Xstrata Plc, which paid US$17 billion for Falconbridge Ltd last year, said it's prepared to spend several billion dollars on acquisitions to expand copper production.

The company is studying projects with the capacity to produce between 150,000 to 300,000 metric tons of copper a year, Charlie Sartain, the chief executive officer of Xstrata's copper unit, said in Manila.

A five-year rally in metal prices has spurred more than US$79 billion of takeovers offers this year in the mining and metals industry.

Mick Davis, the chief executive officer of Swiss-based Xstrata, is trying to create a mining company across five continents to rival the global giants in the field, dominated by BHP Billiton Ltd, Rio Tinto Group and Anglo American Plc.

The cost of an acquisition wouldn't be a limiting factor for Xstrata, Sartain said. It "could be worth several billion dollars," he said.

"We've acquired companies from the size of Tintaya, which was an operating company in Peru in the order of US$800 million, up to US$17 billion for Falconbridge," he said.

"It would make more sense to acquire projects that are already producing.

"We have the strong reputation that allows us to raise capital for acquisition and development of new projects."

Xstrata has six copper mines including Mount Isa and Ernest Henry in Queensland, Australia, Alumbrera in north-west Argentina, Lomas Bayas in northern Chile, Kidd in Canada and Tintaya in Peru.

"Higher copper and nickel prices are driving Xstrata's cash flow, and they're willing to gear up more than other companies in the belief the cycle is longer," Tony Robson, an analyst at Global Mining Research, said in Sydney.

"This means Xstrata can handle a US$20 billion to US$25 billion acquisition."

Shares of Xstrata in London have risen 61 percent in the past year, outperforming the 16 percent gain in the benchmark FTSE 100 Index. The company has high hopes for its expansion strategy in production.