With a market capitalization of approximately 41.8 billion British pounds (USD67.6 billion), Switzerland-based Xstrata (London: XTA, OTC: XSRAY) has been cited as a potential acquirer of other mining companies and as an acquisition target. And the rumor mill has steadily heated up as Xstrata’s profits have continued to rise.

The company boosted revenue 34 percent and growth accelerated in the second half of the year, with operating cash flow surging 53 percent for the year and 31 percent sequentially from the first half of 2010. Much of that gain was due to higher prices owing to robust demand from the developing world. Average copper, nickel and zinc prices rose 46, 48 and 30 percent, respectively. Ferrochrome prices surged 46 percent and coking or metallurgical coal rose 41 percent.

Output growth was also robust as new projects lifted production and acquisitions paid off. Chrome production, for example, surged 50 percent. Overall, the company has 20 major construction projects underway that will boost volumes by 50 percent from 2009 levels.

The overall picture of Xstrata is a company that is successfully going ever-further, ever-deeper and becoming more valuable to shareholders in the process. New Metals and Mining Portfolio Holding Xstrata is a buy up to GBP16 in London and USD7 on the OTC market.

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