Lonrho Regulatory News (LONR)

1 November 2010

Lonrho Plc

('Lonrho' or 'The Company')

Xstrata contracts Lonrho to establish agri processing and farming

operations at its Thorncliff Alloys Mine

Lonrho Plc (AIM : LONR) is pleased to announce that XSTRATA South Africa (pty) Ltd has contracted Lonrho Projects Agri Business, a Lonrho Plc subsidiary, to develop and operate a commercial farming and agri processing development for XSTRATA's Thorncliff Alloys mine within the Sekhukhune District, in the Limpopo Province in South Africa.

The innovative project is part of Xstrata's community enterprise development programme established to provide sustainable economic growth and diversification in the mining communities where Xstrata operates.

Under the agreement, Lonrho will work with local subsistence farmers to develop a farming cooperative that will deliver the yield, volume and quality of production necessary to establish a commercially viable agricultural business. The agreement with Xstrata will provide the funding necessary for Lonrho to design and develop the infrastructure, irrigation, farming and agri-processing facilities necessary for the cooperative to be able to produce on a commercially viable scale.

Through its existing agri-logisitics business and cold chain management services Lonrho will provide access for the farming cooperative to the formal commercial market. This is essential to ensure that the project can maximise prices for the fruit and vegetables that it produces. The project is valued at 42 million Rand ( £ 3.7m ), with an immediate 14.4 million Rand (£ 1.3m ) first phase that will include the establishment of a core anchor farm, Global GAP packhouse and the training, mentoring and management of 300 Rural Community Outgrowers and is scheduled to be completed before December 2011.

The investment from XSTRATA is part of their Social & Labour Plan (SLP) and is aligned with the Comprehensive Rural Development Programme (CRDP) strategy as launched by the State President, His Excellency Jacob Zuma and Minister Gugile Nkwinti of Rural Development & Land Reform in April 2009.

David Lenigas, Executive Chairman of Lonrho commented :

' We are delighted to have been chosen by XSTRATA to develop this project. The Lonrho Agriculture cold chain logistical capabilities to take production from projects such as this and provide the essential access to market is a fundamental necessity for these projects to be commercially viable. The 0pportunity to replicate this project across Southern Africa can have a significant impact on rural agricultural communities and their sustainability '

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