Koniambo Project

Description of Operation

Xstrata Nickel is a 49% joint-venture partner in the development of the massive Koniambo ore body in New Caledonia. Société Minière du Sud Pacifique, the development arm of the North Province of New Caledonia, is the 51% partner. Koniambo is a world-class resource. Nickel is contained in both saprolite and limonite with grades that compare favourably with other laterite deposits in the world. The saprolite orebody contains 142.1 million tonnes of measured and indicated resources grading 2.13% nickel and 156.0 million tonnes of inferred resources grading 2.2% nickel. Nickel would be extracted using a smelting process to produce ferronickel, utilizing an updated version of the process used at our Falcondo operations, called nickel smelting technology (NST). Initially, nickel will be extracted from the saprolite part of the orebody. In future expansions, there are plans to extract nickel from the limonite orebody, an undiluted inferred resource of 100 million tonnes of 1.6% nickel, using a hydrometallurgical process.

Brief History of the Operation

Following extensive technical feasibility studies and Environmental and Social Impact Assessment, early construction activity commenced at the Koniambo Project in February 2007. The objective of this construction program is to establish site access, construction infrastructure and construction utilities in advance of the main construction effort.