• Record annual production of coking coal, semi-soft coking coal, mined nickel and refined nickel
• Year-on-year increases in mined copper, lead in concentrate and ferrochrome production
• The new Nickel Rim South mine in Sudbury commenced full mine operation in April and reached nameplate capacity of 1.25 million tonnes ore per annum in October, six months ahead of schedule
• In South Africa, the Goedgevonden open cut thermal coal mine was successfully commissioned during the year and is ramping up to full capacity of 7 million tonnes per annum in 2011
  During the first half of 2010, Xstrata Coal commissioned the 4 million tonnes per annum, underground Blakefield South mine in Australia
• Xstrata Copper completed construction of a magnetite plant at Ernest Henry mine, part of the operation’s AUD589 million ($542 million) transformation into a major underground copper-gold mine
• During the year, increased mineral resource estimates were published for Xstrata Copper’s Frieda River project (Papua New Guinea), Las Bambas (Peru), Antapaccay (Peru), El Pachón (Argentina), Lomas Bayas (Chile), Collahuasi (Chile) and West Wall (Chile)

Ferrochrome production increased by 48% year on year in response to a recovery in market conditions and improved demand, following the suspension of up to 80% of operation capacity in 2009. The average operating capacity utilisation rate rose to 74% in 2010 compared to 50% in 2009, as the full impact of restarting previously suspended furnaces was offset by scheduled maintenance during the high electricity tariff winter months.

Ferrochrome producers achieved a 46% increase in the average European benchmark ferrochrome price in 2010 compared to 2009, but margins remained under pressure due to the continued strengthening of the South African rand against the US dollar. Lower stainless demand in the second half of 2010, resulted in a decrease of 5¢ per pound in the European benchmark ferrochrome price for the first quarter of 2011 to $1.25 per pound, closing the gap between the contractual and spot prices that existed throughout 2010.

Xstrata’s integrated vanadium operation, Rhovan, achieved record production during the year. Ferrovanadium volumes increased by 89% and vanadium pentoxide production was 90% higher than in 2009 when production was suspended due to an extended maintenance programme.

PGM volumes were 11% lower than in 2009 as a result of mining of lower grade areas at Eland in accordance with the mine plan and due to delays in obtaining the Section 102 mining right, partially offset by improved concentrator recovery. The development of Eland’s western decline shaft, the Kukama Shaft, is progressing with initial production from the first mining level expected in the first quarter of 2011. Development of the eastern decline, the Nyala Shaft, commenced during April 2010 and production from the first mining level is scheduled for second quarter 2011. Production from underground operations will deliver 250,000 tonnes per month by the end of 2013 and reach steady state capacity of 500,000 tonnes per month during the last quarter of 2015; with production of platinum reaching 300,000 platinum ounces per annum.

Xstrata Coal’s total consolidated production in 2010 was 79.9 million tonnes, down 4.8 million tonnes or 6% on the previous year.

Australian coking coal volumes increased by 20% or 1.3 million tonnes as a result of a full year of production from Oaky No. 1 and high productivity from Oaky North. This was partially offset by lower production at the Tahmoor mine in New South Wales due to the now resolved industrial action in the second half of the year.

Australian thermal coal production for 2010, including semi-soft, was 2.9 million tonnes or 6% below 2009 production, primarily due to the planned closure of the United underground colliery in New South Wales and the impact of severe weather during the first quarter and in December on the Queensland open-cut operations, resulting in the loss of 3.1 million tonnes in 2010 (Xstrata Coal share).

During the year, South African production was 3 million tonnes or 15% lower than in 2009 as a result of the planned closure of the Southstock Opencut mine in late 2009, unusually high rainfall in the Witbank region and reduced volumes during the ramp up phase of the new Impunzi opencast. Lower production volumes were partially offset by the ramp up of Goedgevonden, which is on schedule to reach full capacity of 7 million tonnes per annum of thermal coal in 2011.

Thermal coal production from the Cerrejón joint venture in Colombia was in line with 2009 production, despite the extreme wet weather conditions experienced in the second half of 2010. Production from Prodeco, divested in March 2010, has been excluded from reported production.

Xstrata Copper

Xstrata Copper’s total mined copper production increased to 913,500 tonnes in 2010 compared to 907,000 tonnes the previous year, despite challenging operating conditions at some of its South American operations. Improved grades and higher mining rates increased volumes at Kidd underground mine by 21% to 52,600 tonnes and more than doubled copper in concentrate production at Ernest Henry to 74,600 tonnes.

At Collahuasi, Xstrata Copper’s share of production decreased by 6% to 221,800 tonnes compared to the record production levels achieved in 2009, mainly due to an illegal contractor stoppage for nine days in May, a 33-day strike in November during collective bargaining negotiations with unionised employees and lower grades. These were partly offset by significantly improved concentrator plant throughput over the prior year as a result of operational improvements and bottleneck eliminations. Xstrata Copper’s share of copper in concentrate production at Antamina decreased by 5% to 101,700 tonnes due to lower mill head grade which was partially offset by a 9% increase in mill throughput. Copper in concentrate production at Tintaya reduced by 17% compared to 2009 due to reduced grades and recoveries through the year and localised pit wall instability in the third quarter.

Total gold production increased by 4% in 2010 to 524,800 ounces due to a strong recovery in gold production at Ernest Henry that was partially offset by lower grades and recoveries at Alumbrera and Tintaya.

Total combined custom and mined copper cathode production declined by 2% to 715,500 tonnes in 2010 primarily due to the decision to reduce custom processing through the permanent closure of the Kidd metallurgical operations in May. This was partially offset by record cathode production at the Townsville refinery in Australia due to increased supply of anode from Altonorte.

Xstrata Nickel

In 2010, Xstrata Nickel achieved record production volumes at its mines, the Sudbury smelter and the Nikkelverk refinery. Despite the closure of the end-of-life Sudbury operations in 2009, total mined nickel production increased by 6% to 60,670 tonnes in 2010 as a result of the ramp up of Nickel Rim South, the restart of the Fraser mine, improved grade in the second half from Raglan and improved volumes from Xstrata Nickel Australasia (XNA) following the commencement of production at Sinclair mine in September.

Mined nickel production from the Sudbury operations increased by 69% to 15,472 tonnes of nickel in concentrate compared to 2009 as Nickel Rim South, commissioned in April 2010, ramped up to reach its nameplate capacity in the second half of the year, a full six months ahead of schedule. The Fraser mine was restarted during the period to take advantage of favourable market conditions. As a result, nickel in concentrate production from the Strathcona mill increased by 47% to 16,813 tonnes.

Raglan achieved record production levels with 1.32 million tonnes of ore treated, although production of nickel in concentrate decreased by 4% due to slightly lower planned head grades. XNA produced 16,961 tonnes of nickel in concentrate in 2010, up 2% from the prior year and a new record for the operation.

The Sudbury smelter reached an annual production record of 73,667 tonnes of nickel in matte in 2010, a 12% increase over the previous year, due to increased feed volumes, following the decision to send all of XNA’s mined production to Sudbury to utilise available capacity fully. Production of copper in matte increased by 21% driven by rich copper feed from the poly-metallic Nickel Rim South and the restart of the Fraser mine. Cobalt in matte production increased by 6% due to higher volumes of cobalt-rich feeds.

Nickel production from the Nikkelverk refinery was a record 92,185 tonnes in 2010, up 4% over the previous year and above its increased annualised capacity rate of 92,000 tonnes, as a result of Xstrata Nickel’s higher production volumes and maximum throughput at the Sudbury smelter.

The Falcondo ferronickel operation in the Dominican Republic remained on care and maintenance for the period. In October 2010, Falcondo announced its planned 50% capacity, low-capital restart using procured electricity, which will enable the business to operate with reduced costs beginning in the first quarter of 2011.

Xstrata Zinc

Zinc in concentrate production remained at a similar level to the previous year. Expansions and productivity improvements increased zinc in concentrate production by 10% at Mount Isa and McArthur River mines and by 3% at Perseverance mine. This was offset by lower production volumes at Brunswick mine due to the change in its mining plan to extend its life into early 2013, and a planned reduction in zinc volumes at Antamina as the mine plan moved into a lower grade zinc region.

Total refined zinc metal production of 766,000 tonnes was 7% lower than 2009 as a result of the permanent closure of the Kidd Creek zinc smelter in May 2010, partially offset by San Juan de Nieva smelter reaching full capacity during the year and achieving a small increase on 2009 volumes to produce 501,000 tonnes of zinc metal.

During 2010, lead in concentrate production was 3% higher than 2009 as a result of a 14% increase in volumes from the Mount Isa mines that more than offset the decrease in Brunswick production. Refined lead metal production remained at a similar level to the previous year.

Ends

Xstrata contacts:

Alison Flynn
Telephone +44 20 7968 2838
Mobile +44 7769 314374
Email aflynn@xstrata.com

Pamela Bell
Telephone +44 20 7968 2822
Mobile +44 7799 626715
Email pbell@xstrata.com

Investors and analysts
Hanré Rossouw
Telephone +44 20 7968 2820
Mobile +44 7879 455 885
Email hrossouw@xstrata.com

Martin Fewings
Telephone +44 20 7968 2893
Mobile +44 7990 591536
Email mfewings@xstrata.com

Notes to editors
About Xstrata plc
Xstrata is a global diversified mining group, listed on the London and Swiss Stock Exchanges. Headquartered in Zug, Switzerland, Xstrata maintains a meaningful position in seven major international commodity markets: copper, coking coal, thermal coal, ferrochrome, nickel, vanadium and zinc with additional exposure to gold, cobalt, lead and silver. The Xstrata Group also comprises a growing platinum group metals business, iron ore projects, recycling facilities and a suite of global technology products, many of which are industry leaders. The Group's operations and projects span 20 countries.