By Alex MacDonald
LONDON--Anglo Swiss miner Xstrata PLC (XTA.LN) has the capacity
to complete its current capital expenditure program without losing
its investment grade rating or sacrificing its progressive dividend
policy, the company's chief financial officer said Tuesday.
"Clearly, my primary priority was to enter this period of
accelerated capital spend with a balance sheet that could sustain
very extreme headwinds in terms of pricing," Trevor Reid told
analysts in a call. "Given our outlook for commodities, even if you
run a downside case, we still think we will be able to maintain a
progressive dividend."
Xstrata said Tuesday that it would defer about $1 billion in
capital expenditure this year, but that this wouldn't have any
effect on the commissioning schedule of its projects.
It expects to make up for the deferred spending by increasing
its capital spend by $400 million in 2013 and $600 million beyond
that.
"We haven't cancelled any projects and we haven't moved back the
scheduling for commissioning of any approved projects," Xstrata's
Chief Executive Mick Davis told Dow Jones Newswires in an
interview.
Xstrata now expects to spend $7.2 billion on capital expenditure
in 2012, but said that the timing of its approved projects hasn't
changed.
Mr. Reid told analysts that the company has very little
flexibility in terms of adjusting its approved capital program.
"Obviously we could [adjust that] but it would be expensive to
do and I think value destructive," he said, adding that the company
does have flexibility in terms of the sequencing of its unapproved
projects.
Write to Alex MacDonald at alex.macdonald@dowjones.com
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