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Xstrata reviewing Australia coal projects
Xstrata Plc the world’s largest thermal coal exporter said that it’s reassessing the viability of its coal projects in Austr alia because of declining prices.

Mr Mick Buffier group executive for corporate affairs and sustainable development at unit Xstrata Coal in an interview said that “We’re reviewing all those projects. It’s part of a normal business. So much depends on the market, price level and individual projects that have different cost structures.”

Thermal coal prices, which fell to a near three and a half year low this month, have forced job cuts and project deferrals in Australia as the industry battles lower prices and rising costs. BHP Billiton Ltd and Xstrata cut almost 900 jobs at coal operations in September.

Xstrata, whose shareholders are expected to back this year’s biggest takeover later today, owns coal, copper, zinc and lead operations, as well as a suite of development projects in Australia. This includes the AUD 6 billion (USD 6.2 billion) Wandoan thermal coal project in Queensland, where the Zug, Switzerland based co mpany is awaiting a state government decision on granting a mining lease.

Mr Buffier said that “It’s a matter of getting the right return on capital. As prices have come down, projects that would have been viable at very high levels tend to be put back. As prices move up, we’d look again.”

Source – Bloomberg