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Anglo American establishes 50:50 partnership in Pebble project with Northern Dynasty

01 August, 2007

Anglo American has become a 50% partner with the Northern Dynasty Partnership in the Pebble Copper-Gold-Molybdenum project in southwestern Alaska, by making a staged cash investment of US$1.425 billion.

Anglo American plc (“Anglo American”) is pleased to announce the signing and completion of a transaction, whereby a wholly owned subsidiary of Anglo American (“Anglo”) has become a 50% partner with the Northern Dynasty Partnership (a wholly owned affiliate of Northern Dynasty Minerals Ltd. (“Northern Dynasty”)) in a limited partnership with equal rights in the Pebble Copper-Gold-Molybdenum Project (“the Pebble Project”) in southwestern Alaska, USA, by making a staged cash investment of US$1.425 billion.

The Pebble Project's key assets are the near surface, 4.1 billion tonne, open pit style Pebble West deposit and the deeper and higher grade 3.4 billion tonne Pebble East deposit that is amenable to underground bulk mining methods. The Pebble resources rank among the world's most important accumulations of copper, gold and molybdenum.

The purpose of the partnership is to engineer, permit, construct and operate a modern, long-life mine at the Pebble Project. The transaction agreements lay out a schedule to accomplish this goal, targeting completion of a pre-feasibility study in December 2008, a feasibility study by 2011 and commencement of commercial production by 2015.

Anglo's staged investment includes a committed expenditure of US$125 million to complete a pre-feasibility study targeted at the end of 2008. After the completion of the pre-feasibility study, Anglo must, in order to retain its 50% interest, elect to commit to a further US$325 million for a feasibility study, the completion and approval of which is targeted for 2011, and this is expected to take the partnership to a production decision. Upon a positive decision to develop a mine, Anglo must elect to commit to the next US$975 million of expenditures to retain its 50% partnership interest, completion of which will meet the US$1.425 billion requirement. Thereafter, any further expenditure will be funded on a 50:50 basis. If the feasibility study is completed after 2011, Anglo's overall funding requirement increases to US$1.5 billion.

The Pebble project will enhance Anglo American's major portfolio of copper and copper-gold projects already under evaluation, including an expansion at Los Bronces and debottlenecking at Collahuasi, both in Chile, and Quelleveco and Michiquillay in Peru Cynthia Carroll, CEO of Anglo American said “As one of the world's largest copper-gold-molybdenum deposits, Pebble has the potential to be a world-class operation. The project offers Anglo American a unique opportunity to be involved in a very long life, low operating cost mine. We are excited to be initiating operations in the State of Alaska, a jurisdiction known around the world for the responsible development of its natural resources. Like Northern Dynasty, Anglo American is committed to the highest international standards for community relations, environmental protection and health and safety. We are very pleased to bring these skills and experience to this partnership. We also look forward to working closely with the people of Alaska and, in particular, the communities of the Bristol Bay area and Kenai Peninsula, to maximize the value of these resources for all stakeholders, taking into account the positive long-term demand prospects for copper.”

Ron Thiessen, President & CEO of Northern Dynasty stated: “Alaska's environmental standards and permitting requirements are among the most stringent in the world. Northern Dynasty's experienced, largely Alaskan based, mine development team has been undertaking thorough and balanced technical, environmental and social assessments to ensure that the Pebble project is developed in a manner that protects the environment and traditional ways of life. We have sought a partner that shares our approach to development, has the ability to finance, and is an experienced mine operator. Anglo brings commitment and depth in all of these key areas. Our shared goal is to develop a state-of-the-art operation with a high annual metal production profile that will bring direct benefits to the local communities, as well as being a catalyst for sustainable economic development in the region and across the State.”

For further information:

Investor Inquiries
Anna Poulter
Tel: +44 207 968 2155

Charles Gordon
Tel: +44 207 968 8933

Media Inquiries
Anna Poulter
Tel: +44 207 968 2155

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