Xstrata in coal output surge
MINER Xstrata has posted record output from its Australian thermal coal operations for 2011, boosting total coal production seven per cent, as the newly commissioned Mangoola mine helped offset a flood-hit start to the year and strikes in South Africa.
Copper, however, dipped, in line with expectations and Xstrata’s peers. Copper was hit by lower grades and as several mines approach the end of their working life before new operations start later this year, including Antapaccay in Peru.
While iron ore has become the focus of operations at several of the diversified miners, copper and coal account for more than 70 per cent of Xstrata’s profits.
Both commodities are key planks of the FTSE 100 miner’s growth strategy, with supply issues expected to hold up copper prices, while Chinese and Indian demand for seaborne coal helps to support thermal coal prices.
Consolidated coal production totalled 85.3m tonnes, helped by a 12 per cent increase in Australian thermal coal production to 49.8m tonnes, which helped to offset a slide in South African operations following strikes.
Output of coking coal, used in steelmaking, dipped to 7.6m tonnes, disappointing some in the market, in what analysts said was an indication of continued robust input prices for the steel sector.
“The numbers are generally in line with consensus but they show the impact all of the majors are facing on output volumes,” analyst Charles Cooper at Oriel said. “Across the board, year-on-year, Xstrata’s numbers are generally down.”
Total mined copper production was almost three per cent lower at 888,979 tonnes.