LATEST MEDIA RELEASE FROM XSTRATA COAL

6TH JULY 2010

XSTRATA COAL RECOMMENCES QUEENSLAND GROWTH PROJECTS

Xstrata Coal ("Xstrata") will recommence A$186 millon of planned investments into key Queensland growth initatives, including early works and exploration activities associated with its Rolleston West, Sarum and Wandoan Coal Projects.

The decison has been made following the Federal Government's announcements that is proposes to replace the Resource Super Profits Tax (RSPT) with a Mineral Resources Rent Tax (MRRT).  The revised proposal represents significant progress towards a minerals taxation regime that will satisfy the industry's core principles of prospectivity and maintaing international competiveness.

"In recent weeks Xstrata participated in detail land constructive discussions with the Government and belive there is now an improved shared understanding as to what drives mining investments decisions and the importance of a stable long term fiscal regime, "said the cheif Executive Xstrata Coal, Peter Freyberg.

"Today's decision effectively lifts the suspension on expenditure announced by Xstrata last month and allows the next stage of planning for this internationally sigificant Wandoan project to proceed.

Xstrata will continue to honour all obligations and agreements entered into with landowners and key stakeholders to date and will maintain an open dialogue with the community to reduce uncertainty.

If approved, the A$6 billion Wandoan Coal Project and associated infrastructure will provide over 3,000 jobs throughout construction and operation over the next five years and open up the Surat Basin as a major new export region for Queensland.

A final investment decision on the A$6 billion Wandoan mine and assocaited infrastructure project is expected in the second half  of 2011, and will consider feasibility work, the final form of the MRRT legislation and associated royalties.

Xstrata