Press releases - 2021

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Interim Report for the six months ended 30 June 2021

27 July, 2021

KUMBA’S PERFORMANCE CREATES ENDURING VALUE FOR ALL STAKEHOLDERS

Themba Mkhwanazi, Chief Executive of Kumba said, “In the first half, we have marked five years of fatality-free production, while providing comprehensive WeCare Covid-19 support. In these challenging times, we continue to prioritise the safety, health and livelihoods of our colleagues and communities.

Kumba is working with the rest of Anglo American's South African businesses, to address both the immediate and medium-term impact of the recent social unrest, building on our WeCare programme.”

“We are partnering with government, organised business and civil society to ensure the most efficient and impactful contribution. Building on our WeCare programme, this contribution will be directed to groups across civil society to aid their immediate relief efforts and to provide direct support to all our staff and contractors while working with NGOs to support mine-communities. Together with Anglo American we are making a long-term commitment to help rebuild and reset South Africa and its economy.

“With global demand for many metals and minerals driving prices and industry profits higher, mining is contributing significantly to the government fiscus, and ensuring that more resources are available to help our fellow South Africans get back on their feet. Kumba is playing its part in South Africa’s economic recovery at a national level by contributing R9.2 billion in income tax and mineral royalties in the first half of the year. At a regional level, we are helping our host communities economically and socially by employing 85% of our workforce and procuring R1.7 billion of goods and services locally.

“Amidst these challenges, Kumba has achieved five years without a fatal incident, a significant accomplishment for the Company and the South African mining industry, demonstrating our unwavering commitment to safe, responsible production through strict onsite safety protocols. Through our robust and comprehensive WeCare programme we have invested R100 million to support our colleagues and communities through the second year of the pandemic. Working with the National Department of Health and Anglo American, Kumba has started to roll-out its government licensed vaccination programme at our Sishen and Kolomela mine clinics, serving first our workforce and ultimately their families and communities when we are able to do so.

“We are pleased with our strong operational and financial performance. Despite weather related and logistical challenges, Kumba’s operational resilience and capability resulted in production volumes increasing by 12% to 20.4 Mt, surpassing production in the first half of the past two years, while increasing sales by 3% to 19.5 Mt.

“From a financial perspective, Kumba delivered earnings before interest, taxation, depreciation and amortization (EBITDA) of R44.4 billion, underpinned by higher realized iron ore prices and a focus on cost containment. Our ability to maximise returns from our strategy of producing and marketing high-quality products continues to ensure that we achieve a premium well above benchmark. Attributable free cashflow improved to R31.5 billion. This supports the Board’s decision to declare an interim dividend of R72.70 per share and represents a payout ratio of 100% of headline earnings.

“Strategies to extend the life-of-mine and deliver quality products continue to bear fruit. The last remaining residents of Dingleton were safely relocated to Siyathemba, allowing for unconstrained mining of the Sishen mine pit. The Ultra-high-dense-media-separation project, approved in February 2021, will further extend Sishen’s life-of-mine to 2039 and enhance product quality. At Kolomela, the new Kapstevel South open pit operation is mining ahead of plan and activities to advance our exploration programme in the Northern Cape continue. As the global drive towards decarbonisation gathers pace, our high-quality products, which enable cleaner, greener steelmaking, provide a sustained competitive edge.

“Kumba’s first half performance reflects operational resilience and benefit our value over volume realisation strategy. We are maximising the value of our products and positioning our business for the future, to the benefit of all our stakeholders.”

KEY FEATURES

CONTINUING TO DELIVER SHAREHOLDER VALUE

Attributable free cash flow of R31.5 billion
ROCE of 225%
Interim cash dividend of R72.70 per share

SAFETY AND SUSTAINABILITY IS INTEGRAL TO OUR BUSINESS

Over 5 years of fatal-free production
R51 billion of shared value created in H1 2021
R12 million in additional WeCare Covid-19 community support
Zero occupational diseases
Over six years without any level 3-5 environmental incidents

MAXIMISING RETURNS AND POSITIONING FOR THE FUTURE

Average realised FOB export price of US$216/wmt, 32% above benchmark
Robust EBITDA margin of 70%
Closing net cash of R40.7 billion
Cost savings of R370 million

For further information, please contact:

Media	Investors
RSA Sinah Phochana Email: [email protected] Tel: +27 12 683 7019 Mobile: +27 76 066 0655	RSA Penny Himlok Email: [email protected] Tel: +27 12 622 8324 Mobile: +27 82 781 1888

Notes to editors:

Kumba Iron Ore Limited, a member of the Anglo American plc group, is a leading value-adding supplier of high quality iron ore to the global steel industry. Kumba produces iron ore in South Africa at Sishen and Kolomela mines in the Northern Cape Province. Kumba exports iron ore to customers in a range of geographical locations around the globe including China, Japan, Korea and a number of countries in Europe and the Middle East.

www.angloamericankumba.com

Notes to editors:

Anglo American is a leading global mining company and our products are the essential ingredients in almost every aspect of modern life. Our portfolio of world-class competitive operations, with a broad range of future development options, provides many of the future-enabling metals and minerals for a cleaner, greener, more sustainable world and that meet the fast growing every day demands of billions of consumers. With our people at the heart of our business, we use innovative practices and the latest technologies to discover new resources and to mine, process, move and market our products to our customers – safely and sustainably.

As a responsible producer of diamonds (through De Beers), copper, platinum group metals, premium quality iron ore and metallurgical coal for steelmaking, and nickel – with crop nutrients in development – we are committed to being carbon neutral across our operations by 2040. More broadly, our Sustainable Mining Plan commits us to a series of stretching goals to ensure we work towards a healthy environment, creating thriving communities and building trust as a corporate leader. We work together with our business partners and diverse stakeholders to unlock enduring value from precious natural resources for the benefit of the communities and countries in which we operate, for society as a whole, and for our shareholders. Anglo American is re-imagining mining to improve people’s lives.

www.angloamerican.com

Forward-looking statements:

This announcement includes forward-looking statements. All statements other than statements of historical facts included in this announcement, including, without limitation, those regarding Anglo American’s financial position, business, acquisition and divestment strategy, dividend policy, plans and objectives of management for future operations (including development plans and objectives relating to Anglo American’s products, production forecasts and Ore Reserves and Mineral Resource estimates), are forward-looking statements. By their nature, such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Anglo American, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.

Such forward-looking statements are based on numerous assumptions regarding Anglo American’s present and future business strategies and the environment in which Anglo American will operate in the future. Important factors that could cause Anglo American’s actual results, performance or achievements to differ materially from those in the forward-looking statements include, among others, levels of actual production during any period, levels of global demand and commodity market prices, mineral resource exploration and development capabilities, recovery rates and other operational capabilities, the effects of global pandemics and outbreaks of infectious diseases, the availability of mining and processing equipment, the ability to produce and transport products profitably, the availability of transport infrastructure, the impact of foreign currency exchange rates on market prices and operating costs, the availability of sufficient credit, the effects of inflation, political uncertainty and economic conditions in relevant areas of the world, the actions of competitors, activities by governmental authorities such as permitting and changes in taxation or safety, health, environmental or other types of regulation in the countries where Anglo American operates, conflicts over land and resource ownership rights and such other risk factors identified in Anglo American’s most recent Annual Report. Forward-looking statements should, therefore, be construed in light of such risk factors and undue reliance should not be placed on forward-looking statements.

These forward-looking statements speak only as of the date of this announcement. Anglo American expressly disclaims any obligation or undertaking (except as required by applicable law, the City Code on Takeovers and Mergers (the “Takeover Code”), the UK Listing Rules, the Disclosure and Transparency Rules of the Financial Conduct Authority, the Listings Requirements of the securities exchange of the JSE Limited in South Africa, the SIX Swiss Exchange, the Botswana Stock Exchange and the Namibian Stock Exchange and any other applicable regulations) to release publicly any updates or revisions to any forward-looking statement contained herein to reflect any change in Anglo American’s expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. Nothing in this announcement should be interpreted to mean that future earnings per share of Anglo American will necessarily match or exceed its historical published earnings per share.

Certain statistical and other information about Anglo American included in this announcement is sourced from publicly available third-party sources. As such, it has not been independently verified and presents the views of those third parties, though these may not necessarily correspond to the views held by Anglo American and Anglo American expressly disclaims any responsibility for, or liability in respect of, such third-party information.

Legal Entity Identifier: 549300S9XF92D1X8ME43

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