News Releases

Company Announcement: Glencore International Holding in Xstrata

Zug, 6 December 2006

Xstrata plc (”Xstrata”) announces that it has been advised by Glencore International AG (“Glencore”) that the agreement between Glencore and the Credit Suisse Group (the “Capital Management Arrangement”) has been extended. Glencore entered into the Capital Management Arrangement with the Credit Suisse Group in connection with the Xstrata Group’s acquisition of MIM Holdings Limited and associated rights issue in 2003. The agreement was due to expire on 2 December 2006, unless extended.

Glencore, through its wholly-owned subsidiary Finges BV (“Finges”), currently owns 185,240,733 Xstrata ordinary shares (representing approximately 19.6% of Xstrata’s total issued share capital) and has a full economic interest in a further 151,560,600 shares (representing approximately 16.1% of Xstrata’s total issued share capital) through the Capital Management Arrangement.

Separately, Glencore has advised Xstrata that Finges has entered into swap transactions (the “Swap Package”) with each of Barclays Capital, HSBC and Société Générale (the “Banks”) in respect of an aggregate of 28,594,557 Xstrata ordinary shares (the “Glencore Relevant Shares”) or 3.0% of Xstrata’s current issued ordinary share capital. The Swap Package is structured as a combination of cash settled derivative transactions. Glencore (through its wholly owned subsidiary, Finges) retains the voting rights and legal and beneficial title to the Glencore Relevant Shares.

In support of the Swap Package arrangement, Finges has granted a security interest to the Banks over 42,891,836 Xstrata ordinary shares owned by it. The number of Xstrata ordinary shares subject to the security interest will fluctuate over time. Subject to compliance with its obligations under the Swap Package, Finges will retain title to and voting rights over the Xstrata ordinary shares which are the subject of the security interest. The obligations of Finges under the Swap Package are guaranteed by Glencore.

In connection with the 1 for 3 rights issue of up to 235,787,596 new Xstrata ordinary shares announced by Xstrata on 3 October 2006 (the “2006 Rights Issue”), Glencore entered into a lock-up agreement (the “Lock-up Agreement”) with Xstrata under which, amongst other things, Glencore undertook not to, subject to certain exceptions, dispose of any Xstrata ordinary shares held by it during the period commencing on 3 October 2006 and ending six months after the latest time and date for acceptance and payment in full under the 2006 Rights Issue (which occurred on 27 October 2006). Glencore has transferred to Finges 185,240,733 Xstrata ordinary shares, which is permitted under the Lock-up Agreement subject to Finges entering into a similar lock up undertaking to the one given by Glencore. Accordingly, Finges has entered into a lock-up agreement with Xstrata in respect of any Xstrata ordinary shares it may hold in the period commencing on 4 December 2006 and ending on 27 April 2007 (the “Finges Agreement”).

In addition, the granting of the security interest by Finges in connection with the Swap Package described above is permitted under the Finges Agreement subject to the Banks entering into similar lock up undertakings to the one given by Finges. Accordingly, each of the Banks has entered into lock up agreements with Xstrata in respect of any interest it may acquire in Xstrata ordinary shares under the Swap Package (subject to certain limited exceptions) for the period commencing on 4 December 2006 and ending on 27 April 2007.

Xstrata has also been advised by Glencore that the Executive of the UK Takeover Panel has confirmed that the entry into and performance by Glencore and Finges of their obligations under the new financing arrangements described above will not give rise to any breach by Glencore or Finges of Rule 5.1 of the Takeover Code nor will Glencore or Finges thereby incur any obligation under Rule 9.1 of the Takeover Code to make a mandatory cash offer for the ordinary shares in Xstrata.

Xstrata contacts

Claire Divver
Telephone +44 20 7968 2871
Mobile +44 7785 964340
Email cdivver@xstrata.com

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