* Coal output up 7 pct at 85.3 million tonnes
* Copper dips 3 pct to 888,979 tonnes
* Record production of mined nickel
By Clara Ferreira-Marques
LONDON, Jan 31 Miner Xstrata
posted record output from its Australian thermal coal operations
in 2011, boosting total coal production 7 percent, as the newly
commissioned Mangoola mine helped offset a flood-hit start to
the year and strikes in South Africa.
Copper, however, dipped, in line with expectations and
Xstrata's peers, hit by lower grades and as several mines
approach the end of their working life before new operations,
including Antapaccay in Peru, start later this year.
While iron ore has become the focus of operations at several
of the diversified miners, copper and coal account for more than
70 percent of Xstrata's profits. Both commodities are key planks
of the miner's growth strategy, with supply issues expected to
hold up copper prices, while Chinese and Indian demand for
seaborne coal helps to support thermal coal prices.
Consolidated coal production totalled 85.3 million tonnes,
helped by a 12 percent increase in Australian thermal coal
production to 49.8 million tonnes which offset a dip in South
African operations following strikes.
Output of coking coal, used in steelmaking, dipped to 7.6
million tonnes, disappointing some in the market, in what
analysts said was an indication of continued robust input prices
for the steel sector.
"Today's numbers are generally in line with consensus but
they show the impact all of the majors are facing on output
volumes. Across the board, year-on-year, Xstrata's numbers are
generally down," analyst Charles Cooper at Oriel said.
Total mined copper production was almost 3 percent lower at
888,979 tonnes. Xstrata saw production dip at its Alumbrera mine
in Argentina and also Ernest Henry in Australia as well
Collahuasi in Chile, which it owns with Anglo American.
Most of the diversified miners have reported drops in copper
production, with only Anglo American so far announcing a boost
in the fourth quarter from its ramped-up Los Bronces mine.
Xstrata's shares were up 1.3 percent to 1,092 pence at 0910
GMT, slightly underperforming a 1.5 percent rise in the market.
Analysts pointed to an unusually troubled 2011 and an
expected boost from new projects in 2012.
"Xstrata's 2011 production was impacted by massive rain
events, seismic events, industrial action, equipment issues and
lower grades," Deutsche Bank analysts said.
"Lower grades at a number of the copper and zinc operations
impacted production levels, but these will be corrected with
project delivery over the near to medium term."
Zinc, hit by a shift to copper rich ores at the Antamina
copper-zinc mine and lower volumes from Xstrata's Canadian
operations, saw a 2 percent fall in concentrate production.
Total zinc in concentrate dipped to 974,517 tonnes.
Xstrata said nickel production hit a record 105,925 tonnes,
up 15 percent more than the previous year, helped by its
Falcondo ferronickel operation in the Dominican Republic which
outperformed the company's expectations by 8 percent.
Analysts and investors have been watching for news of
progress on Xstrata's Koniambo ferronickel project in New
Caledonia, but the company did not provide an update.
A fire destroyed administrative offices at the site in
November, but Xstrata has said there was no impact to schedule.
In its alloys division, Xstrata saw the impact of weakening
Chinese demand for South African ferrochrome and strikes, with
ferrochrome volumes down 12 percent.