GLNCY - Glencore plc

Other OTC - Other OTC Delayed Price. Currency in USD
+0.14 (+2.65%)
At close: 3:59PM EDT
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Previous Close5.43
Bid0.00 x 0
Ask0.00 x 0
Day's Range5.57 - 5.66
52 Week Range5.29 - 8.97
Avg. Volume323,407
Market Cap37.828B
Beta (3Y Monthly)0.94
PE Ratio (TTM)44.95
EPS (TTM)0.12
Earnings DateN/A
Forward Dividend & Yield0.40 (7.37%)
Ex-Dividend Date2019-04-25
1y Target EstN/A
Trade prices are not sourced from all markets
  • BHP Should Stand Pat on Copper

    BHP Should Stand Pat on Copper

    (Bloomberg Opinion) -- All major miners agree that copper has a bright future. The trouble is how to get at it. Take BHP Group, set to be the world’s biggest producer this year after Freeport-McMoRan Inc. sold down its stake in Indonesia’s Grasberg mine. Costs at BHP’s massive Escondida pit in Chile, which accounts for about one in 20 tons of copper mined globally, keep on disappointing. They’ll rise from the current $1.14 a pound to a range of $1.20 to $1.35/lb next year, the miner said in annual results Tuesday, well above its ambitions to keep them shy of $1.15/lb.When the copper price is trading close to three-year lows at $2.61/lb, that still makes for a pretty profitable business. But with  production for the whole copper business seemingly capped at around 1.75 million metric tons a year, it isn’t clear where volume growth will come from. Miners love copper because it’s seen as a way to make a bet on a clean-energy future. Electric cars contain between four and 10 times as much copper as conventional ones, and wind and solar generators are forecast to consume 813,000 tons annually by 2027. It’s not clear that projects currently in the pipeline will be sufficient to produce enough metal to keep the market supplied once those sources of demand start ramping up around the middle of the next decade.BHP’s main expansion at the moment is an extension of its Spence mine in Chile, which is set to go into production by December next year. That should add about 185,000 tons of annual production – barely enough to offset the the gradual exhaustion of the Cerro Colorado and Antamina pits, which have less than a decade of reserve life left in them.Beyond that is the potentially massive, geologically difficult expansion of South Australia’s Olympic Dam mine. That pit has long been a challenge. Its significant uranium content would make BHP a major and low-cost producer of the atomic fuel. The risk, though, is that such a large influx of supply would crash the uranium oxide market and weaken the high-stakes economics of the project itself. In theory, there ought to be interesting opportunities for M&A in the current environment. Freeport, for instance, could almost double BHP’s copper production, and has a lot less political risk attached now the long tussle with Jakarta over Grasberg is over.With return on capital employed of about 11%, it’s outperforming the underlying 6% return in BHP’s copper business and could be bought for about nine months’ cashflow. But with Elliott Management Corp. still a lingering presence on the shareholder register, management are unlikely to want to do anything too splashy. Indeed, BHP’s rivals are prime examples of the risks that can be run from being too bold around copper. Rio Tinto Group’s Oyu Tolgoi mine in Mongolia could cost as much as $1.9 billion more than forecast, with first production from the expanded project delayed until the middle of 2023, the company said last month. Glencore Plc this month announced plans to shut its Mutanda copper mine in the Democratic Republic of Congo due to rising costs and weak pricing for cobalt, an important by-product from the operation.There may be a lesson in that. For all the billions BHP has spent on copper over the past decade, its returns from the red metal are still among the worst in the group. Rather than chasing volume, it might be better off watching the pennies, letting the market tighten and hoping prices rise to justify the money that’s already been spent. When the cards on the table look weak, there are worse things to do than just stand pat.To contact the author of this story: David Fickling at dfickling@bloomberg.netTo contact the editor responsible for this story: Matthew Brooker at mbrooker1@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.David Fickling is a Bloomberg Opinion columnist covering commodities, as well as industrial and consumer companies. He has been a reporter for Bloomberg News, Dow Jones, the Wall Street Journal, the Financial Times and the Guardian.For more articles like this, please visit us at©2019 Bloomberg L.P.


    Mining Stocks Are Rising on China Stimulus Hopes But the Rally Could Be Short-Lived

    Mining stocks are rising on surging copper prices but the rally could be short-lived as trade war fears loom.

  • Financial Times

    Cobalt rockets as Glencore plans closure of major mine

    it would close the world’s largest mine for the battery metal, offering hope for a sector whose shares have been hit by fears over a global recession. The rise of electric cars propelled cobalt to its highest level in 10 years of $44 a pound in April last year, before crashing to $12 following a surge in supply and stockpiling by companies in the battery supply chain. Glencore, the world’s largest producer of cobalt, said early last week that it would shut its Mutanda mine in the Democratic Republic of Congo at the end of this year, saying mining the metal was no longer “economically viable”.


    Glencore Stock Slides as JPMorgan Downgrades Miner on Global Recession Fears

    Glencore has been downgraded by JP Morgan over rising trade war and global recession risks, sending the mining giant’s shares lower.

  • British stocks stumble for second day on U.S.-China contagion fears

    British stocks stumble for second day on U.S.-China contagion fears

    British stocks on Thursday crumbled on concerns over the global economy in the wake of the U.S.-China trade war, even as data showed its own consumers have been resilient.

  • Financial Times

    Glencore loses ‘Paradise Papers’ court case in Australia

    The decision enables the Australian Taxation Office to retain and use emails, board briefing notes and legal advice relating to the miner’s 2014 restructuring, which were stolen from the Bermuda office of Appleby.

  • Reuters

    Copper exports resume from Peruvian port of Matarani-port operator

    Copper exports from the port of Matarani have resumed after anti-mining protests that had blocked key infrastructure in the country's southern copper belt eased over the weekend, a spokeswoman for the port operator said on Tuesday. Matarani has been able to operate normally since Saturday, a day after the government suspended a permit it had issued for a copper project opposed by local farmers, said Julia Davila, communications director for port operator Tisur. The protests had suspended shipments from Matarani from four mines that produce about half of Peru's copper for nearly three weeks.

  • Glencore Zambian unit closes two mine shafts; opposition sees 1,400 job cuts

    Glencore Zambian unit closes two mine shafts; opposition sees 1,400 job cuts

    Glencore's Mopani Copper Mines in Zambia has closed two shafts at its Nkana mine, the company said on Thursday, a move that an opposition leader said had led to 1,400 job losses. "The closure of the two uneconomic shafts was always part of our plans," Mopani said in a statement, adding that the move would allow it to channel funds toward the completion of other expansion projects. Mopani said it had served notices of non-renewal of all contracts for development support services at the Mindola north and central shafts.

  • Miners Find Out the Hard Way Why Cobalt Is Called the Goblin

    Miners Find Out the Hard Way Why Cobalt Is Called the Goblin

    (Bloomberg) -- Cobalt, a semi-rare metal that derives its name from the German word for goblin, was given its moniker by medieval miners who frequently came across its noxious ores in their hunt for silver and gold. After a 50% drop in prices this year, it’s turned toxic for Glencore Plc too.After reporting the worst financial results in three years, the world’s biggest commodities trader is shutting its Mutanda copper and cobalt mine in the Democratic Republic of Congo. The move will remove about a fifth of global cobalt supply and send shockwaves through a market that’s awash with unsold metal, much of it in Glencore’s hands.“The cobalt price today isn’t helping us, so why rush it?” Glencore chief Ivan Glasenberg said as the company reported earnings on Wednesday. “The only thing you can do that’s under your control is shut or reduce tonnages.”While cutting back production when prices are low seems like an obvious strategy, it’s one that most companies are loath to try. Glencore and De Beers are the only mining majors with a track record of actively controlling their operations to pull a market out of oversupply. For other raw materials, like iron ore, the decision to keep resources in the ground is usually seen as a recipe to handing your competitors a bigger slice of the market.The last time Glasenberg made a big cut to production was in late 2015, when the company slashed zinc output as prices were tanking. That maneuver helped create shortages and zinc prices surged 60% in 2016.Shares in Chinese cobalt companies rallied on Wednesday as traders bet they’ll benefit from the higher prices caused by Glencore’s cutbacks. China Molybdenum Co., which also mines in Congo, rose the most in four years in Hong Kong.For Glencore, the precipitous fall in cobalt is more bruising because the metal, a key ingredient for batteries, was its shining star back in 2017. The miner made its copper and cobalt assets a big part of its selling pitch to investors, touting the future boom in electric cars and global urbanization.But the strategy hit pitfalls. Excess supply has overwhelmed demand for battery materials and because it’s a niche market, Glencore hasn’t been able to hedge its exposure to cobalt, leaving the metals trading business exposed to losses. To make matters worse, Glencore detected uranium in some cobalt last year, rendering it unsaleable.To be sure, Glencore isn’t giving up on Mutanda entirely. It expects to bring it back online in 2021 and is looking at a new mine plan that could boost production over the long term. The restart might coincide with electric cars becoming more popular with consumers, which would boost demand.That could leave Glencore’s traders on a strong footing as they negotiate supply deals with customers who pulled out of contracts when prices were weak. “People who have reneged on us in the past, of course they’re not going to be top of our list,” Glasenberg said.Closing the mine is an easy decision to defend when it’s not making money, but it may get harder to justify if prices rebound, said Colin Hamilton, managing director for commodities research at BMO Capital Markets Ltd. Mutanda produced about 27,000 tons of cobalt last year out of a global total of around 135,000 tons, according to trading firm Darton Commodities.“We’re not being OPEC. We’ve got an operation that wasn’t making money at these levels,” Glasenberg said. “You’re not going to run an operation that’s not making money.”To contact the reporters on this story: Mark Burton in London at;Thomas Biesheuvel in London at tbiesheuvel@bloomberg.netTo contact the editors responsible for this story: Lynn Thomasson at, Nicholas LarkinFor more articles like this, please visit us at©2019 Bloomberg L.P.

  • Cobalt, Africa setbacks shrink Glencore's first-half profit

    Cobalt, Africa setbacks shrink Glencore's first-half profit

    Glencore reported a 32% drop in first-half core profit on Wednesday, sending its shares to their lowest since late 2016, while a fall in cobalt prices prompted it to halt output for two years at the world's biggest mine of the battery material. Chief Executive Ivan Glasenberg blamed "a challenging economic backdrop for our commodity mix" and setbacks during the ramp-up of operations in Africa. Glencore stands apart from other diversified miners because of its high-profile trading division and an appetite for risk that in the past has appealed to investors.

  • Glencore Halts Cobalt Mine After Lowest Profit in 3 Years

    Glencore Halts Cobalt Mine After Lowest Profit in 3 Years

    (Bloomberg) -- Want the lowdown on European markets? In your inbox before the open, every day. Sign up here.Glencore Plc reported the weakest profit in three years and announced plans to halt about a fifth of the world’s cobalt production after prices for the battery metal plunged.Glencore will shutter the Mutanda project in the Democratic Republic of Congo for about two years in a move to put a floor under the cobalt market, which has seen prices fall more than 70% since April last year. Despite the plunge in profits, Glencore’s billionaire Chief Executive Officer Ivan Glasenberg struck an upbeat tone on the outlook for the rest of the year, saying he doesn’t see a big pullback in commodities demand because of the U.S. and China trade war.“Demand is not that bad,” Glasenberg said on a call. Still, he acknowledged that “sentiment is not that great” from the trade war and customers are running down inventories.Falling profits are the latest blow to Glencore, which has been hobbled by corruption probes, tumbling prices and operational problems at key copper mines. Investors punished the company, sending the stock down as much as 4.7% on Wednesday, a seventh day of losses. The shares have tumbled 22% this year to the lowest since 2016.Click here for a live blog on the Glencore earnings reportGlasenberg’s decision to cut supply at a time of low prices is a bold strategy the company has employed in the past to turn around flagging markets. It’s a tactic rarely used by other mining companies because competitors can seize additional market share. In late 2015, Glencore slashed zinc production when prices where plunging, helping create shortages. Zinc prices responded with a 60% surge in 2016."The suspension of Mutanda should put a floor under cobalt prices,” said Colin Hamilton, an analyst at BMO Capital Markets. “This effectively removes the surplus we have in the cobalt market over the next couple of years."Shares in major Chinese cobalt companies rallied on Wednesday. China Molybdenum Co., which also mines in the African nation, rose the most in four years in Hong Kong.Another surprising aspect of Glencore’s new cobalt strategy is that it doesn’t plan to lay off any workers affected by the mine’s closure. It’s a move that could ease tensions with Congolese officials in the face of a long-running dispute over higher taxes and tougher mining regulation.(Adds quote from analyst and background on zinc market.)To contact the reporters on this story: Thomas Biesheuvel in London at;Mark Burton in London at mburton51@bloomberg.netTo contact the editors responsible for this story: Lynn Thomasson at, Nicholas LarkinFor more articles like this, please visit us at©2019 Bloomberg L.P.

  • Glencore's Congo Halt Offers Jolt for Ailing Cobalt Market

    Glencore's Congo Halt Offers Jolt for Ailing Cobalt Market

    (Bloomberg) -- Glencore Plc’s plan to halt a fifth of the world’s cobalt production is set to offer some respite for prices of the battery material that cratered in the past year on a supply glut.The mining giant will put the Mutanda copper-and-cobalt facility in the Democratic Republic of Congo on care and maintenance by the end of this year due to lower prices, the company announced as it reported a 90% fall in half-year net income. Shares in major Chinese cobalt companies rallied on Wednesday, with China Molybdenum Co., which also mines in the African nation, rising the most in four years in Hong Kong.“This should lift sentiment in the global cobalt market,” Daniel Chen, an analyst at CRU Group, said by phone from Guiyang in southern China. “Previously, consensus was that cobalt would be very oversupplied for two or even three years ahead, but now the market will pay more attention to risks in the DRC, and risks on the supply side.”Cobalt’s been on a two-year roller coaster as the industry adjusts to an era of expanding demand for the material used in electric-vehicle batteries. Prices are down more than 70% since April last year, after a buying frenzy on concerns of a shortage gave way to an unexpectedly strong wave of new supply. The DRC produces more than two thirds of the world’s cobalt.The material’s medium and long-term fundamentals remain positive and Mutanda will restart “once the current weak and oversupplied cobalt market sufficiently recovers,” Glencore said. Many cobalt operations across the industry are currently uneconomic, it said. Shares fell 2.3% in London.Rival Shares“Chinese producers are likely to gain market share on the back of the mine closure,” Gerry Alfonso, director of international business department at Shenwan Hongyuan Group Co., said by email.Mutanda produced about 27,000 tons last year out of a global total of around 135,000 tons, according to trading firm Darton Commodities. A second Glencore unit in Congo separately lowered its guidance for 2019 in a Tuesday announcement. In 2020, Glencore expects cobalt output of about 34,000 tons, about half of guidance given at the end of last year.“In the short term, confidence in the cobalt price could be boosted,” Hong Lu, researcher at Shanghai Metals Market, said in a note. “But if prices rise too high, new capacity can come in to feed extra demand, and Glencore won’t be happy to see that.”Market reactions in Hong Kong and mainland China:China Molybdenum, which operates the Tenke Fungurume mine in DRC, closed 20% higher in Hong Kong. Stock rose by 10% daily limit in Shanghai.Zhejiang Huayou Cobalt Co., the world’s biggest refiner, and Nanjing Hanrui Cobalt Co. both also gained by 10% daily limit.(Updates with Glencore statement, earnings in second paragraph.)\--With assistance from Amanda Wang and Thomas Biesheuvel.To contact Bloomberg News staff for this story: Martin Ritchie in Shanghai at mritchie14@bloomberg.netTo contact the editors responsible for this story: Phoebe Sedgman at, Jake Lloyd-SmithFor more articles like this, please visit us at©2019 Bloomberg L.P.

  • Financial Times

    Glencore puts faith in ‘miners’ miner’ Freyberg to turn the tide

    As Glencore’s chief executive Ivan Glasenberg scrambles to reassure investors that a poor first-half set of results will not be repeated, the spotlight has fallen on a veteran coal miner to tame the company’s once swashbuckling culture and put it back on track. Peter Freyberg, a 60-year-old executive from South Africa who has spent most of his career in coal, will be key to reversing a drop in earnings to their lowest level in three years and positioning the miner to take advantage of growing demand for metals from the shift to electric cars. Glencore’s prized mines in Africa, which it had hoped would be a cash cow as the move towards electrified transport and batteries boost demand for cobalt, nickel and copper, have stumbled, dragging down the company’s results.

  • Reuters

    UPDATE 2-European shares end trade-driven losing run but worries linger

    European shares rose on Wednesday, breaking a three-day losing streak on euphoria over a multi-billion dollar German chemical deal but gave up some gains after Wall Street opened sharply lower on recession worries. The pan-European STOXX 600 index closed 0.2% higher, after having gained as much as 1% during the session when Bayer and Lanxess' deal to sell chemical park operator Currenta for $3.9 billion had lifted stocks. Bayer's 6% jump was the biggest boost to the main index and helped Germany's DAX shrug off week industrial output data.

  • Financial Times

    Glencore: the barons’ long goodbye

    Swiss commodities group Glencore is halfway there. Peter Freyberg, newish head of the industrial division, popped up on a half-year earnings call to defend mining practices. Copper boss Telis Mistakidis retired in December.

  • Glencore Plans to Shut Giant Cobalt and Copper Mine in Congo

    Glencore Plans to Shut Giant Cobalt and Copper Mine in Congo

    (Bloomberg) -- Glencore Plc is planning to halt production at one of the world’s biggest cobalt mines after prices for the battery metal collapsed and costs at the project increased, according to a person familiar with the situation.The announcement that Glencore will close its Mutanda mine in the Democratic Republic of Congo is expected to come as the company lays out an overhaul of its key African copper and cobalt business when it releases first-half results on Wednesday. It would be another setback for Glencore, which has been dogged by operational problems, legal challenges and a rift with Congo’s government over a new mining code.Mutanda will stop producing at the end of this year and be put on so-called care and maintenance, according to the person who asked not to be identified as the plans haven’t been made public. It was already expected that the mine would produce half as much copper this year after it mined more complicated ores that raised costs.The Financial Times earlier reported Glencore’s plans to shutter the mine.“The mine is no longer economically viable over the long-term,” Glencore said in a letter to employees at the mine.Future ProfitsEven though African copper and cobalt is a small part of Glencore’s overall business, it’s considered a key source of future profits. The company ranks as the world’s top producer of cobalt and investors have hoped Glencore would ride the boom in electric cars and battery demand. Mutanda produced 27,300 tons of cobalt last year, more than half Glencore’s total output, and 199,000 tons of copper.The decision to shutter the mine highlights how quickly cobalt has shifted from a prized asset to a headache. After quadrupling in two years, prices have collapsed to the lowest since 2016 as new supplies pour into the market.With few hedging tools available, the plunge has left Glencore exposed. The company said last week that it’ll report a $350 million non-cash hit to its trading business from cobalt that’s been mined, but not yet sold.Reduced OutlookAlso on Tuesday, Glencore’s key Katanga Mining Ltd. unit in the Congo lowered its guidance for 2019. Katanga said it’s now expecting to produce about 235,000 tons of copper this year and about 14,400 tons of cobalt. That compares with a previous forecast of 285,000 tons of copper and 26,000 tons of cobalt.Glencore’s billionaire CEO Ivan Glasenberg has said Canada-listed Katanga hadn’t met expectations and a turnaround plan would be announced soon.Katanga struggled with a series of setbacks over the past year. Dozens of illegal miners were killed in a landslide at the company’s vast open-pit mine in July. The company said in April it would likely miss output targets for copper and cobalt. It had to halt cobalt sales in November after detecting radiation in the ore.(Updates with lowered Katanga guidance in ninth paragraph.)\--With assistance from Luzi Ann Javier.To contact the reporters on this story: Thomas Biesheuvel in London at;William Clowes in Kinshasa at wclowes@bloomberg.netTo contact the editors responsible for this story: Lynn Thomasson at, Steven FrankFor more articles like this, please visit us at©2019 Bloomberg L.P.

  • The Top Miners Are Split on How to Chase the EV Battery Boom

    The Top Miners Are Split on How to Chase the EV Battery Boom

    (Bloomberg) -- The world’s biggest miners, including BHP Group and Glencore Plc, are finally firm believers in the electric vehicle battery revolution -- what they don’t agree on is which metals will deliver the best long-term exposure to the developing global market.BHP has revived a declining nickel unit in Western Australia to target the sector, while Rio Tinto Group is accelerating work to enter the lithium market. Glencore is focusing on cobalt and copper and Anglo American Plc is examining prospects for platinum and palladium to be deployed in future battery technologies.“We did a review of all the battery input materials -- nickel, cobalt, lithium,” said Eduard Haegel, asset president at the BHP’s Nickel West unit. “We think that in the medium-to-longer term there will be a margin that will be sticky for nickel -- we think it’s an attractive commodity.”BHP, the biggest miner, this year reversed long-term efforts to seek a buyer for the division, opting to retain Nickel West to benefit from forecast growth in lithium-ion batteries and a scarcity of high-quality nickel supply. From the second quarter of 2020, the unit will begin production of bright-turquoise colored nickel sulphate -- a premium raw material for the battery supply chain -- from a nickel refinery south of Perth, with plans to potentially carry out the industry’s largest expansion.The outlook for battery materials is firming as governments set targets on phasing out combustion engine vehicles, and as automakers commit to expanding line-ups of electric models, according to Angela Durrant, a Sydney-based principal analyst at Wood Mackenzie Ltd. “The demand profile is certainly becoming more clear,’’ she said.Deployment of more than 140 million electric vehicles by 2030 will require 3 million tons more copper a year, 1.3 million tons of nickel and about 263,000 tons of cobalt, according to Glencore Plc’s forecasts. By 2040, almost 60% of new vehicle sales and about a third of cars on the road will be electric, BloombergNEF said in a May report.BHP sees an abundant global supply of lithium, and regards cobalt as at risk of substitution, reducing the attractiveness of both commodities, Chief Financial Officer Peter Beaven said in a May speech. Rio also remains wary over cobalt, while Glencore CEO Ivan Glasenberg said in 2017 the company has “zero interest’’ in lithium, in part because of a lack of arbitrage opportunities.Picking winners hasn’t been helped by price gyrations. Key battery metals have faltered in the past year after dramatic gains. That’s chiefly been on concern that incumbents and new producers have added too much volume too quickly, as well as on short-term worries over a slower pace of growth in China’s electric vehicle market, the world’s largest.Lithium prices tripled between mid-2015 and May last year on fears of shortages and have since slumped more than a third as new mines started up. Cobalt in London quadrupled in the two years to March 2018 before tumbling by almost three-quarters.Even as they warm to the battery theme, major mining companies aren’t yet prepared to move beyond familiar commodities and remain cautious on acquisitions, said Robert Baylis, managing director at Roskill Information Services Ltd. “They don’t want to stray too far from the nest,’’ he said. “Some miners have instead concentrated on developing their own existing projects.’’Base metals are more traditional ground for the largest producers, and nickel is increasingly in focus. Vale SA’s Indonesian unit and partners have outlined plans to invest about $5 billion on nickel projects, in part aimed at the battery market, while Rio has expanded exploration work to find new deposits in nations including Uganda and Finland.BHP’s sales to the battery sector of nickel products now account for more than 75% of the unit’s total production, up from less than 5% in 2016, according to Haegel, who will speak Monday at the Diggers and Dealers mining forum in Kalgoorlie, alongside Rio’s head of growth and innovation, Stephen McIntosh.“It makes sense that these companies are primarily focused on copper and nickel,” said Sophie Lu, Sydney-based head of mining and metals for BNEF. The companies typically already have producing assets and both metals “display significant growth potential in the future from batteries,” she said.Nickel has jumped about a third this year as global inventories decline amid better demand in traditional stainless steel markets and expectations for longer-term battery growth. Battery-grade nickel may face a deficit by 2024 as demand rises, according to BNEF.“We’ll always say they are a lithium battery, but actually the weight is in the nickel – that’s the biggest volume of material,’’ said Wood Mackenzie’s Durrant.To contact the reporter on this story: David Stringer in Melbourne at dstringer3@bloomberg.netTo contact the editors responsible for this story: Alexander Kwiatkowski at, Keith Gosman, Phoebe SedgmanFor more articles like this, please visit us at©2019 Bloomberg L.P.


    Glencore Falls on 1st-Half Production Results

    African operations yield less copper than a year ago, but they have significant potential Continue reading...

  • Glencore feels pain of Africa risk, cobalt price fall

    Glencore feels pain of Africa risk, cobalt price fall

    Glencore said on Wednesday it faced a $350 million hit after cobalt prices halved and has begun an overhaul of its under-performing Africa business, which it will explain next week with output revisions in Democratic Republic of Congo. First-half copper production was 5% lower than last year, while cobalt output rose 28%. Zinc and coal output rose 8% and 10% respectively and nickel dropped 11% versus the same time last year because of maintenance.

  • Glencore’s Troubles Pile Up While Rivals Get Rich on Iron Ore

    Glencore’s Troubles Pile Up While Rivals Get Rich on Iron Ore

    (Bloomberg) -- The bad news just keeps coming for Glencore Plc -- this time out of Africa.The commodities giant has had a tough few years, from corruption probes to getting caught up in the fallout from U.S. sanctions on Russia. This year, it’s been forced to watch from the sidelines a breathtaking rally in iron ore, a metal Glencore doesn’t produce at all, while rivals like BHP Group and Rio Tinto Group cash in.The list of headaches got a little longer Wednesday, as the company warned it will take a $350 million hit to its fabled trading business when it reports first-half earnings next week, after prices for cobalt plunged. Glencore also signaled it’s likely to cut the target for copper production this year as it struggles with mines in the Democratic Republic of Congo.Glencore has underperformed its major rivals this year, even after announcing bumper share buybacks. While other producers benefit from the rally in iron ore, the pressure on Glencore’s shares from probes by the U.S. Commodity Futures Trading Commission and Department of Justice has been compounded by a rout in prices for thermal coal, one of the company’s major profit drivers.“With still no certainty on the DoJ investigation, a lack of momentum in operations, with lower coal prices eroding cash flows, the current discount in Glencore shares is likely to persist in the absence of more significant management action,” said Tyler Broda, an analyst at RBC Capital Markets. “The cobalt price drop continues to wreak havoc on the marketing books.”Cobalt has quickly transformed from a star performer to a headache for the world’s biggest producer of the key battery ingredient. After quadrupling in two years, prices have now collapsed back to the lowest since 2016 as new supplies pour into the market. With few hedging tools available, that’s left Glencore exposed.Excluding the cobalt loss, Glencore expects first-half trading profit of about $1.3 billion. It said previously that full-year profit for the unit would be toward the middle of its $2.2 billion to $3.2 billion long-term range.Glencore has cut its cobalt sales in response to falling prices, but is still mining the metal from its African copper mines. The company said the loss from cobalt will be principally non-cash and described the inventories it’s holding as an “unrealised profit lag.” Effectively, the company’s marketing business has bought the cobalt from its mining unit, but has yet to sell it.Read: Cobalt’s Drop to 2-Year Low Tarnishes Glencore’s Trading JewelThe disappointing trading performance is a blow for Glencore, which has always said its traders can make money in any kind of market. The company touts the unit as a differentiator from other big miners, cushioning the ups and downs of the commodities cycle. The marketing unit deals in almost 100 raw materials including oil and agricultural products.Last year’s trading profit was $2.4 billion, the lowest since 2013, with Glencore pointing to weak results from cobalt and alumina trades.The cobalt losses aren’t Glencore’s only headache from its African copper business, which operates mines across the Democratic Republic of Congo and Zambia.Glencore’s Katanga Mining Ltd. unit, where the company has taken tighter control after Canadian regulators fined and banned executives, is reviewing its mine plans and is likely to lower output expectations. Glencore’s Peter Freyberg, who has joined Katanga’s board, will discuss the turnaround plan at the company’s earnings next week.“Our African copper business did not meet expected operational performance,” billionaire Chief Executive Officer Ivan Glasenberg said in a statement. “We have moved to address the challenges at Katanga with several management changes as well as overseeing a detailed operational review.”While African copper is a relatively small part of Glencore’s overall business, the unit gets a disproportionate amount of interest from investors given both its role as one of the company’s key drivers of growth and a source of legal and operational risks.When the company reports earnings next week, analysts are expecting sharply weaker results.It’s been a different story for Glencore’s rivals this year. Even though Rio Tinto has struggled at its giant iron ore mines in the Pilbara, it’s been bailed out by the surge in prices and is expected to report a big jump in profits tomorrow. Anglo American Plc last week reported bumper earnings, driven by iron ore.To contact the reporter on this story: Thomas Biesheuvel in London at tbiesheuvel@bloomberg.netTo contact the editors responsible for this story: Lynn Thomasson at, Liezel Hill, Nicholas LarkinFor more articles like this, please visit us at©2019 Bloomberg L.P.

  • Reuters

    UPDATE 3-Glencore feels pain of Africa risk, cobalt price fall

    Glencore said on Wednesday it faced a $350 million hit after cobalt prices halved and has begun an overhaul of its under-performing Africa business, which it will explain next week with output revisions in Democratic Republic of Congo. First-half copper production was 5% lower than last year, while cobalt output rose 28%. London-listed Glencore's exposure to risk in Democratic Republic of Congo and Zambia has weighed on the company's share price, which has fallen while those of its diversified mining peers have risen.