Xstrata announces record $23-bn spending to boost growth

Swiss diversified miner Xstrata is planning to spend $23 billion on new and existing mines by 2016 to boost growth by 50 per cent and targeted investing $6.8 billion next year primarily in coal, copper and nickel projects.

As the global economy recovers and current capacity not able to meet the demand for resources, all major mining companies have recently announced massive investments on expansion, but Xstrata's proposed investment is thus far the biggest so far in the mining industry.

Revealing its investment plan ahead of an investors meet today in London, Zug Switzerland-based Xstrata, which has operations spanning 19 countries, said that it is on track to spend $23 billion budgeted to 2016 for expansion, with a focus on alloys, coal, copper, iron ore, nickel and zinc.

It said that it has already approved major projects that are currently in implementation with a capital expenditure of $14 billion, while it expects 14 major projects to be approved within the next 12 months that would cost a further $7.5 billion, and an additional $1.3 billion to progress more than 25 further projects that are in scoping and feasibility development.

The miner expects capital expenditure to be $6.8 billion in 2011, primarily in coal, copper and nickel projects.

The aim of this massive investment is to boost volume growth by 50 per cent and reduce costs by 20 per cent by 2014, said Xstrata.