ANGLO AMERICAN PLC - Anglo American sale of New Largo thermal coal project in South Africa

Anglo American sale of New Largo thermal coal project in South Africa

Anglo American plc
Incorporated in the United Kingdom
(Registration number: 3564138)
Short name: Anglo
JSE Share code: AGL
NSX Share code: ANM
ISIN number: GB00B1XZS820

NEWS RELEASE

Anglo American sale of New Largo thermal coal project in South Africa

Anglo American plc (“Anglo American” or the “Company”) announces the sale, by its 73%-held
subsidiary Anglo American Inyosi Coal (Proprietary) Limited, of the New Largo thermal coal
project and Old New Largo closed colliery in South Africa (together, “New Largo”) to New Largo
Coal Proprietary Limited (the “Purchaser”), which is owned by Seriti Resources Proprietary
Limited (“Seriti”) and Coalzar Proprietary Limited (“Coalzar”), two companies majority owned and
controlled by historically disadvantaged South Africans (“HDSAs”), and the Industrial
Development Corporation SOC Limited (the “IDC”) (the “Transaction”).

The consideration payable for New Largo is ZAR850 million (approximately US$71 million). The
consideration will be payable in cash by the Purchaser upon closing of the Transaction.

New Largo is located in South Africa and its principal asset is the approximately 585Mt Coal
Resource, with the related Mining Right, that is well-positioned to supply Eskom’s new Kusile
Power Station. For further information on the Coal Resource please refer to the Anglo American
Ore Reserves and Mineral Resources Report 2016.

Norman Mbazima, Deputy Chairman of Anglo American South Africa, said: "I am delighted to
announce the sale of New Largo to a new majority black-owned-and-managed company.
Together, Seriti, Coalzar and the IDC have excellent operating and management capabilities to
develop and operate New Largo optimally and sustainably into the future. The sale delivers on
our long-standing strategy to exit our Eskom-tied coal assets and marks another Anglo American
led step-change in the sustainable transformation of the South African mining industry,
supporting both Eskom and the country’s transformation objectives.”

The Transaction is subject to conditions precedent customary for a transaction of this nature,
including regulatory approvals in South Africa. The Transaction is expected to close in the second
half of 2018.

The Transaction is a small related party transaction under UK Listing Authority (“UKLA”) Listing
Rule 11, Annex 1, as the IDC, a substantial shareholder in the Company’s subsidiary Kumba Iron
Ore Limited, is a shareholder in the Purchaser. The Transaction is subject to the requirements of
UKLA Listing Rule 11.1.10R, due to aggregation with the related party transaction(1) that a
subsidiary of the Company entered into on 14 February 2017 involving the Public Investment
Corporation, an associate of the IDC, both of which are ultimately controlled by the Government
of South Africa.

For further information, please contact:

Media                                                     Investors
UK                                                        UK
James Wyatt-Tilby                                         Paul Galloway
james.wyatt-tilby@angloamerican.com                       paul.galloway@angloamerican.com
Tel: +44 (0)20 7968 8759                                  Tel: +44 (0)20 7968 8718

Marcelo Esquivel                                          Trevor Dyer
marcelo.esquivel@angloamerican.com                        trevor.dyer@angloamerican.com
Tel: +44 (0)20 7968 8891                                  Tel: +44 (0)20 7968 8992

South Africa                                              Sheena Jethwa
Pranill Ramchander                                        sheena.jethwa@angloamerican.com
pranill.ramchander@angloamerican.com                      Tel: +44 (0)20 7968 8680
Tel: +27 (0)11 638 2592

Ann Farndell
ann.farndell@angloamerican.com
Tel: +27 (0)11 638 2786

Notes to editors:

New Largo Coal Proprietary Limited
New Largo Coal Proprietary Limited is a newly-formed entity owned by Seriti, Coalzar and the
IDC to acquire and develop New Largo. The company intends to provide meaningful equity
participation for management, employees and communities in its structure.

Seriti
Seriti is a broad-based, majority HSDA owned and controlled South African mining company,
established with the aim of preserving and operating strategic energy assets for the benefit of
South Africa and its people. Seriti is owned jointly by four strategic “anchor” shareholders, namely
Masimong Group Holdings Proprietary Limited, Thebe Investment Corporation, Zungu
Investments Company Proprietary Limited and Community Investment Holdings Projects. Seriti’s
management team will be led by Mike Teke who has extensive mining experience through the
acquisition, operation and development of Optimum Coal Mines and Koornfontein Mines which
produced approximately 10Mtpa of saleable domestic and export thermal coal and the
development of other large scale thermal coal projects. Seriti entered into a binding agreement
for the acquisition of the Eskom-tied domestic thermal coal operations in South Africa from Anglo
American in April 2017.

Coalzar
Coalzar is a broad-based, majority HSDA-owned South African company representing the
interests of its shareholders who are focused on coal mining in the country. Coalzar is owned
jointly by four shareholders, namely Attwood LM Investments Proprietary Limited, Elwood OM
Investments Proprietary Limited, Voranex Proprietary Limited and Karongi Resources Proprietary
Limited. Coalzar’s management team includes Pius Mokgokong and Lefa Mbethe, who have
extensive coal mining experience having been involved in various coal operations in South Africa
over the past 15 years including, through Liketh Investments Proprietary Limited, being involved
in the operating of pit 5 at the Kleinkopje coal operations and having delivered over 20Mt of coal
since 2003 to the Tutuka, Kriel, Matla and Khutala power stations.

IDC
IDC is a developmental funding institution, wholly-owned by the South African Government,
established in 1940 by an Act of Parliament (IDC Act, No 22 of 1940) to promote economic growth
and industrial development in South Africa and other parts of Africa. The IDC has significant
South African mining exposure in the form of listed and unlisted investments.

Anglo American
Anglo American is a globally diversified mining business. Our portfolio of world-class competitive
mining operations and undeveloped resources provides the raw materials to meet the growing
consumer-driven demands of the world’s developed and maturing economies. Our people are at
the heart of our business. It is our people who use the latest technologies to find new resources,
plan and build our mines and who mine, process and move and market our products to our
customers around the world.

As a responsible miner – of diamonds (through De Beers), copper, platinum and other precious
metals, iron ore, coal and nickel – we are the custodians of what are precious natural resources.
We work together with our key partners and stakeholders to unlock the long-term value that those
resources represent for our shareholders and for the communities and countries in which we
operate – creating sustainable value and making a real difference.

www.angloamerican.com


1 The related party transaction refers to the sale of Anglo American Platinum’s 85% interest in
Union Mine, by its wholly owned subsidiary Rustenburg Platinum Mines Limited, to a subsidiary
of Siyanda Resources Proprietary Limited (“Siyanda”). The Public Investment Corporation
(“PIC”) is a 30% shareholder in Siyanda.

The Public Investment Corporation (PIC) has a 13.7% shareholding in Anglo American plc


29 January 2018

Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)

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