Glencore Plc, the Swiss multinational commodity trading and mining giant partially owned by South African billionaire Ivan Glasenberg, has announced a significant cut in its cobalt production targets for the current year.
Founded in the 1970s as a trading company, Glencore is set to reduce operating rates at the Mutanda mine in Congo, with consequential impacts on its copper production. The decision comes as the company faces difficulties in selling the stockpiled metal, leading to a reassessment of its production strategy.
The company revealed on Thursday that it aims to produce between 35,000 to 40,000 tonnes of cobalt this year, marking a substantial 42-percent reduction from the production target set in December 2022.
Glencore faces production hurdles with unsold cobalt, adapts to market dynamics
The move is anticipated to result in higher production costs at Glencore’s copper mines, attributed partly to the accumulation of unsold cobalt. The company has acknowledged the challenging market conditions and the need to adjust its production levels accordingly.
In financial terms, Glencore expects its trading business to have generated $3.5 billion in adjusted pretax earnings last year, narrowing the previous guidance range of $3.5 billion to $4 billion.
Glasenberg’s wealth soars: 9.81-percent stake in Glencore yields $97.4-million gain
Despite the challenges in the production sector, Glencore experienced a positive turn in its share price, surging by 2.49 percent over the past 24 hours to £4.25 ($5.42). This increase propelled the group’s market capitalization above $66 billion.
Notably, the surge in Glencore’s share price contributed to a substantial boost in Glasenberg’s net worth. With a 9.81-percent stake in Glencore, Glasenberg witnessed a $97.4-million surge in his fortune.
However, this positive comes against the backdrop of a year-to-date 9.56-percent decline in Glencore shares, resulting in a net worth decrease for Glasenberg from $8.86 billion at the start of the year to $8.16 billion at the time of drafting this report.