LONDON (REUTERS) - Glencore has taken another step to reduce its debt by selling US$500 million (S$690 million) of future precious metals output, and deepened oil production cuts after prices fell further.
Glencore said on Thursday it planned to produce about 8.5 million barrels of oil in 2016, down 20 per cent from last year and lower than the 9.6 million it had estimated in December.
Brent crude prices have dropped nearly a fifth so far this year, after sliding 35 per cent in 2015 due to a glut of supply and concern about weaker demand.
The Swiss-based mining and trading company said overnight it had agreed to sell future precious metals production from its Antapaccay mine in southern Peru to Toronto-based Franco-Nevada The Antapaccay deal follows Glencore's agreement in November to sell future silver output to Silver Wheaton Minerals for US$900 million in cash.
The moves are part of efforts to regain investor confidence after Glencore came under pressure to cut net debt of about US$30 billion - one of the highest levels in the sector - as prices for commodities such as copper and coal hit multi-year lows.
Glencore also reported on Thursday that fourth-quarter output of copper, its most lucrative product, fell 5.7 per cent to 374,700 tonnes after it shut down mines to counter sliding prices of the metal widely used in power and construction.
The company announced plans last September to suspend 400,000 tonnes of copper output at its Katanga Mining unit in Democratic Republic of Congo and at Mopani Copper Mines in Zambia over an 18-month period.
Glencore's copper output, which accounted for nearly a quarter of total revenue in the first half of last year, is forecast by the company to fall 7.5 per cent this year to about 1.39 million tonnes.
Glencore shares, which slid 70 per cent last year, dropped after rival Rio Tinto scrapped its generous dividend policy in the face of a bleak outlook for the global economy, increasing worries about other miners as well.
London-listed Glencore shares were down 5.4 per cent at 88.46 pence by 1203 GMT, underperforming the UK mining index , which was down 2.8 percent. "If the outlook is more bearish and the market gets hit, the leveraged miners get hit hardest," said analyst Marc Elliott at Investec. "Glencore (production) results were bang in line, but there were no positive surprises."