Oct. 20 (Bloomberg) -- Xstrata Plc, the world’s largest exporter of coal used by power stations, said third-quarter output of the fuel gained 7.9 percent after it acquired two Colombian mines in March.

Production increased to 21.9 million metric tons, from 20.3 million tons a year earlier, the Zug, Switzerland-based company said today in a statement. Total coal output, including coking coal, advanced 8.9 percent to 25.6 million tons. Volumes of platinum group metals, refined nickel, zinc in concentrates and lead also gained.

Xstrata, which last week dropped a proposed merger with Anglo American Plc, shuttered some Canadian and Australian mines in the first half and cut spending after demand for commodities slumped. It said in July that copper output would rise in the second half compared with the first.

Xstrata dropped 25 pence, or 2.4 percent, to close at 1,002 pence in London trading. The stock has more than doubled this year, increasing the coal producer’s market value to 29.4 billion pounds ($48.1 billion.)

The company bought the Prodeco coal assets in Colombia in March from its largest shareholder Glencore International AG for $2 billion. The unit contributed 5 million tons in the first half. Glencore, the world’s largest commodities trader, has an option to buy Prodeco back within 12 months.

South African Mines

Production of thermal coal from South African mines dropped 8.2 percent due to the planned shutdown of the Impunzi mine and lower domestic demand, Xstrata said. Output of Australian coking coal, used in steelmaking, rose 11 percent. Coal was the largest contributor to Xstrata’s first-half operating income, accounting for 54 percent.

Xstrata’s third-quarter mined copper output fell 9.6 percent to 212,173 tons after less metal was recovered from ore at mines in Argentina, Peru and Australia. Production of copper cathode, a finished form of the metal, slid 15 percent to 181,318 tons on the temporary shutdown of a smelter in Canada.

Xstrata, the world’s fourth-largest copper producer, last week said it would invest $293 million to expand the Lomas Bayas II copper project in Chile, and spend $407 million on the ATCOM East coal project in South Africa.

Output of zinc in concentrate, an intermediate product shipped to smelters, gained 9.8 percent to 265,638 tons. Mined nickel production slipped 1.5 percent to 13,418 tons after two mines were closed in Canada’s Sudbury region.

Chrome production fell 20 percent to 245,000 tons after Xstrata’s venture with Merafe Resources Ltd. suspended 17 of 20 furnaces in the first half on weak demand. The venture raised capacity to 60 percent in July and to 85 percent at the end of September on “improved demand,” Xstrata said today.

To contact the reporter on this story: Brett Foley in London at bfoley8@bloomberg.net

Last Updated: October 20, 2009 12:13 EDT