Glencore has announced the sale of further assets to refinance its debt. The company says it is beginning the process of selling its Cobar copper mine in Australia and Lomas Bayas copper mine in Chile following “unsolicited expressions of interest from various potential buyers.”
This announcement follows from a decision made public on Friday to reduce the production of zinc across its operations in Australia, South America and Kazakhstan for a total of 500,000 tonnes, equivalent to approximately one third of Glencore’s annual zinc production. Glencore’s operations at Lady Loretta in Australia and Iscaycruz in Peru will be suspended and operations at George Fisher and McArthur River in Australia and various mine operations in Kazakhstan will cut production levels. The changes will reduce fourth quarter 2015 mine production by approximately 100,000 tonnes of contained zinc metal and will affect employees at those operations.
According to a company statement, Glencore remains positive about the medium and long-term outlook for zinc, lead and silver prices. The short-term strategy in response to the fall in commodity prices, as discussed by Glencore CEO Ivan Glasenberg, is to reduce supply from the markets while waiting for the price to adjust. Glencore has applied the strategy already to copper mines in Africa. “If you are not making money, I believe you should stop production and take out supply,” Glasenberg said at the Financial Times Africa Summit last week, adding that there was “no point” in extracting the metal without making a profitable margin.