Delivering the company’s half-year report, Glencore CEO Ivan Glasenberg said the company’s performance in the first half reflected a challenging economic backdrop for its commodity mix, as well as operating and cost setbacks within its ramp-up/development assets. Adjusted EBITDA declined 32% to $5.6 billion.
The company’s African copper business did not meet expected operational performance. “We have moved to address the challenges at Katanga and Mopani with several management changes as well as overseeing a detailed operational review, targeting multiple improvements to achieve consistent, cost-efficient production at design capacity,” Glasenberg said. “Our teams have identified a credible roadmap toward delivering on the significant cashflow generation potential of these assets, at targeted steady state production levels.”
In response to its reduced economic viability, including low cobalt prices, Glencore said it will place its Mutanda operation on temporary care and maintenance by year end. Looking toward the future, the company said it was confident that commodity fundamentals will move in its favor.
“The rest of our business, however, remained strong and performed well,” Glasenberg said. “Excluding our African copper assets and Koniambo, our metals and coal industrial assets delivered robust Adjusted EBITDA mining margins of 39%.”
The copper business, excluding African copper, recorded an EBITDA mining margin of 52% and a full unit cash cost of $0.72/lb, while the coal business generated margins in excess of $30/metric ton (mt), basis a $46/mt thermal unit cash cost, according to Glasenberg.