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Strategy
At the time of Xstrata’s initial public offering in 2002, the Board and management set out our strategy to develop Xstrata as a distinct mining company focused on growth and the creation of shareholder value. Since that time, Xstrata has grown to become a major diversified mining group with a strong competitive position in each of its key commodity markets, a portfolio of cash-generative operations and a world-class pipeline of organic growth options.
Xstrata’s strategy has been delivered through:
- the execution and integration of three major acquisitions delivering transformational growth;
- the opportunistic identification and completion of a number of bolt-on acquisitions to deliver incremental growth and improvements to the portfolio;
- the development of a significant internal pipeline of growth options; and
- substantial improvements to the capital and operating efficiency of its businesses.
Core Strategy: Growth and Value Creation
| Description | 2008 performance summary | |
|---|---|---|
Transforming transactions |
Pursue value-enhancing, substantial acquisitions which transform Xstrata’s scale, commodity offering and geographic diversity | Discussions with Vale terminated by mutual consent in March 2008; range of opportunities reviewed on an ongoing basis |
Entry into new commodities |
Further diversify Xstrata’s portfolio through buying or building entries into tier one commodities with strong fundamentals | Development of Elandsfontein operations facilitated entry into platinum; acquired 24.9% of Lonmin, world’s third largest platinum producer |
Bolt-on acquisitions |
Complete value-adding incremental acquisitions to complement Xstrata’s existing commodity businesses | Acquisitions of Jubilee Nickel and Resource Pacific thermal coal operations completed in early 2008 |
Organic growth – brownfield and greenfield |
Develop and successfully commission new mining and metals projects to provide a valuable source of lower cost production growth | Perseverance zinc mine, Elandsfontein platinum mine and concentrator and Glendell open cut coal mine successfully commissioned on schedule and budget; significant progress made across extensive pipeline of organic growth projects |
Net present value enhancements and operational excellence |
Extend useful life of operations, achieve sustainable cost reductions, improve safety and environmental performance, enhance our reputation as industry-leading stewards of our shareholders’ assets | Real cost savings of $184 million achieved in 2008; significant increases to resource estimates at Collahuasi, Antamina, and southern Peru copper operations; 2008 total recordable injury frequency rate improved by 18% |