Glencore 2Q16 Earnings Call Notes

Glencore’s (GLCNF) CEO Ivan Glasenberg on Q2 2016 Results

12 fatalities

“Regrettably, we’ve had 12 fatalities from four incidents at our mines and once again these fatalities have occurred at our focused assets and while these are Kazakhstan, Zambia and DRC. And we’re already putting in maximum effort to improve the culture and the mining operations in these focused assets and we’re already working hard to ensure we have zero fatalities across the board.”

No new coal mines being funded around the world

“Where do we see coal going forward over the next 12 to 24 months, the big thing we got to look at in coal is no new supply in the world which is a very important issue. You don’t see anyone building new mines or increasing production of mines, so I would say we’ve got to look carefully at supply. You don’t see new supply coming into any of the markers, okay, China we will talk about separately but you do see Indonesia and countries like that producing the export of their coal, and we see in Indonesia reduce from the top 421 million tonnes of exports during 2014 and they dropping this year on to 350 million tonnes. So a significant decrease coming down from Indonesia, no new supply from Australia, from Colombia, South Africa, et cetera, that’s all relatively stable and no new big mines being built anywhere in the world.”

We don’t develop greenfield projects

“Yes, regarding exploration as you know we are not lovers of Greenfield projects, so we don’t have an exploration team going out there, exploring and looking for new discoveries, that’s definitely not part of us. Where we do have a bit of exploration is around our existing asset base to ensure that we always got replacement and we are not losing production at our existing asset base and extending the life of our existing assets and that’s what we are always looking to do and we know around our existing assets there is a lot of reserves around which haven’t been fully explored and that’s where we will really do the exploration. So it’s obvious that’s why we have a lot lower exploration costs than our peers who are looking for big and new discoveries, that’s not part of our game because we have no intention of developing a new Greenfield project.”