INTERIM MANAGEMENT STATEMENT AND
Q1 PRODUCTION REPORT
Highlights
¡ Production volumes increased across all commodity businesses during the first quarter compared to the same period in 2009:
¡ Ferrochrome production rose by more than 300% and producers achieved a 35% increase in the second quarter European benchmark price to $1.36 per pound
¡ Total consolidated coal production increased by 9% to 21.7 million tonnes, with particularly strong increases in coking coal and semi-soft production and higher thermal coal volumes, despite the considerable loss of production at Rolleston due to flooding
¡ Mined copper production was 3% higher as a result of improved mining rates, grades and metallurgical recoveries at Collahuasi and Alumbrera
¡ Refined nickel production increased by 8% as Nikkelverk maintained its increased annualised capacity rate and set a monthly production record in March
¡ Zinc in concentrate production increased by 15% as a result of the ongoing transformation and expansion of the Australian operations and zinc metal production increased by 12% due to strong smelter performance
¡ On 16 February, Xstrata Copper completed the sale of its 70% interest in El Morro SCM, the holder of the El Morro copper-gold project, and associated rights and assets to New Gold Inc, for a total cash consideration of $463 million
¡ On 5 March, Glencore International AG announced its intention to exercise its option to acquire the Prodeco coal operations for $2.25 billion plus the balance of any profits accrued but not distributed to Xstrata during the period 1 January 2009 to the completion date and the net balance of any cash invested by Xstrata. The transaction completed in April 2010
¡ Xstrata Coal has now settled the majority of its annually priced thermal coal contracts with north Asian customers at prices just below $98 per tonne, representing a 38% increase over the prior Japanese contract period.
¡ For prime hard coking coal, a range of spot, quarterly and annual contract business has been settled at prices ranging from $200 to $270 per tonne with an average in the upper end of the range. In view of the strong coking coal market, Xstrata has settled semi-soft coking coal contracts on a quarterly basis to June at $167 per tonne, over 114% higher than last year
¡ On 1 April, the Nickel Rim South project in Sudbury commenced full mine operation and is continuing its ramp up to reach nameplate capacity of 1.25 million tonnes of ore per annum in 2011
¡ In April, Xstrata Zinc received internal approvals for an AUD133 million expansion to its Black Star Open Cut (BSOC) mine in Mount Isa, Australia. The project will extend the mine life at current production rates by four years to 2016
¡ In January, the board of the Antamina copper-zinc mine in Peru, in which Xstrata has a 33.75% interest, approved a $1.3 billion expansion to expand ore processing capacity at its mine site by 38% to 130,000 tonnes per day
¡ In January, Xstrata Copper announced a resource update at its Frieda River copper-gold project in Papua New Guinea. The new resource estimate indicates a Measured, Indicated and Inferred Resource of over 1 billion tonnes at 0.53% copper, 0.29 g/t gold and 0.8 g/t silver, using a cut-off grade of 0.3% copper
¡ During the period, three-year collective labour agreements have been signed at Xstrata Copper’s Altonorte metallurgical complex in Chile; at Xstrata Nickel operations in Sudbury, Canada and at Xstrata Zinc’s Brunswick mine, Canada
In the period from 1 January 2010, Xstrata’s operating and financial performance continues to be strong and the company’s financial position remains robust.
Xstrata plc will announce half-yearly results for the period from 1 January to 30 June 2010 on 3 August 2010.
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