Tax incentive scheme confirmed for the Northern Plant

Koniambo Nickel SAS (KNS)  announced today the granting by the French authorities of a tax ruling  (décision d’agrément) pursutant to French tax legislation for the promotion of investments in French overseas territories (the so-called “Loi Girardin”) that is expected to  result in a benefit of up to USD223 million to the Koniambo project. Pursuant to this tax ruling, French tax investors will be entitled to invest up to USD780 million in the 350 MW power plant of the project and deduct from their taxable income the value of their investments, subject to making available a portion of their tax savings for the construction of the power plant.

The financial exposition of tax investors will be totally garanteed by Xstrata Nickel in case of withdrawal of the tax ruling. The tax ruling for the Loi Girardin benefit is a particularly positive outcome for the Project showing a clear support form the French authorities and the common objective of KNS, SMSP, Xstrata Nickel, the Northern Province, New Caledonia and the French government to ensure the successful completion of the Koniambo project.