presentation to portfolio committee on public enterprises

Presentation to Portfolio Committee on Public Enterprises

Norman Mbazima- CEO Anglo American Thermal Coal

Cape Town 28th January 2010

2

Discussion points

Coal supply and security of supply

Current stock levels

Quality of coal

Other matters

3

Mozambique

Botswana

ZimbabweNamibia

Reliable long-term supplier for Eskom

AATC has long term relationships with customersHistorical relationship with Eskom is the corner stone of SA coal business

AATC pursues further opportunities with Eskom and local customers depending on production availabilityAATC serves local pulp/paper, cement, and steel industry

Our productsOur products Our approachOur approach

~4,550 kc/kg1 Eskom

~4,870 kc/kg2Sasol

~6,550 kc/kg4 Export

Note: All data in this presentation is based on 8+4 budget figures1. 19.1MJ/kg 2. 20.4 MJ/kg 3. 27.7 MJ/kg, incl. met coal 4. 27.4 MJ/kg. Approximate nar value (FOB): 5,980 kc/kgSource: AA; AATC; BCG analysis

Eskom relationship and volumes lay the foundation for Anglo's SA business

Avg. CV (air dry) (2010E)

59%

9%3%

29%

2007

61%

9%4%

27%

2008

61%

9%3%

28%

2009 8+4

61%

9%2%

28%

2010 Plan

Eskom

Sasol

Otherinland

Export

South Africa

Swaziland

Lesotho

Export/Domestic

Greenside

Kleinkopje

Goedehoop

LandauMafubeZondagsfontein

New Vaal

New Denmark

Kriel

Isibonelo

Domestic (2010)

AATC domestic sales split

~6,610 kc/kg3 Other

AATC continues embedded and enduring partnership with EskomShare of total Eskom burn tons ~28%

• AATC consumes ~5% of electricity in SA

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Security of Supply

• We will meet our contractual obligations and work with Eskom to evaluate the potential for lifex beyond the current life of existing mines

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Overview of mines

Mine name Sales tons (2010) Established End Planned expansions Power Station

Kriel 10.250 1979 2029 2012 / 2014  Kriel

New Vaal 17.300 1987 2050 2016 / 2020  Lethabo

New Denmark 4.810 1990 2041 Tutuka

Kleinkopje   2.250   2022   Majuba

Landau   210 2025 2016 Duvha/Hendrina

Mafube 939   2027   Arnot/Camden

Zondagsfontein   729   2029   Majuba/Kusile

Total Eskom 36.550

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Coal Supply 2010

• We are committed to meeting the Eskom tonnage requirement for 2010 and continue to seek opportunities to provide additional tonnes

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Sales to Eskom for 2010 and beyond are contracted for

Composition of 2010 Eskom volumesComposition of 2010 Eskom volumes Description of categoriesDescription of categories

730

939

211

60

17,300New Vaal

4,810New Denmark

10,250Kriel

Goedehoop

2,250Kleinkopje

Landau

Mafube

Zondagsfontein

5,93230,618 36,550Total Eskom

0 20,000 40,000

Eskom 2010 planned volumes covered by long-term and medium term contracts …

MineMine Volume in ktVolume in kt • Demand covered via Coal supply agreement (CSA)

– 20+ years for Cost+– No short-term demand change

• Annual volume budget agreement– 11% of volume sold to Eskom via medium

term contractsSet for 2010 sales planMedium-term demand volume depending

on AATC price position

Co

st+

m

ine

sF

ixe

d p

ric

e m

ine

s

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Stock Levels

• Stocks are in-line with the Eskom targeted levels for 2010 and we expect to maintain these levels throughout the year

• All mines are currently above Eskom’s system average of 36 days

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Coal Quality

• We expect to meet our contractual obligations and through initiatives like the Optimal Coal Processing Initiative (OCPI) we are working with Eskom to improve power station performance

• Challenges:•Geology•Adverse weather conditions

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Other matters

• Discussing New Largo supply to Kusile power station

• Future projects and Eskom demand

• Lifex

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Eskom is our largest customer and a significant stakeholders

We are committed to ensuring security of supply for the countryWe lead the Coal Working Group during Electricity Challenges in 2008, to ensure that stockpiles returned to comfortable levels and to identify logistical synergies key to improving other logistical challenges

Constructing new mines to meet Eskom’s new build programme

We are committed to meeting our contractual obligations in terms of quality and quantity

We continue to invest in and look for energy efficiency solutions at all our operations

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