Glencore shares rebound after firm denies delisting

Swiss mining giant Glencore, facing rumours in financial circles it would soon be delisted, insisted on Tuesday that its business remained robust, which sent its shares rebounding by 20 percent.

Glencore shares rebound after firm denies delisting
Photo: AFP

“Our business remains operationally and financially robust — we have positive cash flow, good liquidity and absolutely no solvency issues,” the company, headquartered in the canton of Zug, said in a statement.
In London afternoon trading, Glencore shares climbed 20.08 percent to 82.47 pence, after the stock had plunged by nearly 30 percent on Monday.
By the end of the day Monday, Glencore had lost more than three quarters of its value since listing with much fanfare in London and Hong Kong in May 2011, sparking speculation it might be delisted.
Glencore was hammered by weak commodity prices as Chinese demand stumbled, taking a particularly heavy hit because of its towering $30-billion debt-load.
Dealers were further spooked on Monday when brokerage Investec said in a research note to clients: “The challenging environment for mining companies leads us to the question of how much value will be left for equity holders if commodity prices do not improve.
“If major commodity prices remain at current levels, our analysis implies that, in the absence of substantial restructuring, nearly all the equity value of both Glencore and Anglo American could evaporate.”
But on Tuesday, Glencore stressed that it had already taken a number of “proactive steps to position our company to withstand current commodity market conditions.”
The Swiss mining goliath said it was making progress on a range of drastic moves announced at the beginning of the month aimed to cut its $30-billion debt by a third.
Among other measures, the company has raised $2.5 billion in share sales, has suspended dividend payments until further notice and has suspended production at its Katanga copper and cobalt mine in the Democratic Republic of Congo.
“Glencore has no debt covenants and continues to retain strong lines of credit and secure access to funding thanks to long term relationships we have with the banks,” it said in Tuesday's statement.
“We remain focused on running efficient, low cost and safe operations and are confident the medium and long-term fundamentals of the commodities we produce and market remain strong into the future,” it added.

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At least 19 illegal miners killed at subsidiary of Swiss-based Glencore

At least 19 illegal miners were killed on Thursday after part of a copper mine collapsed in southeastern DR Congo, Swiss-based mining giant Glencore said.

At least 19 illegal miners killed at subsidiary of Swiss-based Glencore
Photo: AFP

The incident happened when two galleries caved in at a mine in the Kolwezi area operated by Kamoto Copper Company (KCC), a subsidiary of Glencore.

“Tragically there were 19 fatalities today, with possible further unconfirmed fatalities,” Glencore said in a statement, which said there had been recurrent problems with illicit mining on its concessions.

Other reports suggest the death toll could be higher. 

The Congolese site Actualite.CD reported at least 36 deaths.

“The illegal artisanal miners were working two galleries in benches overlooking the extraction area. Two of these galleries caved in,” the company said.

Glencore said KCC had observed a “growing presence” of illegal miners, with on average 2,000 people a day intruding on its operating sites.

“KCC urges all illegal miners to cease from putting their lives at risk by trespassing on a major industrial site,” Glencore said.

Illegal mining is common and frequently deadly in Democratic Republic of Congo, where safety is often poor and risk-taking high.

Figures indicating the scale of the problem are sketchy, given that many mines are illegal and remote.