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Production Report for six months ended 30 June 2008 (PDF)
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.
Xstrata Alloys
Chrome volumes increased by 3% in the first half of 2008 compared to the same period last year, a new six month production record. This was achieved as a result of the ramp up of the new Lion smelter and the full 6 month contribution from previously idled capacity, which was gradually returned to production during the first half of 2007. The full benefit of additional capacity was partially offset by planned and extended furnace shutdowns in response to reduced electricity supply from Eskom (South Africa’s power utility), as part of a national energy shortage in South Africa. Reduced power supply also impacted vanadium volumes, which fell by 25% compared to the same period in 2007.
Platinum volumes increased by 198% reflecting the ramp up of the Elandsfontein mine acquired through the Eland Platinum transaction in the fourth quarter of 2007.
Chrome
|
Six months |
Six months |
Year ended |
Attributable* saleable production (kt) |
615 |
598 |
1,219 |
* Including Xstrata’s 79.5% share of the Xstrata-Merafe Chrome Venture |
|||
Vanadium
Six months |
Six months |
Year ended |
||
Consolidated* saleable production |
|
|
|
|
Ferrovanadium (k kg) |
1,528 |
2,055 |
4,280 |
|
Vanadium pentoxide (k lb) |
6,927 |
9,249 |
18,870 |
|
* Consolidated 100% |
||||
Platinum
|
Six months |
Six months |
Year ended |
Consolidated* saleable production (oz) |
|
|
|
Platinum |
64,518 |
21,619 |
57,303 |
Palladium |
30,625 |
12,773 |
32,618 |
Rhodium |
8,056 |
3,684 |
9,294 |
* Consolidated 100% of Eland and 50% of Mototolo |
|||
Xstrata Coal
Total consolidated production volumes increased by 4% to 40 million tonnes during the first half of 2008, due to higher volumes of semi-soft and coking coal, up 22% and 39% respectively over the first half of 2007, and stable thermal coal production.
The New South Wales operations prioritised higher-margin semi-soft coal production at the expense of growth in thermal coal production. Semi-soft production also benefited from the inclusion of the recent Resource Pacific acquisition. Lower thermal coal production in New South Wales was offset by improved operational performance at Cerrejón in Colombia, as the operation ramps up to an annual run rate of 32 million tonnes per annum. Thermal coal production in Queensland and South Africa recovered well from heavy rainfall in both regions and South African power outages, with production remaining consistent with the prior period.
Despite extreme storms in Queensland, coking coal production was boosted by improved performance from the Oaky Creek longwalls and the inclusion of the recently acquired Tahmoor operation in New South Wales.
(million tonnes) |
Six months |
Six months |
Year ended |
Total consolidated production |
39.6 |
38.1 |
82.8 |
Total thermal coal |
33.1 |
33.1 |
69.6 |
Australian thermal |
16.9 |
17.4 |
35.0 |
South African thermal* |
11.0 |
11.0 |
24.7 |
Americas thermal |
5.2 |
4.7 |
9.9 |
Total coking coal (Australia) |
3.2 |
2.3 |
6.8 |
Total semi-soft coking (Australia) |
3.3 |
2.7 |
6.4 |
* For production reporting DTJV is included for the first six months. For financial reporting DTJV will be excluded from Xstrata Coal’s ex-mine results as a result of the DTJV re-structuring announced on 3 March 2008 |
|||
Xstrata Copper
Total mined copper production remained at a similar level to the first half of 2007. Volumes were significantly higher at Ernest Henry Mine due to higher head grades and at Collahuasi, where production in the comparable period of 2007 was impacted by a shutdown of the main SAG mill. At Antamina the mine plan moved into a section of higher copper grade ore which boosted production despite lower milling rates resulting from operational difficulties with the SAG mill.
The benefit of improved performance at these operations was offset by lower volumes at Minera Alumbrera, Tintaya and Lomas Bayas. At Alumbrera, lower mining rates caused by lower grades and increased haulage distances were compounded by the processing of oxidised stockpiles with consequent lower recoveries. Production at Tintaya was constrained by lower grades, the treatment of high clay content ores and adverse weather. At Lomas Bayas, production was affected by conveyor system failures and acid supply issues.
Gold production increased by 3% due to higher grades at Ernest Henry, partially offset by lower volumes from Alumbrera.
|
Six months |
Six months |
Year ended |
|
Argentina – Alumbrera* |
|
|
|
|
Material mined (t) |
47,067,883 |
57,780,262 |
109,925,781 |
|
Ore mined (t) |
8,457,363 |
13,328,046 |
25,617,080 |
|
Copper head grade (%) |
0.45 |
0.52 |
0.56 |
|
Gold head grade (g/t) |
0.55 |
0.57 |
0.67 |
|
Ore treated (t) |
18,534,333 |
19,288,423 |
38,606,768 |
|
Concentrate produced (t) |
268,320 |
322,603 |
697,525 |
|
Copper in concentrate (t) |
65,674 |
83,447 |
180,223 |
|
Gold in concentrate (oz) |
217,407 |
228,832 |
540,788 |
|
Gold in doré (oz) |
28,001 |
21,935 |
74,372 |
|
Total gold (oz) |
245,408 |
250,767 |
615,160 |
|
Australia - Ernest Henry |
|
|
|
|
Material mined (t) |
18,527,862 |
22,087,316 |
40,388,117 |
|
Ore mined (t) |
7,848,977 |
4,195,595 |
11,547,835 |
|
Copper head grade (%) |
1.08 |
0.82 |
0.94 |
|
Gold head grade (g/t) |
0.54 |
0.41 |
0.47 |
|
Ore treated (t) |
5,656,346 |
5,254,823 |
11,114,286 |
|
Concentrate produced (t) |
195,061 |
133,794 |
326,857 |
|
Copper in concentrate (t) |
55,739 |
39,512 |
95,846 |
|
Gold in concentrate (oz) |
74,024 |
49,975 |
123,305 |
|
Australia - Mount Isa |
|
|
|
|
Ore mined (t) |
2,783,427 |
2,768,737 |
6,008,567 |
|
Copper head grade (%) |
2.81 |
3.04 |
3.12 |
|
Ore treated (t) |
2,783,426 |
2,829,044 |
6,059,744 |
|
Concentrate produced from ore (t) |
272,802 |
314,658 |
679,948 |
|
Copper in concentrate from ore (t) |
70,950 |
78,452 |
172,552 |
|
Anode copper (t) |
110,733 |
113,340 |
217,907 |
|
Refined copper (t) |
119,142 |
116,402 |
231,959 |
|
Canada - Kidd Creek mine copper |
|
|
|
|
Ore mined (t) |
1,308,572 |
1,203,418 |
2,346,260 |
|
Copper head grade (%) |
1.68 |
1.95 |
2.10 |
|
Ore treated (t) |
1,263,504 |
1,223,162 |
2,364,603 |
|
Concentrate produced (t) |
69,999 |
80,197 |
163,130 |
|
Copper in concentrate (t) |
19,488 |
22,503 |
46,615 |
|
Copper cathode (t) |
63,768 |
60,692 |
127,784 |
|
Canada - Horne |
|
|
|
|
Concentrate treated (t) |
389,276 |
403,608 |
796,639 |
|
Anode copper (t) |
86,582 |
85,063 |
177,289 |
|
Canada - CCR Refinery |
|
|
|
|
Refined copper (t) |
179,503 |
164,400 |
319,552 |
|
Chile – Collahuasi** |
|
|
|
|
Material mined (t) |
36,352,800 |
42,455,556 |
79,982,760 |
|
Ore mined (t) |
11,818,840 |
13,723,947 |
27,266,800 |
|
Copper head grade (%) |
1.15 |
0.93 |
1.10 |
|
Ore milled (t) |
9,456,884 |
8,814,901 |
19,219,139 |
|
Concentrate produced (t) |
324,327 |
241,494 |
592,234 |
|
Copper in concentrate (t) |
87,347 |
70,647 |
173,303 |
|
Copper cathode (t) |
11,124 |
12,982 |
25,593 |
|
Chile - Lomas Bayas |
|
|
|
|
Material mined (t) |
23,303,000 |
25,300,000 |
47,997,375 |
|
ROM leach (t) |
12,568,000 |
10,818,060 |
22,441,476 |
|
ROM copper grade (%) |
0.22 |
0.25 |
0.25 |
|
Heap leach (t) |
6,793,000 |
6,252,028 |
13,098,070 |
|
Heap leach copper grade (%) |
0.4 |
0.43 |
0.41 |
|
Copper cathode (t) |
28,292 |
32,587 |
61,401 |
|
Chile - Altonorte |
|
|
|
|
Anode copper (t) |
127,339 |
141,777 |
272,846 |
|
Peru - Antamina Copper*** |
|
|
|
|
Material mined (t) |
19,720,281 |
18,043,594 |
39,115,169 |
|
Ore mined (t) |
6,025,238 |
5,688,596 |
12,337,415 |
|
Copper head grade (%) |
1.30 |
1.13 |
1.21 |
|
Ore treated (t) |
4,808,492 |
5,357,509 |
10,521,097 |
|
Copper concentrate produced (t) |
198,954 |
181,848 |
383,109 |
|
Copper in concentrate (t) |
56,908 |
52,455 |
111,347 |
|
Peru - Tintaya |
|
|
|
|
Material mined (t) |
38,773,288 |
36,919,900 |
76,453,827 |
|
Ore mined (t) |
3,741,261 |
5,588,642 |
11,766,019 |
|
Ore milled (t) |
3,401,373 |
3,257,272 |
6,766,802 |
|
Copper grade in ore milled (%) |
1.22 |
1.38 |
1.44 |
|
Gold grade in ore milled (g/t) |
0.21 |
0.37 |
0.36 |
|
Concentrate produced (t) |
107,389 |
115,463 |
251,094 |
|
Copper in concentrate (t) |
32,782 |
39,598 |
83,802 |
|
Gold in concentrate (oz) |
12,256 |
20,458 |
38,792 |
|
Copper cathode (t) |
12,178 |
16,953 |
35,982 |
|
Total mined copper production (t) (contained metal) |
444,269 |
449,136 |
986,663 |
|
Total mined gold production (oz) (contained metal) |
331,688 |
321,200 |
777,257 |
|
Total copper cathode (t) (from mined and third party material) |
414,007 |
404,016 |
802,271 |
|
* 100% consolidated figures |
||||
Xstrata Nickel
Despite a stronger second quarter performance, total mined nickel production decreased by 6% in the first half of 2008 compared to the same period last year. Production at the Sudbury and Montcalm operations was impacted by lower grades, reflecting the current transitional phase between existing Sudbury mines, which are nearing their end of life and the commencement of production at the new low-cost Nickel Rim South and Fraser Morgan mines in 2009. Expansion of the Raglan Mine in the Canadian Arctic continues, however severe weather, planned maintenance and lower head grades at the existing operation reduced first half mined nickel production by 16%.
Lower mine feed from the Sudbury operations also impacted nickel in matte production at the Sudbury Smelter, but was partly offset by increased volumes of third party feed. Nikkelverk achieved first-half record production of refined nickel resulting from improved efficiency at the nickel tankhouses.
Xstrata Nickel Australasia (XNA), a new operating division created following the acquisition of Jubilee Mines NL which completed on 22 February 2008, contributed 2,712 tonnes of mined nickel. The integration of the acquisition is proceeding well and work continues to focus on optimising the mine planning schedule and increasing drilling activity to enable production to increase in the second half of 2008.
Despite planned maintenance shutdowns in early 2008, Falcondo achieved a solid production performance of 14,395 tonnes of ferronickel. Significant progress has been made to expedite the studies of a coal conversion project to reduce Falcondo’s reliance on crude oil in a high oil price environment.
|
Six months |
Six months |
Year ended |
|
North America – Sudbury Operations |
|
|
|
|
Ore mined (t) |
882,151 |
982,712 |
1,866,022 |
|
Nickel head grade (%) |
0.96 |
1.06 |
1.04 |
|
Copper head grade (%) |
1.16 |
1.12 |
1.10 |
|
Ore treated (t) |
1,033,141 |
1,133,752 |
2,177,105 |
|
Nickel in concentrate (t) |
8,533 |
10,794 |
19,757 |
|
Nickel in matte (t) |
30,488 |
33,535 |
67,576 |
|
Copper in concentrate (t) |
10,785 |
11,711 |
21,853 |
|
Copper in matte (t) |
9,245 |
11,094 |
21,978 |
|
Cobalt in concentrate (t) |
270 |
334 |
620 |
|
Cobalt in matte (t) |
1,190 |
1,125 |
2,498 |
|
North America – Montcalm |
|
|
|
|
Ore mined (t) |
503,896 |
476,166 |
929,251 |
|
Nickel head grade (%) |
1.27 |
1.37 |
1.34 |
|
Copper head grade (%) |
0.67 |
0.69 |
0.66 |
|
Ore treated (t) |
463,491 |
464,041 |
940,853 |
|
Nickel in concentrate (t) |
4,748 |
5,061 |
10,140 |
|
Copper in concentrate (t) |
2,618 |
2,791 |
5,443 |
|
Cobalt in concentrate (t) |
182 |
203 |
404 |
|
North America – Raglan |
|
|
|
|
Ore mined (t) |
686,836 |
606,174 |
1,127,383 |
|
Nickel head grade (%) |
2.22 |
2.75 |
2.58 |
|
Copper head grade (%) |
0.60 |
0.80 |
0.73 |
|
Ore treated (t) |
650,594 |
603,266 |
1,153,582 |
|
Nickel in concentrate (t) |
12,339 |
14,619 |
26,059 |
|
Copper in concentrate (t) |
3,015 |
3,841 |
6,729 |
|
Cobalt in concentrate (t) |
261 |
289 |
523 |
|
Australia – XNA* |
|
|
|
|
Ore mined (t) |
99,549 |
- |
- |
|
Nickel head grade (%) |
3.35 |
- |
- |
|
Ore treated (t) |
96,139 |
- |
- |
|
Nickel in concentrate (t) |
2,712 |
- |
- |
|
Copper in concentrate (t) |
104 |
- |
- |
|
Cobalt in concentrate (t) |
33 |
- |
- |
|
Dominican Republic – Falcondo** |
|
|
|
|
Ore mined (t) |
2,090,601 |
2,044,362 |
4,062,530 |
|
Nickel head grade (%) |
1.17 |
1.16 |
1.16 |
|
Ore treated (t) |
1,326,795 |
1,295,791 |
2,563,961 |
|
Nickel in ferronickel (t) |
14,395 |
14,749 |
29,130 |
|
Europe – Nikkelverk |
|
|
|
|
Nickel metal (t) |
43,574 |
42,871 |
87,590 |
|
Copper metal (t) |
18,796 |
17,969 |
34,212 |
|
Cobalt metal (t) |
1,665 |
1,919 |
3,939 |
|
Total mined nickel production (t) (contained metal) |
26,610 |
28,349 |
52,108 |
|
Total mined ferronickel production (t) (contained metal) |
14,395 |
14,749 |
29,130 |
|
Total mined copper production (t) (contained metal) |
15,215 |
17,121 |
31,425 |
|
Total mined cobalt production (t) (contained metal) |
683 |
755 |
1,412 |
|
* Consolidated from 31 January 2008 |
||||
Xstrata Zinc
During the first half of 2008, Xstrata Zinc achieved record production of zinc in concentrate. The expansion of the Australian operations and improved productivity increased volumes of zinc concentrate despite slightly lower head grades, offset to some extent by lower production in Canada, following a seismic event at the Brunswick mine in January which sustained minor damage to the operation. Total zinc metal production was marginally lower following the failure of a transformer at the San Juan de Nieva smelter in the first quarter, which offset the benefit of improved recoveries at the Nordenham and Canadian refineries.
Lead in concentrate production increased by 16% to achieve a record six month production. This was realised through recent expansions, higher grades and improved concentrator recoveries at the Australian operations. Lead metal production at the Northfleet refinery was up 23%, primarily due to increased volumes of Mount Isa concentrate.
|
Six months |
Six months |
Year ended |
|
Australia – Mount Isa |
|
|
|
|
Ore mined (t) |
2,891,174 |
2,732,429 |
5,120,651 |
|
Zinc head grade (%) |
6.1 |
6.5 |
6.5 |
|
Lead head grade (%) |
3.7 |
3.3 |
3.3 |
|
Silver head grade (g/t) |
76.9 |
69.8 |
69.1 |
|
Ore treated (t) |
2,843,197 |
2,789,717 |
4,986,078 |
|
Zinc in concentrate (t) |
128,567 |
115,248 |
226,529 |
|
Lead in concentrate (t) |
73,798 |
55,586 |
104,381 |
|
Lead in lead/silver bullion (t) |
83,139 |
56,669 |
125,572 |
|
Lead in purchased concentrate smelted(t) |
19,349 |
8,490 |
31,560 |
|
Silver in crude lead (koz) |
5,263 |
3,192 |
7,533 |
|
Silver in purchased concentrate smelted (koz) |
2,357 |
1,046 |
4,042 |
|
Australia – McArthur River |
|
|
|
|
Ore mined (t) |
1,021,473 |
817,419 |
1,961,347 |
|
Zinc head grade (%) |
9.0 |
10.2 |
10.2 |
|
Lead head grade (%) |
4.4 |
4.1 |
4.2 |
|
Ore treated (t) |
1,035,318 |
945,837 |
1,886,627 |
|
Zinc in concentrate (t) |
66,562 |
70,549 |
137,737 |
|
Lead in concentrate (t) |
18,002 |
16,159 |
33,040 |
|
Silver in concentrate (koz) |
607 |
597 |
1,184 |
|
Australia – Lennard Shelf* |
|
|
|
|
Zinc in concentrate (t) |
12,422 |
6,458 |
21,045 |
|
Lead in lead concentrate (t) |
3,632 |
2,406 |
6,197 |
|
Europe – San Juan de Nieva |
|
|
|
|
Zinc metal (t) |
223,454 |
247,690 |
478,031 |
|
Europe – Nordenham |
|
|
|
|
Zinc metal (t) |
78,737 |
71,920 |
150,222 |
|
Europe – Northfleet |
|
|
|
|
Mount Isa sourced lead (t) |
71,119 |
50,277 |
111,974 |
|
Other lead (t) |
81 |
7,432 |
7,417 |
|
Total lead (t) |
71,200 |
57,709 |
119,391 |
|
Mount Isa refined silver (koz) |
4,031 |
2,331 |
5,808 |
|
Total silver (koz) |
4,031 |
2,331 |
5,808 |
|
North America – Brunswick mine |
|
|
|
|
Ore mined (t) |
1,675,866 |
1,788,195 |
3,437,265 |
|
Zinc head grade (%) |
8.1 |
8.1 |
8.4 |
|
Lead head grade (%) |
3.1 |
3.1 |
3.3 |
|
Silver head grade (g/t) |
103.3 |
102.1 |
105.0 |
|
Ore treated (t) |
1,662,290 |
1,768,311 |
3,411,156 |
|
Zinc in zinc concentrate (t) |
107,517 |
117,439 |
230,991 |
|
Zinc in bulk concentrate (t) |
8,660 |
10,218 |
20,804 |
|
Lead in bulk concentrate (t) |
6,419 |
7,927 |
16,926 |
|
Lead in lead concentrate (t) |
25,902 |
27,709 |
53,191 |
|
Lead in lead concentrate to smelter (t) |
25,412 |
31,174 |
54,238 |
|
Lead in other feeds to smelter (t) |
16,860 |
9,199 |
16,539 |
|
Total refined lead (t) |
42,272 |
41,824 |
70,777 |
|
Silver in bulk concentrate (koz) |
456 |
508 |
1,094 |
|
Silver in lead concentrate to smelter (koz) |
1,307 |
1,469 |
2,643 |
|
Silver in other feeds to smelter (koz) |
1,525 |
1,329 |
2,336 |
|
Total silver in doré (koz) |
2,780 |
2,846 |
4,979 |
|
North America – CEZ refinery ** |
|
|
|
|
Zinc metal (t) |
35,945 |
31,549 |
72,924 |
|
North America-Kidd Creek |
|
|
|
|
Zinc metal (t) |
73,807 |
63,329 |
142,549 |
|
Peru - Antamina Zinc*** |
|
|
|
|
Ore mined (t) |
6,025,252 |
5,688,593 |
12,337,415 |
|
Zinc head grade (%) |
1.5 |
2.1 |
1.2 |
|
Ore treated (t) |
4,808,497 |
2,299,722 |
10,521,090 |
|
Zinc in concentrate (t) |
57,050 |
57,132 |
98,449 |
|
Total zinc in concentrate production (t) |
380,778 |
377,044 |
735,555 |
|
Total zinc metal production (t) |
411,943 |
414,488 |
843,726 |
|
Total lead in concentrate production (t) |
127,753 |
109,787 |
213,735 |
|
Total lead metal production (t) |
113,472 |
99,533 |
190,168 |
|
* Xstrata Zinc’s pro-rata share of Lennard Shelf production (50%), closure announced on 14 July 2008 |
||||
Ends
Xstrata contacts:
|
Investors & analysts | |||
| Claire Divver |
Hanré Rossouw |
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| Telephone |
+44 20 7968 2871 |
Telephone |
+44 20 7968 2820 |
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| Mobile |
+44 7785 964 340 |
Mobile |
+44 7879 455 885 |
|
| Email |
cdivver@xstrata.com |
Email |
hrossouw@xstrata.com |
|
Pamela Bell |
||||
| Telephone |
+44 20 7968 2822 |
|||
| Mobile |
+44 7799 626715 |
|||
| Email |
pbell@xstrata.com |
|||
Notes to editors
About Xstrata plc
Xstrata is a global diversified mining group, listed on the London and Swiss Stock Exchanges, with its headquarters in Zug, Switzerland. Xstrata’s businesses maintain a meaningful position in seven major international commodity markets: copper, coking coal, thermal coal, ferrochrome, nickel, vanadium and zinc, with additional exposures to platinum group metals, gold, cobalt, lead and silver, recycling facilities and a suite of global technology products, many of which are industry leaders. The Group's operations and projects span 18 countries: Argentina, Australia, Brazil, Canada, Chile, Colombia, the Dominican Republic, Germany, New Caledonia, Norway, Papua New Guinea, Peru, the Philippines, South Africa, Spain, Tanzania, the USA and the UK. Xstrata employs approximately 56,000 people, including contractors.