Xstrata is hit by worries at Chilean mine

Problems at its huge copper mine in Chile have provided a fresh headache for the mining giant Xstrata, which is in the throes of a $32bn (£20bn) takeover by the commodities trading giant Glencore.

Xstrata, which squeezed a higher offer from Ivan Glasenberg's Glencore last month, is attempting to turn around production at the Collahuasi mine, controlled with Anglo American.

The mine has been blighted by a combination of work stoppages, heavy rains and fatal accidents, prompting Anglo and Xstrata to put a recovery plan in place and appoint new bosses.

Collahuasi, which accounted for just over a fifth of Xstrata's copper production last year, saw output fall 44 per cent on last year in the three months to September.

The owners of Collahuasi are weighing up whether to go ahead with expansion plans which could more than double annual output. Xstrata's overall production of the red metal dropped to 187,800 tonnes in the quarter, ahead of the previous three months but 16 per cent below a year earlier.

Rival BHP Billiton increased iron ore production in the third quarter.