Business

Glencore production solid

Friday, November 02, 2012    

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GENEVA, Switzerland — GLENCORE International, one of the biggest traders in raw materials like metals and coal, saw its production levels rise in the third quarter despite a drop in the price of many commodities.

The Swiss-based commodities giant — whose production reports serve as a global snapshot of the supply and demand for commercial materials — reported Thursday that business during the third quarter was "good, despite generally weaker commodities prices."

Production rose in both the July to September quarter and on a nine-month basis, the company said. Among the highlights were an 18 per cent increase in gold production by its Kazakh producer Kazzinc and a doubling in coal production, mainly in South Africa, over the first nine months of the year.

But the company also noted that challenges such as transport strikes in South Africa, a strike on the border of Congo and Zambia and power outages in Congo had cost it some growth. It also saw no turnaround in the weakening global economy.

"We are not assuming any short-term material improvement in global macro conditions," the company said, adding that it was "confident" it can remain competitive.

Glencore said its debt fell and it had US$9 billion ($815 billion) in cash liquidity.

Earlier this week, Glencore told European Union regulators it would relinquish some dominance in the European zinc market to gain approval of its US$70-billion merger with Anglo-Swiss mining company Xstrata PLC, which is based in Zug, Switzerland, and was formed in 2002 when it bought Glencore's coal assets. Due to the EU's antitrust concerns, Glencore offered to cancel its exclusive marketing deal with Belgian-Swiss leading zinc producer Nyrstar NV.

That would give an opening to Glencore's rivals to take on the role of trading house for Nyrstar, the world's largest zinc smelter.

Glencore extracts, ships and refines raw materials from coal to copper to corn. It is based in the Swiss town of Baar but has its main stock listing in London. Shares in Glencore were up 1.25 per cent Thursday at 3.44 British pounds (US$5.56).

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