Xstrata Plc has reduced its total capital expenditure for 2013
to 2015 by 15.6 percent to $26 billion, it said at its investor
day presentation Sept. 10.
expects its sustaining capex to be $4 billion per year, at the
lower end of its previous guidance of $4 billion to $5 billion
Xstratas initial industrial asset portfolio review has
been completed, and its underlying capex for 2013-15 has been
reduced by $1.3 billion.
processes also have been integrated across the merged
companies, confirming that "existing Glencore liquidity and
value at risk thresholds remain appropriate for the enlarged
group," the company said.
Cost savings from
synergies are expected to be $1.6 billion in 2014, derived
mainly from corporate and divisional restructuring.
operational productivity and streamlining also are expected to
rise, the company said.
Lower headline capex
and sustaining capex, as well as greater certainty, are
expected to lead to total capex of $12 billion this year, $8
billion next year and $6 billion in 2015. This includes a
$1.9-billion reduction in underlying metals and coal capex,
which will be partially reallocated to high-return exploration
The priority was to
understand Xstratas commitments through an evaluation of
the combined portfolio, the company said.
The sale process for
Glencore Xstratas Las Bambas copper project in Peru has
now been confirmed, and another 88 projects have been reviewed.
Of these, 44 projects have been suspended and seven have had
their scope and costs reduced, the company said. Further
divestments are likely to result from the industrial asset
The revised capex at
Las Bambas and at the Koniambo nickel project in New Caledonia
is now higher than the companys last 2013-15 budget for
the projects, totaling $1.5 billion.
Xstratas total capex was cut by $1.3 billion excluding
the revisions for Las Bambas and Koniambo, and by $1.9 billion
excluding an increase in oil capex.
Switzerland-based company is planning to channel excess capital
toward best returns and value creation, including bolt-on
acquisitions, brownfield expansion and returns to
A version of this article was first published by AMM sister
publication Metal Bulltin.