Xstrata H1 copper, nickel output offMining group posts mixed ...

Tag : refined copper

By Eric Onstad of Reuters
LONDON -- Mining group Xstrata posted mixed first-half productiondata, with slightly weaker output in two key metals, but forecast astrong rise in the second half.
Mined copper and nickel output fell by 1.1 per cent and 6.1 percent respectively, but the Anglo-Swiss group achieved record outputfor the first six months of the year in ferrochrome, platinum,semi-soft and coking coal and refined nickel.
Copper and nickel were responsible for the bulk of Xstrata'soperating profit last year, with copper accounting for 46 per centand nickel for 24 per cent.
"Xstrata has delivered generally sound H1 production dataversus our forecasts except total mined copper, which was slightlylower," said analyst Simon Toyne at Numis Securities.
"H2 is expected to be markedly better for the group as a wholeso, while we will probably reduce our H1 EPS forecast from 276cents to around 265 cents, we expect the market to take the data inits stride."
Mr Toyne, who rates Xstrata as "hold", said he wouldleave his full-year EPS forecast unchanged at $US7.10, a rise of 27per cent from 2007.
Xstrata shares, which have shed 11 per cent over the past month asinvestors worry about demand, rose 3.8 per cent to 3,566 pence inearly trading, compared to a 3 per cent increase in the UK miningindex.
Stronger H2
The firm, the fifth biggest mining group by market value, said in astatement it expected a "significantly" strongersecond-half performance across its portfolio.
This would result from higher grades at several copper and nickelmines, the resolution of one-off operational issues and newproduction from recently acquired and newly launched mines.
Xstrata plans to commission its Sinclair nickel mine in Australiaand the Perseverance zinc mine in Canada while expanding its LomasBayas copper mine and smelter in Chile and the Cerrejon coal minein Colombia.
Copper production for the three months to end June fell to 444,269tonnes from 449,136 tonnes in the same period last year, hit bylower volumes at Minera Alumbrera in Argentina, Tintaya in Peru andLomas Bayas in Chile.
Mined nickel output fell to 26,610 tonnes from 28,349 tonnes, hurtby lower grades at Sudbury and Montcalm in Canada.
The firm's coal division, which is expected to make a strongercontribution to profits this year after prices shot up, posted a3.9 per cent rise in consolidated coal output to 39.6 milliontonnes.
Production of zinc in concentrate rose 1 per cent to 380,778 tonneswhile attributable chrome production rose 2.8 per cent to 615,000tonnes.