Glencore’s growth projects ‘on schedule’

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Commodities trader Glencore, in the process of merging with miner Xstrata, said yesterday first-quarter activity in its closely watched marketing arm was “robust”, as it posted higher output from key growth projects.

In a trading update ahead of its maiden shareholder meeting, Glencore said its major growth projects were “overall” on schedule and within budget, despite heavy rains in Colombia and power outages and equipment failure in Congo.

“Glencore has traded well across all segments of its business in 2012,” the trader said.

“Overall, Chinese demand continues to be healthy. It remains our view that available global inventories are generally low, both on exchanges and within supply chains.”

Glencore agreed in February to take over miner Xstrata, in which it already has a stake of almost 34 per cent, in an all-share deal valued at $35bn at Tuesday’s close.

It confirmed yesterday that the two expected at least $500m of pre-tax synergies in 2013, as well as “material scope for portfolio optimisation”.

Over the quarter to the end of March, Glencore said gold production from its Kazzinc operations in Kazakhstan rose 24 per cent as recovery rates increased. Glencore confirmed it is expecting to complete a deal to increase its stake in the asset to 93 per cent from 50.7 per cent in the third quarter.

Its Katanga copper operation in the Democratic Republic of Congo saw a 2 per cent increase in output to 18,749 tonnes of total contained copper, hit by a mill failure and power outages.