LONDON (Thomson Financial) - Xstrata Plc. reported solid first-quarter production figures for the majority of its operations, although adverse weather in Australia and South Africa affected coal production and power problems in South Africa affected ferrochrome and vanadium output.

Lower grades, severe weather and maintenance shutdowns also reduced mined nickel production by 15 percent from the year-earlier period. Last year, nickel was Xstrata's second-largest division and accounted for 24 percent of the group's EBITDA.

But first-quarter copper, semi-soft coking coal, platinum, ferrochrome, mined zinc and lead production rose from the previous year and the FTSE 100 group said the outlook for 2008 "remains very positive".

The company also reported higher prices for most of its key commodities compared with the first quarter of 2007, including substantial increases in copper, platinum, ferrochrome and thermal and coking coal prices.

Xstrata will announce its interim results on Aug. 6.

The diversified miner said electricity supply to its South African operations remains restricted to about 90 percent of total demand and it is working with Eskom, the country's power utility, and examining a number of power alternatives over the medium term.

First-quarter platinum group metals volumes jumped 128 percent from the Eland Platinum acquisition and the successful commissioning of the Elandsfontein operation in the fourth quarter of 2007. PGM prices also increased, particularly for rhodium.

Total mined copper production climbed 2 percent to 219,978 tonnes as average copper prices on the LME rose 31 percent. Copper was Xstrata's biggest operation last year and accounted for about 46 percent of the group's EBITDA.

Coal output fell 4 percent mainly due to lower thermal coal production in Australia. Flooding and heavy rains in Queensland resulted in two operations declaring force majeure. The Rolleston operation has lifted the force majeure on all contracts and production has returned to normal, but the situation remains under review at NCA, the Newlands and Collinsville operations in Queensland.

Lower production of thermal coal in South Africa was outweighed by increased output at the Cerrejon mine in Colombia.

Zinc in concentrate and lead metal production was little changed, while zinc metal production dipped 4 percent due to the failure of one transformer at San Juan de Nieva plant, although lead in concentrate output rose 21 percent. The company noted nickel and zinc prices have softened from the high levels in early 2007.

Xstrata also said it expects the acquisition of the De Wildt property from Nkwe Platinum Ltd. to become unconditional in the second quarter.

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