Highlights:

• Production volumes increased for ferrochrome, PGMs, Australian coking and semi-soft coal, refined nickel, zinc in concentrate and lead in concentrate compared to the first half of 2009

• Ferrochrome production rose by 149% in response to improved market conditions. The third quarter ferrochrome benchmark price was settled at $1.30 per pound

• Australian coking coal production was 73% higher following the resumption of longwall operations at Oaky No. 1 in August 2009 and increased productivity at Oaky North.  Semi-soft production increased by 50% at the expense of thermal coal volumes to take advantage of higher market prices

• During the first half, Xstrata Coal commissioned the underground Blakefield South mine in Australia that will replace Beltana and is ramping up to reach full capacity in the third quarter of 2010 and continued the ramp of the recently completed Goedgevonden greenfield open cut operation in South Africa, to its capacity of 12 million ROM tonnes per annum (100%)

• Xstrata’s share of Collahuasi’s copper production increased by 8% to 117,363 tonnes, due to improved mill throughput, ore grades and metallurgical recoveries. Higher copper grades improved production at Kidd Mine

• Total refined nickel increased by 8% as the integrated nickel operations maximised capacity through processing all of Xstrata Nickel Australasia’s feed. In April, Nickel Rim South commenced full mine operation and is on track to reach full capacity of 18,000 tonnes of nickel in concentrate per annum in 2011

• The ongoing transformation of Xstrata Zinc through expansions and productivity improvements at the Australian operations contributed to a 6% increase in production of zinc in concentrate. Zinc metal and lead metal volumes increased with all smelters operating at full capacity.

Xstrata Alloys

Ferrochrome production rebounded strongly to 608,000 tonnes in the first half of 2010 in response to rising demand, increasing 149% over the same period in 2009.  Ferrochrome producers achieved a 35% increase in the benchmark price from $1.01 per pound in the first quarter to $1.36 per pound in the second quarter, set against the continued strengthening of the rand against the US dollar and electricity price increases in South Africa.  The third quarter benchmark price has been settled at a slightly reduced level of $1.30 per pound.

Compared to the first six months of 2009, ferrovanadium production volumes increased by 66% to 2,186,000 kg in response to improving demand.  

PGM volumes were 2% higher than the same period in 2009, mainly as a result of increased production at the Mototolo joint venture. The development of Eland’s western decline shaft is progressing according to plan and the eastern decline development commenced in the second quarter of the year. Production from underground operations is projected to double current production levels to reach some 250,000 tonnes per month by 2013, with steady state capacity of 500,000 tonnes per month being achieved during 2015.

Ferrochrome

Vanadium

Platinum

Xstrata Coal

Xstrata Coal’s consolidated production for the six months to June 2010 was at a similar level to the corresponding period of 2009. Australian coking coal production increased by 73% or 1.6 million tonnes due to the inclusion of longwall operations at Oaky No.1, which had not been fully operational in the previous period and increased productivity at Oaky North. 

Australian thermal coal production, including semi-soft, was in line with the first half of 2009. Semi-soft production in New South Wales increased by 50% or 1.3 million tonnes to take advantage of higher prices. This was offset by a loss of around 2 million tonnes of thermal coal (100% basis) due to flooding at Rolleston during the cyclone season.

South African production was 16% lower than in 2009, mainly as a result of the planned shutdown of the Southstock Opencut in the second half of 2009 having reached the end of its reserves and industrial action at Tavistock and logistics provider, Transnet. In addition, unusually high rainfall reduced volumes during the ramp up phase of the new Goedgevonden mine and at ATCOM East, which was transferred into Xstrata’s operations in December 2009 following the restructuring of the Douglas Tavistock joint venture.

Thermal production from the Cerrejón joint venture in Colombia was at a similar level to the corresponding period in 2009.

The Prodeco operations in Colombia produced a total of 3.3 million tonnes in the period from 1 January to 13 April.  Under the terms of the Option Agreement with Glencore, Xstrata is entitled to earnings from Prodeco up to 13 April 2010.  Production from Prodeco has been excluded from all reported production in this report.

Xstrata Copper

Total mined copper production decreased by 3% in the first half of 2010 compared to the corresponding period in 2009. Lower production was mainly due to reduced volumes at Mount Isa and Ernest Henry as a result of lower grades and at Antamina, where higher mill throughput and recoveries only partially compensated for lower copper ore grades. To a lesser extent, production was also impacted by lower mining rates and recoveries at Lomas Bayas and reduced grades at Tintaya as a result of processing stockpiled ore.

At Collahuasi, Xstrata’s share of production increased by 8% to 117,363 tonnes, due to improved mill throughput, ore grades and metallurgical recoveries, more than offsetting an illegal contractors strike that impacted production for nine days in May.  Production improved at Kidd Mine as a result of higher copper grades and because of seismic events impacting output in the first six months of 2009. 

Total gold production decreased by 21% due to declining gold ore grades at Alumbrera, Ernest Henry and Tintaya.

Total mined and third party cathode production rose by 3% compared to the same period of 2009, when volumes were impacted by a record wet season in North Queensland and the global slump in sulphuric acid demand impacted refined copper production.

Xstrata Nickel

Total refined nickel production in the first half of 2010 rose to 45,458 tonnes, 8% higher than the same period last year.  Improved volumes were achieved by processing internally all of the feed from Xstrata Nickel Australasia (XNA) to maximise downstream utilisation at the integrated nickel operations.  At the end of the first half of 2010, the Nikkelverk refinery successfully completed its first twelve months of production at an increased annualised capacity rate of 92,000 tonnes, following low-cost debottlenecking and capacity enhancing initiatives in 2009.

Total mined nickel production decreased marginally compared to the first half of 2009, as the ramp up of the new Nickel Rim South mine in Sudbury substantially offset reduced production following the restructuring of the Sudbury assets, the closure of Montcalm and marginally lower production from Raglan and XNA in the first half of 2009.

Total ore mined and head grade from the Sudbury mines increased by 91% and 48% respectively, reflecting higher grade, polymetallic production from Nickel Rim South, which commenced full mine operations in April.  The operation is on track to reach full capacity of 18,000 million tonnes of nickel in concentrate in 2011.

Raglan total ore mined and nickel head grade fell slightly by 3% and 2%, respectively, in the first half of 2010 due to a planned transition to new ore zones.  At XNA, nickel in concentrate production fell by 9% as a result of the deferral of the Sinclair underground development in April 2009 due to market conditions. The underground development at Sinclair recommenced in April 2010 and production is on track to commence in the fourth quarter of this year. 

Total mined copper production increased by 54% compared to the first six months of 2009 as a result of increased volumes and head grade from the polymetallic Nickel Rim South operation and the commencement of copper mining at Sudbury’s Fraser mine in April 2010.

The Falcondo ferronickel operation in the Dominican Republic remained on care and maintenance for the period.

Xstrata Zinc

Zinc in concentrate production increased by 6% in the first half of 2010 compared to the same period in 2009 mainly as a result of the ongoing transformation of the business through expansions and productivity improvements at the Mount Isa and McArthur River operations.  Xstrata’s zinc and lead smelters produced at full capacity during the period, increasing zinc and lead metal volumes by 1% compared to the prior period, despite production at Kidd Creek zinc smelter’s being 17% lower due to its permanent closure in May 2010.

Lead in concentrate production increased by 10% during the first half of 2010 as a consequence of higher production from the Australian operations.

Bookmark this page!