Zug, Switzerland-based mining company Xstrata Plc (XTA.L), Tuesday, in its third-quarter production report said platinum group metal volumes were 5% higher, coal consolidated total was up by 2.1 million tonnes, and zinc concentrate improved 10% compared with the year-ago period. The company also said mined copper levels declined and nickel remained in line with prior-year production.
Xstrata alloys increased ferrochrome capacity utilization to around 85% by third-quarter end from 60%, in response to improved demand, despite a 20% lower production compared with last year. The strong Rand resulted in margins remaining under pressure, helping ferrochrome producers achieve a 16% increase in pricing. The European benchmark ferrochrome price settled at $1.03 per pound for the fourth quarter, up from $0.89 in the previous quarter, the company said.
PGM volumes were 5% higher than a year ago, with the Mototolo JV now producing at a steady state of 209,500 ounces per annum, 100% basis, Xstrata said. The Eland operation has commenced the development of an underground mine, and is expected to increase current PGM production levels to up to 300,000 platinum ounces per annum from 2014.
Xstrata coal total consolidated production increased 9% to 25.6 million tonnes from 23.5 million tonnes.. Total thermal coal volumes increased 8% to 21.9 million tonnes from 20.3 million tonnes, mainly as a result of the inclusion of the recently acquired Prodeco operation, Xstrata said.
Mined copper production declined 10% to 212,173 tonnes from 234,615 tonnes, as a result of lower grades which impacted volumes at Alumbrera, Antamina and Ernest Henry. Total mined gold production decreased to 99,336 ounces from 141,478 ounces for the year-ago period.
Average LME copper price declined to US$ 5,859 per tonne from US$ 7,680 per tonne, while average LBM gold price increased to US$ 960 per tonne from US$ 869 per tonne a year ago.
Third-quarter mined nickel production was 13,418 tonnes compared with 13,620 tonnes, remaining at a similar level to the same period in 2008.
Zinc in concentrate production increased 10% to 265,638 tonnes from 241,881 tonnes, as a result of improved productivity at the new Perseverance mine in Canada and at the Australian operations following their restructuring and expansions in the first half of the year.
On October 12, Xstrata Copper announced a formal sale agreement with Barrick Gold Corp. for Xstrata's 70% interest in the El Morro copper-gold project for a total cash consideration of US$ 465 million.
The ATCOM East thermal coal project in South Africa that gained Xstrata plc Board approval in October is expected to produce around 5.7 million tonnes per annum of run of mine production and 3.1 million tonnes per annum of saleable thermal coal for a capital commitment of around US$ 407 million.
Xstrata Copper announced a US$ 293 million investment to increase the life of Lomas Bayas in Chile by 8 years to 2020, sustaining production capacity at the recently expanded rate of 75,000 tonnes per year of copper cathode on October 15.
Xstrata Copper announced a revised Mineral Resource estimate for the Tampakan copper-gold project in the Philippines with significantly improved confidence levels, including a 25% increase in Measured tonnes and a 12% increase in Measured and Indicated tonnes on October 20.
Xstrata said, for the period from July 1 its operating and financial performance continues to be strong and the company's financial position remains robust. Xstrata's preliminary results for the year ending December 31 would be announced on February 8, 2010.
XTA.L is currently trading down at 1,024.00 pence on the LSE.
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