Glencore steps up efforts to cut debt

Glencore has taken another step to reduce its debt by selling $500m of future precious metals output, and deepened oil production cuts after prices fell further.
By The Newsroom
Published 11th Feb 2016, 16:40 BST
Updated 11th Feb 2016, 16:45 BST

Glencore said yesterday it planned to produce about 8.5 million barrels of oil in 2016, down 20 per cent from last year and lower than the 9.6 million it had estimated in December.

Brent crude prices have dropped nearly a fifth so far this year, after sliding 35 per cent in 2015 due to a glut of supply and concern about weaker demand.

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The Swiss-based mining and trading company said it had agreed to sell future precious metals production from its Antapaccay mine in southern Peru to Toronto-based Franco-Nevada.

The Antapaccay deal follows Glencore’s agreement in November to sell future silver output to Silver Wheaton Minerals for $900m in cash.

The moves are part of efforts to regain investor confidence after Glencore came under pressure to cut net debt of about $30bn – one of the highest levels in the sector – as prices for commodities such as copper and coal hit multi-year lows.

Glencore also reported on Thursday that fourth-quarter output of copper, its most lucrative product, fell 5.7 per cent to 374,700 tonnes after it shut down mines to counter sliding prices of the metal widely used in power and construction.