core sector communique

XSTRATA - INTERIM MANAGEMENT STATEMENT AND

THIRD QUARTER PRODUCTION REPORT

Highlights

• Record quarterly thermal coal production*, 13% higher than the same period in 2010 and 22% higher than the second quarter of 2011
• Increased volumes of nickel and zinc metal and lead in concentrate production compared to same period last year
• Base metals and coal operations remain on track to deliver a stronger second half performance compared to first half 2011
• Thermal coal prices remain strong with 1 October annual contracts settled with long-term Japanese customers at $126.50 per tonne FOBT (6322GAR basis), following major settlements for the year from 1 April concluded at $129.85 per tonne
• Major growth projects remain on time and on budget with Antamina (copper-zinc), Collahuasi 150ktpd (copper), Koniambo (nickel), Antapaccay (copper) and Ravensworth North (thermal coal) projects on track to start production in 2012

Four growth projects were approved during the period:

• A $1.3 billion expansion project (Xstrata share 33.3%) to increase saleable production and export capacity at the Cerrejón thermal coal operation in Colombia from 32 million tonnes to 40 million tonnes per annum by 2015
• A CAD552 million ($530 million) expansion to mining operations and infrastructure at the world-class Raglan operation in Quebec, Canada to produce 40,000 annual tonnes of nickel in concentrate by 2016
• The CAD123 million ($119 million) Fraser Morgan project to extend the mine life and further exploit polymetallic orebodies at the Fraser complex in Sudbury, Canada
• The AUD246 million ($239 million) construction of the greenfield Lady Loretta zinc-lead-silver mine in north-west Queensland, Australia to produce an annual average of 126,000 tonnes of zinc in concentrate and 40,000 tonnes of lead in concentrate over 10 years

• Xstrata Coal acquired 100% of privately-owned First Coal Corporation for around CAD147 million ($153 million) in August, and in October agreed to acquire the contiguous Lossan deposit from Cline Mining Corporation for CAD40 million, providing access to coking coal exploration leases in the Peace River Coalfield, British Columbia, Canada
• The shareholders in Minera Alumbrera copper-gold mine in Argentina (Xstrata share 50%) secured an exclusive option to acquire Yamana’s 100% interest in the Agua Rica project, a feasibility stage project located approximately 35 kilometres from the Alumbrera mine
• Xstrata Zinc completed its acquisition of the Hackett River and Wishbone exploration properties, in the Western Kitikmeot region of Nunavut, Canada, from Sabina Gold and Silver Corp. for a cash consideration of CAD50 million in October
• Xstrata Zinc Canada agreed to purchase the remaining 23.6% interest in the Pallas Green property in the Republic of Ireland from Minco plc for $19.4 million in July, subject to approvals
• Xstrata Mount Isa Mines secured a long-term supply of electricity and gas from the Diamantina Power Station consortium to 2030, with gas supply and pricing fixed until 2023, to meet forecast demand for the life of current and planned copper and zinc-lead operations in north-west Queensland, Australia.

In the period from 1 July 2011, Xstrata’s operating and financial performance continues to be strong and the company’s financial position remains robust. Significant headroom has been maintained within Xstrata’s corporate debt facilities and $6.8 billion remains undrawn. The modest debt maturities within the next two years, together with a good spread of maturities over subsequent years continue to underpin the Group’s financial position.

Xstrata’s preliminary results for the year ending 31 December 2011 will be announced on 7 February 2012.

* excludes semi-soft coal