Ivan Glasenberg. Picture: REUTERS
Ivan Glasenberg. Picture: REUTERS
Image:

Glencore is not interested in building iron-ore mines, but will consider buying one if the economics stack up, says CEO Ivan Glasenberg.

The large mining and commodity trading company has written down its iron-ore investments and does not mention them unless asked.

But when quizzed, Glasenberg was clear that the company, which favours mining and trading bulk commodities, had no interest in bringing undeveloped iron-ore assets into production.

In fact, Glencore regarded its 50% plus one stake and management control of the Zanaga iron-ore project, with its 2.1-billion tonnes reserve with a 34% iron content, as an option on a high iron ore price and a saleable asset, said chief financial officer Steven Kalmin.

"For us, it’s largely option value," Kalmin said.

"At some point in a high iron-ore price, if someone offered us a nice price, for those we’re probably more of a seller than a developer," he said.

Glasenberg reiterated a comment he made two years ago when asked the same question, saying it was "unlikely" Glencore would develop the two iron ore prospects in which it holds stakes. "They’re greenfields and ... so no current interest from Glencore to move ahead with those," he says, referring to the Zanaga deposit in Republic of Congo and another held by Sphere Minerals in Mauritania.

Zanaga chairman Clifford Elphick said after Glasenberg had made similar comments in October 2015 about Glencore’s lack of interest in pursuing Zanaga to production that a CEO was hardly likely to take the media into his confidence.

Glencore traded a "lot of iron ore", Glasenberg said, adding that the company would buy a producing mine. "If an opportunity presents itself at the right price, we could look at it. To date, we haven’t found anything that interests us."

Please sign in or register to comment.