About Xstrata Coal

Headquartered 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.

Mission statement

We will grow and manage a diversified portfolio of metals and mining businesses with the single aim of delivering industry-leading returns for our shareholders.

We can achieve this only through genuine partnerships with employees, customers, shareholders, local communities and other stakeholders, which are based on integrity, co-operation, transparency and mutual value-creation.

Group overview and strategy
Xstrata plc was created through an initial public offering on the London Stock Exchange in March 2002. Since that time, the Group’s scale, scope, geographic spread and commodity diversification have been transformed through a combination of incremental acquisitions, organic growth projects, operational improvements and value accretive, company-transforming acquisitions. Xstrata is now the fifth largest diversified metals and mining company in the world, with operations and projects in 19 countries and top five market positions in each of its major commodities.

Xstrata’s primary strategic aim is to create superior shareholder value by growing and managing a diversified portfolio of mining and metals businesses. Our Mission statement recognises that to continue to grow and create value over the long term, we must operate in an ethical and transparent way, forming mutually beneficial partnerships with our stakeholders. Our strategic objectives are:

  • To manage an attractive portfolio of assets diversified by commodity, geography and currency
  • To uphold a rigorous and unwavering focus on value and growth, identifying and securing opportunities for value creation
  • To maintain and enhance our financial strength and discipline
  • To create further value through ongoing portfolio optimisation, delivery of capital and operational efficiencies and real cost reductions
  • To achieve and maintain the highest standards of health, safety and environmental performance at our operations and to work in partnership with local communities for mutual benefits, supporting the principles of sustainable development
  • To foster a high performance and entrepreneurial culture through a highly devolved structure, empowering management teams and minimising overheads
  • To conduct our business activities ethically and with the maximum transparency commercially possible

History

Xstrata started life in 1926 as Südelektra AG, a Swiss company with investments in infrastructure and electricity projects in Latin America. A number of disposals and acquisitions had transformed the company into a diversified natural resources group when Südelektra renamed itself Xstrata in 1999.

Throughout 1999 and 2000 Xstrata AG continued to dispose of non-core businesses such as aluminium, oil and gas and to focus on low-cost production in its key markets. In May 2001 Xstrata acquired Asturiana de Zinc, a Spanish listed zinc group.

The current management team took over Xstrata in October 2001, when it was small, Swiss-listed mining company with a market capitalisation of around $500 million and largely reliant on ferroalloys and zinc operations in South Africa and Europe. Mick Davis, formerly Billiton’s Chief Financial Officer and an architect of the BHP Billiton merger, was appointed as Chief Executive Officer. Trevor Reid was appointed as Chief Financial Officer, joining from Standard Bank in London where he was Global Head of Resource Banking

Xstrata plc was created five months later through an initial public offering on the London Stock Exchange in March 2002, which raised just under £1 billion and was oversubscribed in excess of seven times at the offer price. Simultaneously, Xstrata acquired Glencore’s Australian (Enex) and South African (Duiker) coal assets for $2.5 billion becoming the world’s largest exporter of thermal coal and entered the FTSE100 index as the 100th largest company.

Since its listing on the LSE in 2002, key events include:

January 2003, the German Nordenham zinc smelter purchased from Metaleurop for $100 million.

June 2003, Xstrata completed the acquisition of MIM Holdings, an Australian metals and mining group (coking coal, copper, zinc, lead, silver and gold assets) for $2.9 billion. The acquisition provided additional geographic diversification, critical mass and entry into two new commodities: copper and coking coal.

December 2003, Xstrata approved the construction of a new ferrochrome smelter in South Africa, the “Lion project”, which has raised Xstrata’s annual ferrochrome production capacity to one-third of current global capacity.

February 2004, Xstrata plc established a shared venture with SA Chrome & Alloys, which introduced meaningful and sustainable black empowerment participation in Xstrata’s South African ferrochrome business.

February 2004, the Rolleston project was approved, creating a long-life, open-cut thermal coal mine in Queensland, Australia.

April 2004, Xstrata purchases a further 45% of the Cook Colliery for US$6.35 million, increasing its stake in the Queensland-based coking coal mine to 95%.

August 2005, Xstrata purchased 19.9% of Falconbridge Limited and acquired the remaining 80% the following October, the total cost of Falconbridge was $18.8 billion. This acquisition brought a unique portfolio of organic growth opportunities, diversification into nickel, exposure to North America and a significantly enhanced South American copper business, together with additional scale for the zinc business, now the largest listed global producer.

March 2006, a one-third stake in the Colombian coal operation, Cerrejón, was acquired from Glencore International, for $1.7 billion.

June 2006, the Peruvian Tintaya copper operation was brought from BHP Billiton for $811 million.

April 2007, the disposal of Xstrata Aluminum to Apollo Management LP for a total cash consideration of $1.15 billion, was announced. Xstrata Aluminum was created from the former Falconbridge Group’s aluminum assets, known as Noranda Aluminum.

June 2007, the decision was made not to raise the offer for LionOre, following Norlisk’s higher bid.

August 2007, Xstrata successfully took over Eland Platinum Holdings for around $1 billion.

During 2007, Xstrata Coal purchased a number of assets in New South Wales, including: Iluka Resources Limited\'s 50% interest in the Narama mine; a majority shareholding in the Tahmoor operation; and the Anvil Hill asset.

February 2008, Xstrata Nickel acquired the Western Australian nickel miner, Jubilee Mine NL.

February 2008, Xstrata Coal purchased Resource Pacific Holding Ltd, its Newpac operation is an underground semi-soft coking coal and thermal coal mine located in the Hunter Valley coalfields of New South Wales.

October 2008, Xstrata acquired 24.9% of Lonmin, one of the world\'s largest platinum miners.
Today, Xstrata is the world’s largest producer of export thermal coal, the largest producer of ferrochrome, the largest exporter of thermal coal, one of the top five producers of coking or metallurgical coal, the fourth largest global copper producers, the fifth largest global nickel producers and one of the world’s largest miners and producers of zinc.

Group structure

Xstrata’s activities are organised into five global commodity businesses and a technology business, each of which operates with a high level of autonomy. Xstrata differentiates itself from industry peers by devolving maximum responsibility and authority to its commodity business units. We believe this directly benefits our operations by creating a strong sense of local ownership, where entrepreneurial managers are empowered and incentivised to address site-specific challenges and seize opportunities. Xstrata’s commodity businesses are supported by a small corporate centre, split between the head office in Zug, Switzerland and a corporate office in London, UK.

Description of Operation in New South Wales

The Mitchells Flat project area is located in the Hunter Coalfield of New South Wales, about 15 kilometres northwest of Branxton and 12 kilometres east of Singleton. Plans for the development of an underground coal mine and associated infrastructure were approved in 1991 and a mining lease granted in 1993.

Mitchells Flat has Indicated Resources estimated to be 112 million tonnes, and Inferred Resources estimated to be 160 million tonnes. The mine will be able to produce steaming coal and soft coking coal.

The deposit lies within the Wittingham Coal Measures, part of the Upper Permian sediments of the Singleton Super-Group. It is structurally isolated from the remainder of the Hunter Valley measures by the Hunter Thrust to the north and east, and the West Brook fault to the west. It is a multi-seam deposit (8-10 coal seams) in a complex geological setting with potential open cut and underground resources.

World Locations

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Contact Xstrata Coal:

Private Mail Bag 8
Singleton NSW 2330

Ph: 6570 2461
Fax: 6570 2520

For further Information visit the website www.xstratacoal.com