IRON ORE BRAZIL HOLISTIC MINE CLOSURE PLANNING SOCIAL, BIOPHYSICAL & FINANCIAL

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1 IRON ORE BRAZIL HOLISTIC MINE CLOSURE PLANNING SOCIAL, BIOPHYSICAL & FINANCIAL Ricardo Camargo Sustainable Development Manager

2 ANGLO AMERICAN IN THE WORLD 2 2

3 WHO WE ARE One of the largest mining companies in the world. More than 100 thousand employees. Shares listed on the London and Johannesburg stock exchanges. Global leaders in the production of platinum and diamonds and a significant share of copper, nickel, iron ore, metallurgical coal and thermal coal. 3

4 MINAS-RIO PROJECT OVERVIEW Mine & Beneficiation Plant (Minas Gerais) ± jobs during the construction phase Port (Rio de Janeiro) 33 Municipalities Pipeline 530km 5,8bi ton of Resources 26,5 mtpa inicial 68% Fe Pellet feed 4

5 OUR ENVIRONMENTAL VISION Our vision is to minimize harm to the environment by designing, operating and closing all our projects in an environmentally responsible way. 5

6 IRON ORE BRAZIL History Business drivers for closure planning Planning for Sustainable Development AAplc Mine Closure Toolbox Examples Advantages & Summary

7 HISTORY: MINING & CLOSURE LIABILITIES Mining played and is still playing a huge role in human development Mines create dependency Non-renewable resource mines close! Thousands of abandoned mine sites world wide Liability left behind at closure 7 7

8 BUSINESS DRIVERS Residual risk reduction Risk and outcome based closure criteria identification Reshaping of waste rock dumps Early identification of opportunities E.g. Water treatment E.g. Topsoil management Cost reduction and asset optimization Financial perspective not always immediately evident Closure perspective liability (ARD) Integrated approach tailings and waste rock deposition Divestment sale price discounted vs. effective sale Management of perceptions Open pit and housing Operational monitoring Reputational risk and license to operate 8

9 WHAT IS THE FOCUS OF CLOSURE PLANNING? Understand the environment in which you operate Sustainable development / closure vision: Reduce dependency & Manage expectations Focus on post closure ownership of sustainable activities by I&AP Understand and manage the overall closure liability Working towards walk-away closure 9

10 MINE CLOSURE TOOLBOX Developed and piloted in Anglo American ( ) Formal launch (2008) Toolbox currently being implemented at various operations, within Anglo American (40+ operations) 10

11 ANGLO AMERICAN S MINE CLOSURE TOOLBOX Aims to, where possible, expand the focus from rehabilitation and physical closure to planning for sustainability beyond mine closure Before rehabilitation After rehabilitation 11

12 ANGLO AMERICAN MINE CLOSURE TOOLBOX 12

13 STRATEGIC PLANNING Tool 1 Understand the broad state of the environment Determine future post closure vision Determine alternative land uses and economic options Determine post mining use of infrastructure Engage with stakeholders The mine closure plan and what you can and cannot achieve must drive the interaction with interested and affected parties, and Government To integrate social, biological, physical and economic issues into mine closure and post closure land-use Develop a closure vision - fit the closed mine into the environment 13

14 Establishing the Zone of Influence Zone of influence : Area within which the mine has material impacts or can influence impacts Secondary impacts: Flow from direct impacts, e.g. loss of fisheries due to water contamination Primary Induced labour impacts: sending Unplanned/ & unintended/ money activities spending catalysed by the mine, areas e.g. illegal logging Cumulative impacts: Result of numerous separate activities which interact or combine to cause significant impacts Areas directly affected by mine's adverse impacts Area affected by secondary, induced or cumulative Areas of impacts direct disturbance i.e. footprints Surrounding areas that could potentially benefit 14 Additional Guidance Pg 2

15 INTRODUCTION: TOOL 2 RAPID ASSESSMENT Toolbox Pg 4 15

16 Gap Analysis Closure Criteria Toolbox Pg 10 16

17 Gap Analysis Identify column equal to remaining life of mine Include info & references in the item description column GAP GAP Tested closure criteria Select most appropriate cell based on the most representative definition of current information GAP GAP ON TRACK ON TRACK AHEAD AHEAD On track AHEAD Gap GAP Ahead GAP 17

18 INTRODUCTION: TOOL 3 CLOSING THE GAPS Toolbox Pg 4 18

19 Closing the gaps: Step 2 ON TRACK GAP GAP GAP ON TRACK ON TRACK GAP AHEAD AHEAD AHEAD GAP GAP 19

20 Closing the gaps: Step 3 20

21 Financial Provisioning Updated and reported every semester according to construction status Third party audit every three years Use of historic data versus market data ( demolition costs) Threshold depending on the LOM Social development hand in hand with mine closure objectives 21

22 EXAMPLES OAKS MINE Concurrent environmental rehabilitation - mineral residue being deposited via codisposal methods. In the closure phase, the focus was on ecological restoration and removal of remaining infrastructure, enabling the area to be considered for use in game ranching. At closure, two-thirds of the permanent employees had been redeployed to other company mines. Company officials worked with the communities to shape a new future. The key to closure planning does not relate to deferring the rehabilitation / closure costs, but by eliminating future closure activities through integrated closure and life of mine planning. 22

23 EXAMPLES OAKS MINE Concurrent environmental rehabilitation - mineral residue being deposited via co-disposal methods. In the closure phase, the focus was on ecological restoration and removal of remaining infrastructure, enabling the area to be considered for use in game ranching. At closure, two-thirds of the permanent employees had been redeployed to other company mines. Company officials worked with the communities to shape a new future. The key to closure planning does not relate to deferring the rehabilitation / closure costs, but by eliminating future closure activities through integrated closure and life of mine planning. 23

24 EXAMPLES MINAS - RIO Development of a mine closure plan and a financial provision Anglo American Gap Analysis Top soil management and vegetation recuing activities for land rehabilitation with native species. Rehabilitation pilot experiment of degraded areas using native species was initiated on pile 2 Development of local suppliers to built capacity. Working together with Emater on the agricultural production restructuring. Initiated the discussions around the future post closure vision. 24

25 ADVANTAGES Plan with closure in mind Build interested and affected parties relations Identify socio-economic opportunities Build capacity and partnerships Manage your liabilities reduced final closure cost Auditable process Report on closure status at a glance Control back at operation (scoping) Budget control Resource allocation Prioritisation Manage expectations positive legacy 25

26 SUMMARY The business case for proactive and integrated closure planning must form part of any closure plan. The closure vision (final land use, etc.) to be owned by interested and affected parties that will remain in the area post closure and should be implemented by the operation in collaboration with them The success of closure will not be measured by the successful implementation of the final closure plan, but by the legacy left 26

27 LEAVING A POSITIVE LEGACY WHAT WE DO TODAY WILL MAKE A DIFFERENCE TOMORROW 27

28 THANK YOU IRON ORE BRAZIL