XSTRATA COAL ANNOUNCES SIGNIFICANT INCREASE TO COAL RESERVES AND RESOURCES

London and Sydney, 29 January 2009

Summary Coal Reserves and Coal Resources Information

The following summary of Coal Reserves and Coal Resources is extracted from the “Ore Reserves and Mineral Resources Report” published by Xstrata on 29 January 2009. A copy of the full report is available at www.xstrata.com/publications/reserves.

 Xstrata Coal

Total reported managed Coal Resources increased by 2.1 billion tonnes, comprising 1.6 billion tonnes of Measured and Indicated Resources and 0.5 billion tonnes of Inferred Resources. Recoverable Coal Reserves increased by 1.2 billion tonnes. 

Included in these figures is a substantial increase in the Coal Resource at the Wandoan Project to over 2.5 billion tonnes, an increase of approximately 1.4 billion tonnes, together with the declaration, for the first time, of a Coal Reserve of 540 million tonnes.

Other key reserve movements include a combined increase of approximately 300 million tonnes for the expansion of open cut operations in the Ravensworth West/Cumnock areas and a combined increase of more than 300 million tonnes from recent acquisitions Mangoola, Tahmoor and Ravensworth Underground.

 Total Coal Resources as at 30 June 2008 are 18.7 billion tonnes and total Coal Reserves 3.6 billion tonnes, equivalent to a nominal life of 28 years at 2008 mining rates. The Coal Resources are inclusive of the Coal Reserves.

 “This significant increase in reserves demonstrates the long term strength of our current operations, supported by substantial resources which will ensure our continued growth,” said Peter Freyberg, Chief Executive, Xstrata Coal. 

Wandoan

The recently completed prefeasibility study of the Wandoan Project in the Surat Basin of Queensland, delineated more than 540 million tonnes Coal Reserves and an increase of more than 470 million tonnes in Measured and Indicated Coal Resources.

 “The successes achieved in the exploration, geological and mining studies of the Wandoan Project once again confirms that Xstrata Coal is well positioned to meet future global energy needs and market demand for quality thermal coal,” said Mr Freyberg.

 “The Wandoan sample pit generated washed coal for market testing and trial burns with favourable results in mid 2008 and we continue to make good progress.”

 The Wandoan project is expected to deliver over 20 million tonnes of thermal coal annually on a managed basis.