(Reuters) – Glencore Plc <GLEN.L> posted an almost one-third fall in first-half core profit on Wednesday, missing market expectations, as it was hit by a collapse in global cobalt prices that would force it to suspend production at its Mutanda mine.
The company said the planned suspension at the world’s largest cobalt mine, located in the Democratic Republic of Congo, underlined the “reduced economic viability in the current market environment”.
Glencore said adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) were $5.58 billion (£4.59 billion) for the six months ended June 30, compared with $8.18 billion last year.
Analysts had expected Glencore to report core earnings of $5.94 billion in the first half, according to a company-compiled consensus https://www.vuma.com/public/consensus/glen/h1fy19 of 12 estimates.
“Our performance in the first half reflected a challenging economic backdrop for our commodity mix, as well as operating and cost setbacks within our ramp-up/development assets,” Chief Executive Officer Ivan Glasenberg said in a statement.
Glencore said last week it has begun an overhaul of its under-performing Africa business after it faced a $350 million hit after cobalt prices halved.
The Financial Times first reported the planned production halt at Glencore’s Mutanda mine late on Tuesday.
(Reporting by Yadarisa Shabong and Pushkala Aripaka in Bengaluru; Editing by Anil D’Silva)