Glencore to cut debt

The company plans to reduce its total debts to between $18 billion and $19 billion by the end of 2016.

Johannesburg - Global natural resource company Glencore will cut its debt further than planned by the end of next year while scaling back investments as it continues to boost its financial health in a challenging climate for mining companies due to low commodity prices.

The diversified mining and trading group told investors on Thursday that it plans to reduce its total debts to between $18 billion and $19 billion by the end of 2016. It had previously targeted debt cuts to the “low $20s billion”.

“Today we show significant delivery on those commitments, with $8.7 billion achieved to date… Glencore is well placed to continue to be cash generative in the current environment - and at even lower prices.

“We retain a high degree of flexibility and will continue to review the need to act further as required,” Glencore chief executive Ivan Glasenberg said in a statement.

Glencore, which also said it now had more than $2 billion of free cash flow at spot prices and will remain comfortably free cash flow positive at materially lower price levels, said it would further lower its capital expenditure.

Capex would be $5.7 billion at the end of this year and $3.8 billion in 2016 - down from $6 billion and $5 billion respectively.

Earlier this week, mining giant Anglo American announced sweeping restructuring plans that will see its workforce reduced by 85 000. AFRICAN NEWS AGENCY