Xstrata Alliance is Successful Applicant for Donkin

Department of Natural Resources

December 14, 2005 11:14 AM

Nova Scotia is a step closer to having an active mine at the Donkin coal resource near Sydney.

Xstrata Donkin Coal Development Alliance is the successful applicant in the call for proposals for the Donkin coal resource, the largest remaining coal resource in the Sydney coalfield that can be mined by underground methods.

The alliance must apply for a "mineral tenure," which is a special licence or lease, to the Donkin resource within 270 days. Applications for coal explorations must be approved by the provincial government before exploration or development can occur.

The alliance comprises Xstrata Coal of Sydney, Australia, Atlantic Green Energy Development of Savannah, Ga., and Kaoclay Resources, a Nova Scotia mining company.

"Our staff, together with experts in the field, have invested a great deal of time, research and review into ensuring that the pursuit of this opportunity is in the best interest of Nova Scotians," Minister of Natural Resources Richard Hurlburt said today, Dec. 14. "We have examined the responses to the call for proposals with exhaustive analysis and the Xstrata-led Alliance has met each of the criteria. I am certain that this will be the start of an effective, business-based, economically vigourous, and socially beneficial relationship between this company and the people of Nova Scotia."

The alliance is required to obtain all necessary environmental approvals before mining begins.

The provincial government issued the call for proposals for the Donkin coal resource in December 2004. The resulting three responses were reviewed by an independent expert and members of an interdepartmental committee.

The selection of the Xstrata Donkin Mine Development Alliance is based on the demonstrated technical and fiscal capability to develop a large and complex undersea coal mine, the quality of the comprehensive proposal, and Xstrata's record of health and safety, environmental management, and community involvement in its coal mines around the world.


FOR BROADCAST USE:

     Nova Scotia is a step closer to an active mine at the Donkin

coal resource near Sydney.

     Xstrata Donkin Coal Development Alliance made the successful

response to the province's call for proposals for the Donkin coal

resource.

The alliance must make an application for a licence or lease

to the Donkin resource within 270 days.

     The alliance includes Xstrata Coal of Sydney, Australia,

Atlantic Green Energy Development of Savannah, Georgia, and

Kaoclay Resources, a Nova Scotia mining company.

     Natural Resources Minister Richard Hurlburt says that the

three responses to the call for proposals have been evaluated and

the Xstrata-led Alliance has met each of the criteria.

     The Alliance is required to obtain all necessary

environmental approvals before mining begins.

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Media Contact: Tim Dunne
              Natural Resources
              902-424-5239
              E-mail: dunnetij@gov.ns.ca