Last checked at 
* Other miners also buoyed by commodity rebound
* Trading division profits from market volatility
* Additional cash distribution and buyback promised
(Adds more details, CEO, CFO quotes)
By Clara Denina and Zandi Shabalala
LONDON, Aug 5 (Reuters) - Glencore will return $2.8
billion to shareholders in 2021 after soaring commodity prices
helped the mining and trading company to a record performance
for the first six months of the year, it said on Thursday.
The London-listed company joins rivals Rio Tinto and
Anglo American in declaring bonanza payouts after record
half-year profits buoyed by a rebound in demand for commodities.
"Following COVID-19's severe global impacts in early 2020,
the subsequent economic recovery has seen prices of most of our
commodities surging to multi-year highs," said Glencore CEO Gary
Nagle, who took the helm of the company in July.
Provided commodity prices hold up and net debt stays in
check, Glencore could increase payouts further, chief financial
officer Steven Kalmin said.
"We wouldn't leverage the business further to pay
distributions but we are happy to move towards 100% payout ratio
given where the balance sheet is," Kalmin told reporters on a
call.
Glencore cut debt to $10.6 billion from $15.8 billion at the
end of 2020.
This was within its target range of $10-$16 billion, which
the miner said it would need to reach before increasing
dividends and in February, it recommended a total payout of $1.6
billion. It will now add a further $1.2 billion.
Adjusted earnings before interest, tax, depreciation and
amortisation (EBITDA) rose 79% to a record $8.7 billion in the
six months to June, compared with $4.8 billion a year earlier,
broadly in line with analysts' consensus.
The results surpass a previous high in 2018, when Glencore
was again buoyed by a strong commodity rally.
Glencore's trading or marketing division, which sets it
apart from the other big diversified miners, cashed in on
volatility in the market and recorded a EBIT of $1.8 billion in
the period. The division is expected to hit the top end of its
guidance of $2.2-$3.2 billion per annum.
TIGHT SUPPLY
Prone to boom and bust, the mining sector is still
recovering from a period of cost-cutting that halted exploration
projects and acquisitions and has raised the risk of supply
shortfalls as demand increases with economic recovery.
Nagle told analysts in a call the company favoured expanding
existing projects over greenfield projects or acquisitions.
Glencore shares shed 1.2% by 1105 GMT, but still
outperformed most of its peers that tracked wider stocks lower.
Analysts at Citi said the strong results "set the stage" for
a bigger buyback at the year-end and that Glencore's commodity
mix was weighted towards the metals, such as cobalt and copper,
needed for the transition to electric vehicles and other low
emission technology.
But investors focused on ESG (environmental, social and
governance) factors have pressed for changes at mining
companies.
Glencore in June bought the stakes it didn't already own in
its Colombia thermal coal mine from partners BHP plc
and Anglo American, boosting its coal assets when others are
looking to exit the sector. The deal should complete in the
first half of 2022.
It has pledged to reach net-zero carbon emissions by 2050 as
its output of fossil fuels declines over time and it says it is
taking steps to reduce emissions.
Glencore said legal costs, including its own investigations,
rose to $216 million during the first half from $56 million in
the same year-ago period, having "provided for one specific
narrow aspect of these investigations". It did not provide
further explanation.
The U.S. Department of Justice is scrutinising Glencore over
alleged corruption in dealings in the Democratic Republic of
Congo, Venezuela and Nigeria.
Any settlement would remove an important risk factor from
Glencore's stock, which is still well below its flotation price,
analysts said.
(Reporting by Clara Denina and Zandi Shabalala
Editing by David Goodman and Barbara Lewis)
