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The company is exploring for nickel deposits on its Langmuir property near Timmins, Ontario; for nickel-gold-copper on its Cleaver and Douglas properties; and for molybdenum and rare earth elements at recently acquired Desrosiers property.
Message: Xstrata Takes £1.5 Billion Charges
Xstrata Takes £1.5 Billion Charges
http://www.nytimes.com/reuters/2009/12/08/business/business-uk-xstrata-charges.html
By REUTERS
Published: December 8, 2009
Filed at 3:25 a.m. ET
LONDON (Reuters) - Mining group Xstrata <XTA.L> is taking a $1.9 billion (1.2 billion pound) charge for restructuring its nickel business after metal prices fell and is taking further charges of $545 million for copper smeltering operations in Canada and Chile, it said on Tuesday.
"The impairments announced today reflect the structural changes made to our nickel business during 2009, together with the very significant impact of short and medium term currency movements, which have resulted in an exceptional impairment charge against Xstrata's nickel assets," Chief Executive Mick Davis said.
The impairment charge for nickel resulted from various closures and delays in projects as the nickel market was hit by the global downturn and weak prices.
The price of nickel has rebounded this year by 75 percent to around $15,700 per tonne, but is still a fraction of its 2007 peak of $51,650.
Earlier in the year, Xstrata closed its high-cost mines in Sudbury, Canada, and suspended operations at Falcondo in the Dominican Republic and Montcalm in Canada.
"The impact of these restructurings on exploration potential, life of mine plans and expectations of post-restructuring capital and operating costs has continued to evolve over the course of the year," Xstrata said.
Xstrata decided to permanently shut down its Kidd copper and zinc metallugical plant in Canada after warning last week that it was considering closing or selling some of its four copper smelters.
The Anglo-Swiss group, which will take a charge of $375 million for the closure, said it was facing global overcapacity in copper smelting and record low treatment and refining charges.
The Kidd mine and concentrator will continue to operate, it added.
It also took a charge of $170 million for its Altonorte copper smelter in northern Chile.
(Reporting by Eric Onstad)
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Xstrata cutting almost 700 Canadian jobs
http://www.cbc.ca/money/story/2009/12/08/xstrata-charge.html
Last Updated: Tuesday, December 8, 2009 | 8:52 AM ET Comments22Recommend21
The Canadian Press
Xstrata PLC is recording about $2.4 billion US in writedowns linked to its copper and nickel assets, many of them in Canada.
The announcement from Xstrata's headquarters in Zug, Switzerland, comes after the diversified global mining company announced Monday it is slashing 670 jobs by closing Canadian copper and zinc smelters in northern Ontario by May 2010.
The majority of the impairment charges announced Tuesday, however, come from Xstrata cutting the value of its Australian, Norwegian and Canadian nickel assets.
Xstrata acquired Toronto-based nickel and copper producer Falconbridge several years ago after a hotly contested bidding war, before world commodity prices peaked last year and then crashed when the global economy slowed dramatically.
Xstrata said Tuesday that it's writing down the value of its global nickel assets by $1.9 billion US and its Kidd Metallurgical site in Timmins, Ont., which it acquired with Falconbridge, by $375 million US.
Xstrata says it will also take on an exceptional impairment charge of $170 million related to its Altonorte copper smelter in northern Chile.
The Anglo-Swiss company's nickel restructuring included the closure of high-cost end-of-life mines in Sudbury, Ont., the centre of Canada's nickel mining industry.
The city has already been rocked by a prolonged strike at Vale Inco, another global giant of the nickel industry.
'Exceptional impairment charge'
Xstrata cited several underlying global factors for the decisions this week, including poor market demand and a strong Canadian dollar.
"The impairments announced today reflect the structural changes made to our nickel business during 2009, together with the very significant impact of short and medium term currency movements, which have resulted in an exceptional impairment charge against Xstrata's nickel assets," Mick Davis, Xstrata PLC's chief executive officer, said in a statement.
"Non-cash charges at Kidd and Altonorte are due to the shutdown of Kidd copper and zinc plants and our view that the custom smelting market will remain challenging going forward." he said.
Davis added that the successful restructuring of the company's nickel business had transformed the competitive positioning of Xstrata Nickel while preserving growth opportunities.
He also pointed out that the accounting measures announced do not impact the underlying performance or growth potential of the company.
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