Delivering organic growth

Xstrata’s commodity businesses benefit from a broad range of growth projects which have been progressed through the various stages from exploration to conceptual planning to pre-feasibility and feasibility studies over the past several years. In early 2010, over $8 billion of projects are currently in implementation, with approximately ten major projects due to be presented to the Xstrata plc Board for approval during 2010. The successful development of our near-term projects will deliver a 50% increase in overall volumes, predominantly from coal, copper and nickel. New operations will also operate with substantially reduced operating costs, further improving the overall cost position of the Group’s operations. Each project will also provide Xstrata’s shareholders with a robust return on investment at conservative long-run prices, as indicated by the chart to the right.

A further suite of projects is in the feasibility and scoping study stage and will follow on from the projects currently in or about to commence construction, to provide the next stage of growth from the portfolio.

Xstrata’s businesses have already developed $9 billion of major projects over the past six years and each of our commodity businesses benefit from a broad range of executives with substantial experience of developing major mining and industrial projects, including in challenging locations. Our ability to manage the associated environmental and social impacts of developing major projects is also critical to our success in delivering against our strategy. We engage openly and proactively with communities and other stakeholders to gain and maintain a social licence to operate. As set out in Xstrata’s Sustainable Development policy, we aim to demonstrate a broader social and economic benefit from our presence, including prioritising local employment and procurement and providing support for enterprise development, community skills development and training programmes, particularly in areas with high unemployment and greater economic need. We avoid resettlement of communities where possible. Where this is unavoidable, we adhere to the World Bank Operational Directive on Involuntary Resettlement and seek to maintain or improve standards of living and provide ongoing support for resettled communities.