Xstrata Coal and JX Nippon Oil & Energy Joint Venture to Invest $35 million in Pre-feasibility Study in British Columbia

TOKYO, May 15, 2012 /CNW/ - The British Columbian Premier, Christy Clark, joined Xstrata Coal and JX Nippon Oil & Energy Corporation (JX Nippon) today to announce the joint venture's investment of $35 million in British Columbia to conduct a pre-feasibility study of the Suska Coal Project, located between Tumbler Ridge and Chetwynd.

The announcement was made in Tokyo as part of Premier Clark's trade mission, which includes stops in Japan, Korea and the Philippines.

"Through Canada Starts Here: the BC Jobs Plan, our government is working to grow our economy and this recent investment confirms that we are on the right track," said Premier Christy Clark. "Our industry partners can feel confident about their investments because of British Columbia's low taxes, skilled workforce, and a transportation infrastructure that gets products to Asian markets quickly and efficiently."

"Xstrata's partnership with JX Nippon has put us in a positive position to advance the Suska Coal Project," said Mark McManus, Executive General Manager, Xstrata Coal Canada. "The pre-feasibility study will involve significant expenditures on exploration and environmental studies to develop the appropriate mining solution for the delivery of vital natural resources and sustainable value for stakeholders."

The pre-feasibility study is scheduled to be completed in the first half of 2013.  The next step will be to undertake a detailed feasibility study and seek the necessary approvals, including assessment by the BC Environmental Assessment Office.

"JX is very excited about its US$435 million investment in Xstrata Coal British Columbia," said Shunsaku Miyake, Director, Senior Vice President, JX Nippon. "We believe that the BC projects, including Suska, have significant potential for steelmaking coal production. This will allow JX to develop a new line of business and further diversify our market interests."

The Suska Coal Project includes areas acquired by Xstrata in 2011 previously held by First Coal Corporation and Cline Mining. The project will produce coal to be used in the manufacturing of steel.

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Notes to editors

Xstrata Coal is the world's largest seaborne exporter of high energy thermal coal and a significant producer of steelmaking coal.  Xstrata Coal has recently established a significant presence in British Columbia through a series of acquisitions, which together form Xstrata Coal British Columbia.  JX Nippon Oil & Energy (JX) is a diversified energy company that is a wholly owned subsidiary of JX Holdings and a core operating company of the JX Group.  Xstrata Coal British Columbia and JX Nippon Oil & Energy have created a joint venture to own and deliver the British Columbia projects.

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