Xstrata Nickel is the world’s fourth largest nickel producer, and is focused on sustainable, value-creating growth. The company pursues this goal within a framework of corporate social responsibility, focusing on safety and environmental stewardship, working together with its employees and contractors, communities, governments and other stakeholders.

Xstrata Nickel is headquartered in Toronto, Canada, and is one of the commodity business units within Xstrata plc, a major global diversified mining group. Xstrata plc is listed on the London and Zurich stock exchanges (LSE: XTA; SWX: XTAN).

Xstrata Nickel’s mining operations include mines and processing facilities in Ontario and Québec, Canada; a ferronickel mine in the Dominican Republic; nickel sulphide mines in Western Australia, Australia; and a refinery in Kristiansand, Norway. In future the existing operations will be joined by three mines currently under development: nickel mines in Tanzania and in the State of Pará, Brazil; and a ferronickel mine in New Caledonia.

Xstrata Nickel manages an annual production of approximately 106,000 tonnes of refined nickel from its fully-integrated operations. Xstrata Nickel is also one of the world’s largest recyclers and processors of nickel and cobalt-bearing materials.

Xstrata Nickel’s sustainable development initiatives are integral to its operations. It reaches its business objectives by striking a balance between the social, environmental and economic impacts of its operations. Xstrata Nickel understands that the work of each employee contributes to achieving this balance.

Adherence to leading health, safety and environmental standards is core to each operation. Internal and external stakeholders are engaged in an open dialogue during the planning and development of operations. Partnerships are developed with the communities which host Xstrata Nickel’s operations to strengthen these communities and contribute to their stability. Sustainability also means openly reporting Xstata Nickel’s performance against key performance indicators.

For example:

• The initiation of mining operations at Koniambo in New Caledonia is the culmination of 14 years of partnering with Société Minière du Sud Pacifique and the people of New Caledonia. Through the efforts of these parties and Xstata Nickel, 750 permanent staff are employed at the operation and long-term relationships have been developed with local contractors and suppliers. The effects of this development on the region will last well beyond the eventual end of operations.
• Working with the Wahnapitae First Nation at the Sudbury operations, Xstrata Nickel employees receive First Nations awareness training. The training makes employees aware of Aboriginal history, treaties and rights respected under treaties, more recent agreements, issues and concerns, and consultation and land management regulations.
• Each Xstrata Nickel operation has an energy management plan which provides energy consumption and intensity targets, and details how energy efficiency, conservation and demand management goals will be achieved. Starting from the base year of 2010, operations are expected to achieve on average a 15% to 16% in energy consumption by 2014, and to collectively achieve a 12% to 15% reduction of energy intensity by 2013.
• In 2011 the Nikkelverk refinery installed a new US$2 million scrubber system in its sulphuric acid plant. The system removes particulates and gases from the exhaust stream. The result is a reduction of 90% of the emissions in the final part of the process to nearly zero.
• Falcondo restarted its operations in 2011 and achieved a record 4.5 million hours without a lost-time incident. This is a significant achievement because, following a 30 month shutdown period, safety training and coaching needed to be provided to 500 recalled employees. The goal is the promotion of a culture in which everyone takes responsibility for safety leadership, and in which incidents are openly examined in order to correct the situations or prevent incidents from occurring again.

Raglan

Located in the far north region of Québec, Xstrata Nickel’s Raglan property consists of a series of high-grade ore deposits, with nickel and copper as the primary metals. The operation consists of underground mines, a concentrator, a power plant, accommodation and administration buildings, fresh water supply and fuel storage tanks. The mine site is linked by all-weather roads to an airstrip at Donaldson and to the concentrate, storage and ship-loading facilities at Deception Bay. The property stretches 70 kilometres from east to west, with a series of high-grade ore deposits scattered along its length. There are four underground mines in operation. Nickel ore is milled on site and the concentrate is transported to Xstrata Nickel’s Sudbury Smelter for further processing, and then shipped to Xstrata’s Nikkelverk Refinery in Norway to be processed into pure metals. The Raglan mining camp was constructed at a cost of Cdn$600 million and began production in 1997.

Employees
The Raglan operation employs approximately 850 people.

2011 production rates
27,274 tonnes nickel-in-concentrate per year
7,215 tonnes copper-in-concentrate
561 tonnes cobalt-in-concentrate

Reserves as of December 31, 2011
Proved: 4.13 million tonnes grading 2.22% nickel, 0.65% copper and 0.05% cobalt
Probable: 5.30 million tonnes grading 3.73% nickel, 0.88% copper and 0.08% cobalt

Resources as of December 31, 2011
Measured: 4.01 million tonnes grading 2.47% nickel, 0.72% copper and 0.05% cobalt
Indicated: 10.5 million tonnes grading 3.49% nickel, 0.97% copper and 0.08% cobalt
Inferred: 17.9 million tonnes grading 3.0% nickel, 0.9% copper and 0.07% cobalt

Sudbury Operations

Xstrata Nickel’s Sudbury operations consist of the Nickel Rim South mine, the Fraser Mine, a mill and a smelter. The Company has been mining nickel-copper ores in the Sudbury area of northern Ontario, Canada since 1929. The facilities are spread throughout the 60-kilometre-long, oval-shaped geological formation known as the Sudbury Basin. Nickel and copper are the primary metals but cobalt and precious metals, such as platinum, are also produced.

Nickel Rim South is expected to provide a high value ore feed for more than 15 years. The mine is located nine kilometres north of Xstrata’s Sudbury smelter. Nickel Rim South was discovered in 2001 and is a high grade mineral resource located at a depth of 1,100 to 1,800 metres. A five-year deposit definition program was completed in December 2008. Nickel Rim South began full production in 2010 and will continue ramping up to achieve the 1.25 million tonne per annum nameplate production capacity in 2011.

The Strathcona mill receives ore from the mine and produces two concentrate streams – a copper concentrate which goes to Xstrata Copper for smelting and refining, and a nickel concentrate which is transported to the Sudbury smelter for processing.

The Sudbury smelter smelts nickel-copper concentrate from the Sudbury, Raglan and Xstrata Nickel Australasia mines and processes custom-feed materials. The smelter’s electric furnace converts the mineral concentrate into a high grade matte containing nickel, copper, cobalt and platinum group metals. The smelted and granulated matte is shipped to Xstrata’s Nikkelverk Refinery in Norway for refining.

Employees
The Sudbury operations employ approximately 1,200 people.

2011 production rates
69,459 tonnes nickel-in-concentrate
20,041 tonnes copper-in-concentrate
2,209 tonnes cobalt-in-concentrate

Reserves as of December 31, 2011
Proved: 8.66 million tonnes grading 1.39% nickel, 2.37% copper and 0.03% cobalt
Probable: 9.44 million tonnes grading 1.39% nickel, 1.74% copper and 0.04% cobalt

Resources as of December 31, 2011
Measured: 12.85 million tonnes grading 1.78% nickel, 2.05% copper and 0.05% cobalt
Indicated: 22.34 million tonnes grading 2.27% nickel, 1.67% copper and 0.05% cobalt
Inferred: 15.6 million tonnes grading 1.7% nickel, 1.9% copper and 0.1% cobalt

Falcondo

The Falcondo ferronickel surface mining operation is located near the town of Bonao in the centre of the Dominican Republic. Ferronickel is a combination of iron and nickel used principally in the fabrication of stainless steel products. Mine facilities include a metallurgical treatment plant, a crude oil refinery and a thermal power plant. Mined ore is transported to the plant, where it is dried, briquetted and supplied to shaft furnaces. In the furnaces the ore is calcined, and the nickel and iron oxides and partially reduced to metallics. The ore is then transported and smelted in two electric furnaces. After refining, the metal is cast into ferrocones, which contain about 40% nickel and 60% iron, and are sent to market.

Xstrata Nickel holds an 83.5% interest in the operation. The operation restarted in March 2011 at 50% of installed capacity after being shut down for two and a half years due to unfavourable market conditions.

Employees
The Falcondo operations employ approximately 975 people at 50% capacity.

2011 production rates
13,498 tonnes nickel-in-ferronickel

Ore reserves as of December 31, 2011
Proved: 44.0 million tonnes grading 1.28% nickel
Probable: 29.7 million tonnes grading 1.36% nickel

Mineral resources as of December 31, 2011
Measured: 40.2 million tonnes grading 1.45% nickel
Indicated: 34.5 million tonnes grading 1.56% nickel
Inferred: 4.9 million tonnes grading 1.4% nickel

Cosmos

The high grade nickel sulphide deposit at Cosmos was developed in 1999 and first production of nickel concentrate was achieved in April 2000. Cosmos was placed on care and maintenance in September 2012 due to adverse market conditions.

Five high grade massive nickel sulphide deposits were discovered in the vicinity of the operation: Cosmos, Cosmos Deeps, Alec Mairs Complex, Prospero and Tapinos. More recently, the Odysseus, Odysseus North and Odysseus Massive deposits have been discovered and a feasibility study is expected for the first quarter of 2014. A conventional nickel sulphide flotation plant at Cosmos upgrades the ore to approximately 20% nickel in the final concentrate product. This nickel concentrate is smelted in the Sudbury smelter.

Employees
The Cosmos operation employs approximately 450 people.

Reserves as of December 31, 2011
Proved: 0.04 million tonnes grading 2.28% nickel
Probable: 0.53 million tonnes grading 2.66% nickel

Mineral resources as of December 31, 2011
Measured: 13.6 million tonnes grading 0.79% nickel
Indicated: 33.8 million tonnes grading 0.91% nickel
Inferred: 12.7 million tonnes grading 0.6% nickel

Sinclair

The Sinclair nickel operation is located approximately 100 kilometers south of Cosmos. Following project approval in late 2007, all necessary infrastructure was constructed to provide for open pit and underground mining and processing operations. Due to the condition of the markets for nickel, only the open pit operation has been completed, while the development of the underground mine has been deferred.

First concentrate production was achieved in October 2008 as part of the concentrator optimization process, followed by the completion of the open pit in the third quarter of 2009.

Sinclair has been designed to operate as a swing producer, and as a satellite operation which uses infrastructure from Cosmos where possible to limit overheads.

Employees
The Sinclair operation employs approximately 600 people.

Reserves as of December 31, 2011
Proved: 0.29 million tonnes grading 2.02% nickel
Probable: 0.32 million tonnes grading 1.93% nickel

Mineral resources as of December 31, 2011
Measured: 0.55 million tonnes grading 2.87% nickel
Indicated: 0.49 million tonnes grading 2.56% nickel
Inferred: 0.3 million tonnes grading 2.2% nickel

Nikkelverk Refinery

Nikkelverk is among the world’s most efficient nickel refineries. It is located in Kristiansand, Norway and has been in operation since 1910. The primary metals refined at Nikkelverk are nickel, copper, cobalt and precious metals. The plant ranks among the lowest-cost nickel refineries in the western world and is ISO 9001 quality and ISO 14001 environment certified. The refinery uses a chlorine leach and electro-winning process to separate and recover component metals. The refinery processes a granulated matte produced by the Sudbury smelter operations as well as custom feed from other sources. After refining, metals are cut, packaged and shipped to world markets. The Nikkelverk refinery, with 500 employees, has the capacity to process 92,000 tonnes of nickel, 39,000 tonnes of copper cathodes and 5,200 tonnes of cobalt annually. It also produces sulphuric acid and treats the silver, gold and platina metals contained in the feeds from Sudbury and Raglan.

Koniambo

Xstrata Nickel is a 49% joint-venture partner in the development of the massive Koniambo orebody in New Caledonia. Société Minière du Sud Pacifique, the development arm of the North Province of New Caledonia, is the 51% partner. Koniambo will be a long-life, low-cost operation.

Nickel would be extracted using a smelting process to produce ferronickel, utilizing an updated version of the process used at Xstrata Nickel's Falcondo operations, called nickel smelting technology (NST). Initially, nickel will be extracted from the saprolite part of the orebody. In future expansions, there are plans to extract nickel from the limonite orebody.

Reserves as of December 31, 2011
Proved: 17.2 million tonnes grading 2.50% nickel
Probable: 45.3 million tonnes grading 2.36% nickel

Resources as of December 31, 2011
Measured: 21.2 million tonnes grading 2.54% nickel
Indicated: 54.4 million tonnes grading 2.45% nickel
Inferred: 83 million tonnes grading 2.5% nickel

Kabanga

Xstrata Nickel is a 50/50 partner with Barrick Gold Corporation in the Kabanga nickel project in Tanzania. Xstrata Nickel is the operator of the joint venture. The project is located in northwestern Tanzania, south of Lake Victoria and near the Burundi and Rwanda borders. It is considered to be one of the best undeveloped greenfield nickel sulphide deposits in the world.

Since 2005 a major investment has been made in the Kabanga project in terms of drilling and evaluation studies. Depending on the results of a project feasibility study and government infrastructure improvements, it is believed that production will be capable of producing more than 40,000 tonnes per year of nickel-in-concentrate.

Resources as of December 31, 2011
Measured: 13.8 million tonnes grading 2.49% nickel, 0.34% copper, 0.21% cobalt, 0.16 g/t platinum and 0.19 g/t palladium
Indicated: 23.4 million tonnes grading 2.72% nickel, 0.36% copper, 0.19% cobalt, 0.42 g/t platinum and 0.28 g/t palladium
Inferred: 21 million tonnes grading 2.6% nickel, 0.3% copper, 0.2% cobalt, 0.3 g/t platinum and 0.3 g/t palladium

Araguaia

Araguaia is a grassroots discovery in an area where the first recorded drilling for base metals was completed in October 2004. These nickel-laterite properties are located in the northwestern Brazilian state of Pará, approximately 2,200 kilometers north of São Paulo. The properties have the advantages of substantial existing resources, a highly prospective land position, and the potential to access regional infrastructure such as rail, road, and power generation and transmission.

Based on the results of a scoping study completed in 2008, it is estimated that the project has the potential to support annual production of 30,000 tonnes of nickel over a 25 year mine life. Due to low nickel prices, the project is currently on care and maintenance.

Resources as of December 31, 2011
Measured: 16.1 million tonnes grading 1.44% nickel
Indicated: 89.0 million tonnes grading 1.31% nickel
Inferred: 18 million tonnes grading 1.3% nickel

Ian Pearce Chief Executive

Ian Pearce, was appointed Chief Executive of Xstrata Nickel following the acquisition of Falconbridge in August 2006. Mr Pearce has worked for more than 27 years in the metallurgy and mining field. He joined Falconbridge in 2003 where he spearheaded the advancement of major growth initiatives as Senior Vice-President of Projects, before being appointed Chief Operating Officer in 2006. Previously, Mr Pearce worked on Canadian oil sands projects as well as metallurgical and mining projects for Fluor in Canada, Indonesia, Chile and South Africa. He holds an engineering HND in mineral processing and a BSc from the University of Witwatersrand. Mr Pearce is Chair of the Mining Association of Canada, is a member of the Board of Directors of the the Nickel Institute, and is on the Advisory Board of Canada’s Most Powerful Women: Top 100.

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