LONDON – Glencore Chief Executive Ivan Glasenberg said steep output cuts by copper miners will help lift prices in the next 18 months, in some of his first public comments since fears about commodities demand and the company’s debt battered the company’s shares.
Trader and miner Glencore’s stock jumped as much as 72 percent in illiquid trade in Hong Kong and as much as 20 percent in London, partly on prospects the company will sell some assets to cut debt.
The stock has recouped all of its losses from the past week, with several brokers saying a recent sell-off was overdone as the miner and trader had the ability to withstand the crunch on commodity prices.
The price of copper, Glencore’s largest earner, hit six-year lows below $5,000 a tonne in August due to a slowdown in China, one of the world’s biggest consumers of metals and other raw materials. It was around $5,180 on Monday.
“Supply will ultimately tighten… Fundamentals will prevail,” Glasenberg told the FT African Summit on Monday.
Glencore said in September it would suspend some copper production at Katanga Mining in Democratic Republic of Congo and at Mopani Copper Mines in Zambia for 18 months.
“The governments understood what we are doing,” Glasenberg said on Monday, adding that production would resume once the mines become competitive.
The Swiss-based trader has pledged to cut its net debt to $20 billion from $30 billion, by selling assets, reducing capital expenditure, suspending dividend payments and raising $2.5 billion of new equity capital with a share sale.
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