Xstrata profits slump as commodity prices decline

Xstrata, the mining giant that is pursuing a £57bn mega-merger with Glencore, yesterday reported a 42 per cent tumble in first-half profits as commodity prices fell sharply.

The FTSE 100 company said operating profits came were $2.45bn (£1.57bn) against $4.24bn last time, as sales slipped by 7 per cent to $15.6bn. The group suffered as prices of nickel, copper and iron fell amid concerns about the outlook for the global economy, while it was hit further by a reduction in copper production as it makes the transition from declining, older mines to newer ones with longer-term potential.

The fall in profit was smaller than forecast.