Glencore posts first annual loss in four years as impairments bite

The Democratic Republic of Congo supplies about 60 percent of the world’s cobalt, most of it from large mines owned by Glencore. (AFP)
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Updated 18 February 2020

Glencore posts first annual loss in four years as impairments bite

  • Glencore has been hit by falling demand for coal and weaker prices in some of its key markets

LONDON: Glencore reported its first annual net loss since 2015 on Tuesday after writing down $2.8 billion in coal, oil and copper assets.

The world’s largest commodities trader has been hit by falling demand for coal and weaker prices in some of its key markets.

The $2.8 billion in impairments mainly related to the closure of its African copper operations, which suffered from low cobalt prices, the expiry of licenses in its Chad oil operations and weak demand for coal from Europe, which hit its Colombian operations.

“The amount of coal being consumed in the Atlantic is decreasing, right now, seaborne coal demand is about 70 million tonnes and I don’t see a big recovery and it will continue to decrease,” said Chief Executive CEO Ivan Glasenberg.

“The reserves are depleting in Colombia, by 2035, we won’t have any production in Colombia.”

Overall, the Anglo-Swiss miner reported a net loss of $404 million for 2019, compared to a profit of $3.41 billion a year earlier.

Core earnings or adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) of $11.6 billion beat analysts’ estimates of $11.25 billion.

Glencore stock has underperformed its peers due to its exposure to coal and multiple corruption probes linked to its operations in Nigeria, Venezuela and the Democratic Republic of Congo. Glencore is cooperating with the investigations. The company said its legal costs jumped to $159 million from $86 million in 2018.

The company cut the value of its oil business in Chad by $538 million after some mining licenses expired. Since 2015, it has booked impairments of $2.4 billion on assets in Chad.

In Colombia, Glencore runs two coal operations through its company Prodeco and owns a third of the Cerrejon coal mine. The business has been under pressure due to low prices for coal shipped from the region.

In 2019, Prodeco’s profits were down significantly as it invests near term in mine development activities, expected to increase the operation’s medium-term volume productivity and earnings prospects.


Canada’s Trudeau to unveil plan to address coronavirus outbreak, revive economy

Updated 23 September 2020

Canada’s Trudeau to unveil plan to address coronavirus outbreak, revive economy

  • Trudeau will stress the need for environmental policies such as retrofitting buildings, boosting the use of electric vehicles and biofuels
  • Trudeau is paring down talk of a green revolution to slash reliance on export of fossil fuels

OTTAWA: Canadian Prime Minister Justin Trudeau will unveil on Wednesday what he says is a far-reaching plan to help the economy recover from the coronavirus pandemic while ensuring efforts to fight the outbreak do not falter.
Trudeau, who has consistently vowed to do more to combat climate change, is paring down talk of a green revolution to slash reliance on export of fossil fuels as Canada faces a resurgence in coronavirus cases.
“The three prongs of what we are doing are fighting COVID-19, supporting Canadians, and a resilient recovery,” said a government source who requested anonymity given the sensitivity of the situation.
The so-called Speech from the Throne outlining government plans is a confidence measure and given that Trudeau’s Liberals only have a minority in the House of Commons, they will need the support of opposition legislators to avoid being toppled and plunging the country into an election.
The left-leaning New Democrats have made clear they are likely to vote in favor. Trudeau’s popularity initially soared over his handling of the pandemic, but polls suggest he and the Liberals were damaged by a scandal over his close ties to a charity chosen to run a student grant program.
Parliament is usually packed for the occasion but COVID-19 means few legislators will be present when Governor General Julie Payette — the representative of Queen Elizabeth, Canada’s head of state — delivers the speech at around 3 p.m. (1900 GMT).
Later on Wednesday, Trudeau plans to make a national address to address the urgency of fighting COVID-19, a spokesman said.
Officials say the throne speech will contain policy proposals such as childcare and an expanded employment insurance program rather than specific spending commitments, some of which will be disclosed in a fiscal update later in the year.
But Trudeau will stress the need for environmental policies such as retrofitting buildings, boosting the use of electric vehicles and biofuels, aides say.