Key challenges

Resettlement

School agricultural programme at Hualfín, Argentina

Xstrata is committed to, wherever possible, limiting the need to resettle people who live near to our operations or, where necessary, to seek voluntary resettlement. When there is no other safe option, we abide by the World Bank involuntary resettlement policy which states that resettled people should have their standard of living improved, or at least restored. Our resettlement process is conducted in full consultation with the affected parties and in accordance with legislative requirements.

In 2005, it was necessary for two families living near Xstrata Alloys' eastern mines to be resettled. Agreement was reached and suitable alternative property was obtained.

Consultation and planning are underway to resettle 751 people residing mainly in informal settlements in 2006. These settlements are located on land owned by Xstrata Coal South Africa's Goedgevonden project, at which we are planning to undertake open cut mining. The resettlement process will follow the World Bank guidelines on resettlement and the relevant South African legislative requirements. An external consultancy has been appointed to develop a resettlement action plan and to provide guidance on the resettlement process. A public-private partnership is being established between Xstrata Coal South Africa, the national and provincial governments, and the local municipality to develop the new community. The municipality will donate the land to the affected families, Xstrata Coal will assist in demarcating and servicing the blocks of land, and the government departments will build the houses.

Xstrata also works with resettled families to help address socio-economic issues associated with resettlement. In October 2005, the Group provided a ZAR900,000 interest-free loan to establish a charcoal plant which has created employment opportunities for the Ermelo community in South Africa. Lack of employment opportunities was highlighted during the consultation phase of the voluntary resettlement of this community as a key concern. Xstrata provided an external consultant to develop the business plan and strategy for the company, and to implement appropriate coaching and training for local people.