AAL Anglo American Plc

LONDON—Commodities titan Glencore PLC reported Thursday lower fourth-quarter copper and zinc output, in line with its promise to cut back production as it seeks to slash costs and pare back debt amid a protracted commodities price slump.

Copper output, the company's biggest earnings contributor in the first half of last year, fell 6% to 374,700 metric tons in the three months ended Dec 31, 2015 compared with the same quarter a year before. Meanwhile zinc production, another important earnings contributor, fell 18% year-over-year to 317,700 tons during the same period.

The Switzerland commodities trader and producer announced in September plans to shutdown two African copper mines over a period of 18 months, thereby reducing copper output by 400,000 tons. A month later it said it would idle two zinc mines, one in Australia and another in Peru that together produce 500,000 tons of zinc annually, until the zinc price recovers.

Glencore's shares have fallen 68% over the past year, making it the second worst performer out of the U.K.'s blue chip FTSE 100 index after mining peer Anglo American PLC.

Glencore is seeking to cut its debt by more than a third to around $18 billion to $19 billion by year-end to strengthen its balance sheet as it seeks to protect its investment grade credit rating amid investor concerns that commodity prices could remain low for longer or fall further.

Standard & Poor's Ratings Services last week cut Glencore's credit rating to a notch above junk status, citing new concerns about low commodity prices but it maintained a stable outlook on Glencore's new rating, saying its active balance sheet reduction plan should mitigate the risk of another downgrade.

Glencore late Wednesday said it would receive $500 million from the sale of future rights to the gold and silver output from its Antapaccay mine in Peru, brining the total raised from such deals to $1.4 billion.

The miner reported a 17% year-over-year drop in coal output to 29 million tons in the fourth quarter after putting its South African Optimum Coal operations into business rescue proceedings over the summer.

Looking ahead, the company expects copper production to fall as much as 9% to 1.4 million tons this year after falling 3% to 1.5 million tons last year. Zinc output should fall 26% to 1.1 million tons this year after rising 4% to 1.4 million tons last year.

Oil output is also forecast to fall 22% to 8.2 million barrels despite rising 44% to 10.6 million barrels last year. The expected decline in oil output reflects lower drilling activity in response to a tumbling oil price, said a person familiar with the matter.

Write to Alex MacDonald at alex.macdonald@wsj.com

(END) Dow Jones Newswires

February 11, 2016 04:45 ET (09:45 GMT)

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