By Clara Ferreira-Marques
LONDON Oct 31 Glencore Xstrata beat
market forecasts with copper output that rose more than a third
in the quarter, boosted by improvements in its Congolese and
Chilean mines, and metals helped its trading arm perform "in
line" with its expectations.
Copper and coal production accounts for over two-thirds of
profit from the industrial side of Glencore's business, and
output at both climbed in the quarter and the nine months to the
end of September - offsetting expected weakness in nickel and
zinc, where ageing or costly mines have closed.
Glencore Xstrata has the biggest exposure to copper among
the diversified miners, and it said total copper contained -
using feed from its own sources - climbed to 412,900 tonnes in
the third quarter. African production alone rose 30 percent.
Having inherited a hefty position in copper with the
acquisition of Xstrata earlier this year, it also benefitted
from the ramp up of the newly commissioned Antapaccay mine in
Peru and operational improvements at Collahuasi in Chile, a
joint venture with rival Anglo American.
"Copper, coal and oil benefited from better than expected
project growth and 2013/14 guidance looks highly achievable,"
Credit Suisse analysts said in a note, adding average group
production was 2 to 3 percent ahead of their estimates.
At 0800 GMT, Glencore shares were down 0,8 percent.
Total coal production rose 9 percent in the third quarter
compared with last year, helped by expansions in Australian
thermal coal that helped lift exports. Coking coal, though, saw
production dented by the ramp down ahead of the closure of
Collinsville and reductions in high cost output elsewhere.
Zinc output, another key source of revenue for the combined
group, dipped 12 percent to 332,200 tonnes, held back by the end
of operations at depleted Brunswick and Perseverance in Canada.
Nickel, meanwhile, was hit by the closure of higher-cost
mines moved into care and maintenance, falling 6 percent.
Falcondo, in the Dominican Republic, was mothballed in October.
Glencore gave little detail on the performance of its
trading arm, which represents a smaller slice of just over a
fifth of group profit since the merger with Xstrata - but said
profitability there was "broadly in line with expectations".
"Metals and energy remain the strongest, however we are also
witnessing an improvement in agricultural performance," it said