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15 February 2013

Annual Results 2012

Anglo American announces underlying EBITDA(1) of $8.7 billion and underlying operating profit(2) decrease to $6.2 billion

Financial results driven lower by commodity prices in weak global economic conditions

  • Group underlying operating profit(2) of $6.2 billion, decreased by 44%
  • Underlying earnings(3) of $2.8 billion and underlying EPS of $2.26
  • Following one-off impairments, loss attributable to equity shareholders of $1.5 billion
  • Net debt(4) of $8.6 billion at 31 December 2012 (pro forma net debt of $9.3 billion)(5)

Safety

  • It is regrettable that 13 employees lost their lives in work related incidents – safety programmes continuing to drive for zero harm with 70% reduction in fatalities since 2006
  • 48% improvement in lost time injury frequency rate since 2006

Disciplined capital allocation

  • Aiming to maintain a strong investment grade rating, with the Board’s commitment to sustain the rebased dividend and return surplus cash to shareholders
  • Final dividend increased by 15% to 53 US cents per share, bringing rebased total dividends for 2012 to 85 US cents per share, a 15% increase

Impairments recorded and Platinum review proposals announced

  • Minas-Rio project cost and schedule review confirms FOOS end of 2014 and $8.8 billion expected capital expenditure (including $0.6 billion contingency) – $4.0 billion post-tax impairment
  • Platinum industry currently facing challenging economic conditions- $0.6 billion post tax impairment in 2012 on projects. Platinum proposed restructuring to create a sustainable, competitive and profitable business

Solid production performance offsetting grade decline and illegal industrial action

  • Production growth and record set at Kumba Iron Ore, export metallurgical coal, export thermal coal, Nickel and Phosphates as new operations ramp-up and productivity measures take effect
  • Kumba Iron Ore – record production of 43.1 Mt, up 4% despite the unprotected strike at Sishen due to the ramp-up of Kolomela
  • Metallurgical Coal – record production of export metallurgical coal of 17.7 Mt, up 24%
  • Copper – 10% increase due to the ramp-up of the Los Bronces expansion despite disappointing performance at Collahuasi and in the Los Bronces mine
  • Platinum – 8% decrease in equivalent refined production mainly due to illegal industrial action

New mining operations and expansions ramping-up – delivered $1.2 billion of underlying operating profit

  • Kolomela iron ore – 8.5 Mt produced, ahead of its ramp-up schedule; on target for 9 Mt in 2013
  • Los Bronces copper expansion – contributed 196 kt; full ramp-up achieved in August 2012
  • Barro Alto nickel – production of 22 kt; progressing to full run rate
  • Zibulo thermal coal – production of 5.0 Mt

Investment prioritised to most value accretive and lowest risk projects

  • Cerrejón P40 8.0 Mtpa (100% basis) export thermal coal expansion (Colombia) – first coal in 2013
  • Minas-Rio 26.5 Mtpa iron ore (Brazil) – injunctions lifted and FOOS end of 2014
  • Grosvenor 5.0 Mtpa metallurgical coal (Australia) – longwall production in 2016
HIGHLIGHTS
US$ million, unless otherwise stated
Year ended
31 Dec 2012
Year ended
31 Dec 2011

Change
Group revenue including associates(6) 32,785 36,548 (10)%
Underlying operating profit(2) 6,164 11,095 (44)%
Underlying earnings(3) 2,839 6,120 (54)%
Underlying EBITDA(1) 8,686 13,348 (35)%
Net cash inflows from operating activities 5,562 9,362 (41)%
(Loss)/profit before tax(7)(8) (239) 10,782 (102)%
(Loss)/profit for the financial year attributable to equity
shareholders(7)(8)
(1,493) 6,169 (124)%
Earnings per share (US$):
    Basic (loss)/ earnings per share(8) (1.19) 5.10 (123)%
    Underlying earnings per share(3) 2.26 5.06 (55)%

(1) Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) is operating profit before special items, remeasurements, depreciation and amortisation in subsidiaries and joint ventures and includes attributable share of EBITDA of associates. See note 5 to the Condensed financial statements.
(2) Underlying operating profit includes attributable share of associates’ operating profit (before attributable share of associates’ interest, tax and non-controlling interests) and is before special items and remeasurements, unless otherwise stated, see notes 2 and 3 to the Condensed financial statements. For the definition of special items and remeasurements see note 4 to the Condensed financial statements.
(3) See note 9 to the Condensed financial statements for basis of calculation of underlying earnings.
(4) Net debt includes related hedges and net debt in disposal groups. See note 13 to the Condensed financial statements.
(5) Pro forma net debt is net debt adjusted for the estimated effect of the acquisition of a 58.9% interest in the Revuboè metallurgical coal project in Mozambique ($0.6 billion), the expected capital gains tax and withholding tax liabilities from the sale of the 25.4% interest in Anglo American Sur ($0.4 billion), the proceeds received from the disposal of a 16.8% effective interest in Palabora Mining Company Limited ($0.1 billion) and the disposal of certain Tarmac operations ($0.2 billion).
(6) Includes the Group’s attributable share of associates’ revenue of $4,024 million (2011: $5,968 million). See note 2 to the Condensed financial statements.
(7) Stated after special items and remeasurements. See note 4 to the Condensed financial statements.
(8) For the year ended 31 December 2012 special items and remeasurements, including associates, before tax and non-controlling interests, amounted to a loss of $5,845 million (2011: gain of $152 million), and after tax and non-controlling interests, amounted to a loss of $4,332 million (2011: gain of $49 million).

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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 Sarah McNally
Pranill Ramchander Tel: +44 (0)20 7968 8747
Tel: +27 (0)11 638 2592  

Notes to editors:
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

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