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Anglo American plc (Anglo American) is pleased to announce that Kumba Iron Ore Limited (Kumba Iron Ore), a 64.1% subsidiary of Anglo American, listed on the Johannesburg Stock Exchange today. This listing, together with Kumba Resources, renamed Exxaro, which begins trading next Monday, 27 November, 2006, represent two of the most significant empowerment transactions in South Africa to date, both initiated by Anglo American.

In December 2003, when Anglo American acquired 67% of Kumba Resources it determined, with the support of the other shareholders in the company especially the Industrial Development Corporation, to create an empowerment construct that would add value for shareholders and give investment confidence in the future of the country.

The Kumba Iron Ore share debuted at 11500c, giving the group a market capitalisation of R36 billion.

Kumba Iron Ore is a key producer of iron ore, exporting 73% of its production to 30 major customers worldwide.

Anglo American chief executive Tony Trahar said that in line with the group's strong commitment to transformation and empowerment two significant companies had been created-South Africa's biggest ever BEE company Exxaro and a focussed iron ore operator with strong growth prospects. “We are confident that Kumba Iron Ore will contribute materially to Anglo American's continued growth, and that it will play a key role in our iron ore strategy,” Trahar said, adding, “Kumba Iron Ore is currently undertaking the biggest capex project ever in SA's iron ore history with the current Sishen Expansion Project 1of 13Mtpa tons at a cost of R5.1 billion.”

Kumba Iron Ore chief executive, Ras Myburgh, said Kumba Iron Ore's experienced management team was looking forward to growing an already strong business. Myburgh said Kumba Iron Ore would be a significant contributor to Anglo American's bottom line, as iron ore demand remained buoyant.

In line with this demand, Myburgh said Kumba Iron Ore had plans to increase its current 32Mtpa output to 42Mtpa by 2009. “In addition, we have the reserves to take production up to 70Mtpa by 2015 with our strong pipeline of seven key projects which will support this growth. The 13Mtpa Sishen Expansion Project is already underway, and the Sishen Expansion Project II, which could add as much as 20Mtpa to production, is currently at pre-feasibility study stage. A feasibility study to develop a new mine 70km south of the existing Sishen mine with an initial capacity of 9mtpa is expected to be finalised early next year.

Myburgh added, “We are proud to announce the establishment of an employee share participation scheme called Envision, which will see the transfer of three per cent of Sishen Iron Ore Company's shares to employees. Envision represents a critical step in our aim to define a new level of operational and people performance in our industry. It also represents one of our key objectives, namely to deliver outstanding sustainable value to all our stakeholders – our employees included,” says Myburgh.

Background/additional notes for editors:

Anglo American plc
Anglo American:

• now owns 64.9% of Kumba Iron Ore (14% is held by the IDC and the balance will be freefloat) which gives Anglo American an effective direct economic interest of 48% in SIOC, in addition to a further indirect interest of 3% through Anglo American's 19% stake in Exxaro;
• retains 19% of Exxaro as a demonstration of its long-term commitment to Exxaro of which 10% will be locked in for 10 years; and
• has granted options to Exxaro to acquire 100% of Namakwa Sands and 26% of the Black Mountain zinc mine and the Gamsberg zinc project at a total fixed price of R2.2 billion ($300 million).

Kumb Iron Ore
Kumba Iron Ore will be a fully empowered company. Exxaro will have a 20% shareholding in the Sishen Iron Ore Company, the Northern Cape broad-based community groups will have another 3% shareholding and this, together with the employee empowerment/share participation scheme (Envision) of 3%, enables Kumba Iron Ore to be 26% BEE compliant on day one.
www.kumba.co.za

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