Project Development South America Region

Bob Drabik – EGM PDSA 18 September 2011

Agenda

Project Development Division Overview and Team

Project development challenges

Xstrata - Bechtel Strategic Alliance

Standard Concentrator

Other Supplier Alliances

JV Expansions (briefly) – Collahuasi – Antamina

Project Development Division Overview

Project Development South America Region – Antapaccay Project in EPC/EPCM Execution – Las Bambas Project in EPC/EPCM Execution – El Pachon Project in Final Feasibility Study Update – Agua Rica Project in Feasibility Study – Lomas Bayas III Project in Pre-Feasibility Study – Coroccohuayco Project in Scoping Study – JV Support (Antamina Expansion Projects & Collahuasi Phase I, II and

III Projects)

Project Development Asia Pacific Region – Tampakan Project in Interim Engineering Phase – Frieda River Project in Feasibility Study

Project Development South America team

Project Teams in PDSA Antapaccay - Project Director Max

Combes Las Bambas - Project Director Joe

Albright El Pachon - General Manager Xavier

Ochoa Agua Rica - GM Studies Dave Dicaire Antamina and Collahuasi JVs - GM JV

Support Tony Maycock

Core team common support across all projects General Manager Finance Finance Managers Project Services Manager SD Manager HR Manager

Overall organisation led by Bob Drabik, Executive General Manager PDSA

Project development challenges

Xstrata Copper recognized many of the key project development challenges in 2007

– Social licence and community relations – Government relations – Environmental and Social Impact Assessments – Permits to construct and access areas – Remote locations to build in and get people and equipment to – Simultaneous projects in execution – Massive infrastructure development requirements – Availability of sufficient resources to design and build projects – Sufficient project management skills – Availability of materials and equipment to support projects – Cost pressures as global and regional economies heat up causing

general and mining related escalation Created Project Development Division separate from operations Clear division of responsibility and accountability to deal with challenges

Clear division of responsibilities

South American Operations

EISA application and response

Permits

Community relations

Sustainable development

Government interface

Operational readiness

Production ramp-up

Project Development Division

Engineering, Procurement, Construction

Project controls

Traffic and logistics

Change management

Document management

Quality of workmanship

Quality of performance

Xstrata - Bechtel Strategic Alliance

Established in Q4 2007 10 year Alliance for Replicable Copper Concentrators Studies done or underway to date:

– Standard Concentrator Feasibility Study - completed – Antapaccay Feasibility Study – completed – Las Bambas Feasibility Study - completed – Tampakan Feasibility Study - completed – El Pachon Final Feasibility Study Update - underway – Frieda River Pre-Feasibility Study and Feasibility Study – nearing

completion – Loma Bayas III Pre-Feasibility Study – underway

Projects in Execution to date: – Antapaccay Project – Las Bambas Project

Xstrata - Bechtel Strategic Alliance brings benefits in current environment Secures access to large experienced pool of engineering resources and

experienced project management skills Concurrently supports multiple projects at various development stages Retains key staff from project to project and enhances career

opportunities across projects – plus continuity of people Shift resources from one project to next as required – integrates teams Xstrata Copper currently Bechtel’s major client in South America Consistent approach across all projects – many synergies being captured Replication efficiencies and savings both in time and cost

– Engineering – Procurement – Construction – Commissioning, start-up and ramp-up

Apply lessons learned from one project to next – learning curve Key mitigant for some of the risks other projects are experiencing

Project Development South America has the right people

Experience and depth across all projects

Xstrata Copper team has directly relevant project experience – EGM PDSA – 34 years – PD Las Bambas – 38 years – PD Antapaccay – 16 years – GM El Pachon – 15 years – GM Studies – 30 years – GM JV Support – 39 years – Next level of managers (engineering, commercial, business, project

controls, finance, site) – average over 20 years each of project experience

Bechtel team has key management on our projects that average 25 years experience each

Standard Concentrator – Divided into adjustable modules – Primary crusher, grinding area,

flotation area, concentrate and tailings area, re-grind and filter plant

– Truck shop, warehouse, offices, camps – One grinding line or two grinding lines – Enclosed or open air structures

Each mine is unique, each ore is unique, but:

– Standard Concentrator philosophy applied as default case

– Customize only when adds NPV – Look for opportunities to replicate – Apply where it makes sense

Standard Concentrator - First in copper industry

Standard concentrator basic module

Antapaccay – 70 ktpd plant layout

Standard Concentrator applied to Las Bambas modified from Antapaccay – Antapaccay has one SAG mill, two ball mills, one primary crusher – Las Bambas has two SAG mills, two ball mills, two primary crushers – Flotation circuit for Las Bambas is twice Antapaccay’s in capacity

Next applied to El Pachón – Two SAG mill, four ball mills, two primary crushers, concentrator will be

enclosed for high Andes climatic conditions

Standard Concentrator application

Extract from 3D model Las Bambas Las Bambas 140 ktpd plant layout

Other Supplier Alliances

Alliance approach extended to key manufacturers of equipment – Standardizes equipment across multiple projects – Part of Standard Concentrator approach and philosophy – Cost and time savings through replication – Takes equipment off critical path – Xstrata Copper becomes a major customer, therefore important

First Supplier Alliance established with FL Smidth for all SAG mills, ball mills and primary crushers in Q1 2008

Next Alliance established with Siemens for all mill Gearless Motor Drives

Expanded Alliances where possible and created additional Alliances – Metso for Pebble Crushers and Apron Feeders – Siemens for Gas Insulated Switchgear – FL Smidth for Flotation Cells – Thyssen Krupp Robins for Overland Conveyors – Twenty further Alliances created

Conclusions

Xstrata Copper recognized the project challenges, planned well in advance to execute a number of major projects in South America

Assembled experienced teams with right skills to manage and execute the mega-projects

Xstrata - Bechtel Alliance provides overall project management capabilities, track record, experienced people for replicable copper concentrators

Standard Concentrator replication saves time and money

Innovative Supplier Alliances saves time and money

Xstrata also working with Fluor on Agua Rica adjacent to Alumbrera – Fluor designed and constructed Alumbrera in 90’s – Fluor has provided world class materials handling expertise to project

Questions?

Agenda

Introduction Copper market update Xstrata Copper overview South American Operations Project Development South America Antamina and Collahuasi expansions

Antapaccay Project Las Bambas Project El Pachón Project Agua Rica Project Conclusions

Coffee break

Joint Ventures Ownership of first tier assets

Location Ancash, Peru Tarapaca, Chile

Xstrata ownership 33.75% 44%

Partners BHP (33.75%) Teck (22.5%) Mitsubishi (10%)

Anglo American (44%) Mitsui & Co. (12%)*

Mineral Resources** 1.9 Bt @ 0.84% Cu 7.0 Bt @ 0.81% Cu

Ore Reserves** 822 Mt @0.93% Cu 2.4Bt @ 0.83% Cu

Life of mine 18 years 44 years

2010 Cu Production: - 100% - Attributable

302 kt 102 kt

504 kt 222 kt

* Group of Japanese companies headed by Mitsui & Co. ** 100% basis, Mineral Resources inclusive of Ore Reserves.

Collahuasi Mineral Resources as of 30 June 2010; Antamina Mineral Resources as of 1 January 2011

Joint Ventures Active management of JV interests

Xstrata Copper approach to managing Joint Ventures

2010 Top ten copper producers by mine (kt Cu)

0

200

400

600

800

1000

1200 Both Antamina and Collahuasi are

independently managed joint ventures

Xstrata Copper is represented on the board of both and actively participates in technical and other steering committees

Xstrata Copper has a full-time team dedicated to Antamina and Collahuasi: − Led by Executive General

Manager JV division, Roberto Darouiche

− Based in Santiago/Lima − Recently appointed a GM

Project Development for JVs with 39+ years project experience reporting to EGM PDSA

Description Phase 2 Project increases concentrator

capacity from 150ktpd to 160ktpd through a series of debottlenecking initiatives

20ktpa additional copper production Indicative Capital Cost: $210M Project Status 6% complete Phase II currently in engineering

phase; project target completion Q2 2013

Unlocking potential of our JV assets Collahuasi – expansion projects in execution

Phase 1 Expansion Project Phase 2 Expansion Project

Description Phase 1 Project increases current

concentrator capacity from 140ktpd to 150ktpd

20ktpa additional copper production Indicative capital cost: US$123M Project Status 99% complete Phase I completing Q3 2011

Note: all production and capital cost numbers shown on a 100% basis

Description Addition of 4th or 4th & 5th grinding

lines Concentrate plant capacity expansion

to 270ktpd or 380ktpd Total copper production up to 1Mtpa Status Pre-feasibility study underway,

targeted for completion in Q2 2012 Commissioning targeted for 2017

Unlocking potential of our JV assets Collahuasi – expansion projects in development

0

10

20

30

40

50

60

2006 2007 2010

Inferred

Indicated

Measured

Mt Cu

Copper in resource (100%) Phase 3 Expansion Project

Under construction, expected completion of grinding area Q4 2011

– Mills and gearless motor drives installed as well as mill liners

– Flotation cells installed and majority of structural steel, piping and electrical now in place

66% complete total project (July 2011) Ramping up to full production in 2012

Unlocking potential of our JV assets Antamina – expansion projects in execution

Cu & Zn Floating

Milling

SAG 2 Balls

4

Project scope includes the addition of a second SAG mill and a fourth ball mill to increase throughput

Capacity expanded 38% from current 94ktpd to 130ktpd

Indicative capital cost: US$1.3 billion (100%)

Over 4,900 construction workers on project

Description Project Status

In March 2011, Antamina announced an 18% increase to Mineral Reserves and 44% increase to Mineral Resources

Studies under way for increasing plant capacity further, following completion of 130ktpd expansion project

Initial objective of reaching capacity of over 140ktpd through debottlenecking initiatives

Conceptual study under way for a further major expansion of the existing plant

Unlocking potential of our JV assets Antamina – expansion projects in development

0

3

6

9

12

15

18

2007 2010 2011

InferredIndicatedMeasured

Mt

Copper in resource (100%) Future Expansion Potential

Questions?

Agenda

Introduction Copper market update Xstrata Copper overview South American Operations Project Development South America Antamina and Collahuasi expansions

Antapaccay Project Las Bambas Project El Pachón Project Agua Rica Project Conclusions

Coffee break