Xstrata coal’s record in lowering costs led the company’s other operations for the year, according to its latest annual result.

“During the year, our businesses achieved real unit cost savings of $391 million in total,” the company said.

“Our coal business achieved over two-thirds of the total from productivity improvements across our open cut operations in New South Wales, lower cost production from the Mangoola operation and the benefits of previous capital investment in the Cerrejon joint venture.”

Chief executive Mick Davis singled out Mangoola for praise in his report on the result.

“Our coal business accounted for the majority of the savings, primarily due to increased volumes from low cost operations, in particular from the early start-up of the low-cost Mangoola mine which resulted in $230 million of unit cost savings and productivity improvements at the open cut mines in New South Wales,” he said.

“These and other initiatives have moved our coal business back into the lower half of the industry cost curve, offsetting the significant adverse impact of our leverage to a stronger Australian dollar compared to competitors’ operating currencies.”

Capital expenditure for the coal division was $801 million, higher than any other operating division and up on the previous corresponding figure of $568 million.

During the year Xstrata commissioned its $150 million Newlands Northern underground project in Queensland, which will deliver it 3 million tonnes per annum of thermal coal.

Its Ulan West project in NSW – which aims to produce 7Mpta – is 18% complete and is slated to begin production in 2014. It has substantially completed excavation of the box cut for underground access and completed the earthwork.

Ravensworth North in NSW has received archaeological and cultural heritage approvals in 2011 and earthworks are now well advanced. First production is on track for the second half of 2012.