Commodities titan Glencore Xstrata PLC (GLEN.LN) Wednesday reported largely higher output across most of its commodities during the first half of this year.
Commodities titan Glencore Xstrata PLC (GLEN.LN) Wednesday reported
largely higher output across most of its commodities during the first half of
this year.
The report marks the second set of integrated production results since Glencore
completed its all-share, multi-billion dollar merger with Anglo-Swiss miner
Xstrata on May 2. Glencore Xstrata, the world's fourth-largest diversified
miner with a market capitalization of about $63 billion, has since then been
implementing a 100-day integration plan that will remove job duplication,
centralize its business structure and streamline its project pipeline.
Glencore Xstrata hopes to achieve significantly more than $500 million in
annual synergies from the merger, which would be welcomed by investors who are
seeking value from mining companies amid falling commodity prices and concerns
about the health of the global economy.
Glencore Xstrata didn't provide any figures or comments about its marketing
activities, a key earnings generator for the combined company.
The FTSE-100 miner said its own production of copper, nickel, gold and
ferrochrome were up 20%, 1.5%, 10%, and 22% respectively on year in the first six
months of 2013, while zinc and lead were the only metals to report a decline in
output, dropping 3.3% and 5.4% respectively on year in the first half.
Copper output benefited from the continued ramp up in production at its
Katanga
and
Mutanda mines in the
Congo
, as
well as from its Peruvian Antapaccay and Australian Ernest Henry mines.
Gold output benefited from the continued ramp up of production at its
Vasilkovskoye mine, which is operated by its majority owned Kazzinc unit.
Agricultural output rose 31% on year to 3.9 million tons, driven by a rise in
oilseed crushing activities which more than offset a decrease in biodiesel,
rice milling and wheat milling output.
On the energy front, coal output from its own sources rose 4% on year to 67.8
million tons mainly due to higher thermal coal production. Key expansion
projects in
Australia
and
in its operation in Colombia Prodeco delivered growth, partly offset by lower
production at the Colombian Cerrejon coal mine due to a strike.
Meanwhile, oil production on a 100% attributable basis fell 10% on year to 9.94
million barrels of oil.
Glencore will report its first half results on Aug. 20.
Analysts said the first half output report was solid. JP Morgan said "all
key divisions excepting zinc, oil and South African coal delivered
substantial... volume increases" in the first half of the year. It noted
that the upcoming interim results may be overshadowed by the company's investor
day presentation on Sep. 10 where it expects the company to provide the first
details of its corporate and capital allocation strategy, project
prioritization, synergy and potential disposals since merging with Xstrata.
At 0929 GMT, the Glencore Xstrata's shares were up 0.6% at 309 pence a share
while the FTSE 350 mining index was down 0.9%.
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