Arequipa, 14 September 2011

Jose Marún, executive general manager of Xstrata Copper South America Operations Division made a presentation on "Xstrata Copper - Expansion in Peru: Progress and Sustainable Development" to Top Mining in the Thirtieth Mining Convention - PERUMIN, which is taking place in Arequipa.   

During his presentation, Marún reported that the Antapaccay copper project, located in the Cusco region, will begin its production stage in the second half of next year. This deposit has resources equivalent to 817 million tonnes of ore with 0.52% copper and will have an average annual production of 140,000 tonnes of metallic copper in concentrate during the useful life of the mine, which is anticipated to be 20 years. In the first ten years, this figure will reach 160,000 tonnes of metallic copper in concentrate per annum.

The commissioning of Antapaccay located 10 kilometres away from the Tintaya operation in Espinar province, Cusco region, entails an investment of 1.47 billion dollars. Marún reported that currently, the mine’s infrastructure is under construction, with 32% complete at this time.

With regard to Las Bambas, Marún stated that its start-up is scheduled for the second half of 2014. To date, the resources of the deposit are around 1.55 billion tonnes with 0.61% copper. During his presentation, Marún indicated that in the eighteen years of the mine’s anticipated life, average annual production will reach 315,000 tonnes of metallic copper in concentrate. He also said that in the first nine years, copper output will reach 400,000 tonnes of metallic copper in concentrate per annum; and the molybdenum production will border 5,000 tonnes of concentrate annually.

Likewise, Marún explained that the concentrator will be able to treat 140,000 tonnes per day of sulphide ore through the crushing, grinding and flotation processes. The operation of this world-class mining complex will require an investment of US$ 4.23 billion. He also said that the preliminary work for the construction of Nueva Fuerabamba, which is part of the social agreements made with the Fuerabamba community, commenced in the third quarter of this year.

Hand in Hand with Sustainable Development

Marún commented that workers from areas close to the copper-bearing projects make up all of the unskilled labour working in the construction of Antapaccay (Cusco) and Las Bambas (Apurímac).

He also said that, as part of Xstrata Copper’s sustainable development policy, important achievements have been made in terms of the business capacities of suppliers located in surrounding areas to both extractive projects were greatly strengthened. He explained that more than seventy local companies specialising in maintenance, construction, freight services and building materials are suppliers for the company.

Finally, he emphasised that the Tintaya Foundation continues contributing to sustainable development for the benefit of Espinar province residents, implementing projects and programs that will endure beyond the completion of the Tintaya mine operations.

Marún also mentioned the Framework Agreement, signed in September 2003 with Espinar province to establish a strategic alliance that would promote its sustainable development. He reported that, to date, over 750 projects with an investment of more than 170 million Peruvian nuevos soles have been carried out for economic infrastructure work, agricultural mechanisation, training and educational infrastructure, among others.

Marún also reported on the current state of the Las Bambas Social Fund (FOSBAM, in Spanish), reserved to finance social programmes benefitting the towns in Las Bambas area of direct influence (Cotabambas and Grau Provinces, department of Apurímac). He specifically mentioned that since 2005 (when this fund started), seventy projects with an investment of more than 49 million dollars have been developed; of which, 31 are in full implementation, 33 have already been completed and 6 are about to commence.

With regard to the Antamina operation, where XCu holds a 33.75% share, he reported that the 1.28 billion dollar expansion to increase the grinding capacity in 38% is going very well, and commissioning is expected to take place by the end of this year.

The executive general manager of Xstrata Copper South America Operations Division made his presentation before representatives of other major mining companies and authorities, and national and international presenters gathered in the Top Mining event; the exclusive space within the Thirtieth PERUMIN Mining Convention, where the general outlook for mining investments and operations in our country is showcased.  

Xstrata Copper contacts:

Telephone: + 51 1 372 2233 Ext. 1127
Mobile: + 51 989259180
E-mail: ddrago@xstratacopper.com.pe

Notes for 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 additional exposures to platinum group metals, 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 21 countries.

ABOUT XSTRATA COPPER

Xstrata Copper is the world's fourth largest copper producer. In 2010, its attributable mined production of copper contained in cathodes and concentrates reached 913,500 tonnes. It is also one of the world's largest producers of smelter and refined copper, including from third-party materials.

Headquartered in Brisbane, Australia, Xstrata Copper is one of the commodity business units within the major global diversified mining group, Xstrata plc. Its mining and metallurgical operations and development projects span eight countries: Argentina, Australia, Canada, Chile, Papua New Guinea, Peru, the Philippines and the United States. Its operations and projects are administered through a regional divisional management structure, which ensures that critical decisions are taken close to the related businesses. Xstrata Copper also has a recycling business (Xstrata Recycling) with plants in the United States and offices in Canada and Asia.

ABOUT THE SOUTH AMERICA OPERATIONS DIVISION

In March 2011, Xstrata Copper announced the creation of its South America Operations Division, with headquarters in Lima, Peru. The division is responsible for managing the company’s mining operations in the region: Tintaya Antapaccay, Peru; Lomas Bayas, Chile; and Minera Alumbrera, Argentina.

Tintaya Antapaccay

Acquired in May 2006, the existing Tintaya operation consists of a concentrator and SX/EW plant and has annual production of approximately 100,000 tonnes per annum of copper in concentrates and cathodes. In July 2010, Xstrata Copper announced the development of the satellite Antapaccay deposit that will increase annual copper in concentrate production from Tintaya by 60% to an average of 160,000 tonnes from mid 2012 and transform the mine into a long life business with at least 20 years of operations, based on currently known mineral resources.

Las Bambas Mining Project

In August 2004, Xstrata was awarded the right to explore and the option to develop Las Bambas following a competitive international bid process conducted by Peru’s investment promotion agency ProInversión. The project sits at an elevation of 3,700 to 4,650 metres above sea level and is located in the provinces of Cotabambas and Grau in the Region of Apurímac, 75 kilometres southwest of the city of Cusco. The Las Bambas mining project extends of 35,000 hectares and includes the Ferrobamba, Chalcobamba, Sulfobamba and Charcas mining concessions.

The mineral resources in Las Bambas are estimated at 1.55 billion tonnes of copper mineralisation with 0.61% copper at a cut-off grade of 0.3% copper; and it includes significant gold, silver and molybdenum by-products.