July 31, 2018 / 7:14 AM / a year ago

Glencore trims full-year coal, lead guidance, copper rises

LONDON (Reuters) - Glencore (GLEN.L) on Tuesday lowered full-year guidance for its lead and coal output, while first-half copper production rose 8 percent from a year earlier and cobalt increased 31 percent as operations ramped up in Democratic Republic of Congo.

FILE PHOTO: The logo of commodities trader Glencore is pictured in front of the company's headquarters in Baar, Switzerland, November 20, 2012. REUTERS/Arnd Wiegmann/File Photo

Guidance for full-year lead output was lowered by 5 percent and coal trimmed by 1 percent. Glencore plans to give further details when it releases first-half results next week.

Glencore’s share price has fallen around 16 percent this year, underperforming its peers as investors’ concerns have mounted over the miner’s exposure to geopolitical risk.

Shares were trading around 1 percent higher by 0730 GMT.

Congo is potentially a rich source of cobalt and copper, needed for an anticipated increase in electric vehicle use, but Glencore’s activities there have been overshadowed by a dispute over a mining code signed into law this year and a U.S. Department of Justice investigation.

Glencore said in February its copper output this year should rise to nearly 1.5 million tonnes as its Katanga mine in Congo ramps up to add roughly 150,000 tonnes, as well as 11,600 tonnes of cobalt.

Analysts said Tuesday’s output figures were broadly in line but Glencore would need to meet previous guidance for a stronger second half to be on track.

Its first-half copper sales were down by 32,000 tonnes because of shipment timing, Glencore said.

For battery mineral nickel, first-half output was 21 percent higher than a year earlier, following expanded output at Koniambo in New Caledonia and a shutdown at Murrin in Australia the year before.

Metals markets have lost steam this year because of concerns of a possible trade war and doubts about Chinese demand, but nickel CMNI3 has bucked the trend, rising nearly 9 percent so far in 2018.

The miner-trader did not provide an update on expectations for its trading division.

At the time of its results in February, its chief financial officer said its marketing guidance of $2.2-3.2 billion EBIT (earnings before interest and tax) was meant to be broad enough not to need frequent revision.

Reporting by Barbara Lewis; editing by Jason Neely and Dale Hudson

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