Glencore to cut annual zinc production by a third amid falling prices

9th Oct 2015 07:01

(ShareCast News) - Shares in commodities trader Glencore rallied on Friday as investors welcomed its decision to cut 500,000 tonnes or around a third of its annual zinc production as it looks to combat declining prices.The company said the changes would reduce fourth quarter 2015 mine production by around 100,000 of contained zinc metal."The main reason for the reduction is to preserve the value of Glencore's reserves in the ground at a time of low zinc and lead prices, which do not correctly value the scarce nature of our resources," it said.Operations at Lady Loretta in Australia and Iscaycruz in Peru will be suspended, while operations at George Fisher and McArthur River, also in Australia, and several mine operations in Kazakhstan will cut output levels."Glencore remains positive about the medium and long term outlook for zinc, lead and silver prices. This decision will ensure that our zinc operations are sustainable well into the future, providing jobs in the communities where we operate and returns to shareholders."The company said the changes will lead to job cuts at its operations and it will engage with its employees in the coming days.Investec said: "This is a major move by the company showing leadership in cutting output to help support commodity prices and is more meaningful to the market than the coal supply cuts it previously made."At 0900 BST, Glencore shares were up 6.3% at 128.20p.