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2004 Interim Results This presentation is being made only to and is directed only at (a) persons who have professional experience in matters relating to.

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Presentation on theme: "2004 Interim Results This presentation is being made only to and is directed only at (a) persons who have professional experience in matters relating to."— Presentation transcript:

1 2004 Interim Results This presentation is being made only to and is directed only at (a) persons who have professional experience in matters relating to investments falling within Article 19(1) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2001 (the “Order”) or (b) high net worth entities, and other persons to whom it may otherwise lawfully be communicated, falling within Article 49(1) of the Order (all such persons together being referred to as “relevant persons”). Any person who is not a relevant person should not act or rely on this presentation or any of its contents. ANGLO AMERICAN A WORLD OF DIFFERENCE 5 August 2004

2 2004 Interim Results 2 Highlights  Record H1: - Earnings up 52% at $1,304m - EPS up 49% at 91c per share  EBITDA up by $1bn to $3,433m  Record performances from Base and Ferrous Metals  Cost cutting and efficiencies of $248m (2003:$127m)  Interim dividend up 27% at 19c per share

3 2004 Interim Results 3 Headline earnings by business unit PlatinumGoldDiamondsCoalBase Metals Industrial MineralsPaper & PackagingFerrous & Industries H1 2003H1 2004 *NB:Headline earnings for Paper and Packaging have been adjusted for the 6 months ended 30 June 2003 as net interest for wholly owned operations in Paper and Packaging is now accounted for centrally within Corporate Activities

4 2004 Interim Results 4 Geographic headline earnings mix H1 2004 EuropeSouth Africa AmericasRest of World H1 2003

5 2004 Interim Results 5 Strong cash generation into 2004 EBITDA – up 40%

6 2004 Interim Results 6 % The economic cycle - where are we? OECD industrial production Source: MSU

7 2004 Interim Results 7 Falling inventories, rising prices Total LME inventories & MG base metals index Source: UBS LME inventories (kt) MG base metals Nickel, Aluminium, Copper LME inventories MG Base Metal Index Cash – Price Index MG base metals LME inventories (kt)

8 2004 Interim Results 8 H1:Robust commodity prices * API4 FOB Richards Bay Source: MSU H1 2004 H1 2003 Coal * Copper Platinum Zinc Gold

9 2004 Interim Results 9 Strategy for growth  Growth through projects  Growth through acquisitions  Value from cost cutting and efficiencies

10 2004 Interim Results 10 2004200520062007 Siguri $52m Finsch $130m Buxton $173m RPM Ph 1 $210m W.L. Tailings $186m Mponeng $191m Grasstree $106m TauTona $52m PMR Expan. $99m Kleinkopje $56m Isibonelo $65m Dartbrook $55m Black Mtn $110m Ruzomberok $233m Richards Bay $235m Merebank $150m Ticor 2 $54m RPM Ph 2 $444m Skorpion $454m ACP Project $250m BRPM $317m HBMS 777 $276m Collahuasi $288m Cerrejón $17m Copebras $22m Approved $6bn project portfolio Chagres $21m Anglo PlatinumAngloGold AshantiDiamondsCoalBase MetalsIndustrial MineralsPaper & PackagingFerrous Metals Ticor 1 $137m El Soldado $80m Twickenham $343m Kroondal $138m Unki $84m Selected major authorised projects. 100% of subsidiaries and AA plc’s share of JV’s and associates. Full production dates.

11 2004 Interim Results 11 Quellaveco Copper (Peru) Barro Alto Nickel (Brazil) Hope Downs* Iron ore (Australia) Morro Sem Bone Nickel (Brazil) Western Complex Gamsberg Zinc Sishen South Iron ore Obuasi Deeps (Ghana) Pandora Los Bronces expansion Copper (Chile) Collahuasi expansion Copper (Chile) Dawson Valley (Australia) Sishen Expansion Iron ore Lake Lindsay (Australia) $2.0bn South Africa $2.5bn South America $2.6bn Rest of the World Longer term unapproved project portfolio Anglo PlatinumAngloGold AshantiDiamondsCoalBase MetalsIndustrial MineralsPaper & PackagingFerrous Metals Snap Lake (Canada) *It is anticipated that final Kumba Board approval to proceed will be sought before the end of the year

12 2004 Interim Results 12 Actively managing the asset base Mining acquisitions for cash at current stage in the cycle unlikely But opportunities in IMD/Paper & Packaging: –Acquisition of Frantschach minority Sale of Gold Fields stake ($1.18bn) H1 cash acquisitions and disposals ($bn)

13 2004 Interim Results 13 Cost savings and efficiency improvements: $248m $188m $60m

14 2004 Interim Results REVIEW OF FINANCIALS Tony Lea

15 2004 Interim Results 15 Headline earnings $m H1 ’04H1 ’03 Profit for the financial period1,709760 Exceptional items(535)7 Amortisation of goodwill11298 Related tax & minority interests18(9) Headline earnings for the financial period1,304856 EPS (cents per share) 9161 DPS (cents per share) 1915 125% %ch 52% 49% 27%

16 2004 Interim Results 16 Headline earnings variances $m

17 2004 Interim Results 17 Headline variance: Exchange Group total = -$216m $m

18 2004 Interim Results 18 Headline variance: Price Group total = +$866m $m

19 2004 Interim Results 19 $m 30/06/2004 31/12/2003 Shareholders’ Funds 22,53119,772 Net Debt: South Africa 2,702 3,145 Rest of World 6,028 8,7305,488 8,633 Minority Interests 4,160 3,396 Total Capital 35,421 31,801 Net Debt/Total Capital 24.6% 27.1% ROCE 13.7%10.7% EBITDA/Total Capital 20.4% 17.3% Balance sheet

20 2004 Interim Results 20 H1 ‘04 H1 ‘03 EBITDA3,4332,444 Share of EBITDA of JVs & associates(938)(800) Increase in working capital(467)(375) Provisions & other non cash4717 Operating cash flow2,0751,286 Dividends from JVs & associates147203 Operating cash flow including dividends from JVs & associates2,222 1,489 Net interest & other dividend income(140) (75) Taxation(246)(413) Disposal of fixed assets5640 Available cash flow1,892 1,041 Dividends paid - company & minorities(686)(739) Net acquisitions & disposals618(315) Capital expenditure- maintenance(673)(547) - expansionary(724)(625) 427(1,185) Other (524)(226) Increase in net debt(97)(1,411) Cash flow analysis

21 2004 Interim Results REVIEW OF OPERATIONS Tony Trahar

22 2004 Interim Results 22 Highlights – Base Metals Higher prices, acquisitions and new projects boost performance Minera Sur Andes contributes $194m Commissioning of Collahuasi Rosario project ($654m) ahead of schedule and under budget Skorpion at 85% of design capacity - full production set for end 2004 ROCE (annualised) of 23.5% Headline earnings up 658% ($m)

23 2004 Interim Results 23 Highlights – Paper and Packaging European markets impacted by strong Euro and slower growth Bauernfeind (€344m) and Frantschach minority (€320m) acquired Structure: creation of single global UCWF and packaging businesses Ruzomberok and Mondi SA expansions on track and within budget Previous reporting basis 2004: headline earnings of $174m (H1 2003: $178m*) Headline earnings up 10% ($m) *NB:Headline earnings for Paper and Packaging have been adjusted for the 6 months ended 30 June 2003 as net interest for wholly owned operations in Paper and Packaging is now accounted for centrally within Corporate Archives

24 2004 Interim Results 24 Highlights – Diamonds Solid performance from De Beers DTC sales of $2.98bn up 2% Operating cashflow of $870m Net Debt (including preference shares) reduced by 34% to $1,169bn Preference share redemption of $175m US Department of Justice settlement in July Headline earnings down 13% ($m)

25 2004 Interim Results 25 Highlights – Ferrous Metals and Industries Improved prices for iron ore, steel, manganese, ferrochrome and vanadium Strong performances from Highveld, Scaw and Samancor; improved results from Boart and Terra First fully consolidated contribution from Kumba Kumba: attractive iron ore growth opportunities Headline earnings up 405% ($m)

26 2004 Interim Results 26 Highlights – Coal South African & South American earnings up significantly (+116%) Australian earnings impacted by –A$ strength –Moranbah – production resumption in H2 H2 realised prices higher than H1 Proposed Western Complex joint venture announced in May 2004 Drilling commenced on Xiwan Lease Area (China) on 1 July 2004 Headline earnings up 37% ($m)

27 2004 Interim Results 27 Highlights – Platinum Revenues increased due to higher prices and greater sales volumes Platinum production up 26.6% at 1.16m oz (excluding pipeline movements, up 7.8%) Cost initiatives gain momentum Target of 2.45m oz in 2004 remains on track Headline earnings up 30% ($m)

28 2004 Interim Results 28 Highlights – Industrial Minerals Solid performance despite difficult UK markets Strengthening market conditions in Czech Republic and Poland Copebrás operating profit doubled due to market strength and contribution from new Goiás plant New Buxton cement plant (UK) operating at capacity Headline earnings stable ($m)

29 2004 Interim Results 29 Highlights – Gold Lower earnings on the back of strong rand and lower production at Morila Cash costs of $260/oz AngloGold Ashanti transaction completed in April - integration of assets progressing well Acquisition of 29.9% stake in Trans- Siberian Gold Headline earnings down 20% ($m)

30 2004 Interim Results 30 Outlook  Positive global environment for commodities  US/Japan GDP growth encouraging  China set for soft landing?  European growth remains sluggish  Anglo’s product and geographic diversity to underpin performance

31 2004 Interim Results This presentation is being made only to and is directed only at (a) persons who have professional experience in matters relating to investments falling within Article 19(1) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2001 (the “Order”) or (b) high net worth entities, and other persons to whom it may otherwise lawfully be communicated, falling within Article 49(1) of the Order (all such persons together being referred to as “relevant persons”). Any person who is not a relevant person should not act or rely on this presentation or any of its contents. ANGLO AMERICAN ADDING VALUE TO NATURAL RESOURCES 5 August 2004

32 2004 Interim Results ADDITIONAL INFORMATION Handout only

33 2004 Interim Results 33 Key Dates Currency Conversion Ex-dividend (JSE) Ex-dividend (LSE) Record date Payment of Interim Dividend Annual Results 2 August 2004 16 August 2004 18 August 2004 20 August 2004 21 September 2004 23 February 2005

34 2004 Interim Results 34 Market Prices $m H1 ‘04H1 ‘03 Gold 401349 Platinum 850654 Palladium 248207 Rhodium696557 Copper12575 Nickel619379 Zinc 4835 Coal: thermal (RSA - API 4 index average) 49.1525.75

35 2004 Interim Results 35 US$m 10% change in gold price ± 36 10% change in platinum price ± 51 10% change in palladium price ± 7 10% change in coal price ± 81 10% change in copper price ± 77 10% change in nickel price ± 9 10% change in zinc price ± 20 10% change in pulp price ± 4 10% movement in SA rand/US$ ± 249 10% movement in AUD/US$ ± 29 10% movement in Euro/US$ ± 14 10% movement in £/US$ ± 17 Headline Earnings Sensitivities Estimated sensitivities represent 6 month outlook. Excludes the effect of any hedging activities. Stated after tax at marginal rate. Pulp sensitivity depends on recoveries.

36 2004 Interim Results 36 Projects 1 Gold incremental production is total additional capacity over life of project. Capex converted to US$ on date of project approval. 2 Nominal. 3 Incremental production is a per year amount once full production is reached. Capex converted at date of project approval. Gold Life of mineProductionFullApproved Approvedproduction 1 commencesprod.capex $m 2 Mponeng 4.8m oz 20042007 191 TauTona - Expansion project 0.5m oz 20042006 52 TauTona - VCR A & Pillar & CLR <120L 2.4m oz 20052010 117 Moab Khotsong4.9m oz 20032011 690 Siguri - CIP project 2.1m oz200552 Total 14.7m oz1,102 Industrial Minerals Total additionalProductionFullApproved Approvedproduction 3 commencesprod.capex $m Buxton Cement Plant500,000 t 20042004 173 Copebras121,000 t2005200522 Total 195

37 2004 Interim Results 37 Projects 1 Incremental production is a per year amount once full production is reached. 2 Capex converted at date of project approval. 3 Replacement ounces. Platinum Total additionalFullApproved Approvedproduction 1 prod.capex $m 2 ACP Convertor Phase 1 2004 250 PMR Plant Expansion 2005 121 Rustenburg UG2 Phase 1 360,000 oz 2007 210 Bafokeng Rasimone Mine (BRPM) 250,000 oz 2005 317 W. Limb Tailings Retreatment 120,000 oz 2008 186 Rustenburg UG2 Phase 2 3 306,000 oz 2009 444 Twickenham 160,000 oz2009 343 Kroondal 280,000 oz 2006 138 Unki 58,000 oz2008 84 Total 2,093 Meet expansion

38 2004 Interim Results 38 Projects 1 Incremental production is a per year amount once full production is reached. Capex converted at date of project approval. 2 To maintain & expand production levels at German Creek & Dartbrook. Incremental tonnes - German Creek (1.6m tpa) & Dartbrook (0.9m tpa). 3 Extends HBMS life to 2018. 4 Extends El Soldado life to 2027 Coal Total additionalProductionFullApproved Approvedproduction 1 commencesprod.capex $m 2 Kleinkopje Expansion 1.3m tpa 20042004 56 Greenside Expansion1.0m tpa 20032004 17 Cerrejón 2.0m tpa 20052007 17 Isibonelo 5.0m tpa 20052006 65 German Creek - Capcoal (Grasstree) 2 3.9m tpa 20062006 106 Dartbrook (Kayuga) 3.7m tpa 20042004 55 Total 16.9m tpa 316 Base Metals Total additionalProductionFullApproved Approvedproduction commencesprod.capex $m HBMS 777 Project 3 20032004 276 Black Mountain Deeps 20042006 110 Collahuasi Rosario Project 20042004 288 Skorpion150,000 t Zn 20032004 454 El Soldado pit extension 4 2008200880 Codemin II4,000 t Ni2005200567 Total 1,275

39 2004 Interim Results 39 Projects 1 Incremental production is a per year amount once full production is reached. Capex converted at date of project approval. 2 Made up of 20,000t pulp and 10,000t paper. 3 60,000 t increase in cut size capacity plus 16,000t additional production of UCWF paper. Paper and Packaging Total additionalProductionFullApproved Approvedproduction 1 commencesprod.capex $m 1 Ruzomberok: Pulp Mill 105,000 t 20042005 129 Ruzomberok: PM18 Expansion 100,000 t 20032004 104 Richards Bay: BEKP Line 145,000 t 20042005 235 Merebank: PM31 Rebuild 160,000 t 20052006 150 Total 618 Total convertingProductionFullApproved Approvedcapacity 3 commencesprod.capex $m Ybbstal: Flex 05 60,000 t³ 20042005 51 Total 51

40 2004 Interim Results 40 Projects 1 Total additional production shown for the life of the project. Shown on a 100% basis. 2 Approved capex is AA plc’s effective attributable share (48.65%). Diamonds Total additionalProductionFullApproved Current projectsproduction 1 commencesprod.capex $m 2 Finsch Block 4 17m carats 20042006 130 BB1E Cullinan 5m carats 20042007 12 Elizabeth Bay Upgrade 2m carats 20042004 27 Total 24m carats 169 Estimated Under review / awaiting approvalcapex $m 2 C-Cut Cullinan 97m carats 20092014 473 C-Cut BA West Lower Cullinan 18m carats 2009 2012 45 Finsch Block 5 16m carats 20092010 180 Finsch Plant Upgrade 2m carats 20062007 32 Snap Lake 19m carats 20072008 282 Victor 6m carats 20082008 321 Total 158m carats 1,333

41 2004 Interim Results 41 Projects 1Incremental production is a per year amount once full production is reached. Capex converted at date of project approval. Ferrous Metals and Industries Total additionalProductionFullApproved Approvedproduction 1 commencesprod.capex $m 1 Sishen – up current classifier 1 000 ktpa 20042004 13 Ticor: Mineral Sands Furnace 1 125 kt slag 20032006 137 Ticor: Mineral Sands Furnace 2 125 kt slag 20032007 54 Total 204 Estimated Awaiting approvalcapex $m Hope Downs25 mtpa Sishen Expansion 10 mtpa - Sishen South 9 mtpa 300

42 2004 Interim Results 42 Analysis of Headline Earnings $m H1 ‘04H1 ‘03 Platinum 139 107 Gold 66 82 Diamonds 217 248 Coal 147 107 Base Metals 455 60 Industrial Minerals 114 113 Paper and Packaging¹ 226 205 Ferrous Metals 207 41 Exploration (42) (39) Corporate Activities¹² (225) (68) Headline Earnings 1,304 856 ¹Headline earnings for Paper and Packaging have been adjusted for the 6 months ended 30 June 2003 as net interest for wholly owned operations in Paper and Packaging is now accounted for centrally within Corporate Activities ² Includes Gold Fields

43 2004 Interim Results 43 Analysis of Operating Profit $m H1 ‘04H1 ‘03 Platinum 320 204 Gold 133 180 Diamonds 350 378 Coal 196 172 Base Metals 565 98 Industrial Minerals 145 136 Paper and Packaging 320 357 Ferrous Metals and Industries 387 104 Exploration (56) (50) Corporate Activities 1 (112) (45) Operating Profit 2 2,2481,534 1 includes Gold Fields. 2 after operating exceptional items.

44 2004 Interim Results 44 Capital Expenditure $m H1 ‘04H1 ‘03 Platinum292394 Gold227117 Coal 64 74 Base Metals127155 Industrial Minerals127136 Paper and Packaging409233 Ferrous Metals and Industries144 59 Other 7 4 Total 1,397 1,172

45 2004 Interim Results 45 Headline variance: Volume Group total = +$75m $m

46 2004 Interim Results 46 Operating Profit Variance $m Operating profit after operating exceptional items

47 2004 Interim Results 47 Regional Analysis $m H1 ‘04H1 ‘03 South Africa 777 548 Rest of Africa 241 299 Europe 416 409 Americas 723 187 Australasia 91 91 2,2481,534 Operating profit

48 2004 Interim Results 48 $m H1 2003 operating costs Subsidiaries (7,979) JVs (share of turnover less operating profit) (386) (8,365) Inflation (247) Exchange (945) Volume (279) Depreciation & amortisation (81) Structural changes (775) Operating impairments 12 Costs higher than inflation & other (176) H1 2004 operating costs before cost savings (10,856) Cost saving initiatives 248 H1 2004 Operating costs Subsidiaries(10,279) JVs (share of turnover less operating profit) (329) (10,608) Operating Cost Reconciliation Subsidiary & JV Operating Costs

49 2004 Interim Results 49 Anglo Platinum Reconciliation $m IAS net profit (published)217 STC adjustment (9) Movement on unrealised profit on FECs (9) Exploration 11 Profit on assets exchanged not recognised for UK GAAP (10) Net exceptional items 22 Weighted average exchange impact 3 Other4 229 Minority interest (58) Depreciation on assets revalued on acquisition (32) UK GAAP contribution to headline earnings139

50 2004 Interim Results 50 AngloGold Ashanti Reconciliation $m IAS Headline earnings (published) 1 111 Exploration (excluding joint ventures) 19 Amortisation on bond discount 5 Depreciation on assets revalued on acquisition(5) Minority interest (64) UK GAAP contribution to headline earnings 66 1 Before unrealised non-hedge derivatives and fair value losses on interest rate swaps

51 2004 Interim Results 51 Ordinary Preference $mTotal shares shares DBI headline earnings – IFRS (100%)424 - - GAAP adjustments (14) - - DBI headline earnings - UK GAAP (100%) 410 357 53 AA plc’s 45% ordinary share interest 161 161 - Additional 3.65% ordinary share interest 13 13 - AA plc’s portion of preference shares 43 - 43 AA plc headline earnings 217 174 43 De Beers Reconciliation

52 2004 Interim Results 52 Operating Profit Exclude Add Back Add BackAdd Back JVs $m(incl JVsExceptional SubsidiariesSubsidiaries& Associates & Associates)ItemsDepreciationAmortisationDepr. & Amort.EBITDA Platinum320-14982479 Gold133-1431823317 Diamonds350---45395 Coal196-68220286 Base Metals565-118-35718 Industrial Minerals145-105301281 Paper & Packaging320-1841414532 Ferrous Metals & Industries 387-127346563 Other(168)-71211(138) Total2,248-901871973,433 EBITDA by Business: H1 ‘04

53 2004 Interim Results 53 Operating Profit Exclude Add Back Add BackAdd Back JVs $m(incl JVsExceptional SubsidiariesSubsidiaries& Associates & Associates)ItemsDepreciationAmortisationDepr. & Amort.EBITDA Platinum2049081303 Gold18012871628323 Diamonds378--33411 Coal17264218256 Base Metals98109-28235 Industrial Minerals13686262250 Paper & Packaging35714899523 Ferrous Metals & Industries 10443354204 Other(95)61117(61) Total1,53412633751902,444 EBITDA by Business: H1 ‘03

54 2004 Interim Results ANGLO AMERICAN ADDING VALUE TO NATURAL RESOURCES 5 August 2004


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