Press Release: Ferrochrome Price Increases and Production Cut Backs at Xstrata Alloys

Zug, 14 July 2003

Xstrata plc announces that Xstrata Alloys has agreed a price increase of 9Usc/lb chrome with its major European contractual partners (6Usc/lb increase from 1 July 2003 and 3USc/lb from 1 October 2003).

Xstrata Alloys also confirms the closure of three furnaces, with combined annual capacity of some 230,000 tonnes, for routine maintenance. The furnace closures have been timed for the third quarter to correspond with the period of lower demand from stainless steel mills, associated with the northern hemisphere summer, and of higher electricity tariffs, associated with the South African winter.

Peet Nienaber, Chief Executive of Xstrata Alloys, said, "The scheduled closure of three furnaces at a time when power costs are high allows Xstrata Alloys to modulate its production in response to the cycle of seasonal demand, while minimising any negative impact on earnings. We have indicated previously our ability and willingness to adjust our production profile in order to respond rapidly to the market and to maximise returns to our shareholders."

"A decision on when the furnaces will be brought back into production will be taken in the light of the market as we move into the traditionally high-demand fourth quarter."

ends

Xstrata contacts

Trevor Reid
Telephone +44 20 7968 2808
email treid@xstrata.com

Justine Winn
Telephone +61 2 9253 6748
Mobile +61 416 196 403
email jwinn@xstratacoal.com

Brigitte Mattenberger
Telephone +41 41 726 6071
Mobile +41 79 381 1823
email bmattenberger@xstrata.com

Michael Oke & Claire Bithell
Prospero Financial
Telephone +44 20 7898 9394/9387
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