Last paragraph is interesting, why did he just say no they were...

Last paragraph is interesting, why did he just say no they were not interested in OXR

UPDATE: Xstrata CEO Betting On Thermal Coal Price Gain
27/04/2006 7:49PM

By Matt Chambers
Of DOW JONES NEWSWIRES


BRISBANE (Dow Jones)--Xstrata Plc. (XTA.LN) said Thursday it is pushing for a slight rise in thermal coal contract prices this year after spot prices jumped on supply constraints.

The London-based miner is also keen to expand into nickel, platinum and iron ore as commodity prices surge on growing Chinese and Indian demand, chief executive Mick Davis told reporters.

Miners and utilities remain deadlocked in contract talks for the year started April 1. Thermal coal spot prices have climbed about 30% since the beginning of 2006 to around US$54 a ton, leaving analysts to hastily upgrade forecasts that penciled in a fall from last year's US$52 a ton.

"I think the current market prices are a reasonable level" for thermal coal prices to settle at, Davis said at the official opening of the company's Rolleston thermal coal mine in Queensland state's Bowen Basin.

Price talks are dragging out longer than they did last year with a big price gap developing between miners and power producers, Davis said. He wouldn't put a timeframe on when he thought the talks would wrap up.

Xstrata Coal boss Peter Coates said the turnaround in the coal market is highlighted by current expectations total Australian thermal coal production will drop by five million metric tons this year, compared with estimates of a similar gain at the start of 2006.

Davis, who has grown Xstrata into one of the world's biggest mining companies, said he is keen to expand into new commodities where major consumers don't have natural resources of their own.

"Nickel is one, platinum is another and iron ore is a third," he said. While he would be happy to own a company which happens to have a decent uranium mine, Davis said Xstrata isn't actively looking to move down that path.

Davis is still keen to grow Xstrata into an even bigger miner but wouldn't be drawn on timing or targets.

The aggressive miner was beaten last year by BHP Billiton (BHP) when it tried to buy Australia's WMC Resources to boost copper reserves and enter nickel mining.

WMC also owns Olympic Dam, one of the world's biggest uranium mines and a key lure for BHP which won control with a US$7.3 billion offer.

Xstrata currently owns a 20% stake in Canada's Falconbridge (FAL). "I really think that for us to begin the quantum leap into the next level, we're going to have to do that either with a single or several transforming transactions," Davis said.

He said Xstrata's interest in Falconbridge provides "a range of options" but wouldn't elaborate.

Davis also declined to comment on whether Xstrata is interested in bidding for gold and base metals miner Oxiana Ltd. (OXR.AU) which received a boost recently on takeover rumors.

-By Matt Chambers, Dow Jones Newswires;
61-3-9671-4313; [email protected]
-Edited by Ian Pemberton


(END) Dow Jones Newswires

April 27, 2006 05:49 ET (09:49 GMT)

Copyright (c) 2006 Dow Jones & Company, Inc.