Mining in Africa:

1
Mining in Africa A great opportunity for
investment
P. Lazarus Zim Chief Executive Anglo American
Corporation of South Africa Limited 8 February
2005
2
South Africas political transformation

• A stable democracy under a sound constitution.
• 3 peaceful free fair elections.
• One nation, one flag, one anthem.
• Free press independent judiciary.
• An established culture of dialogue and debate to
  resolve issues.
• Political transformation has laid the foundation
  for economic transformation
• Transformation that has already occurred is often
  overlooked

3
accompanied by an already remarkable economic
transformation
4
accompanied by an already remarkable economic
transformation
5
accompanied by an already remarkable economic
transformation
6
accompanied by an already remarkable economic
transformation
7
accompanied by an already remarkable economic
transformation
8
Although recent Rand strength largely offset
higher commodity prices
9
growth in mining investment has outstripped that
of other sectors
10
Total Anglo American investment in SA

•   Rm Rm Rm Rm Rm Rm Rm
•   Dec Dec Dec Dec Dec Jun  
•   1999 2000 2001 2002 2003 2004 TOTAL
• CAPEX 4,529 6,425 10,703 13,390
  14,030 6,020 55,097
• Replacement 4,529 3,047 2,849
  4,631 6,463 2,704 24,223
• Expansionary - 3,378 7,854
  8,759 7,567 3,316 30,874
• Acq of subs 6,934 1,624 5,218 9,874
  9,034 4,462 37,146
• Acq of ass 800 357 205
  3,988 542 9 5,901
• Acq of JVs - 2,548 16
  - - - 2,564
• Total 12,263 10,954
  16,142 27,252 23,606 10,491 100,708

NB Money of the day - figures would be
higher if adjusted to todays money
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Anglo Americans investment programme
Approved 6bn global project portfolio
W.L. TAILINGS 186m
TICOR 2 54m
MEREBANK 150m
ISIBONELO 65m
Kleinkopje 56m
Buxton 173m
SIGUIRI 52m
FINSCH 130m
CERREJÓN 17m
RICHARDS BAY 235m
EL SOLDADO 80m
Skorpion 454m
CUIABÁ 121m
MOAB KHOTSONG 690m
BLACK MTN 110m
COPEBRAS 22m
TAU TONA 52m
RPM PH 2 444m
RUZOMBEROK 233m
PMR Expan. 99m
UNKI 84m
KROONDAL 138m
Collahuasi 288m
MPONENG 191m
DAWSON 306m
BRPM 317m
CHAGRES 21m
ACP Project 250m
TICOR 1 137m
TWICKENHAM 343m
RPM PH 1 210m
GROOTEGELUK 55m
INYANDA 30m
CODEMIN 2 67m
GRASSTREE 106m
Dartbrook 55m
2005
2006
2007
2008
2004
Selected major authorised projects with capex
estimates. Unapproved projects unshaded. 100
of subsidiaries and AA plcs share of JVs and
associates. Full production dates.
12
Anglo Americans investment programme
Approved 6bn global project portfolio
of which 4bn is in Southern Africa
W.L. TAILINGS 186m
TICOR 2 54m
MEREBANK 150m
ISIBONELO 65m
Kleinkopje 56m
Buxton 173m
SIGUIRI 52m
FINSCH 130m
CERREJÓN 17m
RICHARDS BAY 235m
EL SOLDADO 80m
Skorpion 454m
CUIABÁ 121m
MOAB KHOTSONG 690m
BLACK MTN 110m
COPEBRAS 22m
TAU TONA 52m
RPM PH 2 444m
RUZOMBEROK 233m
PMR Expan. 99m
UNKI 84m
KROONDAL 138m
Collahuasi 288m
MPONENG 191m
DAWSON 306m
BRPM 317m
CHAGRES 21m
ACP Project 250m
TICOR 1 137m
TWICKENHAM 343m
RPM PH 1 210m
GROOTEGELUK 55m
INYANDA 30m
CODEMIN 2 67m
GRASSTREE 106m
Dartbrook 55m
2005
2006
2007
2008
2004
Selected major authorised projects with capex
estimates. Unapproved projects unshaded. 100
of subsidiaries and AA plcs share of JVs and
associates. Full production dates.
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South Africa A good story

• South Africa post-1994 is a much better place for
  doing business.
• Because of South Africas size, this has positive
  implications for the Continent.
• SA business often lead by the mining sector -
  is seeking to expand across the Continent.
• This is occurring against the backdrop of a
  highly favourable global environment for mining
  producers.
• As well as a renewed global focus on Africa.

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SAs improved performance impacts positively on
the Region increasingly the Continent
Due to its size South Africa impacts on the
Continent
Angola, Botswana, Lesotho, Malawi, Mauritius,
Mozambique, Namibia, Swaziland, Tanzania,
Zambia, Zimbabwe.
Source World Bank, World Development Indicators,
2004.
15
SAs improved performance impacts positively on
the Region increasingly the Continent
Per capita incomes now growing in most countries
in Southern Africa increasingly the rest of the
Continent
Source World Bank, World Development Indicators,
2004.
16
Significant improvement on pre-1994 performance
Source SA Reserve Bank World Bank, World
Development Indicators, 2004.
17
SA business as a regional investor
Source Who Owns Whom, Africa Inc, Nov 2004
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• Favourable global environment for mining
  producers.
• Accompanied by renewed global focus on Africa.
• As the major source of many of the globes
  unexploited mineral reserves, Africa in
  particular stands to benefit from the improved
  environment for mining.

19
Favourable global environment now reinforces
improved business climate
China's Share of World First-use Metals
Consumption ()
Copper
40
30
Nickel
Zinc
20
10
0
Fe Ore
Aluminium
Steel
Source Anglo American, MSU Macquarie
20
Favourable global environment now reinforces
improved business climate
Source Anglo American, MSU
21
2005 Africa in the global spotlight

• 2005 WEF (Davos) unprecedented focus on Africa.
• Strong African presence participation
  Presidents Mbeki, Obasanjo, Mkapa.
• PM Tony Blair has placed Africa high on the
  agenda of his G8 EU presidencies.
• Awaiting Report of the Africa Commission.
• Growing consensus that Africa should be assisted
  in the same structured way as Europe post World
  War 2.
• Important proposals from the United States,
  Britain and France of the funding mechanism.
• It is vital to synthesise these into one Africa
  Plan by the G8 Summit in July.

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Africa in the global spotlight What we need to
do

• Peace security are vital.
• Will make the full exploitation of Africas
  mineral wealth possible.
• We applaud the AU, Ecowas President Mbekis
  current peace making efforts.
• The current focus of time and resources on peace
  making is necessary.
• Good for economic development, good for Africa,
  good for business.

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Africa in the global spotlight What we need to
do

• Continue to promote investor friendly policies.
• Ensure regulatory and policy certainty.
• For example in SA the rules are clear
• New Mining legislation
• Mining Charter.
• The key challenge and focal area is that of
  implementation.
• It is vital to see mineral right conversion
  early.
• Continue the fight against HIV-Aids.

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Africa in the global spotlight What we need to
do

• Promote strong partnerships between government
  and business.
• Public Private Partnership (PPP) much more that
  a buzzword.
• PPP is a necessity especially in mining.
• Mining projects are high risk, capital intensive,
  infrastructure and power (energy) hungry.
• Need the collective and collaborative effort of
  government and business.
• Past year Good experience in relations with DME.
• Recent Transnet-Kumba MOU on expansion of export
  capacity and tariff structure is a good example
  of PPP.

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Africas business challenges are manageable

• Anglo American sees transformation as a strategic
  imperative.
• This is driven at CEO level through the
  Transformation Committee with strong operational
  interface.
• We will continue to focus on
• Employment Equity
• Ownership
• Procurement
• Enterprise development

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Anglo Americans BEE track record Procurement
Enterprise dev.

• TOTAL TOTAL
• Rm NOMINAL REAL
  (since inception) (2003 money)
• Procurement 9,532
  11,142
• Development (SMEIs) 706
  783
• Large Transactions 13,193
  17,382
• Future
• Continued 20 - 30 per annum procurement
  growth
• Major BEE focus in Anglo Platinum, De Beers,
  Kumba, Mondi, Anglo Coal

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Summary conclusions

• Africa is at a critical historical crossroads.
• The developed world is indicating its willingness
  to assist.
• Global economic circumstances provide a
  supportive backdrop.
• Vital that we, as Africa, seize the moment.
• Confident that mining will play a leading role in
  driving Africa forwards.