XCBC owns the First Coal Corp. leases, acquired by Xstrata Coal in August 2011, representing more than 100,000 hectares of contiguous coal licenses and applications; the Lossan coal deposit acquired by Xstrata Coal in October 2011; and the Sukunka coal deposit, the acquisition of which was announced on March 8, 2012.

Xstrata Coal has retained a 75% interest in XCBC and will develop, operate and manage the assets on behalf of the joint venture. In addition to its 25% interest, JX Nippon will be the exclusive marketing agent for First Coal and Sukunka coal sold into Japan.

“JX and Xstrata Coal have built a strong relationship over the years via our Oakbridge joint venture in Australia,” said Yasushi Kimura, president, JX Nippon. “This opportunity has great significance for JX as it marks our entry into the hard coking coal market. Our existing coal business focuses on the supply of thermal coal to utility companies, and this joint venture enables a full-scale expansion of our business into hard coking coal, which is essential for steel manufacturing. Xstrata Coal has a strong track record of developing projects and extracting maximum value from coal assets, which will prove invaluable as we build a significant new business that will contribute to the long term stable supply of hard coking coal.”

Technical studies indicate the two most advanced XCBC projects, Sukunka and Suska, have the potential to produce up to approximately 9.5 million metric tons (mt) per year. The majority of this production is expected to comprise hard coking coal with the balance expected to be PCI coal.

Xstrata Coal has combined the project, formerly known as Lossan, with neighboring First Coal tenements to create an expanded open cut coal project, now known as the Suska coal project, of significantly larger scale.

“Our consolidation of the First Coal, Lossan and Sukunka assets since August 2011 will enable Xstrata Coal to increase our exposure to metallurgical coal further,” said Peter Freyberg, CEO, Xstrata Coal. “There are meaningful synergies between these assets, creating the opportunity to develop a substantial and efficient complex of mining assets, unlocking significant value for our shareholders and other stakeholders in our operations.”

Sukunka has an NI 43-101 compliant coal resource of 236 million mt in the measured and indicated categories. Norwest has completed a pre-feasibility study for a longwall mine producing hard coking coal. Xstrata Coal’s technical studies indicate the potential to realize further value from the resource.