Glencore ups copper, cobalt production forecasts on Katanga strength, Mutanda return

Diversified miner Glencore has upped its copper and cobalt production forecasts for 2021 and 2022 on the back of strong production at Katanga and the Mutanda mine coming back online, it said Dec. 2.

Glencore Head of Assets Peter Freyberg said in an investor update presentation call that the Katanga operations in the Democratic Republic of Congo continued to perform well in line with production achieved in 2022, with the overall copper portfolio operating mostly within plan.

"In terms of outlook for the next four years, in copper we can see the effect of the Ernest Henry disposal plus there are some modest declines in units from non-copper department, but generally flat," Freyberg said.

The miner forecasts copper production at 1.22 million mt in 2021, 1.15 million mt in 2022, 1.18 million mt in 2023, and 1.12 million mt in 2024.

On the cobalt side, Freyberg said some volume growth was being seen due to Mutanda in the DRC coming back online, as well as some further growth at Katanga.

Cobalt production was forecast at 35,000 mt in 2021, 48,000 mt in 2022, and 50,000 mt/year in 2023 and 2024.

Freyberg also gave an update on Mutanda, which was in care and maintenance until recently.

"We are in the process of starting this operation up and we did produce our first copper cathode in October," he said, adding that the site and processing plant was in good shape and had come through the care and maintenance period well, with a 20-year mine life expected.

"The first phase of that life of asset plan will be the offside phase where we are processing some of the existing stockpiles for the next two to three years while we open up some more oxide reserves in the pit. We are continuing with the sulfide studies," Freyberg said.

The miner plans to mine and process sulfide resources from 2028, using additional flotation, an oxygen plant and Glencore's Isamill and Albion Process technologies.

He added that Mutanda was a relatively modest project in terms of capex and it was also highly capital efficient, with the first few years of production expected to run at an average capacity of just over 25,00-30,000 mt/year of copper and just over 10,000 mt of cobalt.

The average output over the 20-year mine life was expected to be around 76,000 mt/year of copper and just over 20,000 mt/year cobalt, Freyberg added.

Improving nickel output

Looking at Glencore's other metals, nickel production was expected to total 105,000 mt in 2021, 115,000 mt in 2022, 120,000 mt in 2023, and 135,000 mt in 2024.

"With nickel its always of important to talk about the focus asset Koniambo ... it had a difficult first three quarters. It's taken some time to recover from the serious impact that COVID had on the site and plant in 2020," Freyberg said, although he added that there had been a marked improvement in the operating integrity and production over the past couple of months.

Zinc production guidance was set at 1.17 million mt in 2021, 1,11 million mt in 2022 and 2023, and 915,000 mt in 2024, with the ramp-up of the Zhairem asset being offset by disposal of its Bolivian assets and the closure of the Lady Loretta and Kidd operations over next two years.

Freyberg said the ferrochrome department was also expected to perform well, with 1.43 million mt of production forecast for 2021, 1.46 million mt for 2022, and 1.48 million mt/year expected in 2023 and 2024.

"Bottom line when we look at the copper equivalent, we've actually shown around a 10% growth into next year and then steady after that," Freyberg said.

Reducing emissions

Glencore aims to be a net-zero emissions business across its Scope 1, 2 and 3 emissions by 2050.

In 2019, the company's total baseline Scope 1 and 2 emissions were 29.2 million mt of CO2 equivalent.

Freyberg said the company's mix of commodities combined with the geographies in which it operated put it in a good position to reduce its emissions, including growing opportunities to replace fossil fuel electricity at its assets with renewables globally.