Xstrata Production Report for six months ended 30 June 2008
Zug, 30 July 2008
Highlights
– Record first half production of ferrochrome, platinum, semi-soft and coking coal, refined nickel, zinc in concentrate and lead in concentrate
– Coal production recovered strongly from adverse weather conditions in Queensland, Australia and in South Africa in the first quarter, which impacted all open pit coal producers- Electricity to South African operations continues to be restricted to 90% of normal supply, constraining production growth in ferrochrome and vanadium and, to a lesser extent, South African thermal coal
– Copper, coal, nickel and zinc production accelerated in the second quarter compared to the first quarter, with further significant volume growth expected in the second half
– A number of key growth projects were successfully completed and contributed to volume growth in key commodities, including:
–expansion of the Mount Owen coal handling and preparation plant and commissioning of the new Southstock 5-seam underground mine
–ramp up of the first phase of the Elandsfontein platinum mine and PGM concentrator in South Africa, which reached steady state production ahead of schedule
–ramp up of the low-cost Lion ferrochrome smelting complex and Bokamoso pelletising plant
– Several projects currently in execution will start to deliver growth from the second half of the year, including:
–commissioning of the Sinclair nickel mine in Western Australia and the Perseverance zinc mine in Canada
–completion of the new Liddell coal handling and preparation plant
–expansions to the Lomas Bayas copper mine and Altonorte smelter in Chile and the McArthur River Mine zinc-lead open-pit and concentrator in the Northern Territory, Australia
–ramp up of the Mount Isa zinc-lead concentrator expansion to increase annual capacity to 8 million tonnes and augment metal production by 30% year-on-year
–continued ramp up of the 32 million tonnes per annum expansion to Cerrejón coal mine in Colombia
– Successful integration of the recently acquired Resource Pacific, Jubilee and Tahmoor operations contributed to first half production growth and will provide meaningful future growth
– Significantly stronger second half performance expected across the portfolio on the back of higher grades at a number of copper and nickel operations, the resolution of one-off operational issues and the contribution of recently acquired and newly commissioned operations.
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