Full Year 2023 Production Report

Glencore PLC

01 February 2024

 

NEWS RELEASE

Baar, 1 February 2024

Full Year 2023 Production Report

Glencore Chief Executive Officer, Gary Nagle:

"Overall 2023 production was in line with our earlier revised guidance, with stronger second half volumes delivered across our key commodities, including copper, zinc, nickel and coal. Compared to 2022, the moderately lower year-on-year copper and zinc department managed production volumes, primarily reflect disposals of the Cobar copper mine and various South American zinc operations. Nickel volumes fell 9%, owing to higher third-party production at INO and Murrin Murrin maintenance. Coal production was 3% higher, noting the numerous capacity constraints (weather, blockades and logistics) that impacted the base period.

"In this production update, we also provide updated guidance for 2024. Copper in the 950-1,010kt range, reflects the sale of Cobar, as well as cobalt market-related adjustments to operating rates at Mutanda vs previous guidance from our December 2022 Investor Update. Zinc guidance is positioned within a similar range at 900-950kt, while nickel production guidance is 80-90kt, excluding Koniambo (KNS). Coal production is forecast to be steady at the guidance range mid-point of 110Mt, excluding any incremental volumes from the recently announced acquisition of a 77% interest in Teck's steelmaking coal business, currently going through its various approval processes.

"We furthermore expect to report a FY 2023 Marketing Adjusted EBIT result of approximately $3.5 billion, largely repeating H1's run-rate."

Production from own sources - Total¹

		2023	2022	Change %
Copper	kt	1,010.1	1,058.1	(5 )
Cobalt	kt	41.3	43.8	(6)
Zinc	kt	918.5	938.5	(2)
Lead	kt	182.7	191.6	(5)
Nickel	kt	97.6	107.5	(9)
Gold	koz	747	661	13
Silver	koz	20,011	23,750	(16)
Ferrochrome	kt	1,162	1,488	(22)
Coal	mt	113.6	110.0	3

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

Production guidance

				Actual FY	Actual          FY	Actual FY		Guidance FY
				2021	2022	2023		2024
Copper	kt			1,196	1,058	1,010		950-1,010
Cobalt	kt			31.3	43.8	41.3		35-40
Zinc	kt			1,118	939	919		900-950	1
Nickel	kt			102	108	98		80-90	2
Ferrochrome	kt			1,468	1,488	1,162		1,100-1,200
Coal	mt			103	110	114		105-115	3

1 Excludes Volcan.

2 In relation to KNS, we announced in September 2023 that Glencore would not continue to fund ongoing operations from March 2024 and, given such uncertainty, 2024's nickel production guidance above is presented ex-KNS.

3 Guidance excludes any contribution from the Elk Valley Resources (EVR) steelmaking coal assets, in which Glencore agreed in November 2023 to acquire a 77% interest from Teck Resources Limited.

Realised prices

	Realised		LME (average 12 months) $/t	Difference            %
	¢/lb	$/t
Copper	367	8,091	8,485	(5)
Zinc	116	2,564	2,650	(3)
Nickel	851	18,761	21,487	(13)

The average Newcastle coal (NEWC) settlement price for 2023 was $173/t. After applying a portfolio mix adjustment (component of our regular coal cash flow modelling guidance) of $32/t to reflect e.g. movements in the pricing of non-NEWC quality coals, coking coal margins and effect of JPU fixed-price contracts, an average thermal-equivalent realised price of c. $141/t can be applied across all coal sales volumes.

Production highlights

•       Own sourced copper production of 1,010,100 tonnes was 48,000 tonnes (5%) lower than 2022, primarily reflecting the sale of Cobar in June 2023 and lower copper by-product production outside the Copper department. Own sourced copper sales during the period were some 13,000 tonnes lower than net relevant production, due to the timing of shipments.

•      Own sourced cobalt production of 41,300 tonnes was 2,500 tonnes (6%) lower than 2022, mainly due to feed plan adjustments at Mutanda, in the context of an oversupplied market.

•       Own sourced zinc production of 918,500 tonnes was 20,000 tonnes (2%) lower than 2022, mainly reflecting the 2022 disposals of South American zinc operations (27,300 tonnes) and the closure of Matagami (17,300 tonnes), offset by stronger production from Kazzinc (Zhairem) and Antamina.

•       Own sourced nickel production of 97,600 tonnes was 9,900 tonnes (9%) lower than 2022, primarily reflecting higher INO third party production (versus own sourced) and a planned shutdown of Murrin Murrin for routine maintenance, somewhat offset by a more consistent production performance from Koniambo.

•       Attributable ferrochrome production of 1,162,000 tonnes was 326,000 tonnes (22%) lower than 2022, mainly due to planned additional smelter downtime during the 3-month high electricity demand winter season, a period of elevated power prices. Q4 2023 production was 133,000 tonnes (85%) higher than Q3 2023, as the smelter portfolio progressively restarted, albeit with the Rustenburg smelter remaining idle, pending an improved price/cost environment.

•       Coal production of 113.6 million tonnes was 3.6 million tonnes (3%) higher than 2022, reflecting higher productivity in South Africa and a year over year easing in certain external factors that constrain capacity, such as wet weather and blockades.

Unit cost guidance

•       Aggregate thermal coal unit cost for FY 2023 is expected to be reported moderately below the previous guidance provided alongside our 2023 Half-Year results, primarily reflecting lower royalties. We expect to report higher copper, zinc and nickel FY 2023 unit costs than previous guidance, reflecting increased inflation across key operating regions, as well as the impact of cobalt stockpiling and related non-cash inventory adjustments within copper, a fixed cost volume variance impact for zinc and higher third-party feed production in nickel.

Other matters

•       The Group's mineral resources and ore reserves report for 2023 has been published today on our website.

To view the full report please click here: https://www.glencore.com/.rest/api/v1/documents/static/f2f3f568-9437-4c55-bcb6-49d2fc96d305/GLEN_2023-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 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 support decarbonisation while meeting the energy needs of today.

With around 140,000 employees and contractors and 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.

We recognise our responsibility to contribute to the global effort to achieve the goals of the Paris Agreement by decarbonising our own operational footprint. We believe that we should take a holistic approach and have considered our commitment through the lens of our global industrial emissions. Against a 2019 baseline, we are committed to reducing our Scope 1, 2 and 3 industrial emissions by 15% by the end of 2026, 50% by the end of 2035 and we have an ambition to achieve net zero industrial emissions by the end of 2050. For more detail see our 2022 Climate Report on the publication page of our website at glencore.com/publications.

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 (without limitation) 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, without limitation, environmental, social and governance) related goals, ambitions, targets, intentions, visions, milestones and aspirations; approval of certain projects and consummation of certain transactions (including, without limitation, acquisitions and disposals); closures or divestments of certain assets, operations or facilities (including, without limitation, 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, without limitation, "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. The information in this document provides an insight into how we currently intend to direct the management of our businesses and assets and to deploy our capital to help us implement our strategy. The matters disclosed in this document are a 'point in time' disclosure only. 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 (without limitation) 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 risks and uncertainties may materially affect the timing and feasibility of particular developments. Other factors which impact risks and uncertainties 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, including (without limitation) transition risks and the evolution and development of the global transition to a low carbon economy; recovery rates and other operational capabilities; health, safety, environmental or social performance incidents; natural catastrophes or adverse geological conditions, including (without limitation) the physical risks associated with climate change; the outcome of litigation or enforcement or regulatory proceedings; the effect of foreign currency exchange rates on market prices and operating costs; actions by governmental authorities, such as changes in taxation or regulation or changes in the decarbonisation plans of other countries; and political uncertainty.

Readers, including (without limitation) investors and prospective investors, should review and take into account these risks and uncertainties (as well as the other risks identified in this document) when considering the information contained in this document. Readers should also note that the high degree of uncertainty around the nature, timing and magnitude of climate-related risks, and the uncertainty as to how the energy transition will evolve, makes it difficult to determine and disclose the risks and their potential impacts with precision. Neither Glencore nor any of its affiliates, associates, employees, directors, officers or advisers, provides any representation, warranty, assurance or guarantee that the occurrence of the events, results, performance, achievements or other outcomes expressed or implied in any forward-looking statements in this document will actually occur. Glencore cautions readers against reliance on any forward-looking statements contained in this document, particularly in light of the long-term time horizon which this report discusses and the inherent uncertainty in possible policy, market and technological developments in the future.

No statement in this document is intended as any kind of forecast (including, without limitation, a profit forecast or a profit estimate), guarantees or predictions of future events or performance and past performance cannot be relied on as a guide to future performance. Neither Glencore nor any of its affiliates, associates, employees, directors, officers or advisers, provides any representation, warranty, assurance or guarantee as to the accuracy, completeness or correctness, likelihood of achievement or reasonableness of any forward-looking information contained in this document.

Glencore operates in a dynamic and uncertain market and external environment. Plans and strategies can and must adapt in response to dynamic market conditions, joint venture decisions, new opportunities that might arise or other changing circumstances. Investors should not assume that our strategy on climate change will not evolve and be updated as time passes. Additionally, a number of aspects of our strategy involve developments or workstreams that are complex and may be delayed, more costly than anticipated or unsuccessful for many reasons, including (without limitation) reasons that are outside of Glencore's control.

There are inherent limitations to scenario analysis and it is difficult to predict which, if any, of the scenarios might eventuate. Scenario analysis relies on assumptions that may or may not be, or prove to be, correct and that may or may not eventuate and scenarios may also be impacted by additional factors to the assumptions disclosed. Given these limitations we treat these scenarios as one of several inputs that we consider in our climate strategy.

Due to the inherent uncertainty and limitations in measuring greenhouse gas (GHG) emissions and operational energy consumption under the calculation methodologies used in the preparation of such data, all CO₂e emissions and operational energy consumption data or volume references (including, without limitation, 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 emissions and operational energy consumption data, see our latest Basis of Reporting, Climate Report and Extended ESG Data, which can be found on our website.

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.

Except as required by applicable regulations or by law, Glencore is not under any obligation, and Glencore and its affiliates expressly disclaim any intention, obligation or undertaking, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. This document shall not, under any circumstances, create any implication that there has been no change in the business or affairs of Glencore since the date of this document or that the information contained herein is correct as at any time subsequent to its date. Certain statistical and other information 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, and makes no representation or guarantee in relation to, such information (including, without limitation, as to its accuracy, completeness or whether it is current). Glencore cautions readers against reliance on any of the industry, market or other third-party data or information contained in this report.

Subject to any terms implied by law which cannot be excluded, Glencore accepts no responsibility for any loss, damage, cost or expense (whether direct or indirect) incurred by any person as a result of any error, omission or misrepresentation in information in this report.

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.

 

END