Glencore to halt production at major cobalt mine as H1 profits sink

Glencore has announced it will halt production at a major cobalt mine in the Democratic Republic of Congo (DRC) after the commodities giant reported its weakest profits in three years for the first half of 2019.

The decision to shutter the Mutanda project for two years will take around a fifth of the world’s cobalt production off the market, and was made after cobalt prices collapsed by more than 70% since April last year – making the project economically unviable.

In its H1 financial report, Glencore revealed that adjusted Ebitda fell by 32% to US$5.58 billion – slightly below the $5.94 billion average estimate from analysts surveyed by Vuma Financial Ltd.

Falling profits resemble the latest setback for the company that is facing corruption probes, operational problems at copper mines and a dispute with the DRC government over a new mining code. Glencore shares fell for a 7th consecutive day in London, with the stock tumbling by 23% this year.

Glencore has also missed out on an iron ore rally that has seen it underperform in comparison to major rivals this year. However, the firm has maintained its $2 billion share buyback programme despite concerns surrounding the worsening outlook for commodities and the US-China trade war.