Acquisitions and Disposals

On 29 October 2007, the Group announced a cash offer for shares in Jubilee Mines NL (Jubilee) of AUD23 per share. Xstrata gained control of Jubilee on 31 January 2008 and had acquired 100% of the shares in Jubilee by 31 March 2008 for a total cost of $2,751 million net of cash acquired. The acquisition has brought Xstrata Nickel access to the major Western Australian nickel belt through the operational Cosmos nickel mine, together with further growth options from the Sinclair growth project, which was commissioned in October, and a highly prospective land position.

On 5 December 2007, the Group announced an unconditional cash offer for Resource Pacific Holdings Limited (Resource Pacific) of AUD2.85 per share and on 8 February 2008 the offer price was increased to AUD3.20 per share. Xstrata gained control of Resource Pacific on 20 February and the acquisition completed on 23 April 2008. The total cost of the acquisition was $903 million net of cash acquired. Resource Pacific was previously listed on the Australian stock exchange and owns a 90% interest in the Newpac underground coal mine located in the Hunter Valley coalfields of New South Wales, Australia. Under a put option granted as part of the co-operation agreement entered into between Marubeni Corporation and Xstrata Coal, Marubeni Corporation purchased 11.98% of Resource Pacific equivalent to 40.5 million shares for a total consideration of AUD130 million ($122 million) on 21 October 2008 to bring its total shareholding to 22.2%. Xstrata Coal now owns 77.8%.

On 5 September 2008, Xstrata Copper purchased a 17.83% stake in Indophil Resources NL (Indophil) from Lion Selection for AUD 82 million (approximately $68 million). The acquisition followed the expiry of Xstrata Copper’s offer for Indophil at AUD1.28 per share on 29 August, 2008 and brought Xstrata’s total shareholding in Indophil to 19.99%. Indophil’s flagship asset is its 34.23% interest, with a right to acquire an additional 3.27%, in the Tampakan copper project in the southern Philippines. Xstrata Copper has management control of the Tampakan project.

On 6 August 2008, Xstrata announced a proposed cash offer for Lonmin, the world’s third largest platinum producer, valuing Lonmin’s issued share capital at approximately £5 billion ($10 billion at the then prevailing exchange rate), and announced that it had acquired 10.7% of Lonmin’s issued share capital. The proposed offer reflected the Group’s long-stated intention to develop a world-class platinum business. Subsequent market turbulence and uncertainty over the future refinancing of acquisition debt led Xstrata to decide not to proceed with a full offer on 1 October 2008, however, the Group increased its stake in Lonmin to bring its holding to 24.9% to provide a significant stake in a business with attractive long-term fundamentals.