Glencore may cut oil and coal spending: HSBC
[LONDON] Glencore Plc, the mining and commodities trading company headed by billionaire Ivan Glasenberg, may reduce planned spending of US$3 billion on coal and oil projects after prices slumped, according to HSBC Holdings Plc analysts.
The largest publicly traded commodities supplier has estimated spending on oil projects for this year and next of US$2 billion and US$1 billion on coal expansions, HSBC analyst Ash Lazenby wrote on Tuesday in a note.
The company's current estimate on expansions at all operations for the two years is US$6 billion, he said.
Glencore is the world's biggest exporter of power station coal with more than 35 mines in Australia, Colombia and South Africa. It owns oil assets in Chad, Cameroon and Equatorial Guinea.
A spokesman for the Baar, Switzerland-based company declined to comment.
Oil is down more than 50 per cent since June amid a supply glut, forcing producers to reassess new wells and expansion projects.
Energy coal will have a "another tough year" in 2015, according to Macquarie Group Ltd, after the fuel slumped about 25 per cent last year.
Prices for oil and coal prices have been falling amid a broader collapse in raw-material costs and concern slowing world growth will sap demand.
The Bloomberg Commodity Index of 22 raw materials last year slid 18 per cent, the fourth straight annual decline and the longest slump since at least 1991.
Glencore advanced 3.5 per cent to 256.35 pence by 2:37pm in London. It's down 14 per cent this year, giving it a market value of about US$51 billion.
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