On October 20, Switzerland-based mining company Xstrata Plc, the world's largest exporter of coal used by power stations, has issued its interim management statement and third quarter production report.
Accordingly, in the period from July 1, 2009, Xstrata's operating and financial performance continues to be strong and the company's financial position remains robust.
In the third quarter, Xstrata produced 245,000 mt of ferrochrome, 20.5 percent lower than the same period in 2008, as a result of the ongoing suspension of production capacity in response to market conditions. In line with improving demand in the second half of the year, Xstrata increased its ferrochrome production capacity utilization from 60 percent in early July to approximately 85 percent by the end of the third quarter.
However, the miner pointed out that the rand continued to strengthen against the US dollar during the third quarter, and was currently trading near to a 14-month high.
Xstrata said: "The strong rand has resulted in margins remaining under pressure, and subsequently ferrochrome producers have achieved a 16 percent increase in pricing. The European benchmark ferrochrome price was settled at $1.03 per pound for the fourth quarter, up from $0.89 in the previous quarter.
Meanwhile, semi-soft coking coal output increased by 21 percent compared to the year-ago period due to the switching of the New South Wales operations from thermal production to higher-priced semi-soft production, while production of Australian coking coal increased by 11 percent in the third quarter compared to the same period in 2008, through increased productivity at Oaky North and the recommencement of the Oaky No. 1 longwall in August 2009.
Production data (million mt) | Q3 2009 | Q3 2008 | Year-to-date 2009 | Year-to-date 2008 |
Total coking coal (Australia) | 2.0 | 1.8 | 4.2 | 5.0 |
Total semi-soft coking coal (Australia) | 1.7 | 1.4 | 4.3 | 4.7 |
Average received export FOB coal price ($/mt) | Q3 2009 | Q3 2008 | Year-to-date 2009 | Year-to-date 2008 |
Australian coking | 150.9 | 313.8 | 145.7 | 208.3 |
Australian semi-soft coking | 83.3 | 245.8 | 135.3 | 149.0 |
Xstrata, which last week dropped a proposed merger with its rival Anglo American Plc, shuttered some Canadian and Australian mines in the first half and cut spending after demand for commodities slumped.
Xstrata's preliminary results for the year ending December 31, 2009 will be announced on February 8, 2010.