Xstrata has completed the results season for global miners, posting a 79% drop in profits to US$ 1.18 billion from US$ 5.71 billion in 2011. The miner, which is in the final stages of a merger with commodities trader, Glencore, took writedowns on its zinc, nickel and platinum assets, following a pattern of impairment charges set by the other major mining houses. This reduced earnings by US$ 2.6 billion.
According to its annual report, Xstrata’s total consolidated coal production reached a record 90.4 million t, 7% higher than in 2011. Australian thermal coal sales volumes increased following the restart of mining at Blakefield South, a full year of sales from Mangoola, the recovery from flooding at Rolleston and the early stage production tonnes from Ulan West, Ulan Open Cut and Ravensworth North.
In South Africa, the continued ramp up of Goedgevonden, and a full year of production from the ATCOM East mine, combined with continued productivity improvements at the Impunzi and Tweefontein opencast mines positively impacted sales volumes.
At the Cerrejón joint venture in Colombia, productivity improvements also increased volumes.
However, with coal prices significantly lower in 2012 compared to 2011, coal EBITDA dropped from US$ 2.82 billion from US$ 3.85 billion. Australian prices for thermal coal and metallurgical coal fell by 7% and 25% respectively.
The merger with Glencore has been set back again due to delays in getting Chinese approval. Glencore had set a deadline of 15 March for completing the deal.
Written by Jonathan Rowland.
Read the article online at: https://www.worldcoal.com/coal/11032013/xstrata_announces_fall_in_profits_for_2012/