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Xstrata full year profits jump 86%

Tuesday 8th February 2011
As rising demand in emerging markets pushed up commodity prices, mining company Xstrata said its full-year profits have risen 86 percent on stronger prices for most of its commodities.

Xstrata Plc, the largest exporter of coal used for power, said profit surged to $5.15 billion (£3.19 billion), from $2.77 billion last year.

Earnings before interest, tax, depreciation and amortization of $10.39 billion compared with the $10.08 billion average estimate of 18 analysts surveyed by Bloomberg.

Swiss-based Xstrata, one of the most heavily traded companies in London, said it plans to pay a final dividend of 20 cents a share, reflecting a return to pre-crisis levels.

The Anglo-Swiss miner said last week that its 2010 production of thermal coal had been affected by severe weather, but that it was still assessing the damage caused by flooding and cyclones this year in Queensland where it has coal, copper and zinc operations.

The average thermal coal price at Australia’s Newcastle port, a benchmark for Asia, rose to $99 a metric ton in 2010 from $72, according to a McCloskey Group index.

The price of copper, Xstrata’s other main product, averaged $7,558 last year, up 45 percent from 2009.

Xstrata was the first major diversified miner to post earnings this season. BHP Billiton and Rio Tinto will report their results on February 16 and February 10 respectively.

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