KUMBA IRON ORE LIMITED Deutsche Bank BRICS Global Metals and Mining - PowerPoint PPT Presentation

KUMBA IRON ORE LIMITED Deutsche Bank BRICS Global Metals and Mining Conference 2010 3 November 2010 Presented by Chris Griffith; CEO

KUMBA IRON ORE DISCLAIMER Certain statements made in this presentation constitute forward-looking statements. Forward-looking statements are typically identified by the use of forward-looking terminology such as 'believes', yp y y g gy , 'expects', 'may', 'will', 'could', 'should', 'intends', 'estimates', 'plans', 'assumes' or 'anticipates' or the negative thereof or other variations thereon or comparable terminology, or by discussions of, e.g. future plans, present or future events, or strategy that involve risks and uncertainties. Such forward- looking statements are subject to a number of risks and uncertainties, many of which are beyond the g j , y y Company's control and all of which are based on the Company's current beliefs and expectations about future events. Such statements are based on current expectations and, by their nature, are subject to a number of risks and uncertainties that could cause actual results and performance to differ materially from any expected future results or performance, expressed or implied, by the forward- y y p p , p p , y looking statement. No assurance can be given that such future results will be achieved; actual events or results may differ materially as a result of risks and uncertainties facing the Company and its subsidiaries. The forward-looking statements contained in this presentation speak only as of the date of this presentation and the Company undertakes no duty to, and will not necessarily, update any of p p y y , y, p y them in light of new information or future events, except to the extent required by applicable law or regulation.

KUMBA IRON ORE AGENDA ● Overview of Kumba Iron Ore ● Safety y ● Operational performance ● Financial performance ● Projects update P j t d t ● Legal update ● Iron ore market ● Outlook 3

KUMBA IRON ORE 4 Overview of Kumba Iron Ore 1.0 1.0

KUMBA IRON ORE KUMBA – VALUE ADDING SUPPLIER TO THE STEEL INDUSTRY • Kumba is a South-African based pure iron ore company • Mining for more than 70 years • Operates two opencast mines Operates two opencast mines • Sishen Mine • Thabazimbi Mine • Production capacity in excess of 40Mtpa • • ~80% of South African production 80% of South African production ~4% of global seaborne trade (4 th largest • supplier) • Third mine under development – Kolomela Mine • Mineral resources of c 2 0 Bt of ore Mineral resources of c.2.0 Bt of ore • Only hematite ore producer that beneficiates 100% of its product • Exported over 34 Mt of superior iron ore in 2009 from the port at Saldanha Bay • Well situated to service geographically dispersed customers in Europe and Asia 5 5

KUMBA IRON ORE OUR VISION • Kumba is a leading value adding iron ore supplier to the global steel industry • Kumba is a leading value adding iron ore supplier to the global steel industry OUR BUSINESS STRATEGY • Optimise the value of current operations by successfully executing Asset Optimisation initiatives, the start of Bokamoso and Sishen product portfolio optimisation • Capture value across the value chain through the niche product strategy logistics and Ocean Freight • Capture value across the value chain through the niche product strategy, logistics and Ocean Freight Management (OFM) • Deliver on growth projects in Limpopo and the Northern cape to realise additional 29Mtpa production • Enhance organisational responsibility and capability by matching strategy with resources and capability and delivering on our S&SD objectives 6

KUMBA IRON ORE KUMBA IRON ORE OWNERSHIP STRUCTURE Industrial Development Corp Anglo American plc Minority Interests 12.91% 65.30% 21.79% Kumba Iron Ore 74% 26% BEE ownership Exxaro Resources Limited: 20% Sishen Iron Ore Company Sishen Iron Ore Company SIOC Community Development SPV: 3% SIOC Employee Share Operations Participation Scheme (Enivision): 3% ( ) Si h Sishen Mine Mi Thabazimbi Mine 7 Kolomela Mine Saldanha Port Operations 7

KUMBA IRON ORE KUMBA – STRONG FINANCIAL PERFORMANCE SINCE 2006 FY06 -FY09 FY06 -FY09 US$m 1H10 FY09 FY08 FY07 FY06 CAGR (%) Revenue 2375 2819 2575 1635 1286 30 Operating profit (before special items) 1489 1526 1618 835 796 24 Operating margin (%) p g g (%) 63 54 63 51 62 – Attributable earnings 863 831 874 452 502 19 Cash generated from operations 1258 1533 1630 831 632 34 Capital expenditure 190 495 252 300 254 25 Average Rand/US$ Average Rand/US$ 7 53 7.53 8 41 8.41 8 27 8.27 7.05 7 05 6 77 6.77 REVENUE SISHEN MINE UNIT CASH COST (FOR) 2.8 3 2.6 2.4 13.7 15 ion 12.4 11.8 10.3 10.6 2 2 US$ bill US$/ tonne 1.6 10 1.3 1 5 0 0 2006 2007 2008 2009 1H10 2006 2007 2008 2009 1H10 DIVIDENDS PER SHARE OPERATING PROFIT 3 2 2.5 1.6 1.5 1.5 1.8 US$/share 1.7 2 billion 1.1 0.8 0.8 1 1 1 US$ U 8 0.1 0 2006 2007 2008 2009 1H10 0 8 2006 2007 2008 2009 1H10

KUMBA IRON ORE 9 Safety 2.0 2.0

KUMBA IRON ORE SAFETY: WE ARE COMMITTED TO ZERO HARM Si Significant reduction in LTIFR ifi t d ti i LTIFR ● Commitment to zero harm returning visible achievements * 0.90 0.85 ● LTIFR reduced by 23% since 2002 to 1H10 (weighted ● LTIFR reduced by 23% since 2002 to 1H10 (weighted average p.a. reduction) 0.75 • 17 Lost Time Injuries YTD ● 2010 achievements: 0 60 0.60  Sishen: Si h F t lit Fatality-free for 26 months f f 26 th -23% *  Thabazimbi: Fatality-free for 8 yrs 0.51 0.48  Kolomela: > 6.2 million LTI free man hours 0.45 ● 2010 low lights: * 0.29  Mr Moses Machacha fatally injured on 23 February 0.30 * * 2010 – tyre explosion (overhead power lines) 0.22 0.22  Mr Fanie Ramalapi fatally injured on 24 July 2010 – * * tyre explosion (driving with a flat tyre) tyre explosion (driving with a flat tyre) 0 15 0.15 0 12 0.12 * * 0.11  Increase in LTIFR from 2009 0.07 0.00 2002 2003 2004 2005 2006 2007 2008 2009 2010 YTD * Fatality 10 10

KUMBA IRON ORE 11 Operational performance 3.0 3.0

KUMBA IRON ORE OVERVIEW OF SISHEN MINE • Mining started in 1953, first ore exported in 1976 Mi i t t d i 1953 fi t t d i 1976 Geology • Large hematite ore body: ±14km x 3.2km x 400m: 2.4bt resource  1.6bt reserve • Lump to fine ratio of 60:40 compared with 30:70 globally. Lump ore is highly valued by steelmakers. Lump ore is a rare commodity and on the decline • • 24 hr 365 day open pit mining operation 24 hr, 365 day open pit mining operation Mining & Mining & • Positioned in lower half of the FOB cost curve Production • Highly mechanized, continuous blending operation • All products beneficiated through • Dense medium separation (DMS) • JIG gravity separation • Sishen products: • 25mm 66% Fe lump (DMS) • 25mm 64% Fe lump (JIG) • 27mm and 20mm 66% Fe lump – niche products • 27mm and 20mm 66% Fe lump niche products • 8.0mm 64.5% Fe fines • Consistent product quality is ensured through final product blending and reclaiming at Sishen before dispatched to customers • Export ore is transported via Sishen Saldanha Iron ore Export Channel (IOEC) to Export ore is transported via Sishen-Saldanha Iron ore Export Channel (IOEC) to Logistics Logistics Saldanha. Rail and port operations owned and operated by Parastatal Transnet • A Technical committee consisting of Transnet and Industry is performing a feasibility study to assess a financially viable expansion option of the IOEC line beyond 60Mtpa • Sishen has a number of on-mine brown field expansion projects in various stage of Project development from opportunity phase to pre feasibility phase (lower grade pipeline resources) 12

KUMBA IRON ORE SISHEN MINE – ORE OFFERS Brazil Australia SUPERIOR PHYSICAL PROPERTIES SUPERIOR PHYSICAL PROPERTIES Tumble index Tumble index* Africa 100 India Rio – Hamersley Sishen Canada 95 Portman – • Lump ore is highly valued by steelmakers as it Koolyanobbing can be fed directly into a blast furnace without can be fed directly into a blast furnace without Vale – Corumba Vale Corumba 90 90 the need for sintering or pelletizing BHP – Mt. Newman Rio – Hope Downs Baffinland 85 Vale – Southern System • Lump ore is a rare commodity, with high Rio – West Angelas Vale – Northern System sources of lump on the decline globally. Lump 80 ore is sold at a premium to fine ore ore is sold at a premium to fine ore Faleme Sesa Goa 75 • Sishen has a 60%:40% lump to fine ratio, Iron content (%) compared to 30% globally 70 • • Sishen’s lump is high grade and exceptionally Sishen s lump is high grade and exceptionally 60% 60% 62% 6 % 6 % 64% 66% 66% 68% 68% 70% 0% hard. This makes Sishen an exceptional asset *Note: a higher tumble index means higher physical strength, a desirable quality for lump ore Source: Independent ViU Analyst 13