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For more information contact Vicki Wilson, Senior Community Relations Advisor, EHM on 07 4769 4578.

Overview of EHMErnest Henry Mine, located 38 kilometres north east of Cloncurry in north west Queensland, began commercial production in 1998 as an open pit copper mine.

Mined ore is processed at a concentrator on-site at the rate of 11 million tonnes per annum. Copper concentrate containing gold is trucked 157 kilometres to Mount Isa for smelting to anode and the anode is then railed to Townsville for re� ning to cathode at Xstrata Copper’s re� nery.

In 2009, EHM produced 36,000 tonnes of copper in concentrate and 45,000 ounces of gold in concentrate. EHM concentrate usually represents around 30% of Xstrata Copper north Queensland’s total production.

EHM Life of Mine (LOM)The EHM open pit project is based on an optimised pit design to recover as much as is economically possible of the copper-gold orebody. The design has seven stages of development. Mining commenced in 1996 and is scheduled for completion in June 2011. Processing of mined pit ore will continue beyond mining to be completed in 2012.

At the end of 2006, a pre-feasibility study began to evaluate the potential to extend the mine life beyond 2011. Positive pre-feasibility

Ernest Henry Mining: Life of Mine Extension Project

results led to the approval in November 2007 of $26 million to construct the � rst stage of an underground decline that would facilitate early access to underground ore and improve the continuity between the open pit mining operations and potential underground mining operations.

Construction of the underground decline began in February 2008 and was completed in May 2009. A feasibility study to assess the viability of full scale shaft underground mining operations together with a magnetite processing facility began in early 2008 and ran in parallel with the � rst stage of the decline.

The study con� rmed that the development of an underground copper mine and magnetite processing facility had the potential to extend the EHM LOM by 12 years creating 330 jobs during the construction phase and 400 jobs from 2013 until 2024.

On 3 December 2009, Xstrata Copper announced corporate approval of a $589 million development to extend the life of EHM through the transformation of open pit mining operations to a major underground mine with an associated magnetite extraction plant.

On 3 December 2009, Xstrata Copper announced corporate approval of a $589 million development to extend the life of the Ernest Henry Mining (EHM) operation through the transformation of open pit mining operations to a major underground mine together with an associated magnetite plant.

The EHM open pit copper-gold mine A Jumbo Operator installing ground support to stabilise the underground decline at EHM

The course ore stockpile and concentrator at EHM, which processed more than 8 million tonnes of copper ore in 2009

May 2010

“ The project will generate an additional 330 jobs during construction and 400 full-time jobs from 2013 until 2024.”

www.xstrata.com

For more information contact Vicki Wilson, Senior Community Relations Advisor, EHM on 07 4769 4578.

Ernest Henry Mining: Life of Mine Extension Project

Shaft underground mineThe project will enable EHM to achieve annual production levels of approximately 50,000 tonnes of copper and 70,000 ounces of gold in concentrates from 2012 when processing from open pit mining operations ceases. Ore will be mined principally from a major hoisting shaft to be sunk to a depth of 1,000 metres, producing 6 million tonnes per annum of ore at full capacity. Copper-gold concentrates from EHM will continue to be hauled by purpose-built trucks to Xstrata’s Mount Isa copper smelter, with the anode then railed to Xstrata Copper’s re� nery in Townsville.

The existing concentrator at EHM will be recon� gured to align with the underground mine production rate, resulting in continuous milling at lower throughput levels to deliver improved metallurgical recoveries and energy ef� ciencies. A separate extraction circuit will be installed to produce the magnetite concentrates.

Following � nal Queensland Government environmental approvals, construction of the underground mine is expected to commence in the � rst half of 2010 with � rst production in late 2011 and full-scale operation from early 2013.

Since the � rst cut in early 2008, the EHM decline has progressed more than 3,170 metres. The decline is now 700 metres vertically below the surface, or 220 metres below the ¤ oor of the current pit, and will

be used as a mine production access point during the � rst few years of the underground operation.

The decline and underground levels will be further developed in 2010 along with additional vent rises, ore passes and escape-ways. The initial shaft hole will be prepared for the stripping and lining process to take place in 2011. Other major works include the installation of pit dewatering sumps and air conditioning units.

Magnetite processing facilityThe EHM orebody is an iron oxide copper cold (IOCG) deposit and magnetite is the main form of iron oxide. It is a benign and highly magnetic substance used primarily in steel manufacturing and coal washing.

Copper and gold are recovered at EHM using traditional grinding and ¤ otation methods. Magnetite is liberated during this process and the new extraction plant will allow the magnetite to be recovered using

a combination of cyclones and magnetic separators.

This will also allow for the reprocessing of mine tailings to extract magnetite and potentially enable a reduction in the amount of tailings at the on-site storage facility.

The magnetite processing operation at EHM will produce approximately 1.2 million tonnes of magnetite per annum for export to Asia making it Queensland’s � rst iron ore concentrate producer.

Construction of the magnetite plant is expected to commence in the � rst half of 2010 with commissioning expected by the beginning of 2011. The magnetite plant will be constructed within the existing concentrator infrastructure at EHM and the magnetite concentrate produced will be transported by rail to Townsville.

EHM workforce planningXstrata Copper has been consulting with all EHM workers on LOM planning for the past two years and will continue to work with employees and contractors as the site transitions to underground mining operations.

Currently 25% of EHM’s workforce lives in Cloncurry, including the senior management team, and the remaining workforce is ¤ y-in/¤ y-out (FIFO). It is anticipated that a similar ratio will be maintained with the transition to underground mining.

“ The magnetite processing operation at EHM will produce approximately 1.2 million tonnes of magnetite per annum for export to Asia making it Queensland’s � rst iron ore concentrate producer.”

An underground haul truck exiting the portal to the EHM underground decline – the � rst cut of the decline took place on 20 February 2008

Magnetite is a benign and highly magnetic substance used primarily in steel manufacturing and coal washing