* Targets net debt of $18 bln-$19 bln by end 2016
* Trading adjusted earnings seen at $2.5 bln in 2015
* Trading earnings seen at $2.4 bln to $2.7 bln in 2016
* Shares up 12 percent (Adds CEO, CFO comments, updates shares)
By Olivia Kumwenda-Mtambo
JOHANNESBURG, Dec 10 (Reuters) - Glencore hasincreased its debt reduction target and deepened its capitalspending cuts, stepping up its response to lower commodityprices and boosting its battered shares by 12 percent onThursday.
The mining and trading company said it was targeting netdebt of between $18 billion and $19 billion by the end of 2016,against a previous target of $20 billion.
Chief Executive Ivan Glasenberg, a veteran of commoditiestrading who took the company public only four years ago, had tobow to shareholder pressure in September by agreeing to cutGlencore's debts and protect its credit rating.
The London-listed company's net debt peaked at around $30billion, one of the highest in the industry, and prices for itskey products copper and coal have been languishing at multi-yearlows.
After been spurred into action less than three months ago,Glasenberg said on Thursday the company had accelerated its debtcutting after commodity prices tumbled further.
Glencore's debt-reduction plan involves asset sales,reducing capital expenditure, suspending dividend payments andraising $2.5 billion of new equity capital.
The price of copper has since fallen nearly 11percent and hit a six-year low of $4,443.50 a tonne on Nov. 23.
Glencore had previously said the plan would allow it towithstand copper prices of $4,000 a tonne. A source close to thecompany said the revised plan would help Glencore cope withcopper at below $4,000 a tonne, even at $3,500 a tonne.
MINERS DIG DEEP
Glencore is not the only such company having to scale backradically after prices tumbled.
Mining rival Anglo American said this week it wouldsell more assets, suspend dividends until the end of 2016 andwhittle its business down to three divisions to cope with severefalls in commodity prices.
Platinum producer Lonmin was also struggling, evenafter its shareholders approved its deeply discounted $400million share issue to keep the company running.
Glasenberg said the company had already cut debt by $8.7billion and was well placed to continue to be cash generative inthe current environment, and at even lower commodity prices.
Swiss-based Glencore cut its capital expenditure for 2015 to$5.7 billion from $6 billion. Spending is seen falling to $3.8billion in 2016 from a previous estimate of $5 billion.
"In the current price environment the company will need toshow continual delivery against this plan but this update isbetter than expected, sufficiently detailed and provides a cleardebt reduction pathway and timeline," Credit Suisse analystssaid in a note.
Glencore makes about a quarter of its earnings fromcommodities trading, which had previously allowed it towithstand a steep fall in oil and metal prices slightly betterthan pure-play miners.
The trading division will generate adjusted earnings of $2.5billion in 2015, against previous guidance of $2.5 billion to$2.6 billion.
It set guidance of $2.4 billion to $2.7 billion for thedivision's earnings in 2016, reflecting lower working capitaland reduced copper, zinc, lead and coal volumes.
Glencore estimated group core earnings or EBITDA of $7.7billion in 2016 at current prices.
ASSET SALES
Glencore shares, down 68 percent this year, were up 12percent as of 1200 GMT.
Glencore also said it aimed to raise between $3 billion and$4 billion from assets sales, up from $2 billion previously. Itwas selling a minority stake in its agriculture business andChief Finance Officer Steven Kalmin said on Thursday a potentialinitial public offering for the business was also an option.
The company was also selling its Lomas Bayas copperoperation in Chile and its Cobar copper mine in Australia, withinitial bids for the three transactions expected by mid-Decemberand deals seen done in the first half of 2016.
It said a broad spectrum of parties had shown interest inbuying a stake in the agriculture business, while Australian,Asian and South American strategic and financial investors hadshown interest in the copper mines.
Glencore was also looking at other asset disposals and moreprecious metals "streaming deals", a type of alternativefinancing in the mining industry where funds are providedupfront to a miner in exchange for the sale of a fixed amount offuture, usually by-product, production at a discounted price.
"There are all sort of bits and pieces that are being lookedat within the portfolio, some infrastructure, some ships, somerail carts that are looking to potentially add up," Kalmin toldinvestors.
(Additional reporting by Dmitry Zhdannikov in London; Editingby David Holmes and Keith Weir)
