Glencore (LON:GLEN) has outlined a strategic plan to restore its annual copper production to one million tonnes by 2028, according to its newly released 2024 annual report. The company also indicated that it is exploring additional projects that could potentially double this output in the future. The diversified commodities major reported a decline in copper production last year, with total output falling to 951,600 tonnes. Despite this decrease, Glencore remains focused on expanding its copper production capacity while maintaining its recently enlarged steelmaking coal business.

As part of its growth strategy, the company is advancing a range of organic copper development projects, which could contribute an additional one million tonnes of production per year. These projects, according to the company’s assessment, have a weighted average capital intensity of approximately $15,000 to $20,000 per tonne of copper-equivalent. Glencore has stated that the progression of these projects will be dependent on market conditions, country-specific considerations, and broader investment factors. The company plans to push forward the most advanced projects toward feasibility completion and final investment decisions as part of its long-term production strategy.

The company views its current position as a critical moment in its production trajectory, with a clear pathway to recovering its previous copper output levels by 2028. Additionally, Glencore anticipates significant developments in its steelmaking coal business following the acquisition of Teck Resources’ Elk Valley Resources steelmaking coal operations in Canada last year. Earlier this year, Glencore confirmed that it would continue to retain its coal and carbon steel materials business, reinforcing its commitment to supplying critical commodities in the global market.

While the company acknowledges increased geopolitical uncertainties and their potential impact on the industry, it believes that certain commodities may face supply challenges due to the pace and scale of global mine development projects. Glencore has positioned itself to play a role in bridging potential supply gaps through its industrial and marketing business flexibility. The company’s strategy reflects a broader industry trend of securing long-term copper supplies, given the metal’s essential role in renewable energy infrastructure, electric vehicles, and various technological applications. With global demand for copper expected to rise in the coming years, Glencore’s planned production expansion aligns with market needs.

The next steps for Glencore will involve determining which copper projects are most viable for advancement, considering both economic and logistical factors. If market conditions remain favorable, the company aims to move forward with its production expansion plans while balancing its existing coal operations. By maintaining a focus on both its copper and steelmaking coal divisions, Glencore is positioning itself as a key player in the global commodities industry. The coming years will be crucial as the company works toward achieving its production goals and adapting to market dynamics.

The above references an opinion and is for information purposes only. It is not intended to be investment advice. Seek a licensed professional for investment advice. The author is not an insider or shareholder of any of the companies mentioned above.