Anglo American Thermal Coal Investor Presentation

April 2010

Agenda

1. Overview of Anglo American Thermal Coal (AATC) 2. Market Overview 3. Strategy & Growth Pipeline

Agenda

1. Overview of Anglo American Thermal Coal (AATC) 2. Market Overview 3. Strategy & Growth Pipeline

Historical Timeline

1897 1897 Vereeniging Estates Limited (VEL) incorporated into a newly listed company

1941 1941 Production reaches 5Mt

1949 1949 Production reaches 12Mt

1975 1975 Anglo American merges its various coal ventures into VEL which changes its name to Anglo American Coal Corporation Ltd (Amcoal)

1998 1998 Production reaches 53Mt 1998 1998 Amcoal absorbed into Anglo American Corporation of SA

1998 1998 Acquisition of Cerrejon

2009 Anglo American splits its coal operations into focused Thermal & Metallurgical product divisions

1900

1930

1940 .

.1950

1960

1970

. .

1980

1990

. . .. . 2000

. 2009

1936 1936 VEL combines its coal interests with those of A&E to form Amalgamated Collieries, then the largest coal group in Africa

1945 1945 Anglo American buys a controlling interest in VEL

1964 1964 Production reaches 17Mt

1976 1976 Richards Bay Coal Terminal opens

1999 1999 Acquisition of Shell Coal 1999 1999 Anglo American lists in London

2009 2009 Production reaches 98Mt

Source: Anglo American Thermal Coal

Overview of Anglo American Thermal Coal

Colombia (2009)
1

South Africa (2009)

4 2 3 10 9

Puerto Bolvar (33%)

1 6 5

Richards Bay (27%)

Mine

Holding

Total Attributable production 2009 6.9Mt 3.8Mt 4.4Mt 4.2Mt 11.2Mt 3.7Mt 17.6Mt 5.1Mt 2.2Mt 0.1Mt 59.2Mt

Export Mt

Domestic Mt

LOM Years

1 Goedehoop 1.

100% 100% 100% 100% 73% 100% 100% 100% 50% 73%

6.9 3.3 2.0 3.9 1.2 0.0 17.3

0.5 2.4 0.3 11.2 3.7 17.6 5.1 1.0 0.0 41.8

10 12 14 11 16 31 18 17 20 17

2 2. Greenside 3 3. Kleinkopje Mine Holding Total Attributable production 2009 10.2Mt Export Mt Domestic Mt LOM Years 4. Landau 4
5 Kriel 5. 6 New Denmark 6.

1 Cerrejn 1.

33%

10.2

23 US$305m

7 New Vaal 7. 8 Isibonelo 8.

EBIT (2009)

9. 9 Mafube

Export Eskom Other domestic

10 Zibulo1 1 Total production Employees EBIT (2009)

14,446 US$439m

Notes: 1. Zibulo was previously known as Zondagsfontein Project. Steady state production will be 6.6Mtpa 2. Production of AIC assets reported at 100% Source: Anglo American Thermal Coal

A Stable Cash & Earnings Contributor to AA Plc

Coal % Contribution to AA EBIT
25%
Total Coal Anglo Thermal Coal Anglo Met Coal

20%
For 2004-09 Thermal Coal on average accounted for 9% of Anglo American EBIT

15%

10%

5%

0% 2004 2005 2006 2007 2008 2009

AATC has been a consistent contributor to Anglo American profitability

Source: Anglo American annual financial statements * For 2004 to 2007 Australia segment previously reported used for Met Coal. Balance of previous Anglo Coal EBIT allocated to Thermal Coal Division

AATC South Africa Safety Performance

AATC South Africa Lost Time Injury Frequency Rate & Fatalities
LTIFR 0.5
Fatalities LTIFR

Fatalities 8
7 6

2 Fatalities in 2009 vs. 4 in 2008. Zero for 2010 YTD LTIFR improvement of 9.4% AATC 2009 fatal injury frequency rate was 0.009 compared to 0.05 for the RSA coal industry AATC 2009 LTIFR was 0.29 compared to 0.31 for the RSA coal industry Isibonelo more than two years LTI free Rapid Loading Terminal Zero harm in 2009 HPI reporting fully implemented

0.4

0.3

5 4

0.2

3 2

0.1 1 0.0 2005 0 2009

2006

2007

2008

Safety is our No. 1 Priority

Source: Anglo American Thermal Coal

South African Operations Location

Source: Anglo American Thermal Coal

South African Logistics

South Africa coalfields rail & port infrastructure

Coal railed to Richard Bay Coal Terminal (RBCT) for export Coal is railed by Transnet Freight Rail (TFR) with nominal railing capacity of 72Mtpa In 2009 TFR railed only 61Mt railing volumes are bottleneck to coal exports

AATC has 27% shareholding in RBCT RBCT capacity is 72Mt going to 91Mtpa from 2010 - post Phase V expansion

Source: Transnet, Anglo American Thermal Coal

Mining Methods
A.

Surface/Opencast Mining

B.

Underground Mining

1.

Doze Over Shovel & Truck

2.

Dragline Strip Mining

1.

Bord & Pillar Mining

2.

Longwall Mining

3.

Mini Pit Mining

3.

Pillar Extraction

Mafube Waterberg

Landau Kleinkopje New Vaal Isibonelo New Largo

Goedehoop Greenside Kriel Zibulo Elders Limpopo

New Denmark Heidelberg

Mining method choice critical to reserve extraction optimisation

Source: Anglo American Thermal Coal

AATC South Africa Market Position

Anglo Coal SA is a major player in all market segments Total South Africa production for 2009 of approximately 260 Mt
14% 22% 5% Anglo Exxaro Sasol BHP Xstrata Optimum Others

9%

20% 14%

16%

AATC is the leading coal producer in South Africa & holds around a quarter of market share
Source: Wood Mackenzie, Company Financial Statements

10

A 1st Cost Quartile Thermal Coal Producer

90 Port Loading 80 Freight Royalties 70 Mining & Processing 60 Labour 60 70 80 90

50

50

40

40

30

30

20

20

10

10

0 0 50 100 150 200 250 300 350 400 450 500

Cumulative Forecast Production, Mt

All AATC South African export operations within the 1st cost quartile of the AME 2010 global cost structures Opportunity exists to further reduce costs. Project underway to review costcurve and asset portfolio
Source: AME FOB Cost Curve 2010

11

RSA Domestic Market: Eskom & Other

Domestic production share of total AATC RSA tonnage
Production, Mt
60

Share of total Eskom tonnage

50

27%

Export

AATC supplies c.30% of Eskom total

40

30

62% Eskom

c. 36Mt to Eskom for power generation Eskom average CV (air dried) 4,550kc/kg ( 19.1MJ/kg) Pricing strategy a combination of long term cost-plus arrangements and some at fixed price + escalation c. 7Mt of other domestic tonnage including: 5Mt from Isibonelo supplying to Sasol 2Mt to a range of other industrial customers

20

10

11%
0

Other Domestic

AATC a major supplier of coal to Eskom Opportunity exists to further reduce costs. Project underway to review cost structures and asset portfolio and expected to grow
Source: Anglo American Thermal Coal

12

RSA Export Market

ACSA operations are currently well positioned on the 2009 exports by destination 2008 AME Cost Curve Export production share of total AATC RSA tonnage country/region 2009 exports by customer type
Production, Mt
60 16 50 16

Export Sales, Mt

Export Sales, Mt

27%

Export
12

2.4 Mt

Utility Traders Steel

3.8 Mt
12

Other Europe Other Asia Israel Italy

40

11%

Other Domestic

2.0 Mt 1.0 Mt 1.4 Mt

7.0Mt
30 8

Power Utility
8

20

62%

Eskom
4

3.4Mt 1.2Mt 1.0Mt 1.0Mt

Physical Trader
4

3.7 Mt

ARA1

10

Industry Supplier Importer to India Bank

4.9 Mt
0

India

30% of AATC SAs thermal exports to India in 2009

Note: 1. ARA = Amsterdam, Rotterdam, Antwerp Source: Anglo American Thermal Coal

13

Cost Breakdown
ACSA AATC South are currently well positioned on the 2008 AME Cost Curve operations Africa cost breakdown
2009 Actual

8% 0% 3% 7% 43%
Labour&contractors Maintenance&stores Rail,wharfage&othersellingcosts Consumables Power Royalties

Royalties will be applicable from 2010 expected to account for ~1% of costs Electricity a relatively small share of total costs: Eskom power price increases will add 1% to overall costs in 2010 - but will continue to rise

15%

Other

24%

Opportunity exists to further reduce costs. Project underway to review cost structures and asset portfolio
Source: Anglo American Thermal Coal

Labour the major cost component showing cost increases of over 9% per annum over the past 3 years

14

AATC South Africa Margins & ROCE

Price & exchange rate sensitivity
Change in EBIT US$m
20

AATC South Africa EBIT margin

US$m EBIT Margin

Historic adjusted ROCE

ROCE
100%

1000
EBIT EBIT Margin

45% 40% 35% 30%

800

80%
15

600 25% 20% 400 15%

60%
10

40%
5

200

10% 5%

20%
0

0
2005 2006 2007 2008 2009

0%

0% 2005

2006

2007 2008 2009

US$1/t change in price

ZAR0.10 change against the US$

Stable margins despite turbulent times

Source: Anglo American Thermal Coal

15

Leadership in BEE Transactions: Eyesizwe and AIC

Anglo Inyosi Coal empowerment transaction
Lithemba Consortium
33%

Pamodzi Coal
33%

WDB Investment Holdings

19%

Communities
15%

Anglo Coal
73%

Inyosi
27 %

Anglo Inyosi Coal formed in November 2007 for R7bn 27% BEE participation from inception Resources of 4.1 billion tonnes

Anglo Inyosi Coal

Optimal asset mix (existing operations & projects) Stable cashflow stream through Kriel Colliery
Kriel Zibulo New Largo Elders Heidelberg Projects Operations

ESOP commitment All AATCs SA mineral rights converted

Dynamic consortium partner grouping with strong women & community participation
Source: Anglo American Thermal Coal

16

Social Responsibility
Progress against Mining Charter BEE procurement spend 2009: R5.6Bn (56%) HDSA in Management: 45% (target 40%) Women in Mining: 16.5% (target 10%) Women in Management: 17% Women in Technical Occupations: 11% Learnerships in AATC SA: 545 (88% HDSA) Focus Areas of Social and Labour Plans (SLPs) Infrastructure Education and Skills Development SMME development Agriculture Environment Sports, Arts and Culture Strengthening partnerships with government and NGOs Guided by the Anglo Social Way
Vegetable garden at Edward Matjeka Primary School

Winter school classes at Empucukweni Secondary School

Educator Development Programme

Robust implementation of SLP commitments

Source: Anglo American Thermal Coal

17

Sustainable Development: Water Treatment

SAs first large-scale mine water treatment plant ZAR390m Capex, 25 Ml/day potable + 8 Ml/day process water
Navigation

Kleinkopje

Greenside

South Witbank

Addresses environmental impact of mine water whilst alleviating water shortage in local community of Emalahleni
Source: Anglo American Thermal Coal

18

AATC Asset Optimisation Initiatives

CMIG Project: Benchmarking against 109 continuous miners in SA
G/Side Vuma G/Side Thandeka Kriel Ngwenya GH Sim Iskonjane Vlak Mangwapa

Mt

5/Top 10 = Anglo

1.2

GH Sim Imvubu GH South Khomanani

GH South Sizimisele Hope 5/6 G/Side Thusanang

ROM Tons Jan Dec 2009

Kriel Fezela G/Side George

Kriel Ishlosi Kriel Bhubezi Kriel Bhejane

1 Million ton projected target

Asset optimisation is clearly focused on key mining equipment and supporting activities Opencast mines Draglines (DIG Initiative)

1.0

0.8

Position

Section G/Side Vumagara Other Other G/Side Thandeka Other Kriel Ngw enya G/Hoop Isikhonyane G/Hoop Mangw apa Other Other

Miner 12HM31 ABM30 ABM30 12HM31 ABM30 12HM21 12HM31 12HM31 12HM31 12HM31

Hauler 20 ton S/C Cont Haulage Cont Haulage 20 ton S/C Cont Haulage 16/20 ton S/C 20 ton S/C 20 ton S/C 16 ton S/C 20 ton S/C

Prod Shifts 8x8xM 10 x 10 x M 10 x 10 x M 8x8xM 10 x 10 x M 8x8x8 8x8x8 8x8x8 10 x 10 x M 8x8x8

0.6

1 2 3

Underground mines Continuous miners (CMIG initiative)

0.4

4 5 6

0.2

7 8 9 10

0.0

AATCs mines operate 5 out of the top 10 performing Continuous Miners in South Africa
Source: Mining Consultancy Services - www.mcs-com.net

19

Agenda

1. Overview of Anglo American Thermal Coal (AATC) 2. Market Overview 3. Strategy & Growth Pipeline

20

Fuel Demand Outlook

Coal is forecast to increase its share of primary energy, due to higher share of power generation
Mtoe1
6000

GDP growth is the principal driver of growth in demand for energy

GDP CAGR
10%

1990-2007
8%

5000

2030 2007

2007-2015 2007-2030
4000

6%

3000
4%

2000
2%

1000
0% China India Brazil Russia Africa Middle East OECD

0 Coal Oil Gas Nuclear Hydro Biomass Other and renew. waste

Continued urbanisation & industrialisation in developing countries especially in Asia

1. Million tonnes of oil equivalent Source: IEA World Energy Outlook 2009 (Reference scenario)

21

Thermal Coal-Fired Energy Demand

Thermal coal-fired energy demand expected to almost double over the next 20 years, mainly driven by Asian markets
CAGR

Twh
16,000 14,000 12,000

Total 15,300 13,500 11,750 10,500 Asia China India Africa Middle East South America

2.7% 1.8% 4.6% 6.9%

10,000

8,200
8,000 6,000 4,000

4.0% 4.0% 5.7%

North America
2,000

0.5% 0.5%

Europe
0

2007

2015

2020

2025

2030

Majority of thermal coal market is domestic, with only ~10%-15% of volume entering the seaborne export market
Source: IEA World Energy Outlook 2009 (Reference scenario)

22

Seaborne Export Supply & Demand

India the key driver of export demand due to high forecast GDP growth & a shortfall in domestic supply
Demand, Mt
1,250

Indonesia, Australia and Colombia with the highest expected supply growth
Supply, Mt
1,250

CAGR Total 1,018 2.5% 4.1% 2.6% 0.7% 9.6%

CAGR Total 2.5% 1.0% 0.5% 1.8% 3.0% 1.5% 0.5% 3.1%

1,000

Africa, ME, S Am 829 North America Europe

1,000

926 758 627

Other USA China Colombia South Africa Russia Australia

750

681

750

India
500

500

250

Other Asia

1.9%

250

Indonesia
0 0

3.1%

2009

2015

2025

2009

2015

2025

Seaborne export market trends highlight key supply and demand markets across the globe
Source: Wood Mackenzie

23

Growth focused on the Indo-Pacific basin

Russia 69Mt exports Europe 160Mt imports USA/Can. 22Mt imports 35% of
world thermal demand in the Atlantic basin

China 50Mt imports

N. East Asia 221Mt imports

Minor trade flows Major trade flows Importer Exporter Colombia 65Mt exports

36 Mt

India 50Mt imports Indonesia 215Mt exports

South Africa 62Mt exports

26 Mt
to Asia

65% of Others 117Mt imports

world thermal demand in the IndoPacific basin
Source: Anglo internal, IEA, McCloskey, Wood Mackenzie

Australia 135Mt exports

Others 74Mt exports

Note: Only major trade flows shown; rounded figures, 2009 basis

24

AATC maintains its position as swing supplier to Atlantic and Indo-Pacific markets
South African exports 20032009
Volume in Mt 1 (% of total sales) 75 71 8% 2% 8% 68 8% 2% 10% 12% 5% 7% 68 12% 4% 7% 68 10% 7% 70 672 14% 6% 8% Others 12% Other Asia +1% +28% CAGR '03'09

Declining volumes to Europe Overall stagnating market demand due to economic and environmental factors Competition from Colombian coal suppliers and softer gas prices

8 13% (12%) 6% 7% 19 India (28%) +55%

Increasing volumes to India Strong growth of Indian seaborne demand South Africa geographically favorably positioned to supply India Complementary product properties to lower CV, high moisture Indonesian coal
-11%

8% ME 80% 79% 75% 76% 63% 42 (60%) 29 Europe (44%)

-2%

Premium achieved on exports to India compared to Europe

2003

2004

2005

2006

2007

2008

2009

-1%

30% of AATCs SA exports supplied to India in 2009

Note: 1. Minor volume of Met Coal included in export figures 2. Including 3 Mt metallurgical coal Source: McCloskey; AATC analysis

25

Thermal Coal Pricing Outlook

Export thermal coal prices follow indices which are expected to remain high going forward
USD/t

API4 (FOB RBCT) API4 forward curve

1981 - 2001

2002 - 2007

2008 - 2009

2010 - 2014

Source: McCloskey

26

Key market trends and implications for Thermal Coal

Market trend

Thermal Coal implications

Pace of growth in China and India

Export market growth will be driven by two key markets Moderate slow-down in Chinese GDP growth and delays to Indian expansion not expected to change structural market shift Restricted rail and port facilities in key geographies, particularly Australia and Southern Africa, limit growth Supply constraints could result in pricing upside

Rail and port constraints

Environmental Regulation and Taxation

Understand impact in each market and develop appropriate mitigation strategies

Alternative Fuels

Coal is expected to maintain its share of growing world primary energy to 2030 Impact of cheaper gas expected to be limited on main growth markets for coal Important to keep track of impact of - and potential opportunities in - related fields

Source: Anglo American Thermal Coal

27

Agenda

1. Overview of Anglo American Thermal Coal (AATC) 2. Market Overview 3. Strategy & Growth Pipeline

28

Anglo American Thermal Coal Future Production

Current production levels are sustainable for a number of years.

Production, Mt

140
Limpopo

120 100 80 60 40 20 0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Elders OC Cerrejon P500 Waterberg Elders UG Heidelberg UG New Largo Cerrejon P40 Existing and Approved

Projects under review could increase production levels significantly

Source: Anglo American Thermal Coal

29

Approved project: Zibulo

Topic
General information

Description
Approved in Dec. 2007 Project includes colliery and Phola coal wash plant Mining started Q4 2009 (0.1Mt) Full capacity 6.6Mt reached in 2012

Products Export Eskom Financials

3.3mtpa 3.3mtpa Capital expenditure = US$505m

People

659 @ full production

Ownership

73% Anglo American 27% Inyosi

Production & reserves

20 year life @ 8mtpa ROM 8 CM production units supported by battery haulers & shuttle cars

Source: Anglo American Thermal Coal

30

Project: New Largo

Topic
Timeline

Description
Feasibility study: 2010 2011 First coal: 2013 Full capacity: 2017

Products Eskom

14mtpa to Kusile Power Station

Financials

Estimated capital expenditure = US$1.7Bn

People

870 @ full production

Ownership

73% Anglo American 27% Inyosi

Production & reserves

50 year life @ 14mtpa ROM Two 100m3 draglines

Source: Anglo American Thermal Coal

31

South Africa Infrastructure Constraints

TFR expected railings vs RBCT capacity

Capacity, Mt
100
RBCT Capacity

South Africa forecast power supply & demand

TWh 290

280

80
Anglo TFR Allocation

270

60

40
Others TFR Allocation

260

Demand Demand with energy savings Supply

20

250

2011 2011

2012 2012

2013 2013

2014 2014

2015 2015

240 2010

2011

2012

2013

2014

SA infrastructure capacity expected to expand but both rail and power supply expected to be limited in medium-term
Source: Anglo American Thermal Coal, Eskom, TFR

32

Southern Africa Infrastructure

Emergent coal export corridors possible medium term scenario
Hwange Tete Beira

Botswana

Limpopo

Waterberg (to connect to RBCT line) Witbank-Highveld

Maputo

Richards Bay

Existing export corridors Emergent export corridors

Undeveloped basins will require significant transport infrastructure investment

Source: Anglo American Thermal Coal

33

Coal Bed Methane Gas

CBM exploration and pilot projects

Waterberg Waterberg CBM exploration proceeding Small-scale production tests ongoing Conceptual study in progress

Waterberg CBM Pilot Project

GROOTEGELUK COLLIERY

LEPHALALE

Botswana Significant leaseholds in Botswana Reconnaissance exploration in progress

Cleaner energy from coal leading the exploration of CBM in Southern Africa

Source: Anglo American Thermal Coal

34

Discard Coal-Fired Power Project

Witbank project to utilise waste coal

Project under evaluation: fluidised bed boiler technology, ~300MW Third party ownership est. capex ~US$600m Power for use of Anglo American - could enable growth projects and hedge against future costs of power Technical advisers appointed

Reducing environmental impact of waste dumps and improving SA power supply

Source: Anglo American Thermal Coal

35

Conclusion

Stable cash generating business and consistent contributor to AA plc profitability Positive market outlook for RSA thermal coal in the medium term driven by export demand in the Indo-Pacific region & domestic South African power demand Thermal export prices expected to remain at historically high levels in the medium term AATC South African operations in the 1st quartile of the global cost curve Strong growth pipeline but infrastructure constraints will need to be resolved Strong resource & reserve position with reserves of 1.2 billion saleable tons (proved & probable) & further resources of 1.9 billion MTIS1 (measured & indicated) Global growth opportunities under evaluation

Notes: 1. MTIS = minable tonnage in situ. Reserves & resources include South Africa and Colombia

36

Appendix

Global Coal Production

Total world coal production of 6.8Bt in 2008 concentrated in relatively few countries & principally in domestic markets
Production*, Bt
7.0 6.0 5.0 4.0 3.0 2.0
1.5

Major coal producers & exporters (2008)

Mtoe
Major Domestic Markets

Net Exporters

18%
3% 4%

Other Indonesia South Africa Russia Australia India USA

13%

Export
1.3

5% 6% 8% 16%

1.0

0.8

Coal Produced

87% 41%
1.0

Domestic

0.5

Coal Consumed

China

0.3

0.0 South Africa India Indonesia Australia Russia China Poland

0.0

Production by Country

Production by Market

Small imbalances in large domestic markets like China & India have a significant impact on the export market
Source: BP Statistical Review of World Energy 2009, Wood Mackenzie *Note: Includes all coal types

Colombia

Canada

USA

38

Management Team

CEO Thermal Coal N. Mbazima

Head of Thermal Operations D. Haselau

Head of Commercial & Performance M. Samad

Head of Human Resources P. Williamson

Head of Marketing & Sales Z. Docrat*

Manager Comm. & Public Affairs Y. Mfolo

Head of Safety

Head of Strategy & BD

Joint Venture Manager Cerrejn C. Wiggill

Head of Mining Services A. Johnson

P. Fourie

L. Horne*

* Acting

AATC building up an integrated management team

Source: Anglo American Thermal Coal

39