Koniambo

Koniambo is located near the North Province capital of Koné in New Caledonia, an overseas department of France in the South Pacific. The Koniambo Massif rises from a coastal plain to 930 metres above sea level and is located approximately 15 kilometres from the shore.

The balance of interest is owned by La Societe Miniere Du Sud Pacifique.

Koniambo boasts a mine life in excess of 25 years from 62.5 million tones of saprolite reserves grading 2.40% nickel at a 2.0% cut-off grade. An additional resource base which currently comprises 142.1 million tonnes of measured and indicated saprolite resources at 2.13% nickel at a 1.5% nickel cut-off grade has the potential to extend mine life to well in excess of 50 years of economic production.

Open pit mining methods will be employed to mine the nickel ore - saprolite, a soft layer of deeply weathered rock. Hydraulic excavators, bulldozers and haul trucks represent an important part of the mining equipment.

Xstrata will use its proprietary Nickel Smelting Technology, a pyrometallurgical technology which combines mineral processing - calcining, reduction and smelting - with technologies borrowed from the cement industry - counter-current gas flow. The ore preparation facility will have an estimated 3Mtpa capacity. An overland conveyor, a deep-sea port facility, a 1Mtpa coal handling facility, and a desalination plant would be an integral part of the infrastructure.

Production is targeted to begin in 2010 and is expected to reach 60,000 tonnes of nickel in ferronickel per year, which represents approximately 5% of current world consumption.