Zug, 1 February 2010

PRODUCTION REPORT FOR 12 MONTHS ENDED 31 DECEMBER 2009

Highlights:

�  Record annual production of thermal coal, mined nickel, zinc in concentrate and lead metal

�  Stronger second half volumes of chrome, platinum, copper, semi-soft and coking coal, with a significant increase in fourth quarter volumes across almost all commodities compared to third quarter

�  Xstrata Alloys progressively increased production from 20% of annual capacity at the start of 2009 to approximately 85% by year end in line with improving demand

�  Recommencement of Oaky No. 1 longwall in August after seven months of suspended operations

�  Far-reaching restructuring and operational improvements delivered, in particular in nickel and zinc, to achieve material improvements in costs and competitiveness 

�  Record production levels at Mount Isa and McArthur River zinc operations following restructuring and expansion

�  Successful completion of Goedgevonden Colliery, currently being commissioned to reach full capacity of 7 million tonnes per annum of thermal coal in 2011

�  Low-cost Nickel Rim South mine produced more than 500,000 tonnes of ore in 2009 and will reach full capacity of 1.25 million tonnes in 2011, on time and on budget

�  Construction commenced on the $1 billion development of Mangoola open cut thermal coal mine in Australia to produce up to 10.5 million tonnes ROM of export and domestic quality thermal coal annually, with an expected mine life of 18 years

�  During 2009, three major organic growth projects gained Xstrata plc Board approval:

�  ATCOM East thermal coal project in South Africa will produce around 5.7 million tonnes per annum ROM and 3.1 million tonnes per annum of saleable thermal coal for a capital commitment of approximately $407 million

�  $293 million investment approved to extend the life of Xstrata Copper�s Lomas Bayas mine in Chile by eight years to 2020 and sustain production capacity at an expanded rate of 75,000 tonnes per year of copper cathode

�  $542 million development to extend the life of Ernest Henry copper mine in Australia to at least 2024 through transformation to a major underground mine and magnetite extraction plant

�  $1.3 billion (100%) expansion to Antamina Joint Venture (Xstrata share 33.75%) announced in January 2010 to increase processing capacity by 38% through concentrator expansion and mining fleet additions

�  Increased mineral resource estimates in 2009 at Xstrata Coal�s Wandoan project, Ravensworth West/Cumnock areas, Mangoola, Tahmoor and Ravensworth Underground (Australia) and Xstrata Copper�s Southern Peru division, Lomas Bayas copper mine (Chile), Tampakan copper-gold project (Philippines), El Pach�n (Argentina) and, in January 2010, Frieda River  (Papua New Guinea)

Ferrochrome production decreased by 30% in 2009 compared to the prior year, as a result of the Xstrata-Merafe Chrome Venture�s curtailment of up to 80% of ferrochrome production capacity in late 2008 and early 2009 in response to the rapid decline in market conditions.  Production was progressively increased during the year from 20% of annual capacity in early January to approximately 85% by year end, in line with improving demand.  The strengthening of the Rand against the US dollar during 2009 continued to exert pressure on margins and, together with improving demand, enabled ferrochrome producers to achieve a 30% increase in pricing from $0.79 per pound in the first quarter to $1.03 per pound in the fourth quarter.

Ferrovanadium volumes fell by 37% in 2009 due to the suspension of production at Rhovan, Xstrata�s integrated vanadium operation, during the third quarter for extended maintenance.  The operation returned to full production in mid October.

Overall, PGM volumes remained nearly unchanged year-on-year at 222,000 ounces. Production was adversely affected by above average rainfall in the early part of the year, which halted production at Eland for several days, and unforeseen geological anomalies which impacted the head grade at Mototolo.  These disruptions were offset by higher recoveries from an increased supply of UG2 ore to the mill and improved feed grade at Eland. During the last quarter of the year, Eland commenced development of an underground mine to replace its opencast tonnage and progressively increase current platinum production levels to up to 300,000 platinum ounces per annum from 2014.

Ferrochrome

Vanadium

Platinum

Total consolidated coal production increased by 11% to 95.2 million tonnes in 2009, with thermal and semi-soft coal up 13% and 17% respectively compared to 2008.

Total thermal coal volumes rose to 82.6 million tonnes, as a result of the inclusion of 10.5 million tonnes from the Colombian Prodeco operations, acquired in March, combined with increased volumes at the highly productive Newlands Northern Underground mine in Queensland as a result of improved geological conditions.

The construction of the Goedgevonden open pit thermal coal mine in South Africa was successfully completed during the year and is ramping up to full production of 7 million tonnes per annum in 2011.  Despite additional tonnes from Goedgevonden, production from the South African operations fell by 8% compared to the prior year, due to the planned shutdown of Impunzi Underground and reduced demand for unwashed coal in the domestic and export Atlantic market.  Lower demand for export thermal coal in the Atlantic coal market also constrained Colombian production.

Semi-soft coking coal production increased by 17% year-on-year due to the New South Wales operations switching from thermal production to higher-priced semi-soft production to maximise margins.

Production of Australian coking coal decreased by 7% for the full year, as the suspension of longwall operations at Oaky No 1 for the first half of 2009 in response to weak market conditions and industrial action at Tahmoor were only partly offset by increased productivity at Oaky North.

Total mined copper production decreased by 5% to 906,898 tonnes in 2009 compared to the previous year, mainly due to a 75,000 tonne reduction in copper production at Ernest Henry and lower output at Alumbrera and Antamina.  Output at Ernest Henry was significantly impacted by the planned higher waste stripping rate required to access the next ore zone, flooding during the record wet season earlier in the year that required extensive pit dewatering and lower ore grades in line with the mine plan.  Planned lower grades at Alumbrera also reduced output, as the grade profile of the operation naturally declines together with lower copper grades at Antamina as the mine plan moved from mainly copper-only ore zones to a zinc-copper ore zone in 2009.

Record performances at Xstrata Copper�s Chilean operations and the Mount Isa mining operations in Australia partially offset reduced volumes.  Total copper production increased at Collahuasi by 15%, as a result of higher milled volumes, grades and metallurgical recoveries.  These improvements more than compensated for the failure of the main feed conveyor to the concentrator plant in July that resulted in reduced throughput for 44 days.  Copper cathode production at Lomas Bayas improved by 24% following the completion of an expansion project in the last quarter of 2008 that more than offset the impacts of an eight day strike in May. Increased mill throughput and higher grades resulted in a 7% increase to copper in concentrate production at Mount Isa.

Gold production decreased by 27% to 502,967 ounces in 2009 compared to the previous year, mainly due to lower grades and recoveries at Alumbrera and significantly lower gold production at Ernest Henry.

Total combined custom and mined copper cathode production declined by 10% as a result of  the temporary suspension of operations at the Kidd metallurgical plant and slow downs at the other Canadian metallurgical operations resulting from excessive acid inventories following a collapse in demand for sulphuric acid.  This was partially offset by a 16% increase to anode production at Altonorte in Chile, following an expansion completed at the end of 2008 and a 4% increase to achieve record cathode production at the Townsville refinery in Australia due to the increased supply of anode from Altonorte. 

In December 2009, as part of a rationalisation of its Canadian operations, Xstrata Copper announced that the Kidd metallurgical operations would permanently cease operations in June 2010 as a result of fundamental changes in the global smelting industry that have made the Kidd metallurgical plants economically unviable.

Total mined nickel production increased to 57,052 tonnes, 5% higher than in 2008, as increased head grades and volumes from Raglan, significantly higher volumes from Xstrata Nickel Australasia (XNA) and initial feed from the Nickel Rim South operation more than offset the impact of the restructuring of the Sudbury operations.  Xstrata Nickel�s restructuring, which repositioned the business lower on the cost curve, included the closure of high-cost, end-of-life mines in Sudbury, the suspension of Falcondo, significant reductions in operational and administrative costs and the deferral of the Fraser Morgan and Sinclair underground growth projects.  The Montcalm mine was suspended at the end of March and indefinitely suspended from June, following unplanned ground movement.  Strathcona�s milling capacity was reduced by 50% to better align with the processing of inventories from Sudbury mines and decreased local feed volumes.  Total mined ore processed at Strathcona declined by 45% in 2009 compared to last year.

Raglan increased its nickel in concentrate production by 13%, as a result of an 11% increase in nickel head grade and a 12% increase in ore mined compared to 2008.  Nickel in concentrate production at Xstrata Nickel�s Australian operations increased by 119% to a record 16,678 tonnes, due to a significant increase in mining at the Prospero deposit, a 3% increase in head grade overall at Cosmos and the commissioning of the Sinclair open pit mine.

Nickel production at the Nikkelverk refinery remained at a similar level to 2008, as increased volumes at Raglan and XNA offset the loss of direct feed from Sudbury and Montcalm and reduced third party feed volumes.  Nikkelverk produced a record 46,605 tonnes of nickel in the second half of 2009, demonstrating its ability to operate at an increased annualised rate of 92,000 tonnes, following minimal capital cost debottlenecking initiatives.

The Falcondo ferronickel operation in the Dominican Republic remains on care and maintenance.

Zinc in concentrate production increased by 20% to 1,032,755 tonnes compared to 2008, as a result of expansions and restructuring at the Australian operations, the first full year of production at Perseverance mine, increased volumes at Brunswick mine and higher zinc production at the Antamina copper-zinc operation.  The restructuring of the Mount Isa operations resulted in a 15% increase in zinc in concentrate, despite the operation being impacted by severe weather during the first quarter of the year.  Production at McArthur River Mine rose by 17% following its expansion to an open pit operation which was completed in the first half, offsetting the temporary suspension of the operation in the first two months of the year.

Total refined zinc metal production of 825,208 tonnes was a 4% increase on 2008, despite smelter cutbacks in Canada in response to the weak acid market and lower production at Nordenham to optimise power usage.  San Juan de Nieva smelter reached full capacity, producing 500,776 tonnes of zinc metal, an 11% increase on 2008.

Lead in concentrate production decreased by 9% in 2009 as a result of lower ore grades at the Australian operations.  Refined lead metal production increased by 10% in 2009 as higher volumes of crude lead were processed at the Northfleet refinery.

On 1 February 2010, Xstrata Zinc and its joint venture partner Minco Plc announced a $10 million (�7 million) exploration programme for 2010 at the Pallas Green zinc-lead project in Ireland.

Xstrata contacts:

Notes to editors

About Xstrata plc

Xstrata is a global diversified mining group, listed on the London and Swiss Stock Exchanges, with its headquarters in Zug, Switzerland.  Xstrata�s businesses maintain a meaningful position in seven major international commodity markets: copper, coking coal, thermal coal, ferrochrome, nickel, vanadium and zinc, with a growing platinum group metals business, additional exposures to gold, cobalt, lead and silver, recycling facilities and a suite of global technology products, many of which are industry leaders.  The Group's operations and projects span 19 countries.