Higher grades at several copper and nickelmines

Tag : refined copper
Mined copper and nickel output fell by 1.1 percent and 6.1 percentrespectively, but the Anglo-Swiss group achieved record output forthe 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 percentand nickel for 24 percent.

"Xstrata has delivered generally sound H1 production data versusour forecasts except total mined copper, which was slightly lower,"said analyst Simon Toyne at Numis Securities.

"H2 is expected to be markedly better for the group as a whole so,while we will probably reduce our H1 EPS forecast from 276 cents toaround 265 cents, we expect the market to take the data in itsstride."Toyne, who rates Xstrata as "hold", said he would leave hisfull-year EPS forecast unchanged at $7.10, a rise of 27 percentfrom 2007.

Xstrata shares, which have shed 11 percent over the past month asinvestors worry about demand, rose 3.8 percent to 3,566 pence by0835 GMT, compared to a 3 percent increase in the UK mining index .
STRONGER H2
The firm, the fifth biggest mining group by market value, said in astatement it expected a "significantly" stronger second-halfperformance 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 percent rise in consolidated coal output to 39.6 milliontonnes.

Production of zinc in concentrate rose 1 percent to 380,778 tonneswhile attributable chrome production rose 2.8 percent to 615,000tonnes.