ANGLO AMERICAN PLC - Anglo American Platinum taking action to create a sustainable, competitive and profitable platinum business

Anglo American Platinum taking action to create a sustainable, competitive and profitable platinum business

Anglo American plc (“the Company”)

Incorporated in the United Kingdom (Registration number: 3564138)

Short name: Anglo

Share code: AGL

ISIN number: GB00B1XZS820



15 January 2013



Anglo American Platinum taking action to create a sustainable, competitive and
profitable platinum business


Anglo American plc (“Anglo American”) notes today’s announcement by Anglo American
Platinum Limited (“Anglo American Platinum” or “the Company”), its 79.8% owned subsidiary.
Anglo American supports Anglo American Platinum’s conclusions of the review of its business,
announced in February 2012, and endorses the clearly defined proposed strategy to create a
sustainable, competitive and profitable platinum business for the long term benefit of all its
stakeholders.

Cynthia Carroll, Chief Executive of Anglo American and Chairman of Anglo American Platinum,
said “Anglo American Platinum has concluded its thorough business review in the context of
the Company’s revised demand growth expectations and the many structural changes that
have affected the profitability of the platinum business in recent years. In that context, Anglo
American Platinum has identified the optimal mining configuration and the appropriate
processing footprint, overhead structure and commercial strategy to improve profitability and
drive greater performance. The objective has been clear from the outset – to create a
sustainable business by facing the tough and necessary decisions for the benefit of all its many
and varied stakeholders.

“Anglo American recognises the potential impact of these proposals on our people and their
communities. We have designed a comprehensive social plan to ensure we make a positive
difference in the Rustenburg and labour sending areas, creating at least the same number of
new jobs as may be affected as part of the restructuring. A stable and competitive Anglo
American Platinum will be on a sure footing to continue substantial investment in South Africa
for the long term, enabling more secure employment for its 45,000 employees and delivering
more sustainable returns.”

The full text of the Anglo American Platinum announcement is set out below:

Anglo American Platinum takes action to create a sustainable, competitive and
profitable platinum business

Anglo American Platinum Limited (“Anglo American Platinum” or “the Company”) has
concluded the review of its business, announced in February 2012, to create a sustainable,
competitive and profitable platinum business for the long-term benefit of all its stakeholders.

As a result of the review, Anglo American Platinum proposes to:
    •   reconfigure its Rustenburg operations into three mines, with aligned processing
        operations
    •   divest the Union mines at the right time – to maximise value under different ownership
    •   deliver R3.8 billion of annual benefits by 2015, through efficiency and cost reduction
        initiatives, including annual savings of R390 million from optimising its overhead
        structure
    •   provide a comprehensive package of support to its employees and communities in
        Rustenburg and the labour-sending areas
    •   create at least 14,000 new jobs to balance the number of jobs that may be affected by
        the restructuring

The Company’s review of its business is in response to its revised expectations for platinum
demand growth and a number of structural changes that have eroded profitability in recent
years, including capital intensity, mine depths, ore grades, higher-than-inflation unit cost
increases, jewellery demand elasticity and increasing secondary supply of platinum. Anglo
American Platinum has previously stated that a number of its mines have been under
considerable economic pressure for some time. The continued operation of unprofitable shafts
within the current configuration, and in light of the Company’s revised demand and cost
expectations, is not sustainable.

Anglo American Platinum therefore proposes to reconfigure its Rustenburg operations into a
sustainable 320-350,000oz platinum producer across three operating mines. Four
unsustainable, high-cost shafts, namely Khuseleka 1 and 2 and Khomanani 1 and 2, will be put
on long-term care and maintenance. As a result the production profile will be reduced by
approximately 400,000oz per annum with a baseline production target of 2.1 – 2.3 million oz
per annum.

The Rustenburg processing operations will also be reconfigured to align with the revised mining
footprint, which may include closing the Waterval UG2 Concentrator and No. 2 Smelting
Furnace.

Anglo American Platinum believes that the Union mines (“Union”) are likely to be of greater
value under different ownership, particularly in comparison to the other attractive growth
options in the Company’s portfolio, and it therefore proposes to divest Union at the right time. In
the interim, it is proposed that Union be reconfigured to protect near-term value, by stopping
mining activities at the Union North Declines, combining Union North and South Shafts into one
operation and putting the Mortimer Merensky concentrator on long-term care and maintenance.
The restructuring of joint venture operations has also been reviewed in order to optimise long-
term profitability and competitiveness. This may include rationalisation of farm boundaries to
optimise life-of-mine extensions and other commercial considerations.

Prevailing and forecast market conditions necessitate cash preservation and the optimal
allocation of capital. The proposed restructuring of the operations will ensure more effective
capital allocation towards the Company’s mines that are best placed to sustain and create
employment over the long term. The Company proposes to reduce its planned capital
expansion expenditure over the next 10 years by approximately 25% to R100 billion to focus
investment on low-cost, high-margin projects.

In line with the proposed changes to Anglo American Platinum’s mining and processing
operations footprint, the Company proposes to deliver R3.8 billion of annual benefits by 2015
through cost reduction and efficiency improvements, including savings of R390 million to be
achieved through a redesign of the Company’s overhead structure.

As a result of the proposed changes to the business, a total of up to 14,000 jobs may be
affected, 13,000 of which will be in the Rustenburg area.
Anglo American Platinum will continue to take its social responsibilities seriously, particularly to
its employees and surrounding communities, and proposes to provide a comprehensive
package of support to any affected employees and communities. In particular, the Company will
target the creation of at least 14,000 jobs - an equivalent number of jobs to those that may be
affected by the restructuring. The job creation initiatives will focus on housing, infrastructure
and small business development in Rustenburg and the labour-sending areas.

Chris Griffith, CEO of Anglo American Platinum, says:

“The platinum business has attractive underlying fundamentals, but we are facing tough
decisions to restore profitability to our operations. We must evolve to align the business with
our expectations of the platinum market’s long-term dynamics and address the structural
changes that have eroded profitability over time. We have reviewed our business across the
entire value chain, building upon the steps taken to improve operational performance in recent
years, and will be consulting extensively with our stakeholders in relation to our proposed
changes.

“We have designed a comprehensive social plan to ensure that we can compensate for any
necessary labour restructuring and make a positive difference through job creation. By creating
a sustainable, competitive and profitable business, we will be in a stronger position to continue
substantial investment, provide more secure and stable employment, and to benefit our
customers, suppliers, shareholders – which include more than one million beneficiaries in our
local communities and key labour sending areas via our Alchemy community share ownership
programme and some 48,000 employees in our Kotula employee share scheme – and the
South African economy as a whole.”

For further information, please contact:

Media                                                      Investors
UK                                                         UK
James Wyatt-Tilby                                          Leng Lau
Tel: +44 (0)20 7968 8759                                   Tel: +44 (0)20 7968 8540

Emily Blyth                                                Caroline Crampton
Tel: +44 (0)20 7968 8481                                   Tel: +44 (0)20 7968 2192

South Africa                                               Sarah McNally
Pranill Ramchander                                         Tel: +44 (0)20 7968 8747
Tel: +27 (0)11 638 2592

Anglo American is one of the world’s largest mining companies, is headquartered in the UK and
listed on the London and Johannesburg stock exchanges. Anglo American’s portfolio of mining
businesses spans bulk commodities – iron ore and manganese, metallurgical coal and thermal
coal; base metals – copper and nickel; and precious metals and minerals – in which it is a
global leader in both platinum and diamonds. Anglo American is committed to the highest
standards of safety and responsibility across all its businesses and geographies and to making
a sustainable difference in the development of the communities around its operations. The
company’s mining operations, extensive pipeline of growth projects and exploration activities
span southern Africa, South America, Australia, North America, Asia and Europe.
www.angloamerican.com

Further information about the Anglo American Platinum review is available at
www.angloamerican.com/platinumreview


Sponsor: UBS South Africa

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