Glencore has announced a significant increase in its copper production for the second half of the year, along with higher copper reserves, just as its discussions with Rio Tinto approach an important regulatory deadline.
The two mining giants are exploring a partnership that could form the largest mining company globally, propelled by Rio Tinto’s eagerness to secure additional copper projects.
In a recent market update, Glencore, based in Switzerland, stated that its copper resources have surpassed previous estimates. Gary Nagle, the company’s CEO, expressed satisfaction with the recent growth in Glencore’s copper mineral resource base.
This increase includes an extra 500 million tonnes of inferred mineral resources from the El Pachon project in Chile, contributing to a nearly 20% rise in Glencore’s South American copper resources.
Analyst Ben Davis from RBC noted that Glencore and the copper market are experiencing positive momentum, which is likely aiding their discussions with Rio Tinto. He highlighted that Glencore’s production has exceeded expectations, which is a rare achievement.
The negotiations with Rio Tinto have been ongoing for several months and are approaching a regulatory deadline of February 5. By this date, Rio Tinto will need to either make a formal offer or step back from the conversations, although the deadline can be extended upon mutual agreement.
For the second half of last year, Glencore’s copper production saw a 48% increase compared to the first half, although overall annual production was still lower than the prior year.
Recently, copper prices surged above $14,000 per tonne, driven by a general rise in metal prices and concerns about potential supply disruptions. In response to these developments, Glencore’s shares rose by 3% during morning trading in London.