Xstrata reinstates dividend, upbeat on outlook

Xstrata dropped a "merger of equals" proposal for Anglo that would have created a group with a market value of $96 billion after refusing demands from Anglo shareholders that it pay a premium.

The group said Monday it had over $8 billion in projects currently under construction and a further 10 projects worth $9 billion were due to be approved in 2010. The mine expansions will cost $14 billion in capital spending over the next three years, including $4.9 billion in 2010.

Xstrata posted mixed production data last week, showing an 11 percent rise in coal output and a five percent fall in mined copper, its two most profitable products.

Average coal prices last year fell as much 38 percent, copper slid 26 percent and zinc 11 percent.

(Reporting by Eric Onstad; Editing by Julie Crust and Louise Heavens)