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• Engage • Integrate • Perform • Grow Anglo Americanplc Annual Report2007 Anglo American plc 20 Carlton House Terrace Our strategy in action: London SW1Y 5AN England Tel +44 (0)20 7968 8888 • Engage Fax +44 (0)20 7968 8500 Registered number 3564138 www.angloamerican.co.uk • Integrate • Perform • Grow Annual Report 2007 88549_AA_Rep_COVER_bm_260208.indd1549_AA_Rep_COVER_bm_260208.indd1 1 229/2/089/2/08 223:13:553:13:55 About Anglo American Anglo American aims to become the leading global mining company We are committed to delivering operational excellence in a safe and responsible way, adding value for shareholders, customers, employees and the communities in which we operate About Anglo American 58 Governance 01 Highlights of the year 58 The Board 02 Our locations 60 Executive Committee 02 Our operations 61 Directors’ report 04 Chairman’s statement 65 Corporate governance 06 Chief executive’s statement 70 Remuneration report 10 Our strategy in action 83 Independent remuneration report review 84 Statement of directors’ responsibilities 14 Operating and fi nancial review 85 Financial statements 15 Group overview 15 The Group 86 Independent auditors’ report 15 The businesses 87 Principal statements 17 Key performance indicators (KPIs) 91 Notes to fi nancial statements 18 Performance against KPIs 25 Resources 27 Group fi nancial performance 136 Other information 31 Business unit overview 136 Ore Reserves and Mineral 31 Platinum Resources estimates 35 Diamonds 158 Production statistics 38 Base Metals 163 Exchange rates and commodity prices 43 Ferrous Metals 164 Key fi nancial data Printed on Revive 50:50 Silk and Revive 100 46 Coal 166 Summary by business segment 51 Industrial Minerals Uncoated paper. Revive 50:50 Silk is made from 167 Reconciliations of reported earnings pre and post consumer waste and virgin wood fi bre, 54 Discontinued operations 168 The business – an overview Revive 100 Uncoated is made from 100% de-inked post consumer waste. Both have been independently 55 Principal risks and uncertainties 170 Shareholder information certifi ed in accordance with the FSC (Forest Front cover: This year’s cover features the Stewardship Council). 171 Other Anglo American publications faces of 90 of our 100,000 employees who are helping to shape Anglo American’s future Printed at St Ives Westerham Press Ltd, ISO14001, success. See page 172 for the names of FSC certifi ed and CarbonNeutral® those employees featured on our cover Designed by Addison Corporate Marketing Ltd 88549_AA_Rep_COVER_bm_260208.indd2549_AA_Rep_COVER_bm_260208.indd2 2 229/2/089/2/08 223:14:143:14:14 About Anglo American Highlights of the year Operating profi t Underlying earnings Earnings per share $10.1bn $5.8bn $4.40 • Record total Group operating profi t of $10.1 billion, with operating profi t from core operations up 12% to $8.9 billion • Strong performances from Base Metals, Platinum, Ferrous Metals and Industrial Minerals • Uplifting our unique portfolio and driving signifi cant growth $)6)$%.$30%23(!2% 5.$%2,9).'%!2.).'30%23(!2% 53CENTS 53 3PECIAL &INAL )NTERIM Total Group includes both continuing and discontinued operations. Underlying earnings represents total Group underlying earnings unless otherwise stated. Basis of calculation of underlying earnings is set out in note 12 to the fi nancial statements. Operating profi t represents total Group operating profi t and includes share of associates’ operating profi t (before share of associates’ tax and fi nance charges) and is before special items and remeasurements unless otherwise stated. Operations considered core to the Group are Base Metals, Platinum, Ferrous Metals’ core businesses (Kumba Iron Ore, Scaw Metals, Samancor and Minas-Rio), Coal and Diamonds. Throughout this report 2003 is presented under UK GAAP. 2004, 2005, 2006 and 2007 results are presented under IFRS. Unless otherwise stated ‘$’ and ‘dollar’ denote US dollars. Anglo American plc Annual Report 2007 | 01 88549_AA_Rep_01-13_im_250208.indd01549_AA_Rep_01-13_im_250208.indd01 0011 229/2/089/2/08 223:08:513:08:51 About Anglo American Our locations North America South America Europe Our operations Precious Base Platinum Diamonds Base Metals Business profi le Business profi le Business profi le • The world’s leading primary producer • De Beers accounts for about 40% • Comprises primarily copper, nickel, of platinum, accounting for around by value of global rough diamond zinc and niobium operations 37% of the world’s newly mined production • Operates in South America, southern platinum output • The world’s largest supplier and Africa and Ireland marketer of gem diamonds • Copebrás produces phosphate fertilisers Products and uses Products and uses Products and uses • Primarily used in jewellery • About 30% of mined diamonds by • Copper is used mainly in wire and cable, and autocatalysts weight are suitable for use in jewellery as well as in brass, tubing and pipes • Also used in chemical, electrical, • Some natural stones are used for industrial • Zinc is chiefl y employed in galvanising electronic, glass and petroleum purposes such as cutting, drilling and other • Nickel is mostly used in the production industries and medical applications applications of stainless steel Financial highlights(1) Financial highlights(1)(3) Financial highlights(1)(2) 12 months 12 months 12 months 12 months 12 months 12 months $ million 31 Dec 2007 31 Dec 2006 $ million 31 Dec 2007 31 Dec 2006 $ million 31 Dec 2007 31 Dec 2006 Operating profi t 2,697 2,398 Share of associate’s Operating profi t 4,338 3,897 EBITDA 3,155 2,845 operating profi t 484 463 EBITDA 4,683 4,255 Net operating assets 9,234 7,078 EBITDA 587 541 Net operating assets 4,989 4,599 Capital expenditure 1,479 923 Group’s aggregate investment Capital expenditure 610 315 Share of Group operating in De Beers 1,802 2,062 Share of Group operating profi t (%) 28% 27% Share of Group operating profi t (%) 45% 44% Share of Group net profi t (%) 5% 5% Share of Group net operating assets (%) 35% 33% operating assets (%) 19% 22% (1) Share of Group operating profi t and share of Group net operating assets for both 2007 and 2006 is based on continuing operations and therefore excludes the contribution of Mondi and AngloGold Ashanti. (2) In 2007, Copebrás and Yang Quarry were reclassifi ed from Industrial Minerals to Base Metals and Coal respectively to align with internal management reporting. As such, the comparative data has been reclassifi ed. (3) De Beers is an independently managed associate of the Group. 02 | Anglo American plc Annual Report 2007 88549_AA_Rep_01-13_im_250208.indd02549_AA_Rep_01-13_im_250208.indd02 0022 229/2/089/2/08 223:08:533:08:53 About Anglo American Africa Asia and Australasia Key Corporate and representative offi ces See right Operations and New expansions projects Platinum See below Diamonds Base Metals Ferrous Metals Coal Industrial Minerals Regions in which exploration is currently under way As one of the major diversifi ed mining groups, Anglo American’s exploration activities cover many parts of the globe. In its constant search for minerals, Anglo American is currently prospecting in 25 countries. In addition to its focus on areas surrounding its existing mining operations, Anglo American is now looking at relatively unexplored new frontiers, including in the Arctic region through an arc stretching from Alaska to the Russian far east. During 2007, $283 million was spent on exploration – $77 million on base metals, $36 million on platinum, $32 million on coal, $12 million on ferrous metals and $126 million by De Beers. Bulk Ferrous Metals Coal Industrial Minerals Business profi le Business profi le Business profi le • Operations are mainly in South Africa, • Anglo Coal is one of the world’s • Tarmac is the No. 1 UK producer of South America, Canada and Australia largest private sector coal producers aggregates and asphalt and a leading • Businesses produce iron ore, manganese and exporters producer of ready-mixed concrete and steel products for the mining and • Its operations are in South Africa, Australia, • Its operations are primarily in the UK, infrastructure sectors Colombia, Venezuela and Canada continental Europe and the Middle East Products and uses Products and uses Products and uses • Iron ore is the basic raw material used in • About 40% of all electricity generated • Tarmac is involved in the production of steel production globally is powered by coal crushed rock, sand, gravel, concrete and • Manganese is a key component in steelmaking • Around 70% of the world’s steel industry mortar, lime, cement and concrete products • Steel products serve the construction, railway, uses coal and it is an important fuel for power generation, mining, cement, marine and other industries offshore oil industries Financial highlights(1) Financial highlights(1)(2) Financial highlights(1)(2) 12 months 12 months 12 months 12 months 12 months 12 months $ million 31 Dec 2007 31 Dec 2006 $ million 31 Dec 2007 31 Dec 2006 $ million 31 Dec 2007 31 Dec 2006 Operating profi t 1,432 1,360 Operating profi t 614 862 Operating profi t 474 317 EBITDA 1,561 1,560 EBITDA 882 1,082 EBITDA 732 539 Net operating assets 3,987 2,796 Net operating assets 3,984 2,870 Net operating assets 4,509 4,185 Capital expenditure 471 582 Capital expenditure 1,052 782 Capital expenditure 274 279 Share of Group operating Share of Group operating Share of Group operating profi t (%) 15% 15% profi t (%) 6% 10% profi t (%) 5% 4% Share of Group net Share of Group net Share of Group net operating assets (%) 15% 13% operating assets (%) 15% 13% operating
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