Just over a year ago, we took a first step towards our medium-term goal of building a substantial iron ore business. In November 2009, Xstrata obtained an option to acquire a stake in the early stage Zanaga iron ore project in the Republic of Congo, where a pre-feasibility study is currently underway. As announced in February 2011, Xstrata has agreed to exercise its option to acquire a 50% plus one share interest in Jumelles, the owner of the Zanaga project and a subsidiary of Zanaga Iron Ore Company Limited, in exchange for funding a feasibility study.
In August 2010, Xstrata announced an agreed offer to acquire Sphere Minerals, an Australian-listed junior mining company with three iron ore projects in Mauritania, a country with an established history of iron ore exports. The projects include potential near-term production from the Askaf project and longer-term growth potential from the large-scale Guelb El Aouj project, which will provide exposure to the attractive iron ore market, further diversifying Xstrata’s portfolio. Xstrata currently owns in excess of 75% of the company and integration of the Sphere operations into Xstrata is well advanced. These projects are currently managed through our coal business, sharing the substantial expertise available in bulk mining, successful project development and logistics.
