Full Year 2022 Production Report

RNS Number : 4692O

Glencore PLC

01 February 2023

 

NEWS RELEASE

Baar, 1 February 2023

Full Year 2022 Production Report

Glencore Chief Executive Officer, Gary Nagle:

"Overall, 2022 production volumes were in line with our revised guidance from October 2022, with final quarter sequential production increases delivered across most of our key commodities, including copper, zinc, nickel and coal. During the year, however, we saw a mixed overall production performance. Copper and zinc volumes reflect the base effect of asset sales (notably Ernest Henry and Bolivia), Katanga's geotechnical constraints and supply chain headwinds in Kazakhstan. Nickel volumes benefitted from operating two lines at Koniambo for the majority of the year, partially offset by Canadian industrial action. Overall coal volumes rose during the year with the acquisition, in January 2022, of the balance of Cerrejón that we did not already own, however, on a like for like basis, Group production actually declined by almost 9 million tonnes (7%), primarily due to abnormally wet weather."

Production from own sources - Total¹

		2022	2021	Change %
Copper	kt	1,058.1	1,195.7	(12 )
Cobalt	kt	43.8	31.3	40
Zinc	kt	938.5	1,117.8	(16 )
Lead	kt	191.6	222.3	(14 )
Nickel	kt	107.5	102.3	5
Gold	koz	661	809	(18)
Silver	koz	23,750	31,519	(25)
Ferrochrome	kt	1,488	1,468	1
Coal	mt	110.0	103.3	6
Oil (entitlement interest basis)	kboe	6,131	5,274	16

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

Production guidance (unchanged from our December 2022 Investor Update)

				Actual FY	Actual   FY	Actual FY		Guidance FY
				2020	2021	2022		2023
Copper	kt			1,258	1,196	1,058		1,040 ± 30
Cobalt	kt			27.4	31.3	43.8		38 ± 5
Zinc	kt			1,170	1,118	939		950 ± 30	1
Nickel	kt			110	102	108		112 ± 5
Ferrochrome	kt			1,029	1,468	1,488		1,310 ± 30
Coal	mt			106	103	110		110 ± 5

1 Excludes Volcan.

Coal realised pricing

The average Newcastle coal (NEWC) settlement prices for 2022 was $360/t. After applying a portfolio mix adjustment (component of our regular coal cash flow modelling guidance) of $115/t to reflect e.g. movements in the pricing of non-NEWC quality coals, coking coal margins and the lag effect of 2021's JPU fixed-price contracts, an average thermal-equivalent realised price of c. $245/t can be applied across all coal sales volumes.

Production highlights

• Own sourced copper production of 1,058,100 tonnes was 137,600 tonnes (12%) lower than 2021, due to the basis change arising from the sale of Ernest Henry in January 2022 (44,800 tonnes), the ongoing geotechnical constraints at Katanga (44,300 tonnes), Collahuasi planned mining sequence changes (26,100 tonnes) and a lower contribution from Mount Isa (21,000 tonnes).

• Own sourced cobalt production of 43,800 tonnes was 12,500 tonnes (40%) higher than 2021 following Mutanda's restart in Q4 2021.

• Own sourced zinc production of 938,500 tonnes was 179,300 tonnes (16%) lower than 2021, reflecting the disposal / cessation of South America operations (83,400 tonnes), closure of Matagami (30,100 tonnes) and lower volumes from Mount Isa (39,600 tonnes), as Lady Loretta approaches end of mine life.

• Own sourced nickel production of 107,500 tonnes was 5,200 tonnes (5%) higher than 2021, reflecting Murrin Murrin's scheduled major maintenance shut in the prior year and Koniambo running two production lines for the majority of 2022, partially offset by lower production at INO due to strike action in Canada and Norway.

• Attributable ferrochrome production of 1,488,000 tonnes was in line with 2021.

• Coal production of 110.0 million tonnes was 6.7 million tonnes (6%) higher than 2021, reflecting higher attributable production from Cerrejón, following the acquisition in January 2022 of the remaining two-thirds interest that Glencore did not already own, less declines elsewhere in the portfolio. On a like for like basis, overall Group production declined by 8.9 million tonnes (7%), primarily due to wet weather challenges and an extended community blockade in Colombia.

• Entitlement interest oil production of 6.1 million barrels of oil equivalent was 0.9 million barrels (16%) higher than 2021, due to a full year of production from the Alen gas project in Equatorial Guinea, following its commencement in March 2021.

Other matters

• The Group's mineral resources and ore reserves report for 2022 is published today on our website.

To view the full report please click here: https://www.glencore.com/dam/jcr:e43e5f94-6484-4332-9f09-e3601aafb44f/GLEN_2022-FY_ProductionReport.pdf

For further information please contact:

Investors
Martin Fewings	t: [phone]	m: [phone]	[e-mail]
Media
Charles Watenphul	t: [phone]	m: [phone]	[e-mail]

www.glencore.com

Glencore LEI: 2138002658CPO9NBH955

Please refer to the end of this document for disclaimers including on forward-looking statements.

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. Such statements may include, but are not limited to, statements in respect of trends in commodity prices and currency exchange rates; demand for commodities; reserves and resources and production forecasts; expectations, plans, strategies and objectives of management; climate scenarios; sustainability performance (including environmental, social and governance) related goals, ambitions, targets, intentions, visions, milestones and aspirations; approval of certain projects and consummation of certain transactions (including acquisitions and disposals); closures or divestments of certain assets, operations or facilities (including associated costs); capital costs and scheduling; operating costs and supply of materials and skilled employees; financings; anticipated productive lives of projects, mines and facilities; provisions and contingent liabilities; and tax, legal and regulatory developments.

These forward-looking statements may be identified by the use of  forward-looking terminology, or the negative thereof including, but not limited to, "outlook", "guidance", "trend", "plans", "expects", "continues", "assumes", "is subject to", "budget", "scheduled",  "estimates", "aims", "forecasts", "risks", "intends", "positioned", "predicts", "projects", "anticipates", "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 conditions and discussions of strategy, and reflect judgments, assumptions, estimates and other information available as at the date of this document or the date of the corresponding planning or scenario analysis process.

By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements to differ materially from any future event, results, performance, achievements or other outcomes expressed or implied by such forward-looking statements. Important factors that could impact these uncertainties include, but are not limited to, those disclosed in the risk management section of our latest Annual Report and Half-Year Report (which can each be found on our website). These uncertainties 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; changes in environmental scenarios and related regulations; recovery rates and other operational capabilities; health, safety, environmental or social performance incidents; natural catastrophes or adverse geological conditions; the outcome of litigation or enforcement or regulatory proceedings; 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.

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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. Certain statistical and other information about Glencore included in this document is sourced from publicly available third-party sources. As such it has not been independently verified and presents the view of those third parties, but may not necessarily correspond to the views held by Glencore and Glencore expressly disclaims any responsibility for, or liability in respect of, such information.

Due to the inherent uncertainty and limitations in measuring greenhouse gas and air emissions and operational energy consumption under the calculation methodologies used in the preparation of such data, all greenhouse gas and air emissions and operational energy consumption data or volume references (including ratios and/or percentages) in this document are estimates. There may also be differences in the manner that third parties calculate or report such data compared to Glencore, which means that third-party data may not be comparable to Glencore's data. For information on how we calculate our greenhouse gas and air emissions and operational energy consumption data, see our latest Reporting criteria for selected KPIs, Climate Report and Extended ESG Data, which can be found on our website.

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..

 

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