London 09/10/2015 - Glencore will cut its annual zinc metal mining production by a 500,000 tonnes in order to preserve the value of its reserves until prices rebound, the struggling UK-Swiss mining and trading company said today.
In the fourth quarter alone, the company will reduce output by approximately 100,000 tonnes of contained zinc metal, the release said.
Glencore’s operations at Iscaycruz in Peru and at Lady Loretta in Australia will be suspended, additionally operations at the company’s George Fisher and McArthur River mines in Australia and its mines in Kazakhstan will reduce production levels.
The cuts represent a third of Glencore’s annual zinc production. This also equates to roughly 3.7 percent of 13.513 million tonnes of the global zinc produced in 2014, according to figures from the International Lead Zinc Study Group (ILZSG).
After ending 2014 as the best performing of all base metals, three-month zinc prices on the London Metal Exchange have collapsed by 24 percent since the start of the year to $1,678 per tonne at the time of writing.
The company will also reduce its production of lead metal by about 100,000 tonnes, the release added.
“Glencore remains positive about the medium and long term outlook for zinc, lead and silver prices. This decision will ensure that our zinc operations are sustainable well into the future,” the company said.
Glencore share prices have been battered over the past month following a downturn in global commodity prices, as well as investor worries on the company’s vast debt pile.
(Editing by Tom Jenneman)