Glencore Slashes Annual Zinc Production by More than a Third

Glencore is slashing its annual zinc production by more than a third in reaction to a 30% plummet in the price in the past few months.

The mining giant is cutting 500,000 tonnes of zinc production, 4% of the world’s total supply.

Zinc prices have been at five-year lows, but news of Glencore’s actions sent its price up 6%.

Most of the cutbacks will be in Australia where more than 500 jobs will be lost.

Other centers of output that will be trimmed are in South America and Kazakhstan.

The company said in a statement: “Glencore remains positive about the medium and long term outlook for zinc, lead and silver, however we are taking a proactive approach to manage our production in response to current prices.”

Glencore is in the throes of trying to reduce $30 billion of debt, created by its ambitious 2013 takeover of Xstrata. That deal added dozens of mines in numerous countries to the commodity trader’s business leaving it as one of the world’s biggest miners and traders of the products of those mines.

It has so far cut copper production, suspended dividend payments to shareholders and is issuing new shares to raise money.

Shares in Glencore rose 6.5% to 128.50p in early trade in London.

Glencore’s shares are listed in London and Hong Kong, although its headquarters are in Switzerland.

Last week, its share price fell by one third in one day to a record low after analysts at Investec warned that Glencore’s high debts together with low metals prices “could see almost all equity value eliminated”.

However, Glencore responded by saying it was “operationally and financially robust”.

On October 5, Glencore’s shares jumped 17% on reports that it was in talks to sell a stake in its agricultural business.