1. Mine 2011 The game has changed Jason Burkitt Mine Africa 26 September 2011 www.pwc.co.uk/mining

2. PwC The new game The game has changed in the mining industry Demand continues to be stoked by growth in the emerging markets Supply challenging – declining grades and new mines in remote locations Cost base of the industry has changed to a new level, leading to sustained higher commodity prices Over $300 billion capex announced by the Top 40 – 1/3 in 2011 Shift in the industry to the emerging markets Increased focus by governments and stakeholders June 2011 Mine 2011 Slide 2

3. PwC Spectacular results Market capitalisation up 26% Revenue up 32% - greater than $435 billion Profits $110 billion Cash reserves over $100 billion Net debt down to 8% Total assets approaching $1 trillion Margins improve, but not at record levels, as cost pressures continue June 2011 Mine 2011 Slide 3

4. PwC We are also seeing… The new era bringing a changing face to the industry Vertical integration upstream led by the steel industry Private Equity and Sovereign Wealth Funds State Owned Enterprises entering through funding and off-take agreements Stakeholder management is increasingly critical Political attention on the distribution of benefits June 2011 Mine 2011 Slide 4

5. PwC Top 10 miners’ market capitalisation June 2011 Mine 2011 Slide 5 A clear break in the industry with Top 3 stepping out 26% Growth in market capitalisation of the Top 40 Market capitalisation of number 4o increased from $6.5 billion to $11.0 billion in 2010 Source : Capital IQ

6. PwC TSR – a shift to Emerging Markets June 2011 Mine 2011 Slide 6 Continued growth in emerging markets Strong economic position compared to developed economies is driving demand Source : Bloomberg, PwC analysis

7. PwC 2010 four year TSR – Top 10 by market cap* June 2011 Mine 2011 Slide 7 * Showing Top 9 as Coal India listed in October 2010 Source : Bloomberg, PwC analysis

8. PwC A view from the top Higher level of confidence than seen in several years Belief in the emerging markets story Drive for organic growth – building is better than buying A battle for talent to support growth plans Resource nationalism a greater challenge More complex industry with greater number of stakeholders Search for innovation and technological advantages The game has changed June 2011 Mine 2011 Slide 8

9. PwC Market evolution - 9 year trends A record year by many measures ROE up to 22% but well below highs – expensive equity and cost pressures June 2011 Mine 2011 Slide 9 Source : PwC analysis

10. PwC Market evolution - 9 year trends Composition of Top 40 shifting to emerging markets Additional new players on the horizon (e.g. traders, IPOs) June 2011 Mine 2011 Slide 10 Source : PwC analysis

11. PwC Income statement for the Top 40 June 2011 Mine 2011 Slide 11 Revenue - price increases and 5% rise in production driving growth The cost curve has moved higher Record net profit of $110 billion – up 156% 20102009 $ billion Revenue435330 Operating expenses(246)(220) Adjusted EBITDA*189110 Net profit11043 *EBITDA adjusted to exclude impairment charges

12. PwC Commodity prices June 2011 Mine 2011 Slide 12 Significant price rises across most commodities Iron ore prices have risen dramatically Copper and gold reaching new highs Source : AME, PwC analysis

13. PwC Production June 2011 Mine 2011 Slide 13 5% increases after a period of decline Reflection of positive impact of large capital projects 35 year mine life for the Top 40 based on current production Source : PwC analysis

14. PwC Revenue by commodity June 2011 Mine 2011 Slide 14 Four major commodities drive revenue Iron ore share up from 15% to 20% of total revenue China is the major customer of the industry Source : PwC analysis

15. PwC Returns from mining – risk vs reward June 2011 Mine 2011 Slide 15 Returns to miners carries the most risk, with it comes the most potential reward Employees payments rising steadily, despite fluctuations in the market Government share has experienced significant growth, primarily a fixed return Source : PwC analysis

16. PwC Capital projects are back June 2011 Mine 2011 Slide 16 Greater focus on organic growth Major capital projects come online pushing production up 5% $300 billion of future projects announced - $120 billion in 2011 Source : PwC analysis

17. PwC Cash flow for the Top 40 June 2011 Mine 2011 Slide 17 Operating cash flows back above$100 billion 85% of net investing cash flow into organic growth – sustaining and development capex For every $1 revenue, 18 cents invested back into the business. In 2007 was 40 cents. Average over nine years is 26 cents Capital raisings replaced by distributions to shareholders $ billion2010 2009 Cash flows related to operating activities13786 Cash flows related to investing activities(79)(77) Cash flows related to financing activities(35)8 Cash and cash equivalents at end of period105 81

18. PwC Balance sheet for the Top 40 Net debt down to $46 billion – 8% gearing Borrowings only 16% of total assets – industry funded by equity Cash increased 30% to $105 billion Almost $1 trillion of assets Net assets as a percentage of market capitalisation remains stable June 2011 Mine 2011 Slide 18 $ billion20102009 Cash10581 Total Assets943798 Borrowings151163 Total liabilities387357 Equity556441

19. PwC Outlook Demand fuelled by emerging markets Supply challenges remain and will continue Mining high on the political agenda …the game has changed June 2011 Mine 2011 Slide 19

20. Mine 2011 The game has changed This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication, and, to the extent permitted by law, PricewaterhouseCoopers LLP, its members, employees and agents do not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it. © 2011 PricewaterhouseCoopers LLP. All rights reserved. In this document, “PwC” refers to PricewaterhouseCoopers LLP (a limited liability partnership in the United Kingdom) which is a member firm of PricewaterhouseCoopers International Limited, each member firm of which is a separate legal entity.