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Xstrata To Restructure Sudbury Nickel Operations, Cut 686 Jobs

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Edited Press Release



LONDON -(Dow Jones)- Xstrata said Monday Xstrata Nickel plans to restructure
its Sudbury operations in response to ongoing challenging market conditions.


As a result of the restructuring, 686 permanent employee positions will be
made redundant, affecting both union and salaried employees in operational and
non-operational roles. A three-day stoppage of operations was initiated Monday
to allow the restructuring to occur.


The restructuring follows the announcement in November 2008 of the accelerated
closure of the end-of-life Craig and Thayer-Lindsley operations at Sudbury, both
of which will cease operations with immediate effect.


As a result of the restructuring, the Fraser Mine Complex will be placed on
care and maintenance and associated support and administrative functions will be
reorganized. The Strathcona Mill, with annual capacity of 2.7 million tonnes of
ore, will be reduced to two work shifts from four as a result of reduced feed.
In addition, the Fraser Morgan development project will be deferred. This
project will be evaluated on an ongoing basis and may be re-initiated when
economic conditions allow, Xstrata said.


Monday's announcement does not impact the Nickel Rim South project in the
Sudbury basin. The project remains on schedule to ramp up to 60% of its
ultimate 1.25 million tonne per annum production capacity in 2009, equivalent to
approximately 7,400 tonnes of nickel.


Total production from the Sudbury Smelter is expected to remain at a similar
level compared to 2008 production as shortfalls arising from the cessation of
Sudbury Mines will be offset by concentrates from Nickel Rim South and Xstrata
Nickel Australasia. Concentrates will also continue to be processed from Xstrata
Nickel's Montcalm and Raglan operations, together with third-party feed, the
company said.