Glencore says marketing arm solid despite uncertain economy

City A.M. Reporter
Commodities giant Glencore (GLEN.L) said trading within in its marketing arm remained "solid" over the third quarter despite economic uncertainty, as it posted a jump in copper and gold output and announced it had produced first oil ahead of plan.

The news is likely to come as a relief to investors fretting Glencore's key marketing business could be hit by turbulence seen at rival Noble (NOBG.SI), which last week posted its first quarterly loss in over a decade.

"Despite the financial market uncertainty and some weather and equipment-driven disruptions, Glencore's overall healthy operational and financial performance has continued through quarter three 2011," the company said in a statement.

"Within our marketing operations, trading remains solid. Glencore's financial position has continued to strengthen and, with the current capex programme peaking, balance sheet flexibility is expected to improve further."

Glencore, the world's largest diversified commodities trader, said own coal production rose 18 percent compared to the first nine months of last year, while its Prodeco operations jumped 69 percent in the quarter.

On base metals, over the first nine months of the year zinc production rose 19 per cent, copper 40 percent and gold, including gold equivalents, was up 45 percent.

The group also said its Aseng field in Equatorial Guinea had seen first oil flowing earlier this month, ahead of initial plans that had forecast the start of next year. The first tanker of oil is expected to be offloaded in December 2011.

Glencore has seen its shares fall over 23 per cent since its record London and Hong Kong listing in May, slightly underperforming a sector battered by worries over global demand, though it has recovered from mid-year lows.

The company did not provide profit figures. It will announce full-year results on 5 March.