The Xstrata difference

Other mining companies might only be interested in tier 1 assets. Not us. With coal ten years ago, the assets we picked up wouldn’t have been considered world-class coal assets.

Turning a tier 2 asset into a tier 1 business

If you look at the coal business now – we’re the largest exporter of seaborne thermal coal in the world and our assets now would attract tier 1 premiums if they were put on the market.

So the Xstrata approach is not to be restrained by the fact that there aren’t tier 1 assets just sitting there to be developed. We look for opportunities where others might not see them. It’s the same with iron ore. You can take an asset that isn’t tier 1 geologically but by operating that business efficiently, you can create a tier 1 business out of a tier 2 asset. That’s the difference. Xstrata can see value and opportunity where others can’t, and through the way we acquire and run and develop those businesses we create more value.

We’re always looking at developing not only the local mining industry but also complementary industries, supporting the region and ensuring we have a solid supply chain. There might be a small clothes making industry that we can support by using locals to provide mine uniforms for example. We try to identify existing industries in the area, so we can provide wider support in a sustainable way to the overall community. It’s part of our early commitment and investment in any area.

“We look for opportunities where others might not see them.”

Looking to the next 10 years

We want to maximise value in a sustainable way. It’s a balance. The easiest way to maximise value in terms of today's dollars is to double the output and half the mine life, but that’s not sustainable. So we’re looking at how one project can benefit another, how to stage them, how each project will be slightly bigger than the previous one.

Getting the first project running is part of it but we’re also looking at the long term – thinking about what our business and the countries our projects are will be like in 10 years.

We do what we say. The coal business has gone from effectively nothing to 100 million tonnes in 10 years. We want to be a top five producer in iron ore. That’s easy to say, but we’ve done it in the coal business and I’ve got every confidence we can do it here in iron ore.