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    GLEN   JE00B4T3BW64

GLENCORE PLC

(GLEN)
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Glencore : Half-Year Production Report 2021

07/30/2021 | 02:10am EDT

Glencore Chief Executive Officer, Gary Nagle:

'Our Industrial operating assets continued to manage responsibly and effectively amid the health and logistical challenges presented by Covid-19, while, from a market perspective, we remain disciplined in a recovering, yet somewhat uncertain, global economic picture. I am particularly pleased to report an improved safety performance. We relaunched our 'SafeWork' program earlier this year to address underlying issues in historical safety performance. Unfortunately, we recorded the loss of one life at Glencore's managed operations in the first half. We remain relentless in our ambition to achieve a fatality-free business.

'In our key copper and zinc businesses, production met our H1 guidance, while planned coal and nickel volumes were impacted by a range of factors during the half. Prodeco's care and maintenance and market-driven Australian supply reductions since H2 2020 are mainly responsible for a 16% period-on-period decline in coal production. Nickel production was constrained by various operating issues at Koniambo, with a restart of its second production line currently expected in August.

'Our Marketing business has again performed well, with constructive market conditions allowing us to raise our full year 2021 EBIT expectations to the top end of our $2.2-$3.2 billion p.a. guidance range.

'In the near term we remain alert to the continuing challenges of Covid-19, and our operational teams remain focussed on operating safely and responsibly to create sustainable long-term value for all stakeholders.'

Production from own sources - Total1

H1 2021

H1 2020

Change %

Copper

kt

598.0

588.1

2

Cobalt

kt

14.8

14.3

3

Zinc

kt

581.8

550.1

6

Lead

kt

117.0

127.9

(9)

Nickel

kt

47.7

55.2

(14)

Gold

koz

423

411

3

Silver

koz

15,984

14,185

13

Ferrochrome

kt

773

466

66

Coal - coking

mt

4.1

3.7

11

Coal - semi-soft

mt

2.6

2.6

-

Coal - thermal

mt

42.0

51.8

(19)

Coal

mt

48.7

58.1

(16)

Oil (entitlement interest basis)

kboe

2,557

2,612

(2)

H1 production highlights

  • Own sourced copper and cobalt production of 598,000 tonnes and 14,800 tonnes, respectively, was modestly higher than H1 2020.
  • Own sourced zinc production of 581,800 tonnes was 31,700 tonnes (6%) higher than H1 2020, mainly relating to recovery from Covid-related suspensions in Q2 2020, particularly in Peru.
  • Own sourced nickel production of 47,700 tonnes was 7,500 tonnes (14%) below H1 2020 due to planned major maintenance at Murrin and various operational issues at Koniambo.
  • Own sourced gold and silver production were, respectively, 3% and 13% ahead of H1 2020.
  • Attributable ferrochrome production of 773,000 tonnes was 307,000 tonnes (66%) higher than H1 2020, reflecting that mining and smelting operations were suspended for much of Q2 2020 due to the South African national lockdown.
  • Coal production of 48.7 million tonnes was 9.4 million tonnes (16%) lower than H1 2020, reflecting a full period of Prodeco care and maintenance (3.8 million tonnes), various movements in the Australian portfolio, mainly reflecting the continued market-driven supply reductions initiated in H2 2020 (5.0 million tonnes) and reduced export rail capacity in South Africa (1.4 million tonnes), partly offset by the recovery at Cerrejón from its Covid-related restrictions in the base period.
  • Entitlement interest oil production of 2.6 million barrels of oil equivalent (boe) was broadly in line with H1 2020, reflecting the offsetting effects of the Chad oil fields placed on care and maintenance in April 2020 and the gas phase of the Equatorial Guinea project commencing in February 2021.

Realised prices

Realised

US$ million

¢/lb

$/t

Copper

425 9,370

Zinc

128 2,831

Nickel

788 17,372

The average Newcastle coal (NEWC) settlement prices for the period was $98.85/t. After applying a portfolio mix adjustment (component of our regular coal cash flow modelling guidance) of $26.60/t to reflect e.g. movements in the pricing of non-NEWC quality coals, coking coal margins and the lag effect of 2020's JPU fixed-price contracts, an average thermal-equivalent realised price of c.$72.25/t can be applied across all coal sales volumes in H1. Own sourced copper sales during the period were c.21kt lower than production and own sourced zinc sales were c.20kt higher than production.

Production guidance

Actual
FY

Previous
guidance

Current guidance

2021 weighting

2020

2021

2021

H1

H2

Copper

kt

1,258

1,220 ± 30

1,220 ± 30

49%

51%

Cobalt

kt

27.4

35 ± 2

35 ± 3

42%

58%

Zinc

kt

1,170

1,250 ± 30

1,170 ± 30

1

50%

50%

Nickel

kt

110

117 ± 5

105 ± 5

45%

55%

Ferrochrome

kt

1,029

1,400 ± 30

1,430 ± 30

54%

46%

Coal

mt

106

113 ± 4

104 ± 4

47%

53%

  • Changes to guidance mainly reflect: lower H2 for zinc, due to a lengthier expected ramp-up at the recently-commissioned Zhairem mine in Kazakhstan; extended maintenance at the Koniambo nickel plant, delaying a return to a two-line processing operation; and reduced coal production volumes, on account of export rail constraints and weaker domestic demand in South Africa and a slower recovery from the Australian market-driven supply reductions initiated in H2 2020.

To view the full report please click: https://www.glencore.com/dam/jcr:9897d2a2-0d44-491f-9912-0728c92e69f4/GLEN_2021-HY_ProductionReport.pdf

For further information please contact:

Investors

Martin Fewings
t: +41 41 709 2880
m: +41 79 737 5642
martin.fewings@glencore.com

Media

Charles Watenphul
t: +41 41 709 2462
m: +41 79 904 3320
charles.watenphul@glencore.com

Glencore LEI: 2138002658CPO9NBH955

Notes for Editors

Glencore is one of the world's largest global diversified natural resource companies and a major producer and marketer of more than 60 responsibly-sourced commodities that advance everyday life. The Group's operations comprise around 150 mining,metallurgical and oil production assets.With a strong footprint in over 35 countries in both established and emerging regions for natural resources, Glencore's industrial activities are supported by a global network of more than 30 marketing offices. Glencore's customers are industrial consumers, suchas those in the automotive, steel, power generation, battery manufacturing and oil sectors. We also provide financing, logistics and other services to producers and consumers of commodities. Glencore's companies employ around 135,000 people, including contractors.

Glencore is proud to be a member of the Voluntary Principles on Security and Human Rights and the International Council onMining and Metals. We are an active participant in the Extractive Industries Transparency Initiative. Our ambition is to be a net zero total emissions company by 2050.

Important notice concerning this document including forward looking statements
This document contains statements that are, or may be deemed to be, 'forward looking statements' which are prospective in nature. These forward looking statements may be identified by the use of forward looking terminology, or the negative thereof such as 'outlook', 'plans', 'expects' or 'does not expect', 'is expected', 'continues', 'assumes', 'is subject to', 'budget', 'scheduled','estimates', 'aims', 'forecasts', 'risks', 'intends', 'positioned', 'predicts', 'anticipates' or 'does not anticipate', or 'believes', or variations of such words or comparable terminology and phrases or statements that certain actions, events or results 'may', 'could',
'should', 'shall', 'would', 'might' or 'will' be taken, occur or be achieved. Forward-looking statements are not based on historical facts, but rather on current predictions, expectations, beliefs, opinions, plans, objectives, goals, intentions and projections about future events, results of operations, prospects, financial condition and discussions of strategy. By their nature, forward-looking statements involve known and unknown risks and uncertainties, many of which are beyond Glencore's control. Forward looking statements are not guarantees of future performance and may and often do differ materially from actual results. Important factors that could cause these uncertainties include, but are not limited to, those disclosed in the last published annual report and half-year report, both of which are freely available on Glencore's website. For example, our future revenues from our assets, projects or mines will be based, in part, on the market price of the commodity products produced, which may vary significantly from current levels. These may materially affect the timing and feasibility of particular developments. Other factors include (without limitation) the ability to produce and transport products profitably, demand for our products, changes to the assumptions regarding the recoverable value of our tangible and intangible assets, the effect of foreign currency exchange rates on market prices and operating costs, and actions by governmental authorities, such as changes in taxation or regulation, and political uncertainty.
Neither Glencore nor any of its associates or directors, officers or advisers, provides any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements in this document will actually occur. You are cautioned not to place undue reliance on these forward-looking statements which only speak as of the date of this document. Except as required by applicable regulations or by law, Glencore is not under any obligation and Glencore and its affiliates expressly disclaim any intention, obligation or undertaking, to update or revise any forward looking statements, whether as a result of new information, future events or otherwise. This document shall not, under any circumstances, create any implication that there has been no change in the business or affairs of Glencore since the date of this document or that the information contained herein is correct as at any time subsequent to its date. No statement in this document is intended as a profit forecast or a profit estimate and past performance cannot be relied on as a guide to future performance. This document does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for any securities. The companies in which Glencore plc directly and indirectly has an interest are separate and distinct legal entities. In this document, 'Glencore', 'Glencore group' and 'Group' are used for convenience only where references are made to Glencore plc and its subsidiaries in general. These collective expressions are used for ease of reference only and do not imply any other relationship between the companies. Likewise, the words 'we', 'us' and 'our' are also used to refer collectively to members of the Group or to
those who work for them. These expressions are also used where no useful purpose is served by identifying the particular company or companies.

Disclaimer

Glencore plc published this content on 30 July 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 July 2021 06:08:15 UTC.


ę Publicnow 2021
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