Xstrata Copper output down 3% in H1 on lower grades, recoveries

Xstrata Copper, one of Anglo-Swiss mining group Xstrata's (LSE: XTA) five business units, saw its mined copper production drop 3% year-on-year in H1 to 434,147t due to lower grades, mining rates and recoveries at most of its operations, the company said in its latest production report. Lower production was mainly due to reduced volumes at Australia's Mount Isa and Ernest Henry mines as a result of lower grades and at Peru's Antamina, where higher throughput and recoveries only partially offset lower grades. Output at Chile's Lomas Bayas was also down due to lower mining rates and recoveries, and Peru's Tintaya mine saw production fall as a result of the processing of stockpiled ore with lower copper content, the report said. At Chile's Collahuasi mine, the company's 44% share of production saw an 8% growth to 117,363t, as improved mill throughput, ore grades and metallurgical recoveries more than offset an illegal subcontracted workers strike that impacted production for nine days in May. Output also increased at the US-located Kidd Mine operation, while copper in concentrate production remained almost the same at Argentina's Alumbrera mine. Xstrata said gold production in H1 fell 21% to 234,206oz due to declining grades at Alumbrera, Tintaya and Ernest Henry. The company produced 371,173t of copper cathodes from mined and third-party material in the period, up 3% year-on-year. Thermal coal production at the Cerrejon JV in Colombia was at a similar level compared to the first half of last year. Thermal coal output from the Prodeco mine, also in Colombia, was excluded from the production report. Under the terms of the agreement for the reacquisition of the mine by Swiss company Glencore International, Xstrata was entitled to earnings from Prodeco up to the completion of the transaction, which occurred in April this year, the report said. Zinc in concentrate production from Antamina rose to 74,601t from 67,829t. To read the full report, go to this link