Glencore is on course to produce roughly 40% less copper this year than it did in 2018, and even less next year.. — Bloomberg
LONDON: Glencore Plc outlined plans to almost double copper production over the next decade as the miner seeks to reverse a slump in output, although it was also forced to lower its ambitions for next year.
The target – announced at Glencore’s first capital markets briefing in three years – comes as the miner seeks to reassure investors about its growth prospects after a steep drop in copper output.
Miners are racing to extract more of the metal as prices soar to all-time highs, but Glencore is on course to produce roughly 40% less copper this year than it did in 2018, and even less next year.
The growth strategy, which includes a US$9.5bil brand new mine in Argentina plus restarting a mothballed operation in the same country, may help chief executive officer Gary Nagle sooth investor discontent over missed production goals.
The company also said it’s cut 1,000 jobs as part of a sweeping operational review to cut costs and improve performance.
Glencore shares jumped as much as 6.2% in London trading, after falling to the lowest since 2020 earlier this year.
“We’ve had criticism on our ability to deliver,” Nagle said in a presentation on Wednesday.
“We have made substantial changes to our business. That allows us to be very confident that what we present today will be delivered.”
Glencore’s ambition to raise copper production to 1.6 million tonnes by 2035 comes as the metal has never been more valuable. Copper hit a fresh record on Wednesday, trading above US$11,400 a tonne after gaining about 30% this year.
While Glencore laid out plans for future copper growth, mostly coming from the expansion of existing mines, there was less good news for next year.
The company now expects to produce 810,000 to 870,000 tonnes, down from its previous target of 930,000 tonnes in 2026.
That follows setbacks at the Collahuasi mine in Chile, where it partners with Anglo American Plc.
The company also lowered its zinc and cobalt targets for next year.
Yet Glencore said it’s confident that 2026 will be its production nadir, before output starts to recover from 2027 onward.
Glencore also reiterated a plan to raise copper production to one million tonnes by 2028. As part of that process, it will restart the Bajo de la Alumbrera mine in northwestern Argentina.
Glencore flagged a series of so-called brownfields projects – where existing mines are expanded – to grow its production in the next decade, including Collahuasi and other projects in Argentina, Peru and the Democratic Republic of Congo.
Still, the company’s plans also include building its El Pachon project in Argentina, which it said would cost US$9.5bil. — Bloomberg
