The global commodities giant would keep reviewing operations that did not return adequate margins and return on investment, he told an analysts briefing.
“What is also important that we do decrease production at some of these assets, even if they are cash-positive,” he said. “These are not loss-making operations. They are not cash-negative. Some of them…our coal operations where we have cut production, these operations we saw as cash-positive.
“So we do have a belief. We just do not want to put more supply into a market where it is not required, and preserve the asset base and the production where we can get higher margins.”
Last week Glencore continued its strategy of reducing coal production during the low coal price environment by winding down output from its troubled Collinsville mine in Queensland, resulting in the likely loss of 180 jobs.
The company had started consultation with its Collinsville workforce over further steps to reduce production at the mine, explaining that lower coal prices and market oversupply have contributed to Collinsville incurring financial losses during 2015.
Most employees at the mine will take annual leave during the shut down for nearly three weeks over the Christmas period.
Glasenberg said the marketing adjusted EBIT guidance for the company has now moved between $US2.4 billion to $2.7 billion for 2016.
“The majority of these earnings, as we continue stating in the past and we continue to state for the future, is underpinned by logistics activities-services that are less sensitive to pricing, he said.
“And this has once again been improved by our 2015 marketing EBIT where it will be around $2.5 billion for 2015.
“The guidance for 2016 being $2.4 billion to $2.7 billion is below the usual guidance of $2.7 billion to $3.7 billion. And why we have dropped it below the $2.7 billion because, as you all know, we have dropped production at various of our assets.
“We've reduced working capital.”
Long-term, Glencore has no intention to reduce its anticipated $2.7 billion to $3.7 billion target.
“And we believe, as markets stabilize and we bring these production tonnes back and we are able to increase our working capital, then we will get back to those figures,” he said.
