Connect with us

Base Metals

Glencore’s Nagle ups ante with $6bn M&A warchest as copper deficit grows

GLENCORE could spend up to $6bn on mergers and acquisitions and might even break with custom by building a greenfields mine as it chased down an estimated…

Share this article:

Published

on

This article was originally published by Miningmx

GLENCORE could spend up to $6bn on mergers and acquisitions and might even break with custom by building a greenfields mine as it chased down an estimated 50 million tons (Mt) a year supply deficit in copper over the next eight years.

“The world just doesn’t get it. It doesn’t understand that there’s a massive [copper] deficit coming,” said Gary Nagle, CEO of Glencore in an investor update today. In addition to new builds and mergers and acquisitions, Glencore had enough organic potential to double current copper production by adding one million tons in output.

Current copper consumption globally was about 300Mt a year against future annual demand of 350Mt of which 100Mt would be from renewable power sources alone, and a further 20Mt a year from electric vehicle production. Nagle said the deficit was unsustainable: “It is impossible. The world will stop (without the additional copper supply). But the price of copper is not expecting it.”

Included in Glencore’s organic growth options are its stake in Collahausi which it shares with Anglo American, and an expansion of Antapaccacy in Peru. But it also identified the possibility of eventually developing El Pachon, a greenfields prospect in Argentina. It has an estimated copper resource of about 1.5Mt costing $5.6bn to develop.

Nagle sought to downplay the imminence of developing El Pachon. “We’re a long way off and the market shouldn’t get too excited. We don’t want to pull the trigger too soon,” he said. Glencore might seek a joint venture partner to assist it with El Pachon’s development. “We need to derisk it significantly,” said Nagle.

Asked for details of planned mergers and acquisitions, Nagle said they would be where the group had a strategic advantage such as having an existing stake or where it had nearby infrastructure. He also said Glencore would be wary of bringing projects on too soon. “It will be the last taxi off the rank,” he said of El Pachon.

“We are not bringing on copper at current levels. We need to see substantially higher prices and to feed growing demand. It is a carefully balanced game of feeding demand without impacting pricing,” he said. The market would be “screaming” for the metal before adding new production, he added.

Based on illustrative spot mineral prices as of December 1, Glencore said it expected to generate group earnings before interest, tax, depreciation and amortisation of $28.7bn in its 2023 financial year. Free cash flow would total $14.6bn of which coal production would contribute $16.7bn despite a recent easing in thermal coal prices.

The post Glencore’s Nagle ups ante with $6bn M&A warchest as copper deficit grows appeared first on Miningmx.

ax
copper

Share this article:

Energy & Critical Metals

Aluminum MMI: Aluminum Prices Pause Following Surge

Aluminum prices have stayed bearish in the short term. At the beginning of February, price action showed a short-term sideways trend, as no new lows or…

Share this article:

Continue Reading
Uncategorized

Resources Top 5: Battery Age keeps pumping, copper-gold explorers catch a bid on monster drill hits

Tennant Minerals (ASX:TMS) and Carnaby Resources (ASX:CNB) have unveiled monster copper-gold hits at their respective projects. … Read More
The post…

Share this article:

Continue Reading
Base Metals

GreenTech fires up the drill rigs at bonanza historic copper prospect

Special Report: GreenTech Metals has begun drilling at a long forgotten copper gem in the Pilbara which once delivered ore … Read More
The post GreenTech…

Share this article:

Continue Reading

Trending