KUMBA IRON ORE LIMITED - Sishen Western Expansion Project

Sishen Western Expansion Project

Kumba Iron Ore Limited
A member of the Anglo American plc group
(Incorporated in the Republic of South Africa)
Registration number 2005/015852/06
JSE Share code: KIO
ISIN: ZAE000085346
("Kumba")

SISHEN WESTERN EXPANSION PROJECT

Shareholders have previously been advised that the Sishen Western Expansion
Project (“SWEP”) is designed to extend the anticipated Life of Mine at the
Sishen Mine. Significant progress has been made in the progression of this
project. Project development remains within budget, and construction
activities have been completed.

A major milestone in the development of the project was the relocation of
the Transnet railway line from its previous position to the west of the
current Sishen pit, to the far western extent of the SIOC property. The
properties on which the railway line was situated are 30m wide, and
traverse approximately 14km over the Sishen mine area in a north to south
direction, immediately adjacent to the current Sishen pit. As part of a
sequenced programme to progress the SWEP project, agreements have been
concluded with Transnet in terms of which Sishen Iron Ore Company (Pty) Ltd
(“SIOC”) would be granted ownership of the surface rights over the
properties where the railway line used to run (“the Rail properties”), and
in turn SIOC would grant surface right ownership to Transnet for the
properties where the new railway line would be established. Registration of
the ownership rights to reflect this transaction is currently pending at
the Deeds Registry. The relocation of the railway line was completed in May
2013.

As a consequence of Transnet having previously held the surface rights over
the Rail properties, the Rail properties are excluded from the Sishen
Mining Right area.

SIOC has applied to the Department of Mineral Resources (“DMR”) to obtain
the necessary rights in relation to the Rail properties.

The 2013 mining schedule does not contemplate any mining activities over
the Rail properties, but it is currently contemplated that these areas
would be affected by pre-stripping from 2014.

The status of the application for the Mining Rights does not, at this time,
require an adjustment of SIOC’s total reserve base for the Sishen mine of
918.9Mt as at 31 December 2012, as SIOC is confident that there is a
reasonable expectation of these rights being granted by the DMR. However,
while the Ore Reserves in the Rail properties are not considered materially
significant, constituting approximately 3.3% of the Ore Reserve, should the
applications be unsuccessful, the expansion of the Sishen pit in a westerly
direction may be materially affected by virtue of the fact that in the
medium and long term SIOC would potentially not be able to access
approximately 33% of the Sishen reserve currently included in SIOC’s Life
of Mine.

The current Ore Reserve classification in the area affected by the
applications may require adjustment in the 2013 Resource and Reserve
statement to reflect the adjusted confidence level associated with the
exploitation of these reserves. Should the matter not be resolved at the
time of reporting on SIOC’s reserves in relation to Kumba’s financial year
which ends on 31 December 2013, the Company will conduct a detailed
assessment to determine whether to restate the Ore Reserve classification.

SIOC will engage actively with the DMR to ensure the expeditious resolution
of this matter.

Shareholders will be informed of any further material developments in this
regard.

Pretoria
15 October 2013
For further information please contact:

Investor/Analyst queries:
Esha Mansingh
Investor Relations
Kumba Iron Ore Limited
Tel: (012) 683 7257

Media queries
Yvonne Mfolo
Public Affairs
Kumba Iron Ore Limited
Tel: (012) 683 7074

Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)

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