Mining in Africa: A great opportunity for investment

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 Africa’s 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. Higher & less volatile GDP growth 6.0 5.0 4.0 3.0 2.0 % change 1.0 0.0 Forecast (Reuters Consensus) 2004-07 = 3.8% pa -1.0 1984-93 = 1% pa 1994-2003 = 2.9% pa -2.0 -3.0 84 86 88 90 92 94 96 98 00 02 04 06 … accompanied by an already remarkable economic transformation

4. Private fixed investment 1984-93 = -1.2% pa 1994-2003 = 2.2% pa … accompanied by an already remarkable economic transformation

5. Government debt Expenditure Revenue Medium-term Economic Framework Budget deficit Deficit … accompanied by an already remarkable economic transformation

6. and significantly lower inflation 1984-93 = 14.3% 1994-03 = 7.8% 20 18 16 Prime overdraft rate 14 CPI (CPIX from 1998) 12 % 10 8 6 Target 4 Forecast (Reuters Consensus) 2 CPI/CPIX (from 1998) 0 84 86 88 90 92 94 96 98 00 02 04 06 (Nov) … accompanied by an already remarkable economic transformation

7. Recognised by improved Sovereign credit ratings Moody's S&P Fitch 1994 Baa3 BB BB 1995 Baa3 BB+ BB 2000 Baa3 BBB- BB+ BBB- 2001 Baa2 BBB- BBB- 2002 Baa2 BBB- BBB- 2003 Baa2 BBB BBB 2004 Baa2 BBB BBB 2005 Baa1 BBB BBB … accompanied by an already remarkable economic transformation

8. Rand/oz Rand/oz USD/oz USD/oz Although recent Rand strength largely offset higher commodity prices…

9. Mining & quarrying Total excl mining …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 subs6,934 1,624 5,218 9,874 9,034 4,462 37,146 Acq of ass800 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 today’s money

11. Anglo Platinum Diamonds AngloGold Ashanti Coal Base Metals Industrial Minerals Paper & Packaging Ferrous Metals Anglo American’s investment programme Approved $6bn global project portfolio… TICOR 2 $54m W.L. TAILINGS $186m MEREBANK $150m Kleinkopje $56m ISIBONELO $65m 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 UNKI $84m PMR Expan. $99m 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 plc’s share of JV’s and associates. Full production dates.

12. Anglo Platinum Diamonds AngloGold Ashanti Coal Base Metals Industrial Minerals Paper & Packaging Ferrous Metals Anglo American’s investment programme Approved $6bn global project portfolio… …of which $4bn is in Southern Africa TICOR 2 $54m W.L. TAILINGS $186m MEREBANK $150m Kleinkopje $56m ISIBONELO $65m 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 UNKI $84m PMR Expan. $99m 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 plc’s share of JV’s and associates. Full production dates.

13. South Africa: A good story • South Africa post-1994 is a much better place for doing business. • Because of South Africa’s 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.

14. SA’s 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. SA’s 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. GNP per capita - 1980-91 8.0 But some successes Declining per capita incomes 6.0 4.0 % per annum 2.0 0.0 1.4% pa -2.0 -4.0 Malawi Angola Zambia Namibia Lesotho Mauritius Tanzania Zimbabwe Botswana Swaziland South Africa* Mozambique Mozambique* * 1985-94 Significant improvement on pre-1994 performance Source: SA Reserve Bank & World Bank, World Development Indicators, 2004.

17. 1993 -18 of SA top 100 listed companies invested in rest of Africa • 2004 • 40 of SA top 100 listed companies invested in rest of Africa • 232 investments in 27 countries employing 72 000 people SA business as a regional investor Source: Who Owns Whom, Africa Inc, Nov 2004

18. Favourable global environment for mining producers. • Accompanied by renewed global focus on Africa. • As the major source of many of the globe’s unexploited mineral reserves, Africa in particular stands to benefit from the improved environment for mining.

19. Note: Fe ore is sea-borne. Ni includes Ni content of stainless imports. 1994 Source: MSU, WBMS, INSG, Macquarie (Fe Ore, Steel and 2004 Al). 2010 Favourable global environment now reinforces improved business climate Copper China's Share of World First-use Metals Consumption (%) 40 30 Nickel Zinc 20 10 0 Aluminium Fe Ore Steel Source: Anglo American, MSU & Macquarie

20. LME Inventories* and Base Metals Price Index Jan 1997 to Dec 2004 3.5 120 3.0 * Cu includes Comex. Nickel 110 Al 2.5 Lead Price Index Stocks, Mt 1990=100 100 2.0 90 1.5 Zn 80 1.0 70 0.5 Cu 0.0 60 Jan 97 Jan 98 Jan 99 Jan 00 Jan 01 Jan 02 Jan 03 Jan 04 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.

22. Africa in the global spotlight: What we need to do • Peace & security are vital. • Will make the full exploitation of Africa’s mineral wealth possible. • We applaud the AU, Ecowas & President Mbeki’s 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.

23. 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.

24. 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.

25. Africa’s 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

26. Anglo American’s BEE track record – Procurement & Enterprise dev. TOTALTOTAL Rm NOMINAL REAL (since inception) (2003 money) Procurement 9,532 11,142 Development (SMEI’s) 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

27. 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.