Glencore's new mines, Africa help boost copper output
LONDON (Reuters) - Miner and trader Glencore Xstrata (GLEN.L: Quote) reported copper production increased by a fifth in the first six months of 2013, driven by the ramp-up of mines replacing depleted operations and a stronger performance in Congo.
Glencore, which is due to report full half-year earnings next week, gave no update on its closely-watched trading division, but met market expectations with higher volumes in not only copper, but also coal and agricultural products.
Among the diversified miners, Glencore Xstrata has the biggest exposure to copper.
It produced 673,400 tons of the red metal in the first half, broadly in line with forecasts, thanks to an increase in Latin American operations including newly commissioned Antapaccay in Peru, and operational improvements at Collahuasi in Chile, in which it owns a stake.
In the second quarter, group copper production totalled 351,600 tons, up just over 22 percent.
African copper production alone, including Zambia as well as the Democratic Republic of Congo, came to 171,500 tons in the first six months - up more than 40 percent. Glencore expects Katanga and Mutanda in Congo to hit annualized production capacity of up to 270,00 tons and 200,000 tons respectively.
"Strong growth in African copper should increase market confidence in Glencore's ability to develop and operate assets," analysts at Liberum, which has a "buy" rating on Glencore.
Zinc output, another key source of revenue for the combined group, dipped 3 percent to 729,500 tons, hit by the impact of declines at operations reaching the end of their mine lives.
Total coal production rose 4 percent, as Australian operations and Prodeco in Colombia offset the impact of a strike at Cerrejon, also in Colombia, a venture co-owned with Anglo American (AAL.L: Quote) and BHP Billiton (BLT.L: Quote). Continued...