Hard times in the mining world as Glencore Xstrata announced a $8.1 billion (6.05 billion euros) writedown on the value of assets.
That comes after the merger of the two industry giants and following a three month long review of Xstrata’s assets, which contributed $7.7 billion (5.75 billion euros) to the writedowns.
Glencore completed its takeover of miner Xstrata in May. It was the sector’s biggest acquisition to date.
The company, like other miners, has been hit by falling prices for metals in the first half of the year.
Its adjusted core profit was down nine percent from the same period last year at the equivalent of just under 4.48 billion euros.
Asked about the writedowns, Chief Financial Officer Steven Kalmin said: “There are clearly areas where we have taken a fairly conservative approach to value in the current environment, including the greenfield, early-stage projects in which Xstrata had committed spending.”
Glencore did not break down the impairment, but much of the hit is expected to be from early-stage projects and greenfield operations. That is mines built from scratch which have long been unpopular with Glencore management. These include the $5 billion (3.73 billion euros) nickel operation Koniambo in New Caledonia.