Directors’ Report

Results and Dividend

The Group’s financial results are set out in the Financial Information section and in the Financial Review section of this report.

In light of the rights issue, Xstrata’s Board has decided to waive the final dividend for 2008. As a result, the total 2008 dividend will consist of the interim dividend of 18¢ per share, which was declared in August and paid on 10 October 2008. The Board recognises the importance of dividend payments to shareholders and will resume dividend payments at the earliest opportunity.

Principal Activities

Xstrata is a major global diversified mining group, listed on the London and Swiss stock exchanges with its headquarters in Zug, Switzerland. Additional information on the Group’s operations is provided in the Strategy, Financial Review and Operating Review sections of this report.

Review of the Business, Future developments and Post-Balance Sheet Events

A review of the business and the future developments of the Group, including the principal risks and uncertainties, is presented in the Chairman’s Statement and the Strategy section. The financial position of the Group, its cash flows, liquidity position and borrowing facilities are described in the Financial Review

A full description of acquisitions, disposals, and changes to Group companies undertaken during the year, including post-balance sheet events, is included in the Financial Review.

Exploration and Research, Development

The Group business units carry out exploration and research and development activities that are necessary to support and expand their operations.

Financial Instruments

The Group’s objectives, policies and processes for managing its capital; its financial risk management objectives; details of its financial instruments and hedging activities; and its exposure to credit risk and liquidity risk are discussed in the Financial Review and in Note 37 of the Financial Statements.

Health, Safety, Environment & Community (HSEC)

A review of health, safety and environmental performance and community participation is presented in the Sustainable Development section of this report.

Political and Charitable Donations

In accordance with Xstrata’s corporate social involvement (CSI) policy, no political donations were made in 2008. Xstrata’s corporate social involvement expenditure supports initiatives that benefit the communities local to the Group’s operations in the areas of health, education, sport and the arts, community development, job creation and enterprise. In 2008, Xstrata set aside over $84 million for CSI initiatives. Donations during the year to UK registered charities totalled £368,466.

Employee Policies and Involvement

The Group’s policy and performance regarding employee involvement, disabled employees, labour relations and employee share schemes is described in the Sustainable Development section of this report.

Corporate Governance

A report on corporate governance and compliance with the provisions of the Combined Code is set out in the Corporate Governance Report.

Directors and their interests

The Directors as at 31 December 2008 were:

Director	Position	First appointed	Re-elected	Retirement by rotation at AGM
Mick Davis	Chief Executive	25 February 2002	8 May 2007
Ivan Glasenberg	Non-executive	25 February 2002	9 May 2006	Standing for re-election
Paul Hazen	Non-executive*	25 February 2002	6 May 2008
Claude Lamoureux	Non-executive*	6 May 2008
Robert MacDonnell	Non-executive*	25 February 2002	9 May 2006	Retiring
Sir Steve Robson	Non-executive*	25 February 2002	8 May 2007
David Rough	Deputy Chairman, Senior Independent Director and non-executive*	1 April 2002	8 May 2007
Trevor Reid	Chief Financial Officer	25 February 2002	8 May 2007	Standing for re-election
Ian Strachan	Non-Executive*	8 May 2003	6 May 2008
Willy Strothotte	Chairman and Non-executive	25 February 2002	6 May 2008
Santiago Zaldumbide	Executive	25 February 2002	9 May 2006	Standing for re-election

back to top >

Appointment of Directors

The rules for the replacement and appointment of directors are set out in the Articles of Association. Directors may only be appointed by the shareholders of the Company by ordinary resolution and not by the Board of Directors. Under the terms of a Relationship Agreement to which the Company is a party with Glencore International AG (‘Glencore’) dated 20 March 2002, Glencore, as a controlling shareholder of Xstrata, can nominate up to three directors or (if lower or higher) such number of directors equal to one less than the number of directors who are independent directors.

At every AGM of Xstrata, one-third of the directors or if their number is not three or a multiple of three, the number nearest to one-third, but at least one, must retire by rotation. The directors to retire are those who have been longest in office. Any director who has at the start of the AGM been in office for more than three years since his last appointment or reappointment shall retire at the AGM. As between those who were appointed or reappointed on the same day, those to retire are (unless they otherwise agree) determined by lot. A retiring director is eligible for re-election.

In accordance with the Articles of Association, four directors will retire and three will offer themselves for re-election at the forthcoming AGM. Details of the resolutions that will be put to the AGM are given in the Notice of AGM. Further details about the directors and their roles within the Group are given in the directors’ biographies.

Name of director	Ordinary shares held beneficially as at 1 January 2008	Ordinary shares held beneficially as at 31 December 2008	Name of director	Ordinary shares held beneficially as at 1 January 2008	Ordinary shares held beneficially as at 31 December 2008
Executive			Non-executive
Mick Davis	195,173	414,489	Ivan Glasenberg	–	–
Trevor Reid	–	53,763	Paul Hazen	238,213	238,213
Santiago Zaldumbide	–	–	Claude Lamoureux	–	9,000
			Robert MacDonnell	394,560	304,560
			Sir Steve Robson	–	–
			David Rough	13,604	12,999
			Willy Strothotte	–	–
			Ian Strachan	8,666	14,366

Powers of the Directors

Subject to Xstrata’s Memorandum and Articles of Association, UK legislation, and to any directions given by special resolution, the business of the Company is managed by the Board which may exercise all the powers of the Company. The Articles of Association contain specific provisions concerning Xstrata’s power to borrow money and also provide the power to make purchases of any of its own shares. The directors have no existing authority to purchase Xstrata’s own shares. The directors have been authorised to allot and issue ordinary shares. These powers are exercised under authority of resolutions of the Company passed at its Extraordinary General Meeting, held on 2 March 2009. Further details of the authorities the Company will be seeking at the next AGM to issue and allot ordinary shares of $0.50 each are set out in the Annual General Meeting section.

Details of interests in the share capital of the Company of those directors in office as at 31 December 2008 are given below. None of the shares were held non-beneficially. No director held interests in the shares of any subsidiary company.

On 26 February 2009, Mick Davis, Trevor Reid and Santiago Zaldumbide acquired beneficial interests in ordinary shares in the Company upon the vesting of deferred bonus shares awarded under the Executive Committee Bonus Plan. This resulted in an increase of the total beneficial holdings of Mick Davis of 72,773 shares to 487,262 shares; of Trevor Reid of 34,120 shares to 87,883 shares; and of Santiago Zaldumbide from nil to 41,947 shares. These shares are held in trust for the directors by K.B. (C.I) Limited on terms that the shares will not be transferred to the directors until 18 March 2009 following termination of the rights trading period.

In addition to the above interests in shares, the executive directors, along with other employees, also have interests in the share capital of the Company in the form of conditional rights to free shares and options to subscribe for shares and deferred bonus shares and in the case of Mick Davis, shares awarded under the Added Value Incentive Plan, subject to vesting. Details of these interests are disclosed in the Directors’ Remuneration Report.

back to top >

Directors’ Conflicts of Interest

With the coming into effect of section 175 of the Companies Act 2005 on 1 October 2008, a director of a company must avoid a situation in which he has, or can have, a direct or indirect interest that conflicts, or possibly may conflict, with the interests of the company. The duty is not infringed if the matter has been authorised by the directors of the relevant company. Under the Act, the board of directors of the relevant company has the power to authorise potential or actual conflict situations. The Board has established effective procedures to enable Xstrata’s directors to notify the Company of any actual or potential conflict situations and for those situations to be reviewed and, if appropriate to be authorised by the Board, subject to conditions and for an initial period of one year. The Nominations Committee undertakes the role of reviewing notifications in detail and making appropriate recommendations to the Board regarding authorisation. Directors’ conflict situations will be reviewed annually. A register of authorisations is maintained.

Share Capital

On 29 January 2009, the Company announced a 2 for 1 Rights Issue to raise proceeds of $5.9 billion in cash. At the Extraordinary General Meeting (‘EGM‘) held on 2 March 2009 to approve the Placing and Open Offer and the related party acquisition of Prodeco from Glencore International AG, a resolution was passed increasing the authorised share capital of the Company from $750,000,000.50 and £50,000 to $2,250,000,000 and £50,000 by the creation of an additional 3,000,000,000 ordinary shares of $0.50 each in the capital of the Company having the rights and privileges and being subject to the restrictions contained in the Articles of Association of the Company and ranking pari passu in all respects with the existing ordinary shares of $0.50 each in the capital of the Company.

As a result of the passing of resolutions at the EGM on 2 March 2009, the Company has provisionally alloted 1,955,341,080 ordinary shares which, when issued, will have the effect of increasing Xstrata’s issued ordinary share capital to $1,466,505,810 represented by 2,933,011,620 ordinary shares.

On 16 October 2006, the Financial Services Authority as UK Listing Authority approved the admission to the Official List by way of blocklisting of 13,575,432 ordinary shares of $0.50 each to be issued upon conversion of the Xstrata Capital Corporation A.V.V. 4% Guaranteed Convertible Bonds due 2017. During the course of the year, notice was given in respect of 100,000 bonds to convert them into Xstrata Capital preference shares which were then exchanged into Xstrata ordinary shares. The total number of shares issued in the year resulting from these conversions totalled 3,620, leaving a further 13,571,812 ordinary shares to be allotted upon conversion of outstanding bonds.

The Company has in place an equity capital management programme (’ECMP’) under which up to 10% of the issued share capital of the Company can be purchased in the market by Batiss Investments Limited (’Batiss’). During the course of the year, Batiss purchased 6,920,000 ordinary shares of $0.50 each in Xstrata through the ECMP for a total consideration of GBP256,879,645. On 2 March 2009, the total number of shares held by Batiss amounted to 16,230,000 ordinary shares or 1.66% of Xstrata’s issued ordinary share capital.

The ordinary issued share capital was increased on 16 January 2008 when the directors issued and allotted six million new ordinary shares of US$0.50 each to K.B. (C.I.) Nominees Limited for a consideration of GBP209,400,000. This issue was made for the purposes of the Company’s Employee Share Ownership Trust, an employees’ share scheme. The six million new ordinary shares rank pari passu with the existing ordinary shares, trade on the London Stock Exchange and the SIX Swiss Exchange and were admitted to the Official List on 22 January 2008.

back to top >

Share Rights

The rights and obligations attached to Xstrata’s ordinary shares are set out in the Articles of Association, copies of which can be obtained from Companies House in the UK or by writing to the Company Secretary. Subject to the Companies Acts (as defined in the Articles of Association), and without prejudice to any rights attached to any existing shares or class of shares, any share may be issued with such rights or restrictions as the Company may by ordinary resolution determine or, subject to and in default of such determination, as the Board may determine.

Ordinary Shares

Holders of ordinary shares are entitled to attend, speak and vote at general meetings of the Company, and to appoint proxies to exercise their rights. Holders of ordinary shares may receive a dividend and on a winding up may share in the assets of the Company

Deferred Shares

The holders of deferred shares do not have the right to receive notice of any general meeting of the Company nor the right to attend, speak or vote at any such general meeting. The deferred shares have no rights to dividends and, on a winding-up or other return of capital, entitle the holder only to the repayment of the amounts paid upon such shares after repayment of the nominal amount paid up on the ordinary shares, the nominal amount paid up on the special voting share plus the payment of GBP100,000 per ordinary share. The Company may, at its option, redeem all of the deferred shares in issue at any time (but subject to the minimum capital requirement of the Companies Act 1985) at a price not exceeding GBP1.00 for each share redeemed to be paid to the relevant registered holders of the shares.

Special Voting Share

Certain rights, that are inalienable under Swiss law, have been preserved in the Xstrata plc Articles of Association by creating a special voting share that carries weighted voting rights sufficient to defeat any resolution which could amend or remove these entrenched rights. The holder of the special voting share is the Law Debenture Trust Corporation plc which has entered into a voting agreement with the Company, specifying the conditions upon which it is entitled to exercise its right to vote. The special voting share does not carry a right to receive dividends and is entitled to no more than the amount of capital paid up in the event of liquidation.

Shares held by Xstrata plc Employee Share Ownership Trusts

At 31 December 2008, the trustee of the Xstrata plc Employee Share Ownership Trusts, which is an independent trustee, held 5,073,344 shares under the terms of the trusts for the benefit of employees and former employees of the Company. The trusts are discretionary trusts and the shares are held to meet employees’ entitlements under the Company’s Long Term Incentive Plan and Service Contract Arrangements. Employees have no voting rights in relation to the shares while they are held in trust. The trustee has full discretion to exercise the voting rights or to abstain from voting. Shares acquired by employees through the Company’s Long Term Incentive Plan rank pari passu with shares in issue and have no special rights.

Voting Rights

Subject to the rights and restrictions attached to any class of shares:

1. on a show of hands, every member present in person or by proxy has one vote (save that neither the holder of the special voting share nor any holder of deferred shares shall be entitled to vote) and a proxy appointed by a member on behalf of such member’s shareholding shall also have one vote;
2. on a poll:
   1. every member present in person or by proxy (except the holder of the special voting share and any holder of the deferred shares shall have:
      1. one vote for each fully paid share; and
      2. for each partly-paid share, such proportion of the votes attached to a fully paid share as would mean that such proportion is the same as the proportion of the amount paid up on the total issue price of that share;
   2. the holder of the special voting share shall, on an Entrenched Rights Action, have enough votes to defeat the resolution but, on all other decisions, shall have no votes; and
   3. the holders of the deferred shares shall not be entitled to vote.

back to top >

Restrictions on Transfer of Shares

There are no restrictions on the transfer of ordinary shares in the Company other than:

1. the right of the Board to refuse to register the transfer of a certificated share which is not a fully paid share provided that the refusal does not prevent dealings in shares of that class in the Company from taking place on an open and proper basis. The Board may also refuse to register the transfer of a certificated share, unless the instrument of transfer (a) is lodged, duly stamped (if applicable) with the Company and (except where the shares are registered in the name of a recognised person and no certificate shall have been issued therefor) is accompanied by the relevant share certificate and such other evidence of the right to transfer as the Board may require; (b) is in respect of one class of share only; and (c) is in favour of not more than four persons;
2. pursuant to Xstrata’s share dealing code whereby the directors of the Company require and employees may require approval to deal in Xstrata’s shares;
3. certain restrictions may from time to time be imposed by laws and regulations (for example, insider trading laws); and
4. where a person whose shares represent at least a 0.25% interest in Xstrata’s shares has been served with a disclosure notice and has failed to provide the Company with information concerning interests in those shares, except as otherwise provided in the Articles.

The Company is not aware of any arrangements between shareholders that may result in restrictions on the transfer of ordinary shares and for voting rights.

The Board shall decline to register any transfer of the special voting share unless approved in accordance with a voting deed between the Company and the holder of the special voting share.

Major Interests in Shares

On 2 March 2009, the following major interests in the ordinary issued shares of $0.50 each of the Company had been notified to the Company:

Name of shareholder	Number of ordinary shares of $0.50 each	% of ordinary issued share capital
Glencore International AG*	336,801,333	34.45
Capital Research and Management	51,492,225	5.27
AXA S.A.	41,225,636	4.21
Legal & General Group Plc	29,999,246	3.06

Directors’ Liabilities

The Company has granted qualifying third-party indemnities to each of its directors against any liability which attaches to them in defending proceedings brought against them, to the extent permitted by the Companies Acts. In addition, directors and officers of the Company and its subsidiaries are covered by Directors & Officers liability insurance.

Creditor Payment Policy and Practice

In view of the international nature of the Group’s operations there is no specific Group-wide policy in respect of payments to suppliers. Individual operating companies are responsible for agreeing terms and conditions for their business transactions and ensuring that suppliers are aware of the terms of payment. It is Group policy that payments are made in accordance with those terms, provided that all trading terms and conditions have been met by the supplier.

Xstrata plc is a holding company with no business activity other than the holding of investments in the Group and therefore had no trade creditors at 31 December 2008.

back to top >

Articles of Association

Xstrata’s Articles of Association (adopted by special resolution on 19 March 2002, amended by special resolutions passed on 9 May 2005 and 6 May 2008) may only be amended by special resolution at a general meeting of the shareholders.

Significant Agreements

The Companies Act 2006 requires the Company to disclose the following significant agreements that contain provisions entitling the counterparties to exercise termination or other rights in the event of a change of control of the Company:

Relationship Agreement

The Company is party to the Relationship Agreement with Glencore International AG (’Glencore’) dated 20 March 2002. The Agreement regulates the continuing relationship between the parties. In particular it ensures that (a) the Company is capable of carrying on its business independently of Glencore as a controlling shareholder (as such term is defined in the Agreement); (b) transactions and relationships between Glencore (or any of its subsidiaries or affiliates) and the Company are at an arm’s-length and on normal commercial terms; (c) Glencore shall be entitled to nominate up to three directors or (if lower or higher) such number of directors equal to one less than the number of directors who are independent directors; and, (d) directors of the Company nominated by Glencore shall not be permitted to vote on any Board resolution, unless otherwise agreed by the independent directors, to approve any aspect of the Company’s involvement in or enforcement of any arrangements, agreements or transactions with Glencore or any of its subsidiaries or affiliates. It is expressed that the Agreement terminates in the event that Glencore ceases to be a controlling shareholder of the Company following a sale or disposal of shares in the Company or if the Company ceases to be listed on the Official List and traded on the London Stock Exchange.

$4.68 billion Syndicated Facility

On 25 July 2007, Xstrata (Schweiz) AG and Xstrata Finance (Canada) Limited entered into a $4.68 billion multicurrency revolving loan facility agreement with, amongst others, Barclays Capital and The Royal Bank of Scotland plc (as arrangers and bookrunners), Barclays Bank plc (as the facility agent) and the banks and financial institutions named therein as lenders (the ’Syndicated Facilities Agreement’).

Upon a change of control, no borrower may make a further utilisation unless otherwise agreed. The majority lenders, as defined in the agreement, can also require that the Syndicated Facilities Agreement is immediately terminated and declare that all outstanding loans, become immediately payable. Alternatively, if the majority lenders do not require cancellation, but a specific lender does on the basis of internal policy, that particular lender can require that its commitments are cancelled and all amounts outstanding in respect of that lender’s commitments shall become immediately payable.

$500 million Notes due 2037

On 30 November 2007, Xstrata Finance (Canada) Limited issued $500 million 6.90% notes due 2037, guaranteed by the Company, Xstrata (Schweiz) AG and Xstrata Finance (Dubai) Limited. The terms of these notes require Xstrata Finance (Canada) Limited to make an offer to each noteholder to repurchase all or any part of such holder’s notes at a repurchase price in cash equal to 101% of the aggregate principal amount of the notes so repurchased plus any accrued and unpaid interest on the principal amount of the notes repurchased to the date of repurchase, if both of the following occur:

1. 1)a change of control (as defined in the terms and conditions of the notes) of Xstrata; and
2. 2)the notes are rated below investment grade by each of Moody’s and Standard & Poor’s on any date from 30 days prior to the date of the public notice of an arrangement that could result in a change of control (as defined in the terms and conditions of the notes) until the end of the 60-day period following public notice of the occurrence of a change of control.

€750 million Notes due 2011

On 23 May 2008, Xstrata Canada Financial Corporation issued €750,000,000 5.875% guaranteed notes due 2011, €600,000,000 6.25% guaranteed notes due 2015 and £500,000,000 7.375% guaranteed notes due 2020 (the ’2008 MTN Notes’). The 2008 MTN Notes are guaranteed by each of Xstrata plc, Xstrata (Schweiz) AG, Xstrata Finance (Dubai) Limited and Xstrata Finance (Canada) Limited and were issued pursuant to the $6,000,000,000 Euro Medium Term Note Programme.

Pursuant to the terms and conditions of the 2008 MTN Notes, if:

1. 1)a change of control occurs (as defined in the terms and conditions of the 2008 MTN Notes); and
2. 2)the 2008 MTN Notes carry, on the relevant announcement date of the change of control:
   1. a)an investment grade credit rating and such rating is either downgraded to a non-investment grade credit rating or is withdrawn; or
   2. b)a non-investment grade credit rating and such rating is downgraded by one or more notches or is withdrawn; or
   3. c)no credit rating and a negative rating event (as defined in the terms and conditions of the 2008 MTN Notes) occurs, each holder has the option to require Xstrata Canada Financial Corp. to redeem such 2008 MTN Notes in cash at the principal amount plus interest accrued to (but excluding) the date of redemption.

$5.459 billion Revolving Loan Facility

On 1 October 2008, the Company entered into a $5 billion multicurrency revolving loan facility agreement with, amongst others, Barclays Bank plc (as the facility agent) and the banks and financial institutions named therein as lenders. The facility was amended on 30 December 2008 to increase the facility amount to $5.459 billion. This agreement contains change of control provisions, in substance, identical to those set out in the above referenced Syndicated Facilities Agreement.

Xstrata Plc Long Term Incentive Plan

The rules of Xstrata’s employee share plans set out the consequences of a change of control of the Company on employees’ rights under the plans. Generally such rights will vest on a change of control and participants will become entitled to acquire shares in the Company or, in some cases, to the payment of a cash sum of equivalent value.

back to top >

Annual General Meeting

The Annual General Meeting (AGM) of the Company will be held at Theater-Casino Zug, Artherstrasse 2-4, Zug, Switzerland on Tuesday 5 May 2009 at 11:00 am (Central European Summer Time). A live webcast will be provided of the AGM through Xstrata’s website www.xstrata.com. A telephone dial-in facility will also be provided on a listen-only basis. Further details of the dial-in facility and webcast will be available from Xstrata’s website www.xstrata.com at least one week in advance of the meeting.

Special Business at the AGM

The Notice convening the meeting is sent to shareholders separately with this Report. Resolutions 1 to 7 are termed ordinary business while resolutions 8 and 9 will be special business. These resolutions are:

Resolution 8, which will be proposed as an ordinary resolution, seeks to authorise the directors:

1. (A)to allot relevant securities (as defined in the Companies Act 1985) up to an aggregate nominal value of $488,835,270 which is equal to approximately one-third (33.33%) of Xstrata’s issued ordinary share capital as at 2 March 2009; and
2. (B)to allot relevant securities comprising equity securities (as defined in the Companies Act 1985) up to a nominal amount of $977,670,540 which is equal to approximately two-thirds of Xstrata’s issued ordinary share capital as at 2 March 2009 in connection with an offer by way of a rights issue.

The Association of British Insurers has revised its guidelines on share allotments following a report of the Rights Issue Review Group. Based on the new guidelines, the cap on the annual allotment authority under section 80 of the Companies Act 1985 has been increased from one-third to two-thirds of issued share capital but the amount of any authority above one-third has to be applied only to fully pre-emptive rights issues, and can be raised for one year only. If the additional authority is taken and a decision is taken to make an issue pursuant to such authority, the ABI expects that all directors wishing to remain in office will stand for re-election at the next AGM after the decision to make the issue in question.

The authority extends until the end of the next AGM. The Board does not have any present intention of exercising this authority other than for the purposes of Xstrata’s employee share schemes.

Resolution 9 will be proposed as a special resolution and will empower the directors to allot for cash, equity securities of a nominal amount not exceeding $73,325,290.50 (equivalent to 146,650,581 ordinary shares of $0.50 each, representing 5% of the issued share capital) without first offering such securities to existing ordinary shareholders. The authority extends until the end of the next AGM. Any issue of shares for cash will, however, still be subject to the requirements of the UK Listing Authority.

The Board intends to follow the provisions of the Financial Reporting Council’s Pre-Emption Group statement of principles regarding the issue of not more than 7.5% of Xstrata’s ordinary share capital for cash other than to existing shareholders in any rolling three-year period.

Electronic proxy voting

Registered shareholders have the opportunity to submit their votes (or abstain) on all resolutions proposed at the AGM by means of an electronic voting facility operated by Xstrata’s Registrar, Computershare Investor Services plc. This facility can be accessed by visiting www-uk.computershare.com/Investor/Proxy/. As usual, paper proxy cards will be distributed to all registered shareholders with the Notice of Annual General Meeting.

CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment service may do so by using the procedures described in the CREST Manual. CREST Personal Members or other CREST sponsored member and those CREST members who have appointed one or more voting service provider(s) should refer to their CREST sponsor or voting service provider(s) who will be able to take the appropriate action on their behalf. The Company may treat as invalid a CREST proxy instruction in the circumstances set out in Regulation 35(5)(a) of the Uncertificated Securities Regulations 2001.

Electronic Copies of the Annual Review and Financial Statements 2008 and other Publications

A copy of the 2008 Annual Report (which includes the Overview and Strategy sections, Operating and Financial Reviews, Financial Statements, Directors’ Report, Corporate Governance Report and Directors’ Remuneration Report), the Notice of the Annual General Meeting, the 2008 Sustainability Report (available in early April) and other corporate publications, reports, press releases and announcements are available on Xstrata’s website at www.xstrata.com.

Auditors

A resolution will be put to the members at the forthcoming AGM to reappoint Ernst & Young LLP as auditors and to authorise the Board to determine the auditor’s remuneration.

Disclosure of information to auditors

Having made enquiries of fellow directors and of Xstrata’s auditors, each director confirms that so far as each director is aware, there is no relevent audit information of which Xstrata’s auditor is unaware and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that Xstrata’s auditor is aware of that information.

Going Concern

The directors believe, after making inquiries that they consider to be appropriate, that the Company has adequate resources to continue in operational existence for the foreseeable future. For this reason they continue to adopt the going concern basis in preparing the financial statements.

By order of the Board.

Richard Elliston

Company Secretary

2 March 2009

back to top >