nkp & bee sa platinum, page-81

Chair,

Interesting comment. The downside of mining the merensky reef only upfront is that the ferrochrome synergies could be delayed until the ug2 reef is eventually mined. However I would imagine a lower capex, quicker to production option targeting merensky is of benefit in the following situations:

1. On the expectation of a significant basket price spike coinciding with merensky only production. In these situations it is possible to up production rates which will help pay off the capex quickly (see article)

2. If nkwe are attempting to attract other suitors. No doubt a lower capex quicker production scenario would suit parties without ferrochrome synergies associated with ug2 mining.

The following article discusses some of these mining options. Taking some time to think about it I think this 2 option bfs will certainly keep Xstrata on their toes and possibly place some other suitors into the equation. On a final note I would also be interested to know the basket price difference between a merensky only vs merensky and ug2 mining operation.

http://findarticles.com/p/articles/mi_qa5348/is_200110/ai_n21478773/?tag=content;col1