Zug, 5 May 2009
Highlights
- Successful 2 for 1 rights issue enabled $3.7 billion of debt to be repaid and secured a robust balance sheet
- Acquisition of world-class, cash-generative Prodeco coal operations in Colombia for a consideration of $2 billion, effective from 1 January 2009
- Thermal and coking coal, nickel, platinum, zinc in concentrate and lead metal production volumes increased in the first quarter compared to the same period in 2008:
- Thermal coal volumes boosted by production from Prodeco operations
- Better operating conditions at Queensland operations and improved volumes at Tahmoor led to a 20% increase in coking coal production
- Production from the new Perseverance mine in Canada and improved operational performance at a number of operations supported a 21% increase in zinc in concentrate production
- In January, the Xstrata-Merafe Chrome Venture announced the suspension of an additional six ferrochrome furnaces to bring total suspended ferrochrome production to 80% of annual operating capacity
- In February, Xstrata Zinc’s McArthur River Mine in Australia received final approval for its open-pit development
- As part of an ongoing response to the economic downturn, Xstrata’s businesses undertook a number of pro-active initiatives during the period to optimise our operations, including:
- In February, Xstrata Nickel placed its Fraser complex on care and maintenance, reduced Strathcona mill production and deferred the Fraser Morgan project at Sudbury;
- Xstrata Zinc restructured its operations at Mount Isa to reduce capital and operating costs while increasing metal production. In late February, Handlebar Hill was placed on care and maintenance and is being replaced by increased production from the higher-grade George Fisher underground mine and the large-scale, lower-cost Black Star open cut mine
- Xstrata Copper suspended operations at the copper smelter at the Kidd metallurgical operation for eight weeks from mid-April in response to weak market conditions for sulphuric acid
- In April, Xstrata Nickel Australasia announced it would defer the development of the underground mine at the Sinclair operation. The open pit operation will continue until August as scheduled, when the operation will be placed on care and maintenance
The Group’s financial position has been strengthened through the successful rights issue during the period, the net proceeds of which were used to repay existing debt. Consequently gearing (defined as net debt to net debt plus equity) has fallen to 30%. Additionally, Xstrata has no significant debt refinancing requirements until 2011.
Xstrata plc will announce half-yearly results for the period from 1 January to 30 June 2009 on 4 August 2009.
Xstrata contacts
Claire Divver
Telephone: +44 20 7968 2871
Mobile: +44 7785 964340
Email: cdivver@xstrata.com
Pamela Bell
Telephone: +44 20 7968 2822
Mobile: +44 7799 626715
Email: pbell@xstrata.com
Investors & analysts
Hanré Rossouw
Telephone: +44 20 7968 2820
Mobile: +44 7879 455885
Email: hrossouw@xstrata.com
This Interim Management Statement has been prepared solely to provide additional information to shareholders as a body to meet the relevant requirements of the UK Listing Authority’s Disclosure and Transparency Rules and should not be relied on by any other party or for any other purpose.