PALABORA MINING COMPANY LIMITED - Further details about The Rio Tinto Group (Rio Tinto) And Anglo American Plc (Anglo American) binding agreement

Further details about The Rio Tinto Group (“Rio Tinto”) And Anglo American Plc (“Anglo American”) binding agreement

PALABORA MINING COMPANY LIMITED
(Incorporated in the Republic of South Africa)
Registration number – 1956/002134/06
JSE Code: PAM ISIN: ZAE000005245
(“Palabora” or “the Company”)

FURTHER DETAILS ABOUT THE RIO TINTO GROUP (“RIO TINTO”) AND ANGLO AMERICAN PLC
(“ANGLO AMERICAN”) BINDING AGREEMENT TO SELL THEIR SHAREHOLDINGS IN PALABORA
AND RENEWAL OF CAUTIONARY ANNOUNCEMENT

Palabora shareholders are referred to the announcement published on SENS on 11 December
2012, regarding Rio Tinto and Anglo American’s entry into a binding agreement to sell their
respective effective shareholdings in Palabora (“Agreement”) to a consortium comprising of
South African and Chinese entities led by the Industrial Development Corporation of South
Africa Limited ("IDC") and by the Hebei Iron & Steel Group Co. Ltd.

Subsequent to that announcement, Shareholders are advised of the following further
information relating to the Agreement provided to Palabora by Rio Tinto and Anglo American:

The completion of the sale of Rio Tinto's and Anglo American’s respective effective
shareholdings in Palabora is conditional on the occurrence of the following by 30 June 2013
(which date can be extended by mutual consent of the parties to the Agreement):

    •   South African regulatory approvals being obtained:
           o approval from the relevant competition authorities; and
           o approval from the exchange control authorities, to the extent necessary;

    •   PMC’s broad-based black economic empowerment transaction becoming unconditional;

    •   Approvals being obtained from the following Chinese governmental agencies:
           o SASAC – the State-owned Assets Supervision and Administration Commission;
           o NDRC – the National Development and Reform Commission;
           o MOFCOM – the Ministry of Commerce; and
           o SAFE – the State Administration of Foreign Exchange;

    •   Anti-trust (competition law) regulatory approvals being obtained in any jurisdiction
        where such approval is mandatory;

    •   A material deterioration (other than as a result of force majeure) in PMC’s operational
        and financial performance not having occurred and not being remedied. For these
        purposes, a material deterioration is limited to a production shortfall of at least 30%
        and/or Palabora's cash balances being reduced below an agreed, variable threshold,
        which threshold takes into account anticipated sums for operating and capital
        expenditure, and includes a buffer for contingencies;

    •   No superior proposal for the acquisition of Rio Tinto’s and Anglo American’s effective
        shareholdings in Palabora having been received by Rio Tinto or Anglo American within
       90 days after the entry into of the Agreement. The purchasers under the Agreement
       have a right to match any such superior proposal within a limited timeframe; and

   •   The entry into of a Magnetite Off-Take Framework Agreement between Palabora and
       the IDC for the sale by PMC to the IDC, on a long-term basis, of an agreed quantity of
       beneficiated magnetite should the IDC’s steel manufacturing project become
       operational.

As previously communicated, the fulfilment of these conditions is expected by Rio Tinto and
Anglo American to take between 4 to 6 months.

As also previously communicated, the purchasers must extend an offer in terms of South African
Takeover Regulations ("Mandatory Offer") to all remaining shareholders in Palabora upon the
sale of Rio Tinto’s and Anglo American’s interests completing (“Closing”). Any offer to minority
shareholders of Palabora is therefore conditional on the completion of the sale of Rio Tinto and
Anglo American’s shareholdings in Palabora.

Pursuant to such Mandatory Offer, and subject to and in accordance with the Takeover
Regulations, minority shareholders would be offered ZAR 110 per share of Palabora, plus an
escalation of 5% over the period from 1 July 2012 (which escalation is conditional on Palabora
maintaining a threshold financial performance up until Closing). Should Palabora pay any
dividend prior to Closing, the per share consideration payable to shareholders under the
Mandatory Offer will be reduced by an amount equal to the per share amount of such
dividend/s.

The Agreement also regulates (as between the sellers and purchasers thereunder, and to which
PMC is not a party) various other matters, including the interim conduct of Palabora pending
Closing and transitional arrangements in respect of the services currently provided to Palabora
by Rio Tinto, which transitional arrangements are aimed at ensuring an efficient and safe
operational transition in Palabora following Closing. Details of such further provisions, as
appropriate, will be included in the circular to Palabora shareholders in relation to the
Mandatory Offer in due course.

Accordingly, shareholders of Palabora are advised to continue exercising caution when dealing
in the Company’s securities until a further announcement is made.

Phalaborwa
28 December 2012

Sponsor
One Capital

Date: 28/12/2012 10:29:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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