Sustainability website / Reporting & Standards / Independent Assurance Statement

We asked Deloitte to provide independent assurance of our report. This is their statement for the printed / pdf Sustainability Report 2007 only, to which the page references refer.

Independent assurance report by Deloitte & Touche LLP to Xstrata plc
on its Sustainability Report 2007 (‘the Report’)

What we looked at: scope of our work

Xstrata plc (‘Xstrata’) has engaged us to give assurance on:

• Group sustainability reporting using the AA1000 principles – Xstrata’s description on page 12 of its approach to sustainability reporting at Group level using the principles of materiality (how they identify material issues), completeness (how they report comprehensively on all material issues) and responsiveness (how they respond to stakeholder concerns) set out in the AccountAbility 1000 Assurance Standard (AA1000 AS); and
• GRI application level – whether Xstrata’s self-declared application level of the Global Reporting Initiative’s (GRI) G3 sustainability reporting guidelines on page 12 is not materially misstated.

What standards we used: basis of our work and level of assurance

We carried out limited assurance in accordance with the International Standard on Assurance Engagements 3000 (ISAE 3000). Limited assurance is designed to give a similar level of assurance to that obtained in a review of interim financial statements. To achieve limited assurance ISAE 3000 requires that we review the processes, systems and competencies that deliver the information in the areas on which we provide assurance. It does not include detailed testing of source data or the operating effectiveness of processes and internal controls. This provides less assurance and is substantially less in scope than a reasonable assurance engagement.

The evaluation criteria used for the first subject matter above are based on the AA1000 AS principles of materiality, completeness and responsiveness and Xstrata’s application of these principles in preparing the Report, as described on page 12. This subject matter and criteria are primarily of a qualitative nature, assessing whether the reporting provides the main audience for the report (i.e. the investment community as defined on page 10) a useful understanding of Xstrata’s sustainability approach taken as a whole. To perform this evaluation, limited review of reported quantitative performance information and, where relevant, review of the supporting evidence for such information has been performed. However, it does not provide assurance of performance information in the Report.

What we did: key assurance procedures

Considering the risk of material error, a multidisciplinary team of Corporate Responsibility and assurance specialists planned and performed our procedures to obtain the information and explanations we considered necessary to provide sufficient evidence to support our assurance conclusion. Key procedures included:

• Review of Xstrata’s own Sustainable Development (SD) assurance programme for 2007 to evaluate its quality and consistency in supporting Xstrata’s Group SD framework. This included interviewing the process owner of Xstrata’s SD assurance programme; reviewing the documentation used for the SD assurance framework; and reviewing 2007 SD assurance reports for four sampled Xstrata operations;
• Interviews with five managers at Xstrata head office, including those responsible for Xstrata’s Group sustainability approach and reporting to understand Xstrata’s approach to sustainability management and reporting;
• Review of meeting minutes from 2007 meetings of Xstrata’s Board HSEC committee and selected meeting minutes of 2007 meetings of Xstrata’s executive management to assess their deliberations on sustainability management and reporting;
• A limited analysis of public information relating to Xstrata and industry practices regarding sustainability performance during the year;
• Visits to one commodity business (Xstrata Copper) and four sampled operating sites across different commodity businesses; and
• Analysis and high-level review of sampled documentation to obtain a high-level understanding of the key structures, systems, processes, procedures and controls relating to:
• Stakeholder identification, engagement and responsiveness, including reviewing stakeholder outcomes and how stakeholder concerns are reflected in the report;
• Management and governance structures used for managing sustainabililty;
• Presentation of the Sustainability Report against GRI G3 guidelines;
• Implementation of sustainability related policies, internal audit and other monitoring activities; and
• Sustainability Report development and approval process, including the selection of material issues to be reported on, related key performance indicators, review of draft and final reports, and other features of the Sustainability Report.

What we found: our assurance conclusion

Based on the assurance work we have concluded that:

• Group sustainability reporting using AA1000 principles – Nothing has come to our attention indicating that Xstrata’s description on page 12 of how it uses the AA1000 AS principles of materiality, completeness and responsiveness in preparing the Sustainability Report is materially misstated; and
• GRI application level – the reported application level of GRI on page 12 is not materially misstated.

Our further comments

In accordance with the requirements of the AA1000 AS and without affecting our assurance opinion, Xstrata has also asked us to provide our key observations and recommendations for improvement.

Xstrata has made the following key improvements in its sustainability approach since last year:

• Improved environmental performance reporting with key performance indicators and targets on emissions of CO₂-equivalents, energy usage and water consumption being normalised to tonne of production (intensity measures);
• Developed and further integrated the SD assurance process into the business, with the ownership of the process having been devolvedto commodity businesses and by streamlining the process further;
• Improved the Report’s stakeholder responsiveness by further clarifying stakeholders’ general concerns and expectations on page 29; and
• Completed a review on its sustainability approach resulting in an improved SD Governance framework being approved by the Board at the end of 2007.

Our key recommendations to Xstrata for future improvement in its sustainability approach are to:

• Improve further the quality of sustainability performance information, especially by improving the quality of operational data-input into the Group sustainability database;
• Continue to improve the SD assurance process by integrating it further with other internal assurance processes and ensuring it supports the quality of Group sustainability performance information; and
• Consider expanding the description of how the SD management framework operates at commodity business level to increase the understanding of how Xstrata manages sustainability.

Responsibilities of Directors and independent assurance provider

The Directors are responsible for the preparation of the Sustainability Report and for the information and statements contained within it. They are responsible for determining Xstrata’s objectives in respect of sustainability performance and for establishing and maintaining appropriate performance management and internal control systems from which the reported information is derived.

Our responsibility is to independently express conclusions on the reliability of management’s assertions on selected subject matters as defined within the scope of work above.

Our team performed the engagement in accordance with Deloitte’s independence policies, which cover all of the requirements of the International Federation of Accountants (IFAC) Code of Ethics and in some areas are more restrictive. We confirm to Xstrata that we have maintained our independence and objectivity throughout the year, including the fact that there were no events or prohibited services provided which could impair that independence and objectivity in the provision of this engagement.

This report is made solely to Xstrata plc in accordance with our letter of engagement for the purpose of the Directors’ governance and stewardship. Our work has been undertaken so that we might state to the Company those matters we are required to state to them in this report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than Xstrata plc for our work, for this independent assurance report, or for the conclusions we have formed.

This report provides no assurance on the maintenance and integrity of the website, including controls used to achieve this, and in particular whether any changes may have occurred to the information. These matters are the responsibility of the Directors of Xstrata plc.

Deloitte & Touche LLP
London, United Kingdom, 17 April 2008