Santiago, Chile — MININGREVIEW.COM — 03 April 2009 – Xstrata Plc – the world’s fourth- largest copper miner – has revealed that it is in the market to purchase other producers, in the wake of the global collapse in equities that has slashed the cost of potential targets.
“A lack of financing for small- and mid-sized companies is creating opportunities for Xstrata that were previously closed off when equities were soaring,” said Xstrata Copper CEO Charlie Sartain in an interview here with Bloomberg News.
Acquisitions may help Xstrata double copper output and take advantage of stronger demand once the financial crisis ends. He added that the Zug, Switzerland-based company had raised US$$5.9 billion (R56 billion) in a share sale last month, and might use those funds to help finance purchases in copper or other commodities.
“We’d certainly be looking at acquisitions as part of growth,” Sartain emphasised. “We’re looking at shifting our focus.”
Xstrata’s copper production will be little changed this year at about 950 000 tonnes, but the company wants to increase output to about 2 million tonnes. Unlike larger competitors such as BHP Billiton Limited and Freeport-McMoRan Copper & Gold Incorporated, Xstrata hasn’t cut output of the metal this year after a 57% drop in copper prices.
“The long-term outlook for copper hasn’t fallen as much as the share prices of some companies, making assets more attractive,” Sartain said. “While there has been a significant drop in copper supplies, supply will outpace demand this year” he added.