Glencore said to weigh selling stake in Kazakh miner Kazzinc

Glencore is also in the process of selling the Kazzinc-operated Vasilkovskoye gold mine, the people said, having scrapped a previous sale more than seven years ago.

The gold mine and Kazzinc’s core zinc operations could be sold to separate buyers or a single party, according to some of the people. Deliberations are preliminary and may not lead to a transaction. A representative for Glencore declined to comment.

Kazzinc is made up of a sprawling network of mines, concentrators and metal finishing plants across Kazakhstan that allow the company to go from digging ore to producing finished zinc metal and products. The company was set up in 1997 through the merger of eastern Kazakhstan’s three main non-ferrous metals companies, which were majority government-owned.

Glencore chief executive officer Gary Nagle has continued his predecessor’s strategy of looking to simplify the business, selling off smaller or more challenging assets. The company has already sold zinc assets in Peru, and some of its smaller copper operations.

Like copper, zinc prices have rallied this year on the back of constraints on mine supply, but the long-term outlook is clouded by the metal’s heavy exposure to the downtrodden construction sector. It has also been hampered by zinc’s limited uses in fast-growing industries like renewable energy and electric vehicles, where demand for other metals like copper and aluminum is soaring.

Prices were 1.6% lower at $2,888.00 Wednesday on the London Metal Exchange, trimming zinc’s yearly gain to 8.6%.

Kazzinc’s zinc production rose 27,500 tons in 2023 to 173,900 tons, while lead production totaled 35,600 tons, copper was 14,800 tons and gold reached 598,000 ounces, according to Glencore’s annual report.

(By Dong Cao, Archie Hunter and Thomas Biesheuvel)