JOHANNESBURG (miningweekly.com) – In addition to the interim dividend of $2.8-billion, diversified mining company Glencore on Tuesday announced a top-up of $2.2-billion, which lifted this year’s total announced shareholder returns to $9.3-billion.

“If you look at the results as a whole for 2023 versus some of our history, and if we exclude 2022 – which, as we know, was an exceptional year because of its circumstances –  this is the best first half we’ve had in the last 20 years,” Glencore CEO Gary Nagle said during the London- and Johannesburg-listed company’s presentation of half-year results, covered by Mining Weekly. (Also watch attached Creamer Media video.)

Glencore reported half-year earnings before interest, taxes, depreciation and amortisation (Ebitda) of $9.4-billion, $7.4-billion of that from the industrial asset business and on the marketing side, an adjusted marketing Ebit of $1.8-billion, annualising above the guidance range of $2.2-billion to $3.2-billion a year. With the top end of range exceeded, the company is guiding between $3.5-billion and $4-billion for the year.

“We’re nicely on track to meet that guidance for the full year on a very solid and strong set of results from the marketing side of $1.8-billion. The business remains highly cash-generative and through the first half of the year, the cash generated by our operating activities was just short of $8.5-billion, which has allowed us to return additional cash to our shareholders,” said Nagle.

The $2.2-billion top-up shareholder return is broken up between R1-billion in cash dividends and $1.2-billion of share buyback, taking the already announced 2023 returns to the R9.3-billion return.

ENVIRONMENTAL SCORECARD

On the environmental side, during the early part of the year the company published updates on its progress in the three main areas of climate, water and nature, with the 2022 Climate Report and 2022 Sustainability Report providing transparency on how it approached its ESG and in particular, the environmental side of the business.

On the social side, the loss of life of an employee has resulted in an intensification of efforts to strive for zero harm. On the back of record 2022 profits, Glencore paid $12-billion in tax, royalties and levies, compared with $7.6-billion in 2021,

On the governance side, under agreements with the Department of Justice, two independent compliance monitors have begun work. Overall tailings conformance has also been achieved to the Global Industry Standard on Tailings Management (GISTM) for "extreme” and “very high consequence” tailings dams, which have been independently assured by third-party assurance. Work is continuing on full tailings dam disclosure, with the remainder to be made known by 2025, as required under GISTM.

TRANSITION METALS

Glencore took first-half steps to invest in three transition metals opportunities that firmed up its copper, cobalt, aluminium-alumina and zinc decarbonising metals range.

The first, in Alunorte, provides Glencore with long-term exposure to carbon alumina and bauxite. The second makes Glencore the sole owner and operator of the MARA copper project in Argentina, and the third involves an agreement to acquire the remaining 17.8% of Polymet to gain access to copper, nickel and platinum-palladium.

“Zinc is sometimes the forgotten commodity of decarbonisation, but it is absolutely critical in the decarbonisation journey,” said Nagle.

As a producer of a million tons of copper a year, Glencore has considerable brownfield copper leeway to add another million tons of copper, which will be brought on as the world needs it.

“We also continue to grow our recycling business and we promote circularity and will continue to invest in that, both organically and inorganically.

“We’re already producing a significant amount of metals through our recycling business and it gives us an added advantage in being able to add third-party material, our own material and recycled material.

“Not only is it the responsible thing to do but when you look at where the world is going, and the requirements under law, and the requirements of what our customers need, to be able to provide recycled material is beneficial to our business and we expect to see that business grow further in the years ahead,” said Nagle.

MODERATING INFLATION, CHINA

Moderating inflation and supportive government policy in China across key end-user sectors, are bringing a more positive macroeconomic second-half  backdrop, Nagle noted.

Low metal inventories, higher production costs, geopolitical uncertainty and energy transition demand are all supportive of above-average real-term prices through the cycle and into the longer term, he added.

Glencore’s diversified business model across industrial and marketing, focusing on metals and energy, has proved itself adept in a range of market conditions, giving the company a solid foundation to navigate the near-term macroeconomic uncertainty, as well as meet the resource needs of the future.