INTERIM MANAGEMENT STATEMENT AND
Q3 PRODUCTION REPORT
Highlights
¡ Strong momentum for coal, copper and nickel volumes was seen in the third quarter over the previous quarter
¡ During the period, Xstrata successfully closed a $4 billion multi-currency revolving credit facility for general corporate purposes and to replace an existing facility due to mature in October 2011
¡ In July, the Xstrata plc Board approved a $1.47 billion investment to develop the Antapaccay copper project as a major long-life, low cost brownfield expansion to the Tintaya copper mine in southern Peru. The development will increase annual copper in concentrate production from Tintaya by 60% to an average of 160,000 tonnes for the first six years and transform the mine into a long life business with at least 20 years of operations, based on currently known mineral resources
¡ The low-cost, long-life $4.2 billion Las Bambas copper project in Peru also received approval from Xstrata plc’s Board. Las Bambas’ initial production will be 400,000 tonnes per annum of copper in concentrate, including significant gold, silver and molybdenum by-products, with first quartile cash costs
¡ In August, the Xstrata Plc Board approved the development of the $1.1 billion Ulan West underground thermal coal mine in the central west of New South Wales, Australia. The mine will produce 6.7 million tonnes per year of export thermal coal, with a mine life of approximately 18 years and cash costs at the bottom of the second quartile of the industry cost curve
¡ On 9 July, Xstrata Zinc Canada announced the commencement of construction of the new Bracemac-McLeod Mine. Ramping up to reach full production in the first quarter of 2013, the mine will produce 80,000 tonnes of zinc and 10,000 tonnes of copper annually
¡ Xstrata Nickel’s Falcondo ferronickel mining and processing operation in the Dominican Republic announced on 12 October, it was restarting operations to a planned 50% of installed capacity by March 2011 to take advantage of improved market conditions and reduced operational costs
¡ Following the Australian government’s decision to replace the Resource Super Profits Tax with a Mineral Resource Rent Tax, Xstrata Coal recommenced its AUD186 million of planned growth initiatives and Xstrata Copper resumed activities at its AUD589 million Ernest Henry underground mine and reinstated its AUD30 million north Queensland regional exploration programme.
¡ On 24 August, Xstrata made an off-market takeover offer to acquire all of the issued and outstanding shares of Sphere Minerals Limited for AUD2.50 per share, valuing Sphere at approximately AUD428 million. Sphere is a West-Africa focused iron ore company, with interests in three iron ore projects in Mauritania, West Africa
In the period from 1 July 2010, Xstrata’s operating and financial performance continues to be strong and the company’s financial position remains robust. Xstrata’s preliminary results for the year ending 31 December 2010 will be announced on 7 February 2011.
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