Higher prices lift Xstrata

Kasmira Jefford
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XSTRATA, the Anglo-Swiss miner, saw first half profits jump by 27 per cent, boosted by higher commodity prices and a growing Asian demand for coal and metals.

Net income rose to $2,865m (£1,758m) in the six months to June compared with $2,299m a year earlier. Its copper division alone posted a 42.5 per cent profit rise, while average copper prices climbed over 30 per cent.

The miner was severely hit by flooding in Queensland last year, affecting its coalmines and rail infrastructure, but it said that it recovered quickly due to improved flood defences.

The miner said it was still struggling with cost inflation, increased labour costs and a weaker US dollar.

The capital expenditure of its nickel project in the South Pacific island of New Caledonia jumped by 30 per cent to $4.6bn, disappointing investors and analysts.

Mick Davis, its chief executive, said the group was on track to achieve 50 per cent growth target by end of 2014 and also increased its interim dividend to 13 cents a share.