Glencore (LSE: GLEN) released an interim management statement this morning covering the third quarter, which told investors of a rise in production.
‘Own sourced’ coal production rose by 7% to 111.4 million tonnes, mainly related to higher production in Australia, despite the price of coal plunging to a five-year low. Meanwhile, ‘attributable own-sourced’ ferrochrome production was up 5% to 939,000 tonnes, reflecting the higher operating capacity and a ramp-up in production from the Lion 2 expansion project in South Africa.
Elsewhere, ‘own sourced’ copper production lifted by 8%, to 1,149,000 tonnes. This was mainly driven by a 48% increase in production at the Mutanda open-pit mine in the Democratic Republic of the Congo, of which Glencore owns 40%.
Glencore also saw results with oil, producing 5.1 million barrels for a 50% increase, which reflected the commencement of production at Alen (EG) and Badila (Chad) during 2013.
These rises in production more than offset the 6% fall in ‘own sourced’ zinc production (relating to the closure of the Perseverance and Brunswick mines in June 2013), and ‘own sourced’ nickel production, which fell 1% after the Falcondo, Cosmos and Sinclair mines were placed into care and maintenance in 2013 (the latter has since had a sale agreed, subject to customary approvals).
Glencore’s strategy of placing itself as a lower-cost producer has seen it stay ahead of many rivals, despite obvious industry headwinds. While no mention of further takeover approaches for Rio Tinto were mentioned in today’s update, whispers keep circulating around the City.
