KUMBA IRON ORE LIMITED - Operational Update

Operational Update

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" or the “Company”)

Kumba Operational Update

Sishen Mine Reconfiguration
Shareholders are advised that the deteriorating price environment has necessitated a further optimisation
of the Sishen mine plan that was set out at the Group’s interim results on 21 July 2015. Kumba has
decided to reconfigure the Sishen pit to a lower cost shell configuration in order to optimise margins. This
is in line with the Company’s strategy to focus on value (cash generation) over volume, thereby
safeguarding the mine’s viability at lower prices.

“Our industry is under tremendous pressure with the market now pricing in a more muted trend for the
iron ore price over the medium to longer term. This is driven mainly by the expectation that supply growth
will remain strong, against the backdrop of an ever more cautious outlook on China’s economic growth
trajectory. These circumstances have reinforced the need to make tough decisions for our business, that
will enable it to withstand a longer period of much lower prices,” said CEO Norman Mbazima.

The new pit shell configuration will allow for a more flexible approach, reduce execution risk and lower
capital cost over the life of mine. The mine will target FOB unit costs of ~$30/t and a breakeven price of
~$40/t CFR for 2016. Waste movement is expected to be materially below previous guidance of ~230mt,
at ~135 Mt and production is expected to be reduced from previous guidance of 36 Mt for 2016 to ~26 Mt.

Kolomela continues to perform strongly
In order to reduce costs, Kolomela has been transitioned from three pits to two in the short to medium
term. The mine is targeting a 2016 FOB unit cost of ~US$27/t and a breakeven price of ~$38/t CFR for
2016. The production target remains at 13Mt by 2017.

Thabazimbi closure on track
The Thabazimbi mine closure is progressing according to plan with the processing of previously mined
material continuing until 1H2016.

Norman Mbazima emphasised, “Our first priority remains safety as we start to implement our plan to
continue delivering improvements in performance and cost competitiveness. Attention remains focused
on taking every step possible to ensure that we maintain positive cash generation to see this cycle
through.”

Further details will be provided at the Anglo American investor presentation this morning in London. The
presentation will begin at 11.00am CAT and end at approximately 1.00pm CAT, and will be webcast live
via the Anglo American website [www.angloamerican.com]. The presentation slides will be available on
Kumba's website [www.angloamericankumba.com] from 11.00am CAT today.

A further operational update will be given at the Company’s 2015 annual results presentation on 9
February 2016.

This announcement contains forward-looking statements and is subject to a number of risks and
uncertainties, many of which are beyond Kumba's control and all of which are based on the Company's
current beliefs and expectations about future events. The operational and financial forecasts provided in
this announcement are estimates and have not been reviewed and reported on by the Company's
external auditors.

Centurion
8 December 2015


For further information, please contact:

Media                                                   Investors
Nikki Wetzlar                                           Nerina Bodasing
Tel: +27 (0)12 683 7019                                 Tel: +27 (0)12 622 8324
Mobile: +27 (0) 82 561 7407                             Mobile: +27 (0) 82 940 7505


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

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