HomeBase MetalsXstrata to spend US$6.8 billion on new mines next year

Xstrata to spend US$6.8 billion on new mines next year

Xstrata “’ big
expansion plans
London, England — MININGREVIEW.COM — 08 December 2010 – Major global diversified mining group Xstrata “’ based in Switzerland and listed on the London and Swiss stock exchanges “’  plans to increase spending on new mines by about 50% next year to US$6.8billion (R47.6 billion) as it keeps its main focus on organic growth rather than acquisitions.

Revealing this here ahead of an investor presentation, the company said total spending on new mining operations was due to reach US$23 billion (R160 billion) over the next six years.

Reuters reports that in its early years Xstrata grew quickly through a series of takeovers, but last year it switched its focus to expanding existing operations and building new projects.

“Together with opportunistic M&A where we can extract value, our focus on organic growth means that Xstrata’s path to value is clear, and is in the hands of our management teams,” CEO Mick Davis said.

The Anglo-Swiss group added that it was on track to meet its targets set last year to boost volumes by 50% and cut costs by 20% by 2014. Xstrata “’ the world’s biggest exporter of thermal coal for power plants “’ said it now aimed to add a further 30% volume growth by 2016.

Next year’s planned spending for new mines of US$6.8 billion (R47.6 billion) would be mainly for coal, copper and nickel projects. It compared with US$4.6 billion (R26.4 billion) estimated in August for 2010.

In August, Xstrata added more than US$5 billion (R34 billion) to its long-term capex budget after approving US$4.2 billion (R28.9 billion) for the Las Bambas copper mine in Peru and US$1.1 billion (R7.6 billion) for the Ulan West coal project in Australia.