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Glencore Xstrata OK depleting tonnages

Keywords: Tags  Glencore Xstrata, Ivan Glasenberg, mining assets, Steve Kalmin, Las Bambas, copper project, Claire Hack

LONDON — Glencore Xstrata Plc "doesn’t mind" depleting tonnages at its mining assets, chief executive officer Ivan Glasenberg said during the company’s investor day webcast Sept. 10.

"It’s not the end of the world. We don’t need to have those graphs showing more production to maintain production," he said. "If we can’t maintain production at the right rate of return, so be it."

The company is "hostage to external factors" in terms of its return on equity, Glencore Xstrata chief financial officer Steve Kalmin added.

"There will be periods where we are below (expected return on equity), but we would build on the assumption that assets will deliver in time," he said. "At the base business today, we’re running it as best we can, working assets as hard as we can and trying to extract as much value as we can."

The Baar, Switzerland-based company aims to make sure any incremental capital increases are appropriately invested or returned to shareholders, Kalmin said.

The sale proceeds from its Las Bambas copper project in Peru will also improve headroom in terms of available capital, he added.

"We were going to get to a period of being significantly cash flow generative (anyway)—the proceeds from Las Bambas accelerates the flexibility and headroom more than we might otherwise have seen," Kalmin said. "We will redeploy that capital and then we will be in a nice position."

A version of this article was first published in AMM sister publication Metal Bulletin.

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