Glencore Plc is intensifying its cost-cutting efforts at its Canadian copper and zinc plants, building on job cuts made last year as part of a broader restructuring of its global smelting operations due to a decline in processing margins. The company’s copper plants in Quebec, along with several recycling sites in the US, will be integrated into its global zinc smelting division, aiming to enhance business synergies and improve operational efficiency, according to Bloomberg.
The consolidation is part of Glencore’s ongoing comprehensive review of its global copper and zinc smelting assets, along with a widespread decline in profitability across the industry due to competition for mined ores. The company has already written down the value of several smelters, shut down a copper plant in the Philippines, and is now focusing on significant cost reductions at its Canadian assets.
“Our smelting and refining business continues to be under a high level of economic pressure due to challenging market conditions that have led to historically low treatment charges,” Suresh Vadnagra, Glencore’s head of zinc assets, said this week.
Xavier Wagner, Glencore’s chief operating officer, and Jon Evans, its head of industrial copper assets, are said to meet with the staff this week to discuss further changes as well as the future of Canadian copper and zinc metallurgical assets.
The restructuring follows Glencore’s decision in December to reduce its Montreal-based team, cutting approximately 85 of the 100 employees overseeing its Canadian copper and zinc assets, according to sources familiar with the matter. Glencore’s Canadian smelting assets include the Horne copper smelter in northern Quebec, the Canadian Copper Refinery east of Montreal, and CEZinc in southern Quebec. Together, these facilities employ over 2,300 people, with CEZinc being the second-largest zinc plant in North America.
The Quebec smelters benefit from access to low energy costs, skilled labor, and proximity to US consumers, but margins at the plants have come under threat after a massive expansion in global smelting capacity. The increased competition has made feedstock, including copper and zinc ores and concentrates, harder and pricier to get hold of, and soaring raw-material costs have strained smelters’ cashflows.
Last month, Glencore suspended operations at a copper smelter in the Philippines and took a $1.5 billion writedown on various smelting units. The company also said that they are evaluating their long-term business assets, including the plants in Spain, Italy, Germany, and Australia.
Canadian metal producers are facing the risk of tariffs on shipments to the US. President Donald Trump has already imposed a 25% tariff on global aluminum and steel imports and is considering copper tariffs. He briefly imposed 25% duties on most Canadian and Mexican goods earlier this month but extended the deadline to April 2, exempting goods covered by the North American Free Trade Agreement (NAFTA).
Glencore collection plants in the US are also the largest electronic scrap processors in the continent alongside Horne, which processes electronic scrap and concentrates to produce copper for the North American market, with an annual capacity to produce 210,000 metric tons of copper anodes.
Source: Mining.com