Coal up but copper down for Xstrata
Copper, however, dipped, in line with expectations and Xstrata’s peers, hit by lower grades and as several mines approach the end of their working life before new operations start later this year.
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 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.
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Hide AdConsolidated coal production totalled 85.3 million tonnes, helped by a 12 per cent increase in Australian thermal coal production to 49.8 million tonnes which offset a dip in South African operations following strikes.
Output of coking coal, used in steelmaking, dipped to 7.6 million tonnes, disappointing some in the market, in what analysts said was an indication of continued robust input prices for the steel sector.
“Today’s numbers are generally in line with consensus but they show the impact all of the majors are facing on output volumes. Across the board, year-on-year, Xstrata’s numbers are generally down,” analyst Charles Cooper at Oriel said.
Total mined copper production was almost 3 per cent lower at 888,979 tonnes.