Covid-19 restrictions hit Glencore’s operations
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Mandatory Covid-19 pandemic restrictions weighed heavily on Glencore’s ferrochrome, nickel and oil operations in 2020, chief executive Ivan Glasenberg said yesterday. Photo: African News Agency (ANA) Archives
JOHANNESBURG - MANDATORY Covid-19 pandemic restrictions weighed heavily on Glencore’s ferrochrome, nickel and oil operations in 2020, chief executive Ivan Glasenberg said yesterday.
“Required Covid-19 related mandatory suspensions and international mobility restrictions significantly impacted 2020 production of ferrochrome in South Africa, oil in Chad and nickel at Koniambo. Furthermore, various proactive market-related supply reductions were initiated in the second half of 2020, primarily with respect to coal production from Australia,” Glasenberg said.
Glencore, the global metals and mining giant, which owns a 79.5 percent stake in the Glencore-Merafe Chrome joint venture, recorded a 28 percent decline year-on-year in 2020 to 1.02 million tons due to the lockdown in South Africa, and the halting of smelter operations in the second quarter with a phased restart thereafter.
‘’Lydenburg smelter has been placed on extended care and maintenance. The remaining four smelters were fully operational from the fourth quarter, resulting in materially higher quarter on quarter production,” said the group.
In May, with the easing of lockdown restrictions from level 5 to level 2, the Glencore-Merafe Joint Venture decided to resume operations at Lion smelter, Eastern Chrome mines and UG2 plants. It also resumed the Boshoek and Wonderkop smelters as well as Kroondal mine.
However, the Lydenburg smelter was placed in care and maintenance indefinitely. The worsening market conditions across the South African ferrochrome industry, unsustainable electricity tariffs and interruptions placed further pressure on the joint venture.
In June, the joint venture entered into Section 189 talks with organised labour over possible retrenchments at the Lydenburg Smelter, Wonderkop Smelter, Boshoek Smelter, Lion Smelter, and the Eastern and Western Chrome Mines.
In terms of oil, the group said the entitlement interest oil production fell 29 percent year-on-year to 3.9 million barrels as operated fields in Chad were placed on care and maintenance in April 2020. The operations were yet to be restarted, given continued pandemic-related challenges in international mobility.
“The balance reflects year over year production increases in Equatorial Guinea and Cameroon since new wells were drilled,” said the group.
Glencore recorded a 9 percent year-on-year decline in own-sourced nickel production to 110 200 tons, reflecting Koniambo operating as a single-line operation for the majority of 2020, with Covid-19-related mobility restrictions affecting its maintenance schedule.
However, output from the group’s copper, cobalt and zinc production operations recorded gains during 2020.
“Our mining assets performed well in difficult circumstances during 2020. Various precautionary operating changes made in the second quarter continued into the second half, with sustainable and safe working practices embedded for the pandemic era. Production picked up accordingly, with year-over-year increases in zinc, gold and silver production,” Glasenberg said.
Meanwhile, Glencore said it had appointed Cynthia Carroll, the former Anglo American PLC chief executive, on its board as an independent non-executive director with immediate effect.
Chairman Tony Hayward said Carroll had extensive knowledge of the resources industry as well as strong non-executive director experience.
“We look forward to benefiting from her insights and contribution to our board,” Hayward said.
Carroll, who has 30 years experience in the resources sector, is currently a non-executive director of Hitachi, the Baker Hughes Company and Pembina Pipeline Corporation.
BUSINESS REPORT