Investing in world class assets
the most attractive commodities

We own, operate and grow world class mining assets in those commodities that we believe deliver the best returns through the economic cycle and over the long term.

Delivering real value to our stakeholders

At the Minas-Rio project in Brazil, contractors work on the pipeline that will ultimately transport iron ore 529 kilometres from the mine in Minas Gerais to the purpose-built port being constructed at Açu in Rio de Janeiro state.

Investing - in world class assets in the most attractive commodities

A unique and balanced portfolio

In order to realise its ambition of being the investment of choice, Anglo American has a clear strategy of deploying capital in those commodities that deliver superior, long term, through-the-cycle returns for its shareholders.

We aim to focus on those commodities in which we have advantaged positions and on large scale assets with long lives, low cost profiles and with clear expansion potential, that is: copper, diamonds, iron ore, metallurgical coal, nickel, platinum, and thermal coal.

World class near term growth pipeline

The development of our four key near term strategic growth projects (Barro Alto, Los Bronces, Kolomela and Minas-Rio) is progressing well, with the first production of nickel from the Barro Alto project on schedule for March 2011. The four projects are well placed on their respective industry cost curves, have long lives, and are on track to enter production from 2011 onwards, in what is expected to be a growing commodity demand environment.

New capital investment

Anglo American’s pipeline of projects spans its core commodities and is expected to deliver organic production growth of 50% by 2015. Our $70 billion pipeline of more than 60 projects has the potential to double the production of the Group over the next decade.

The Los Bronces copper expansion project in Chile is on schedule for first production in the fourth quarter of 2011. Production at Los Bronces is scheduled to increase to 490 ktpa over the first three years of full production following project completion and to average 400 ktpa over the first 10 years. At peak production levels, Los Bronces is expected to be the fifth largest producing copper mine in the world, with highly attractive cash operating costs and reserves and resources that support a mine life of over 30 years, with further expansion potential. Also within the Los Bronces district, work continues on the exploration tunnel being constructed. This tunnel will provide underground drilling access to explore and define the resources at the very significant and high quality new discovery at the Los Sulfatos discovery.

The Barro Alto nickel project in Brazil was 99% complete at the year end and is on schedule to deliver first production in March 2011. This project makes use of a proven technology and will produce an average of 36 ktpa of nickel in full production (41 ktpa over the first five years), with a competitive cost position.

The Minas-Rio iron ore project in Brazil has made significant progress and is expected to produce 26.5 Mtpa of iron ore in its first phase. The award of the second part of the mine, beneficiation plant and tailings dam installation licence (LI part 2) in December 2010 was the final primary installation licence and supports commencement of the civil works for the beneficiation plant and tailings dam construction; these works are expected to start in March 2011, after the rainy season. This licence followed the award of the mining permit in August. It should take between 27 and 30 months from commencement of these works to construct and commission the mine and plant, complete the project and deliver the first ore on ship; however, there are still a number of other licences and permits to be obtained during this period.

Anglo American also reached agreement on a fixed 25-year iron ore port tariff with its port partner, LLX SA, in relation to the LLX Minas-Rio (LLX MR) iron ore port facility at Açu. The iron ore volumes associated with the first phase of the project will be subject to a net port tariff of approximately $5.15 per tonne (in 2013 terms) after taking into account Anglo American’s shareholding in LLX MR ($7.10 per tonne gross). As part of the agreement to secure the long term tariff arrangements, Anglo American has agreed to fund a greater share of the development cost of the first phase of the port. This agreement is expected to result in additional capital expenditure attributable to Anglo American of approximately $525 million in relation to the port.

Studies for the expansion of the Minas-Rio project have continued during 2010 and the latest resource statement provides a total resource volume (Measured, Indicated and Inferred) of 5.3 billion tonnes, supporting the expansion of the project. The port tariff agreement also covers a long term tariff arrangement for all Anglo American’s iron ore volumes beyond the first phase of the Minas-Rio project. The level of the expansion tariff will be dependent upon the capital cost to expand the port to accommodate those additional volumes and that capital cost will be determined in due course.

Kumba Iron Ore’s Kolomela project in South Africa is well advanced and overall project progress reached 81% at 31 December 2010. The project remains on budget and on schedule to deliver initial production by the end of the first half of 2012, ramping up to full capacity in 2013. To date, 22.6 Mt of waste material has been moved, 18.6 Mt of it during 2010.

The Mogalakwena North project reached steady state during the third quarter of 2010 (annual steady state 2011) and through optimisation projects will continually produce 600 kt per month of ore.

Dishaba East Upper project implementation commenced in 2007 and is on schedule to reach steady state production of 100 kozpa of platinum by 2012.

The concentrator at the Unki project in Zimbabwe was formally commissioned during the fourth quarter of 2010. First production of refined metal from the mine is expected during the first quarter of 2011. At full capacity, Unki will supply 70 kozpa of refined platinum, a run rate expected to be reached in 2013.

Selected major projects

Completed in 2010

Sector Project Country Completion date   Capex $m(1) Production volume (2)
Platinum MC Plant Capacity Expansion – phase 1 South Africa Q2 2010   95 11 ktpa Waterval Converter Matte (WCM)
Mainstream inert grind projects South Africa Q3 2010   149 Improve process recoveries

Approved

Sector Project Country First production date Full production date Capex $m(1) Production volume (2)
Platinum Thembelani No. 2 Shaft South Africa 2008 2018 316 Replace 115 kozpa refined platinum (3)
Mogalakwena North South Africa 2007 2010 822 350-400 kozpa refined platinum
Twickenham South Africa 2015 2019 911 180 kozpa refined platinum
Unki Mine Zimbabwe 2010 2013 459 70 kozpa refined platinum
Khuseleka Ore Replacement South Africa 2007 2015 187 Replace 101 kozpa refined platinum
Base metals refinery expansion South Africa 2011 2013 360 11 ktpa nickel
Dishaba East Upper UG2 South Africa 2007 2012 219 100 kozpa refined platinum
Diamonds Jwaneng – Cut 8 Botswana 2010 2024 3,000(4) 100 million carats
Copper(5) Los Bronces expansion(6) Chile 2011 2012 2,500 200 ktpa copper(7)
Collahuasi phase 1 Chile 2011 2011 92 19 ktpa copper
Nickel Barro Alto Brazil 2011 2012 1,900 36 ktpa nickel
Iron Ore and Manganese Minas-Rio phase 1 Brazil 2013 2014 5,034 26.5 Mtpa iron ore pellet feed (wet basis)(8)
Kolomela (previously Sishen South) South Africa 2012 2013 1,062 9.0 Mtpa iron ore
Thermal Coal Zibulo (previously Zondagsfontein) South Africa 2009 2012 517 6.6 Mtpa thermal

Future unapproved

Metallurgical Coal took further steps to focus its business on high margin export products by progressing the Grosvenor and Drayton South feasibility studies. It is expected that a Board approval decision in relation to the development of the 4.3 Mtpa Grosvenor metallurgical coal project will be taken in the second quarter of 2012.

In South Africa, the $517 million Zibulo project is approaching completion, the opencast operation is at full production and the underground operation has four of eight production sections deployed. The washing plant, which is a 50:50 joint venture with BHP Billiton Energy Coal South Africa, is fully commissioned and is operating at 80% of planned monthly production. Completion of the man and materials shaft is expected to be in the second quarter of 2011. The feasibility study for the New Largo project started in 2010 and is expected to be completed in the first quarter of 2012.

Debswana commenced the $3 billion Cut-8 expansion project at Jwaneng mine during 2010. Cut-8 represents the largest ever mining investment in Botswana and is expected to extend the life of mine to at least 2025.

Sector Project Country First production date Full production date   Production volume (2)
Platinum Tumela No. 4 shaft South Africa 2020 2026   271 kozpa refined platinum
Copper(5) Quellaveco Peru 2015 2016   225 ktpa copper
Collahuasi expansion phase 2 Chile 2012 2012   20 ktpa copper(9)
Michiquillay Peru 2018 2019   155 ktpa copper(10)
Pebble US TBD TBD   175 ktpa copper
Nickel Jacaré phase 1 Brazil TBD TBD   34 ktpa nickel
Morro Sem Boné Brazil TBD TBD   32 ktpa nickel
Iron Ore and Manganese Sishen Expansion Project phase 1B South Africa 2011 2012   0.7 Mtpa iron ore
Sishen Expansion Project 2 South Africa 2015 2019   10.0 Mtpa iron ore
Sishen Concentrate South Africa 2015 2016   2.0 Mtpa iron ore
Minas-Rio expansion Brazil TBD TBD   TBD
Metallurgical Coal Grosvenor Australia 2013 2016   4.3 Mtpa metallurgical
Drayton South Australia 2015 2019   4.2 Mtpa thermal
Moranbah South) Australia 2016 2019   TBD
Thermal Coal Elders Project South Africa 2016 2020   12.8 Mtpa thermal
New Largo South Africa 2013 2016   15 Mtpa thermal
Cerrejón P500 P1 Colombia 2013 2015   8 Mtpa thermal
Cerrejón P500 P2 Colombia TBD TBD   10-20 Mtpa thermal
  • (1) Capital expenditure shown on 100% basis in nominal terms. Platinum projects reflect approved capital expenditure.
  • (2) Represents 100% of average incremental or replacement production, at full production, unless otherwise stated.
  • (3) Thembalani No. 2 Shaft is currently under review.
  • (4) Debswana will invest $500 million in capital expenditure. Project investment, including capital expenditure, is likely to total $3 billion over the next 15 years. Total carats exposed are over the life of the expansion.
  • (5) Pebble will produce molybdenum and gold by-products, Michiquillay will produce molybdenum, gold and silver by-products and other projects will produce molybdenum and silver by-products.
  • (6) The February 2010 earthquake in Chile impacted the rate of progress and ultimate capital cost of the Los Bronces expansion project. Remedial actions have ensured the project remains on schedule for first production in Q4 2011. The cost impact remains under review.
  • (7) Production represents average over first 10 years of the project. Production over the first three years of the project will average 278 ktpa.
  • (8) Capital expenditure, post-acquisition of Anglo American’s shareholding in Minas-Rio, includes 100% of the mine and pipeline, and an attributable share of the port, as modified by the agreement with LLX SA and LLX Minas- Rio.
  • (9) Further phased expansions have the potential to increase production to 1 Mtpa.
  • (10) Expansion potential to 300 ktpa.

Investing – in world class assets

Anglo American’s pipeline of projects will deliver organic production growth of 50% by 2015.

$1.6bn

attributable spend to date on the Minas-Rio project

4

key strategic growth projects

92km

of the 529 km pipeline installed to date

+50%

Organic production growth expected by 2015

$70bn

pipeline of projects