Glencore Xstrata Says Third-Quarter Copper Output Gains 34%
Glencore Xstrata Plc (GLEN), the mining company created in a $29 billion deal five months ago, said quarterly production of copper increased 34 percent as African mines added to volumes.
Output from its own mines was 412,900 metric tons in the three months through September, Baar, Switzerland-based Glencore said today in a regulatory statement. Total copper production including feed from third-party sources was 695,600 tons. The figures include operations acquired from Xstrata Plc.
Glencore completed a 15-month takeover of Xstrata in May to create the fourth-largest mining company, now valued at $74 billion. Copper and coal sales are the biggest contributors to earnings. The trader and minerals producer last month trimmed its spending budget for the three years through to 2015 by $3.5 billion from $29 billion to combat declining demand and prices.
The group has interests in more than 35 coal mines in Colombia, Africa and Australia, accounting for about 10 percent of global seaborne supplies of the fuel. Glencore teamed up Japan’s Sumitomo Corp. (8053) last week to buy a $1 billion controlling stake in an Australian coal mine.
Total coal output gained 9 percent to 36.8 million tons in the quarter, it said. Zinc production dropped 12 percent to 332,200 tons, lead increased 5 percent to 80,700 tons and nickel retreated 6 percent to 22,500 tons.
The stock climbed 0.8 percent to close at 345.05 pence in London trading yesterday. It’s up 1.3 percent this year.
In September the company estimated cost savings of $2 billion next year through combining with Xstrata. The forecast included $1.4 billion saved by closing 33 Xstrata offices, firing workers and cutting costs at existing operations.
A review of 88 projects acquired from Xstrata resulted in activities at 44 of them being suspended, Glencore said in September. A month earlier the company wrote down the value of assets acquired in the takeover by $7.7 billion to reflect the “broader negative mining industry environment.” Glencore, the world’s biggest exporter of power-station coal, reported a first-half net loss of $8.9 billion on the writedowns.
The group employs about 190,000 people in more than 50 countries across its industrial and trading divisions. The takeover of Xstrata was completed almost two years after Glencore’s $10 billion initial public offering, which ended more than three decades of it operating as a closely held company.
Peter Grauer, the chairman of Bloomberg LP, the parent of Bloomberg News, is a non-executive director of Glencore Xstrata.
To contact the reporter on this story: Jesse Riseborough in London at email@example.com
To contact the editor responsible for this story: John Viljoen at firstname.lastname@example.org