Sydney Mining Club7 November 2002

Presentation by Peter CoatesCEO Xstrata Coal

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The Agenda

• The transformation of Xstrata Plc

• Xstrata Coal’s origins

• Xstrata Coal today

• The outlook for the thermal coal market

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Xstrata Plc

• International, diversified natural resources company

• Diversified portfolio of high-quality, cash generative metals and mining businesses• Xstrata Coal • Xstrata Zinc• Xstrata Alloys

• Based in Switzerland and listed on the London Stock Exchange

• New international shareholder base• Admitted to the FTSE 100 Index in June 2002

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Transformation of Xstrata

To create a platform from which value couldbe created, growth credibility pursued

and existing potential unlocked

The key challenges were:

• US$ 1 billion capitalisation, – lack of critical mass

• 2 quality assets (ferroalloys and zinc) not diversified by earnings profile or pricing cycle

• Growth constrained by: high gearing (85% debt to equity ratio); an illiquid stock and a domestic shareholder base

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Xstrata’s origins

Xstrata AG converts to plc and acquires Duiker & Enex for US$2.5bn – US$1.5bn equity offering: 7x oversubscribed– US$1.4bn international debt facility

Xstrata AG converts to plc and acquires Duiker & Enex for US$2.5bn – US$1.5bn equity offering: 7x oversubscribed– US$1.4bn international debt facility

Xstrata plc enters FTSE 100 Xstrata plc enters FTSE 100

Acquisition of FerroAlloy assets in South Africa and other international assets

Acquisition of FerroAlloy assets in South Africa and other international assets

Glencore acquisition of Duiker

Glencore acquisition of Duiker

Glencore acquires coal assets in Australia: creation

of Enex

Glencore acquires coal assets in Australia: creation

of Enex

Xstrata AG (Sudelektra)(established 1926)

Xstrata AG (Sudelektra)(established 1926)

Glencore acquires38.5% Xstrata AG

Glencore acquires38.5% Xstrata AG

GlencoreGlencore

1990 - 20021990 - 2002

19901990

June 2002June 2002

March 2002March 2002 Xstrata AG converts to plc and acquires Duiker & Enex for US$2.5bn – US$1.5bn equity offering: 7x oversubscribed– US$1.4bn international debt facility

Xstrata AG converts to plc and acquires Duiker & Enex for US$2.5bn – US$1.5bn equity offering: 7x oversubscribed– US$1.4bn international debt facility

Xstrata plc enters FTSE 100 Xstrata plc enters FTSE 100

Acquisition of FerroAlloy assets in South Africa and other international assets

Acquisition of FerroAlloy assets in South Africa and other international assets

Glencore acquisition of Duiker

Glencore acquisition of Duiker

Glencore acquires coal assets in Australia: creation

of Enex

Glencore acquires coal assets in Australia: creation

of Enex

Xstrata AG (Sudelektra)(established 1926)

Xstrata AG (Sudelektra)(established 1926)

Glencore acquires38.5% Xstrata AG

Glencore acquires38.5% Xstrata AG

GlencoreGlencore

1990 - 20021990 - 2002

19901990

June 2002June 2002

March 2002March 2002

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Coal Acquisition

• Coal assets: Ideal vehicle for transportation• Complemented quality of the portfolio

• New commodity, pricing, earnings and geographical exposure

• Scale to unlock new listing and international shareholder base

• Transaction had to stand on financial merits:• Conservative assumptions: Acquisition makes returns in

excess of cost of capital at long-run coal price of US$26/ton and US:Australian dollar exchange rate of 63c

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Roadshow Summary

• In total, Xstrata’s IPO roadshow covered some 190 institutions worldwide, with an 89% success rate

• 11 day programme• Meetings with investors in 13 cities in 7

countries• 66 one-on-ones• 15 groups meetings• 5 video or tele-conferences

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The new Xstrata

• Successful IPO placed Xstrata in strong position

• Company effectively transformed

New Xstrata Former Xstrata AG

Proforma net cash from operations

US$340m US$33m

Net debt to equity ratio 19.6% 84.7%

Debt to EBITDA <1.5x 3.6x

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Top Shareholders: Public Data

GlencoreCapitalFidelityUndisclosed UKUndisclosed CH

No of shares%

Glencore International AG 101,040,00040.0

Capital Group of Companies 35,409,00614.7

Fidelity 7,639,144 3.0

Undisclosed UK - 32.5% of total register

Undisclosed CH - 9.8% of total register (Total shares in issue: 252.6 million)

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Xstrata Plc Revenue by Commodity - 2001

Coal62%

Alloys17%

Zinc20%

Other1%

2001 Proforma Revenue – US$1,875 million

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Xstrata Plc Revenue by Commodity - 2002

Alloys18.2%

Zinc21.6%

Other0.2%

Coal60.0%

Six months to 30 June 2002 – US$957.9 million

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Xstrata has global leading positions in its selected markets

0 10 20 30 40 50

BHP Billiton

Xstrata

Rio Tinto

Anglo American

Thermal coal exports (2001) mt

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Xstrata has global leading positions in its selected markets

Refined zinc production (2001) kt

0 200 400 600 800 1,000

Korea Zinc

Pasminco

Umicore

Xstrata

Teck Cominco

Noranda

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Xstrata has global leading positions in its selected markets

South African ferrochrome (2001) kt

0 200 400 600 800 1,000

Xstrata

Samancor

Hernic

Assmang

ASA metal

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Xstrata Coal

One of world’s largest exporters of thermal coal

• Australia• 14 mines – approximately 32 Mt managed

production/ 27.5 mt consolidated production• 20% of Australian thermal exports

• South Africa• 12 mines – approximately 14 Mt managed

production/ 16mt consolidated production• 20% of South African exports

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Xstrata Coal’s origins

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Cerrejon, Columbia

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The Genesis of Glencore Coal

• 1995 – Glencore purchase of Prodeco assets• Carbones del Cerrejon• Calenturitas• Lenquazacue • Puerto Zuniga

• Development of Mine and Port• Carbones del Cerrejon to 4mtpa• Puerto Zuniga to 6 mtpa

• 1998 – Sell down and consolidation• Sale of 50% of CdelC to Anglo• Merger of CdelC with Rio’s Oregenal

• Later – Further consolidation• Exit of Rio• Buy in of BHP• Purchase of Carbocol share of CZN• Purchase of Exxon share of CZN

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On the Acquisition Trail

1998 Cumnock Coal Ltd (Underwritten Rights Issue)

Mt Owen OC (BHP)

1999 Teralba UG, West Wallsend UG, Westside OC (HIH) Liddell OC (Savage Resources)

United UG (White Industries)

2000 Bulga OC, Sth Bulga UG and Baal Bone UG (Cyprus)

2001 Ulan UG and OC Mines (Exxon)Duiker Mining Ltd (On-market takeover)

2002 Ravensworth East OC, Narama OC (Rio)

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Xstrata Coal Australia

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Xstrata Coal South Africa

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Leading NSW coal producer

ESTI MATED OWNERSHIP OF SALEABLEESTI MATED OWNERSHIP OF SALEABLECOAL PRODUCTI ON I N NSWCOAL PRODUCTI ON I N NSW

Xstrata29%

Rio Tinto26%

Anglo6%

BHPB12%

Centnal11%

Other16%

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Strong outlook for thermal coal demand

Thermal coal imports by major Asian countries (Mt)

0

50

100

150

200

250

Japan Korea Taiwan ASEAN Total

1999

2010

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Australia’s thermal coal supply - Major potential for expansion

Australian export thermal supply potential (mtpa)

0

50

100

150

200

2000 2001 2002 2003 2004 2005 2010 2015

New

Expansion

Existing

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In Summary

• Xstrata Plc is a leading international, diversified natural resources company

• Xstrata Coal is one of the world’s largest exporters of thermal coal

• Well-positioned to capture future growth in coal market