Glencore coal output drops amid soft market

Coal operation at the Mt Owen mine in New South Wales.

Coal operation at the Mt Owen mine in New South Wales. Image: Glencore.

Glencore has suffered a blow to its Australian coal production across all product categories during the second half of last year.

The company reported a 24 per cent decline in its coal production across the company, dropping from 139.5 million tonnes in 2019 to 106.2 million tonnes last year.

Its semi-soft coal production, which makes up the smallest percentage of Glencore’s coal portfolio, recorded the largest drop at 28 per cent.

Glencore chief executive Ivan Glasenberg said various proactive market-related supply reductions were initiated in the second half of last year, primarily with respect to coal production from Australia.

The company still maintains its 2021 production guidance for the commodity, as announced in December.

It aims to deliver 109-117 million tonnes of coal, up from an actual production of 106 million tonnes during 2020.

This is based on “cautious coal supply increases” in Australia after last year’s reductions.

Meanwhile, Glencore’s zinc production improved by 9 per cent to around 1.17 million tonnes last year, guided by an improved output from the Mount Isa operations.

Its copper production, however, fell by 8 per cent to over 1.2 million tonnes last year.

This was largely due to Glencore’s Mutanda copper-cobalt operation in the Democratic Republic of Congo being on care and maintenance.

Glasenberg said that the company’s mining assets had performed well in difficult circumstances during 2020.

“Various precautionary operating changes made in (the second quarter) continued into the second half, with sustainable and safe working practices embedded for the pandemic era,” he said.

“Production picked up accordingly, with year-over-year increases in zinc, gold and silver production. Work continues to advance options around other non-core assets within the group.”

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