Xstrata hole deepens
MINING group Xstrata is to take a £1.5billion hit by closing copper and zinc smelters and cutting the value of nickel operations.
Chief executive Mike Davis said the firm did not need a major takeover deal after scrapping plans to merger with rival Anglo American and the company would not turn to its own resource to boost production volumes.
Xstrata said it would book £1.1billion in impairments this year following a drop in nickel values, partly the result of the weak dollar.
It follows the company’s decision to overhaul nickel operations earlier this year when it closed several mines. It is also looking to shut smelting plants. The shares fell 38p to 1034p.
When Xstrata walked away from its £60billion merger plan with Anglo earlier this year Davis hinted the group would be back once a six-month bar ended but yesterday he said: “The important thing is you don’t need to find a transforming transaction. Anglo was an opportunity but it’s a lost opportunity for value.”
Xstrata is planning to increase production by a half by the end of 2013.