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Martha SekaboaneThabazimbi Mine, South Africa
Joshua BurnsCapcoal Colliery, Australia
Alvaro VegaLos Bronces Mine, Chile
Nelson SilvaLos Bronces Mine, Chile
Emma CoombsCapcoal Colliery, Australia
Sizwe MdikaneNew Vaal Colliery, South Africa
TRANSFORMATION IN ANGLO AMERICAN SOUTH AFRICA
Godfrey Gomwe
PRESENTATION TO THE PORTFOLIO COMMITTEE ON MINERAL RESOURCES
Lindiwe Zikhali
02 November 2011
CONTENTSCONTENTS
1. Anglo American in South Africa Today
2. Mining Charter Progress to Date
3. Contributions beyond the Mining Charter
4. Appendices
1. Ownership and Joint Ventures – List of Transactions
2. Anglo American’s Commitment to South Africa
2
1 ANGLO AMERICAN IN SOUTH1. ANGLO AMERICAN IN SOUTH AFRICA TODAY
3
Founded in Johannesburg Anglo American has
A NATIONAL CHAMPIONFounded in Johannesburg, Anglo American has a 94-year history in South Africa
• Today, a global company with operations in >40 countries; however South Africa remains the single most important country to the Group
• 3 out of the Group’s 7 Commodity Business Units are globally managed from South Africa
• 4 Business unit CEOs based in South Africa and 8 out of 15 ExCo members are South African
• In 2010, c.43% of the Group’s operating assets, c.48% of its revenue and c.51% of its operating profit had their origin in Southern Africa
• Anglo American is an employer of choice to c. 91 500 employees in South Africa
Presentation to the Portfolio Committee on Mineral Resources, 02 November 2011
91,500 employees in South Africa
4Anglo American South Africa Today
Roof bolt installation using a remotely controlled drill at Tumela mine
The Group has a number of assets whichSouth Africa Simplified Structure
(as at 31 December 2010)
BUSINESS OVERVIEW
The Group has a number of assets which are strategic to South Africa:
• Anglo Platinum (c.79% owned) – the world’s leading platinum producer, accounting for c.39% of global supply
(as at 31 December 2010)
Anglo American South Africa Ltd
(AASA)
global supply
• Kumba Iron Ore (c.65% owned) – the world’s 4th largest iron ore producer in the seaborne iron ore market
Anglo SA (Proprietary) Ltd
Anglo SA Capital Anglo Operations
• Thermal Coal (100% owned) – one of the world’s largest private sector coal producers and exporters
• De Beers (45% owned) – the world’s leading diamond business
(Proprietary) Ltd Operations Ltd
Anglo American Platinum
KumbaIron Ore De Beers
Thermal CoalThermal Coal is a division of AOL
• Other: Samancor Manganese (40% owned) – the world’s largest integrated producer of manganese ore; Exxaro – flagship BEE mining company in South Africa (9.7%)
Platinum
Other:Samancor 40%
79.7% 65.3% 45.0% of “B”
shares
100%
division of AOL
Presentation to the Portfolio Committee on Mineral Resources, 02 November 2011
• Anglo American South Africa Limited (AASA) is the holding company for all of Anglo American’s interests in South Africa
Samancor – 40%Exxaro – 9.7%
5Anglo American South Africa Today
THERMAL COAL
OPERATING FOOTPRINTIn 2010 Anglo American had over 30 mines and shared access to 3
Zimbabwe
1. Greenside
2. Goedehoop
3. Kleinkopje
4. Landau
5. KrielPLATINUM
1. Dishaba 13. Mogalakwena
In 2010 Anglo American had over 30 mines and shared access to 3 ports in South Africa
Western Limb Eastern Limb
Mozambique1
2
Botswana1
6. New Denmark
7. New Vaal
8. Mafube
9. Isibonelo
10. Zibulo1
1314
1516
17
2. Tumela
3. Union
4. Bafokeng/Rasimone (JV)
5. Khuseleka
6. Thembelani
7 B th l
14. Bokoni
15. Ga-Phasha (JV)
16. Twickeham Mine
17. Modikwa
18. Mototolo (JV)
7 2 1
34 5
69
1021
IRON ORE AND MANGANESE1. Sishen
2. Thabazimbi
3. Hotazel
12
3
4
56
7
187. Bathopele
8. Khomanani
9. Siphumelele
10. Kroondal
11. Marikana
12. Pandora9
810
1112
3
SOUTH AFRICA
OTHER MINING AND
DIAMONDS1. Venetia
2. Kimberley
3. Voorspoed
212
Richards Bay
3
Presentation to the Portfolio Committee on Mineral Resources, 02 November 2011
6
INDUSTRIALS1. Palabora
2. Scaw Metals
Saldanha Bay
Port Elizabeth
Anglo American South Africa Today
A MAJOR CONTRIBUTOR TO SOUTH AFRICA’S ECONOMYAnglo American is:
A significant investor in South Africa• Invested c. R148bn (c.$21.1bn) in Capex in South Africa since 1999 (till 2010)
One of the largest contributors to the South African fiscus• In 2010, Anglo American group companies paid c.R14.3bn (c.$1.95bn) in direct and indirect taxes
A major contributor to South African foreign earnings• c.50% of South Africa’s foreign earnings are generated from commodity exports• Since its London listing in 1999, Anglo American’s foreign shareholding has increased from about 17% to c.66%,
resulting in a total of c. R124.5bn (c. US$21.5bn) of capital inflow. Generated export revenues of c.R105bn (c.$14.3bn) in 2010
A significant contributor to the South African economy• In 2010 Anglo American produced some 2.5% of South Africa’s GDP
One of the largest components of the JSE (together with its controlled companies)• Combined market capitalisation of c.R770bn (c. US$90bn), representing c.18% of the value of JSE top 100 as of 31
December 2010December 2010• South African shareholders make up c. 34% of AA plc Share Register
A key partner to some of South Africa’s most important state-owned enterprises• Eskom: In 2010, Anglo American spent c.R3.1bn (c. US$423m) with Eskom, and delivered 32 million tonnes of thermal
coal ~R4.6bn (c. US$630m) to Eskom for South Africa’s electricity needs• Transnet: c. R4.1bn (c.US$560m) Anglo American spend on Transnet in 2010
Presentation to the Portfolio Committee on Mineral Resources, 02 November 2011
7
( ) g
Anglo American South Africa Today
A CONSIDERABLE PROJECT PIPELINE IN SOUTH AFRICA
Anglo American has a c R30bn (US$4 4bn)Anglo American has a c. R30bn (US$4.4bn)project pipeline to be delivered over the next 3 years in South Africa
• Iron Ore: – Kolomela project 94% complete, hot
commissioning started in Q3 2011
• Thermal Coal: – 6.6 million tonnes of coal per annum Zibulo
project is on ramp-up, with full production expected in Q4 2012
– New Largo project (to supply Eskom’s Kusilepower station) is in feasibility stage with Boardpower station) is in feasibility stage, with Board approval to be sought by Q3 2012
• Platinum:– Capital expenditure of c. R1.6bn (US$223m) in Kolomela Iron Ore Project Commissioning, Postmasburg,
Northern Cape
Presentation to the Portfolio Committee on Mineral Resources, 02 November 2011
the first half of 2011 on various expansion projects at Thembelani, Mogalakwena, Twickenham, Khuseleka and Dishaba mines
p
8Anglo American South Africa Today
2 MINING CHARTER2. MINING CHARTER PROGRESS TO DATE
9
OWNERSHIP AND JOINT VENTURESVENTURES
10
Mine planning office, TumelaPlatinum Mine
OWNERSHIP AND JOINT VENTURES ANGLO AMERICAN EMPOWERMENT TRANSACTIONS
Business Unit Transaction Empowerment partners
Thermal Coal 26% of current Pamodzi Women’sAnglo American has completed all necessary
Thermal Coal- Anglo American Inyosi Coal
26% of current and future production
Pamodzi, Women s Development Bank, Lithemba, workforce, communities and Eyesizwe Coal
Iron Ore - Kumba Iron Ore
26% of equity Exxaro, workforce, communities
% f
empowerment transactions, and hasreceived its conversions to new order miningrights
R60b i BEE t ti l d d i Manganese- Samancor
26% of equity Exxaro, Ntsimbintle, Ncab, Iziko, workforce, communities
Platinum- Anglo Platinum
Greater than 26% of production
Mvelaphanda, Anooraq, Royal Bafokeng, ARM, workforce, communities
Other Mining and 26% of equity Exxaro, Izingwe Holdings,
• c.R60bn in BEE transactions concluded since 1994 across all business units
• Significant facilitation provided• Broad-based participation ensured: strategic
shareholders, communities, employees Other Mining and Industrial- Scaw Metals- Black Mountain- Gamsberg
26% of equity Exxaro, Izingwe Holdings, Shanduka Resources, Southern Palace Holdings, workforce, communities
Diamonds- De Beers
26% of equity Ponahalo (inc. communities), workforce
All group company employees are ESOP participants
Anglo American’s empowerment transactions have led to the creation of flagship black-owned mining companies e.g. Exxaro Resources, ARM , Mvelaphanda/Afripalm and ShandukaResources.
Community participation a key focus• Direct participation of communities affected by
mining operations in the benefits they generate• Transactions aimed at sustainable, long term
economic uplift of mining areas
Presentation to the Portfolio Committee on Mineral Resources, 02 November 2011
economic uplift of mining areas
11Original / Revised Mining Charter
In many cases, Anglo American has contributed directly towards vendor financing for empowerment partners to ensure financial viability and long-term success of the transaction
COMMUNITY SHARE OWNERSHIPProject Lefa La Rona – Anglo American Platinum : Sishen Iron Ore Community Trust:
• Anglo American Platinum has committed to concluding a groundbreaking multi-billion rand broad-based economic empowerment ownership transaction
• Beneficiary communities: Twickenham, Mogalakwena, Rustenburg and Amandelbult operations as well as key
• As part of the Sishen Iron Ore (SIOC) Black Economic Empowerment transaction, the company empowered the communities surrounding its mining operation with a 3% Rustenburg and Amandelbult operations as well as key
Labour Sending Areas• New approach that emphasises broad-based economic
empowerment and engagement with the beneficiary communities
• Taking Anglo American Platinum beyond legislative
g g pshareholding, held by the SIOC Community Development Trust.
• The key objective was to help the comm nities to become both empo ered and
“Zuma unveils R3,5 billion share scheme in Limpopo”
Apr 07,2011,6:46:00 PM, SABC
Taking Anglo American Platinum beyond legislative compliance
communities to become both empowered and economically active in a way that would be sustainable even after mining ceased.
• The community’s stake was paid up in 2010President Jacob Zuma unveiled a groundbreaking R3,5 billion share scheme in Anglo Platinum in Limpopo. This to benefit communities in its mining lands… The R3,5 billion Project Alchemy is a community share scheme. Its been set up to drive sustainable socio-economic development for people living in the mining areas
y p p
• Current community shareholding is estimated to be worth R6.3bn, with money flowing to the communities for development projects in 2010 and 2011 standing at R668m
Presentation to the Portfolio Committee on Mineral Resources, 02 November 2011
mining areasArticle printout courtesy of the South African Broadcasting Corporation
Copyright © 2000 – 2007 SABC
12Revised Mining Charter
and 2011 standing at R668m.
• The initiatives benefit about 600 000 people.
EMPLOYEE SHARE OWNERSHIP
Kumba workers to get R2.3bn payoutBrendan Ryan | Mon, 08 Aug 2011 14:30
“CHRISTMAS In the Northern Cape will arrive during November this year when Kumba Iron Ore’s Envision broad-based employee share participation scheme isparticipation scheme is set to pay out up to R500,000 to each of its 5,000 employees.”
S
Presentation to the Portfolio Committee on Mineral Resources, 02 November 2011
13
Source: MiningMX
Revised Mining Charter
EMPLOYMENT EQUITYEMPLOYMENT EQUITY
14
54%51%
44%
52%50%
60%HDSA WIM
Progress from 2005 – 2009
EMPLOYMENT EQUITY HDSA Women in Mining
60%
44%
16% 15%20%
30%
40%40% HDSA* Target 10% Women in Mining Target
HDSA’s in ManagementW i Mi i
34%39%
42%45% 47%
52%
40%
50%
60% 12%15%
12%
0%
10%
Platinum Thermal Coal Kumba Iron Ore
AASA
Women in Mining
Total
8% 9% 11% 12% 12% 12%10%
20%
30%
54%51%
44%
52%
45%
38%42%
40%
50%
60%Including white women Excluding white women
8%
0%
10%
2005 2006 2007 2008 2009Excl. Jnr
Mgt
2009Incl. Jnr Mgt
34%
10%
20%
30%
40%
Presentation to the Portfolio Committee on Mineral Resources, 02 November 2011
0%
10%
Platinum Thermal Coal Kumba Iron Ore
AASA15
Original Mining Charter
* HDSA = Historically Disadvantaged South AfricansTotal
25%As at 31 December 2010
EMPLOYMENT EQUITY (continued) Women in Mining
Total Women Women in Management
20%
13%
17% 18%
12%
16% 16%13%
10%
15%
20%
70%
40% HDSA* Target 10% Women In Mining Target
Top ManagementMiddle Management
Senior ManagementJunior Management
0%
5%
Platinum Thermal Coal Kumba Iron Ore
AASA
52%
46%50% 50%
60%
41%
47%
58%
50%
60%
Total
30%33%
29%
38%
28%
33% 31%
20%
30%
40% Aggregate %HDSA in Management by Business Unit
55%
47%51%
45%50%
60%Including White Women Excluding White Women
0%0%
10%
Platinum Thermal Coal Kumba Iron Ore AASA
42%%45%
37% 36%42%
10%
20%
30%
40%
50%
Total
Presentation to the Portfolio Committee on Mineral Resources, 02 November 2011
16Revised Mining Charter
* HDSA = Historically Disadvantaged South Africans
0%
10%
Platinum Thermal Coal Kumba Iron Ore
AASATotalAll transformation reports for 2010 to the Department of Mineral
Resources submitted ahead of original March 2011 headline
Total Women Women in Management
20% 19%
25%As at 30 September 2011
EMPLOYMENT EQUITY (continued) Women in Mining
12%
17% 16%13%
20%18% 19% 19%
10%
15%
20%
70%
Top Mgt (Band 2&3) Senior Mgt (Band 4&5)
Middle Mgt (Band 6) Junior Mgt (Band 7)
40% HDSA* Target 10% Women In Mining Target
Top ManagementMiddle Management
Senior ManagementJunior Management
0%
5%
Platinum Thermal Coal
Kumba Iron Ore
AASA44%
55%
49%52% 54%
63% 62%
52%
61%
50%
60%
70%
Total
33% 35%
40%
28%
37%34%
20%
30%
40%
53%54%
61%55%60%
70%
Aggregate %HDSA in Management by Category
Including White Women Excluding White Women
0%0%
10%
20%
Platinum Thermal Coal Kumba Iron Ore AASATotal
35%
25%
42%45%
35%34%
10%
20%
30%
40%
50%
Presentation to the Portfolio Committee on Mineral Resources, 02 November 2011
17Revised Mining Charter
* HDSA = Historically Disadvantaged South Africans
Total
0%
10%
Top Senior Middle Junior Total
HUMAN RESOURCES DEVELOPMENTDEVELOPMENT
18
Employee training at New Vaal Colliery, Gauteng
72478000
ABET LearnersHUMAN RESOURCES DEVELOPMENT
2504
3955 3831 3692
5754
4000
60002005-2009 Highlights:
• Scaw Metals provided training in welding and computing skills to 114 school leavers who normally could not afford further education (in
0
2000
2004 2005 2006 2007 2008 2009
normally could not afford further education (in partnership with the Mayor and the Department of Social Welfare of the local municipality) in 2005
• R26m spent on education support for secondary and tertiary institutions across South Africa in
579
746707
600
800
and tertiary institutions across South Africa in 2007
• Training and development for employees accounted for c. 6% spend of payroll in 2006
Bursars
395346
486
200
400• R19m spent on education support for secondary
and tertiary institutions across South Africa in 2009
Presentation to the Portfolio Committee on Mineral Resources, 02 November 2011
02004 2005 2006 2007 2008 2009
19Original Mining Charter
ABET LearnersHUMAN RESOURCES DEVELOPMENT (continued)
29828595444
2500
3000
2010-2011 Highlights:
• In 2010 training and development accounted for c. 5% spend of total employee costs– c.R810m spent on employee training
initiatives, bursaries, ABET, management
2358
1500
2000
2500
, , , gprogrammes and re-training from core businesses alone (approximately c.R530m or US$63m) despite headcount reduction [Target = 3% of payroll]– Platinum – c. R441 million (US$60m),
4.3% of total payroll0
500
1000
Platinum Thermal Coal Iron Ore Other Total
Bursars
3% o o a pay o– Thermal Coal – c. R202 million
(US$28m), 8.2% of total payroll– Kumba Iron Ore – c. R167 million
(US$23m, 6.8% of total payroll• c.2 600 employees received portable skills
training to be employable outside the mining
39755 793
600
700
800
training to be employable outside the mining industry in South Africa
• Anglo American operates a global world-class technical centre in South Africa, the Technical Business Coordination Group, which employs 883 personnel in South Africa and the budgeted cost for 2011 is R 946 million
341
200
300
400
500
600
Presentation to the Portfolio Committee on Mineral Resources, 02 November 2011
20Revised Mining Charter
cost for 2011 is R 946 million.• Anglo American views human resource
development as a strategic tool to achieve employment equity targets by 2014 0
100
200
Platinum Thermal Coal Iron Ore Total
MINE COMMUNITYMINE COMMUNITY DEVELOPMENT
21
Patients in the waiting room at the UGM Community Clinic in Kathu, Northern Cape, which services 35,000 people in the area
MINE COMMUNITY DEVELOPMENT
2007-2011 YTD Mine • Collectively, since 2007 Anglo American h t R1 1b i
500
Community Development Spend* (Rm)
has spent c. R1.1bn on various community development initiatives (including corporate social investment)
• Community development initiatives di tl t ib t t i i l
Education
Infrastructure
Health
300
400 directly contribute to progressing social labour plan commitments which are aligned to municipal integrated development plans (IDPs)
Health
100
200
0Anglo
American Platinum
Anglo American
Thermal Coal
Kumba Iron Ore
AASA
Presentation to the Portfolio Committee on Mineral Resources, 02 November 2011
Platinum Thermal Coal
22Original / Revised Mining Charter
Students learning about electric circuitry at Kathu High School, Northern Cape* Excluding corporate social investment expenditure
MINE COMMUNITY DEVELOPMENT (continued)2007-2011 Sample of Community Development Initiatives Supported
Road/Bridge construction & upgrading
InfrastructureCommunity Centres
• 7 areas and 3 villages immediately benefited
• 16 schools and crèches constructed and upgraded
• 15 classrooms upgraded• 4 science labs constructed
and upgraded
• 4 community halls / centres built
• 1 sports ground built• 1 multipurpose
i Centres immediately benefited(incl. a bus/taxi rank)
and upgraded• 11 computer centres
constructed and upgraded
community centre constructed
• 2 traditional courts and offices built
Health Water SupplyMine Community Development Initiatives
• 9 areas supplied with fresh water
• 6 wellness clinics constructed
• 1 areas provided with
EducationElectricity
• R250m annual spend on R&D• 9 areas in Limpopo, N. C d M l
1 areas provided with mobile clinics
Presentation to the Portfolio Committee on Mineral Resources, 02 November 2011
SanitationR250m annual spend on R&D
• R128m spent on education support (incl. educator training, Maths/Science support and early childhood development)• 6 areas received
sewage works upgrades
Cape and Mpumalanga supplied with electricity infrastructure
• Bethal substation upgrade benefited c. 100 000 people
23Original / Revised Mining Charter
ENTERPRISE DEVELOPMENT
Olivia Jacobs at the Butterfield Bakery in Kathu. Northern Cape. The business was founded th h i t f A l
24
through assistance from Anglo American Zimele.
ENTERPRISE DEVELOPMENT/JOB CREATION: ZIMELE
Zimele*
Supply Chain Fund
S l h i
Anglo American Khula Mining Fund
J i l
Community Fund
F di
Olwazini Fund
F l t i i
Anglo American Green Fund(Approved)
F d· Supply chaininvestments
· Support· Minorityequity and loansM R /d l
· Junior scale mining investments· R200m Fund· Support· Minority equity and
· Funding entrepreneurs around Anglo American’s
mines and labour sending areas
· Formal training and development
· Support· Max R20k/deal· Loans only @ 6% p.a.
· Fund environmentally sustainable projects.
· Support· Minority equity
d l
Management Services
· Max R5m/deal· Loans @ Prime + 1% p.a.
q yloans
· Max R40m/deal· Loans @ Prime p.a.
sending areas· Support· Max R1m/deal · Loans only @ 6% p.a.
and loans· Max R10m/deal· Loans @ Prime
p.a.
Presentation to the Portfolio Committee on Mining, 02 November 2011
gManagerial / Legal / Company Secretarial / Accounting / Corporate Governance / Safety, Health & Environment /
Marketing / PR, etc* Established 1989
Revised Mining Charter
25
31 August 2011
ENTERPRISE DEVELOPMENT/JOB CREATION: ZIMELE (continued)31 August 2011
Total Supply Chain Fund
Anglo American
Khula Mining Fund
Community Fund Olwazini Fund
Number of transactions 1,301 42 20 1,176* 63*
People employed 18,267 7,119 1,014 9,957 177
Turnover – Rm 1,940 994 491 438 17
Funding - Rm 519 96 164 258 0.56
Female entrepreneurs supported 35% 26% 6% 36% 40%
Youth supported 48% 10% 36% 49% 65%
* Companies 972 42 20 848 62
Repeat transactionswith the same companies 329 0 0 328 1
T t l 1 301 42 20 1 176 63
Presentation to the Portfolio Committee on Mineral Resources, 02 November 2011
Total 1,301 42 20 1,176 63
Average loan repayment rate 86% 90% 90% 84%
Revised Mining Charter
26
JOB CREATION: BUSINESS CALL TO ACTION
The Call:
• Anglo American has committed to create 25,000 employment opportunities (preserved and new jobs) with 1 500 companies by 2015 –
The Call:
and new jobs) with 1,500 companies by 2015 18,267 jobs already created since 2008
• 32 small business hubs to be created (29 already in place) in Anglo American’s miningalready in place) in Anglo American s mining communities and poverty stricken laboursending areas
Presentation to the Portfolio Committee on Mineral Resources, 02 November 2011
Richard Olifant, an Anglo American Zimeleentrepreneur in training
Revised Mining Charter
27
LOCAL PROCUREMENT
28Local artisans maintain and repair large buckets and bowls from trucks close to Platinum’s Mogalakwena mine
LOCAL PROCUREMENT
• Group BEE spend and business development has grown significantly: from c. R1.1bn ($133m) in 2000 to c R23 5bn
24.623.5
30
Anglo American Historical BEE Procurement Spend 1999-2009 (Rbn)
($133m) in 2000 to c.R23.5bn (c.$2.8bn) in 2009
• Excluding procurement spend 17.320
25
with state owned enterprises and municipalities, this represented c. 40% of total spend 5.8
9.0
12.3
10
15
p
• In 2009 a dedicated local procurement function was also initiated with Supply Chain to
1.1 1.11.5
2.43.6
0
5
Presentation to the Portfolio Committee on Mineral Resources, 02 November 2011
initiated with Supply Chain to drive local procurement in Anglo American
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
29Original Mining Charter
LOCAL PROCUREMENT (continued)
• In 2010, BEE local procurement spend was c.R21bn (US$2.4bn) in 2010 ti 44%
2010 BEE Procurement Spend by Category and Business Unit (%)Lines = Revised Mining Charter Targets
ServicesConsumablesCapital goods
2010, representing 44% of total spend (excluding state owned enterprises and municipalities) 50% 51%
43%43%
50%59%
47%
67%
42%50%
60%
70%
80% Capital GoodsServicesConsumables
• In H1 2011, 42% of total spend of managed businesses was with
25%
43%43%35%
31%
42%
10%
20%
30%
40%
businesses was with historically disadvantaged South Africans (excluding state owned enterprises
0%
Anglo American Platinum Anglo American Thermal Coal
Anglo American Kumba Iron Ore
Anglo American South Africa
Presentation to the Portfolio Committee on Mineral Resources, 02 November 2011
and municipalities)
30Revised Mining Charter
HOUSING AND LIVING CONDITIONS
Pensfontein employee housing, Kolomela, Northern CapeLakhutshona LHC Phase 2 housing at Sishen, Northern Cape
31Completed hostel conversion, Thabazimbi, North West Seraleng Project for 924 employees in Rustenburg, North West
HOUSING
• Hostel occupancy has been reduced from 19 895Hostel occupancy has been reduced from 19 895 in 2004 to 12,547 in 2009/2010
• c. R2 billion committed to employee housing initiatives to be implemented by 2014
• Memorandum of Understanding between Anglo American’s Platinum Business Unit and National Department of Housing in place (Limpopo and North West Provinces)
Completed hostel conversions External viewCompleted hostel conversions – External view, Thabazimbi, North West
32Original Mining Charter
Completed hostel conversions – Kitchen & bedroom, Thabazimbi, North West
HOUSING (continued)
• The target occupancy rate of 1 person per room by 2014 will g p y p p ybe met through a combination of hostel conversions andfacilitating home ownership by employees:
• Employee housing allowances and subsidies range from c. R1,000-R7,000 per employee, , p p y
• In total, c. 28,000 housing units to be built (20,000 units in partnership with the national Department of Human Settlements in the Limpopo and North West Provinces) New employee housing – External view, Aloe
Ridge Mpumalanga) Ridge, Mpumalanga
33Revised Mining Charter
New employee housing – Bathroom, Clewer, Mpumalanga
New employee housing – Kitchen, Aloe Ridge, Mpumalanga
BENEFICIATION ANDBENEFICIATION AND RESEARCH & DEVELOPMENT
The jig technology plant (SEP) at Sishen mine, Northern Cape, upgrading waste material into iron ore and increasing iron ore
34
upgrading waste material into iron ore and increasing iron ore production by 13 million tonnes per annum
BENEFICIATION AND RESEARCH & DEVELOPMENT
• The Original Mining Charter provided little clarification as to the definition and meaning of beneficiation for the mining industry
• Despite this Anglo American continued to conduct extensive work and research intoDespite this, Anglo American continued to conduct extensive work and research into formalising its beneficiation strategy and approach at Business Unit level
• In 2009, position papers for the beneficiation of Anglo American’s core commodities in South Africa (iron ore, platinum and thermal coal) were developed for approval at ExCo level within each respective Business Unit (Kumba Iron Ore, Anglo American Platinum and Anglo American Thermal Coal)
• Since this process was initiated, work has been under way to further develop the initiatives already implemented to enhance beneficiation in line with section 26 of theinitiatives already implemented to enhance beneficiation in line with section 26 of the MPRDA and the new Beneficiation Strategy
• Beneficiation initiatives have been implemented across all of Anglo American’s business units in South Africa and have directly contributed to job creation
Presentation to the Portfolio Committee on Mineral Resources, 02 November 2011
y j
35Original Mining Charter
BENEFICIATION AND RESEARCH & DEVELOPMENT: PLATINUMKey beneficiation initiatives: “Angloplat unveils R100m PGM fund as part of
b fi i ti t t ”y
• In partnership with various government departments providing input to co-develop a fuel cell strategy for South Africa
beneficiation strategy”
23rd July 2009
“The launch of the (Anglo American Platinum’s beneficiation) strategy came at a time when government
b i h ll d d h i iti ti lik th• Supporting the catalyst manufacturing industry within the Automotive Development Plan
• Investing in a fuel cell company that currently services the mobile communications industry
was being challenged, and when initiatives like these were needed… In the past, PGMs only made up about 2% of the beneficiation figures, but that it had recently reached up to 20% of the total amount of metals beneficiated in South Africa… We hope that as we proceed, we will also be able to increase the PGMs in terms of the percentage that is beneficiated in South Africa…. This will assist in making sure that South Africa becomes an industrialised
• Providing the local jewellery industry access to a metal financing scheme
• Sponsoring annual jewellery and innovation competitions to promote interest excitement and drive creativity and
making sure that South Africa becomes an industrialisedcountry.”
Susan Shabangu, Minister for Mineral Resources
“Platinum in particular is a unique commodity that enables the producers to directly support the demand and thepromote interest, excitement and drive creativity and
innovation across the PGMs sector
• Collaboration with the Department of Science and Technology, providing seed capital through the R100 million PGM Development Fund, connecting international
the producers to directly support the demand and the growth of the market development for the product. Our large reserves in southern Africa mean that is an opportunity to directly inject economic growth and job creation into this economy.”
Neville Nicolau, CEO, Anglo American Platinump g
partners with the local fuel cell development program
36Revised Mining Charter
BENEFICIATION AND RESEARCH & DEVELOPMENT: PLATINUM (continued)Key research & development initiatives:
• Anglo American Platinum has a number of programmesresearching new applications and uses
• The business engages in projects with our fabricator partners and local research institutions in South Africa to develop local research capacity in the value addition space and assist to develop world-class PGM research competence in South Africa – these include:
E t bli h t f d l t f d t d t Anglo American Platinum fuel cell at• Establishment of a development fund to encourage product development, commercialisation and beneficiation
• Project support provided at local universities
• Jewellery development studios and research support at 6
Anglo American Platinum fuel cell at Lephalale, Limpopo Province
• Jewellery development studios and research support at 6 local institutions
• PGM collaboration workshop to identify opportunities with local and international PGM specialists: 16 project proposals supportedp oposa s suppo ted
• PGM innovation competition to drive innovation into the local industry
37Revised Mining Charter
Platinum autocatalyst
BENEFICIATION AND RESEARCH & DEVELOPMENT: THERMAL COALKey beneficiation initiatives:y
• Most of the coal mined by Anglo Coal South Africa undergoes a beneficiation “washing process” in order to improve the saleability of the product coal (Eskom’s new-generation power will require washed coal)
• In partnership with Anglo American Platinum, Anglo American Thermal Coal is piloting a stationary fuel cell on an Anglo Coal exploration site near Lephalale in the Limpopo province (thesite near Lephalale in the Limpopo province (the electricity generated will be channelled to support a disadvantaged community project)
• Anglo American Thermal Coal supplies weathered coal for the production of a specialised humic acidcoal for the production of a specialised humic acid based fertiliser. This enhances rehabilitation of the environment, through the use of what would otherwise be a potential pollutant.
Beneficiation plant at Goedehoop Colliery, eMalahleni, Mpumalanga
38Revised Mining Charter
BENEFICIATION AND RESEARCH & DEVELOPMENT: THERMAL COAL (continued)Key research & development initiatives:
• Anglo American Thermal Coal is a leader in coal-bed methane (CBM) technology in South Africa, which is being considered for potential power generation, and has run a successful pilot looking at the beneficiation of the by-products of CBM
• Thermal Coal in collaboration with government and other major players in the coal industry have established the South African Carbon C t d St C t d d l iCapture and Storage Centre and developing a Carbon Storage Atlas for South Africa
• Anglo Coal is a leader in South Africa in investigating ways to commercially exploit discard coal for power generation purposes
Project Khanyisa (development of a 450MW Independent– Project Khanyisa (development of a 450MW Independent Power Producer /IPP generation project using Anglo American Thermal Coal discards)
• Leading participant in the South African Coal Roadmap (SACRM) initiative and supporter of the Coaltech initiative t at e a d suppo te o t e Coa tec t at e
• Investigating to derive economic value by utilising by-products, such as the gypsum produced as a by-product at the EmalahleniWater Treatment Plant. 39
Revised Mining Charter
A water recycling plant at Landau uses bacteria to break down sulphides in the water
and reclaim water for processng.
BENEFICIATION AND RESEARCH & DEVELOPMENT: IRON OREKey beneficiation initiatives:y
• Kumba Iron Ore has invested substantially in downstream value creation, resulting in a share of domestic refinement of iron that is higher than in other major iron ore exporting countries
• More than 20% of KIO’s production is supplied to the domestic market, translating into local steel production capacity of approximately 10 million tonnes per annum
• Kumba has facilitated cooperation between the Industrial• Kumba has facilitated cooperation between the Industrial Development Corporation and Tata Steel in investigating various business models and iron ore sources, as well as setting up a second steel producer in South Africa
• Kumba’s novel jig technology plant is an example of the application of pioneering technology to better utilize current resources as the plant enables the upgrading of lower grade waste material into ore thereby increasing iron ore production by 13 million tonnes per annum
Anglo American Kumba Iron Ore’s jig plant at Sishen mine, Northern Cape
p y p
40Revised Mining Charter
BENEFICIATION AND RESEARCH & DEVELOPMENT: IRON ORE (continued)Key research & development initiatives:
• KIO and AMSA are 50:50 commercial partners in a commercial venture in the development of the Zandrivierspoort Project to beneficiate iron ore from 35% iron content to 67% iron content through the application of novel technology
• In partnership with Mintek, and the CoegaDevelopment Corporation, Kumba is investigating
t ti Si h C d t i l t i dconcentrating Sishen C-grade material to a required iron ore or pellet grade in order to feed a portion to a proposed Coega Steel plant, which will be located in the Eastern Cape
• KIO is playing an active role with the IDC in• KIO is playing an active role with the IDC in investigating suitable technology to convert fine iron ore into a metal scrap replacement product Anglo American Kumba Iron Ore’s concentration
plant at Sishen mine, Northern Cape
41Revised Mining Charter
SUSTAINABLE DEVELOPMENTSUSTAINABLE DEVELOPMENT
42Safety and medical training at Mogalakwena platinum mine, Limpopo
A rigorous safety culture with three underlying
SUSTAINABLE DEVELOPMENT: SAFETY
A rigorous safety culture with three underlying principles
• A zero harm mindset • Simple, non-negotiable standards • No tolerance for repeat incidents
Committed to working in partnership to share best practice and raise standards in safety
• Management has been working with government, unions and peers to find common solutions to achieve a breakthrough in safety in the industryg y y– First Anglo American Tripartite Safety Summit
held in Johannesburg in April 2008– Tripartite initiative continues with union and
government officials participating in Anglo American safety training courses including site visits and interaction with employees – now being rolled out to operational level within our own South African business units
– ‘Visible Felt Leadership’ toolkit extended across all operations
Mineworkers receiving safety instructions at Goedehoop colliery, Mpumalanga
4343
– Solidarity Union named Anglo American as employer of choice for its commitment to safety in 2010
Anglo American is committed to addressing key
SUSTAINABLE DEVELOPMENT: ENVIRONMENTAnglo American is committed to addressing key environmental concerns
• Award-winning eMalahleni water reclamation plant currently purifies 25 megalitres of water per day in the Witbank area, supplying c. 80 000 people –the plant will soon enter its second phase, doubling capacity to 50 megalitres per day
• During 2010 Anglo American recycled 53During 2010, Anglo American recycled 53 megalitres of water, including a 60% reduction in potable water achieved by Bafokeng Rasimoneplatinum mine through innovative water re-usage
• Through the Platinum Eastern Limb bulk water supply project we have developed a long term strategy in partnership with governments, other mining companies and key stakeholders to provide 1 9 million people access to clean water
Maintenance work being conducted at the eMalahleni Water Reclamation Plant
4444
provide 1.9 million people access to clean water through the Lebolelo Water Scheme, Flag-Boshiloand De Hoop Dam construction works
SUSTAINABLE DEVELOPMENT: RESEARCH AND DEVELOPMENT
• Anglo American operates a global world-class technical centre in South Africa, the centre is referred to as the Technical Business Coordination Group (TBCG)• TBCG employs 883 personnel in South Africa
and the budgeted cost for 2011 is R 946 million
• The centre employs mainly experienced technical professionals Developmenttechnical professionals Development
• In 2010, Anglo American’s South African business units has spent R404 million on research and development, with c. R250 million spent locally in South Africa
• In 2011, Anglo American’s South African business units has spent R722 million on research and
Anglo American supported research student at the University of Cape Town
4545
units has spent R722 million on research and development, with c. 50% spent locally in South Africa
MIGRANT LABOURMIGRANT LABOUR
46
MIGRANT LABOURSouth Africa Mozambique Lesotho
Anglo American South Africa Workforce by Nationality
• Anglo American South Africa has historically sourced most of its labour from South Africa –however, a significant number of employees have historically been drawn from South 95%
100%
Botswana Swaziland Zimbabwe
have historically been drawn from South Africa’s neighbouring countries, particularly Lesotho, Botswana, Zimbabwe and Mozambique
• Anglo American’s human resources policy has 85%
90%
95%
• Anglo American s human resources policy has always adhered to ensuring that migrant labour from South Africa’s labour sending areas and neighbouring countries is in line with South African labour relations legislation 75%
80%
85%
gto ensure no unfair treatment or discrimination against such employees
70%
75%
Platinum Thermal Coal Iron Ore Total
Presentation to the Portfolio Committee on Mineral Resources, 02 November 2011
47Original Mining Charter
3. CONTRIBUTIONS BEYOND THE MINING CHARTERTHE MINING CHARTER
48
HEALTHCARE
Th f bi h d Hi h ld H it l M l
49
The refurbished Highveld Hospital, Mpumalanga
HEALTHCARE: EMPLOYEES • Anglo American operates the largest private sector HIV/AIDS treatment g p g p
programme in the world
• Demonstrable leadership in the fight against HIV/AIDS:• 94% of all employees participated in voluntary counseling and
testing c 100 000 peopletesting – c. 100,000 people• c. 4,000 employees on Anglo American’s ARV treatment
programme in 2010• Have been providing HIV/AIDS treatment to not only employees but
dependants and family members of employees since 2008p y p y
• Extending our holistic approach to managing HIV/AIDS and Tuberculosis by integrating these programmes into broader wellness initiatives e.g. iCARE campaign (including testing for Weight, Height, Blood Pressure, Haemoglobin Cholesterol and Blood Glucose)Haemoglobin, Cholesterol, and Blood Glucose)
• Providing occupational healthcare for employees, particularly in preventing noise-induced hearing loss
50Contributions beyond the Charters
HEALTHCARE: COMMUNITIES
• Extending our healthcare provision strategy for• Extending our healthcare provision strategy for employees to our host communities:
• R19m spent on the Batho Pele Mobile Health Units in the John Taolo Gaetsewe municipality in the Northern Cape for benefits of improvedthe Northern Cape for benefits of improved primary and secondary health care
• Bhubezi Community Health Centre in Bushbuckridge, Mpumalanga (established by Anglo American’s Thermal Coal business in 2007 in conjunction with Virgin Unite, US AID/ PEPFAR, and Ndlovu Care Group), providing ARTs to over 3,000 local community members
• Ulysses Gogi Modise Clinic in Kathu, Northern Cape (established by Kumba Iron Ore) providing ART to over 900 affected local community
bmembers• Developing a business plan to revitalise Primary
Healthcare in two districts of the Eastern Cape through Health Systems Strengthening
Sister Jackie Schoeman gives a blood test to patient Mickle Rolsen at the UGM Community clinic in Kathu
• Our latest vision is to help raise a new generation of young South Africans who will be free of AIDS and free of cervical cancer 51
Contributions beyond the Charters
y
SOCIAL INVESTMENT
Presentation to the Portfolio Committee on Mineral Resources, 02 November 2011
52
City Year - Service leader supported by Anglo American in classroom teaching learners leadership skills at LekangSchool in Soweto, Gauteng
• Total Corporate Social Investment spend in
SOCIAL INVESTMENTTotal Corporate Social Investment spend in South Africa reached c. R482m (c. US$65.9m) in 2010
• c. 73% of spend directly contributing to our social and labour commitments towards local economic development in the communities around our operations
• Renewing commitment to local communities through direct social investment linked to mine social and labour planssocial and labour plans– c. R14.5m spent upgrading primary
healthcare facilities in various communities around our Platinum mines in the Limpopo province
• Corporate social investment by Business Unit:– Platinum – c. R119m or 1.2% of NOPAT– Thermal Coal – c. R98m or 1.5% of NOPAT– Kumba Iron Ore – c. R134m or 1.5% of
NOPAT
Presentation to the Portfolio Committee on Mineral Resources, 02 November 2011
NOPAT
53Contributions beyond the Charters
The Blackhill Schoongezicht school, Mpumalanga, donated to the community by Landau Colliery, Mpumalanga
CAPACITY BUILDINGCAPACITY BUILDING
54
eMalahleni Water Reclamation Plant, Mpumalanga, supplying 20% of eMalahleni Municipality’s water needs
CAPACITY BUILDING INITIATIVES• A capacity building initiative between Anglo American and the Development Bank of South Africa has been p y g g p
established to create a sustainable operations and maintenance programme of municipal existing and new infrastructure, capacitating municipalities through deployment of sector experts and apprentices/artisans
• Through the Platinum Eastern Limb bulk water supply project we have developed a long term strategy in partnership with governments, other mining companies and key stakeholders to provide 1.9 million people access to clean water through the Lebolelo Water Scheme, Flag-Boshilo and De Hoop Dam construction works
• The Emalahleni Water Treatment Plant treats water from mining operations and transforms the water to a potable standard meeting about 20% of the local government’s daily requirements in supporting municipal, commercial and industrial growth
• Thermal Coal’s Emalahleni Reclamation Plant produces 200 tonnes of raw gypsum every day as a by-product which is used as a raw material in the construction of homes. This low-cost, high-quality building material has been used to build 66 three-bedroom units with more units planned
• The John Taolo Gaetsewe (JTG) Rural Research Project focuses on identifying evaluating and locating anThe John Taolo Gaetsewe (JTG) Rural Research Project focuses on identifying, evaluating and locating an appropriate socio-economic framework for the communities spanning the JTG District Municipality, KgatelopeleLocal Municipality and the Tsantsabane Local Municipality
• Anglo American's Science, Career Guidance and Information and Communications Technology (ICT) Resources Centre is a R19 million facility, located in eMalahleni, Mpumalanga, providing interactive science, y p g p gcareer guidance and ICT resource facilities for educators and learners throughout the Nkangala district.
55Contributions beyond the Charters
THANK YOUTHANK YOU
APPENDIX
57
OWNERSHIP AND JOINTOWNERSHIP AND JOINT VENTURESTRANSACTION HIGHLIGHTSTRANSACTION HIGHLIGHTS
58
OWNERSHIP AND JOINT VENTURESTransactions
Anglo American South Africa ValueAnglo American South Africa ValueBEE transaction summary (at transaction date) Key Broad based Broad based Broad based
Rm Date Empowerment % partner partner interest beneficiariesAnglo American Platinum 25 634 Northam 423 Aug-2000 17.5% Mvela None Modikw a JV w ith ARM 2 423 Aug-2001 50.0% ARM ARM BBBEE Trust 13.5% of ARM See notes
% f f S BRPM JV w ith RBN 3 141 Aug-2002 67.0% Bafokeng Bafokeng See notes 300 000 people Pandora JV 205 Feb-2003 15.0% Mvela Bapo Ba Mogale
community 7.5% in JV 35 000 people
Ga-Phasha JV w ith Plateau 990 Aug-2004 50.0% Anooraq
Western Bushveld 249 Oct-2004 26.0% Africa Wide
Elandsfontein 120 Dec-2005 26.0% Ngazana 26% in mine Union JV 491 Nov-2006 15.0% Bakgatla Bakgatla 15% in mine 350 000 people Lebow a 7 905 Jun-2009 51.0% Anooraq Pelew an
Investments65% in Anooraq See notes
Northam (second sale) 2 655 Aug-2008 22.4% Mvela Resources
Booysendal 3 480 Jun-2009 100.0% Mvela Resources ESOP 2 490 Jun-2008 1.5% Employees 1.5% of APL 50 000 people
59
p y p p Western Bushveld JV 1 062 Dec-2008 37.0% Wesizw e Bakubung
community + BEE consort.
(Bakubung share ~16% in Wesizw e)
OWNERSHIP AND JOINT VENTURESTransactions (continued)
Anglo American South Africa ValueBEE transaction summary (at transaction date) Key Broad based Broad based Broad based
Rm Date Empowerment % partner partner interest beneficiariesAngloGold 1 831Vaal Reefs 38Bokamoso & Izingw e 665 Oct-06 1.90% Bokamoso ESOP
Trust and Izingw eEmployees and Izingw e
1.4% Bokamoso and 0.5% Izingw e
30000 Employees and Izingw e
of AngloGoldWestern Holdings 28Free State Assets 1 100 Nov-01 50% ARM ARM 50% ARM
Anglo Coal 2 902New Coal 360 Dec-00 16% Eyesizw eKZN coal assets 6 LeeuwKZN coal assets 6 LeeuwCoal rights 17 HDSA generalCoal rights 268 ShandukaRBCT rights 0 HDSA generalAnglo Coal - ESOP 251 Employees 9000 employees
(7000 HDSA)Anglo Inyosi Coal - ESOP 111 EmployeesAnglo Inyosi Coal 1 890 Feb 07 27% Pamadozi Community Trust Community TrustAnglo Inyosi Coal 1 890 Feb-07 27% Pamadozi,
Lithemba, Woman's Development Bank
Community Trust and see note
Community Trust (15% of 27%) and see note
Mondi 1 675SAFCOL 100Ramana 35
60
Ramana 35Shanduka - New sprint 550 Aug-04 58% ShandukaShanduka - Packaging 990 Aug-04 42% Shanduka Employees 6400 employees
OWNERSHIP AND JOINT VENTURESTransactions (continued)
Anglo American South Africa ValueBEE transaction summary (at transaction date) Key Broad based Broad based Broad based
Rm Date Empowerment % partner partner interest beneficiariesKumba Iron Ore 11 735Kumba - at SIOC level 11 735 Nov-06 26% Exxaro Envision employee
share scheme and Community Trust
6% 4000 employees + community
Community Trust
Scaw Metals 1 378Scaw Metals 1 378 Apr-07 26% Izingw e Employee share 5% 5 600 employees
trust
De Beers 3 710De Beers (DBCM) 3 710 Apr-06 26% Ponahalo See notes 19% Employees,
disadvantaged w omen, disabled persons and pcommunities
Samancor 4 117 0.26 HEMP 1 1 370 Aug-07 9% Ntsimbintle Community HEMP2 1 065 Aug-07 7% Ncab Community HEMP 3 825 Aug-07 5% NzikoHEMP 4 825 Dec 09 5% Other nominees
61
HEMP 4 825 Dec-09 5% Other nominees ESOP 32 Employees 750 employees
OWNERSHIP AND JOINT VENTURESTransactions (continued)
Anglo American South Africa ValueBEE transaction summary (at transaction date) Key Broad based Broad based Broad based
Rm Date Empowerment % partner partner interest beneficiariesOther Mining & Industrial 10 324Avmin 844 Oct-06 50% ARM 50% ARMSouthern Life 163 51% African LifeJ h i 2 655 A 96 35% Th N ti l 35% f J h i ' HDSAJohnnic 2 655 Aug-96 35% The National
Empow erment Consortium (NEC)
35% of Johnnic's issued share capital
HDSAs
JCI 2 474 Nov-96 30% Saflife Ltd See notesIkageng 601 Apr-97 6% The National
Empow erment Consortium (NEC)
6% of Johnnic's issued share capital
32000 HDSAs
De Beers 38Conlog 39Boschendal 323Hulamin 990 Jun-07 10% Imbew u and
Makana
Tongaat Hulett 2 197 Jun-07 18% Sangema, Masithuthukisane Trust, Mphakathi Trust, Ayavuna and a ESOP/MSOP
62
BENEFICIATION STRATEGYBENEFICIATION STRATEGY AND APPROACH
63
BENEFICIATION
Anglo American Platinum’s beneficiation strategy emphasises a holistic and balanced portfolioAnglo American Platinum s beneficiation strategy emphasises a holistic and balanced portfolio approach to local platinum market development
Market Development Overview Key Levers
Fundamental Research
Commercialisation• Maintaining strong
links with universities, fabricators and end-users is critical
Improving Creating viable
Product Development
Providing solutions
Development Phase
• Integration of government and beneficiation initiatives into the R+D program
Improving understanding of the physical world
• Universities and
Focus
Creating viable market for new product
• Fabricators• Fabricators
Providing solutions to customer problems
• The establishment of a development fund to encourage product d l t
Key Partners
Examples of k t
• Universities and scientific institutions
• In-house R&D
R h G t
• Marketing Support
• Seed funding
• Fabricators
• Entrepreneurs• Entrepreneurs
• End Users
• Third party R&D grants
IP li i
64
development, commercialisation and beneficiation
market development tools
• Research Grants
• Scholarships
• Advocacy
Seed funding
• PGM pricing
• IP licensing
• Advocacy
• IP licensing
• Seed funding
• Advocacy
Revised Mining Charter
1 ANGLO AMERICAN IN SOUTH1. ANGLO AMERICAN IN SOUTH AFRICA TODAY
65
ANGLO AMERICAN’S COMMITMENT TO SOUTH AFRICAFor the 12 months ended 31 December 2010For the 12 months ended 31 December 2010
ANGLO AMERICAN IN SOUTH AFRICA:
• A national champion
• A major contributor to South Africa’s economy
• A considerable project pipeline in South Africa
• A conscious approach to safety is delivering results
• A promoter of broad-based empowerment participation in its South African operationsA promoter of broad based empowerment participation in its South African operations
• A comprehensive and far-reaching approach to transformation
• An employer of choice to around 91,000 people in South Africa
• A responsible corporate citizen
• A partner of choice
67
• A national thought leader
A NATIONAL CHAMPION• Founded in Johannesburg, Anglo American has a 94-year history in South Africag, g y y• Today a multinational company with operations in >40 countries• However South Africa remains the single most important country to the Group
– 3 out of the Group’s 7 commodity business units are globally managed from South Africa– 4 business unit CEO’s based in South Africa and 8 out of 15 ExCo members are South African
In 2010 c 43% of the Group’s operating assets c 48% of its revenue and c 51% of its operating– In 2010, c.43% of the Group’s operating assets, c.48% of its revenue and c.51% of its operating profit had their origin in South Africa
Operating assets by geography (2010)
South Africa
f f
Revenue by geography (2010)
South Africa
Operating profit by geography (2010)
South AfricaRest of Africa
Europe
North America
South America
Australia and Asia
Rest of Africa
Europe
North America
South America
Australia and Asia
South Africa
Rest of Africa
North America
South America
Australia and Asia
43%
38%
10%
7%
48%23%
13%
7%2%8%
51%33%
10%
5%
The group has a number of assets which are strategic to South Africa• Anglo Platinum (c.79% owned) – the world’s leading platinum producer, accounting for c.39% of global
supply
1%1%1%
68
pp y• Kumba Iron Ore (c.65% owned) – the world’s 4th largest iron ore producer in seaborne iron ore• Thermal Coal – one of the world’s largest private sector coal producers and exporters• De Beers (45% owned) – the world’s leading diamond business • Samancor Manganese (40% owned) – the world’s largest integrated producer of manganese ore
A MAJOR CONTRIBUTOR TO SOUTH AFRICA’S ECONOMYAnglo American is:
A significant investor in South Africa• Invested c. R148bn (c.$21.1bn) in Capex in South Africa since 1999 (till 2010)
One of the largest contributors to the South African fiscusOne of the largest contributors to the South African fiscus• In 2010, Anglo American group companies paid c. 14bn (c.$1.95bn) in direct and indirect taxes
A major contributor to South African foreign earnings• c.50% of South Africa’s foreign earnings are generated from commodity exports• Since its London listing in 1999, Anglo American’s foreign shareholding has increased from about 17% to
c 66% resulting in a total of c c R124 5bn (US$21 5bn) of capital inflow Generated export revenues ofc.66%, resulting in a total of c. c. R124.5bn (US$21.5bn) of capital inflow Generated export revenues of c.R105bn (c.$14.3bn) in 2010
A significant contributor to the South African economy• In 2010 Anglo American produced some 2.5% of South Africa’s GDP
One of the largest components of the JSE (together with its controlled companies)One of the largest components of the JSE (together with its controlled companies)• Combined market capitalisation of >US$90bn (c.R770bn), representing c.18% of the value of JSE top 100• South African shareholders make up c. 34% of AA plc Share Register
A key partner to some of South Africa’s most important state-owned enterprises• Eskom: In 2010, Anglo American spent US$423m (c.R3.1bn) with Eskom, and delivered 32Mt of thermal coal
$
69
(US$630m or c. R4.6bn) to Eskom for South Africa’s electricity needs• Transnet: c.US$560m (R4.1bn) Anglo American spend on Transnet in 2010
A CONSIDERABLE PROJECT PIPELINE IN SOUTH AFRICA
Anglo American has a c R30bn (US$4 4bn)Anglo American has a c. R30bn (US$4.4bn)project pipeline to be delivered over the next 3 years in South Africa
• Iron Ore: – Kolomela project 94% complete, hot
commissioning started in Q3 2011
• Thermal Coal: – 6.6 million tonnes per annum Zibulo project (to
supply Eskom’s Arnot power station) is on ramp-up, with full production expected in Q4 2012
– New Largo project (to supply Eskom’s Kusilepower station) is in feasibility stage with Boardpower station) is in feasibility stage, with Board approval to be sought by Q3 2012
• Platinum:– Capital expenditure of c. R1.6bn (US$223m) in Kolomela Iron Ore Project Commissioning, Postmasburg,
Northern Capethe first half of 2011 on various expansion projects at Thembelani, Mogalakwena, Twickenham, Khuseleka and Dishaba mines
p
70Anglo American South Africa Today
A rigorous safety culture with three underlying principlesANGLO AMERICAN’S APPROACH TO SAFETY IS DELIVERING RESULTS
• A zero harm mindset • Simple, non-negotiable standards • No tolerance for repeat incidents
Committed to working in partnership to share best practice and raise standards in safety• Management has been working with government unions and peers to find common solutions to achieve a• Management has been working with government, unions and peers to find common solutions to achieve a
breakthrough in safety in the industry– First Anglo American Tripartite Safety Summit held in Johannesburg in April 2008– Tripartite initiative continues with union and government officials participating in Anglo American safety training
courses including site visits and interaction with employees – now being rolled out to operational level within our own South African business unitsown South African business units
– ‘Visible Felt Leadership’ toolkit extended across all operations– Solidarity Union named Anglo American as employer of choice for its commitment to safety in 2010
Improved safety standards mean saving peoples’ lives• Under Cynthia Carroll’s leadership, fatalities in SA have reduced by 58% over the past 4 years to 11; LTIFR by 51%Under Cynthia Carroll s leadership, fatalities in SA have reduced by 58% over the past 4 years to 11; LTIFR by 51%
to 0.57 (up to December 2010) – this places us among the best performers in our peer group– Anglo American’s lost-time injury rate, excluding our deep-level hard-rock mining operations, is 0.22 YTD in 2011
– a sector-leading performance– Anglo American’s fatal-injury frequency rate at end-October was 0.008 – 53% lower than at the end of 2006– Anglo American Thermal Coal completed its first ever fatality-free calendar year in 2010
7171
– Thermal Coal's Isibonelo Colliery has been awarded the Department of Mineral Resources' safety flag for 2010/11 - the most prestigious award given to a mine with an excellent safety record
– ‘Train-the-Trainer’ (TTT) Zero Harm orientation programme rolled out across our Platinum operations to address the ‘hearts and minds’ aspect of effective leadership in safety
OWNERSHIP AND JOINT VENTURESANGLO AMERICAN EMPOWERMENT TRANSACTIONSAnglo American has completed all necessary Business Unit Transaction Empowerment partners
Thermal Coal- Anglo American Inyosi Coal
26% of current and future production
Pamodzi, Women’s Development Bank, Lithemba, workforce, communities and Eyesizwe Coal
g p yempowerment transactions
• c.R60bn in BEE transactions concluded since 1994 across all business units
• Significant facilitation provided y
Iron Ore and Manganese- Kumba Iron Ore- Samancor
26% of equity Exxaro, Ntsimbintle, Ncab, Iziko, workforce, communities
PlatinumAnglo Platinum
Greater than 26% of production
Mvelaphanda, Anooraq, Royal Bafokeng ARM workforce
• Broad-based participation ensured: strategic shareholders, communities, employees
- Anglo Platinum of production Bafokeng, ARM, workforce, communities
Other Mining and Industrial- Scaw Metals
Black Mountain
26% of equity Exxaro, Izingwe Holdings, Shanduka Resources, Southern Palace Holdings, workforce, communities
All group company employees are ESOP participants
Community participation has been a key - Black Mountain- Gamsberg
communities
Diamonds- De Beers
26% of equity Ponahalo (inc. communities), workforce
Anglo American’s empowerment transactions have led to the
focus• Direct participation of communities affected
by mining operations in the benefits they generate g
creation of flagship black-owned mining companies e.g. ExxaroResources, African Rainbow Minerals and Shanduka Resources.
• Transactions aimed at sustainable, long term economic uplift of mining areas
72Original Mining Charter
H i
A COMPREHENSIVE AND FAR-REACHING APPROACH TO TRANSFORMATION
Housing• In 2010 Anglo American provided 17,286 employees with company accommodation as part of a c.R2.5bn
($300m) programme, in partnership with government, providing 20,000 houses are being constructed to 120,000 people in the Limpopo and North West provinces
BEE E l t E it d T f tiBEE procurement spend (Rbn)
30BEE, Employment Equity and Transformation• Largest private sector employer in the country –
c. 70,500 full-time employees and c. 21,000 contractors employed (as of December 2010)
• Created rigorous safety culture and hence 9
12.3
17.3
24.623.5
20.9
15
20
25
30
• c 47% of Anglo American employees at management level in South Africa are HDSA
positively impacted the mining industry • Group BEE spend grew from c. R1.1bn
(US$133m) in 2000 to c.R21bn (US$2.4bn) in 2010, representing c.44% of total spend
1.1 1.11.5 2.4
3.6
5.8
9
0
5
10
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
c.47% of Anglo American employees at management level in South Africa are HDSA• Women now make up c.13% of South African employees, exceeding the 10% Mining Charter target
– c.19% of management positions held by women– Increasing number of women in core mining jobs – 5,282 in 2010, representing 11% of the total mining
workforce
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Enterprise development• Anglo American Zimele has a 20-year track record in supporting and developing black entrepreneurs, and as at
December 2010 has invested invested c. R482 ($54m), to date, in 637 businesses, creating over 15,000 employment opportunities
Social Investment
A RESPONSIBLE CORPORATE CITIZEN...
An acknowledged leader in corporate social spend in South Africa• Total Corporate Social Investment spend in South Africa reached c.$65.9m in 2010 – over 60% of global spend,
and an increase from c. R512m (US$54m) in 2009, through the Anglo American Chairman’s Fund and other delivery vehicles such as the Epoch scheme and the Optima Trust, with c. 73% of spend directly contributing to our social and labour commitments towards local economic development in the communities around our operations
$– Platinum – c. R119m (US$16m), 1.2% of NOPAT– Thermal Coal – c. R98m (US$13m), 1.5% of NOPAT– Kumba Iron Ore – c. R134m (US$19m), 1.5% of NOPAT
• In addition, Anglo American is renewing its commitment to local communities through direct social investment linked to mine social and labour plans
c R14 5m spent around Sishen in the Northern Cape on 9 mobile health units to assist the provincial Department– c. R14.5m spent around Sishen in the Northern Cape on 9 mobile health units to assist the provincial Department of Health to render a quality and frequent primary and secondary health care service in the rural communities in the Joe Morolong Municipal Area
– c. R14.5m spent upgrading primary healthcare facilities in various communities around our Platinum mines in the Limpopo province (Twickenham, Rustenburg and Mogalakwena areas)
Addressing key environmental concerns• Award-winning eMalahleni water reclamation plant currently purifies 25 megalitres of water per day in the Witbank
area, supplying c. 80 000 people – the plant will soon enter its second phase, doubling capacity to 50 megalitres per day (the project, already internationally recognised, has recently been selected as the winner of the 'best community project in Africa' category of the Asia Mining Global Sustainability Awards)
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p j g y g y )• During 2010, Anglo American recycled 53 megalitres of water, including a 60% reduction in potable water achieved
by Bafokeng Rasimone platinum mine through innovative water re-usage• Through the Platinum Eastern Limb bulk water supply project we have developed a long term strategy in
partnership with governments, other mining companies and key stakeholders to provide 1.9 million people access to clean water through the Lebolelo Water Scheme, Flag-Boshilo and De Hoop Dam construction works
Projects of National importance being evaluated
A RESPONSIBLE CORPORATE CITIZEN (ctd)j p g
• Primary health care initiatives in the Eastern Cape in partnership with Provincial Government, communities and other NGO’s – Bhubezi Community Health Centre in Bushbuckridge, Mpumalanga (established by Anglo American’s Thermal
Coal business in 2007 in conjunction with Virgin Unite, US AID/ PEPFAR, and Ndlovu Care Group), providing ART to over 3,000 local community members – the project won the Frontline Heroes for Health award and received their award from Cynthia Carroll and Richard Branson in New York in June 2011
– Ulysses Gogi Modise Clinic in Kathu, Northern Cape (established by Kumba Iron Ore), providing ART to over 900 affected local community members
– Anglo American’s Platinum business is developing a business plan with the Eastern Cape Department of Health Partnership to revitalise primary healthcare services in four sub-districts of that province.
• Provision of integrated development programmes in the labour sending areas• Provision of integrated development programmes in the labour sending areas• Capacity building in selected municipalities in the provinces where we operate and major labour sending areas, in
partnership with the Development Bank of South Africa• Evaluating the feasibility of low-cost solar water-heating for low-income households• All of Anglo American’s South African operations achieved 100% compliance with the Anglo American Social Way,
including compliance with International Finance Corporation compliance standards on community resettlementincluding compliance with International Finance Corporation compliance standards on community resettlement, interactions with indigenous people and accommodating cultural heritage.
Post-graduate diplomas• Anglo American has supported the development of a new post-graduate diploma in Strategic Stakeholder
Engagement Practice (SSEP) at the University of Cape Town (UCT) Graduate School of Business in 2009
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g g ( ) y p ( )– One of only two university courses to address community engagement and development in the mining industry
(the other is at University of Queensland)– From 2011 Anglo American will support the participation of traditional leaders on the programme in
partnership with the South African government
AN EMPLOYER OF CHOICE TO ~91 000 EMPLOYEES IN SOUTH AFRICA
Local workforce developmentSkills development is an integral part of the group’s human resource process• In South Africa, where currently almost two thirds of our global workforce is located (c. 64% in 2010, including
contractors), training and development remains a key focus area, accounting for c. 5% spend of total employee costs– c.R810m (US$111m) spent on employee training initiatives, bursaries, ABET, management programmes
and re-training in South Africa from core businesses alone – up 26% in Rand terms from 2009 (approximately c.R530m or US$63m) despite headcount reduction [Target = 3% of NOPAT]– Platinum – c. R441m (US$60m), 4.3% of total BU payroll– Thermal Coal – c. R202m (US$28m), 8.2% of total BU payroll
K b I O R167 (US$23 6 8% f t t l BU ll– Kumba Iron Ore – c. R167m (US$23m, 6.8% of total BU payroll• c.3 600 employees, contractors and community members currently enrolled in ABET programmes• c.2,500 employees received portable skills training to be employable outside the mining industry in South Africa
HIV/AIDSHIV/AIDSDemonstrable leadership in the fight against HIV/AIDS:• c.94% of the group’s South African employees have participated in voluntary counseling and testing programmes,
representing >100,000 employees and contractors in 2010 (up from 82% in 2009)• 3,965 employees on Anglo American’s ARV treatment programme• c 59% of all HIV positive employees at our Southern African operations participating in HIV disease management
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c.59% of all HIV positive employees at our Southern African operations participating in HIV disease management programmes (up from 51% in 2009)
• Offer for free ART treatment extended to employees’ families since 2008 – a milestone development for the industry
Eskom both a key supplier and customer
A PARTNER OF CHOICEy pp
• Anglo American is one of the largest Eskom clients with c.R3.1bn (c. US$423m) spend in 2010 • Anglo American Thermal Coal Coal continues to be a major supplier to Eskom, supplying 32Mtpa coal to Eskom
(c.30% of Eskom’s coal requirements in 2010 and in 2009)• In September 2008 Anglo American signed an MOU with Eskom to conceptualise and implement energy efficiency
programmes and promote skills development• In May 2008 Anglo American seconded Kumba CEO Ras Myburgh to Eskom to assist the utility in solving its coal
procurement problems• Participate in the Task team with the Department of Energy
Long-standing relationship with Transnet supporting South Africa’s infrastructure development G i j f th T t’ il d t i f t t ith $560 ( R4 1b ) d• Group companies are major users of the Transnet’s railway and port infrastructure with c.$560m (c.R4.1bn) spend in 2009
PIC and IDC are key shareholders• The PIC holds c.5.46% in Anglo American, c.5.5% in Anglo Platinum and c.3.8% in Kumba Iron Ore – investments
carrying a combined value of c R33bn (c US$4 5bn)carrying a combined value of c.R33bn (c. US$4.5bn)• The IDC holds c.12.95% in Kumba Iron Ore, currently valued at c.R14.6bn (c. US$2.0bn)
BEE partners are important stakeholders• Transactions aimed at sustainable mutual value creation
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Communities benefit from upliftment programmes• Community engagement and development seen as a key element of the group’s contribution to South Africa
An active and long standing participant in a multitude of key industry forums at CEO/Executive level
A NATIONAL THOUGHT LEADER
An active and long-standing participant in a multitude of key industry forums at CEO/Executive level
• Chamber of Mines• Energy Intensive Users Group and support for IRP task team• Business Leadership South Africa• Business Unity South Africa• Business Unity South Africa• Business Against Crime South Africa • Industry alignment Forum• UN Global Impact• Extractive Industries Transparency Initiative• Global Reporting InitiativeGlobal Reporting Initiative • Voluntary Principles on Security and Human Rights • Investment Climate Facility for Africa
A key contributor to innovation and national policy transformation
• Working alongside government, unions and peers in developing a strategy for the sustainable growth and meaningful transformation of South Africa’s mining sector through senior representation in the Mining Industry Growth, Development and Employment Task Team (MIGDETT)
• Working alongside government, unions and peers in improving safety in South Africa’s mining industry through the establishment of the Tripartite safety initiative
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the establishment of the Tripartite safety initiative