South African mines produced 16.4Mt while the company’s Australian operations produced 27.6 million tones, which was 4.2Mt, or 18% higher, than 2001. Xstrata said the increase was attributable to capacity expansion at the Mt Owen opencast mine of 400,000t, purchase of the Ravensworth/Narama operations in March 2002 (2.5Mt), commencement of longwall mining at United in June 2002 (1.1Mt) and increased production from the Ulan complex of 400,000t.

 

“Increased production from the Ulan complex reflects the higher productivity achieved since the current management took over in February 2001,” Xstrata said.

 

By end 2002, a productivity improvement of 15% was achieved at the Ulan underground mine, due to the implementation of management initiatives and reduced manning levels.

 

Unit operating costs in Australia have gone down by approximately 2% in US Dollar terms and by 7% in A$ terms, the company said.

 

“One of the attractions of our coal business is the flexible and low-cost growth opportunities inherent in the assets, especially in Australia, where some 12Mt of new annual production capacity exist over the next 10 years,” Xstrata said. “These projects are being planned and developed, against stringent business criteria, to enable the business to grow in a manner consistent with our market projections.”

 

The company’s expansion projects will see a jump in output of 4Mt by 2005 for a capital investment of some $US60 million. Production this year is set to rise by 700,000t and in 2004 by an additional 3Mt. Beltana is expected to contribute 1.4Mt in 2004, Glendell 500,000t and increases at Mt Owen, West Wallsend and Ulan Opencast.

 

Underground mining at South Bulga is scheduled to finish this year as resources are depleted and mining will move to the nearby $US38 million Beltana development mine.

 

“Beltana’s reduced manning levels and advanced work practices, compared to conventional underground longwall mines, provide a highly competitive cost structure, which is thought to be among the lowest in Australia. Beltana is expected to be a high productivity, low-cost operation that will further increase XCA’s productivity and reduce the average unit cost of the business,” the company said.

 

Xstrata said it was examining a number of other low cost, low risk opportunities including introducing a second longwall at Ulan. The Chinese longwall top coal caving method is also being examined.

 

Capital expenditure in 2002 for the Australian operations totalled $US71.5 million, mainly relating to the commissioning of longwall mining at United and development of Beltana.