Press Release Archive - 2002

Disputada is a world class, integrated copper producer located in Chile and comprising the Los Bronces and El Soldado mines and the Chagres smelter.

1. DESCRIPTION OF ASSETS
Los Bronces mine

Added value potential:

• expansion projects currently underway to expand copper production to 225,000 tonnes per annum by 2004
• additional 200 million tonnes of resource grading 0.95% copper identified immediately below or adjacent to existing pit (31/12/00)
• further expansion potential
• synergies

El Soldado mine

Added value potential:

• nearby exploration
• synergies

Chagres Smelter

Added value potential:

• current capacity – 150,000 tonnes
• potential production increase
• synergies

Further Details:
The financial statements of Disputada for the year ended 31 December 2001, which were prepared in accordance with US GAAP, showed Disputada's net assets (excluding net intercompany debt) as being $776 million, profit before interest, tax and depreciation of $114 million and profit before tax of $38 million (net of interest of $11 million on intercompany debt).

The principal and accrued interest on the intercompany loan acquired by Anglo American at Completion amounted to $238 million.

2. FURTHER EXPLORATION / EXPLOITATION POTENTIAL
Los Bronces is located in a 70,000 hectare property owned by Disputada which has excellent exploration and exploitation potential. In addition to the Los Bronces mine reserves and the immediately adjacent resources, Disputada has already identified over 300 million tonnes of additional resources at an average grade of 0.85% copper.

3. PURCHASE PRICE / PRICE PARTICIPATION

• Disputada is third party debt free.
• A net consideration of $1.3 billion is payable on completion, such consideration including the assumption by Anglo American of certain intercompany loan accounts.
• Anglo American will fund the net consideration from existing bank facilities and internal cash resources.
• Price Participation agreement:
  ExxonMobil will be entitled to receive contingent payments, which will amount to between zero and a maximum cumulative amount of $120 million if the average copper price over the next three and a half years exceeds certain agreed threshold levels as detailed below:

Should, in any period, the copper price exceed the threshold price, Anglo American and ExxonMobil will share equally in the incremental revenues attributable to agreed production volumes in the relevant period subject to a maximum cumulative amount payable to ExxonMobil of $120 million. If, in any period, the average copper price does not exceed the threshold price, no payments will be made to ExxonMobil in respect of that period. Should the full $120 million not have been paid by May 2006, the shortfall will cease to be payable.

In all years, the threshold levels in each period are higher than those used by Anglo American in its valuation of Disputada. Accordingly, price participation payments will only be made to ExxonMobil if the revenue forecasts for Disputada are greater than that originally forecast by Anglo American.

4. SYNERGIES

• The synergies between Disputada and Anglo American's existing operations in Chile are estimated to exceed an N.P.V. of $100 million. These include:
  • the Mantos Blancos and Disputada head offices will be combined into one head office organisation which will act as a shared services facility for four mines (Los Bronces, El Soldado, Mantos Blancos, Mantoverde,) and the Chagres smelter, as well as continuing to provide input and support to the 44% owned Collahuasi;
  • procurement;
  • marketing, sales and logistics;
  • exploration – the exploration work of the two companies will be integrated;
  • further scope for substantial improvements in production, productivity and costs.

5. ANGLO AMERICAN'S EXISTING OPERATIONS IN CHILE
Mantos Blancos comprises two 100% owned open pit copper mines. Mantos Blancos is located in the Atacama desert near Antofagasta and Mantoverde is located south of Antofagasta in the Copiapo region. In 2001, copper production was 156,800 tonnes at an average operating cash cost of 57.7 US cents per lb.

Collahuasi is an open pit copper mine located south east of Iquique in Chile. Anglo American has a 44% interest and joint control of Collahuasi. In 2001, copper production was 452,700 tonnes at an average operating cash cost of 39.5 US cents per lb. (Anglo American attributable production – 199,200 tonnes).

Disclaimer:
The information contained in press releases, annual or interim reports, analyst presentations, and financial information should not be deemed accurate or current except as of the date of issue. Anglo American plc does not, does not intend to, and specifically disclaims any duty to, update or correct such information.