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REPORT: Glencore Increases Copper, Coal Production in First Half

The worlds largest commodity trader Glencore (LSE:GLEN) recorded a 13 percent increase in copper output to 741,000 tons, in line with market forecasts.C...

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|Aug 14|magazine5 min read

The world’s largest commodity trader Glencore (LSE:GLEN) recorded a 13 percent increase in copper output to 741,000 tons, in line with market forecasts.

Coal for the London-listed company also rose in output, increasing five percent to 71.2 million tons thanks in part to the expansion at its Australian mines.

The two metals and minerals have been Glencore’s most profitable assets so far in 2014.

"Second-quarter production was broadly in line with our forecasts. The production profile for the group is weighted towards the second half and we therefore expect volume improvements going forward," Citi analysts said.

Copper output improved primarily by growth at it African and South American mines, including its Mutanda and Katanga mines in the Democratic Republic of Congo and at its Antapaccay mine in Peru. Almost half of the company’s profits come from the red metal.

While copper and coal have performed well for Glencore, output for zinc and nickel has not.

Zinc dropped 11 percent to 650,400 tons in the first-half and nickel production fell eight percent to 49,100 tons.

The dip in nickel production can be contributed to the closure of mines in Australia and the Dominican Republic.

The company’s Koniambo mine in New Caledonia, a multi-billion Greenfield project, produced 4,100 tons of nickel in ferronickel in the first half reporting.

The previous goal for Koniambo was 55,000 tons by 2016. Glencore plans to announce a revised target number for the mine next week.

"The ramp up of Koniambo is still likely to take longer than expected, and could be an incremental downside risk," Nomura analysts said in a note.

Shares for Glencore were down 1.2 percent yesterday, in line with a one percent fall in the UK-listed mining sector.