PRODUCTION CUTS AT XSTRATA COAL’S AUSTRALIAN OPERATIONS

Zug, 17 June 2003

Xstrata plc announces that its coal business, Xstrata Coal, will reduce production at its Australian operations by some 600,000 tonnes of thermal coal by the end of July 2003.

Xstrata Coal’s Mt Owen mine will implement a 50% reduction in production over a two-week period in July, with the net effect of a one-week production shutdown. This follows two-week maintenance shutdowns over Easter at both Bulga Open Cut and Liddell mines, together with production losses at Beltana mine, associated with ongoing Enterprise Agreement negotiations.

Mr Peter Coates, Chief Executive Xstrata Coal, said, “We are understandably reluctant to over-produce in a market characterised by declining coal prices and a strengthening Australian dollar which together are placing pressure on our operations to remain competitive and viable. There is currently an oversupply in the export thermal coal market and these initiatives will assist in controlling our stock levels. This is consistent with our stated desire to closely match output with demand.

“We will continue to monitor our stock levels carefully in relation to the market and will review production levels again in the second half of the year if necessary.”

ends

Xstrata contacts

Marc Gonsalves
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Email mgonsalves@xstrata.com

Justine Winn
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Email jwinn@xstratacoal.com

Brigitte Mattenberger
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