While the company announced improved third quarter production across its operations, the changes in guidance reflect the tightening of most profit margins and coal production being 5mt (4%) down as a resulting from extension of the two-month industrial strike at Cerrejón.
Cerrejón, owned equally by Glencore, Anglo American, and BHP has been in negotiations with its largest union and earlier this week said that it has made “significant advances.”
As Glencore’s year-to-date coal production fell by 20% at 83.5 million tonnes, influenced by the strike, the miner decreased its full-year output guidance from 114 million tonnes to 109 million tonnes.
Glencore CEO Ivan Glasenberg said: “We maintain our 2020 full year production guidance, except coal, which was adjusted for the extended strike at Cerrejón. We will provide a detailed business update, including progress on climate change initiatives at our Investor Update on 4 December.”
As a result, Glencore’s London-listed shares dropped by 2.4% at 08:04 GMT on 30 October.
The generally strong sequential quarterly production of Glencore’s performance was largely impacted by reversal of short-term Covid-19-related shutdowns in Q2, as mandated by national and local governments. For this reason, copper production grew by 17.6% from the previous quarter.
“Glencore has delivered a solid third quarter operating performance, including the continued successful ramp-up of Katanga, which remains on track to achieve design capacity by year end. Our teams have adapted well to the numerous challenges presented by Covid-19,” Glasenberg said.
The miner’s own-sourced copper production of 934,700 tonnes was 8% lower than the comparable prior period, reflecting Mutanda mine in the Democratic Republic of Congo being on care and maintenance. In addition, there was a temporary suspension of operations at Antamina during Q2, partly caused by a continued strong milling performance at Collahuasi and Katanga’s ramp-up.