Switzerland-based mining and commodities giant Glencore has increased its earnings guidance for 2017 because of an expected “large scale” push for electric vehicles and energy storage systems.
CEO Ivan Glasenberg (pictured) said in half-year results released on 10 August the group had increase its full-year marketing adjusted earnings before interest and tax (EBIT) guidance by $100 million to between $2.4 billion and $2.7bn.
Glasenberg said: “Looking ahead, the potential large-scale roll out of electric vehicles and energy storage systems looks set to unlock material new sources of demand for enabling underlying commodities, including copper, cobalt, zinc and nickel.”
Glencore said first-half net income attributable to equity holders increased to a profit of $2.45bn compared to a loss of $369m in the corresponding year-ago period.
Glencore said “notable average period over period increases” in commodity prices were cobalt (115%), coal (GC Newc. 57%), zinc (49%), lead (28%) and copper (22%).
“Underpinning new battery technologies and applications, cobalt has enjoyed a significant price rise in 2017, having doubled to around $30/lb on the back of fundamental drivers and speculative activity,” Glencore said.
“Most automotive players are now accelerating investment in/adoption of electric vehicle technologies, reflecting, in part, increasingly aggressive government mandates around emission targets that look likely to result in reductions in demand for internal combustion engines.”
The group said growth in electric vehicles and energy storage systems “requires changes in material flows, including the installation, rebuild and replacement of supporting infrastructure”. “Based on current and emerging technologies, these changes should benefit enabling commodities such as copper, cobalt and nickel.”