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ANGLO AMERICAN plc ANNUAL REVIEW 2006 Annual Review 2006 Anglo American – a global leader in mining Anglo American: Our diversiﬁ ed products are Delivering essential parts of modern life Anglo American is committed to operating in a proﬁ table, our strategic goals sustainable and responsible way

Contents

Highlights of 2006 01 Chairman’s statement 02 Chief executive’s statement 04

Delivering on our strategy 08 One of the strongest pipelines in the industry 10 Driving operational excellence 12 Anglo American plc 20 Carlton House Terrace London SW1Y 5AN Financial review 14 16 England Operating review Executive Board 21 Meeting our wider responsibilities 22 Telephone +44 (0)20 7968 8888 The Board 24 Fax +44 (0)20 7968 8500 Delivering on Registered number 3564138 our strategy Summary directors’ report 26 www.angloamerican.co.uk Consolidated income statement 27 Summary consolidated 1 p08 balance sheet 28 Throughout this review, ‘$’ and ‘dollar’ Summary consolidated denote United States dollars. 2004, 2005 28 One of the strongest cash fl ow statement and 2006 fi gures are presented under Summary remuneration report 29 IFRS. Figures for the years 2002 and growth pipelines in Independent auditors’ statement 32 2003 are presented under UK GAAP. Key fi nancial data 33 the industry The 2006 Annual Review, the 2006 2 p10 Annual Report and the Notice of Annual General Meeting, together with the The business – an overview 34 Driving operational 36 shareholder information booklet, are Shareholder information available on the corporate website: excellence www.angloamerican.co.uk 3 p12 ANGLO AMERICAN plc ANNUAL REVIEW 2006 Annual Review 2006 Anglo American – a global leader in mining Anglo American: Our diversifi ed products are Delivering essential parts of modern life Anglo American is committed to operating in a profi table, our strategic goals sustainable and responsible way

Contents

Highlights of 2006 01 Chairman’s statement 02 Chief executive’s statement 04

UNDERLYING EARNINGS OPERATING PROFIT EBITDA COST SAVINGS AND EFFICIENCIES $5.5 bn $9.8 bn $12.2 bn $583 m Record underlying earnings of Operating proﬁ t up 54% to $9.8 billion, Cash generation at a record level: Cost savings and efﬁ ciencies of $5.5 billion, a 46% increase over 2005. with record production levels at ongoing EBITDA of $12.2 billion, up $3.2 billion. $583 million. operations for platinum group metals, zinc, nickel, coal and diamonds.

UNDERLYING EARNINGS EBITDA

By business unit $m By region % US$m 4,792 4,785 7,031 8,959 12,197

• Platinum 1,265 • Americas 41 • Diamonds 227 • South Africa 35 • Base Metals 2,647 • Europe 11 • Ferrous Metals and Industries 583 • Rest of the world 13 • Coal 640 • Industrial Minerals 266 • 274 Paper and Packaging 02* 03* 04 05 06 • Gold 178

UNDERLYING EARNINGS PER SHARE DIVIDENDS PER SHARE 33 67 US$ 1.25 1.20 1.87 2.58 3.73 US cents 1536 15 39 19 51 28 62 33 75

• Special • Final • Interim

02* 03* 04 05 06 02 03 04 05 06

*UK GAAP Throughout this review unless otherwise stated, operating profi t includes share of associates’ operating profi t (before share of associates’ tax and fi nance charges) and is before special items and remeasurements. See footnote 1 to the key fi nancial data for the basis of the calculation of underlying earnings. See footnote 2 to the key fi nancial data for the defi nition of EBITDA.

Anglo American plc Annual Review 2006 | 01 ANGLO AMERICAN plc ANNUAL REVIEW 2006

CHAIRMAN’S STATEMENT ‘Another strong year for the Group with record proﬁ ts and laying the foundation for signiﬁ cant future growth.’

2006 was another strong year for Anglo American. The Group returned record proﬁ ts and laid the foundations for further growth. A number of major projects were initiated, adding to the strength of the pipeline and a $7.5 billion return of capital was announced in 2006, underlining the Group’s strong balance sheet

Progress was made in delivering Tony Trahar has made a on our strategy of becoming a pivotal contribution to Anglo more focused mining group. American’s growth and A number of the steps required development at a crucial time to complete the restructuring in its history. Over the last involve complex regulatory seven years he has presided issues but I am confi dent that over a major streamlining of the these will be successfully Group’s interests, including managed and substantive through a signifi cant programme further progress made by the of acquisitions and disposals. middle of 2007. Moreover, through some shrewd acquisitions, organic growth An important development opportunities and improved will be the appointment of cost control, shareholder Cynthia Carroll, who will succeed returns have been signifi cantly Tony Trahar as chief executive improved. He leaves the on 1 March 2007. The Board Company in good health and was seeking a candidate with poised for a new phase in its experience in a capital intensive development. The Board industry with long investment is grateful to him for his horizons. It identifi ed three contribution over many years that the intensive training drive signifi cantly during 2006 critical factors: a track record of with the Group. undertaken at all management amongst policy makers and operational excellence and of and supervisory levels during the public. Business must growing a global business; an The fi rst three quarters of 2006 the year to embed the Anglo play its part in driving more ability to give new momentum saw a signifi cant improvement Safety Way will yield results effi cient energy use and in the to our work in transforming the in our safety performance in 2007. Some 20 sites have adoption of new technologies. culture of the Group, within South but the record once again undertaken safety peer reviews. However, this involves Africa and beyond; and an ability deteriorated in the fi nal quarter. The lessons emerging from substantial long term investment to work well with governments Despite the strong focus on these will be acted upon across and greater certainty about the and other stakeholders. Cynthia safety during the year only the Group. post Kyoto policy framework is Carroll met these criteria a small improvement in the urgently needed. admirably. She was the number of fatalities was Perceptions of the need for unanimous choice of the Board achieved and much remains a more energetic response In the interim, Anglo American after a very rigorous process. to be done. The Board expects to climate change grew is continuing to improve its

02 | Anglo American plc Annual Review 2006 See also Meeting our wider responsibilities p22 Financial review p14 The business p34

At a glance • The Group achieved record proﬁ ts and laid the foundations for further growth

• Progress was made in delivering on our strategy of becoming a more focused mining group

• Cynthia Carroll appointed as successor to Tony Trahar

• Evolving strategies to combat climate change

– with major programmes in IN DETAIL South Africa and Chile – and Our performance implementation of our Socio- Economic Assessment Toolbox (SEAT) process, which has taken place at over 50 sites in 15 countries. Anglo American’s share price outperforms the FTSE 100 At an international level, we were during 2006 the fi rst private sector investor in the Investment Climate Anglo American vs FTSE 100 Facility for Africa, have played a 2006 (Indexed) leading role in the mining sector • Anglo American in the Extractive Industries • FTSE 100 130 Transparency Initiative and 120 participated in programmes 110 on business and development 100 through the International 90 Council on Mining & Metals and 31/12/05 31/12/06 the World Business Council for Sustainable Development. We see action to improve the Anglo American’s lost time and management of our impacts fatal injury frequency rates and to contribute to good governance as fundamental LTIFR and FIFR to our licence to operate and • LTIFR • FIFR access to resources. 2.5 0.04 2.0 Many commentators expect 0.03 1.5 to see some softening of 0.02 1.0 commodity prices, and 0.5 0.01 especially of base metals, in 0 0 2007 compared with the highs 00 01 0203 04 05 06 achieved in 2006. Nonetheless, prices are likely to continue to energy effi ciency with hundreds Australia’s diesel requirements be relatively high for the of site level initiatives. We have as well as a major investment immediate future, underpinned established two methane in carbon capture and storage. by demand from the BRIC capture and use projects in We are also participating in the economies and the anticipated ■ Australia which between them FutureGen project to achieve strength of the world economy. are achieving greenhouse gas near zero emissions power savings equivalent to removing generation from coal. 375,000 cars from the roads. Also in Australia, we are We have continued to work on pursuing the Monash Energy projects designed to improve project through a new joint our ability to contribute to venture with Shell. If it proves sustainable development. At feasible, Monash would produce a local level this involves, for Sir Mark Moody-Stuart a signifi cant amount of example, business development Chairman

Anglo American plc Annual Review 2006 | 03 ANGLO AMERICAN plc ANNUAL REVIEW 2006

CHIEF EXECUTIVE’S STATEMENT ‘We achieved operating proﬁ t of $9.8 billion, the highest ever recorded for Anglo American, on the back of increased production and higher commodity prices.’

2006 was an important year In addition, we were very pleased for Anglo American. We made to announce that Cynthia Carroll good progress in executing our will succeed me as chief executive restructuring initiatives to become on 1 March 2007. Cynthia brings a a more focused mining group. wealth of highly relevant We reported our strongest ever experience and an excellent operating results, announced a operational track record and is $7.5 billion capital return in 2006 ideally suited to take Anglo and a further $3 billion in 2007, American to the next phase of while also investing in signifi cant its development. growth opportunities and progressing our $6.9 billion of Record fi nancial results Tony Trahar projects across our portfolio. We achieved operating profi t Chief Executive for the year of $9.8 billion –

04 | Anglo American plc Annual Review 2006 See also Anglo American at a glance IFC Operating review p16 The business p34

During 2006 • Good progress was made in our restructuring initiatives to become a more focused mining group

• Strongest ever operating results

• A record $7.5 billion returned to our shareholders

• Signiﬁ cant investment in our project pipeline

our highest ever recorded – on Regarding Mondi, plans for a full The unbundling of Tongaat- development and are assessing a the back of increased production demerger are progressing. Hulett’s aluminium business to further $10 billion to $15 billion of and higher commodity prices. Approval in principle has been shareholders and simultaneous unapproved opportunities that will While cost pressures persist in received from the regulatory introduction of broad based BEE provide us with a profi table the sector, Anglo American authorities in South Africa for into both Tongaat-Hulett and growth platform over the next successfully continued to limit a Dual Listed Company Structure Hulett Aluminium will occur decade. the impact. Underlying earnings with primary listings in during the second quarter of were $5.5 billion with record Johannesburg and London. 2007. This will reduce Anglo Anglo Platinum expects refi ned EBITDA of $12.2 billion. The Arrangements are being fi nalised American’s interest in Tongaat- platinum production to be strong cash generation from our to enable a smooth and effi cient Hulett to 38% and in Hulett between 2.8 and 2.9 million operations, as well as proceeds transition to a fully independent Aluminium to 39%. ounces in 2007 in line with its from non-core disposals, resulted company. The senior long term growth target of 5% in 2006 in the announcement of management team is in place Tarmac’s strategic review, per annum. During 2006 the a $7.5 billion return of capital in and a new board of directors completed in early 2006, clearly company approved several major the form of share buybacks and is being established. The listing defi nes the scope of its business projects, including the $692 special dividends – one of the of Mondi is targeted for mid- as aggregates, together with million Potgietersrust Project, highest levels of capital return in 2007. three routes to market (asphalt, the $224 million Amandelbult the industry – in addition to concrete and concrete products) expansion and the $316 million $1.4 billion in ordinary dividends Good progress was made in and integration of cement where Paardekraal 2 shaft replacement paid in 2006 and a further restructuring our Ferrous Metals appropriate. The disposals project. These projects will $1.1 billion fi nal dividend and Industries business. In July announced in February 2006 contribute 456,000 platinum recommended in 2007. 2006, we disposed of the have been largely completed ounces to Anglo Platinum’s majority of our stake in Highveld and good progress is being production. The Townlands Ore Focus on core mining Steel, with Russia’s Evraz group made on delivering structural Replacement project, at a capital portfolio and Credit Suisse each acquiring operational improvements. cost of $139 million, was Our strategic focus is clear: 24.9% of Highveld’s share approved in February 2007. (1) to further focus the Group capital for an aggregate A profi table growth This will replace 70,000 ounces on its core mining portfolio consideration of $412 million. platform over the next of refi ned platinum per annum by and in the process simplify Evraz has an option to increase decade 2014 with production from new our structure and enhance its stake in Highveld, once During 2006, we made excellent Merensky and UG2 areas at the profi tability; regulatory approvals are progress in developing our pipeline Rustenburg Townlands shaft. (2) to deliver on our signifi cant received, entitling Evraz to of growth opportunities across $6.9 billion project pipeline; purchase our remaining 29.2% numerous territories. We currently Anglo Coal has one of the most and shareholding. On implementation have $6.9 billion of projects under extensive near term portfolios of (3) to return any excess capital of the option arrangement, the to our shareholders. aggregate amount that will have been realised by Anglo American IN DETAIL In 2006, we made signifi cant for its 79% interest in Highveld Anglo American’s fi nancial position progress restructuring our will be $678 million. portfolio. In April, we sold $1 billion worth of AngloGold In November 2006, we Operating profit US$m 2006 H2 production increase Ashanti, reducing our completed the restructuring • 2006 • Iron ore shareholding from 51% to 42%. of Kumba Resources with the • Gold • The decision to reduce and listings on the Johannesburg 5,269 Platinum • Copper 15% 15% ultimately exit our gold holding Stock Exchange of Kumba Iron v H1) (H2 % Increase 4,563 • Coal relates to the higher relative Ore as a pure-play iron ore valuations attributable to pure- company in which Anglo play gold companies, rather than American holds 64%, and 9% as part of a diversifi ed mining Exxaro, which became South group. We will continue to Africa’s largest black economic 5% explore all available options to empowered (BEE) natural 3% exit AngloGold Ashanti in an resources company. orderly manner. H1 H2

Anglo American plc Annual Review 2006 | 05 ANGLO AMERICAN plc ANNUAL REVIEW 2006

CHIEF EXECUTIVE’S STATEMENT

Left to right: Safety and Sustainable Development (S&SD) Committee chairman Dr Chris Fay, Tony Trahar and Dawson project construction manager Ken Grother during the visit of the S&SD Committee to Anglo Coal Australia’s Dawson project in April 2006

growth options in the coal In February 2007, Anglo Coal 26 year mine life. Construction Scaw produced a record industry and is currently announced the creation of Anglo of the Barro Alto facilities is operating profi t for the year developing four major projects Inyosi Coal, an empowered coal scheduled to begin in 2007, with of $160 million, up $39 million across three operating regions. company housing key current and production commencing in 2010 on 2005, driven by strong In Australia, work is continuing future domestic and export and ramping up to full capacity demand for its range of products on the $835 million Dawson focused coal operations. Anglo during 2011. In addition, Anglo and the acquisition of AltaSteel, project, which is planned to reach Coal has signed a Heads of Base Metals is continuing work a manufacturer of value added full production in 2007, Agreement with Inyosi, a newly on feasibility and debottlenecking steel products in Canada. producing 12.7 million tonnes formed broad based BEE studies at the two major Chilean per annum (Mtpa) for export company. Inyosi will acquire copper operations, Los Bronces Progress continues on De Beers’ markets. We also began 27% of Anglo Inyosi Coal, and Collahuasi, and a decision to Canadian projects at Snap Lake construction of the $516 million creating a company valued at proceed with these expansions is and Victor. Despite project Lake Lindsay greenfi eld project at $1 billion and incorporating expected in 2007. costs rising, owing to higher the German Creek mine which several key Anglo Coal assets; energy costs, technological will produce 3.7 Mtpa of namely Kriel Colliery (an Kumba Iron Ore is well advanced challenges and the impact metallurgical coal and 0.3 Mtpa existing mine) and the Elders, on the $754 million Sishen of the early closure of the of thermal coal by 2008, most Zondagsfontein, New Largo expansion project in South Africa’s winter road to the sites, both of it for the Pacifi c Rim markets. and Heidelberg projects. Northern Cape, with fi rst output developments remain on In South Africa, we started due in 2007 and full ramp up to track to open in the fi nal development of the Mafube mine Anglo Base Metals is currently 13 Mtpa targeted for 2009. This quarters of 2007 and 2008 following the granting of assessing a number of major will take Kumba Iron Ore to respectively. In 2006, De Beers prospecting rights, while the projects, which will drive 45 Mtpa of iron ore production, also approved two projects Isibonelo project, which supplies signifi cant production growth of which 36 Mtpa will be in South Africa: the re-opening 5 Mtpa to Sasol, reached full well into the next decade. In exported. Further brownfi eld and of the dormant Voorspoed production in 2006. In Colombia, December, we approved the greenfi eld projects offer the mine and the South African the fi rst phase of the expansion $1.2 billion Barro Alto project potential to increase Kumba Iron Sea Areas marine mining to 28 Mtpa at the Cerrejón mine in Brazil which will produce an Ore’s annual production to over project for a total capital reached completion and a second average of 36,000 tonnes of 70 Mtpa by 2015. Other iron expenditure of $315 million. expansion to 32 Mtpa is already nickel per year in the form of ore growth opportunities are under way. ferronickel over a minimum being pursued.

06 | Anglo American plc Annual Review 2006 MANAGEMENT FOCUS ‘Relatively strong Proﬁ le global growth will provide a supportive Anglo American’s incoming climate for commodities chief executive, Cynthia Carroll in the coming year.’

Safety EITI supports improved governance Cynthia Carroll joined the Anglo American plc Board The most signifi cant challenge in resource rich countries. on 15 January 2007 and will succeed Tony Trahar as remains our safety performance. chief executive on 1 March After several years of steady Outlook safety improvement, the last Global economic growth was quarter of 2006 was marred by a especially rapid in the fi rst half signifi cantly higher incidence of of 2006, with all the major fatal accidents. During the year, regions of the world growing 44 employees and contractors rapidly over this period. Commodity lost their lives. All loss of life at prices reacted positively to this the workplace is totally environment, with new highs unacceptable and we continue being recorded for a number of to strive through a variety of products. In the second half, measures for the elimination global growth began to moderate, of any loss of life and injury. particularly in the US. During 2006, we introduced a comprehensive new framework European markets are now of safety policies – the Anglo improving and emerging markets Safety Way – and guidelines generally, and China and India in which are based on the principles particular, are growing strongly. of achieving zero harm, of Continued growth in these Cynthia Carroll was formerly president Hallmarks of her fi ve year tenure as identifying key learnings from regions in 2007 is likely to and CEO of Alcan Primary Metal, the Alcan Primary Metal’s president and each incident and of using these largely offset weaker US growth largest division of Canadian aluminium CEO were her ability to reconfi gure to prevent repeat incidents and and thus the decline in global producer, Alcan. In that position she organisational structure and leadership of ensuring that there is uniform economic activity from the was responsible for all primary metal roles to create greater accountability adherence at site level to a set strong level achieved in 2006 facilities, power generation plants, R&D for decision making and execution of clear rules. should be fairly modest. The and technology development centres. throughout the business, as well as Group continues to progress its the implementation of a worldwide asset Sustainable development strong project pipeline and drive During her 18 years at Alcan, she optimisation strategy resulting in value In terms of sustainable its operational excellence to established a strong track record of creation of around $1 billion. development, Anglo American meet ongoing demand for its improving operational performance continues to be amongst the commodities. Relatively strong and realising and integrating synergies Throughout her career, she has shown leading companies in the global growth will provide across that group, particularly in regard a keen interest in engaging with local extractive sector, including a supportive climate for to newly acquired assets. communities in addressing through a big improvement in the commodities in the coming year. developmental and sustainability proportion of employees coming Cynthia substantially repositioned Alcan challenges in countries as diverse as forward for voluntary counselling I retire from Anglo American in in the aluminium industry, expanding Australia, Brazil, Cameroon, Canada, and testing for HIV/AIDS, the knowledge that the Group the company’s operations from being China and the US. She is strongly continued success in improving is today one of the largest and Canadian focused to a global company committed to improving safety in the our local development impacts strongest mining companies in operating in 20 countries, with 18,000 workplace and under her leadership through our Socio-Economic the world. Its people and assets employees. Following the takeover of Alcan Primary Metal achieved a major Assessment Toolbox (SEAT) are second to none and I have French aluminium producer Pechiney by reduction in lost time accidents. process and through our position every confi dence that my Alcan, she led the successful integration as the fi rst private sector investor successor, Cynthia Carroll, of Pechiney’s primary metals business, Cynthia, who is 50, is married and has to commit to fund the Investment will continue to serve all our while simultaneously reducing costs. four children. She is a US citizen who Climate Facility for Africa. We stakeholders in a successful Alcan Primary Metal is now achieving its has an MSc in Geology from the have continued to be actively and profi table way. highest ever returns, profi tability and University of Kansas and an MBA from involved in the development and growth. Today, Alcan holds the largest Harvard. Cynthia began her career in promotion of the Extractive I would like to thank the share of capacity at the lowest end of 1982 in the US as a senior petroleum Industries Transparency Initiative Board of directors, management the aluminium industry’s cost curve. geologist with Amoco and from 1988 (EITI), including through and all employees for their until the end of 2006 held various representing the mining sector support during my tenure as positions in Alcan, working in the US, ■ on the EITI’s governing body. The chief executive. Ireland and Canada.

Anglo American plc Annual Review 2006 | 07 ANGLO AMERICAN plc ANNUAL REVIEW 2006

DELIVERING OUR STRATEGIC GOALS • $1.6 billion has been realised through the disposal Delivering on of non-core assets in 2006 our strategy • Mondi demerger planned for mid-2007 1 • Phased exit of the AngloGold Ashanti holding Anglo American’s strategy has been to become a more focused mining group, in the process simplifying its structure and enhancing returns

This has entailed a major De Beers, like Anglo Platinum, partnership with a number producer, with several expansions restructuring of its asset base. is a world leader in its fi eld. It of major energy companies, under way or at the feasibility Over the past seven years, has a market share of some 40% Anglo Coal is examining the stage. With Anglo Platinum’s nickel disposals of non-core businesses of rough diamond production and feasibility of producing production set to rise signifi cantly, have totalled $11.8 billion and is bringing on stream two new downstream products such as combined with Anglo Base Metals’ acquisitions amounted to mines in Canada and one in South gas and synthetic fuels on a Barro Alto nickel project, the Group $15.7 billion. Africa over the next two years to commercial scale and is gradually is set to become a signifi cant nickel augment its overall output. moving from being a pure coal producer with around 100,000 Following implementation of the supplier to becoming a broader tpa in 2012. restructuring programme, Anglo In little over a decade, Anglo player in the energy fi eld. American will be focused around Coal has become a leading Kumba Iron Ore is becoming a six commodity groups: platinum, producer and exporter, supplying Anglo American is consolidating major force in the consolidated diamonds, base metals, coal, coal from three continents. In its position as a major copper iron ore industry, with current ferrous metals and industrial minerals. As a more focused, cohesive group, further cost savings and synergies as well as technology and knowledge sharing will be key priorities.

Platinum is one of the main differentiators of the Group. With platinum group metals enjoying an unparalleled and expanding range of applications, and the prospect of buoyant demand for years to come, Anglo Platinum, will continue to be a major part of the Group’s mining portfolio. The steady increase of Anglo Platinum’s production over the last decade is testament to the major role Anglo Platinum will play in the Group’s future.

Right: Underground drilling at Anglo Platinum’s Paardekraal mine in South Africa

Right: A De Beers exploration camp at Pingu Juak on Developing Bafﬁ n Island in the Nunavut Territory Anglo American’s of the Canadian core mining $15.7 bn $11.8 bn Arctic portfolio of acquisitions worldwide of disposals worldwide since 1999 since 1999

08 | Anglo American plc Annual Review 2006 See also Anglo American at a glance IFC Operating review p16 Below: Fuel cells promise to be the major ‘next wave’ driver of long term platinum The business p34 demand both in vehicles and for stationary applications

expansions that will boost structural profi t improvement BUSINESS FOCUS production by around 40% to over the next three years. 45 Mtpa, with further potential to raise this to over 70 Mtpa by 2015. In terms of the restructuring, Anglo Platinum: Anglo American has sold Following an extensive review, $1 billion of its stake in Future growth prospects Tarmac has restructured in the AngloGold Ashanti, reducing its underpinned by strong demand UK and reduced its downstream shareholding from 51% to 42%. activities. Tarmac has sold a We will continue to explore all number of small underperforming available options to exit AngloGold businesses in western Europe Ashanti in an orderly manner. Anglo Platinum, with its unparalleled long life and is focusing on the growth reserve base and one of the biggest expansion markets of eastern Europe. It is Regarding Mondi, plans for a programmes in mining, is set to remain the No. 1 aiming to make a $50 million full demerger are progressing. global player in platinum. Platinum group metals Approval in principle has been (PGMs) continue to expand their wide range of received from the regulatory uses, from the traditional sectors of autocatalysts authorities in South Africa for and jewellery to service new demand stimulated a Dual Listed Company Structure by a vast array of industrial and scientifi c uses with primary listings in Johannesburg and London. For many years, PGMs – platinum, Currently, the jewellery industry In 2006, the fi rst tranche of Anglo palladium, rhodium, ruthenium, iridium absorbs about 30% of the world’s American’s 79% shareholding in and osmium – have outshone all other platinum, as well as signifi cant Highveld Steel was sold to Evraz elements in their unique range of quantities of palladium. China has and Credit Suisse. In November, applications. Autocatalysts represent been the big driver in recent years, Kumba was restructured. Anglo the most important demand sector, overtaking Japan in 2000 to become American now owns 64% in with PGM catalysts being used to clean the world’s largest platinum jewellery pure-play iron ore company up auto exhaust gases. Currently, market. PGMs’ applications in industry Kumba Iron Ore. The unbundling nearly half of the world’s newly mined are constantly expanding. Key areas of Tongaat-Hulett’s aluminium platinum fi nds its way into the auto of new demand include hard disks, business to shareholders and industry, where over 90% of the mobile phones, the LCD/fl at screen simultaneous introduction of world’s new vehicles are fi tted with TV sectors of glass manufacturing, broad based BEE into both autocatalysts. Tightening emissions petroleum refi ning, turbine coatings Tongaat-Hulett and Hulett legislation worldwide and the increasing and anti-cancer drugs. Finally, steady Aluminium will occur during the demand for more fuel effi cient diesel progress continues to be made in second quarter of 2007. This will vehicles (the majority of which can only fuel cells, with most major auto reduce Anglo American’s interest use catalytic converters that are manufacturers investing in the in Tongaat-Hulett to 38% and in platinum based) are intensifying development of commercial fuel ■ Hulett Aluminium to 39%. demand for PGMs. cell vehicles.

Right: In western China, an Anglo Platinum drill rig is employed in the search for platinum $10.5 bn group metals capital return announced in 2006 and 2007

Anglo American plc Annual Review 2006 | 09 ANGLO AMERICAN plc ANNUAL REVIEW 2006

BUSINESS FOCUS DELIVERING OUR STRATEGIC GOALS Anglo Coal: One of the strongest Powering ahead into growth pipelines in new frontiers 2the industry

Coal remains the world’s most abundant, Anglo American has This array of projects stretching affordable and secure fuel source. With the one of the strongest into the future, building on Anglo help of technology it is also becoming a project pipelines American’s unique suite of cleaner fuel in world mining. existing assets, has created formidable organic growth Across the Group, potential for the Group. the platinum, Some 250 years on from its powering However, real technological alternatives diamond, coal, base In South Africa, Anglo Platinum, of the Industrial Revolution, coal looks are opening up new pathways to a near metals and iron ore the world leader in platinum, set to remain a vital part of the energy zero emissions environment. Through a with considerable platinum mix. Global energy demand is expected combination of new, super efﬁ cient coal projects that are reserves, is implementing its to rise by 2% a year – meaning energy ﬁ red boilers for power generation and under development, extensive suite of projects to consumption will double in 35 years. carbon capture and storage, it is total $6.9 billion expand and maintain production, Since the start of the decade, coal has estimated that coal’s emissions can be with $1.6 billion approved in enjoyed one of the fastest rates of cut by more than 80%. 2006. Against a background of growth of all fuels. Global coal use is positive fundamentals for the forecast to increase by 1.4% every Anglo American is building a more entire range of platinum group year until 2030, with two thirds of this sustainable energy future and ensuring metals (PGMs), the company increase coming from China and India. that coal remains an important part of plans to lift its platinum that future. It has joined the FutureGen production in 2007 to between industrial alliance in the US, which aims to demonstrate the production of power IN DETAIL with near zero emissions, and has signed Future growth – strong project pipeline a joint development agreement with Shell to advance the clean coal-to-liquids 1 Monash Energy project in Victoria, Coal mt

Australia. This would involve the • Current production gasiﬁ cation of brown coal from the • Approved South African projects 150 • Approved Australian projects extensive deposits of Victoria’s Latrobe Unapproved Australian projects • New projects in South America 130 Valley for conversion into liquid fuels, especially ultra clean synthetic diesel, (current production 96mt) Unapproved South African projects 110 with the potential for large scale storage

of CO2 in the the major oil and gas ﬁ elds 90 of the Bass Strait. The partners are currently studying the project’s 70 commercial and technical aspects, which 20062008 2010 2012 2014 if successfully concluded would form the Copper1 000 tonnes basis for the feasibility phase. • Base production Further expansion potential at Collahuasi 1,000 (current production 643,800 tonnes) Quellaveco

Los Bronces expansion 800

Collahuasi debottleneck 600

400 2006 2008 2010 2012 2014 ¹ Unapproved projects unshaded

Left: Bucket wheel excavators at Anglo Anglo Coal South Africa’s New Denmark American: colliery scoop up coal destined for the Strong organic $6.9 bn Tutuka power station growth potential of approved projects (background) of electricity generating utility, Eskom See also Group at a glance IFC Operating review p16 The business p34

Our future is developing key projects including: • Anglo Platinum’s PPRust open pit project under construction

• $1.2 billion Barro Alto nickel project approved in December 2006

• Major expansion of Sishen iron ore project under way

• Dawson ($835 million) and Lake Lindsay ($516 million) export coal mines under construction

2.8 and 2.9 million ounces, as Anglo Base Metals has several whether to proceed with the production will be 4.0 Mtpa, well as expand output of other projects in South America which mine, which would produce in comprising mainly metallurgical PGMs. A $692 million project to will ensure that Anglo American the region of 200,000 tonnes coal. The recent granting of add 230,000 platinum ounces retains its signiﬁ cant market of copper a year, at a capital prospecting rights to Anglo Coal per annum at PPRust is under position in copper, while the cost of approximately $1.2 by South Africa’s Department of way, with a further $230 million Group is also becoming a bigger billion, is expected in 2008. Minerals and Energy is an allocated to maintaining existing player in nickel. At Minera Sur In Brazil, the recently approved encouraging development. At production of 200,000 ounces Andes in Chile, the Chagres $1.2 billion Barro Alto project will Cerrejón in Colombia, capacity is per annum. The $224 million smelter is now operating at full produce an average of 36,000 being expanded from the current East Upper UG2 project at capacity following the completion tonnes of nickel in ferronickel level of 28 Mtpa to 32 Mtpa in Amandelbult, to exploit mainly of a recent expansion project. annually over a minimum 26 year 2008, with further expansion the UG2 reef, will raise the Los Bronces has a feasibility mine life. The mine should come potential to at least 50 Mtpa. mine’s platinum output by study under way on a $1.2 billion on stream in 2010, ramp up to 106,000 ounces a year by 2012. project to increase copper full production the following De Beers has a number of Accessing Merensky reef, the production by 75%, while a year and boost the Group’s total signiﬁ cant projects to maintain $316 million Paardekraal 2 shaft debottlenecking opportunity is nickel production to around the its role as a leading global project, to replace 120,000 being evaluated at Collahuasi. 100,000 tonnes per annum diamond producer. The major ounces of platinum annually by A feasibility study is being level by 2012. expansion focus is in Canada, 2015, has also been given the conducted on the Quellaveco where it is spending about go ahead. project in Peru. A decision on Anglo Ferrous Metals, $1.7 billion to bring two through Kumba Iron Ore, is well advanced projects to production. advanced on the 13 Mtpa $754 The technically and logistically million Sishen expansion project challenging Snap Lake in South Africa’s Northern Cape, development close to the

1 with fi rst output due in 2007 Arctic Circle in the Northwest Iron ore mt and full ramp up targeted for Territories is due to come on • Sishen 2009. Further brownfi eld and stream in 2007, producing • SEP 1 100 greenfi eld projects should 29 million carats over the life • Thabazimbi Other iron ore projects 80 increase Kumba Iron Ore’s of the project. In Ontario, the Pellets annual production to over province’s fi rst diamond mine, (current production 31mt) SEP 2 Phase 1 60 Phoenix Sishen South 70 Mtpa by 2015. Other iron Victor, is set to enter production 40 ore growth opportunities are in the last quarter of 2008 and 20 being pursued. yield 7 million carats over a mine life of about 12 years. In South 0 Anglo Coal’s actual and Africa, work is under way on 2006 2008 2010 2012 2014 approved thermal/domestic reopening the long dormant Nickel1,2 000 tonnes coal projects are scheduled to Voorspoed mine and on getting raise attributable production diamond mining under way off • Base production • Barro Alto 120 to surpass 100 Mtpa early on South Africa’s Atlantic coast, in the next decade. In Australia, for a total investment of (current production 26,400 tonnes) Further nickel projects ■ 80 the $835 million Dawson mine $315 million. is planned to reach production in late 2007, producing 12.7 Mtpa 40 of metallurgical and thermal coal for the export market. 0 Construction has also started 2006 2008 2010 2012 2014 on the $516 million Lake Lindsay 1 Unapproved projects unshaded greenfi eld project at the German 2 Not including Anglo Platinum’s nickel production (21,700 tonnes in 2006) Creek mine. Annual saleable

Capex by geography %

2006 Excluding associates

• Americas 13 • South Africa 48 $ $ bn • 23 10- 15 Europe of future projects • Rest of world 16

Anglo American plc Annual Review 2006 | 11 ANGLO AMERICAN plc ANNUAL REVIEW 2006

BUSINESS FOCUS DELIVERING OUR STRATEGIC GOALS Base Metals Driving operational Tyres – keeping the excellence wheels moving 3

Anglo American’s operations across the A key challenge is to drive the process globe continue to be challenged by a of operational excellence throughout combination of higher energy and other the business – from exploration input costs, including tyres, against the to procurement background of the strongest upturn in metal prices for more than 40 years

The focus on continuous improvement operators are spread over four shifts, Operational excellence is very heavy mining machinery such as within Anglo Base Metals over the last making communication diffi cult. This much a twin pronged thrust: load haul dumpers in different four years provided an ideal vehicle for hurdle was overcome by employees driving a culture change through conditions, which enables more addressing the industry tyre shortage meeting outside working hours at their our continuous improvement accurate replacement strategies issue. At the start of 2005, Mantos own initiative to discuss ways of efforts that aim to get each to be put in place. Modifi cations Blancos, one of Anglo Base Metals’ overcoming the problem. The success of employee involved in improving can now be designed to extend Chilean copper operations, was faced this initiative has created a great sense what they do and how they the life of XLP and other with the threat that its fl eet availability of pride and achievement at all levels of do it, and the development or equipment and it is intended to would be seriously impacted by the the workforce. adoption of leading edge embed these design principles shortage of tyres by September of that technology and of applying it into the equipment’s specifi cations year. This led to the ‘Protect the Rubber’ This outcome is just one illustration of the quickly and intelligently. by transferring the technology to campaign at the mine, which has resulted benefi ts that are resulting from instilling a the equipment manufacturers. in a near doubling of tyre life over the continuous improvement consciousness. Procurement and supply chain Following its success at Waterval past two years. The initiative involved There are more than 500 initiatives in excellence has been a major mine, this new mining method about 160 people (including truck drivers, Anglo Base Metals, addressing all aspects element of the Group’s activities will be implemented at other managers and supervisors) and has of the business and including all levels of since 2000 with the inception Anglo Platinum operations, where yielded savings of more than $860,000. employees in the operations. of Project Angelo, which was practically and economically Below: A continuous improvement designed to increase volume viable, during 2007-2008. This project is a good example of the campaign at Mantos Blancos copper leverage for lower supplier prices commitment shown by employees. mine in Chile has led to a near and maximise synergies At Kumba Iron Ore’s Sishen mine doubling in tyre life of the truck fl eet Equipment operates continuously and and generated substantial savings Groupwide. In 2006, Anglo the focus is on bringing about a American businesses spent sustained improvement in $14 billion with their suppliers operating margins by extracting and achieved cost savings of ore from material previously $583 million in synergies, defi ned as waste. The mining operating effi ciencies and operation reduces waste negotiated procurement savings. stripping by using smaller loaders in the ore waste contact areas. At Anglo Platinum’s Waterval ‘Contact’ ore that would have mine, trials of extra low profi le been discarded owing to (XLP) trackless mining equipment, excessive dilution is now employed in areas of severely separated and recovered by the restricted height, have shown smaller scale equipment. The a near tripling in cubic metres ‘clean’ ore is then hauled to the mined per month, with improved crusher and the waste discarded. productivity and safety. The This selective mining process has exercise has also shown that it is yielded two important benefi ts: possible to determine accurately ore that would have been the structural life expectancy of discarded owing to dilution is

Anglo American: A focused mining group 15% $1.2 bn 13 Mtpa increase in platinum production Barro Alto project approved Sishen Expansion Project on track over 2005 by Base Metals

12 | Anglo American plc Annual Review 2006 See also Anglo American at a glance IFC Below: Anglo Platinum is using extra low proﬁ le Operating review p16 equipment at three pilot sites in the mining of narrow ore deposits. Increased mining efﬁ ciency has resulted, The business p34 while safety has been enhanced by removing operators from the stope face to a safe, supported area

Driving operational excellence • XLP trackless mining equipment shows potential to improve productivity and safety at Anglo Platinum

• Selective mining process at Kumba’s Sishen mine reduces waste

• A matrix of technologies is being examined in the ongoing drive to reduce vehicle related incidents

recovered, while ‘contact’ waste, Vehicle related incidents are that would have claimed space responsible for a disproportionately in the benefi ciation plant, is high number of deaths and removed before the material serious injuries at Group enters the plant. During 2006, operations. Anglo Technical 2.7 million tonnes of ore was Division and business unit in haul truck maintenance costs, IN DETAIL recovered from waste, with a representatives have compiled increased tyre life, improved Cost savings near equivalent amount of ‘clean’ a matrix of technologies to productivity arising from shorter ore delivered to the plant. examine various collision truck turnaround times and a avoidance systems. saving of around $200,000 in At the Skorpion zinc mine, Combinations of several diesel in 2006. Procurement and supply chain located in a remote and arid technologies, including radar, excellence has been a major environment in southern Namibia, video cameras, ultrasonic, infrared In the UK, Tarmac recently element of the Group’s a novel solvent extraction and and radio frequency, are being completed a review to evaluate activities since 2000. Since the electrowinning process was implemented at Group operations. the commercial activities of the beginning of 2002, the Group developed by Anglo Base in Information is being shared Aggregate Products business and has achieved procurement partnership with Anglo Research across the business units, to identify areas of opportunity. savings of almost $900 million. and Spanish technology providers while a joint working group is The project, which drew together to treat an oxide zinc ore. Skorpion establishing closer relationships people from all major disciplines Cost savings in 2006 US$m is now one of the lowest cost with suppliers and investigating in Tarmac, has resulted in • Materials 279 281 zinc producers in the world – joint initiatives with other a signifi cant change in 16 33 and supplies 24 • 52 exploiting a deposit that was mining companies. organisational structure and Labour 15 • 6 Maintenance 7 previously uneconomic to mine. proposed new ways of working 211 • Admin and 7 21 In South Africa, poor road that require retraining, upskilling overheads 46 Open pit slope stability is an conditions at Anglo Coal’s and behavioural change. Post • Other • Energy issue of growing importance to Landau colliery had been causing programme audits have been 122 the mining industry due to the damage to haul trucks and undertaken to embed the new potential for loss of life and impacting productivity in wet skills and knowledge gained and serious injury – not to mention weather. To counter this, and to to continue the improvements in damage to equipment, leading ensure that there would be working practices. ■ to loss of production. Radar sustained improvement, a Procurement Operating efficiencies based and laser based mobile detailed haul road design and systems, designed to detect sub- construction standard was drawn millimetre slope movements long up. Previously discarded In addition to the above, before they can be detected by sandstone was used in the restructuring and synergies the naked eye, and then generate construction of the haul roads, have amounted to $23 million. alarms, are being installed where which were properly cambered, necessary at open pit operations with improved drainage. The across the Group. benefi ts include a 7% reduction

Right: Pit radar and laser beam system that forms part of the slope stability monitoring system at Anglo Platinum’s PPRust 15 % 131% mine increase in copper production in the increase in operating proﬁ t second half of 2006 over the ﬁ rst half at Base Metals

Anglo American plc Annual Review 2006 | 13 ANGLO AMERICAN plc ANNUAL REVIEW 2006

See also Operating review p16 Consolidated income statement p27 Summary consolidated balance sheet p28

FINANCIAL REVIEW Record underlying EPS of $3.73, up 45%, with increased production at many operations. Strong operational cash ﬂ ow drives $10.5 billion capital return over 2006 and 2007

Both Base Metals and Platinum had a MANAGEMENT FOCUS particularly strong year, delivering record results, as a result of higher production $10.5 billion and robust prices. Production at Coal was also higher than last year. Record cash capital return generation, with EBITDA of $12.2 billion, up 36%, contributed to funding our $10.5 billion return of capital

Financial review of the full year impact of the disposal in During 2006 and early 2007 Anglo American Group’s results mid-2005 of Boart Longyear and announced a $10.5 billion capital return to Underlying earnings per share for Samancor Chrome. its shareholders through three share buyback the year increased to $3.73 per programmes and special dividends share, an increase of 45% over With strong operational results, 2005. Underlying earnings profi t for the year after special totalled $5.5 billion, with strong items and remeasurements contributions from Base Metals increased by 76% to $6.2 billion and Platinum as well as a compared with $3.5 billion in the Strong operating cash fl ows saw the programme to $2.0 billion, which signifi cant increase in prior year. There was a Company embark on a programme of ultimately saw the repurchase of contribution from AngloGold signifi cant increase in net profi ts returning $10.5 billion to its shareholders 48.9 million shares between March Ashanti. Coal recorded lower on disposal, which, including in 2006 and 2007, in addition to its and August. During this period the underlying earnings mainly associates, was $1.2 billion regular dividend fl ows. This was share price closed at a high of £25.12 due to a decline in export sales higher than 2005, mainly as a composed of three share buyback and a low of £18.19, its lowest level volumes and increased costs. result of the Group’s disposal of programmes, and a $500 million of the year. Paper and Packaging’s lower 19.7 million ordinary shares in special dividend, issued with the fi nal contribution and Industrial AngloGold Ashanti and the 2005 dividend and a $1.0 billion Following the announcement of record Minerals’s fl at contribution, Group’s non-participation in the special dividend, issued with the 2006 underlying earnings at the interim was owing to diffi cult market issue of ordinary shares by interim dividend. results, a further $4.0 billion share conditions, although conditions AngloGold Ashanti ($909 million buyback was announced. This improved for Paper and net profi t on disposal) as well as The fi rst buyback programme, announced programme, which commenced in Packaging in the second half of the profi t of $301 million on part towards the end of 2005 following the September and is currently ongoing, the year. De Beers’ underlying disposal of Highveld. This was strategic review, was for the return of repurchased 42.3 million shares up to earnings were below the prior largely offset by the $52 million $1.0 billion of surplus capital to 31 December, spending $1.9 billion. The year, mainly refl ecting lower loss on part disposal of Kumba’s shareholders in 2006. A robust share share price maintained an upward trend sales by The Diamond Trading non iron ore assets as well as price early in the year and favourable for much of this period, the average Company and increased operating special item losses and dividend assumptions by many market closing price being £24.05, more than exploration and development remeasurements of $991 million, participants led to the conversion of the £2.00 higher than the same price for costs, as well as lower including the impairment and majority of the $1.1 billion convertible the initial buyback period. preference share income due restructuring of certain Tarmac bonds issued in April 2002 into ordinary to the June 2006 redemptions, assets ($278 million), shares of the Company. This contributed The third share buyback of $3 billion was and higher minorities as a result impairment and closure costs to the increase in size of the fi rst announced on 21 February 2007. of the Ponahalo transaction in relating to the Dartbrook coal April 2006. Kumba’s results mine in Australia ($125 million), showed a signifi cant increase impairment mainly of certain Share buyback US$m over the prior year. However, downstream converting Cumulative value of shares purchased Ferrous Metals as a whole packaging assets and certain • JSE 6,000 recorded a lower contribution business paper assets at Paper • LSE 4,800 mainly due to lower manganese and Packaging ($104 million) 3,600 and vanadium prices, the impact and unrealised losses on non- 2,400 of the increased minorities as hedge derivatives ($429 million), 1,200 a result of the Highveld part recorded principally at 0 disposal in July, as well as the AngloGold Ashanti. 01/01/06 31/03/07

14 | Anglo American plc Annual Review 2006 • Strong performance during the year with underlying EPS of $3.73, up 45% over 2005

• Base metals and Platinum produced record results

• Increased production in most commodities, with particularly strong performances in second half of the year

• Proﬁ t for the ﬁ nancial year up 76% over 2005

Net fi nance costs IN DETAIL Net fi nance costs, excluding Financial overview: Groupwide fi gures special items and fi nancing remeasurements of nil (2005: 2006 2005 Earnings per share US$ gain of $35 million), decreased ($m) ($m) Underlying EPS 3.73 from $428 million in 2005 to Operating profi t before special 9,832 6,376 54% $165 million. The decrease 2.58 items and remeasurements* refl ects lower interest costs due 1.87 to the reduction in net debt. Underlying earnings 5,471 3,736 46% 1.25 1.20 Financing remeasurements, Net profi t on disposals 1,367 185 including associates, are mad e including associates up of a $18 million fair value loss Net attributable share of special (652) (400) 02* 03* 04 05 06 on the AngloGold Ashanti items and remeasurements convertible bond option, including associates** Group EBITDA US$m unrealised net gains of $8 million on non-hedge derivatives and a Profi t for the year attributable 6,186 3,521 76% 12,197 $40 million foreign exchange to equity shareholders 8,959 gain on De Beers’ dollar EBITDA 12,197 8,959 36% 7, 0 3 1 4,792 4,785 preference shares held by a rand Net debt 3,324 4,993 denominated entity. Underlying EPS 3.73 2.58 45% Taxation Basic EPS 4.21 2.43 73% 02* 03* 04 05 06 The effective rate of taxation * including share of associates’ tax before special items and remeasurements * UK GAAP before special items and ** excluding net profi t and disposals remeasurements and including share of associates was 32.7%. In 2006 and 2007, the Group Cash fl ow from associates amounted to This was an increase from the announced capital returns of Net cash inflows from operating $394 million representing effective rate on the same basis $10.5 billion to shareholders. activities was $8,310 million redemption of preference shares of 26.5% in the year ended against $6,781 million in 2005. by De Beers. Purchases of tangible 31 December 2005. The December Net debt, excluding hedges but EBITDA was $12,197 million, a assets amounted to $3,686 2005 tax rate benefited from the including balances that have been substantial increase of 36% from million, an increase of $380 million. one-off impact of a reduction in reclassified as held for sale $8,959 million in 2005. Depreciation Increased capital expenditure by the statutory tax rates in South ($80 million) was $3,324 million, and amortisation decreased by Platinum, Coal, Ferrous Metals and Africa and Ghana. Without this a decrease of $1,669 million from $405 million to $2,036 million. Industries, Industrial Minerals and one-off benefit the effective tax 31 December 2005. This was Base Metals was partially offset by rate for the prior year would have principally due to reduction of debt Acquisition expenditure accounted a reduction in capital expenditure at been 29.7%. The December from cash flows from operations for an outfl ow of $344 million Paper and Packaging, as well as 2006 tax rate reflects the relative and disposals, deconsolidation of compared with $530 million in the impact of including AngloGold impact of the statutory tax rates, AngloGold Ashanti debt and 2005. This included $76 million, net Ashanti’s capital expenditure up to on a fully distributed basis where conversion of $1.1 billion of the of cash acquired, in respect of the 20 April 2006, after which it is appropriate, of the countries in Group’s convertible debt, although Group’s investment in AltaSteel accounted for as an associate. which the Group’s operations are this was partially offset by (Ferrous Metals and Industries) and based. In future periods it is $3.9 billion of share buyback $65 million in respect of the Group’s Dividends expected that the effective tax and $1.5 billion special dividend investment in Akrosil and A fi nal dividend of 75 US cents rate, including associates’ tax, as at 31 December 2006. Net Stambolijski (Paper and Packaging). per share to be paid on 3 May will remain at or above the UK debt at 31 December 2006 Proceeds from disposals totalled 2007 has been recommended. statutory tax rate of 30%. comprised $6,304 million of debt, $1,642 million, with net proceeds offset by $2,980 million of cash, on the sale of 19.7 million ordinary Return on capital employed Balance sheet cash equivalents and current shares of AngloGold Ashanti of ROCE in 2006 was 32.4%, ■ Equity attributable to equity financial asset investments. Net $839 million and net proceeds of compared to 19.2% in 2005. shareholders of the Company debt to total capital(1) as at $412 million received on disposal (1) was $24,271 million compared 31 December 2006 was 12.9%, of 49.8% of Anglo American’s Net debt to total capital is calculated as net debt divided by total capital less with $23,621 million as at compared with 17.0% at shareholding in Highveld. investments in associates. Total capital 31 December 2005. 31 December 2005. Repayment of loans and capital is net assets excluding net debt.

Anglo American plc Annual Review 2006 | 15 ANGLO AMERICAN plc ANNUAL REVIEW 2006

OPERATING REVIEW Platinum Diamonds

2006 2005 2006 2005 Operating Operating proﬁ t $2,398 m $854 m proﬁ t $463 m $583 m

EBITDA EBITDA $2,845 m $1,282 m $541 m $655 m

Overview The Amandelbult 1 shaft Overview optimisation project was completed in March 2006. The • World’s No. 1 primary producer of • De Beers is a global leader in the deepening of Bafokeng-Rasimone platinum world diamond industry and the sinking of the Lebowa • Highest ever operating profi t in 2006 • Global retail sales continue to rise Merensky declines are well • One of the biggest capital expenditure • De Beers group diamond production advanced. The PPRust North programmes in world mining surpasses 50 million carats expansion project commenced • Long term outlook is favourable • Upcoming projects will add 3.3 million and the Paardekraal 2 shaft and for platinum and other platinum carats to De Beers’ annual production Amandelbult’s East Upper UG2 group metals capacity projects have been approved. Paardekraal 2 shaft replacement project is expected to yield 120,000 ounces of refi ned Anglo Platinum’s operating profi t platinum per annum by 2015 and climbed by 181% to a record the Amandelbult East Upper UG2 $2,398 million, supported by a project will contribute an Right: X-Ray separation machines employed in the diamond recovery signifi cantly higher price achieved additional 106,000 ounces a process at the Venetia mine in for the basket of metals sold, year by 2012. South Africa increased production and a weaker exchange rate. The average dollar Anglo Platinum is continuing with price realised for the basket of its expansion programme and Anglo American’s share of produced 14.6 million carats and metals sold rose by 46% to expects refi ned platinum output operating profi t from De Beers 2 million carats, respectively. $2,030 per platinum ounce. of between 2.8 and 2.9 million declined by 21% to $463 million, Refi ned platinum production was ounces in 2007. Studies continue largely due to lower sales by In Canada, De Beers is on target 15% higher at 2,816,500 ounces, to evaluate the ramping up of The Diamond Trading Company to start production at Snap Lake with platinum mining output up various projects to support its (DTC), the marketing arm of in October 2007, while Victor in by 5% to 2,638,600 ounces. stated average compound growth De Beers, and the dilution in Ontario should commence in the target of 5% per annum. Another earnings following the sale of last quarter of 2008. In South strong performance is forecast 26% of De Beers Consolidated Africa, De Beers has been Below: Drill rig operator and section for 2007, with the most Mines to a South African black granted a mining licence for the safety representative straighten and signifi cant variables affecting economic empowerment long closed Voorspoed mine and check drill hoses on the front of a drill rig earnings being metal prices and consortium. is progressing its $145 million at the Waterval Shaft of Anglo Platinum’s ■ Rustenburg Platinum mine the exchange rate. Sea Areas marine mining project. Global retail sales for 2006 grew by about 4%-5%. The DTC’s Demand for rough diamonds sales were $6.2 billion, a slight remains steady, though growth decline on 2005, refl ecting the in DTC sales is likely to be reduced supply available to the constrained by shortages DTC and the challenging following the reduction in environment in the rough Russian purchases as agreed diamond wholesale market. with the European Commission. De Beers will continue to bring Group production increased by new production on stream and 2 million carats to a record invest downstream through the 51 million carats. Debswana venture with Moët Hennessy raised output from 31.9 million Louis Vuitton and the carats to 34.3 million carats, Forevermark marketing while South Africa and Namdeb programmes. ■

16 | Anglo American plc Annual Review 2006 See also Anglo American at a glance IFC Business unit heads p24 The business p34

Base Metals Ferrous Metals and Industries 2006 2005 2006 2005 Operating Operating proﬁ t $3,876 m $1,678 m proﬁ t $1,360 m $1,456 m

EBITDA EBITDA $4,214 m $1,990 m $1,560 m $1,779 m

Overview Attributable copper production Overview Highveld’s operating profi t increased to 643,800 tonnes, declined to $230 million with record operating profi ts of following a weaker vanadium • One of the world’s leading copper • Further progress in optimising the $3,019 million. The $80 million market. Evraz, which with Credit producers, with important nickel and asset base: formation of Kumba Iron El Soldado pit extension project Suisse has acquired 49.8% of zinc assets Ore as a pure-play iron ore company was completed on time and Anglo American’s 79% stake in • Operating profi ts in 2006 set a new • Kumba Iron Ore has a $754 million under budget. Highveld, has an option to record of $3.9 billion expansion programme to boost acquire the remaining 29.2%. • $1.2 billion Barro Alto nickel project production by 40% by 2009 Nickel output was 26,400 gets go ahead • Record iron ore production tonnes, similar to 2005, with the Scaw Metals produced a record • Signifi cant expansion potential in copper • Scaw makes record operating profi t of nickel, niobium and mineral sands operating profi t of $160 million, $160 million division accounting for operating on the back of increased profi t of $405 million. Total demand. The acquisitions of nickel production will increase AltaSteel in Canada and the In 2006 Anglo Base Metals materially by 2011 when the remaining 50% of Moly-Cop generated its highest ever level recently approved $1.2 billion, Canada contributed $32 million of operating profi t of $3,876 36,000 tpa Barro Alto project Below: Kumba Iron Ore for the year. million on the back of increased in Brazil reaches full capacity. excavator working a stockpile at Saldanha Bay, copper, zinc, lead and Sishen’s export port on ferroniobium production and Zinc output increased to South Africa’s Atlantic coast signifi cantly higher metal prices, 334,700 tonnes. Skorpion partially offset by signifi cant experienced a slight decline due rises in the costs of energy and to a tankhouse fi re, which was most key consumables. more than offset by increases at Lisheen.

Agreement has been reached to Below: Copper sheets awaiting export at sell 100% of Namakwa Sands Mantoverde mine in Chile and 26% each of Black Mountain and Gamsberg to black economic empowerment group Exxaro for a combined total of R2,195 million ($314 million) subject to the satisfaction of conditions precedent and contractual price adjustments. Operating profi t declined by Anglo American’s attributable 7% to $1,360 million, due to share of Samancor’s operating The current consensus is one the sale of non-core businesses profi t dropped to $52 million, of slightly lower growth in and lower vanadium and while Tongaat-Hulett’s rose to 2007. While supply/demand manganese prices. $154 million. fundamentals remain supportive, this suggests an easing of prices. Kumba made an operating profi t The outlook for Ferrous Metals The full extent of any price of $778 million, refl ecting and Industries remains broadly moves and the pace of such ongoing strength in global iron positive, though earnings will be change will be dictated by ore demand. A $754 million infl uenced by the timing of a fl uctuations in speculative and expansion programme at Sishen number of the restructuring investment funds sentiment in will increase annual sales transactions. ■ what is likely to be a volatile volumes by 40% to 45 million pricing environment. ■ tonnes by 2009.

Anglo American plc Annual Review 2006 | 17 ANGLO AMERICAN plc ANNUAL REVIEW 2006

OPERATING REVIEW Coal Industrial Minerals

2006 2005 2006 2005 Operating Operating proﬁ t $864 m $1,019 m proﬁ t $336 m $370 m

EBITDA EBITDA $1,082 m $1,243 m $580 m $618 m

Overview work is under way on the $264 Overview million Mafube mine, which will increase thermal coal production • New capital expenditure projects • Completion of strategic review by 5 million tonnes per annum in Australia: Dawson project facilitates continuous improvement (Mtpa) from 2008. ($835 million) set to come on stream both operationally and commercially in late 2007 and Lake Lindsay • Tarmac’s international businesses The Australian operations’ ($516 million) in 2008 increase their contribution by 5% operating profi t reduced by • Cerrejón is ramping up to 32 Mtpa, • Tarmac acquires assets in Turkey and 14% to $279 million. The $835 with full production scheduled for 2008 Romania for fi rst time million Dawson and $516 million • Market remains strong for thermal coal • Work under way on Tarmac’s largest Lake Lindsay projects are now ever contract – resurfacing a stretch of ramping up. Dawson expects to England’s M1 motorway attain design capacity of 12.7 Mtpa in 2007. Lake Lindsay plans Anglo Coal’s operating profi t to produce its fi rst coal in 2008. decreased by 15% to $864 million, Right: The Streetwalker is a new In South America, Cerrejón generation tool used to break up road despite a marked recovery in the surfaces and reduces exposure to hand- second half, due to an overall increased output by 9% to arm vibration syndrome. It is being decline in export volumes and 28.4 Mtpa, with further expansion introduced throughout Tarmac a pull back in export prices from to 32 Mtpa scheduled for 2008. 2005’s high levels. Operating profi t was 5% lower at Anglo Industrial Minerals’ mixed concrete business in $227 million following a decline operating profi t fell by 9% to Romania. Operating profi t for South in export selling prices, higher $336 million. Tarmac’s operating African sourced coal, at $380 operating costs and a stronger profi t was 7% lower at $315 Tarmac has completed its million, was 19% below 2005, Colombian peso. million, principally attributable to operational, commercial and refl ecting lower average export diffi cult UK market conditions, organisational restructuring. prices and a marginal decline in Exchange rates and coal prices where margins were eroded by The scope of its activities is export sales volumes. Isibonelo will be the two main variables in high energy costs. These input now also clearly defi ned as went into full production, while 2007. Thermal coal prices should cost pressures were partly aggregates, together with the remain strong though still mitigated by cost savings of three routes to market (asphalt, susceptible to volatility, while some $63 million. concrete and concrete products), Below: Dragline stripping overburden at hard coking coal prices have with integration of cement where Anglo Coal South Africa’s new Isibonelo softened up to 20% for 2007 Despite a substantial decline in appropriate. colliery that is supplying synthetic fuel ■ producer Sasol with 5 Mtpa of coal contracts beginning in April. demand from the housing sector, Tarmac Building Products Market conditions in the UK are improved results. Demand, expected to remain challenging, however, remained weak for with weak demand in certain aggregate products, particularly sectors and high cost pressures. in the road and housing sectors. The uncertainty of government spending on infrastructure is also Operating profi ts for Tarmac a cause for concern, as is the International improved owing increasing impact of different to stronger markets in France, types of construction materials Germany and Poland and the such as steel and timber on the opening of a quarry in the Middle industry. Volatility of energy East. Tarmac has boosted its prices and the impact that has on presence in eastern Europe by the business will also continue to entering Turkey and acquiring a affect performance. ■ developing quarrying and ready-

18 | Anglo American plc Annual Review 2006 See also Anglo American at a glance IFC Business unit heads p24 The business p34

Gold Paper and Packaging

2006 2005 2006 2005 Operating Operating proﬁ t $467 m $332 m proﬁ t $477 m $495 m

EBITDA EBITDA $843 m $871 m $923 m $916 m

Overview In 2006, AngloGold Ashanti’s Overview upturn in packaging paper pricing production from ongoing offset by higher input costs and operations declined by 9% to continued margin pressure in the • Strategic alliances established in • Agreement in principle reached for 5.64 million ounces. Reductions converting operations. During Russia and are being pursued in China Mondi to become a Dual Listed in output in Tanzania, South the year Mondi strengthened its • Continuing investor interest in gold Company Structure, with listings in Africa and Ghana were only position in the high growth niche • The gold price has risen for six years London and Johannesburg partly compensated by small release liner segment, in sack in succession • In 2006, productivity improved at Mondi increases from operations in kraft and extrusion coating Packaging by 9% across the business Australia, Argentina and Mali. though a number of acquisitions. • First phase of modernisation programme Mondi Business Paper’s operating at Syktyvkar in Russia under consideration AngloGold Ashanti is focusing profi t was down 20% at • $365 million capital expenditure in on growing the reserve and $130 million, owing to the slow Poland or Czech Republic being considered resource base, both through start up at Merebank, South exploration and through a Africa, of the PM31 paper AngloGold Ashanti’s operating disciplined, value adding mergers machine following a major profi t increased by 41% to and acquisitions programme. rebuild and tough trading $467 million. Total cash costs Below: An extensive range of tinted conditions. PM31 is now rose by $27 per ounce to $308 AngloGold Ashanti is now papers is made in Austria, with operating at an improved rate production at the plant in Kematen and per ounce, mainly resulting from looking outside of the world’s special fi nishing (featured here) in the and producing better grades of stronger operating currencies, mature gold regions and has plant in Hausmening paper. Syktyvkar in Russia and infl ation and lower grades. exploration projects in the Democratic Republic of Congo and in Colombia. In Russia, a strategic alliance has been formed with Polymetal and other Below: At AngloGold Ashanti’s Mponeng strategic alliances are being mine in South Africa a miner pumps pursued in China. Exploration ammonium nitrate into drill holes which are then charged before being partnerships in the Philippines electronically detonated and Laos have resulted in land positions being acquired in several prospective areas.

The gold price has now risen for six years in succession. Ongoing strong demand from the growing economies of China and India as Operating profi t declined to Ruzomberok in Slovakia recorded well as continued investor $477 million, due to margin strong results, as did Mondi speculation and offi cial sector pressures as a result of Packaging South Africa. activities are seen as being signifi cant input costs of fi bre, supportive of the gold price. ■ chemicals and energy, partly While pricing is still well below offset by improving prices. historical mid-cycle levels, the However, Mondi was able to trading environment has deliver $224 million in cost improved, though concerns saving and profi t improvement remain about the strength of initiatives. the recovery and the level of overcapacity in some markets. Mondi Packaging’s operating A better fi nancial performance profi t was $6 million lower at overall is expected in 2007. ■ $287 million, with a strong

Anglo American plc Annual Review 2006 | 19 ANGLO AMERICAN plc ANNUAL REVIEW 2006

OPERATING REVIEW Exploration Technology

Overview Anglo Research is a world class R&D organisation that supports the strategies of the business For decades, Anglo American has been units. Numerous technology distinguished by a strong technology developments are under way, base. Its unique portfolio of in-house including fl otation optimisation, ore and partnered technologies and upgrading, improved comminution associated skills has served to maintain effi ciency and alternative the Group’s leadership in key areas of hydrometallurgical processes. its core mining activities, adding signifi cant value to operations. Safety improvement remains a A technology council has been formed prime concern and appropriate to better co-ordinate the Group’s technology is assisting in the R&D initiatives drive to reduce injury and fatality rates. Vehicle collisions are receiving particular attention and a Groupwide initiative is Above: De Beers Marine’s Peace in Africa Overview is currently being refi tted as a mining investigating and developing vessel in the search for diamonds off warning devices for personal use. South Africa’s Atlantic coast Exploration is one of the key activities In the exploration fi eld, SQUID Other projects are aimed at for the continued growth of Anglo and Scandinavia (through is a superconducting quantum reducing environmental impact American. The strong competition for alliances) and zinc programmes interference device, cooled by and improving energy effi ciency. resources globally has led the Group into continue in Australia, South liquid helium, that is being used Anglo American is engaged in more remote regions, to create Africa and Namibia. in highly sensitive instruments partnerships with major energy exploration alliances and to apply new to fi nd and characterise buried companies with a view to and innovative technology in its search Anglo Platinum ($30 million) is deposits of conducting or securing coal’s future as a vital for new mineral resources. In 2006, the exploring in and around existing magnetic materials. Anglo part of the energy mix by both Anglo American Group was active across operations in South Africa’s Technical Division is also making it cleaner and adding 33 countries, including 111 alliances with Bushveld Complex. Drilling employing a gravity gradiometer value through downstream coal- 103 different entities in 25 countries continues at its Danba project to measure small changes in to-liquids applications. ■ in China, following encouraging gravity, facilitating the structural exploration results. mapping of deposits of non- metallic minerals. Below: Anglo Platinum piloted the application of a high intensity, submerged In 2006, Anglo Base Metals spent Anglo Coal ($24 million) is injection furnace installed at its plant at $53 million and has increased its continuing to investigate Rustenburg exploration around its Chilean resources for thermal and coking copper mines, adding signifi cant coal, coal bed methane and oil resources at Los Bronces. sands, mainly looking in Exploration to the south of southern Africa, China and Los Bronces continues to report Australia. Anglo Coal conducted signifi cant intervals of copper advanced resource evaluations of mineralisation. In Brazil, further the Xiwan project in China and drilling at the Jacaré nickel projects in Canada and Australia. discovery has indicated the potential for a major new nickel Anglo Ferrous Metals ($9 million) asset for the Company, while is exploring for iron ore in South work continues in the Philippines Africa and other iron ore growth to complete a pre-feasibility opportunities are being pursued. study at Boyongan by the end of 2007. At Gamsberg, South De Beers spent $140 million Africa, initial drilling of several and is currently active in Angola, key zinc targets has provided the Democratic Republic of encouraging results. Copper Congo, Botswana, Canada, India, ■ exploration is being undertaken South Africa and Namibia. in Brazil, Chile, Indonesia, Mexico, Peru and the US. Nickel sulphide mineralisation is being sought in Arctic Canada, Russia

20 | Anglo American plc Annual Review 2006 See also Financial review p14 Summary directors’ report p26 Remuneration report p29

EXECUTIVE BOARD The Executive Board is the key co-ordinating management body. It is responsible for implementing strategies approved by the Anglo American Board, monitoring operating results, prioritising allocation of capital, technical and human resources and establishing best management practice

1. Tony Trahar*

2. René Médori*

3. Cynthia Carroll* Joined the Executive Board on 15 January 2007. 1 2 4. Simon Thompson*

5. David Hathorn*

6. Philip Baum*

7. Ralph Havenstein*

3 4 8. Russell King BA Hons 49, has held a variety of business and functional responsibilities in the UK and Australia with ICI PLC. From 1997 to 2000 he was managing director of Orica Consumer Products. He joined Anglo American in July 2001 as executive vice 5 6 president, Group human resources and business development, and is responsible for sustainable development issues.

9. Tony Redman MSc, BSc 58, worked for Anglo American on the Zambian Copperbelt from 1970 to 1974. In 1976 he started working at Vaal Reefs 7 8 gold mine before moving to the Anglo Coal division in 1979, where he was appointed managing director in 1996 and chairman in 2002. In January 2005 he took up the position of Group technical director of Anglo American, retaining the chairmanship of Anglo Coal. He is a member of Anglo American’s 9 Investment and Safety & Sustainable * See page 24 for Development Committees. biographical details

Anglo American plc Annual Review 2006 | 21 ANGLO AMERICAN plc ANNUAL REVIEW 2006

SUSTAINABLE DEVELOPMENT REVIEW At a glance • Our safety efforts will be redoubled Meeting our wider • We achieved a big improvement in participation in voluntary counselling and testing for HIV/AIDS responsibilities • We are launching a more advanced version of our Socio-Economic Assessment Toolbox

• Clean coal energy alliance formed with Shell

Rigorous safety reviews, which will inform the next phase of our safety programme, are being undertaken across the Group

Safety – our leading priority the Anglo Safety Way, was training and management of tested and to confront their After several years of signifi cant launched which stressed the goal contractors; more rigour in status. At our South African progress in reducing our fatal of zero harm, the importance of determining the root causes of operations, the level of injury frequency rate (FIFR), learning from incidents so as to incidents through better incident participation in VCT increased the last quarter of 2006 was prevent repeats, and that safety investigation; training and from 30% to 58% during 2006. marred by a higher incidence standards are non-negotiable. competence issues to be more At Anglo Coal South Africa of fatalities. Thus the number This framework was effectively addressed; and a participation in VCT is now in of fatalities in our managed implemented across the more single minded approach excess of 80% with indications operations fell only slightly from organisation during 2006, to enforcing existing rules that the treatment programme 46 in 2005 to 44 in 2006. augmented by an active and standards. is becoming self fi nancing Of these, 29 were employees communications programme, through reduced loss of skills, and 15 were contractors and, including high profi le industrial There has been undoubted less absenteeism and fewer unusually, three were the result theatre at our South African progress in building a safety new infections. of lightning strikes. Of the operations. 6,400 managerial culture at site level, but much 44 fatalities, 12 occurred in and supervisory staff, including still remains to be done. Our community partnerships businesses that have been all senior management, have at eight South African sites divested or are no longer undergone comprehensive HIV/AIDS – a big increase continued to be highly effective managed within the Group. training in the new framework. in voluntary counselling in addressing prevention among and testing young people. In 2006, we The Board and senior management Safety peer reviews were Deaths from HIV/AIDS continue also became partners with remain determined that this undertaken at 20 sites. These to exact a heavy toll in many international donors, Virgin and performance will improve and that will inform the next phase of parts of southern Africa. In the public health service, in an all loss of life must be eliminated. our safety programme with 2002, we initiated our strategy ambitious capacity building a particular focus on fi ve of encouraging voluntary project in the rural area of It is pleasing that the number consistent themes: a more counselling and testing (VCT) Bushbuckridge. of operations operating without rigorous approach to risk and the provision of anti- lost time injury increased during management and the retrovirals at the correct stage of Engaging with local 2006. At the end of 2005, management of change; greater infection. Since then the South communities a new set of rules and principles, attention to the selection, African public health service has One of the major challenges initiated an increasingly effective for modern mining operations programme with which we seek is to ensure that they command to partner. a continuing social licence to operate and play a part in At the end of 2006, over 4,500 creating sustainable benefi ts for employees (including AngloGold local communities. To this end, Ashanti) were in receipt of anti- in 2004 we initiated a leading retroviral therapy – up over 40% edge methodology for assisting on 2005. Moreover, increasing our operations to improve the numbers were willing to be management of their social and

Left: The ‘One’ safety campaign at the Johannesburg corporate ofﬁ ce was $50.3 m launched with an donated to community causes in 2006 industrial theatre presentation in August 2006 See also Anglo American at a glance IFC Chairman’s statement p02 CEO’s statement p04

BUSINESS FOCUS Anglo American and its subsidiaries contributed $50.3 million to community causes in 2006

One of the objectives of the Socio- Transparency International, Children economic impacts. The Socio- Tackling the climate Economic Assessment Toolbox (SEAT) of the Andes, Starfi sh and Engineers Economic Assessment Toolbox change challenge programme has been to focus without Borders. Anglo American was (SEAT) consists of assessment We are an intensive user of management attention on the delighted to support what has become tools and a series of rigorous energy and one of the world’s developmental impacts of our core the National Gallery’s most popular stakeholder identifi cation and major coal producers. Coal has business activities. Nonetheless, social exhibition ever – From Manet to Picasso. engagement tools to identify an important and inescapable investment has an important role to play priorities, needs and concerns. role in meeting the energy needs in supporting partnerships and good In South Africa, where some two thirds The operation then discusses the of many countries, especially in causes especially at site level. of our social investment was disbursed, issues raised with stakeholders the developing world. We the Anglo American Chairman’s Fund and commits to specifi c recognise that we must play our In 2006 we devoted $50.3 million to was once again widely recognised for the management responses to part in addressing climate change social investments, compared with quality of its programmes by its peers. improve its performance and through improving our energy $57.6 million in 2005. The biggest single Its key recipients included Cotlands, publishes a summary report to effi ciency and working with element in accounting for that decline is which provides care for HIV orphans, all local stakeholders. others to develop and implement the change in the accounting treatment the Mbweli Secondary School – a highly clean coal technologies. of AngloGold Ashanti, whose successful educational partnership in SEAT has now been implemented contribution of $9 million was no longer Limpopo Province – and the Field Band at more than 50 Anglo American In 2006 we formed the Synergy included in our Group fi gures after Foundation. sites in 16 countries, with more Alliance with Shell to work on April 2006. than 250 managers having been potential clean coal projects, In South America, the focus for new trained to implement the process. including the Monash project During 2006 we established the Anglo programmes in Chile was around SEAT has received extensive in Australia. If implemented, American Group Foundation to disburse enterprise development, including international recognition. It has Monash would involve the grants at a head offi ce level. The most through new initiatives with NGOs assisted operations to gasifi cation of our coal reserves prominent benefi ciaries of these grants Casa de la Paz and the Fondo Esperanza understand local communities in Victoria’s Latrobe Valley into were CARE, Sight Savers International, on micro fi nance. better; to improve the quality of clean transport fuels and the their Community Engagement capture and storage of up to

Plans; to form partnerships with 13 million tonnes of CO2 governments and community equivalent annually. We have based groups; to address also joined the FutureGen public- problems and to enhance their private industrial alliance which positive impacts in areas such is seeking to develop a near zero as enterprise development, emissions coal fuelled power social investment, training generation plant in the US. and procurement. We have also been making good In 2006, we undertook a progress towards achieving our signiﬁ cant revision of the SEAT target of 15% energy savings by manual. During 2007, we plan to 2014 (against a 2004 baseline) roll out the revised process which through site level projects and includes additional tools on intensive programmes to share topics like conﬂ ict prevention, experience and best practice. ■ grievance procedures, community health, working with international donors and water and energy projects.

Above: Anglo American Chile supported a beekeeping programme during 2006

LTIFR and FIFR Rising uptake in VCT*

• LTIFR • FIFR % employees in risk areas 2.5 0.04 66%

2.0 0.03 1.5 0.02 31% *Voluntary 1.0 Left: Anglo 21% counselling and 0.5 0.01 American’s lost time testing 0 0 and fatal injury frequency rates Weighted average 00 01 0203 04 05 06 04 05 06

Anglo American plc Annual Review 2006 | 23 ANGLO AMERICAN plc ANNUAL REVIEW 2006

THE BOARD Executive Non-executive

Tony Trahar, BCom, CA (SA) 57, is chief executive and has been with the Group since 1974. He was appointed to the Board on 18 March 1999 and became chief executive on 8 July 2000. He is chairman of the Executive Board and a member of the Safety and Sustainable Development (S&SD) Committee. Tony Trahar’s other directorships include AngloGold Ashanti, Anglo Platinum and De Beers sa. He will retire as chief executive on 1 March 2007.

Cynthia Carroll, MSc, MBA 50, was appointed to the Board with effect from 15 January 2007 and is a member of the Executive Board. She will succeed Tony Trahar as chief executive on 1 March 2007. Cynthia Carroll is the former president and chief executive offi cer of Alcan’s Primary Sir Mark Moody-Stuart KCMG Bobby Godsell Metals Group and is a non-executive PhD, MA, FGS MA director of Sara Lee Corporation. 66, was appointed a non-executive 54, joined the Board on 18 March 1999. director on 16 July 2002 and non- He is a member of the S&SD Committee René Médori, Doctorate in Economics executive chairman on 1 December and has been with the Group since 1974. 49, joined the Group and was appointed 2002. He also sits on the Remuneration, He is chief executive of AngloGold Ashanti to the Board on 1 June 2005, becoming S&SD and Nomination Committees. and has been chief executive of its fi nance director on 1 September 2005. He is a director of HSBC Holdings plc predecessor company, AngloGold, since René Médori is a member of the Executive and Accenture Ltd. He is a member of 1998. He is chairman of South Africa’s Board, chairman of the Investment the UN Global Compact and chairman national business organisation, BUSA, and Committee and a director of AngloGold Ashanti and De Beers sa. He is a former of the Global Compact Foundation. a past president of South Africa’s Chamber fi nance director of The BOC Group plc and of Mines. is a non-executive director of Scottish and Fred Phaswana Southern Energy plc. MA, BCom David Challen CBE 62, joined the Board on 12 June 2002. He MBA, MA David Hathorn, BCom, CA (SA), CFA is chairman of the Nomination Committee 63, joined the Board on 9 September 44, was appointed to the Board on 20 April and a member of the Remuneration and 2002. He is chairman of the Audit 2005 and is a member of the Executive Audit Committees. He is the non- Committee and a member of the Board. David Hathorn is chairman and executive chairman of Anglo American Remuneration Committee. He is currently chief executive of the Mondi group. He South Africa and Anglo Platinum. He is vice chairman of Citigroup European has been with the Group since 1989. currently chairman of Transnet and a Investment Bank and a non-executive director of Naspers and was previously director of Smiths Group plc. Previously he Simon Thompson, MA BP regional president: Africa, a director of was chairman of J. Henry Schroder & Co. 47, was appointed to the Board on BP Oil (Benelux), an associate president of Limited, where he spent most of his 20 April 2005 and is a member of the BP Netherlands and chairman and chief professional career. He is currently the Executive Board and the Investment executive of BP Southern Africa. He is also deputy chairman of the UK’s Takeover Panel. Committee. Simon Thompson is chairman a member of the South African Institute of of Anglo Base Metals, Anglo Industrial International Affairs. Minerals and Anglo Exploration and a director of AngloGold Ashanti. He joined the Group in 1995.

BUSINESS UNIT HEADS

Platinum Diamonds Base Metals Ferrous Metals

Ralph Havenstein, MSc, BSc, BCom, AMP Gareth Penny, MA Peter Smith, BS (BEng) Philip Baum, BCom, LLB, 50, was appointed chief executive of Anglo 44, was appointed to the board of 59, is chief executive of Anglo Base Higher Dip Tax Law Platinum on 1 July 2003. He is a director De Beers Centenary in 2002 and in April Metals. He has been with the Group since 52, is chairman and chief executive of of Anglo American South Africa, Anglo 2003 he was appointed to the board of 1977 and was appointed chief operating Anglo Ferrous Metals and Industries, Platinum group subsidiaries, Northam De Beers sa. In July 2004, Gareth Penny ofﬁ cer of Anglo Base Metals in 2001 and acting chief executive of Anglo Platinum, Anglo American South Africa became the managing director of chief executive in 2005. American South Africa and is and Mintek. In 2005, he was appointed The Diamond Trading Company, and in responsible for Group procurement. vice president of the Executive Council March 2006, the De Beers group. of South Africa’s Chamber of Mines.

24 | Anglo American plc Annual Review 2006 See also Financial review p14 Summary directors’ report p28 Remuneration report p29

Sir Rob Margetts CBE Nicky Oppenheimer Dr Chris Fay CBE Professor Karel Van Miert BA, FREng MA PhD, BSc, FREng, FRSE, FICE, FEI Graduate in Diplomatic Sciences 60, joined the Board on 18 March 1999 and 61, joined the Board on 18 March 1999. 61, joined the Board on 19 April 1999. 65, joined the Board on 19 March 2002. was appointed as the senior independent He is a member of the Nomination He is chairman of the S&SD Committee He is a member of the Audit and Nomination non-executive director in April 2003. He is Committee. He joined the Group in 1968 and a member of the Remuneration and Committees. He is currently a member of chairman of the Remuneration Committee and subsequently became an executive Audit Committees. He is non-executive the supervisory boards of German utility and a member of the Nomination director and a deputy chairman of Anglo chairman of Expro International Group plc RWE, Philips NV, Munich Re and Vivendi Committee. He is the chairman of Legal American South Africa. He became deputy and Stena International b.v. He is a former Universal. He is also a member of the & General Group Plc, was formerly the chairman of De Beers Consolidated Mines chairman of Shell UK and of the British advisory boards of Goldman Sachs and chairman of The BOC Group plc and vice in 1985 and has been chairman of government’s Advisory Committee on Eli Lilly and a member of the Boards of chairman of ICI PLC. He was also chairman De Beers since 1998. Nicky Oppenheimer Business and the Environment. Dr Fay is Solvay s.a. and Agfa-Gevaert. He was of the UK Natural Environment Research is being proposed for re-election at the being proposed for re-election at the AGM previously President of Nyenrode Council and is a member of the UK Council AGM in April. in April. University, Netherlands Business School, for Science and Technology. Sir Rob a member of the European Parliament Margetts is being proposed for re-election Peter Woicke Dr Mamphela Ramphele from 1979 to 1985 and a member of the at the AGM in April. MBA PhD, BCom European Commission from 1989 to 1999. 64, joined the Board on 1 January 2006 59, joined the Board on 25 April 2006. Ralph Alexander and is a member of the Audit and She is a member of the Nomination and MSc Nomination Committees. From 1999 S&SD Committees. Dr Ramphele is the 51, was appointed to the Board on 20 April to January 2005 he was chief executive chairperson of Circle Capital Ventures, 2005 and is a member of the S&SD ofﬁ cer of the International Finance a black empowerment company, and a Committee. Ralph Alexander is the former Corporation. He was also a managing non-executive director of MTN Group CEO of BP Petrochemicals. From 1977 to director of the World Bank. Prior to joining Limited. She was formerly co-chair of the 1982 he worked for Exxon. He joined BP the International Finance Corporation, Global Commission on International in 1982 where his career encompassed Peter Woicke held numerous positions Migration, a World Bank managing director experience in Latin America, Africa, China over nearly 30 years with J.P. Morgan. and vice chancellor of the University of and Russia including positions as executive He is currently a member of the boards Cape Town. vice president and CEO, Gas Power and of Raiffeisen International Holding, Renewables and group vice president, Plugpower Inc, MTN Group Limited and Upstream, responsible for Russia. He is Aldwych Holdings Limited. a director of Foster Wheeler Limited.

Coal Industrial Minerals Gold Paper and Packaging

John Wallington, BSc David Weston, MBA, BSc, MI MechE, ACGI Bobby Godsell David Hathorn 49, started his career at Anglo American 48, became the chief executive of See page opposite. See page opposite. as a mining graduate in 1981. He has Tarmac in 2006. Prior to joining Tarmac, held the position of executive vice David Weston spent 25 years at Shell, president, South African operations, where he spent time in the Middle East at Anglo Coal since 2001 and has been and Pakistan. When he left Shell, he was chief executive of Anglo Coal since president of Shell Canada Products Ltd. January 2005.

Anglo American plc Annual Review 2006 | 25 ANGLO AMERICAN plc ANNUAL REVIEW 2006 Summary directors’ report for the year ended 31 December 2006

Introduction Business activities and development The directors present their summary fi nancial statements for the Reports by the chairman and chief executive on the performance for year ended 31 December 2006. The summary fi nancial statements the year and the future development of the Group are included at the do not constitute the statutory fi nancial statements as they do not beginning of this document. contain suffi cient information to allow as full an understanding of the results of the Group and the state of affairs of the Company or of Dividends the Group, and of its policies and arrangements concerning directors’ An interim dividend, including a special dividend, of 100 US cents per remuneration, as is provided by the full Annual Report. ordinary share was paid on 21 September 2006. The directors are recommending that a fi nal dividend of 75 US cents per ordinary share The full fi nancial statements, directors’ report and report of the be paid on 3 May 2007, subject to shareholder approval at the AGM. auditors (which is unqualifi ed and contains no reservations about accounting records or obtaining necessary information) are included in Annual General Meeting a separate document entitled Annual Report 2006, which is available The AGM will be held on 17 April 2007. A separate booklet enclosed to shareholders free of charge. To obtain a copy of the Annual Report, with this document contains the notice convening the meeting together for this and/or for future years, shareholders should contact either with a description of the business to be conducted. Lloyds TSB Registrars or Link Market Services as appropriate. Contact details for each are given on page 159. Corporate governance Anglo American is committed to the highest standards of corporate Shareholder communications governance – the way in which the Company is directed and controlled Shareholders on the UK register may elect to receive communications – and complied fully with the Combined Code on Corporate Governance from the Company electronically and will then receive future Annual (the ‘Code’) throughout the year under review. Reviews/Annual Reports, Notice of the Annual General Meeting (AGM) and all other shareholder communications via e-mail notifi cation. By Directors registering for this service shareholders will be able to vote online The Board has a strong independent element and currently comprises, at AGMs and access information on their shareholding including, for in addition to the chairman, fi ve executive and ten non-executive example, dividend payment history, sales and purchases and indicative directors, eight of whom are independent according to the defi nition share prices. For the Company, electronic communication represents a contained in the Code. Biographical details of the directors currently saving in terms of both costs and environmental resources. serving on the Board are given on pages 24 and 25 of this document.

To register for the service, shareholders should log on to The Company is conscious of the need to maintain an appropriate mix www.shareview.co.uk and follow the on-screen instructions. It will be of skills and experience on the Board and to progressively refresh its necessary to have a Shareholder Reference Number when registering, composition over time. In this respect, 2006 saw the appointment of which is shown on share certiﬁ cates, dividend tax vouchers and Peter Woicke and Mamphele Ramphele as new independent non- proxy cards. executive directors. Maria Silvia Bastos Marques retired from the Board at the 2006 AGM. Cynthia Carroll was appointed to the Board with The new Companies Act 2006 contains provisions which will allow effect from 15 January 2007 and will be proposed for election at the a company to publish documents such as the Annual Report/Annual forthcoming AGM. She will succeed Tony Trahar as chief executive on Review on its website rather than posting them to shareholders, 1 March 2007. Tony Trahar will retire from the Board at the conclusion provided it consults shareholders in advance and then continues to mail of the AGM. Chris Fay, Sir Rob Margetts and Nicky Oppenheimer will such documents to shareholders that request them. At the forthcoming be proposed for re-election at the AGM. AGM, the Company will propose amendments to its Articles of Association to incorporate this new power. Should the Company decide Details of the remuneration policy and of the remuneration of directors to exercise this power, it will ﬁ rst write to shareholders offering them are given in the remuneration report in the Annual Report and a the opportunity to elect to continue receiving such documents by post. summary is set out on pages 29 to 32 of this document.

20 February 2007

26 | Anglo American plc Annual Review 2006 Consolidated income statement for the year ended 31 December 2006

Before Before special items Special special items Special and items and and items and remeasurements remeasurements remeasurements remeasurements US$ million 2006 2006 2006 2005 2005 2005 Group revenue 33,072 – 33,072 29,434 – 29,434 Total operating costs (24,330) (868) (25,198) (24,090) (487) (24,577) Operating profi t from subsidiaries and joint ventures 8,742 (868) 7,874 5,344 (487) 4,857 Net profi t on disposals – 1,168 1,168 – 87 87 Share of net income from associates 582 103 685 696 (39) 657 Total profi t from operations and associates 9,324 403 9,727 6,040 (439) 5,601 Investment income 609 57 666 498 72 570 Interest expense (774) (57) (831) (926) (37) (963) Net fi nance costs (165) – (165) (428) 35 (393) Profi t before tax 9,159 403 9,562 5,612 (404) 5,208 Income tax (expense)/income (2,763) 123 (2,640) (1,283) 8 (1,275) Profi t for the fi nancial year 6,396 526 6,922 4,329 (396) 3,933

Attributable to: Minority interests 925 (189) 736 593 (181) 412 Equity shareholders of the Company 5,471 715 6,186 3,736 (215) 3,521

Earnings per share (US$) Basic 4.21 2.43 Diluted 4.12 2.36

Dividends Proposed ordinary dividend per share (US cents) 75 62 Proposed ordinary dividend (US$ million) 1,107 903 Proposed special dividend per share (US cents) – 33 Proposed special dividend (US$ million) – 480

Ordinary dividends paid during the year per share (US cents) 95 79 Ordinary dividends paid during the year (US$ million) 1,391 1,137 Special dividends paid during the year per share (US cents) 100 - Special dividends paid during the year (US$ million) 1,448 -

Anglo American plc Annual Review 2006 | 27 ANGLO AMERICAN plc ANNUAL REVIEW 2006 Summary consolidated balance sheet as at 31 December 2006

US$ million 2006 2005 Non-current assets Intangible assets 2,134 2,572 Tangible assets 23,498 30,796 Investments in associates 4,780 3,165 Other non-current assets 3,039 2,210 Total non-current assets 33,451 38,743 Current assets Inventories 2,974 3,569 Trade and other receivables 5,312 5,174 Current fi nancial asset investments and cash and cash equivalents 3,004 3,446 Other current assets 554 958 Total current assets 11,844 13,147 Assets classifi ed as held for sale 1,188 – Current liabilities Short term borrowings (2,028) (2,076) Other current liabilities (6,771) (7,474) Total current liabilities (8,799) (9,550) Total assets less current liabilities 37,684 42,340 Non-current liabilities Medium and long term borrowings (4,220) (6,363) Retirement benefi t obligations (775) (1,258) Deferred tax liabilities (3,687) (5,201) Other non-current liabilities (1,328) (1,940) Total non-current liabilities (10,010) (14,762) Liabilities directly associated with assets classifi ed as held for sale (547) – Net assets 27,127 27,578

Attributable to: Equity attributable to equity shareholders of the Company 24,271 23,621 Minority interests 2,856 3,957 Total equity 27,127 27,578

The fi nancial statements, including the summary fi nancial statements, were approved by the Board of directors on 20 February 2007 and signed on its behalf by Tony Trahar, chief executive, and René Médori, fi nance director.

Summary consolidated cash ﬂ ow statement for the year ended 31 December 2006

US$ million 2006 2005 Cash inﬂ ows from operations 10,057 7,265 Dividends from associates and investments 288 470 Net interest (paid) (186) (337) Taxation (2,035) (954) Net capital expenditure (3,626) (3,034) Acquisitions and disposals(1) 1,692 517 Dividends paid to minority interests and Company shareholders (3,271) (1,558) Purchase of Treasury shares (3,922) – Financing activity 567 (1,988) Other 266 221 Net increase in cash and cash equivalents (170) 602 (1) Includes repayments of loans and capital from associates

28 | Anglo American plc Annual Review 2006 Summary remuneration report for the year ended 31 December 2006

This is a summary of the full remuneration report contained in the retention, Bonus Shares vest only if the participant remains in Annual Report, copies of which may be obtained free of charge from employment with the Group until the end of a three year holding the Company’s Registrars or South African Transfer Secretaries, or may period, or (if having left during the holding period) is, in the view be viewed on, UK downloaded from, the Company’s website, of the Committee, deemed to be a ‘good leaver’. www.angloamerican.co.uk. The maximum potential, at face value, of the Enhancement Shares Remuneration Committee is 75% of the face value of the Bonus Shares (e.g. in the case of Anglo American has a Remuneration Committee (the Committee) the outgoing chief executive a maximum of 68% of basic salary). consisting of non-executive directors, chaired by Sir Rob Margetts, Awards will vest after three years only to the extent that a challenging which is responsible for considering and making recommendations to performance condition (based on EPS growth) has been met. the Board on executive and senior management remuneration policy, specifi c remuneration packages for executive directors and the design On a change of control of the Company, Bonus Shares would be and operation of the Company’s share incentive schemes. released and Enhancement Shares would vest, to the extent that the applicable performance conditions have been satisfi ed. The BSP is not Remuneration policy for executive directors pensionable. Each executive director’s total remuneration consists of salary, annual bonus, long term incentives and benefi ts. The basic salary of the Other long term incentive plans (LTIP) executive directors is reviewed annually and is targeted at the median Conditional LTIP awards are made annually to executive directors. The of companies of comparable size, market sector, business complexity maximum grant level under the LTIP is 200% of salary. It is anticipated and international scope. Company performance, individual performance that in 2007, grants under the LTIP will be made at 175% of salary and changes in responsibilities are also taken into consideration in for all executive directors, including the new chief executive. The setting salary levels at the end of each year. An appropriate balance is Committee is content that the performance conditions that need to be maintained between fi xed and performance related remuneration and satisfi ed for these awards to vest in full are suffi ciently stretching in between elements linked to short term fi nancial performance and those the context of the award levels. In determining annual award levels, linked to longer term shareholder value creation. Assuming on target the Committee also gives consideration to market competitiveness performance, the Committee’s policy is that at least 50% (60% for and has set the levels taking account of median expected value of the chief executive) or more of total executive director remuneration long term incentives relative to other companies. These awards are is performance related. In 2006, 69% of the chief executive’s discretionary and considered on a case-by-case basis. remuneration on an expected value basis was performance related; for other directors, on average, the fi gure was 64%. The LTIP closely aligns the interests of the shareholders and executive directors by rewarding superior shareholder and fi nancial performance Bonus Share Plan and by encouraging executives to build up a shareholding in Anglo The Bonus Share Plan (BSP) was fi rst operated in 2004 and all American plc. executive directors are eligible to participate in it. The BSP requires executive directors to invest a signifi cant proportion of their Within fi ve years of their appointment, executive directors are remuneration in shares, thereby more closely aligning their interests expected to acquire a holding of shares with a value of two times with those of shareholders, and encourages management at all levels basic salary in the case of the chief executive and one times basic to build up a meaningful personal stake in the Company. Awards salary in the case of other executive directors. under the BSP are made annually and consist of three elements: a performance-related cash element, Bonus Shares as a conditional The vesting of LTIP awards made during 2006 is subject to the award to a value equal to the cash element and an additional achievement of stretching performance targets, relating to Total performance-related element in the form of Enhancement Shares. Shareholder Return (TSR) and to an operating measure, currently Return on Capital Employed (ROCE), over a fi xed three year period. The value of the bonus is calculated by reference to achievement Half of each award is subject to a Group TSR measure, while the other against annual performance targets which include measures of half is subject to a Group ROCE measure. These performance measures corporate and, where applicable, business unit performance as well were selected on the basis that they clearly foster the creation of as the achievement of specifi c individual objectives. In 2006, 60% shareholder value. There is no retesting of performance. of each annual bonus award was based on the corporate or business measure and the remaining 40% on key personal performance For awards made from 2005 onwards, the portion of each award measures. The level of bonuses payable will be reduced if certain that is based on TSR is measured 50% against the Sector Index and overall safety improvement targets are not met. For executive 50% against the constituents of the FTSE 100. Maximum vesting on directors, the corporate element is based on demanding Earnings the TSR element of an award will only be possible if Anglo American Per Share (EPS) targets. In 2006 the EPS targets were met in full. outperforms by a substantial margin both the sector benchmark and the largest UK companies across all sectors. Maximum vesting of The Committee reviews these measures annually to ensure they the whole LTIP award, would, in addition, depend on the Company’s remain appropriate and suffi ciently stretching in the context of the performance exceeding demanding ROCE targets. Taken as a whole, economic and performance expectations for the Company and its vesting depends on a very challenging set of performance hurdles. operating businesses.

In the case of the directors and top tier of management, half of the bonus is payable in cash. The maximum cash element has been 90% of basic salary in the case of the chief executive and 75% of basic salary for the other executive directors (from 2007, the maximum cash element for the new chief executive will be 75%). The maximum bonus would only be paid for meeting targets which, in the opinion of the Committee, represent an exceptional performance for the Group. The other half of the bonus is in the form of a conditional award of Bonus Shares equal in value to the cash element. To encourage

Anglo American plc Annual Review 2006 | 29 ANGLO AMERICAN plc ANNUAL REVIEW 2006

Summary remuneration report continued

For awards made in 2006, the companies constituting the Sector Pensions Index were as follows (up until 31 December 2006, after which the Each executive director participated in defi ned contribution pension percentage attributable to Paper and Packaging falls to zero): arrangements and two of the executive directors are also active members of defi ned benefi t pension schemes in respect of their South Mining Paper and Packaging Industrial Minerals African services. During the year, in the light of the new UK pensions Category regime which applied from 6 April 2006, the Committee decided weighting 78% 13% 9% that it would consider requests from executive directors that their Comparator BHP Billiton plc Sappi Limited CRH plc companies CVRD SCA Hanson plc contracts be altered for future service, so that further pension benefi ts Rio Tinto plc Stora Enso Oyj Holcim Limited are reduced or cease to accrue and that a pension allowance be paid Teck Cominco UPM-Kymmene Lafarge having the same value as the defi ned contribution benefi ts forgone. Vedanta Group Similarly, the Committee decided that it would consider requests from Resources plc executive directors (as is the case for employees more generally) that Xstrata plc their contracts be altered for future service, so that supplementary pension contributions are made into their defi ned contribution pension arrangements, in return for equivalent-value reductions in their future In the event of a change of control of the Company, the number of basic salary and/or the cash element of the BSP. shares that vest under the LTIP will be calculated by reference to the extent to which the applicable performance conditions have been met Executive directors’ service contracts at the time of the change of control. Cynthia Carroll and Simon Thompson are employed by Anglo American Services (UK) Ltd; Tony Trahar and David Hathorn have contracts with Anglo American International (IOM) Limited and with Anglo Operations 0%2&/2-!.#%'2!0( Limited and René Médori is employed by Anglo American International • !NGLO!MERICAN (IOM) Limited. It is the Company’s policy that the period of notice for • &43%)NDEX executive directors will not exceed 12 months and the employment contracts of all executive directors except that of Cynthia Carroll are terminable at 12 months notice by either party. As part of Cynthia Carroll’s terms upon joining the Company, her initial notice period will be 24 months, which will reduce to 12 months after the initial 12 month period.

The contracts of executive directors do not provide for any enhanced payments in the event of a change of control of the Company, or for liquidated damages.

Non-executive directors’ remuneration and service The graph shows the Company’s TSR performance from 1 January contracts 2002 to 31 December 2006 against the TSR performance of the FTSE Non-executive director remuneration is set at a level which is intended 100 Index, chosen as being a broad equity market index consisting of to be sufﬁ cient to attract and retain world-class non-executive companies of comparable size and complexity to Anglo American plc. talent and consistent with recognised best practice. Non-executive In drawing this graph, it has been assumed that all dividends paid have directors may not participate in the Company’s BSP, LTIP or pension been reinvested. This graph has been produced in accordance with the arrangements. The Board reviews non-executive directors’ fees requirements of Schedule 7A to the Companies Act 1985. periodically to ensure they remain market-competitive. All non- executive directors have letters of appointment with Anglo American plc for an initial period of three years from their date of appointment, subject to re-election at the AGM.

30 | Anglo American plc Annual Review 2006 Directors’ emoluments The fees and other emoluments paid to non-executive directors during the year ended 31 December 2006 amounted to £1,807,000 (2005: £1,683,000). In addition, under Bobby Godsell’s service contract with AngloGold Ashanti, his basic salary was equivalent to £491,000 per annum (2005: £500,000) and he was awarded a performance bonus equivalent to £192,000 (2005: £173,000). Bobby Godsell is also entitled to the provision of car allowance, medical insurance and death and disability insurance. The total value of these beneﬁ ts was equivalent to £15,000 (2005: £16,000).

Emoluments paid to executive directors, and their share interests, were as follows:

Plus Basic salary Annual Basic salary sacriﬁ ced into performance bonus as paid Pension Scheme(5) Total basic salary – cash element(5) Beneﬁ ts in kind(6) Total 2006 2005 2006 2005 2006 2005 2006 2005 2006 2005 2006 2005 Executive Directors(1)(2)(3)(4)(7) £000 £000 £000 £000 £000 £000 £000 £000 £000 £000 £000 £000 Tony Trahar 786 855 239 95 1,025 950 830 627 112 54 1,967 1,631 David Hathorn 520 335 – – 520 335 277 216 50 17 847 568 René Médori 485 303 75 – 560 303 370 164 25 13 955 480 Simon Thompson 495 335 25 – 520 335 316 213 34 17 870 565

In addition to the emoluments set out above, aggregate gains on exercise of directors’ share options in the year amounted to £4,681,000 (2005: £5,630,000) and R3,121,000 (2005: R6,934,000) and aggregate gains on vesting of directors’ LTIP, DBP and BSP awards during 2006 amounted to £2,806,000 (2005: £2,319,000) and R3,300,000 (2005: R1,208,000).

Two directors participated in defi ned benefi t pension schemes and four directors participated in defi ned contribution pension arrangements during 2006. Normal contributions to defi ned contribution schemes in respect of these directors amounted to £821,000 (2005: £562,000). Further contributions were payable during 2006 amounting to £3,346,000 arising out of: contractually agreed reductions in salary and/or in the cash element payable under the BSP; reductions in the value of defi ned benefi t pension entitlements; and/or the crystallisation after April 2006 of benefi ts accrued in unfunded pension arrangements.

Shares and options in Anglo American plc at 31 December 2006

Beneﬁ cial Anglo BSP Deferred bonus share American SIP LTIP BSP Enhancement matching interests SAYE options matching shares(9) shares(10) Bonus Shares(11) Shares(11) shares(12) Other(13) Executive Directors(8) 2006 2006 2006 2006 2006 2006 2006 2006 Tony Trahar 40,291 5,553 297 331,675 124,965 93,723 – – David Hathorn 17,851 – – 126,560 32,837 24,627 – – René Médori 38 951 38 115,414 8,724 6,542 – 20,240 Simon Thompson 78,655 – 297 150,959 41,366 31,024 – –

(1) Subsequent to their retirement from the Board in 2001, Leslie Boyd and Mike King continue to hold non-executive directorships with certain listed subsidiaries of the Group. They received fees of £36,000 (2005: £26,000) and £22,000 (2005: £17,000) respectively, for the provision of these services during the year. (2) Subsequent to his retirement from the Board in 2004, Bill Nairn has provided consultancy services to Anglo American. He received £120,000 (2005: £130,000) for the provision of these services during the year. (3) Subsequent to his retirement from the Board in 2005, Barry Davison provided consultancy services to Anglo American, receiving £192,000 for the provision of these services during the year. He also continued to hold non-executive directorships with certain listed subsidiaries of the Group. He received fees of £53,000 for the provision of these services during the year. (4) Subsequent to his retirement from the Board in 2005, Tony Lea remained an employee until 24 March 2006 receiving total remuneration (including benefi ts and pension contributions) of £597,000 (2005: £969,000). Thereafter (until 31 December 2006) he provided consultancy services to the Group, receiving £441,000 for the provision of these services. (5) Their employing companies have contractually agreed with the executive directors that supplementary pension contributions be made into their pension arrangements in return for equivalent-value reductions in their base salaries and/or in the cash elements payable under the BSP. (6) Each director receives a car allowance and a limited amount of personal taxation/fi nancial advice. All directors receive death and disability benefi ts and also receive medical insurance. Tony Trahar and Simon Thompson also receive club membership. (7) No share options were granted to executive directors during the year, although 355,000 options were exercised by executive directors in 2006. Bobby Godsell also has 190,000 options in AngloGold Ashanti. (8) The exercise of options under the ESOS is subject to Anglo American’s EPS (based on the Company’s headline earnings measure) increasing by at least 6% above the UK Retail Price Index over a three-year period. The EPS growth requirement takes account of the cyclical nature of the natural resource business. (9) Benefi cially held SIP matching shares ‘released’ after three years are disclosed in the benefi cial interest total. (10) 246,785 conditional awards of shares were made to executive directors under the LTIP during the year. The vesting of those LTIP awards is subject to the achievement of stretching performance measures relating to TSR and ROCE. In 2006, 83,202 awards vested to executive directors under the 2003 LTIP Scheme. The outcome on the Group ROCE element of the 2003 LTIP was 100% and on the TSR element nil. Thus, the average vesting level for those directors with a 50% Group ROCE, 50% TSR split was 50%. (11) 59,121 Bonus Shares and 44,338 Enhancement Shares were conditionally awarded to executive directors under the BSP during 2006 (in respect of 2005 performance). Bonus Shares vest if the executive director remains in employment with the Group until the end of the three-year holding period. The Enhancement Shares will vest to the extent that challenging EPS performance conditions were met. (12) No further awards were made to executive directors under the Deferred Bonus Plan during the year. 48,519 awards vested to executive directors during the year. (13) René Médori received 50,600 forfeitable shares not included in any share plans upon joining Anglo American plc. 30,360 were released to him on 1 May 2006; the remaining 20,240 will be released in May 2007, conditional upon his continued employment in the Group.

Anglo American plc Annual Review 2006 | 31 ANGLO AMERICAN plc ANNUAL REVIEW 2006

Summary remuneration report continued

Independent remuneration report review We note the Committee has refi ned its modus operandi each year This letter reports on the results of the review carried out by Mercer taking into account any comments we have made in our reviews. Human Resource Consulting Limited of the processes followed by the Anglo American Remuneration Committee (the Committee) that In addition, the Committee has taken steps to improve its processes support the Remuneration Report for the fi nancial year 2006. Mercer refl ecting areas for improvement highlighted in the Evaluation of the undertook the review at the request of the chairman of the Committee Committee undertaken with input from external advisors. in order to provide shareholders with assurance that the remuneration processes followed are appropriate and that the Committee has As a result we believe that the Anglo American Remuneration complied with the policies set out in the Remuneration Report. Committee is exemplary in its conduct, decision making and reporting.

In order to reach our opinion, we reviewed the Committee’s Terms The members of the Remuneration Committee are regularly updated on of Reference and the minutes of its meetings held during the year as executive compensation and corporate governance matters. well as material presented to the Committee for its review. We also interviewed the Chairman and Secretary of the Committee. Our review Further detail regarding the Mercer review is included in a letter of this was not intended to audit the compensation data set forth in the date addressed to the Committee Chairman which we understand will Remuneration Report or to evaluate the merits of Anglo American’s be made available on the Company’s website. remuneration programme. Belinda Hudson Based on our review, Mercer is of the opinion that the processes Principal followed by the Committee during 2006 were fully consistent with Mercer Human Resource Consulting Limited its Terms of Reference and that the decisions taken by the Committee Tower Place were in line with the principles set out in the Remuneration Report. It London EC3R 5BU continues to be our view that the Committee takes a suitably robust and pro-active approach to its work. 13 February 2007

Independent auditors’ statement to the members of Anglo American plc

We have examined the summary ﬁ nancial statement which comprises Basis of opinion the summary directors’ report, consolidated income statement, We conducted our work in accordance with bulletin 1999/6 ‘The summary consolidated balance sheet, summary consolidated cash ﬂ ow Auditors’ Statement on the Summary Financial Statement’ issued by statement and summary directors’ remuneration report. the Auditing Practices Board, for use in the United Kingdom.

This report is made solely to the Company’s members, as a body, Our report on the Company’s full annual fi nancial statements describes in accordance with section 251 of the Companies Act 1985. Our the basis of our audit opinions on those fi nancial statements and the work has been undertaken so that we might state to the Company’s directors’ remuneration report. members those matters we are required to state to them in an auditors’ report and for no other purpose. To the fullest extent Opinion permitted by law, we do not accept or assume responsibility to anyone In our opinion, the summary fi nancial statement is consistent with other than the Company and the Company’s members as a body, for the full annual accounts, the directors’ report and the directors’ our audit work, for this report, for our audit report or for the opinions remuneration report of Anglo American plc for the year ended we have formed. 31 December 2006 and complies with the applicable requirements of section 251 of the Companies Act 1985, and the regulations Respective responsibilities of directors and auditors made thereunder. The directors are responsible for preparing the Annual Review in accordance with United Kingdom law. Our responsibility is to report Deloitte & Touche LLP to you our opinion on the consistency of the summary fi nancial Chartered Accountants and Registered Auditors statement within the annual review with the full annual accounts, London the directors’ report and the directors’ remuneration report, and its compliance with the relevant requirements of section 251 of the 20 February 2007 Companies Act 1985 and the regulations made thereunder. We also read the other information contained in the Annual Review as described in the contents section, and consider the implications for our report if we become aware of any apparent misstatements or material inconsistencies with the summary fi nancial statement.

32 | Anglo American plc Annual Review 2006 Key ﬁ nancial data

US$ million (unless otherwise stated) 2006 2005 2004 US$ million (unless otherwise stated) 2003(7) 2002(7)(8) Group revenue including associates 38,637 34,472 31,938 Group turnover including share Less: share of associates’ revenue (5,565) (5,038) (5,670) of joint ventures and associates 24,909 20,497 Group revenue 33,072 29,434 26,268 Less: Share of joint ventures’ turnover (1,060) (1,066) Operating profi t including associates Share of associates’ turnover (5,212) (4,286) before special items and remeasurements 9,832 6,376 4,697 Special items and remeasurements (excluding Group turnover – subsidiaries 18,637 15,145 fi nancing special items and remeasurements) 376 (455) 933 Operating profi t before exceptional items 2,892 3,332 Net fi nance costs (including remeasurements), Operating exceptional items (286) (81) taxation and minority interests of associates (481) (320) (399) Total profi t from operations Total operating profi t 2,606 3,251 and associates 9,727 5,601 5,231 Non-operating exceptional items 386 64 Net fi nance costs (including special items Net interest expense (319) (179) and remeasurements) (165) (393) (367) Profi t before tax 9,562 5,208 4,864 Profi t on ordinary activities Income tax expense (2,640) (1,275) (923) before taxation 2,673 3,136 Profi t for the fi nancial year 6,922 3,933 3,941 Taxation on profi t on ordinary activities (749) (1,042) Minority interests (736) (412) (440) Taxation on exceptional items 13 (3) Profi t attributable to equity Equity minority interests (345) (528) shareholders of the Company 6,186 3,521 3,501 Profi t for the fi nancial year 1,592 1,563 Underlying earnings(1) 5,471 3,736 2,684 Underlying earnings(1) 1,694 1,759 Earnings per share ($) 4.21 2.43 2.44 Earnings per share ($) 1.13 1.11 Underlying earnings per share ($) 3.73 2.58 1.87 Underlying earnings per share ($) 1.20 1.25 Ordinary dividend per share (US cents) 108.0 90.0 70.0 Dividend per share (US cents) 54.0 51.0 Special dividend per share (US cents) 67.0 33.0 – Weighted average number of shares Basic number of shares outstanding (million) 1,468 1,447 1,434 outstanding (million) 1,415 1,411 EBITDA(2) 12,197 8,959 7,031 EBITDA(2) 4,785 4,792 EBITDA interest cover(3) 45.5 20.0 18.5 EBITDA interest cover(3) 9.3 50.5 Operating margin (before Operating margin special items and remeasurements) 25.4% 18.5% 14.7% (before exceptional items) 11.6% 16.3% Ordinary dividend cover (based on Dividend cover underlying earnings per share) 3.5 2.9 2.7 (based on underlying earnings) 2.2 2.5 Balance sheet Balance sheet Intangible and tangible assets 25,632 33,368 35,816 Intangible and tangible fi xed assets 26,646 18,841 Other non-current assets and investments 7,819 5,375 5,375 Investments 7,206 6,746 Working capital 3,246 3,719 3,715 Working capital 1,903 822 Other net current liabilities (1,177) (1,492) (611) Other non-current liabilities and obligations (5,790) (8,399) (8,339) Provisions for liabilities and charges (3,954) (2,896) Net debt (3,324) (4,993) (8,243) Net debt (8,633) (5,578) Net assets classifi ed as held for sale 721 – – Net assets 27,127 27,578 27,713 Minority interests (2,856) (3,957) (4,588) Equity minority interests (3,396) (2,304) Equity attributable to the equity shareholders of the Company 24,271 23,621 23,125 Total shareholders’ funds (equity) 19,772 15,631 Total capital(4) 30,451 32,571 35,956 Total capital (4) 31,801 23,513 Cash infl ows from operations 10,057 7,265 5,291 Net cash infl ow from operating activities 3,184 3,618 Dividends received from associates Dividends received from joint and fi nancial asset investments 288 470 396 ventures and associates 426 258 Return on capital employed(5) 32.4% 19.2% 14.6% Return on capital employed(5) 10.7% 17.5% EBITDA/average total capital(4) 38.7% 26.0% 21.2% EBITDA/average total capital(4) 17.3% 24.4% Net debt to total capital(6) 12.9% 17.0 % 25.4% Net debt to total capital(6) 32.0% 27.9%

Years 2004, 2005 and 2006 are prepared under IFRS. Years 2002 and 2003 are prepared under UK GAAP. (1) Underlying earnings is net profi t attributable to equity shareholders, adjusted for the effect of special items and remeasurements, and any related tax and minority interests. (2) EBITDA is operating profi t before special items, operating remeasurements (2002 to 2003: exceptional items), depreciation and amortisation in subsidiaries and joint ventures and share of EBITDA of associates. (3) EBITDA interest cover is EBITDA divided by net fi nance costs excluding other net fi nancial income, exchange gains and losses on monetary assets and liabilities, amortisation of discounts on provisions, special items and fi nancial remeasurements (2002 to 2003: exceptional items), but including share of associates’ net interest expense. (4) Total capital is net assets excluding net debt. (5) Return on capital employed is calculated as total operating profi t before impairments for the year divided by the average total capital less other investments and adjusted for impairments. (6) Net debt to total capital is calculated as net debt divided by total capital less investments in associates. (7) 2002 and 2003 have been restated to refl ect the adoption of UITF abstract 38 Accounting for ESOP trusts. (8) 2002 has been restated for the adoption of FRS 19 Deferred Tax.

Anglo American plc Annual Review 2006 | 33 ANGLO AMERICAN plc ANNUAL REVIEW 2006 The business An overview – effective 21 February 2007

Platinum Diamonds Base Metals Ferrous Metals and Industries Anglo Anglo Base Anglo Ferrous Metals Platinum 75.4% De Beers(1) 45% Metals 100% and Industries 100%

South Africa South Africa (100% owned) Copper Ferrous Metals Rustenburg Section 100% Cullinan Collahuasi (Chile) 44% Kumba Iron Ore Union Section 85% De Beers Group Services Chagres (Chile) 100% (South Africa) 64% Amandelbult Section 100% (Exploration and Services) El Soldado (Chile) 100% Highveld Steel (South Africa and Austria) 29% (3) Potgietersrust Platinums 100% De Beers Marine Los Bronces (Chile) 100% Finsch Scaw Metals Lebowa Platinum Mines 100% Mantos Blancos (Chile) 100% (worldwide) 100% Kimberley Mines Western Limb Mantoverde (Chile) 100% Samancor (South Tailings Retreatment 100% Koffi efontein Palabora (South Africa) 17% Africa and Australia) 40% Waterval Smelter (including Namaqualand Mines Quellaveco (Peru) 81% converting process project) 100% The Oaks Industries Polokwane Smelter 100% Venetia Nickel Tongaat-Hulett Mortimer Smelter 100% Codemin (Brazil) 100% (southern Africa) 50% Rustenburg Base Botswana Loma de Níquel Hulamin (South Africa) 45% Metals Refi nery 100% Debswana (Damtshaa, (Venezuela) 91% Vergelegen Precious Metals Refi nery 100% Jwaneng, Orapa and Barro Alto (Brazil) 100% (South Africa) 100% Twickenham Mine 100% Letlhakane mines) 50% Zinc/Lead Namibia (Joint ventures or Black Mountain sharing agreements) Namdeb (Mining Area (South Africa) 100% (2) No. 1 Orange River Mines, Modikwa Platinum Lisheen (Ireland) 100% Joint Venture 50% Elizabeth Bay and Marine concessions) 50% Gamsberg Kroondal Pooling and (South Africa) 100% (2) Sharing Agreement 50% De Beers Marine Namibia 70% Skorpion (Namibia) 100% Bafokeng-Rasimone Joint Venture 50% Tanzania Mineral Sands Marikana Pooling and Sharing Agreement 50% Williamson Diamonds 75% Namakwa Sands (South Africa) 100% (2) Mototolo Joint Venture 50% Canada Niobium Catalão (Brazil) 100% Masa Chrome Company 74% Snap Lake 100% Pandora Venture 42.5% Victor (approved for construction) 100% Northam Platinum Limited 22.5% Trading and Marketing Various companies involved in purchasing, selling and marketing of rough diamonds, including The Diamond Trading Company 100%

Industrial Diamonds Companies manufacturing synthetic diamonds and abrasive products 60%

(1) An independently managed associate. (2) In January 2007, Exxaro Resources Ltd (3) Highveld Steel and Vanadium exercised an option in terms of which, continues to be consolidated in the subject to the exercise of conditions Group due to an additional 24.9% of precedent, it agreed to acquire 100% the voting rights that Anglo American of Namakwa Sands and 26% of each plc controls through shares held by of Black Mountain and Gamsberg. Credit Suisse.

34 | Anglo American plc Annual Review 2006 Coal Industrial Minerals Gold Paper and Packaging Anglo Anglo Industrial AngloGold Anglo Paper Coal 100% Minerals 100% Ashanti 41.7% and Packaging 100%

South Africa (100% owned) Aggregates and building South Africa (100% owned) Packaging Bank materials Great Noligwa Mondi Packaging Goedehoop Tarmac Group (UK) 100% Kopanang (worldwide) 100% Greenside Tarmac France (France Moab Khotsong Mondi Packaging and Belgium) 100% South Africa 55% Isibonelo Mponeng Tarmac Germany 100% Kleinkopje Savuka Tarmac Poland 100% Business Paper Kriel (4) Tau Lekoa Tarmac Czech Republic 100% Mondi Business Paper Landau TauTona (Austria, Hungary, Tarmac Iberia (Spain) 100% New Denmark Slovakia, Russia, Tarmac Turkey 100% South Africa, Israel) 100% New Vaal Rest of Africa Tarmac International Holdings Nooitgedacht Geita (Tanzania) 100% (Far East and Middle East) 100% Newspaper + Merchanting Iduapriem (Ghana) 85% Tarmac Romania 60% Mondi Shanduka South Africa – other Morila (Mali) 40% Newsprint (South Africa) 50%(6) Mafube 50% Navachab (Namibia) 100% Phosphate products Aylesford Richards Bay Coal Copebrás (Brazil) 73% Obuasi (Ghana) 100% Newsprint (UK) 50% Terminal 27% Sadiola (Mali) 38% Europapier (Europe) 90% Siguiri (Guinea) 85% Australia Yatela (Mali) 40% Callide 100% Dawson Complex 51% North America Drayton 88% Cripple Creek and Victor German Creek (Capcoal) 70% (USA) 67%(5) Jellinbah East 23% Moranbah North 88% South America AngloGold Ashanti Australia – other Mineração (Brazil) 100% Monash Energy Serra Grande (Brazil) 50% Holdings Limited 100% Cerro Vanguardia Dalrymple Bay Coal (Argentina) 92.5% Terminal Pty Ltd 33% Newcastle Coal Australia Shippers Pty Ltd 20% Sunrise Dam 100% Canada Boddington 33% Peace River Coal 60%

Colombia Cerrejón 33%

Venezuela Carbones del Guasare 25%

(4) Kriel forms part of the proposed Anglo (5) AngloGold Ashanti is entitled to (6) Shareholdings are shown on the basis Inyosi Coal of which Anglo Coal will receive 100% of the cash fl ow from that the contemplated community own 73%. Heads of Agreement have the operation until a loan, extended share ownership is fi nalised. been signed and the transaction will to the joint venture by AngloGold be effective upon the fi nalisation Ashanti, is repaid. and execution of the defi nitive agreements relating to the deal and the fulfi lment of the conditions precedent contained therein. Anglo American plc Annual Review 2006 | 35 ANGLO AMERICAN plc ANNUAL REVIEW 2006 Shareholder information

Annual General Meeting Other Anglo American publications Will be held at 11:00 am on Tuesday 17 April 2007, at The Royal • 2006 Annual Report Society, 6-9 Carlton House Terrace, London, SW1Y 5AG. • 2006 Interim Report • 2006/07 Fact Book Shareholders’ diary 2007/8 • 2006 Notice of AGM and Shareholder Information Booklet Interim results announcement August 2007 • 2006 Report to Society Interim dividend payment September 2007 • Optima – Anglo American’s current affairs journal Annual results announcement February 2008 • Good Neighbours: Our Work With Communities Annual report March 2008 • Good Citizenship: Our Business Principles AGM April 2008 • Investing in the future – Black Economic Empowerment Final dividend May 2008 If you would like to receive copies of Anglo American’s publications, Shareholding enquiries please write to: Enquiries relating to shareholdings should be made to the Company’s UK Registrars, Lloyds TSB or the South African Transfer Secretaries, Investor and Corporate Affairs Department Link Market Services, at the relevant address below: Anglo American plc 20 Carlton House Terrace UK Registrars London SW1Y 5AN Lloyds TSB Registrars England The Causeway Worthing Alternatively, publications can be ordered online at: West Sussex BN99 6DA http://www.angloamerican.co.uk/newsandmedia/reportsand England publications/request/requestreportpopup/ Telephone: In the UK: 0870 609 2286 The 2006 Annual Report and the booklet containing the Notice From outside the UK: +44 121 415 7558 of AGM and other shareholder information are available free of charge from the Company, its UK Registrars and South African Transfer Secretaries in South Africa Transfer Secretaries. Link Market Services South Africa (Pty) Ltd 11 Diagonal Street Charitable partners Johannesburg 2001, South Africa This is just a selection of the charities which we have worked with (PO Box 4844 Johannesburg 2000) in 2006: Telephone: +27 (0) 11 834 2266

Enquiries on other matters should be addressed to the Company Secretary at the following address:

Registered and Head Ofﬁ ce Anglo American plc 20 Carlton House Terrace London SW1Y 5AN England Telephone: +44 (0)20 7968 8888 Fax: +44 (0)20 7968 8500 Registered number: 3564138 Website: www.angloamerican.co.uk

Additional information on a wide range of shareholder services can be found in the Shareholder Information section of the Notice of Annual General Meeting and on the Group’s website.

36 | Anglo American plc Annual Review 2006 ANGLO AMERICAN plc ANNUAL REVIEW 2006

Anglo American at a glance KEY Geographical locations

• Platinum Anglo American is a global • Diamonds • Base Metals leader in mining, focused on • Ferrous Metals • Coal adding value for shareholders, • Industrial Minerals • Gold customers, employees and • Paper and Packaging the communities in which ■ Indicates countries in which it operates exploration is currently under way The Group has a range of high quality, core mining businesses covering platinum, diamonds, coal, base and ferrous metals and industrial minerals

OUR BUSINESSES EXPLORATION OTHER BUSINESSES

Platinum Diamonds Base Metals Ferrous Metals Coal Industrial Minerals Exploration Gold

Business profi le Business profi le Business profi le Business profi le Business profi le Business profi le As one of the major diversifi ed Business profi le • The world’s largest primary • De Beers accounts for about • Comprises primarily copper, • Operations are mainly • Anglo Coal is one of the • Tarmac is the No. 1 UK mining groups, Anglo • AngloGold Ashanti is a producer of platinum, 40% by value of global nickel, zinc and mineral in southern Africa, world’s largest private sector producer of aggregates and American’s exploration major world gold producer. accounting for around 40% rough diamond production. sands operations. South America, Canada coal producers and exporters. asphalt and a leading activities cover many parts of • It has 22 operations in of the world’s newly mined • The world’s largest supplier • Operates in South America, and Australia. • Its operations are in South producer of ready-mixed the globe. In its constant ten countries. platinum output. and marketer of gem southern Africa and Ireland. • Businesses produce iron Africa, Australia, Colombia concrete. search for minerals, Anglo diamonds. ore, manganese and steel and Venezuela. • Its operations are primarily American is currently Products and uses Products and uses Products and uses products for the mining in the UK, continental Europe prospecting in more than 30 • Fabricated gold is used • Primarily used in Products and uses • Copper is used mainly in sector. Products and uses and the Middle East. countries. In addition to its in jewellery, electronics, autocatalysts and jewellery. • The majority of cuttable wire and cable, as well as • About 40% of all electricity focus on areas surrounding its dentistry, decorations, • Also used in chemical, diamonds are used in in brass, tubing and pipes. Products and uses generated globally is Products and uses existing mining operations, medals and coins. electrical, electronic, glass jewellery. • Zinc is chiefl y used • Iron ore is the basic powered by coal. • Tarmac is involved in the Anglo American is now looking and petroleum industries • Some natural stones are for galvanising. raw material used in • Around 66% of the world’s production of crushed rock, at relatively unexplored new • Paper and and medical applications. used for industrial purposes Nickel is mostly used in the steel production. steel industry uses coal and sand, gravel, concrete and frontiers, including in the Arctic Packaging such as cutting, drilling and production of stainless steel. • Manganese and vanadium it is an important fuel for mortar, lime, cement and region through an arc stretching other applications. are key components in other industries. concrete products. from Alaska to the Russian far steelmaking. • Copebrás is a Brazilian east. During 2006, over Business profi le • producer of phosphate $250 million was spent on Mondi is an integrated paper fertilisers. exploration – $53 million on and packaging group. • base metals, $30 million on Its operations and interests are worldwide. Design and production: Addison Corporate Marketing Ltd platinum, $24 million on coal, Print: St Ives Westerham Press $9 million on ferrous metals and $140 million by De Beers. Products and uses Printed on Revive 50:50 Silk, made at an ISO 14001 mill with • Mondi makes packaging 25% de-inked post-consumer waste, 25% pre-consumer waste and 50% virgin wood fi bre. and offi ce papers, board, converted packaging and newsprint. ANGLO AMERICAN plc ANNUAL REVIEW 2006

Anglo American at a glance KEY Geographical locations

OUR BUSINESSES EXPLORATION OTHER BUSINESSES

Platinum Diamonds Base Metals Ferrous Metals Coal Industrial Minerals Exploration Gold

Anglo American at a glance KEY Geographical locations

OUR BUSINESSES EXPLORATION OTHER BUSINESSES

Platinum Diamonds Base Metals Ferrous Metals Coal Industrial Minerals Exploration Gold

Contents

Highlights of 2006 01 Chairman’s statement 02 Chief executive’s statement 04