Wednesday 31 October 2018 9:54 am

Glencore increases cost savings forecast on stronger coal prices

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Mining giant Glencore expects to achieve 50 per cent more cost savings after being boosted by strong coal prices.

As part of a two-year cost-cutting drive the Anglo-Swiss firm had expected to save around $300m (£235m) by the end of the year but could now make savings of more than $450m, it said on Wednesday.


Its mine unit costs are expected to fall to $49 per tonne in 2019 for its operations in Australia, South Africa and Columbia, from a forecast of $52 per tonne for 2018,

“(The firm has achieved) strong unit cost performance despite material cost headwinds from energy, royalties and higher consumable costs,” the company said in a presentation to analysts in Melbourne.

The company said it expected to produce 145m tonnes of coal in 2019, which could generate $6.2bn in EBITDA earnings at a price of $108 per tonne of Newcastle coal.

Earlier this year the FTSE 100 company acquired the Hail Creek mine in Australia and a 49 per cent stake in the Hunter Valley Operations from Rio Tinto.

The joint venture with Yancoal Australia has already cut almost a fifth of its workforce and removed 13 per cent of trucks without affecting production, Glencore said.

 

 


 

 

 

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