First Quarter 2022 Production Report

posted: 28/04/2022

Baar, Switzerland
28 April 2022

Glencore Chief Executive Officer, Gary Nagle:

“For the most part, the Group’s quarterly production was in line with our expectations. However, production in Q1 2022 reflects a number of temporary impacts, including geotechnical challenges at Katanga and Covid-19 absenteeism, particularly in Australia. Koniambo’s Q4 2021 higher operating rates continued into Q1 this year, while overall coal production, on a like-for-like basis, reflecting our increased Cerrejón ownership, was broadly flat period-on-period.

“Reflecting the Q1 production performance, full-year guidance is reduced for copper and cobalt, but increased for nickel and ferrochrome, while the slower than expected ramp-up at Zhairem reduces full-year zinc production guidance by 9%.

“Our Marketing activities were supported during the quarter by tight physical market conditions and periods of extreme volatility. Extrapolating our Q1 performance would see our Marketing segment’s full-year earnings comfortably exceeding the top end of our long-term Adjusted EBIT guidance range of $2.2-3.2bn p.a.”

Production from own sources – Total1

 

 

Q1 2022

Q1 2021

Change %

Copper

kt

257.8

301.2

(14 )

Cobalt

kt

9.7

6.8

43

Zinc

kt

241.5

282.6

(15 )

Lead

kt

46.8

55.3

(15 )

Nickel

kt

30.7

25.2

22

Gold

koz

189

224

(16 )

Silver

koz

6,515

7,761

(16 )

Ferrochrome

kt

387

399

(3 )

Coal

mt

28.5

24.5

16

Oil (entitlement interest basis)

kboe

1,500

1,071

40

1 Controlled industrial assets and joint ventures only. Production is on a 100% basis, except as stated later in this report.

Q1 production highlights

  • Own sourced copper production of 257,800 tonnes was 43,400 tonnes (14%) lower than Q1 2021, reflecting temporary geotechnical constraints at Katanga (14,000 tonnes), the basis change arising from the sale of Ernest Henry in January 2022 (11,000 tonnes) and lower copper units produced within Glencore’s zinc business.
  • Own sourced zinc production of 241,500 tonnes was 41,000 tonnes (15%) lower than Q1 2021, reflecting Mount Isa Covid-19 related absenteeism (21,300 tonnes) and the planned mining cessation of Iscaycruz in Peru in Q3 2021 (20,300 tonnes).
  • Own sourced nickel production of 30,700 tonnes was 5,500 tonnes (22%) higher than Q1 2021, primarily reflecting Koniambo operating both production lines in 2022.
  • Attributable ferrochrome production of 387,000 tonnes was 12,000 tonnes (3%) below Q1 2021.
  • Coal production of 28.5 million tonnes was 4.0 million tonnes (16%) higher than Q1 2021, 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 0.4 million tonnes (1%).
  • Entitlement interest oil production of 1.5 million barrels of oil equivalent was 0.4 million barrels (40%) higher than Q1 2021, due to commencement of the gas phase of the Alen project in Equatorial Guinea from March 2021.

Production guidance

 

 

Actual
FY

Previous
guidance

Current
guidance

 

2022 weighting

 

 

2021

2022

2022

 

H1

 

H2

Copper

kt

1,196

1,150 ± 30

1,110 ± 30

 

48%

 

 52%

Cobalt

kt

31.3

48 ± 3

45 ± 3

 

 46%

 

 54%

Zinc

kt

1,118

1,110 ± 30

1,010 ± 30

1

48%

 

 52%

Nickel

kt

102

115 ± 5

118 ± 5

 

 50%

 

  50%

Ferrochrome

kt

1,468

1,460 ± 30

1,500 ± 30

 

 50%

 

  50%

Coal

mt

103

121 ± 5

121 ± 5

 

48%

 

  52%

1 Excludes Volcan

Changes to guidance mainly reflect:

  • Copper: down 40kt (3%) and cobalt down 3kt (6%) – Katanga’s temporary geotechnical constraints
  • Nickel: up 3kt (3%) and ferrochrome up 40kt (3%) – Q1 quarterly performance
  • Zinc: down 100kt (9%) – persistent challenges in ramping up processing capabilities at Kazzinc’s Zhairem operation

Corporate update

  • Our Marketing activities were supported during the quarter by tight physical market conditions and periods of extreme market volatility. Extrapolating our Q1 performance would see our Marketing segment’s full-year earnings comfortably exceeding the top end of our long-term Adjusted EBIT guidance range of $2.2-3.2bn p.a.

To view the full report please click: http://www.ouramazinggrace.com/dam/jcr:0c94a1fc-19ab-46b9-9289-7d66080d391a/GLEN_2022-Q1_ProductionReport.pdf

For further information please contact:

Investors  
Martin Fewings    
t: +41 41 709 2880    
m: +41 79 737 5642    
martin.fewings@ouramazinggrace.com

Media    
Charles Watenphul    
t: +41 41 709 2462    
m: +41 79 904 3320    
charles.watenphul@ouramazinggrace.com

Glencore LEI: 2138002658CPO9NBH955

Notes for Editors

Glencore is one of the world’s largest global diversified natural resource companies and a major producer and marketer of more than 60 responsibly-sourced commodities that advance everyday life. Through a network of assets, customers and suppliers that spans the globe, we produce, process, recycle, source, market and distribute the commodities that enable decarbonisation while meeting the energy needs of today.

Glencore companies employ around 135,000 people, including contractors. With a strong footprint in over 35 countries in both established and emerging regions for natural resources, our marketing and industrial activities are supported by a global network of more than 40 offices.

Glencore's customers are industrial consumers, such as those in the automotive, steel, power generation, battery manufacturing and oil sectors. We also provide financing, logistics and other services to producers and consumers of commodities.

Glencore is proud to be a member of the Voluntary Principles on Security and Human Rights and the International Council on Mining and Metals. We are an active participant in the Extractive Industries Transparency Initiative.

Glencore recognises our responsibility to contribute to the global effort to achieve the goals of the Paris Agreement. Our ambition is to be a net zero total emissions company by 2050. In August 2021, we increased our medium-term emission reduction target to a 50% reduction by 2035 on 2019 levels and introduced a new short-term target of a 15% reduction by 2026 on 2019 levels.

Important notice concerning this document including forward looking statements
This document contains statements that are, or may be deemed to be, “forward looking statements” which are prospective in nature. These forward looking statements may be identified by the use of forward looking terminology, or the negative thereof such as “outlook”, "plans", "expects" or "does not expect", "is expected", "continues", "assumes", "is subject to", "budget", "scheduled",
"estimates", "aims", "forecasts", "risks", "intends", "positioned", "predicts", "anticipates" or "does not anticipate", or "believes", or variations of such words or comparable terminology and phrases or statements that certain actions, events or results "may", "could", "should", “shall”, "would", "might" or "will" be taken, occur or be achieved. Forward-looking statements are not based on historical
facts, but rather on current predictions, expectations, beliefs, opinions, plans, objectives, goals, intentions and projections about future events, results of operations, prospects, financial condition and discussions of strategy.
By their nature, forward-looking statements involve known and unknown risks and uncertainties, many of which are beyond Glencore’s control. Forward looking statements are not guarantees of future performance and may and often do differ materially from actual results. Important factors that could cause these uncertainties include, but are not limited to, those disclosed in the last published annual report and half-year report, both of which are freely available on Glencore’s website.
For example, our future revenues from our assets, projects or mines will be based, in part, on the market price of the commodity products produced, which may vary significantly from current levels. These may materially affect the timing and feasibility of particular developments. Other factors include (without limitation) the ability to produce and transport products profitably, demand for our products, changes to the assumptions regarding the recoverable value of our tangible and intangible assets, the effect of foreign currency exchange rates on market prices and operating costs, and actions by governmental authorities, such as changes in
taxation or regulation, and political uncertainty.
Neither Glencore nor any of its associates or directors, officers or advisers, provides any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements in this document will actually occur. You are cautioned not to place undue reliance on these forward-looking statements which only speak as of the date of this document. 
Except as required by applicable regulations or by law, Glencore is not under any obligation and Glencore and its affiliates expressly disclaim any intention, obligation or undertaking, to update or revise any forward looking statements, whether as a result of new information, future events or otherwise. This document shall not, under any circumstances, create any implication that there has been no change in the business or affairs of Glencore since the date of this document or that the information contained herein is correct as at any time subsequent to its date.
No statement in this document is intended as a profit forecast or a profit estimate and past performance cannot be relied on as a guide to future performance. This document does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for any securities.
The companies in which Glencore plc directly and indirectly has an interest are separate and distinct legal entities. In this document, “Glencore”, “Glencore group” and “Group” are used for convenience only where references are made to  Glencore plc and its subsidiaries in general. These collective expressions are used for ease of reference only and do not imply any other relationship between the companies. Likewise, the words “we”, “us” and “our” are also used to refer collectively to members of the Group or to those who work for them. These expressions are also used where no useful purpose is served by identifying the particular company or companies.