ANGLO AMERICAN

SUSTAINABILITY PERFORMANCEAndile Sangqu, Executive Head: Anglo American South Africa

OVERVIEW

WHY SUSTAINABILITY MATTERS

A FOCUS ON SOUTH AFRICA• Our people

• Our host communities

• Our partners

ADDRESSING OUR MOST MATERIAL ISSUES• Safety

• Health

• Social impacts

• Socio-Economic development

• Environmental impacts

• Water

• Climate change

• Mine closure

• Tailings facilities

WHY SUSTAINABILITY

MATTERS

5

Sustainability issues are critical for the

delivery of our strategy

Mining has relatively small global

footprint, but results in significant local

impacts

Local approach to sustainability gives

us our legal and social licence to

operate

Zero harm, constructive relationships

with stakeholders, resource efficiency,

and 100% compliance are core

characteristics of high-quality assets

WHY SUSTAINABILITY MATTERS

MISSION

Together, we create

sustainable value

that makes a real

difference

VISION

To be partners in the

future

FOCUS

ON SOUTH AFRICA

MEANINGFUL CONTRIBUTION

TO SOCIO ECONOMIC

DEVELOPMENT

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SOUTH AFRICA: THE CONTEXT

Mining has historically provided the backbone of South Africa’s

economy and continues contribute be one of the key sectors of

the economy

The mining sector is pivotal to the task of redressing historical

and social inequalities in a sustainable manner

We are doing our best to adapt to the challenging operating

context

We continuously seek collaboration opportunities to support

growth and sustainability in the mining sector

We engage with government and labour, with the aim of

ensuring the sustainability of the mining sector and its continued

contribution to the country’s

We are committed to the objectives of the MPRDA and the

Mining Charter, as such we regard transformation as a business

imperative

We are also committed to economic growth and development

objective of the National Development Plan

Lambasi Harvesting at Lusikisiki, Easten Cape

8

SOUTH AFRICA: OUR EMPLOYEES

Our employees are the business. We strive to build a

culture that reflects and harnesses a rich diversity of

ideas and perspectives. We support the identification,

development and retention of HDSAs

Our Performance

Internal targets are set over and above those set by legislation

63% HDSAs in management

Gender diversity remains a priority - 17% women in overall

workforce

$73.2m (R936m) spent on HDSA training - 4.8% of annual HDSA

payroll

All business units achieved housing and accommodation Mining

Charter requirements

$149m (R1.9bn) spent on housing initiatives – more than 4,000

houses built since 2010

Micahel Faku at the Anglo American Chairman's Fund-

supported Middestand Evanfeliese Sord computer centre

9

SOUTH AFRICA: OUR COMMUNITIES

Mining companies and mining communities must

work together to help create mutual trust and

success. Only by working together can we change

the way people think about resource development

and how we can make a valuable difference to

people in communities in their everyday lives.

Our Performance

Social and Labour Plans are in place at each of our operations,

$41m (R520m) spent in 2015

$70m (R891m) spent on community development programmes

Engagement with community representatives to identify priority

projects that will best address community needs

Focus on education, health, infrastructure and capacity

development

Diagnostic tool to assess compliance with SED plans

Chairman’s Fund is a dedicated corporate social investment

arm

Mphakiseng Tsotetsi pictured with her baby at the Lilian

Mambakazi Community Health Centre in Standerton, which

was recently handed over to the local government

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SOUTH AFRICA: OUR PARTNERS

Diversifying ownership in our mining assets,

increasing local procurement, and facilitating

enterprise development and beneficiation are all

critical means of advancing the empowerment of

HDSAs and contributing to the socio-economic

development of our communities

Our Performance

We exceeded Mining Charter ownership requirements

$5.2bn (R67bn) value of BEE transactions since 1994

Flagship mining companies formed as a result of our BEE

partnerships. E.g. Exxaro, ARM, Inyosi Coal, Royal Bafokeng

$2.87bn (R36.7 bn) procurement expenditure with BEE

empowered companies

BEE procurement: AASA achieved 75% on capital goods, 82%

on services and 79% on consumables

All SA-based employees are members of an ESOP

8,624 employment opportunities created through Anglo Zimele;

40% of Zimele beneficiaries are female while 35% are youth

$24m (R308m) funding provided for 321 businesses in 2015Winslow Nyakudya pictured at the Anglo American Zimele

Road show in Mthatha

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SOUTH AFRICA: EMPLOYEE INDEBTEDNESS AT ANGLO

AMERICAN PLATINUM – A CASE STUDY

Post the five-month strike in 2014, research

was conducted into the financial position of

Anglo American Platinum employees:

- Around 1,330 Anglo American Platinum

employees were under administration

- Debt to income levels of the average

employee in Rustenburg:

24% were at ‘dangerous levels’ (75% plus of

their income is used to service debt)

26% were ‘in trouble’ (between 51% and

75% of their pay used to bring down debt)

Summit Financial Partners had been auditing

employees’ garnishee orders since 2011 and

had collectively saved employees

approximately R3 million over a 3-year period

Anglo American Platinum extended Summit’s

services to include a financial wellness offering

– to run from 2014-2016

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SOUTH AFRICA: EMPLOYEE INDEBTEDNESS AT ANGLO

AMERICAN PLATINUM – A CASE STUDY

Programme was named ‘Nkululeko’, meaning Freedom

– a call to action for employees to embark on a journey

to financial freedom

From October 2014 to August 2016:

- 8,695 employees consulted a Nkululeko consultant

- Over R32,2 million saved for employees annually on

debt instalments

- 964 debt relief solutions have been implemented

- 1,000 audit cases on garnishee and admin orders

and loan agreements

- 7,480 cases of reckless lending identified

- Garnishee orders have reduced from 5,877 in March

2011 to 797 in June 2016

Employees told their own stories of how they had

benefitted financially from the programme

Employee indebtedness programmes are also running

across our other business units and showing positive

results

SUSTAINABILITY

ADDRESSING OUR MOST

MATERIAL ISSUES

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SAFETY

Safety is a matter of basic human rights

as well as an investment in an engaged,

motivated and productive workforce

Our approach

Leadership

Effective planning and standards

Supervision

Incident management

Risk management

Performance

Deeply disappointing increase in number of

losses of life in 2016 after years of improvement

Injury rates continue to improve

Focus on Zero HarmUnrelenting focus on Zero Harm

41% We are encouraged by continued

improvement in total injury rate since 2012

Critical controlsApproach to safety focused on implementing

controls to manage risks

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HEALTH

Managing occupational health risks, and

promoting health and wellbeing in the

workplace, protects our people, enhances

productivity, and is essential for

minimising potential long-term liabilities

Our approach

Reducing occupational health risks as source

Employee well-being programmes – including

HIV/TB – that support the overall health of our

workforce

Partnerships to support the health of communities

Performance

42% of employees exposed to noise levels and 9%

to dust levels above OEL. All wear PPE

Reduction in number of new cases of occupational

disease; no new cases of silicosis since 2011

Leader in HIV/AIDS

78,993employees and contractors tested in southern Africa

92% of identified HIV-positive employees enrolled in

wellness programmes

Community healthContinued investment in local health partnerships to

support communities near mines and in labour sending

areas

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MANAGING SOCIAL IMPACTS

We seek to maximise the benefits of mining and

mitigate its potential negative effects, which can

trigger stakeholder opposition, resulting in project

delays, disruption to our operations, and reputational

damage

Our approach

Social performance entrenched in Values and Business Principles

Social Way outlines mandatory performance standards

SEAT provides practical tools for managing social impacts,

improving development and stakeholder engagement

Enhancing stakeholder

dialogue is a critical aspect of SEAT and our overall social performance

programme

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MANAGING SOCIAL IMPACTS…CONTINUED

Performance

Assessment results show a steady improvement

across almost all the requirements and decline in

non-compliances

Level 3–5 social incidents are reported to the

Board Sustainability Committee

319 Level 3–5 incidents recorded in 2015

A small number of incidents impacted production

slightly

Social conflict impacted Platinum operations. Complex

causes including poor public service delivery and lack of

employment opportunities.

We’ve been working with the DMR with regards to issues of

public service delivery, and a task team with community

representatives has been established to serve as an

engagement platform. The Minister appointed the South

African Human Rights Commission to serve as the mediator

between the communities and the mine.

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MAXIMISING BENEFITS

Delivering a ‘fair share’ of benefits supports our

social and legal licenses to operate and can

position us as a partner of choice for host

governments and communities

Our approach

Supporting the productivity of local markets

Supporting productivity of public services

Performance

Support productivity of LOCAL MARKETS

Support productivity of PUBLIC SERVICES

Local procurementExternal capacity development

Enterprise developmentSynergies from mine infrastructure

Workforce development Social investment

Skills sharing/Employee volunteering

$23,365mtotal value distributed

75%value distributed in

developing countries

$10,000mspent with suppliers

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MAXIMISING BENEFITS…CONTINUED

Enterprise development

One of the most effective means of

ensuring sustainable livelihoods

Local procurement

Can reduce expectations on the

business to deliver public services

External capacity building

Can reduce expectations on the

business to deliver public services

110,780jobs supported in SA,

Botswana, Peru, Brazil,

Chile since 2008

62,394SMEs supported inside

and outside supply chain

17Municipalities supported

in SA and Latin America

$5,4mMillion investment in

external capacity building

$1,500mspent with local suppliers

world-wide

Caroline and Rebaone Matloko living in one of the new

houses in Postmasburg built for Kolomela Iron Ore mine.

Rebaone is a Komatsu 730 Haul truck operator on the mine

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MANAGING ENVIRONMENTAL IMPACTS

Ensuring responsible environmental

management through all the life-cycle

stages of an operation can influence

our future access to land and capital,

improve resource security, and

reduce operational costs and closure

liabilities

Our approach

Mandatory Environment Way management

system standard

Supported by a set of performance standards

on water, waste, air quality, etc

Environmental management increasingly

being incorporated into integrated approach

to operational risk management

Debmarine Namibia: SS Nujoma marine diamond mining vessel

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MANAGING ENVIRONMENTAL IMPACTS…CONTINUED

Performance

Track level 1-5 environmental incidents; 3-5 incidents reported to

the CEO and Board

Steady progress in reducing the number of significant (3-5)

incidents from 21 to 6 in five years

One incident in SA during 2015 at Thabazimbi - discharge of water

into Crocodile river, but no immediate change to the aquatic

ecosystem

No permanent environmental harm associated with 2015 incidents,

nor production impacts

Mindful of water incidents recurring once droughts lift

Indigenous flora near Kolomela mine in the Northern Cape

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WATER

Water is a human right and a critical input to our

business. To maintain our licence to operate, we

cannot degrade water quality or compromise the

rights of other water users

Our approach

Three focus areas:

Water security in water scarce regions

Water quality, particularly at operations that have an

excess of water

Water balance management, particularly at operations

that are prone to seasonable flooding and droughts

Around 75% of our current

portfolio is located in high-water-

risk regions Percy Nxumalo and Islay-Jane Sparks at the Kolomela Aquifer

Recharge pump station, where water pumped from the mining

pits is fed back into an adjacent aquifer

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WATER…CONTINUED

Performance

All operations have risk-based water efficiency targets in

place

Water security has impacted production at Los Bronces in

Chile, but is under control following several technical

interventions

Water quality challenges being addressed by treatment

plants in high-risk cases

Moving to passive treatment technologies that are low-cost

and viable post closure

Looking ahead: we see opportunities in playing a

leadership role in catchment level water issues

25m m3

Volume of water saved

by water efficiency

projects in 2015

222m m3

Volume of new water

used in 2015

64%of total water

requirements are met by

recycled/reused water

Raesetja Teffo and Malesela Kutumela discussing water

efficiency levels at the Mogalakwena north concentrator

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CLIMATE CHANGE

The Paris Agreement

will, over time, effect

fundamental changes

to our economic and

social systems. Anglo

American seeks to

understand the

implications of these

on our value chain and

maximise opportunities

associated with the

transition to a low-

carbon future

Hydrogen Fuel Cell Electric Vehicles. A group of companies is aiming to set two new records for FCEVs with a continuous

five-day and five-night drive around the M25 in the UK as part of the London Hydrogen Network Expansion. Hydrogen

FCEVs produce no harmful tailpipe emissions with water being the only by-product. With range and refuelling times similar

to those of petrol or diesel cars, they can be seen as direct replacements for conventional vehicles

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CLIMATE CHANGE

Our approach

Our climate-change strategy aims to:

Reduce our carbon footprint mitigate exposure to climate-change

regulation

Manage climate risks and opportunities associated with products

and investments

Drive greater resilience to the physical effects of climate change

within our business and host communities

Performance

2015 energy and GHG targets met; all operations have new targets

in place

Improving market risk/opportunity profile following coal divestment

decision. Opportunities linked to climate change for platinum market

Some early work on renewables, but opportunities still limited

Leading work on climate adaptation studies and planning

Power system in SA will remain constrained; business continuity

and emergency response plans in place

~$100mEnergy savings from

ECO2MAN and BI projects

325Number if energy and GHG

savings projects

5.8m GJEnergy saved

4.6 MtCO2-e avoided

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MINE CLOSURE

We emphasise the importance of designing, planning

and operating a mine in consultation with communities

and with closure in mind. The aim is to reduce liabilities

to our business and leave a positive legacy

Our approach

Industry leading Mine Closure Toolbox seeks to ensure that:

Opportunities, risks and liabilities are identified

Closure plans are fully costed

Provision is made for the planned operational life of the mine or

premature closure

Performance

Decision to close Thabazimbi mine in 2015 after 80 years and

several life extension projects

Mining and production ceased June 2016. Progressive rehabilitation,

demolition and asset sale in progress

800 employees and 360 contractors affected. Extensive consultation

throughout and investment in economic development projects

independent of mining

Environmental Auditing at Mogalakwena North - taking

photographs from fixed positions for environmental

comparisons - Riaan Van Zyl (Water Officer) and Calvin

Shibusi (Environmental Assistant)

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TAILINGS FACILITIES

Applying best practise standard to the management of

waste storage facilities is an ongoing focus for Anglo

American

Our approach

Apply the ‘avoid, reduce, re-use and recycle’ management hierarchy

and actively explore the re-use of by-products

New mineral residue management standard implemented from

2014-2018

We seek to move beyond compliance

Facilities are classified in terms of potential safety, health,

environmental and reputational impacts

These factors determine design criteria; the frequency of monitoring

and inspection; assignment of personnel; and governance structure

Performance

Series of specific reviews untaken following Samarco to ensure risks

are adequately managed – no significant concerns identified

No Level 3-5 incidents relating to mineral waste in recent yearsInspection at El Soldado’s El Torito tailings dam in Chile

THANK YOU