Xstrata is a major global diversified mining group. Xstrata maintains a meaningful position in six major international commodity markets: copper, coking coal, thermal coal, ferrochrome, vanadium and zinc, with additional exposures to gold, lead and silver. The Groups operations and projects span four continents and seven countries: Australia, South Africa, Spain, Germany, Argentina, Peru and the UK.

            Red = 25 day moving average.           Green = 200 day moving average.

SALES PER ACTIVITY (Data as of 31/12/2005)

Coal:       42%
Copper:    25%
Zinc:       18%
Chrome:   10%
Vanadium: 4%
Others:     1%

3 October 2006

Xstrata announces a fully underwritten rights issue of up to 235,787,596 New Shares at a price of 12.65 pence per New Share on the basis of one New Share for every three Existing Shares held on the record date of Monday, 2 October 2006.

The total net proceeds of the Rights Issue, after estimated aggregate costs and
expenses, are expected to be approximately 2.9 billion (approximately US$5.5 billion). The Rights Issue is being undertaken to refinance part of the US$7.0 billion Equity Bridge Facility arranged as part of the financing for the successful acquisition of Falconbridge in August 2006.

The Issue Price of 12.65 pence per New Share represents a 42.5% discount to the
closing middle-market price of the Ordinary Shares of 21.98 on 2 October 2006
(a 35.6% discount to the theoretical ex-rights price (TERP) of 19.6475).

Save in respect of New Shares which Glencore International takes up pursuant to the irrevocable undertakings it has given to the Company and pursuant to the separate underwriting commitment Glencore International has given to the Banks pursuant to the Glencore Underwriting Letter, the Rights Issue is fully underwritten by Deutsche Bank and, on behalf of its affiliate JPMorgan Cazenove, by J.P. Morgan Securities Ltd.

Glencore International and Credit Suisse Securities (Europe) Limited ('CSSEL') have the largest shareholdings in the Company, holding approximately 14% and 22% respectively of the Ordinary Shares. Glencore International has irrevocably undertaken to take up its full entitlements under the Rights Issue. In addition, CSSEL has agreed to transfer to Glencore International its entitlements in respect of 151,560,600 Ordinary Shares under the Rights Issue and Glencore International has also irrevocably undertaken to take up in full such entitlements. CSSEL (in respect of 151,560,600 Ordinary Shares) and Glencore International have agreed to lock-ups which, subject to certain exceptions, will expire six months after the latest time for acceptance and payment in full of entitlements to subscribe for the New Shares. A total of 84,200,333 New Shares are subject to Glencore International's irrevocable
undertakings (approximately 35.71% of the maximum number of New Shares to be
issued under the Rights Issue). Glencore International will be paid an underwriting commission by the Company of US$35.1 million in connection with its undertakings.

Dealings in New Shares, nil paid, are expected to commence on the London Stock
Exchange and on the SWX Swiss Exchange ('SWX') on Thursday, 5 October 2006. The expected latest date for acceptance and payment in full under the Rights Issue
is Friday, 27 October 2006.

The Rights Issue is conditional upon a number of matters that are typical for a
transaction of this nature. If these conditions are not fulfilled, the Rights Issue will not proceed. Shareholder approval is not required in respect of the Rights Issue following the passing of the resolutions at the Extraordinary General Meeting of the Company held on 30 June 2006. Shareholders who choose not to take up their rights under the Rights Issue will be diluted by approximately 33.3% following the issue of the New Shares.

Commenting, Mick Davis, Xstrata Chief Executive, said:

'The buoyant cash flow generation of the Enlarged Xstrata Group and our confidence in the prospects for the business following the first six weeks of ownership of the Falconbridge assets have exceeded our expectations. This has enabled us to reduce the size of the Rights Issue, from the anticipated US$7.0 billion required to be refinanced under the Equity Bridge Facility, to approximately US$5.5 billion net of expenses and is in line with our commitment to maintain an investment grade credit rating and a prudent capital structure that provides the flexibility to fund the enormous organic growth potential within our portfolio. The remainder of the Equity Bridge Facility will be funded through cash flow and/or through alternative means, which may include accessing the debt markets.

'We have been very encouraged by the quality of personnel and assets within Falconbridge since taking control and beginning the integration process into Xstrata's devolved business structure. The initial 30-day stage of that process is now complete and we have confirmed offers of positions with the Enlarged Xstrata Group or redundancies for all former Falconbridge employees.

'We have successfully established two new commodity businesses, Xstrata Nickel and Xstrata Aluminum, integrated the copper and zinc operations to form new business units within Xstrata Copper and Xstrata Zinc and appointed the senior executives across these new structures. Our teams have made excellent progress in transforming the businesses, realigning resources and responsibility within Xstrata's devolved business structure and identifying a number of exciting opportunities for further value creation for the Enlarged Xstrata Group. As a consequence, we believe there is upside potential for additional synergy benefits from the acquisition. The execution stage of our integration process is now underway and we expect this to complete at the end of this year, at which point we will be in a position to provide greater detail on the potential that we believe the Falconbridge Acquisition has delivered to Xstrata. Key priorities for this next stage, therefore, will be the completion of our review of the aluminium business, the ongoing identification and delivery of synergies and the development of the organic growth potential of the Enlarged Xstrata Group.'

AFX

LONDON (AFX) - Xstrata PLC said it is to raise 2.9 bln stg in a 1-for-3 rights issue of 235.8 mln new shares at 12.65 stg each.

Proceeds will be used to partly refinance a 7 bln usd loan which Xstrata secured to fund the acquisition of Canadian miner Falconbridge Ltd in August.

The rest of the money it needs to refinance the loan will come from cash flow and/or through alternative means, which may include accessing the debt markets, said Xstrata.

The issue price represents a 42.5 pct discount to Xstrata's closing middle-market price of 21.98 stg on Monday, it said.

Glencore International, which holds a 14 pct stake in the company, will take up its full entitlements under the offer, subject to a lock-up period of six months.

'The buoyant cash flow generation of the enlarged Xstrata Group and our confidence in the prospects for the business following the first six weeks of ownership of the Falconbridge assets have exceeded our expectations,' said chief executive Mick Davis.

'This has enabled us to reduce the size of the rights issue... and is in line with our commitment to maintain an investment grade credit rating and a prudent capital structure that provides the flexibility to fund the enormous organic growth potential within our portfolio,' he said.

Falconbrige, following the expiry of the offer by Inco Ltd for the company in July, paid Inco a break free of 150 mln usd in July and a further 300 mln usd in August.

Turning to current trading, Xstrata said it continued to trade well since end-June, with demand for commodities remaining robust.

'In the wider market, this demand, together with market supply constraints and long lead times to add new market capacity, has supported prices for the enlarged Xstrata Group's commodities significantly above long-term averages,' it said.

3 October 2006 - Source: Easy Bourse

Xstrata expects significant benefits from new assets


The finance director of Anglo-Swiss miner Xstrata PLC said Tuesday that the company has had a number of approaches for the aluminium assets it acquired as part of its recent purchase of Canada's Falconbridge, although he declined to name the firms involved.

Xstrata is "open to all outcomes for this business," Reid said.

The chief financial officer's comments come as the company unveils a $5.5 billion (GBP2.9 billion) one-for-three rights issue to refinance its acquisition of Canadian miner Falconbridge, announced in August.

Xstrata said it is experiencing significant operational benefits from the new assets and is increasingly confident that it will surpass the synergies expected when the firm first unveiled the deal.

Reid declined to quantify those synergies, but said Xstrata expects them to come from its copper and nickel divisions.

During the course of the Falconbridge deal, Xstrata said it would seek to collaborate with the eventual owner of the Sudbury basin nickel assets held by Canadian mining firm Inco Ltd. (N), which is in the process of being taken over.

Inco's Sudbury basin assets are located next to those of Xstrata and cooperation on exploiting the reserves could result in cost savings and other benefits, Xstrata has said.

Inco's board of directors Sept. 24 recommended that its shareholders accept a $18 billion all-cash offer from Brazilian mining giant Companhia Vale do Rio Doce (RIO), or CVRD, after a protracted bidding war for the company.

Xstrata has an "ongoing dialogue with all major mining companies," Reid said, adding that talks have continued with CVRD. But substantive discussions surrounding Sudbury haven't taken place.

Having had some contact at operational levels with Inco employees, Xstrata feels that there is "huge momentum" to put the businesses together.

The Times - October 04, 2006

Investors should dig deep for unbeatable Xstrata share offer - By Robert Cole (Tempus)


IT IS the bargain of the week, surely? If you own three shares in Xstrata, market price 22.46, you can buy another share for a knockdown 12.65. If the market price of shares remains unchanged, shareholders will make a pretty much instant 77 per cent return on the new money they put in.

The number of shares in issue after the 2.9 billion cash call will be expanded by a third so the shares currently in issue may be diluted in value. The theoretical ex-rights price, which adjusts for the dilution, is 19.65. But if the new shares issued at 12.65 move up only to that level, investors will enjoy a 44 per cent uplift.

That said, to judge by yesterdays upward movement in the market price, the stock may continue to trade above the theoretical ex-rights price. Xstrata shares rose more than 2 per cent yesterday, further than any other FTSE 100 share.

The investment decision is not quite as straightforward as it might appear. For one thing yesterdays market reaction is partly related to the unwinding of short postions taken by investors who believed that Xstrata shares would fall when the rights issue details were unveiled. Since shares did not come under pressure, the short sellers had to buy in order to cover their positions.

Investors also face the risk that Xstrata is taking opportunistic advantage of the fact that its shares are highly rated at present. As the graph shows, shares are trading near their record high and have risen very rapidly over the past year. It is instructive to note that Xstrata shares have traded at an average price of 18.01 over the past year and 11.77 over the past three years.

Xstrata shares also produce a 1 per cent dividend yield, compared with an average for the mining sector of 2.1 per cent and 3.5 per cent for the London market as a whole. That hardly suggests that the shares, at 22.46, are cheap. The fact that the company felt it neccesary to price new shares at such a large discount also suggests that it is concerned that investors might think the current market price is less than robust.

For all that, the 12.65 offer is too good to refuse. Especially since the company also said yesterday that the integration of Falconbridge, the nickel and copper miner whose purchase prompted the cash call, is advancing ahead of expectations. And because it painted an upbeat assessment of general trading conditions and its cashflows. Subscribe.

dai, can you enlight me how can I get onto the right issues play? I haven't hold any XTA at the moment but intend to get onto it.

Money is printed by central banks. It won't decrease, but change hands

China October Trade Surplus Hits Record
Monday November 12, 7:16 am ET
By Joe Mcdonald, AP Business Writer
China's Trade Surplus Jumps in October to New Monthly High of $27 Billion

BEIJING (AP) -- China's trade surplus jumped to a new all-time monthly high in October, according to official data released Monday, despite government pledges to restrain export growth and adding to pressure for action on trade barriers and currency.

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The report comes amid demands by some U.S. lawmakers for sanctions if Beijing fails to ease currency controls. The European Union says it also will press China for action at a summit this month.

China's trade surplus for the first 10 months jumped a massive 59 percent to $212.4 billion, according to figures released by the General Administration of Customs. The annual surplus already has surpassed the full-year record of $177.5 billion set in 2006.

October's trade gap rose to $27 billion, up 13.6 percent from the same month last year, according to the customs data. The previous monthly record high was $26.9 billion in June.

Chinese leaders say they are not actively pursuing huge surpluses and have imposed new taxes to restrain exports of steel, plastic and other goods deemed too dirty or energy-intensive.

Foreign demand for low-cost Chinese goods has stayed strong despite a string of foreign recalls and warnings over faulty or tainted Chinese goods ranging from toothpaste to tires.

The surge in import revenues has strained the government's ability to restrain pressure for prices to rise. The central bank drains billions of dollars a month from the economy through bond sales, and has piled up the world's biggest foreign reserves at $1.3 trillion.

China's trade surplus with the United States rose 12 percent to $15.7 billion on total two-way trade of $26.7 billion, according to the customs agency.

U.S. lawmakers are working on several proposed measures to impose punitive tariffs on Chinese imports if Beijing fails to take action on its currency controls.

The United States and other trading partners complain that China's currency, the yuan, is kept undervalued, giving its exporters an unfair price advantage and adding to the country's surpluses.

The surplus with Europe, China's biggest trading partner, rose nearly 50 percent to $13.9 billion on total trade of $31.4 billion, the agency reported.

A European Union delegation led by Prime Minister Jose Socrates of Portugal, which holds the 25-nation group's presidency, will press Chinese leaders for action to ease trade barriers and to let the yuan rise faster in value, EU Ambassador Serge Abou said Monday.

The comments reflected Europe's growing official urgency about China's swollen trade surpluses, an area where Washington has taken the lead in the past on lobbying Beijing.

China's imports in October climbed 25.5 percent from the same month a year earlier to $80.7 billion, according to the agency. Exports grew by 22.3 percent to $107.7 billion.

The United States reported a $232.5 billion trade deficit with China last year, its biggest ever with any country. The gap this year is on track to surpass that.

For the first 10 months of the year, China's total exports grew 26.5 percent to $985.84 billion, while total imports rose 19.8 percent to $773.48 billion.

HOC was up 10% earlier. Why?

talk of a 48 bid next week and a done deal!!

no question that there is almost certain to be significant consolidation in both oils and mining ..... the difficulty is to choose the right ones

with miners tumbling (again), XTA could make a reasonable buy when sp hits 25 (3325) or 50 (3365) dma as below

Yes possibly, but XTA is on the acquisition trail & much like the BLT/RIO saga, the predator sp seems to suffer, whereas the target seems to get a boost.
My guess is that the sp will fall nearer to the 3200p level, unless more M&A details are forthcoming.

all depends on whether XTA is hunter or hunted

I would say the hunter, but in an amicable way (i.e. not a hostile takeover):

"Xstrata confirms that its ongoing interaction with other industry participants includes dialogue with a number of parties covering a range of topics of mutual interest such as industry consolidation,' Xstrata said
Xstrata chief executive Mick Davis is also understood to be trying to interest Anglo American PLC in a deal, they said."

Snippet from Saturday's (19th Jan) Times:
"Xtrata was the top performer, up 266p at 33.63 on speculation that Vale, of Brazil, had cancelled a road show next week to finalise a bid."

In the Sunday Times today, almost as a footnote to article re BLT and RIO:
"Meanwhile, Companhia Vale de Rio has started due diligence on a potential bid for Xstrata."

just hope it's not some depraved individual indulging himself with lascivious thoughts on how to make himself millions when everyone dives in

actually both XTA and RIO could/should make interesting punts for the early birds

More likely a salacious individual not wishing to deprive herself of the rewards she may reap from having already plunged in

totally scandalous ... most depraved behaviour that ill-becomes a gentlewoman

so Ms Toya, did you catch all those blokes with their knickers down? ...... i confess to being amazed that XTA opened on such a down note .... guess it's because the chinese are playing hardball re iron ore prices, or at least i can think of no other reason.

anyway, have just bought in fairly modestly at 3209, as the fall looks unwarranted and if the much-touted bid does materialise, it will surely be at a much higher price than currently enjoyed (perhaps an interesting choice of word!)

XTA briefly touched 3500 this morning, now still above 3400 so you and I both in profit Cynic - enjoy it while we may!