Glencore Cuts Coal Target Again as Colombian Strike Hits Output
Glencore Cuts Coal Target Again as Colombian Strike Hits Output
(Bloomberg) -- Glencore Plc, the world’s biggest shipper of coal, reduced its production target for the third time this year as the company faces an extended strike at a key Colombian mine.
Glencore now expects to produce around 109 million tons of coal this year, compared with an earlier goal of about 114 million tons, the company said in a statement Friday.
Production in the first nine months of 2020 was 20% lower than a year earlier as a result of pandemic-related disruptions, the strike at the Cerrejon mine and “volume reductions across the Australian portfolio, during a time of weak market conditions.”
Thermal coal, used in power stations, has been one of the hardest-hit commodities this year as the global slowdown reduced usage. In Europe, the fuel is also increasingly being displaced by cheaper and cleaner gas.
Glencore previously lowered its coal target in July after making a small reduction in April. The company has a history of cutting production of commodities to defend prices, and billionaire Chief Executive Officer Ivan Glasenberg hinted earlier this month it was considering more significant coal cuts that could be announced at an investor day in early December.
Glencore tightened the forecast ranges for the rest of its commodities but left overall guidance unchanged.
Third-quarter production for most other commodities rose as Glencore’s mining operations continued to recover from the early impact of the coronavirus pandemic. Copper output rose 18%, while zinc production increased 22% from the previous quarter.
©2020 Bloomberg L.P.