Mining giant Glencore endured a mixed bag in its production levels in the first three months of the year, suffering a decline in gold, silver, zinc, copper and lead output while cobalt, nickel, coal and oil surged.
Shortfalls were driven by technical constraints, supply chain issues and Covid-19 related absenteeism during the first three months of the year.
In the case of precious metals, gold production fell 16 per cent from 224 koz to 189 koz, while silver dropped from 7,761 koz to 6,515 koz.
Meanwhile, own sourced copper production of 257,800 tonnes was 43,400 tonnes (14 per cent) lower than in the first quarter of 2021.
This reflected temporary geotechnical constraints at Katanga (14,000 tonnes), the sale of Ernest Henry in January 2022 (11,000 tonnes) and lower copper units produced within Glencore’s zinc business.
Zinc production was also 15 per cent lower than in the first quarter of 2021 – coming in at 241,500 tonnes.
Nevertheless, own sourced nickel production soared to 30,700 tonnes – which was 5,500 tonnes (22 per cent) than this time last year, with New Caledonia mine Koniambo operating both production lines in 2022.
Coal production of 28.5 million tonnes was 4 million tonnes (16 per cent) higher over the same period, mainly reflecting higher attributable production from Cerrejón, following the acquisition in January 2022 of the remaining two-thirds interest that Glencore did not already own.
On a like-for-like basis, the increase was 400,000 tonnes.
Separately, oil production spiked 40 per cent to 1.5m barrels, due to commencement of the gas phase of the Alen project in Equatorial Guinea from March 2021.
Glencore chief executive officer Gary Nagle said: “For the most part, the group’s quarterly production was in line with our expectations. However, production in the first quarter of 2022 reflects a number of temporary impacts, including geotechnical challenges at Katanga and Covid-19 absenteeism, particularly in Australia. Koniambo’s higher operating rates continued into the first quarter of this year, while overall coal production, on a like-for-like basis, reflecting our increased Cerrejón ownership, was broadly flat period-on-period.”
Following its first quarter performance, Glencore’s full-year guidance is reduced for copper and cobalt, but increased for nickel and ferrochrome.
Separate to its production business, marketing activities were supported during the quarter by tight physical market conditions and extreme volatility.
If its full-year earnings reflect its first-quarter performance, Glencore expects it marketing division to comfortably exceed its top end of long-term adjusted EBIT guidance range of $2.2-3.2bn this year.