Xstrata PLC : Xstrata Coal announces changes to Australian coal operations

Sydney, 10 September 2012

As part of an ongoing review of its business in Australia, Xstrata Coal is undertaking a planned restructuring to respond to industry-wide pressures including low coal prices, high input costs and a strong Australian dollar against the US dollar.

Following this review, and in keeping with the cost savings objectives announced at our half-year earnings, we will be reducing our employee numbers by approximately 600.  The reductions involve both contractors and permanent positions.

Although we are not breaking down the reductions by individual site, the restructure is focused on scaling back high cost production at some of our mines.  We do not expect a material impact on Australian production volumes.  We are also reducing some roles at our corporate headquarters in Sydney and consolidating our office-based operations in Queensland. 

Our approved growth projects, such as Ravensworth North, Ulan West and our expansion at Rolleston, are proceeding as planned, and remain on budget and on schedule.  Feasibility studies into our Wandoan Project continue, to enable an investment decision once relevant approvals have been completed and market conditions permit.    

Ongoing reviews continue across the business to ensure that Xstrata Coal retains a highly competitive cost position in the current market environment.  If further adjustments are required, an announcement will be made at that time. 

End

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Xstrata Coal contacts:

National media:
Francis De Rosa
Telephone: [phone]
Mobile: [phone]
Email: [e-mail]

Queensland media:
Kate Campbell                   
Telephone: [phone]
Mobile: [phone]  
Email: [e-mail]

New South Wales media: 
Allyn Hamonet
Telephone: + 61 2 4925 6431
Mobile: [phone]
Email: [e-mail]

www.xstratacoal.com

About Xstrata:
We are one of the world's largest mining and metals companies - a major producer of seven commodities used in everything from constructing buildings and delivering electricity to developing jet engines and mobile phones. We operate in more than 20 countries and employ more than 70,000 people globally.

About Xstrata Coal:
We are the world's largest seaborne exporter of thermal coal, which provides a vital source of safe, reliable and affordable energy for millions of people around the world.  We are also a significant producer of premium quality hard coking and semi-soft coal used to make steel.

The coal we produce is essential for global economic development. This coal helps raise and sustain people's living standards in countries around the world. In addition to generating the electricity that lights our homes and offices, it helps make the steel used to build our schools and cars, as well as vital infrastructure like bridges and telecommunications towers.

Founded in 2002, we are headquartered in Sydney, Australia, and employ more than 17,000 people, including contractors.  We have interests in more than 30 operating coal mines in Australia, South Africa and Colombia and each year manage production of around 100 million tonnes of coal.  We export about 80% of this coal to customers around the world, in the process helping meet the energy requirements of millions of people. We have a strong pipeline of long-term coal projects across all our existing geographies, as well as exploration projects in Canada.  These projects have the potential to expand our current production by more than 50 million tonnes a year.

At Xstrata Coal, our sustainable development performance is critical to our business. We place great emphasis on operating safely, using energy and water efficiently and minimising environmental impacts from our mines. We understand the importance of creating benefits for the local communities in which we are privileged to operate, and of supporting related industry sectors.  We invest in social, environmental, educational and health initiatives within our communities to create shared value that endures beyond the lifespan of our mining operations.  Our commitment to sustainable development has seen us named Mining Sector Leader of the annual Dow Jones Sustainability Index in each of the past five years.