PRESENTATION ON SUSTAINABLE DEVELOPMENT AND CORPORATE RESPONSIBILITY ISSUES

29 April 2003 Anglo American

Presentation Team

Sir Mark Moody-Stuart – Chairman John Groom – Safety, Health and Environment Russell King – Human Resources and Business Development Nick Von Schirnding – Investor and Corporate Affairs Edward Bickham – External Affairs

Safety, Health & Environment Dr John Groom

Global Mining Initiative

• Mining, Minerals and Sustainable Development project • GMI Conference, Toronto • International Council on Mining and Metals - Characterised by intensive engagement with stakeholders - Provided a solid basis for our participation at the Johannesburg World Summit on Sustainable Development - Anglo American played a key role

International Council on Mining and Metals

• SD Charter – A commitment to 10 key principles – A commitment to be measured against them • International engagement – Global Reporting Initiative – Community Engagement tools project with the World Bank – World Bank Extractive Industries Review – Extractive Industries Transparency Initiative

Report to Society

Scope now expanded to become an SD Report • Business practices & performance • Workplace – Safety – Occupational health – Human resources • Environment • Society – Community health – Social & community initiatives – Economic contribution Benchmarked against the GRI core indicators

Environment

• Risk based prioritising – Tackling global issues: using local illustrations • Energy and greenhouse gases – Much improved linkage to units of production – Climate change policy – Value-at-risk study completed • ISO 14001 certification now covers 51% of turnover. The target is full certification by end of 2004.

Environment

• Water management – Still reporting in aggregate – Future focus will be on individual businesses where water issues are a priority – For example, Lisheen, Namakwa Sands, Mantos Blancos and Mondi Paper have innovative water-use strategies

Biodiversity

• Clear strategy • Site biodiversity action plans to be developed (where not already in place) – Link to environmental impact assessment and closure planning • Corporate contributions to the global challenge – Kew Millenium Seedbank – Active partners in the ICMM/IUCN dialogue on mining and protected areas – Key sponsor of the UNEP World Conservation Monitoring Centre in Cambridge

Environmental Targets

Besides the management system targets(ISO14001 and FSC Certification), our business units are setting clear, quantifiable environmental targets that are of greatest relevance to their particular circumstances and their communities.

Many such specifics are listed on p. 51 of our report.

Technological Innovations

• Process R&D and alternatives to traditional smelting (HBMS zinc pressure leach) • Sulphate reducing bacteria for water treatment at South African coal mines • Coal-bed methane recovery for use (Australia) • Energy efficient technologies • New smelting process will reduce Anglo Platinum SO 2 emissions by 55 000 tonnes/year by end of 2004 • Fuel cell technology: joint venture with Johnson Matthey

Legal Compliance

• 281 incidents were reported involving the regulatory authorities (336 in 2001) • Fines paid totalled $162,000 ($187 000 in 2001)

Verification

• KPMG conducted their third review of our SHE performance and reporting • Nine sites visited, and previous site visits reviewed • Methane emission reporting remains incomplete

2.5

2.0

2.26

Safety I

Lost time injury frequency rates (LTIFR) Fatal injury frequency rates (FIFR)

0.10

0.08

1.50

1.5

1.0

0.5

0.0

0.87

0.64

0.031

0.033

0.020

2000 2001 2002 2003 0.06

0.04

0.02

0.00

Safety II

• 127 000 employees: c.65 000 contractors in managed operations • 47 fatal injuries – down by 33% from 2001 • Lost-time injuries down by 42% • Introduction of Golden Rules • Safety performance an element of Executive and Management remuneration

Much more remains to be done

Safety III

• Challenging new targets set • Visible felt leadership • Training and the promotion of safe behaviour • The development of leading indicators • The fostering of a true safety culture • OTTO: Zero Tolerance, Target Zero • Our clear goal is to do business without hurting people

Occupational Health

• Developed integrated industrial hygiene/ occupational health management guidelines: roll-out commenced • Performance audited against the guidelines will provide leading indicators

Human Resources Russell King

Key Issues

• Decentralised business model but with strong corporate values • Corporate role to advise and facilitate • Sceptical about utility of data aggregation

Key Data

• 127 000 employees in managed operations of which: – Africa 85 000 – Europe – The Americas – Australasia 30 000 8 500 3 500 • Contractors c. 65 000 • 2002 – no major industrial disputes • Support freedom of association – 70% union membership • Training – minimum 2.2% of total employment costs

Human Resources – Priority Challenges I

DIVERSITY Ensuring equal opportunities throughout the organisation globally • • Gender c. 10% of employees are women c. 15% in management roles • • • South Africa Employment Equity By 2008, 40% of managerial employees should be HDSAs (c. 22% in 2002) Longstanding programmes to develop HDSA managers, including through educational bursaries c. 600

Human Resources – Priority Challenges II

• Talent Management – Key aspect of diversity agenda – Part of senior management performance contracts • Performance Management and Development – Now cover about half of employees • Employee Communication – Developing two-way dialogues

South African Challenges

Black Economic Empowerment

Nick Von Schirnding

South African Challenges

• Minerals Development & Petroleum Act • Empowerment Charter – 15% equity or production ownership in 5 years – 26% equity or production ownership in 10 years • Empowerment Scorecard – Ownership; beneficiation; procurement; employment equity; human resources development; housing conditions and community development • Money Bill - consultation

• • Anglo’s Black Economic Empowerment Commitment US$1.8 billion in BEE transactions completed Procurement expenditure of US$800 million from black-owned businesses

2500 2000

• •

1500 1000 500 0 1999 2000 2001

Small business development – Currently invested in 20 companies; 1 000+ jobs – Khula Mining Fund Chairman’s Fund support for education

2002 ZAR Millions

Social, Community and Economic Issues Edward Bickham

Human Rights

• Strong commitment in ‘Good Citizenship’ Principles – Support Universal Declaration – Commitment to make representations on behalf of employees and communities • Major issues in Zimbabwe • Consideration of adherence to ‘Voluntary Principles on Security and Human Rights’ • Child labour • Development of ‘best practice’ in relation to indigenous peoples

2002 - Controversies

• Zambia – withdrawal from KCM • Colombia – Resettlement • Congo – UN Special Panel

HIV/AIDS - I

Rigorous scientific reflection HIV/AIDS policy and strategy development 1 Developing culturally appropriate prevention messages 9 2 Linking care to prevention 8 Total Management Commitment Situating prevention in a community context 7 6 Challenging denial and stigma 5 3 4 Sustaining awareness and education Tackling socio-economic factors Establishing partnerships

•

HIV/AIDS - II

Voluntary counselling and testing • ART initiative for employees (24% infection rate) • Treatment protocols in place • 30 sites now registered for ART • Estimate 3 000 on treatment after 12 months • Seeking to broaden coverage of ART • Emphasis on community partnerships – Zimbabwe – Western Cape – KwaZuluNatal

Communities I - Objectives

• Engagement and consultation • Enhance capacities / economic upliftment • Improved management of socio-economic impacts • Community projects to reflect local priorities

Communities II - Engagement

• Community Engagement Plans – 3-year rolling: – Consultation – Management of key issues – Complaints procedures – Contribution to local economy – Support for community projects – Resources and accountabilities • Growth in Community Liaison Panels • 2002 – Community Engagement Guidelines and ‘Good Neighbours’ publication

Communities III – Managing Impacts

• Social Impact Assessment for new projects • Rapid Socio-Economic Assessment Methodology – pilot projects: – Mondi Forest, SA – Catalao, Brazil – German Creek, Australia

Communities IV – Economic Upliftment

• Indigenous management and local labour (eg, Skorpion) • Creative use of procurement • Income generation schemes • Small business development model

35 30 25 20 15 10 5 0

Corporate Social Investment

CSI Expenditure 2 3 4 • CSI expenditure US$28.8 million • 0.9% of pre-tax profit • Priorities: education, health and community development • Chairman’s Fund leading social investment vehicle in South Africa • ENGAGE campaign – employee volunteering

Economic Contribution

Distribution of Benefits Arising from Economic Activity During 2002 ($m)

Suppliers 8,730 Employees 2,796 Dividends 1,011 Company Tax 621 Interest 300

Payments to Governments

Taxes and Other Payments to Governments 2002

900 800 700 600 500 400 300 200 100 0 Africa Europe North and South America Aust/Asia Managed companies Non-managed companies

Anglo American's Regional Economic Contribution 2002

7,000 6,000 5,000 4,000 3,000 2,000 1,000 - Africa Europe North and South America Australia / Asia Value added (non-managed) Value added (managed) Payments to suppliers, indirect taxes and royalties (non-managed) Payments to suppliers, indirect taxes and royalties (managed)

‘Good Citizenship’ – Assurance and Reporting Business Principles • Launch Briefings • Training • Integrate into management processes • Provision for whistle blowing Operations’ Annual Letter of Assurance Divisional CEOs Letters of Assurance Supply Chain • contractors • suppliers • contract compliance KPMG Roll-out Review Anglo American plc Internal audit to carry out reviews on request ‘Report to Society’

Embedding ‘Good Citizenship’ Principles • Integration into decision-making • Development of Programmes – Communities – Employee communication – Business integrity – Human rights – Whistle-blowing – Complaints • Supply Chain Issues • Improvement of social KPIs

Reporting: What Next?

• Stakeholder round-tables on evolution of Report • Progress towards more divisional and local reporting • Examining greater use of web as medium for detailed reporting