Xstrata sees finances robust as metals prices fall

Xstrata Plc said that its finances are still robust after metal prices plunged on concern global demand will slow. It added that it agreed a three year USD 5 billion loan on October 1st 2008 and has no significant need to refinance debt until 2011. Mr Sam Catalano analyst at Macquarie Bank Limited said that "In the current environment, to know there are no material refinancing requirements in the short term removes an element of risk. The market will welcome that.'' Xstrata has rebounded 10% this week on the London Stock Exchange after tumbling more than 70% from the beginning of the year as prices for copper, zinc, lead and nickel slumped. The London Metal Exchange Index of six industrial metals has fallen 31% this year and is poised for the biggest annual decline since at least 2001. Xstrata said that coal production gained 12% to 23.5 million tonnes on improved output at Australian and Colombian mines. It set October thermal coal price contracts with Japanese customers at USD 145 a tonne. On October 1st 2008, Xstrata scrapped a GBP 5 billion hostile bid for Lonmin Plc as turmoil in financial markets prompted concern over funding the deal. Xstrata is 34% owned by Glencore International AG. ---steelguru