LONDON -- The shares of Glencore Xstrata (GLEN 0.89%) rallied 1% to 347 pence this morning after the newly merged commodities giant revealed an 18% increase in first-quarter copper production to 321,000 tonnes.
Glencore Xstrata -- now the fourth-largest mining group in the world -- reported a 44% surge in copper production from its African mines, benefiting from both new and expanded projects.
The company, which is the world's largest shipper of thermal coal, posted a 1% increase in coal production.
Despite this, Glencore Xstrata revealed last night that it would abandon its plans to build a high-capacity coal export terminal in Queensland, citing "concerns about the industry's medium-term outlook."
Commenting on its improvement in copper production, the company added:
This increase primarily reflects strong growth from Antapaccay, Katanga, Mount Margaret (Ernest Henry) and Mutanda, as they benefit from their respective expansion plans. ... Overall, Marketing performance during the quarter was broadly in line with our expectations. Metals and Minerals delivered solid results despite some softening in prices toward the end of the quarter. ... Energy saw markedly improved profitability during Q1 2013, while Agricultural Products has made a slow start to the year, in what is often a seasonally weaker quarter.
With a market cap of £21 billion, Glencore Xstrata's shares trade at 10 times expected earnings, and offer a prospective dividend yield of 2.9%.
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