GLOBAL IRON ORE & STEEL FORECAST QUALITY IRON ORE A BRAZILIAN & SOUTH AFRICAN PERSPECTIVE James Harman Head of Business Development, Iron Ore & Coal 23 March 2011
CONTENTS Anglo American World class mining company Strong financial position Diversified across the most attractive commodities Our view of the Global economy Global economy Steel outlook Anglo American s Quality Iron Ore Business Major growth being developed South Africa a unique position Brazil 5 billion tonne + resource Anglo American s quality advantage Australia
ANGLO AMERICAN
OUR AMBITION IS TO BE THE LEADING GLOBAL MINING COMPANY Key Corporate & representatives offices E Exploration offices Platinum Diamonds Copper Nickel Iron ore and Manganese Metallurgical Coal Thermal Coal 4
WORLD CLASS MINING COMPANY Outperforming the industry 1 Op Profit ($bn) Op Profit Margin (%) 12 45% 40% 10 35% 8 30% 25% 6 20% 4 15% 10% 2 5% 0 0% 2005 2006 2007 2008 2009 2010 Anglo American operating profit Industry profit margin Anglo American profit margin Strengthening balance sheet Well diversified portfolio 2 Structurally attractive commodities 3 Nickel 2% Platinum 24% Diamonds 10% Copper 18% Iron Ore & Manganese 24% Met Coal 12% Thermal Coal 10% World class project pipeline China s share of global consumption (%) 32% 21% 11% 27% 38% Met Coal Iron ore Steel Copper 43% 62% 60% Nickel Platinum Palladium Thermal coal imports Delivering commodity positions in lower half of cost curves 4 2010: Proceeds from asset sales $3.3bn 100% 100% 80% H2 2011: Key projects start production 50% 60% Barro Alto Los Bronces Kolomela Minas Rio 40% 20% H1 2010 2011 2012 2013 2009 2015 Outlook 0% Copper Nickel Platinum Export Iron Ore 1. Source: Anglo American; 2. Core revenue split; 3. Source: AME, Brook Hunt, a Wood Mackenzie company, Johnson Matthey. Thermal Coal represents share of internationally traded market, nickel and copper represent share of world mined production, 4. Source: AME, Brook Hunt, a Wood Mackenzie company, Anglo Platinum. Estimated % of attributable production in each half of the cost curve after delivery of near term pipeline by 2015 Hard Coking Coal Export Thermal Coal 5
STRONG FINANCIAL POSITION Underlying EPS $ 4.36 2.14 4.13 Key financials ($bn) 2010 2009 change Core operating profit (1) 9.1 4.5 +104% Operating profit 9.8 5.0 +97% Effective tax rate 31.9% 33.1% 2.90 Underlying earnings 5.0 2.6 +94% 1.46 0.91 1.23 1.84 2.29 Capex (2) 5.0 4.8 EBITDA 12.0 6.9 +73% Net debt 7.4 11.3 (35%) H1 2008 H2 2008 H1 2009 H2 2009 H1 2010 H2 2010 Results shown before special items and remeasurements and including share of associates 1) Core operations exclude Tarmac, Scaw, Zinc, Copebrás, Catalão, Coal Canada and Tongaat Hulett/Hulamin 2) Capital expenditure is presented net of cash flows on related derivatives 6
UNIQUE AND WELL DIVERSIFIED PORTFOLIO Attributable earnings by Business Unit 1 % PRECIOUS Attributable earnings by geography % 2% 5% 9% 6% 22% 42% 44% 9% 37% 10% 1% 12% Platinum Copper Met Coal KIO ROW Australia/Asia De Beers Nickel Thermal Coal Samancor South America South Africa 1 Core businesses 7
OUR VIEW OF THE GLOBAL ECONOMY
OVERALL MACRO ECONOMIC AND MARKET CONTEXT 1. Industrial Recovery 2. Weak USD Source: Anglo Commodity Research % % 65 Manufacturing activity 90 USD indexed to exchange rate basket May US Sept Purchasing managers index, 50 = no change Quantitative Lehman 60 Easing failure 55 85 Greek rescue package Nov US QE2 50 45 80 40 35 US China 75 30 2007 2008 2009 2010 3. Strong commodity currencies help drive high commodity prices % 150 70 31 Dec 10 2007 2008 2009 2010 31 Dec 10 500 4. Markets remain volatile, but more optimistic about the global economic outlook 100 400 80 100 50 0 2007 USDZAR USDBRL 2008 USDAUD USDCLP 2009 Metals 2010 c/lb 300 60 200 40 100 20 VIX index Copper spot 0 0 31 Dec 10 2007 2008 2009 2010 31 Dec 10 9 VIX Index
STRONG EMERGING MARKET GROWTH WILL CONTINUE GROWING MIDDLE CLASS IN EMERGING ECONOMIES WILL CONTINUE TO DRIVE DEMAND CHINA AND US WILL CONTINUE TO DRIVE INFRASTRUCTURE GROWTH Middle Classes by region, million US$ billion, constant 2005 prices and exchange rates 1000 Investment in infrastructure 900 800 2008 2030 700 600 500 400 300 200 100 0 US Japan Germany UK China India Brazil Source: OECD, Standard Chartered Research Source: McKinsey Global Institute 10
2007 2008 2009 2010 2011F 2012F 2013F 2014F 2015F 2007 2008 2009 2010F 2011F 2012F 2013F 2014F 2015F in Million tonnes In Million tonnes WORLD STEEL PRODUCTION WILL CONTINUE TO GROW Crude Steel Output Forecast Steel Consumption Forecast 2,000 1,500 800 700 600 500 North America Europe China CIS India Other 1,000 400 300 500 200 100 0 0 11 Source: Anglo American Analysis
CHINA DRIVING DEMAND AND USE OF HIGHER QUALITY MATERIALS URBANISATION IN CHINA WILL DRIVE DEMAND FOR OUR KEY METALS AND MINERALS Continued urbanisation in China, in context of GDP growth, drives finished steel demand Finished Steel Consumption kg per capita, vs. urbanisation WITH A GREATER FOCUS ON HIGH QUALITY MATERIALS Chinese share of global stainless steel consumption increasing Stainless steel consumption in China 800 9.0 40% Finished steel Kg per capita 700 600 500 400 300 200 100 China South Korea Japan Germany Consumption (Mt) 8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 1.5 8% 1.7 9% 2.3 3.2 12% 15% 4.2 4.5 5.2 18% 18% 6.0 21% 23% 21% 6.6 6.2 8.2 24% 33% 35% 30% 25% 20% 15% 10% 0 15 25 35 45 55 65 75 85 Urbanisation % 0.0 1999 2001 2003 2005 2007 2009 5% 12 Source: AME, IISI, EIU
ANGLO AMERICAN S QUALITY IRON ORE BUSINESS
Mt ANGLO AMERICAN S IRON ORE GROWTH STORY Anglo American s iron ore assets have the potential to produce in excess of 150 Mtpa by 2020 Current and Potential Iron Ore Production 100% Projects currently in implementation or approved will result in ~80 Mtpa production 180 160 140 120 100 80 60 Unapproved Construction Production Ramp-up and Conceptual projects could raise capacity to beyond ~155 Mtpa by 2020 Minas-Rio Phase 1 Amapá Kolomela 40 20-2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Sishen Expansion Sishen Thabazimbi 14 Source: Anglo American Analysis
ANGLO AMERICAN HAS A UNIQUE IRON ORE FOOTPRINT Thabazimbi 2 Amapá State 2 1 Sishen Mine and Kolomela Minas Gerais State 1 Santana Port Saldanha Port 525km Slurry Pipeline Rio de Janeiro State Açu Port Kumba Iron Ore Minas-Rio Amapá 2009 Production 41.1 Mt Target Prod. (Phase 1) 26.5 Mtpa 2010 Production 4.0 Mt 2010 Production 43.1 Mt Potential Capacity > 80.0 Mtpa Potential 6.5 Mtpa 2010 Domestic Sales 7.0 Mt Resources 5.7 Bt Reserves + Resources 238 Mt 2010 Export Sales 36.1 Mt Product Fe Content > 68% Products Pellet Feed, Fines Product Fe Content 64-66% Products Pellet Feed, Fines Logistics Rail & Port Products Fines, Lump Slurry Pipeline 100% owned Product Fe Content 62 / 68% Açu Port 49% owned 15 Source: Anglo American Analysis
SOUTH AFRICA: CURRENT OPERATIONS SISHEN Kumba Iron Ore (KIO) (65.3% owned by Anglo American) Northern Cape province of South Africa One of the largest open-pit mines in the world Produced 43.1 Mt in 2010 Very high quality lump ore with outstanding physical properties Source: Kumba Iron Ore; Anglo American 16
SOUTH AFRICA: PROJECT DEVELOPMENTS KOLOMELA Kolomela 9 Mtpa iron ore project on schedule for first production Q2 2012 At full capacity the mine will deliver 9 Mtpa of high quality seaborne iron ore Expected to operate in the lower half of the cost curve Source: Kumba Iron Ore; Anglo American 17
BRAZIL: CURRENT OPERATIONS AMAPÁ Located in Amapá state, in North-East Brazil Fully integrated operation utilising shovel and truck, beneficiation and rail to the Amazon port of Santana Produced 4.0 Mt of iron ore in 2010 18 Source: Anglo American
BRAZIL: CURRENT PROJECT DEVELOPMENT MINAS-RIO One of the world s largest mining projects, acquired by Anglo American in 2007-2008 Tier 1 asset Situated in an established iron ore mining area of Brazil Integrated mine, pipeline and port operations 5.7 Bt resource 26.5 Mtpa Phase 1 production >80 Mtpa potential production Extremely high quality pellet feed Leading cost position, in the first quartile of the cost curve Project implementation well advanced FOOS planned for Q3 2013 525km Slurry Pipeline Minas Gerais State Rio de Janeiro State Açu Port 19 Source: Anglo American
BRAZIL: CURRENT PROJECT DEVELOPMENT MINAS-RIO Anglo has significantly increased Minas Rio s iron ore resource since the acquisition to 5.7 Bt Resources consist of two closely located assets: Itapa and Serra do Sapo Phase 1 plan mines the Serra do Sapo friable resources. Minas-Rio will be mined with conventional truck and shovel open-pit operation with an average strip ratio of 1.1 over the LOM Stockpile IC S1 1.940 m S2 238 m Sapo S3 527 m S4 846 m S5 964 m Plant Tailing dump Itapanhoacanga Crusher Limit Mineral Right Limit Tailing Dump Plant area Conveyors belt Mine out point Pit 1.670 m 2.280 m 1.816 m 2.404 m A B C D E 2.770 m 3.430 m 2.790 m 3.080 m F G H I J 20 Source: Anglo American
BRAZIL: CURRENT PROJECT DEVELOPMENT INFRASTRUCTURE PIPELINE Initial underground 26 inch diameter slurry pipeline with 26.5Mtpa capacity Well-tested logistics method in Brazil built by highly experienced local contractors Slurry propelled by gravity with two pump stations and one valve station, developed in three spreads Sole use 525km pipeline corridor with room for at least two pipelines Source: Anglo American PORT 100% owned by LLX Minas-Rio 49% Anglo American; 51% LLX SA Anglo American managing port construction 3,000m port access bridge completed 10,000 tph loading capacity Capesize vessels Land available to expand the port and/or downstream operations Long term low tariff agreed 21
BRAZIL: CURRENT PROJECT DEVELOPMENT PROGRESS Coagulant / Flocculant Terminal Station Clarifier Thickener Filtering Building Substation Key components advancing in accordance with schedule for FOOS Q3 2013 Significant progress with licenses and permits Engineering and major equipment purchases substantially completed Beneficiation plant earthworks well advanced; civil works commenced March 2011 Pipeline ahead of schedule Filtration plant ahead of schedule Port offshore bridge, iron ore pier completed Source: Anglo American 22
ANGLO AMERICAN IRON ORE - A QUALITY POSITION Minas-Rio is a high grade, low contaminant expandable resource 10% Dotted bubble indicates processed ore 8% Australia - high quality India Bubble size indicates an average production of 50 Mtpa Alumina + silica content 6% 4% Australia - medium quality China 1 Sishen Other Africa Amapá CIS North America 2% Brazil Minas-Rio Phase1 Minas-Rio expansion 0% 56% 58% 60% 62% 64% 66% 68% 70% Grade Notes: 1. Chinese production (rich ore equivalent) inferred from a small sample of mines. Source: CRU, AME, Anglo American Analysis 23
ANGLO AMERICAN IRON ORE TRADE FLOWS Unique iron ore geographic footprint in Brazil and South Africa. Iron ore in Australia would complement existing production and provide blending opportunities to service clients in Asia.? 24
CONCLUSION Ambition to become the leading global mining company Global footprint Diversified portfolio across the most attractive commodities Strong financial position Significant existing high quality iron ore production Strong project pipeline towards 150mtpa Looking to grow our position in iron ore Australia?
THE LEADING GLOBAL MINING COMPANY EMPLOYER OF CHOICE PARTNER OF CHOICE INVESTMENT OF CHOICE