Xstrata Mulls $9 Billion of New Investments in 10 Projects -Shanghai Metals Market

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Xstrata Mulls $9 Billion of New Investments in 10 Projects

Industry News 04:32:35PM Mar 23, 2010 Source:SMM

March 23 (Bloomberg) --Xstrata Plc., the fourth-largest nickel producer, is mulling new investments worth $9 billion and is still looking at acquisitions, an executive said.

The company is studying 10 projects, which may add to the more than $14 billion it expects to spend on expansion in the next three years, Ian Pearce, chief executive officer of London- based Xstrata's nickel unit, said at a conference in Singapore today. 

Xstrata is betting that a revival in metal and coal demand will continue as the global economy recovers from last year's recession. Base metal prices have gained 80 percent in the past year as Chinese demand jumped to a record on the government's stimulus spending and strategic reserve purchases.

"The majority of the projects are low cost, low risk, brownfield expansions," Pearce said. Xstrata continues to look at "opportunistic acquisitions" as part of its strategy, he said.

Xstrata's Koniambo nickel mine in New Caledonia is on track to start production in 2012, he said.

The company plans to expand output 50 percent by 2013, mainly at its copper and coal units, Chief Executive Officer Mick Davis said in December. Xstrata is also the world's largest exporter of coal used for power. 
 
 

Xstrata Mulls $9 Billion of New Investments in 10 Projects

Industry News 04:32:35PM Mar 23, 2010 Source:SMM

March 23 (Bloomberg) --Xstrata Plc., the fourth-largest nickel producer, is mulling new investments worth $9 billion and is still looking at acquisitions, an executive said.

The company is studying 10 projects, which may add to the more than $14 billion it expects to spend on expansion in the next three years, Ian Pearce, chief executive officer of London- based Xstrata's nickel unit, said at a conference in Singapore today. 

Xstrata is betting that a revival in metal and coal demand will continue as the global economy recovers from last year's recession. Base metal prices have gained 80 percent in the past year as Chinese demand jumped to a record on the government's stimulus spending and strategic reserve purchases.

"The majority of the projects are low cost, low risk, brownfield expansions," Pearce said. Xstrata continues to look at "opportunistic acquisitions" as part of its strategy, he said.

Xstrata's Koniambo nickel mine in New Caledonia is on track to start production in 2012, he said.

The company plans to expand output 50 percent by 2013, mainly at its copper and coal units, Chief Executive Officer Mick Davis said in December. Xstrata is also the world's largest exporter of coal used for power.