Glencore can thank soaring coal prices for its strong half-year performance after the company recorded a $US10.3 billion increase in earnings for the first half of 2022.
The company posted an earnings before interest, taxes, depreciation and amortisation (EBITDA) of $US18.9 billion ($27.2 billion) for the six months, which came as it enjoyed an average realised coal price of $US277 ($398) per tonne ($US98 per tonne in the first half of 2021).
“Notwithstanding what has clearly been a very complex environment for our markets, our operations and the world in general, we are pleased to report an exceptional financial performance for Glencore over the period,” Glencore chief executive officer Gary Nagle said.
“Global macroeconomic and geopolitical events during the half created extraordinary energy market dislocation, volatility, risk, and supply disruption, resulting in record pricing for many coal and gas benchmarks and physical premia.”
Glencore sold 35 million tonnes (Mt) of thermal coal (including agency volumes) during the first half of 2022, which was a 11 per cent increase from what was sold in the first six months of 2021.
The situation wasn’t all rosy, however, as Glencore’s Australian coal operations navigated errant weather conditions during February, leading to the lowest first half Australian export volumes since 2013.
Glencore said the coal market was further disrupted by decisions made in Indonesia.
“During January, Indonesia temporarily banned the export of thermal coal to review producer licences and compliance with their domestic supply obligations, reducing January Indonesian export supply year-over-year by 23.5Mt, during a period of seasonally strong demand,” the company said in its half-year report.
“Reduced gas supply to Europe, combined with significantly reduced European nuclear generation capacity, raised European thermal coal imports by 123 per cent year-over-year during the first half of 2022.”
Glencore produced approximately 276,000 tonnes of zinc, 29,000 tonnes of copper and 79,900 tonnes of lead from its Australian operations during the first half of 2022, which were all down on the first six months of 2021.