Glencore Xstrata, the world’s biggest exporter of coal for power stations, said production of copper increased 18 per cent in the first quarter as its mines in Africa boosted output.
Production was 321,800 metric tons in the three months ended March 31, Baar, Switzerland-based Glencore said today in a statement. That compared with 273,200 tons a year earlier.
The figures include operations acquired from Xstrata. Glencore completed the 15-month long takeover of Xstrata this month to create the world’s fourth-largest mining company with a market value of $70 billion. The combined group has interests in about 35 coal mines in Colombia, Africa and Australia, accounting for about 10 per cent of global seaborne supplies of the fuel.
Coal production increased 1 per cent to 32.7 million tons, it said. Prices for the fuel exported from Australia, its largest coal producing region, were 23 per cent lower in the quarter compared than a year earlier, it said.
The stock fell 3.1 per cent to 343.9 pence in London on May 10. The company estimates spending on new projects of $29 billion over the next three years, it said this month.
After 2015, spending is expected to “materially decline” to $4 billion to $5 billion, it said. The group employs about 190,000 people in more than 50 countries across its industrial and trading divisions.
The takeover of Xstrata was completed almost two years after Glencore’s $10 billion initial public offering that ended more than three decades of it operating as a closely-held company.
The Xstrata acquisition will reduce the trading arm's contribution to earnings to 28 per cent from 63 per cent, Deutsche Bank analysts Rob Clifford and Grant Sporre wrote in a May 2 report.
The copper and coal divisions will be the biggest contributors to profit this year, according to Deutsche Bank. The performance by the marketing division in the quarter was “broadly in line with our expectations,” Glencore said today.
Glencore Xstrata halted work on the Balaclava Island export terminal in Australia’s Queensland state because of poor market conditions and overcapacity.
Specific shipping limitations and concerns about the industry’s medium-term outlook added to the decision to shelve the new terminal, the company said in an e-mailed statement today.
The facility had a planned export capacity of 35 million tons a year, according to the Glencore Xstrata website.
Bloomberg
