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24 April 2012

Anglo American announces sale of Scaw South Africa to complete its Scaw Metals Group divestment

Anglo American plc ("Anglo American") announces the final stage of the $1.4 billion Scaw Metals Group ("Scaw") divestment with the sale of Scaw South Africa (Pty) Ltd. ("Scaw South Africa"), a leading South Africa based integrated steel maker, to an investment consortium led by the Industrial Development Corporation of South Africa ("IDC") and Anglo American’s partners in Scaw South Africa (Pty) Ltd, being Izingwe Holdings (Pty) Limited, Shanduka Resources (Pty) Limited and the Southern Palace Group of Companies (Pty) Limited (collectively "the Consortium"), for a total consideration of R3.4 billion ($440 million) on a debt and cash free basis.

This transaction follows the sale of Scaw’s international businesses, Moly-Cop and AltaSteel, to Onesteel in December 2010 for a total consideration of $932 million on a debt and cash free basis. In aggregate, the total consideration achieved from the sale of all Scaw’s businesses has amounted to $1.4 billion on a debt and cash free basis.

Cynthia Carroll, Chief Executive of Anglo American, said: "The sale of Scaw brings the total announced proceeds from our divestments of non-core assets to $3.7 billion since 2010, maximising value from these businesses for our shareholders. I am particularly pleased that the manner in which we conducted this divestment reinforces our ongoing commitment to South Africa. This acquisition will contribute positively to the South African government’s industrial development objectives by enabling the IDC to play a meaningful role in the strategically important steel industry. I wish to thank the management team and employees at Scaw for their support during this process and wish them all the best under the ownership of the Consortium."

Geoff Qhena, Chief Executive Officer of the IDC, said: "The IDC endeavours to promote the establishment of domestic-based manufacturing industries, supporting the infrastructure expansion programmes of both Eskom and Transnet. In this regard, Scaw South Africa is well positioned to take advantage of long term growth trends in the mining industry, as well as in the railway and power generation sectors, and is aligned to our primary objective of creating balanced, sustainable economic growth in South Africa and across the African continent."

Sipho Pityana, Chairperson of Izingwe Holdings (Pty) Ltd. and representing Anglo American’s partners in Scaw South Africa, said: "This transaction provides an excellent platform for the strategic positioning of a BEE player in the manufacturing sector, in line with the new and emboldened approach of government, and affords us an opportunity to gradually increase black participation in the asset. We commend Anglo American for demonstrating a readiness to embrace the above transformation vision by allowing us, as their partners in Scaw, to buy their interest in the business with suitable partners and we are grateful to the IDC and the government for their strong support."

The transaction is subject to customary closing conditions such as regulatory approvals in South Africa including but not limited to competition clearance, and is expected to be completed during the course of 2012. Further announcements will be made in due course, as appropriate.

Notes to editors:

Scaw Metals Group
Scaw is a leading South Africa based integrated steel maker producing highly specialized and critical consumable components for the mining, rail, power, offshore oil and gas, construction, commercial and other industrial sectors. The business operates through four product focused business units with facilities in South Africa. Grinding Media produces high chrome and forged grinding media. Wire Rod Products produces steel wire rope, chain, wire and strand and other related products for mining, industrial, construction and offshore oil drilling applications. Cast Products designs and produces a variety of cast steel products for the mining, metal processing, power generation and railway industries. Rolled Products is a manufacturer of low and high carbon long steel products.

In addition to Scaw South Africa, the Business includes a 50% interest in CWI, a joint venture with ArcelorMittal South Africa; a 31% interest in GSIL, a joint venture with Lucchini SpA, and 100% equity interest in each of Haggie North America Inc, Haggie Reid (Pty) Ltd., African Wire Ropes (Pty) Ltd., Haggie Rand Zimbabwe (Pty) Ltd., Scaw Metals (Pty) Ltd. (previously known as PWB Anchor (Pty) Ltd.) and Afrope Zambia Ltd.

Anglo American
Anglo American is one of the world’s largest mining companies, is headquartered in the UK and listed on the London and Johannesburg stock exchanges. Anglo American’s portfolio of mining businesses spans bulk commodities – iron ore and manganese, metallurgical coal and thermal coal; base metals – copper and nickel; and precious metals and minerals – in which it is a global leader in both platinum and diamonds. Anglo American is committed to the highest standards of safety and responsibility across all its businesses and geographies and to making a sustainable difference in the development of the communities around its operations. The company’s mining operations, extensive pipeline of growth projects and exploration activities span southern Africa, South America, Australia, North America, Asia and Europe. www.angloamerican.com

Purchaser
The IDC is a national development finance institution set up to promote economic growth and industrial development in South Africa and across the rest of the African continent. The IDC is wholly owned by the South African government under the supervision of the Economic Development Department. Anglo American’s partners in Scaw South Africa (Pty) Ltd. – Izingwe Holdings, the Southern Palace Group of Companies and Shanduka Resources – are leading black owned and managed investment companies with investments across a broad range of sectors. The partners have been invested in Scaw since 2007.

For further information, please contact:
Media Investors
UK UK
James Wyatt-Tilby Leng Lau
Tel: +44 (0)20 7968 8759 Tel: +44 (0)20 7968 8540
   
Emily Blyth Caroline Crampton
Tel: +44 (0)20 7968 8481 Tel: +44 (0)20 7968 2192
   
South Africa Leisha Wemyss
Pranill Ramchander Tel: +44 (0)20 7968 8607
Tel: +27 (0)11 638 2592  
   
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