Anglo American FY11 Preliminary Results

RNS Number : 6042X

Anglo American PLC

17 February 2012

Anglo American announces record EBITDA of $13.3 billion and 23% increase in underlying EPS

Financial results driven by impressive operational performance and higher prices

· Record Group operating profit⁽¹⁾ of $11.1 billion

· Record underlying earnings⁽²⁾ of $6.1 billion and underlying EPS of $5.06, a 23% increase

· Net debt⁽³⁾ reduced to $1.4 billion at 31 December 2011

· Final dividend increased by 15% to 46 US cents per share, bringing total dividends for the year to 74 US cents per share, a 14% increase

Delivery of value through operational efficiency and strategic opportunities

· Kumba Iron Ore record export sales volumes of 37.1 Mt

· Met Coal - record open cut metallurgical coal production; 7% increase despite Q1 2011 rainfall

· $5.1 billion acquisition of up to 40% interest in De Beers - unique opportunity to consolidate control of the world's leading diamond company

· $5.4 billion sale of a minority 24.5% interest in Anglo American Sur copper assets - highlights value and quality of asset base

· Acquisition of 25.17% minorities in Peace River Coal -- 100% ownership of high quality one billion tonne metallurgical coal resource

Nine growth projects commissioned on or ahead of schedule⁽⁴⁾

· Newly commissioned and approved projects to deliver 35% volume growth by 2014

· Barro Alto 36 ktpa nickel project - first production in March 2011

· Los Bronces 200 ktpa copper expansion - first production in October 2011

· Kolomela 9 Mtpa iron ore project - first shipment in December 2011

· Collahuasi Phase I expansion (copper), Zibulo (thermal coal), Unki and Mogalakwena North (platinum) projects all completed in 2011

Maintaining momentum into the next phase of growth

· Minas-Rio 26.5 Mtpa iron ore project is progressing well; implementing measures to mitigate various site challenges in a high inflationary Brazilian mining environment, to target H2 2013 first ore on ship

· Six growth projects approved in 2011, including Grosvenor 5 Mtpa metallurgical coal project in Australia approved in December 2011

· Quellaveco 225 ktpa copper project in Peru progressing towards approval

· Exploration discoveries replenishing world class resource base across copper, nickel, PGMs - Sakatti discovery in Finland a significant grassroots exploration success

· Expect to approve $16 billion of projects over next three years

Safety performance

· Tragically, 17 employees lost their lives

· Despite downward trend since 2007, disappointing performance in 2011 at Platinum; particularly with 12 fatal accidents

· Lost time injury frequency rates, excluding Platinum, reduced by 16%

HIGHLIGHTS US$ million, unless otherwise stated	Year ended 31 Dec 2011	Year ended 31 Dec 2010	Change
Group revenue including associates⁽⁵⁾	36,548	32,929	11%
Operating profit including associates before special items and remeasurements⁽¹⁾	11,095	9,763	14%
Underlying earnings⁽²⁾	6,120	4,976	23%
EBITDA⁽⁶⁾	13,348	11,983	11%
Net cash inflows from operating activities	9,362	7,727	21%
Profit before tax⁽⁷⁾⁽⁸⁾	10,782	10,928	(1)%
Profit for the financial year attributable to equity shareholders⁽⁷⁾⁽⁸⁾	6,169	6,544	(6)%

Earnings per share (US$):
Basic earnings per share⁽⁷⁾	5.10	5.43	(6)%
Underlying earnings per share⁽²⁾	5.06	4.13	23%

⁽¹⁾Operating profit includes attributable share of associates' operating profit (before attributable share of associates' interest, tax and non-controlling interests) and is before special items and remeasurements, unless otherwise stated, see notes 2 and 3 to the Condensed financial statements. For the definition of special items and remeasurements see note 4 to the Condensed financial statements. ⁽²⁾See note 9 to the Condensed financial statements for basis of calculation of underlying earnings. ⁽³⁾Net debt includes related hedges and net debt in disposal groups. See note 12 to the Condensed financial statements. ⁽⁴⁾ The schedule for delivery of first production from projects refers to the information published in Anglo American's 2010 Annual Report. ⁽⁵⁾Includes the Group's attributable share of associates' revenue of $5,968 million (2010: $4,969 million). See note 2 to the Condensed financial statements. ⁽⁶⁾Earnings before interest, tax, depreciation and amortisation (EBITDA) is operating profit before special items, remeasurements, depreciation and amortisation in subsidiaries and joint ventures and includes attributable share of EBITDA of associates. See note 5 to the Condensed financial statements. ⁽⁷⁾Stated after special items and remeasurements See note 4 to the Condensed financial statements. ⁽⁸⁾For the year ended 31 December 2011 special items and remeasurements, including associates, before tax and non-controlling interests, amounted to a gain of $152 million (2010: gain of $1,820 million), and after tax and non-controlling interests, amounted to a gain of $49 million (2010: gain of $1,568 million).

Cynthia Carroll, Chief Executive, said: "Anglo American delivered an impressive financial and operational performance in 2011, as we continued to capture the benefits of operational improvements and disciplined cost management to capitalise on the attractive commodity demand and pricing environment that prevailed for much of the year. We have reported a record operating profit of $11.1 billion, a 14% increase, EBITDA of $13.3 billion and underlying earnings increased by 23% to $6.1 billion, also a record.

Our successful delivery of three major mining projects on or ahead of schedule during the year is a great achievement, and will contribute significant new volumes of iron ore, copper and nickel as the new operations continue to ramp up during 2012. Our decision to sustain capital investment in the development of these and other growth projects through the cycle, with highly competitive operating costs and capital intensity ratios, sets us apart as a near term volume growth leader.

The first shipment of lump iron ore from the 9 Mtpa Kolomela mine in South Africa in December 2011, five months ahead of schedule, was an important step towards our goal of increasing production to 70 million tonnes per annum from our South African iron ore assets this decade. In copper, the expansion at Los Bronces in Chile, completed in October 2011, will more than double the mine's production of 221,000 tpa, on average over the first three years of full production, with reserves and resources that support a mine life of over 30 years. And in Brazil, we delivered first production at our new Barro Alto nickel operation in March 2011. Barro Alto will average 41,000 tpa of nickel over its first five years of full production and increase Anglo American's nickel volumes by 180%.

We also made good progress during the year at the greenfield Minas-Rio iron ore project in Brazil, the fourth of our strategic growth projects. We are continuing to manage a number of challenges in a high inflationary Brazilian mining environment. To mitigate these challenges, we are implementing various measures including acceleration activities within the previously announced 15% capital expenditure increase, to target first ore on ship in the second half of 2013.

We are maintaining momentum into our next phase of growth, with the Board approval of six growth projects across six commodities including our 5 Mtpa Grosvenor metallurgical coal project in Australia. We expect to approve further new projects during 2012, including the Quellaveco copper project in Peru. Looking further out, we are focused on prioritising the most value-accretive options from our $84 billion pipeline of unapproved projects towards development and we continue to replenish and increase our world class resource base through industry-leading exploration successes. Our discovery of copper, nickel, PGMs and cobalt at Sakatti in northern Finland is a great example of Anglo American's deep-rooted greenfield exploration expertise delivering value as well as the use of innovative drilling technology to reduce our environmental impacts as we work towards defining the resource.

Beyond our organic growth programme, we continue to deliver shareholder value commercially. We took the unique opportunity in November to finalise the agreement to acquire the Oppenheimer family's shareholding in De Beers, taking Anglo American's interest in the world's leading diamond company to up to 85%. We will continue to pursue growth where we see the most compelling, long term opportunities and to deliver value from our high quality asset base. Our sale of a non-controlling interest in our Anglo American Sur (AA Sur) assets to Mitsubishi for $5.4 billion, valuing those assets at $22 billion, is a demonstration of that commitment and of the quality of our assets.

Safety remains my absolute priority and I have not wavered on this commitment since my appointment as Chief Executive five years ago. I am deeply saddened that in 2011, 17 employees died while working for Anglo American. We have a long way to go to achieve our objective of zero harm, despite marked improvements in our safety record since 2007, with significant reduction in the number of our people who have lost their lives at work and lost time injury rates. While we continue to see many examples of safety excellence across Anglo American, we are committed to reviewing, refocusing and reprioritising our safety related programmes to address ongoing challenges.

Despite short term uncertainty persisting in the global economy, particularly in Europe, the longer term outlook for Anglo American's diversified mix of commodities remains strong. We expect sustained growth in the emerging economies, notably in China and India, which will underpin robust demand for commodities, supplemented by early recovery signs in the US. Continuing industrialisation and urbanisation and the considerable scope for the convergence of living standards, combined with long term supply constraints, present an attractive proposition across our unique portfolio of early, mid and late development cycle commodities."

Review of 2011

Financial results

Anglo American's underlying earnings were $6.1 billion, up from $5.0 billion in 2010, with a record operating profit of $11.1 billion, 14% higher than 2010. This increase in operating profit was mainly driven by the Kumba Iron Ore, Metallurgical Coal, Thermal Coal and Diamonds business units, which benefited from strong market prices. There was an increase in realised prices across all major commodities with export metallurgical coal and South African export thermal coal prices increasing by 42% and 39% respectively from 2010.

Iron Ore and Manganese generated an operating profit of $4,520 million, 23% higher than 2010. Within this commodity group, Kumba Iron Ore had a strong performance with a record operating profit of $4,397 million, 29% higher.

Metallurgical Coal delivered a record operating profit of $1,189 million, a 52% increase on 2010, primarily due to higher realised export selling prices, which offset the impact of rain on production and sales.

Thermal Coal's record operating profit of $1,230 million was 73% higher than 2010, as a result of higher export thermal coal prices for both South African and Colombian coal and a strong rail performance in South Africa in the second half of 2011.

Copper delivered an operating profit of $2,461 million, 13% lower than 2010, as a result of lower sales volumes and higher operating costs, partly offset by high copper prices during the first half of the year.

Nickel reported an operating profit of $57 million, $39 million lower than 2010, largely due to higher project evaluation and exploration expenditure related to the development of the unapproved Nickel project pipeline.

Platinum generated an operating profit of $890 million, a $53 million increase, due to higher metal prices, which were offset by higher costs driven by labour and electricity rate increases.

Diamonds reported a record operating profit of $659 million, 33% higher than 2010, owing to significant price increases in 2011.

Other Mining and Industrial generated an operating profit of $195 million, 71% lower than 2010, owing to the disposal of a number of businesses during the year and in 2010. Copebrás and Catalão delivered a combined increase in operating profit of 29% compared to the prior year. This was driven by an increase in sales volumes and prices at Copebrás owing to high demand for fertilizers.

Production

The Group's operations were impacted by a number of challenges in 2011, most notably weather disruptions in Queensland, Chile and southern Africa. Iron ore production from Kumba Iron Ore's Sishen Mine decreased by 6% to 38.9 Mt as production from the mine's dense media separation plant was hampered by mining feedstock constraints following wet weather. The Kolomela mine, which started production ahead of schedule, produced 1.5 Mt in 2011. Metallurgical Coal export production decreased by 9% compared to the prior year primarily as a result of heavy rainfall and subsequent flooding in late 2010 and in the first quarter of 2011, which resulted in force majeure declarations being in effect until June. However, the business made a strong recovery as a result of successful mitigation actions taken early in the year to recover lost volumes in the second half of the year. Thermal Coal RSA export production performance remained flat year-on-year and a record production performance at Cerrejón led to a 7% increase in production compared to 2010. Copper production of 599,000 tonnes was 4% lower compared to 2010 due to lower grades, extreme wet weather, and operating issues at Collahuasi. Production was marginally higher at the Los Bronces operation as a result of the start-up of the Los Bronces Expansion Project in October. Nickel production in 2011 increased by 44% to 29,100 tonnes as a result of delivery of the Barro Alto project, which produced 6,200 tonnes, and higher output at both Loma de Níquel and Codemin. Equivalent refined platinum production from the mines managed by Platinum and its joint venture partners for 2011 totalled 2.41 million ounces, a decrease of 3% compared to 2010. Diamond production totalled 31.3 million carats a 5% decrease compared to 2010, reflecting the impact of maintenance and excessive rainfall in southern Africa during the first half of the year, and a focus on waste stripping, as well as scheduled maintenance at the Debswana and De Beers Consolidated Mines operations in the second half.

Capital structure

Net debt, including related hedges, of $1,374 million was $6,010 million lower than at 31 December 2010, and $5,420 million lower than at 30 June 2011. Cash inflows from operating activities of $9,362 million and the proceeds from disposals of $533 million, funded capital investment (including related hedges) of $5,764 million, including combined investment of $2,350 million in the Los Bronces, Barro Alto, Minas-Rio and Kolomela (previously Sishen South) projects.

Special items and remeasurements

The Group recognised a number of operating special charges and remeasurements, amounting to $173 million, including associates. These included an impairment of Tarmac Building Products (Other Mining and Industrial segment) of $70 million and accelerated depreciation of $84 million at Loma de Níquel (Nickel segment) due to ongoing uncertainty over the renewal of three concessions that expire in 2012 and over the restoration of 13 concessions that have been cancelled. In addition, restructuring costs of $19 million principally relate to retrenchment and consultancy costs within the Platinum and Diamond segments.

Dividends

Anglo American's dividend policy will provide a base dividend that will be maintained or increased through the cycle. The Group has maintained this policy and recommended a final dividend of 46 US cents per share, giving a total dividend for the year of 74 US cents per share, subject to shareholder approval at the Annual General Meeting to be held on 19 April 2012. As previously stated, after taking into account the Group's substantial investment programme for future growth, future earnings potential and the continuing need for a robust balance sheet, any surplus cash will be returned to shareholders.

Three major new mining operations delivered on or ahead of schedule

Anglo American commissioned three major new mining operations on or ahead of schedule during 2011 - the Kolomela iron ore mine in South Africa, the Los Bronces copper expansion in Chile and the Barro Alto nickel mine in Brazil. The Group's pipeline of projects spans its core commodities and is expected to deliver organic production growth of 35% by 2014 from those projects that have been commissioned during 2011 and those that are approved and currently in development.

During 2011, the Board of Anglo American approved a number of growth projects across the Group's portfolio of commodities, including the 5 Mtpa Grosvenor metallurgical coal project in Queensland, Australia and the Collahuasi Phase 2 expansion in Chile. Beyond the near term, Anglo American has a world class pipeline of projects across its chosen commodities and is progressing towards approval decisions in relation to the development of further high quality growth projects, including the 225 ktpa Quellaveco copper project in Peru. Submission to the Board for approval is expected for the Quellaveco project once the necessary water permits have been obtained. Together with a number of other medium and longer term projects, Anglo American has the potential to double production through its $98 billion pipeline of more than 85 approved and unapproved projects.

Anglo American has a clear strategy of deploying its capital in those commodities with strong fundamentals and the most attractive risk-return profiles that deliver long term, through-the-cycle returns for its shareholders. The Group has developed a portfolio of world class operating assets and development projects with the benefits of scale, expansion potential and attractive cost position and capital intensity. Anglo American's project management systems and processes ensure close collaboration between the Group's technical and project teams to execute projects effectively.

Barro Alto - delivered on schedule in March 2011

The Barro Alto nickel project in Brazil, a greenfield nickel project approved for development in December 2006, delivered its first metal in March 2011. Barro Alto is ramping up towards full production capacity, which it is expected to reach at the beginning of 2013. This project makes use of proven technology and will produce an average of 36 ktpa of nickel in full production (41 ktpa over the first five years), more than doubling production from Anglo American's Nickel business, with a competitive cost position in the lower half of the cost curve.

Los Bronces - delivered on schedule in October 2011

The Los Bronces copper expansion project in Chile delivered its first production on schedule in October 2011. Production at Los Bronces is expected to more than double (increase by 278 ktpa on average) over the first three years of full production following project completion and to average 200 ktpa over the first 10 years. At peak production levels, Los Bronces is expected to be the fifth largest producing copper mine in the world, with highly attractive cash operating costs, reserves and resources that support a mine life of over 30 years and with further expansion potential.

Kolomela - delivered ahead of schedule in December 2011

Kumba's Kolomela project in South Africa shipped its first lump iron ore from the port of Saldanha to China in December 2011, five months ahead of schedule. Kolomela is situated 80 km to the south of Kumba's world class Sishen mine and, when full production is achieved in 2013, will produce 9 Mtpa of high quality seaborne iron ore, with further potential for expansion.

Minas-Rio - progressing well

The Minas-Rio iron ore project in Brazil is expected to produce 26.5 Mtpa of iron ore in its first phase and has made good progress during the year. Minas-Rio has secured a number of major licences and permits during the year; the offshore and onshore works at the port are on schedule; more than 90% of land access has been secured along the 525 km pipeline route and more than 200 km of pipe has been installed; and the civil works at the beneficiation plant are well under way. As with other complex greenfield mining projects, a number of unexpected issues, such as the discovery of caves at the beneficiation plant site which require specialised assessment, continue to cause delays to the work scheduling, in addition to outstanding land access and an evolving permitting environment. Minas-Rio is implementing various measures to manage these challenges in a high inflationary Brazilian mining environment, including acceleration activities within the previously announced 15% capital increase, to target first ore on ship in the second half of 2013.

Pre-feasibility studies for the second phase of the Minas-Rio iron ore project commenced during 2011 and, although still under way, the studies, together with the current resource statement (total resource volume (Measured, Indicated and Inferred)) of 5.8 billion tonnes, support the expansion of the project.

Grosvenor - on track

The greenfield Grosvenor project is situated immediately to the south of Anglo American's Moranbah North metallurgical coal mine in the Bowen Basin of Queensland, Australia. The mine is expected to produce 5 Mtpa of metallurgical coal from its underground longwall operation over a projected life of 26 years and to benefit from operating costs in the lower half of the cost curve.

Grosvenor forms a major part of the Group's strategy of tripling production of metallurgical coal from its Australian assets by 2020, equivalent to a 12% compound annual growth rate, using a standard longwall and coal handling and preparation plant (CHPP) design model. In its first phase of development, Grosvenor will consist of a single new underground longwall mine, targeting the same well understood Goonyella Middle coal seam as Moranbah North, and will process its coal through the existing Moranbah North CHPP and train loading facilities. A pre-feasibility study for expansion by adding a second longwall at Grosvenor is under way.

Exploration discoveries replenishing world class resource base

Anglo American's exploration and discovery expertise was widely acclaimed during 2011, winning two major exploration awards. The Exploration team received the Prospectors and Developers Association of Canada's award for the Los Sulfatos copper discovery in Chile and the Fennoscandian Exploration and Mining award for the Sakatti discovery in Finland. The Exploration team was also recognised by the Metals Economics Group as the most successful Major Company explorer in terms of copper and nickel found during the period 1999 to 2010. The Group's exploration success, with 15 major discoveries since 1999, differentiates Anglo American by enabling significant replenishment of its resource base at a highly competitive cost.

Anglo American's most recent major discovery, known as the Sakatti project in northern Finland, is a significant copper-nickel-platinum group metals grassroots discovery. Sakatti is located within a known mining region, 150 km north of the Arctic Circle, with excellent infrastructure including major highways and power generation facilities. Anglo American's tenure to the Sakatti deposit and surrounding area is part of a contiguous extensive tenure package covering 830 km². The current exploration drilling programme is focused on delineating the boundaries of the mineralised body and, as such, precludes infill drilling at a density required for the definition and estimation of a Joint Ore Reserves Committee compliant Mineral Resource.

Anglo American sees Finland as highly prospective and its immediate plans are to continue to expand its exploration work at the Sakatti deposit, as well as looking at other priority targets within Lapland and the broader Fennoscandia region.

Opportunities seized to deliver additional value

De Beers

In addition to pursuing its extensive organic growth programme, Anglo American constantly evaluates other opportunities to deliver value to shareholders. In November 2011, Anglo American agreed to acquire the Oppenheimer family's 40% interest in De Beers for $5.1 billion, pending regulatory and government approvals, increasing Anglo American's current 45% shareholding to up to 85%. Cash proceeds will be paid on completion of the transaction.

This transaction is a unique opportunity for Anglo American to consolidate control of the world's leading diamond company - De Beers, marking the Group's commitment to an industry with highly attractive long term supply and demand fundamentals. Underpinned by the security of supply offered by a new 10 year sales agreement with the Government of the Republic of Botswana, this forms a compelling proposition.

The benefits brought by Anglo American's scale, technical, operational and exploration expertise and financial resources, combined with the unquestionable leadership of De Beers' business and iconic brand will enable De Beers to enhance its position across the diamond pipeline and capture the potential presented by a rapidly evolving diamond market.

Anglo American Sur

In November 2011, entirely in accordance with its rights, Anglo American announced the completion of the sale of a 24.5% stake in Anglo American Sur (AA Sur), comprising a number of the Group's copper assets in Chile, to Mitsubishi Corporation LLC (Mitsubishi) for $5.39 billion in cash. This transaction highlighted the inherent value of AA Sur as a world class, tier one copper business with extensive reserves and resources and significant further growth options from its exploration discoveries, valuing AA Sur at $22 billion on a 100% basis.

There is continuing litigation between Anglo American and Codelco in respect of the option agreement between them relating to AA Sur (described fully in Note 15 to the Condensed financial statements). Anglo American will continue to defend its rights vigorously, while remaining open to working with Codelco to reach a settlement that recognises the strength of Anglo American's legal position and protects the interests of Anglo American's shareholders.

Peace River Coal

In October 2011, Anglo American announced that it had acquired 100% ownership of Peace River Coal Limited Partnership (PRC), which comprises the Trend metallurgical coal mine and various exploration leases in British Columbia, Canada, through the acquisition of the 25.17% interest in PRC that it did not already own for a cash consideration of $166 million. PRC is a large and high quality coking coal resource of approximately one billion tonnes, on an attributable basis, supported by well developed power, rail and port infrastructure. Anglo American sees significant resource upside and plans to invest in further exploration studies to ascertain its full long term potential. In the near term, a feasibility study to increase production from 1 Mtpa to 3.5 Mtpa by 2015 is progressing.

Update on non-core businesses

Subject to regulatory approvals, Anglo American's programme to divest of its businesses not considered core to its operations has been largely completed. Scaw South Africa, the remaining business of the Scaw Metals group, is the last such business to be sold and that sales process is under way.

On 18 February 2011, Anglo American and Lafarge announced their agreement to combine their cement, aggregates, ready-mixed concrete, asphalt and contracting businesses in the United Kingdom; Tarmac, Lafarge Cement UK, Lafarge Aggregates and Concrete UK. The 50:50 joint venture will create a leading UK construction materials company, with a portfolio of high quality assets drawing on the complementary geographical distribution of operations and assets, the skills of two experienced management teams and a portfolio of well-known and innovative brands. This transaction is progressing through the regulatory clearance processes.

Outlook

Despite short term uncertainty persisting in the global economy, particularly in Europe, the longer term outlook for Anglo American's diversified mix of commodities remains strong. Sustained growth in the emerging economies should underpin robust demand for commodities, albeit with a degree of short term volatility, while the signs of economic recovery and stimulus in the US should provide a further fillip.

Rapid 'catch-up' in living standards, notably in China and India, combined with a medium term need for infrastructure replacement in the developed countries, present an attractive proposition for the early cycle commodities. Over time the considerable scope for an expanding middle class in many emerging economies should boost consumption, which positions Anglo American well due to its breadth of unique mid to late cycle exposure from copper and nickel to platinum and diamonds.

Prices for Anglo American's commodities are expected to be robust as widespread supply constraints and the challenges producers face in bringing new supply into production will lead to increasing capital intensity and tight market fundamentals. Costs are likely to continue to be affected by strong producer currencies and increasing prices for key inputs.

Selected major projects

Completed / In Commissioning 2011
Sector	Project	Country	Completion date	Capex $m⁽¹⁾	Production volume⁽²⁾
Iron Ore and Manganese	Kolomela	South Africa	Q4 2011	1,062	9.0 Mtpa iron ore
Thermal Coal	Zibulo	South Africa	Q4 2011	517	6.6 Mtpa thermal
Copper	Los Bronces expansion	Chile	Q4 2011	2,800	200 ktpa copper⁽³⁾
	Collahuasi Phase 1	Chile	Q4 2011	148	19 ktpa copper
Nickel	Barro Alto	Brazil	Q1 2011	1,900	36 ktpa nickel⁽⁴⁾
Platinum	Unki Mine	Zimbabwe	Q4 2011	459	70 kozpa refined platinum
	Mogalakwena North	South Africa	H2 2011	822	350-400 kozpa refined platinum
	Base metals refinery expansion	South Africa	Q3 2011	360	11 ktpa Nickel
	Dishaba East Upper UG2	South Africa	H2 2011	219	100 kozpa refined platinum

Approved
Sector	Project	Country	First production date	Full production date	Capex $m⁽¹⁾	Production volume⁽²⁾
Iron Ore and Manganese	Minas-Rio phase 1	Brazil	2013	2014	5,034	26.5 Mtpa iron ore pellet feed (wet basis)⁽⁵⁾
	Groote Eylandt Expansion Project (GEEP 2)⁽⁶⁾	Australia	2013	2013	280	0.6 Mtpa manganese ore
Metallurgical Coal	Grosvenor Phase 1	Australia	2013	2016	1,700	5.0 Mtpa metallurgical
Thermal Coal	Cerrejón P500 Phase 1	Colombia	2013	2015	1,311	8.0 Mtpa thermal
Copper	Collahuasi expansion Phase 2	Chile	2013	2014	212	20 ktpa copper⁽⁷⁾
Platinum	Twickenham	South Africa	2015	2019	1,248	180 kozpa refined platinum
	Khuseleka Ore Replacement	South Africa	2007	2015	187	Replace 101 kozpa refined platinum
	Bathopele Phase 4	South Africa	2009	2012	67	65 kozpa refined platinum
	Bathopele Phase 5	South Africa	2013	2018	230	139 kozpa
Diamonds	Jwaneng - Cut 8	Botswana	2017	2021⁽⁸⁾	3,000⁽⁹⁾	100 million carats
Other Mining and Industrial	Boa Vista Fresh Rock	Brazil	2013	2014	173^{(10) )}	2.7 ktpa additional niobium in product

See the following page for footnotes.

Future unapproved
Sector	Project	Country	First production date	Full production date	Production volume⁽²⁾
Iron Ore and Manganese	Sishen Expansion Project phase 1B	South Africa	2013	2014	0.75 Mtpa iron ore
	Sishen B Grade	South Africa	2016	2017	6.0 Mtpa iron ore
	Sishen Concentrates	South Africa	2017	2019	1.1 Mtpa iron ore
	Kolomela Expansion	South Africa	2017	2019	6.0 Mtpa iron ore
	Minas-Rio expansion	Brazil	TBD	TBD	TBD
Metallurgical Coal	Grosvenor Phase 2	Australia	2015	2017	6.0 Mtpa metallurgical
	Drayton South	Australia	2015	2015	4.0 Mtpa thermal
	Moranbah South	Australia	2016	2019	12.0 Mtpa metallurgical
Thermal Coal	Elders Multi-product Project	South Africa	2017	2019	3.0 Mtpa thermal
	New Largo	South Africa	2015	2017	13.0 Mtpa thermal
	Cerrejón P500 P2	Colombia	TBD	TBD	10-20 Mtpa thermal
Copper	Quellaveco	Peru	2016	2017	225 ktpa copper
	Michiquillay	Peru	2019	2020	187 ktpa copper⁽¹¹⁾
	Collahuasi expansion Phase 3	Chile	TBD	TBD	469 ktpa
	Pebble	US	TBD	TBD	175 ktpa⁽¹²⁾
Nickel	Jacaré	Brazil	TBD	TBD	TBD
Platinum	Tumela Conglomerate	South Africa	2020	2026	271 kozpa refined platinum
Diamonds	Gahcho Kué	Canada	TBD	TBD	TBD
	Venetia UG⁽¹³⁾	South Africa	TBD	TBD	TBD

⁽¹⁾ Capital expenditure shown on 100% basis in nominal terms.

⁽²⁾ Represents 100% of average incremental or replacement production, at full production, unless otherwise stated.

⁽³⁾Production represents average over first 10 years of the project. Production over the first three years of the project will average 278 ktpa.

⁽⁴⁾Average production of 36 ktpa over the full production years; a new mine plan will extend the life of Barro Alto with lower production in the additional years.

⁽⁵⁾ Capital expenditure, post acquisition of Anglo American's shareholding in Minas-Rio, includes 100% of the mine and pipeline, and an attributable share of the port, as modified by the agreement with LLX SA and LLX Minas-Rio. Capital expenditure is under review to contain the capital increase to approximately 15% of this guidance.

⁽⁶⁾Subject to conditions precedent being fulfilled.

⁽⁷⁾ Further phased expansions have the potential to increase production to 1 Mtpa.

⁽⁸⁾ Waste stripping at Cut-8, an extension to Jwaneng Mine, began in 2010. Carat recovery will commence in 2017, with Cut-8 reaching full production when Cut-7 ore is exhausted in 2021.

⁽⁹⁾ Debswana is investing $500 million in capital expenditure. Project investment, including capital expenditure, is likely to total $3 billion over the next 15 years. Total carats exposed are over the life of the extension.

⁽¹⁰⁾Capital estimate subject to review.

⁽¹¹⁾Expansion potential to 300 ktpa.

⁽¹²⁾ Pebble will produce molybdenum and gold by-products and other projects will produce molybdenum and silver by-products.

⁽¹³⁾A feasibility study is scheduled for consideration by the De Beers Consolidated Mines (DBCM) board in 2012.

For further information, please contact:

Media		Investors
UK James Wyatt-Tilby Tel: +44 (0)20 7968 8759		UK Leng Lau Tel: +44 (0)20 7968 8540
Emily Blyth Tel: +44 (0)20 7968 8481		Caroline Crampton (née Metcalfe) Tel: +44 (0)20 7968 2192
South Africa Pranill Ramchander Tel: +27 (0)11 638 2592		Leisha Wemyss Tel: +44 (0)20 7968 8607

Anglo American is one of the world's largest mining companies, is headquartered in the UK and listed on the London and Johannesburg stock exchanges. Anglo American's portfolio of mining businesses spans bulk commodities - iron ore and manganese, metallurgical coal and thermal coal; base metals - copper and nickel; and precious metals and minerals - in which it is a global leader in both platinum and diamonds. Anglo American is committed to the highest standards of safety and responsibility across all its businesses and geographies and to making a sustainable difference in the development of the communities around its operations. The company's mining operations, extensive pipeline of growth projects and exploration activities span southern Africa, South America, Australia, North America, Asia and Europe. www.angloamerican.com

Webcast of presentation:

A live webcast of the results presentation, starting at 9.00am UK time on 17 February, can be accessed through the Anglo American website at www.angloamerican.com.

Note: Throughout this results announcement, '$' denotes United States dollars and 'cents' refers to United States cents; operating profit includes attributable share of associates' operating profit and is before special items and remeasurements, unless otherwise stated; special items and remeasurements are defined in note 4 to the Condensed financial statements. Underlying earnings, unless otherwise stated, is calculated as set out in note 9 to the Condensed financial statements. Earnings before interest, tax, depreciation and amortisation (EBITDA) is operating profit before special items and remeasurements, depreciation and amortisation in subsidiaries and joint ventures and includes attributable share of EBITDA of associates. EBITDA is reconciled to 'Total profit from operations and associates' and to 'Cash flows from operations' in note 5 to the Condensed financial statements. Tonnes are metric tons, 'Mt' denotes million tonnes and 'kt' denotes thousand tonnes, unless otherwise stated.

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 and acquisition strategy, plans and objectives of management for future operations (including development plans and objectives relating to Anglo American's products, production forecasts and reserve and resource positions), are forward-looking statements. 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 availability of mining and processing equipment, the ability to produce and transport products profitably, 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 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 Services Authority, the Listings Requirements of the securities exchange of the JSE Limited in South Africa, the SWX 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 presents the views of those third parties, though these may not necessarily correspond to the views held by Anglo American.

Financial review of Group results

Operating profit $ million	Year ended 31 Dec 2011	Year ended 31 Dec 2010
Iron Ore and Manganese	4,520	3,681
Metallurgical Coal	1,189	780
Thermal Coal	1,230	710
Copper	2,461	2,817
Nickel	57	96
Platinum	890	837
Diamonds	659	495
Other Mining and Industrial	195	664
Exploration	(121)	(136)
Corporate Activities and Unallocated Costs	15	(181)
Operating profit including associates before special items and remeasurements	11,095	9,763

Group operating profit was a record at $11,095 million, 14% higher than 2010. This improvement in operating profit was primarily driven by increases in the realised prices of commodities. These included a 42% rise in export metallurgical coal realised prices, a 39% increase in South African export thermal coal realised prices, and a 26% increase in iron ore realised prices. However, increased commodity prices impacted results mainly in the first half of the year as global macro-economic uncertainties led to a decrease in commodity prices in the second half.

During the year, three projects (Barro Alto, Los Bronces Expansion and Kolomela) were delivered. While this contributed to an increase in production, operating profit was negatively impacted by production disruptions across the Group's operations due to various causes, including inclement weather, safety stoppages and grade declines. These disruptions, industry-wide mining cost pressures and economic uncertainties leading to a fall in commodity prices during the fourth quarter have also affected operating profit and resulted in lower production volumes and in higher unit costs of production across the Group. The impact of this negative global trend was mitigated by the continuing positive performance of our embedded Asset Optimisation and Procurement programmes.

The Group's results are impacted by currency fluctuations in the countries where the operations are based. The weakening of the US dollar against the Australian dollar, Chilean peso and Brazilian real resulted in a $149 million negative exchange variance in operating profit compared to 2010. CPI inflation had a further negative $585 million impact on operating profit compared to 2010.

Group underlying earnings were $6,120 million, a 23% increase on 2010, which reflects the operational results above. Net finance costs, before remeasurements, excluding associates, were $20 million (compared to $244 million for 2010). The effective rate of tax, before special items and remeasurements and including attributable share of associates' tax, reduced in the year from 31.9% to 28.3%.

Group underlying earnings per share were $5.06 compared with $4.13 in 2010.

Reconciliation of profit for the period to Underlying earnings $ million	Year ended 31 Dec 2011	Year ended 31 Dec 2010
Profit for the financial year attributable to equity shareholders of the Company	6,169	6,544
Operating special items	173	253
Operating remeasurements	74	(382)
Net profit on disposals	(203)	(1,598)
Financing special items	9	13
Financing remeasurements	(205)	(106)
Special items and remeasurements tax	118	112
Non-controlling interests on special items and remeasurements	(15)	140
Underlying earnings⁽¹⁾	6,120	4,976
Underlying earnings per share ($)	5.06	4.13

⁽¹⁾See note 3 to the Condensed financial statements

Summary income statement $ million	Year ended 31 Dec 2011	Year ended 31 Dec 2010
Operating profit from subsidiaries and joint ventures before special items and remeasurements	9,668	8,508
Operating special items	(164)	(228)
Operating remeasurements	(65)	386
Operating profit from subsidiaries and joint ventures	9,439	8,666
Net profit on disposals	183	1,579
Share of net income from associates (see reconciliation below)	977	822
Total profit from operations and associates	10,599	11,067
Net finance costs before remeasurements	(20)	(244)
Financing remeasurements	203	105
Profit before tax	10,782	10,928
Income tax expense	(2,860)	(2,809)
Profit for the financial year	7,922	8,119
Non-controlling interests	(1,753)	(1,575)
Profit for the financial period attributable to equity shareholders of the Company	6,169	6,544
Basic earnings per share ($)	5.10	5.43
Group operating profit including associates before special items and remeasurements⁽¹⁾	11,095	9,763
Operating profit from associates before special items and remeasurements	1,427	1,255
Operating special items and remeasurements	(18)	(29)
Net profit on disposals	20	19
Net finance costs (before special items and remeasurements)	(48)	(88)
Financing special items and remeasurements	(7)	(12)
Income tax expense (after special items and remeasurements)	(384)	(315)
Non-controlling interests (after special items and remeasurements)	(13)	(8)
Share of net income from associates	977	822

⁽¹⁾ Operating profit before special items and remeasurements from subsidiaries and joint ventures was $9,668 million (2010: $8,508 million) and attributable share from associates was $1,427 million (2010: $1,255 million). For special items and remeasurements see note 4 to the Condensed financial statements.

Special items and remeasurements

	Year ended 31 Dec 2011			Year ended 31 Dec 2010
$ million	Subsidiaries and joint ventures	Associates	Total	Subsidiaries and joint ventures	Associates	Total
Operating special items	(164)	(9)	(173)	(228)	(25)	(253)
Operating remeasurements	(65)	(9)	(74)	386	(4)	382
Operating special items and remeasurements	(229)	(18)	(247)	158	(29)	129
Net profit on disposals	183	20	203	1,579	19	1,598
Financing special items	-	(9)	(9)	-	(13)	(13)
Financing remeasurements	203	2	205	105	1	106
Special items and remeasurements tax	(119)	1	(118)	(110)	(2)	(112)
Non-controlling interests on special items and remeasurements	12	3	15	(141)	1	(140)

Operating special items and remeasurements, including associates, amounted to a loss of $247 million. This includes impairment and related charges, restructuring costs and operating remeasurements.

Impairment and related charges were $154 million (2010: $122 million). This principally comprises an impairment of Tarmac Building Products of $70 million (Other Mining and Industrial segment) and accelerated depreciation of $84 million (2010: $97 million), mainly arising at Loma de Níquel (Nickel segment). The accelerated depreciation charge at Loma de Níquel has arisen due to ongoing uncertainty over the renewal of three concessions that expire in 2012 and over the restoration of 13 concessions that have been cancelled. Restructuring costs in 2011 principally relate to retrenchment and consultancy costs within the Platinum and Diamond segments (2010: Other Mining and Industrial, Platinum and Diamond segments).

Operating remeasurements reflect a net loss of $74 million (2010: gain of $382 million) principally in respect of non-hedge derivatives of capital expenditure in Iron Ore Brazil. Derivatives which have been realised in the year had a cumulative net operating remeasurement gain since their inception of $383 million (2010: gains of $255 million).

Net profit on disposals, including associates, amounted to a gain of $203 million (2010: $1,598 million). In February 2011 the Group completed the disposal of its 100% interest in the Lisheen operation and its 74% interest in Black Mountain Mining (Proprietary) Limited, which holds 100% of the Black Mountain mine and the Gamsberg project, resulting in a net cash inflow of $499 million, generating a profit on disposal of $397 million. Lisheen and Black Mountain were included in the Other Mining and Industrial segment.

Also included in net profit on disposals is a charge of $141 million on Platinum broad based community economic empowerment transactions completed. This principally relates to an IFRS 2 Share-based Payment charge of $131 million resulting from a community economic empowerment transaction involving certain of Platinum's host communities, which was completed in December 2011.

The Group sold Tarmac's businesses in China, Turkey and Romania in July, October and November 2011 respectively. Tarmac is included in the Other Mining and Industrial segment.

Financing remeasurements reflect a net gain of $205 million (2010: gain of $106 million), including associates, and relate to an embedded interest rate derivative, non-hedge derivatives of debt and other financing remeasurements.

Special items and remeasurements tax amounted to a charge of $118 million (2010: charge of $112 million). This relates to a credit for one-off tax items of $137 million (2010: nil), a tax remeasurement charge of $230 million (2010: credit of $122 million) and a tax charge on special items and remeasurements of $25 million (2010: charge of $234 million).

The current year credit relating to one-off tax items of $137 million principally relates to the recognition of deferred tax assets in Iron Ore Brazil which were originally written off as part of the impairment charges related to the Amapá iron ore system in 2009, and a capital gains tax refund related to a prior year disposal.

Net finance costs

Net finance costs, before remeasurements, excluding associates, were $20 million (compared to $244 million for 2010). This reduction compared to 2010 was driven by increased interest income due to higher average levels of cash and an increase in interest capitalised.

Tax

	Year ended 31 Dec 2011			Year ended 31 Dec 2010
$ million (unless otherwise stated)	Before special items and remeasurements	Associates' tax and non-controlling interests	Including associates	Before special items and remeasurements	Associates' tax and non-controlling interests	Including associates
Profit before tax	10,626	401	11,027	9,109	322	9,431
Tax	(2,741)	(385)	(3,126)	(2,699)	(313)	(3,012)
Profit for the financial year	7,885	16	7,901	6,410	9	6,419
Effective tax rate including associates (%)			28.3%			31.9%

IAS 1 Presentation of Financial Statements requires income from associates to be presented net of tax on the face of the income statement. Associates' tax is therefore not included within the Group's income tax expense. Associates' tax included within Share of net income from associates for the year ended 31 December 2011 is $384 million (2010: $315 million). Excluding special items and remeasurements this becomes $385 million (2010: $313 million).

The effective rate of tax before special items and remeasurements including attributable share of associates' tax for the year ended 31 December 2011 was 28.3%. The decrease compared to the equivalent effective rate of 31.9% for the year ended 31 December 2010 is due to a number of non-recurring factors that include the recognition of previously unrecognised tax losses and the reassessment of certain withholding tax provisions across the Group. In future periods it is expected that the effective tax rate, including associates' tax, will remain above the United Kingdom statutory tax rate.

Balance sheet

Equity attributable to equity shareholders of the Company was $39,092 million at 31 December 2011, up on the $34,239 million at 31 December 2010. This was mainly due to the increase in the Group operating profit, and the proceeds on the disposal of 24.5% of Anglo American Sur SA. Investments in associates were $340 million higher than at 31 December 2010, principally as a result of a significant improvement in earnings at De Beers. Property, plant and equipment increased by $739 million compared to 31 December 2010, due to ongoing investment in growth projects. There were no assets classified as held for sale at 31 December 2011 (compared to assets, net of associated liabilities, of $188 million at 31 December 2010) due to the sale of the remaining Zinc assets during the year.

Cash flow

Net cash inflows from operating activities were $9,362 million compared with $7,727 million in 2010. EBITDA was $13,348 million, an increase of 11% from $11,983 million in the prior year, reflecting strong prices across the Group's core commodities.

Net cash used in investing activities was $4,853 million compared with $2,470 million in 2010. Purchases of property, plant and equipment, net of related derivative cash flows, amounted to $5,764 million, an increase of $770 million, reflecting major spend on the Group's strategic growth projects. Proceeds from disposals, principally the Group's remaining Zinc portfolio (net of cash and cash equivalents disposed) were $533 million (2010: $2,795 million).

Net cash inflow from financing activities was $1,474 million compared with net cash used of $2,400 million in 2010. During the year the Group paid dividends of $818 million to company shareholders, and $1,404 million in dividends to non-controlling interests.

Liquidity and funding

Net debt, including related hedges, was $1,374 million, a decrease of $6,010 million from $7,384 million at 31 December 2010. The decrease in net debt reflects strong operating cash flows and proceeds on the disposal of 24.5% of Anglo American Sur SA.

Net debt at 31 December 2011 comprised $12,873 million of debt, partially offset by $11,732 million of cash and cash equivalents, and the current position of derivative liabilities related to net debt of $233 million. Net debt to total capital⁽⁾ at 31 December 2011 was 3.1%, compared with 16.3% at 31 December 2010.

At 31 December 2011, the Group had undrawn committed bank facilities of $8.4 billion.

The Group's forecasts and projections, taking account of reasonably possible changes in trading performance, indicate the Group's ability to operate within the level of its current facilities for the foreseeable future.

Corporate Activities and Unallocated Costs

Following a reassessment of our estimate of the likely outcome of existing insurance claims and a low number of new claims received, liabilities in the insurance captive have reduced in the current year. This reduction, combined with an increase in insurance premium income, has more than offset the unallocated corporate costs in 2011, resulting in the operating profit recorded within Corporate Activities and Unallocated Costs.

Dividends

Analysis of dividends US cents per share	2011	2010
Interim dividend	28	25
Recommended final dividend	46	40
Total dividends	74	65

Related party transactions

Related party transactions are disclosed in note 16 to the Condensed financial statements.

Operations review 2011

In the operations review on the following pages, operating profit includes attributable share of associates' operating profit and is before special items and remeasurements unless otherwise stated. Capital expenditure relates to cash expenditure on property, plant and equipment including cash flows on related derivatives.

IRON ORE AND MANGANESE

$ million (unless otherwise stated)	Year ended 31 Dec 2011	Year ended 31 Dec 2010
Operating profit	4,520	3,681
Kumba Iron Ore	4,397	3,396
Iron Ore Brazil	(42)	(97)
Samancor	165	382
EBITDA	4,733	3,856
Net operating assets	13,069	11,701
Capital expenditure	1,732	1,195
Share of Group operating profit	41%	38%
Share of Group net operating assets	30%	27%

Operating profit before special items and remeasurements increased by 23% from $3,681 million to $4,520 million, principally owing to stronger export prices, a year-on-year weighted average price increase of 26% in export iron ore for Kumba and an increase of 3% in export sales volumes.

Markets

Global steel demand growth continued to be driven by ongoing urbanisation and industrialisation in China. China is now the biggest steel producing country accounting for approximately 45% of the global steel market. In early 2011, steel production in China reached record levels. However, the tightening in monetary policy to manage the inflationary pressures experienced in China since October 2010 led to credit liquidity constraints and a slower GDP growth rate in the second half of the year. This coupled with margin compression as a result of higher raw material input costs and lower steel prices, led to a reduction in steel production rates and downstream steel de-stocking by end-users.

Steel demand and pricing in Europe has been subdued since April 2011, following concerns around the European sovereign debt crisis. Japanese steel production and prices were initially impacted by the earthquake and tsunami during the first quarter but recovered during the third quarter. However, as macro-economic uncertainty increased, this also weighed heavily on steel prices and demand in Japan towards the end of the year. As a result, European and Japanese steel producers started to implement production slowdowns in an attempt to stabilise steel markets. Consequently, iron ore offtake in these regions has slowed and China was the target of diverted contractual tonnages from a number of suppliers.

The combination of higher seaborne ore supplies and lower crude steel production during the second half of 2011 resulted in a sharp fall in index prices in the fourth quarter. Steel producers resumed sourcing of iron ore during November 2011, following a period of de-stocking, particularly in China. Index and spot iron ore pricing has now reached a support level provided by high cost Chinese domestic iron ore production.

Underpinned by global steel production, prices for manganese ores have been under considerable pressure, particularly in the second half of 2011, on the back of a general oversupply in the market and a build-up of port inventories in China. Alloy conversion capacity continued to grow through the year, placing additional pressure on margins for all alloys, with some higher cost producers eventually idling capacity in order to cut losses.

Operating performance

Kumba Iron Ore

The total material mined at Sishen mine increased by 8% from 153.2 Mt in 2010 to 165.0 Mt, of which waste mined was 119.0 Mt, an increase of 17% from 2010. This planned increase in mining activity was negatively affected by wet pit conditions resulting from excessive rainfall during the first half of 2011. As a consequence, the availability of run-of-mine material supplied to the dense media separation (DMS) plant reduced, causing total production at Sishen mine to decrease by 6% from 41.3 Mt in 2010 to 38.9 Mt. The jig plant achieved a run rate in excess of design capacity, producing 13.5 Mt for the year (2010: 13.3 Mt) as a result of an improved yield brought about by moderating the quality of the ore produced by the plant. Kolomela was brought into production ahead of schedule. Waste material stripped in the year amounted to 30.3 Mt (2010: 18.6 Mt) as two open pits were developed at a cost of $131 million (2010: $108 million), all of which was capitalised. The plant was successfully commissioned during 2011, delivering 1.5 Mt of production in the year.

Kumba's total sales volumes increased by 0.4 Mt to 43.5 Mt in 2011 (2010: 43.1 Mt). Total export sales volumes increased by 1.0 Mt to a record 37.1 Mt. Export sales volumes to China increased to 68% of total export volumes for the year, compared with 61% in 2010. The company's traditional markets accounted for about 22% of export sales, while Kumba sold a small portion of its total exports into the Middle East and North Africa, and South America. Approximately 73% of exports were sold to long term and annual contractual customers and 27% at prices derived from index.

Iron Ore Brazil

Iron Ore Brazil generated an operating loss of $42 million, largely reflecting the pre-operational state of the Minas-Rio project.

The Amapá operation contributed an operating profit of $120 million for the year, compared with an operating profit of $16 million in 2010, reflecting a strong production performance and continued cost containment during a period of elevated prices. Production in 2011 totalled 4.8 Mt, a 20% increase over the previous year.

Samancor

Operating profit declined by 57% to $165 million (2010: $382 million), driven mainly by lower prices and stronger average local currencies in South Africa and Australia.

Production was lower at the South African mines owing to safety related downtime, issues concerning sinter plants and higher stripping ratios. In addition, production was lower at GEMCO in Australia as a result of concentrator downtime and unusually heavy rainfall in early and late 2011. Anglo American's share of ore production at 2.8 Mt was 6% lower than the prior year, while alloy production of 300,500 tonnes was only marginally lower.

Manganese ore sales prices softened by 19% in 2011, due to an oversupplied market and a build-up of port inventories in China.

Projects

Excellent progress was made at Kolomela mine, which was delivered five months ahead of schedule and within budget. Kolomela is ramping up well and is on track to produce between 4 Mtpa and 5 Mtpa in 2012, before producing at full design capacity of 9 Mtpa in 2013.

Kumba's stated South African growth target of producing 70 Mtpa by 2019 is intact:

· 9 Mtpa will come from Kolomela in 2013;

· 15 Mtpa to be delivered from other projects in the Northern Cape Province; and

· 5 Mtpa potential from projects in the Limpopo Province.

The second expansion of the GEMCO operation in the Northern Territory of Australia (GEEP2 project) was approved in May 2011. This follows the successful completion of the GEMCO Expansion Phase 1 (GEEP1) project in January 2010.

The first phase expansion confirmed GEMCO's status as the world's largest and lowest cost producer of manganese ore. This second expansion, which is expected to be completed in late 2013 will further enhance GEMCO's competitive advantages and create additional options for growth. The $280 million GEEP2 project (Anglo American's 40% share: $112 million) will increase GEMCO's beneficiated product capacity from 4.2 Mtpa to 4.8 Mtpa through the introduction of a dense media circuit by-pass facility. The expansion will also address infrastructure constraints by increasing road and port capacity to 5.9 Mtpa, creating 1.1 Mtpa of latent capacity for future expansions.

Outlook

Continuing macroeconomic uncertainty has undermined the short term outlook for the global seaborne iron ore market. Monetary tightening to control inflation in emerging economies such as China has restrained economic growth. In addition, an uncertain policy response to tackle the European sovereign debt crisis has also weakened economic activity. Despite the short term macro-economic uncertainty, medium to long term prospects for iron ore demand remain robust as China's living standards continue to 'catch up' with those in the developed economies. Nevertheless, as China shifts from an investment intensive to consumption driven economy, the rate of growth for steel materials is expected to moderate to a more sustainable level.

While demand is a key driver for pricing, supply constraints also play a crucial role. In the short term, iron ore supply is anticipated to remain tight amid seasonal weather impacts in Brazil and Western Australia, and the government's moves in India to control exports of iron ore. The ongoing challenges faced by producers to deliver new supply is expected to lead to increased capital intensity and will, therefore, underpin the long term pricing outlook. Anglo American's ability to supply iron ore to the market will be enhanced by the ramping up of Kolomela during 2012 and the delivery of the Minas-Rio project in the second half of 2013.

Kumba Iron Ore update

Sishen Supply Agreement arbitration

Sishen Iron Ore Company (SIOC) notified ArcelorMittal South Africa Limited (ArcelorMittal) on 5 February 2010 that it was no longer entitled to receive 6.25 Mtpa of iron ore contract mined by SIOC at cost plus 3% from Sishen mine, as a result of the fact that ArcelorMittal had failed to convert its old order mining rights. This contract mining agreement, concluded in 2001, was premised on ArcelorMittal owning an undivided 21.4% interest in the mineral rights of Sishen mine. As a result of ArcelorMittal's failure to convert its old order mining right, the contract mining agreement automatically lapsed and became inoperative in its entirety as of 1 May 2009.

As a result, a dispute arose between SIOC and ArcelorMittal, which SIOC has referred to arbitration. During 2011, three arbitrators were appointed and May 2012 was set as the date for the arbitration to begin. On 9 December 2011, SIOC and ArcelorMittal agreed to postpone the arbitration until the final resolution of the mining right dispute (see below).

SIOC and ArcelorMittal reached an interim pricing arrangement in respect of the supply of iron ore to ArcelorMittal from the Sishen mine. This interim arrangement endured until 31 July 2011. SIOC and ArcelorMittal agreed to an addendum to the interim supply agreement which extended the terms and conditions of the current interim agreement. The new interim pricing agreement, which is on the same terms and conditions as the first interim pricing agreement, commenced on 1 August 2011 and will endure to 31 July 2012.

21.4% undivided share of the Sishen mine mineral rights

After ArcelorMittal failed to convert its old order rights, SIOC applied for the residual 21.4% mining right previously held by ArcelorMittal and its application was accepted by the Department of Mineral Resources (DMR) on 4 May 2009. A competing application for a prospecting right over the same area was also accepted by the DMR. SIOC objected to this acceptance. Notwithstanding this objection, a prospecting right over the 21.4% interest was granted by the DMR to Imperial Crown Trading 289 (Pty) Limited (ICT). SIOC initiated a review application in the North Gauteng High Court on 21 May 2010 in relation to the decision of the DMR to grant a prospecting right to ICT.

The High Court Review, in which SIOC challenged the award of the 21.4% prospecting right over Sishen mine by the DMR to ICT, was presided over by Judge Raymond Zondo in the North Gauteng High Court in Pretoria, South Africa, from 15 to 18 August 2011.

On 21 December 2011 judgment was delivered in the High Court regarding the status of the mining rights at Sishen mine. The High Court held that, upon the conversion of SIOC's old order mining right relating to the Sishen mine properties in 2008, SIOC became the exclusive holder of a converted mining right for iron ore and quartzite in respect of the Sishen mine properties. The High Court held further that as a consequence, any decision taken by the DMR after such conversion in 2008 to accept or grant any further rights to iron ore at the Sishen mine properties was void. Finally, the High Court reviewed and set aside the decision of the Minister of Mineral Resources or her delegate to grant a prospecting right to ICT relating to iron ore as to a 21.4% share in respect of the Sishen mine properties. On 3 February 2012, both the DMR and ICT submitted applications for leave to appeal against the High Court judgment.

The High Court order does not affect the interim supply agreement between ArcelorMittal and SIOC, which will endure until 31 July 2012 as indicated above.

SIOC will continue to take the necessary steps to protect its shareholders' interests in this regard.

Samancor

A general state of oversupply in the global manganese ore market and high port stocks in China have pushed prices to lower levels of approximately $4.80/mtu CIF China. Demand is expected to slow even further owing to stock utilisation, and short term macro-economic uncertainty.

Alloy prices have also been affected by ongoing macro-economic uncertainty and steel producers minimising stock in the pipeline. This trend is expected to continue in 2012. Prices of manganese ore and alloy are expected to decline further from current levels with a recovery anticipated towards the latter part of 2012.

METALLURGICAL COAL

$ million (unless otherwise stated)	Year ended 31 Dec 2011	Year ended 31 Dec 2010
Operating profit	1,189	780
EBITDA	1,577	1,134
Net operating assets	4,692	4,332
Capital expenditure	695	235
Share of Group operating profit	11%	8%
Share of Group net operating assets	11%	10%

⁽¹⁾ In 2011 Peace River Coal has been reclassified from Other Mining and Industrial to Metallurgical Coal, to align with internal management reporting. Comparatives have been reclassified to align with current year presentation.

Metallurgical Coal's operating profit increased by 52% to a record $1,189 million. Higher realised export selling prices and a strong production recovery in the second half of the year more than offset the impact of rain on production and a strong Australian dollar. Production at the Queensland operations was affected by heavy rainfall and subsequent flooding in late 2010 and in the first quarter of 2011, which resulted in force majeure declarations being in effect until June 2011. Export metallurgical coal production decreased by 9% compared to the prior year, primarily as a result of the impact of these adverse weather conditions, although the business made a strong recovery in the second half of the year, particularly at the open cut operations. Unit costs increased as a result of lower production, the additional costs associated with flood recovery initiatives and the strong Australian dollar.

Markets

Anglo American weighted average achieved FOB prices ($/tonne)	2011	2010
Export metallurgical coal	251	177
Export thermal coal	101	87
Domestic thermal coal	34	33

Attributable sales volumes ('000 tonnes)	2011	2010
Export metallurgical coal	13,983	15,729
Export thermal coal	6,274	6,384
Domestic thermal coal	7,455	8,342

Despite short term macro-economic uncertainties and monetary tightening measures in China impacting steel production in the second half of the year, metallurgical coal supply shortages due to wet weather and industrial disruptions resulted in a strong metallurgical coal market for most of 2011. Record quarterly prices were settled across all metallurgical coal categories in the April to June 2011 quarter, resulting in overall 2011 average prices being well above historical levels.

Anglo American led the metallurgical coal quarterly price settlements in three consecutive quarters during 2011, providing a well-supported market reference for premium hard coking coals and PCI coals. The majority of Anglo American's metallurgical coal sales were placed against term contracts with quarterly negotiated price settlements.

Operating performance

Attributable production ('000 tonnes)	2011	2010
Export metallurgical coal	14,190	15,570
Thermal coal	13,426	14,461

Production declined following Queensland's record rainfall, with floods affecting both the open cut and underground operations. As a consequence, sales of high quality metallurgical coal decreased by 11% to 14.0 Mt for the year. However, successful mitigation actions taken early in the year to recover lost volumes and ongoing asset optimisation improvements led to record run-of-mine production at the open cut operations. For the second half of the year, all metallurgical coal open cut operations set new production records, demonstrating the strong effort to recover from the flooding events. A mitigation programme aimed at reducing the impact of rain at the open cut operations has been completed, which will significantly reduce the impact of such events in the future.

At the underground operations, productivity improvement was a major focus during the year, with the implementation of a structured internal programme to raise the longwall operations' productivity to benchmark levels. The programme also involved partnership agreements with equipment suppliers to establish best-in-class practices. New weekly production records have since been set at both longwall underground operations. Scheduled longwall moves in the second half of the year reduced production below prior year levels, however, a partial drift failure at Moranbah delayed the restart of the longwall following its move.

Optimisation of the entire coal supply chain through streamlined logistics management and new product offerings to customers through blending, continue to deliver significant benefits and value to our customers.

Projects

In December 2011, the development of the $1.7 billion, 5 Mtpa Grosvenor Phase 1 metallurgical coal project was approved. This represents the first phase of our investment programme in Australia to grow our high margin, hard coking coal production. Grosvenor's first development coal will be produced in 2013, with full commercial production expected in 2016. Advanced stage project studies continue at the greenfield projects of Moranbah South, Dartbrook and Drayton South in Australia, and also at Roman in Canada, to achieve our objective of tripling hard coking coal production by 2020 to meet expected growth in demand for both metallurgical and thermal coal.

Negotiations continue on the proposed divestment of the Callide mine as part of Metallurgical Coal's strategy to exit the low margin domestic thermal coal business. Callide primarily supplies domestic power stations in Queensland, producing 8.0 Mt of thermal coal in 2011, with expansion potential from its resource base of more than 800 million tonnes.

Outlook

Metallurgical Coal will be a 100% exporter, with a focus on high margin hard coking coal growth, following the planned divestment of Callide. Sustained productivity increases at both the underground and open cut operations, together with the industry leading expansion plans already announced, will position Anglo American as a leading producer of premium products in a highly attractive market.

In the short term, continuing global economic uncertainty is expected to challenge the recovery of the steel market during 2012. Measures to control inflation in emerging economies such as China and India have restrained economic growth. In addition, an uncertain policy response to tackle the European sovereign debt crisis has also weakened economic activity. Despite the short term macro-economic uncertainty, the medium to long term prospects for metallurgical coal demand remain robust as China and India continue to grow strongly.

In the absence of weather-related disruptions, Australian supply is expected to continue to recover to pre-flooding levels. However, persistent industrial disruptions may impact the full recovery of supply in Australia.

THERMAL COAL

$ million (unless otherwise stated)	Year ended 31 Dec 2011	Year ended 31 Dec 2010
Operating profit	1,230	710
South Africa	775	426
Colombia	482	309
Projects and corporate	(27)	(25)
EBITDA	1,410	872
Net operating assets	1,886	2,111
Capital expenditure	190	274
Share of Group operating profit	11%	7%
Share of Group net operating assets	4%	5%

Thermal Coal generated an operating profit of $1,230 million, representing a 73% increase on 2010, driven by stronger average export thermal coal prices. This was in part offset by industry-wide cost pressures, primarily in labour, fuel and power.

Markets

Anglo American weighted average achieved FOB prices ($/tonne)	2011	2010
RSA export thermal coal	114.27	82.49
RSA domestic thermal coal	21.36	18.42
Colombian export thermal coal	101.01	72.69

Attributable sales volumes ('000 tonnes)	2011	2010
RSA export thermal coal	16,532	16,347
RSA domestic thermal coal	40,136	41,323
Colombian export thermal coal	10,685	10,461

The Asia-Pacific region commenced the year with severe weather interruptions in Australia and Indonesia, disrupting coal exports and driving Newcastle thermal coal FOB prices to a post-2008 high of $136/t⁽¹⁾ during January and averaged $121/t⁽¹⁾ for the year (2010: $99/t⁽¹⁾). The earthquake and tsunami which struck Japan in March damaged the country's Pacific coast coal-fired power plants and transmission infrastructure. Although this event immediately reduced Japan's thermal coal requirements, India and China imported significantly more thermal coal during 2011, some 25% and 15% respectively above 2010 volumes, which increased overall demand in the Asia-Pacific region by approximately 8%. During the final quarter of 2011 the market weakened, as the earlier upsurge in the international thermal coal prices and increased exports from Indonesia softened demand, Australian FOB prices subsequently stabilised in December at $110/t⁽¹⁾.

The Atlantic-Mediterranean region was impacted by the political upheaval and ensuing geo-political tensions that affected several North African and Middle Eastern countries during 2011, which led to an increase in global energy prices and improved thermal coal's competitiveness compared with gas-powered electricity generation. This was a contributing factor to an estimated 8% increase in thermal coal imports into the Atlantic-Mediterranean region during 2011 and added support to South African FOB export prices, which averaged $116/t⁽⁾ for the year (2010: $92/t⁽²⁾). A warm start to the northern hemisphere winter, continued economic uncertainty within Europe and increased exports from the US, Colombia and South Africa adversely affected market sentiment during the fourth quarter. This placed further pressure on seaborne thermal coal prices, which for South African exports settled at $104/t⁽²⁾ FOB during December.

Operating performance

Attributable production ('000 tonnes)	2011	2010
RSA thermal coal	21,388	21,612
RSA Eskom coal	35,296	36,403
Colombian export thermal coal	10,752	10,060

South Africa

Operating profit from South African operations increased by 82% to $775 million, driven by higher export thermal coal prices, although partly offset by the impact of the stronger rand particularly in the first half of the year. Costs were impacted by industry-wide increases in labour, power and fuel, as well as additional stock management costs following train derailments during the first quarter. These were compounded by a 20-day extended maintenance stoppage during May and June 2011 on the railway line to Richards Bay Coal Terminal (RBCT). Export sales volumes were also similarly affected in the first half. However, export sales recovered during the second half of the year as optimised load out efficiencies on the operations complemented improved Transnet Freight Rail performance.

Production for the year decreased by 2% to 57 Mt. Although Zibulo moved from project to operational phase during the fourth quarter of 2011, as a result of some sections opening ahead of schedule. These gains were offset, however, by heavy rainfall in the first quarter that hampered the opencast operations as well as geological issues at certain underground operations. In addition production was impacted by industrial action in the third quarter.

Colombia

At Cerrejón, operating profit of $482 million was 56% higher, primarily due to higher thermal coal prices and production offsetting the impact of above inflation cost increases and a strong local currency. Record production was achieved despite the continuation of the rain-related stoppages associated with the La Niña weather phenomenon. Although rain-related stoppages were approximately double the forecast, there was an improvement from 2010. This improvement, in combination with mining efficiencies and scheduling, enabled Cerrejón to exceed its theoretical production capacity of 32 Mtpa for the first time, resulting in a 7% increase in production year-on-year.

Projects

The 6.6 Mtpa Zibulo mine in South Africa reached commercial operating levels in the fourth quarter of 2011, ahead of schedule.

Also in South Africa, the New Largo Coal Project, currently at feasibility stage, has two main elements: a new opencast mine and a conveyor which will run from an existing coal plant to an Eskom power station. The operation plans to mine domestic thermal coal and Thermal Coal is currently negotiating a coal supply agreement with Eskom for delivery into its Kusile power station. Initial coal from the mine is expected in 2015.

In Colombia, Phase 1 of the Cerrejón P500 expansion project, to increase production by 8 Mtpa, was approved by Cerrejón's three shareholders in the third quarter of 2011. First coal is targeted during the fourth quarter of 2013, with the project expected to achieve full production at the end of 2015. As at the end of 2011, the project was on schedule and on budget.

Outlook

The international seaborne thermal coal market is expected to remain in balance during 2012, as increased supply from the main exporting countries of Australia, Indonesia and Colombia is consumed by the developing Asia-Pacific economies, aided by Japan's recovery from the recent natural disasters. Growth in thermal coal consumption is expected to continue in both China and India reflecting rising energy demand as their economies grow strongly. In Europe, demand for thermal coal is expected to be consistent with 2011, with minimal demand growth in line with forecast weak GDP growth in the region. The Atlantic market is expected to continue to see the impact of strong US thermal coal exports in reaction to the increasing supply of US domestic gas and low US gas prices.

COPPER

$ million (unless otherwise stated)	Year ended 31 Dec 2011	Year ended 31 Dec 2010
Operating profit	2,461	2,817
EBITDA	2,750	3,086
Net operating assets	7,643	6,291
Capital expenditure	1,570	1,530
Share of Group operating profit	22%	29%
Share of Group net operating assets	17%	14%

Copper generated an operating profit of $2,461 million, 13% lower than in 2010. The higher average copper price for the year was more than offset by lower sales volumes and higher operating costs. Higher power and fuel-related costs affected all operations, particularly the Los Bronces operation due to a period of exposure to the elevated marginal cost of power on the central Chilean grid. At Collahuasi, the decision to incur additional logistics costs in order to maximise sales while the Patache port shiploader was being repaired also had an adverse effect on unit costs.

Markets

Average prices	2011	2010
Average prices (LME cash, c/lb)	400	342
Average realised prices (c/lb)	378	355

Copper prices increased strongly during the first half of the year, and reached a record (nominal) high of 460c/lb as demand increased and supply remained constrained. However, as concerns grew over the outlook for the world economy, the price moved off this peak and was more volatile in the second half of the year as Europe's sovereign debt crisis continued to affect sentiment.

After dropping sharply in September, the copper price recovered during subsequent months to end the year at 343c/lb, representing a decrease of 25% from its February high.

For the full year, the realised price averaged 378c/lb, a 6% increase compared with 2010. This included a negative provisional price adjustment for 2011 of $278 million, versus a net positive adjustment in the prior year of $195 million.

Operating performance

	2011	2010
Attributable copper production (tonnes)	599,000	623,300

Total attributable copper production of 599,000 tonnes was 4% lower than in 2010. This was mainly due to lower production from Collahuasi, Mantos Blancos and Mantoverde.

Attributable production at Collahuasi was 10% lower at 199,500 tonnes. The decrease was due to expected lower grades, abnormally high rainfall and heavy snow affecting throughput, and an illegal strike during November. Output at Mantos Blancos and Mantoverde was 8% and 4% lower at 72,100 tonnes and 58,700 tonnes respectively, due to lower grades.

Production at Los Bronces was marginally higher at 221,800 tonnes; the operation benefiting from 19,000 tonnes achieved from the start-up of the expansion project and higher throughput, as a result of asset optimisation initiatives. This increase in production was offset by anticipated lower grades, a temporary failure in a return solutions pipeline impacting copper cathode production, and safety stoppages following a fatal accident in September. Production at El Soldado also increased by 16%, to 46,900 tonnes, owing to higher ore grades following a period of mine development.

The impact on Collahuasi's sales volumes arising from the December 2010 shiploader failure at the Patache port, was successfully overcome in the first half of the year through the implementation of a contingency plan that included shipping copper concentrate through the ports at Arica, Iquique and Antofagasta. The shiploader was repaired and fully operational by July 2011.

Projects

The delivery of first copper production from the Los Bronces expansion was achieved on schedule in the fourth quarter of 2011. The ramp-up period is expected to take 12 months before full production is reached, during which time processing plant throughput will increase from 61,000 tonnes to 148,000 tonnes of ore per day. The expansion will increase the mine's output by an average of 200,000 tonnes of copper per annum over the first 10 years.

At Collahuasi, an expansion project to increase concentrator plant capacity to 150,000 tonnes of ore per day, to yield an additional 19,000 tonnes of copper a year over the estimated life of mine, was commissioned in the fourth quarter of 2011. A further project to raise throughput to 160,000 tonnes of ore per day, resulting in an annual average copper production increment of 20,000 tonnes of copper over the mine's estimated life, is under way and is expected to be commissioned in 2013. A pre-feasibility study is also in progress to evaluate options for the next phases of major expansion at Collahuasi, with potential to increase production to up to 1 Mt of copper a year.

In Peru, Anglo American is focused on obtaining the necessary permits for the Quellaveco project to progress to Board approval. Early-stage work is continuing at the Michiquillay project and drilling relating to the geological exploration programme has recommenced after completion of discussions with the local communities. It is envisaged that the Michiquillay project will move to the pre-feasibility stage following the completion of drilling analysis and orebody modelling.

Activity at the Pebble project in Alaska continues with the focus on completing the pre-feasibility study by late 2012 and targeting production early in the next decade. An environmental baseline document highlighting key scientific and socio-economic data was delivered to government agencies in late 2011.

Outlook

The ramp-up of the Los Bronces expansion to full capacity over the next 12 months will lead to significantly higher production levels. However, this will be partly offset by the lower ore grades expected at Collahuasi in 2012.

Industry-wide input cost pressures are expected to continue over the short term, particularly in relation to power and fuel related costs. However, these will be partially mitigated by the increased production from the expanded Los Bronces operation. Our global supply chain network and strong supplier relationships will continue to play a vital role in identifying opportunities to reduce costs and improve the quality and security of the key services and materials that support our operations.

Persistent market concerns arising from uncertainties over the near term outlook for the global economy will continue to lead to relatively pronounced short term volatility in commodity prices, including copper. Robust demand from the emerging economies, the lack of new supply and increasing capital intensity for new supply, however, means that the medium to long term fundamentals for copper remain strong.

As announced in September 2011, we are participating in a sale process to dispose of our effective 16.8% interest in Palabora Mining Company. A review of this investment in the second half of 2011 concluded that the asset was no longer of sufficient scale to suit the Group's investment strategy.

NICKEL

$ million (unless otherwise stated)	Year ended 31 Dec 2011	Year ended 31 Dec 2010
Operating profit	57	96
EBITDA	84	122
Net operating assets	2,535	2,334
Capital expenditure	398	525
Share of Group operating profit	1%	1%
Share of Group net operating assets	6%	5%

Nickel generated an operating profit of $57 million which was net of $31 million project evaluation operating costs. Loma de Níquel and Codemin's financial performance was similar to that of the previous year.

Markets

Average price (c/lb)

2011

2010

Average market price (LME, cash)

Average realised price

1,035

1,015

989

986

The average market nickel price was 5% higher than in 2010. During the first half of the year the nickel price was supported by demand growth from the stainless steel industry and a supply gap owing to mine disruptions and delays to a number of projects. The price peaked in February above 1,310c/lb.

However, prices softened considerably in the second half, reflecting ongoing concern around uncertainty over the near-term outlook for the global economy, softer summer demand in the northern hemisphere, higher supply from new projects (including Barro Alto) and nickel pig iron (NPI) production. As a consequence, the nickel price fell to a low of less than 770c/lb in November, before closing the year at 829c/lb.

The market was broadly in balance in 2011; global nickel consumption increased by around 7%, while supply increased by around 12%.

China continued to be a key consumer of nickel in 2011, contributing more than 40% of global stainless steel production in the year. Nickel consumption growth in China is expected to outpace other markets in 2012, although the North American market may surprise on the upside, while demand in Europe and the rest of Asia is expected to decrease.

Although NPI was a feature of the Chinese market in early 2011, prices fell significantly enough by the end of the year to have a real impact on NPI run rates, encouraging stainless steel producers in China to switch back to refined metal and ferronickel.

Operating performance

	2011	2010
Attributable nickel production (tonnes)	29,100	20,200

Nickel production in 2011 increased by 44% to 29,100 tonnes as a result of delivery of the Barro Alto project and higher output at Loma de Níquel and Codemin. Barro Alto was commissioned in March 2011 and produced 6,200 tonnes.

Loma de Níquel produced 13,400 tonnes, an increase of 15% over the prior year, mainly due to an additional two months of production from the electric furnace 2, which was restarted in March 2010. The loss of production in 2010 from general power rationing did not recur in 2011; power rationing, however, continues to pose a threat and stand-by on-site generators have been installed to mitigate production risks.

Due to ongoing uncertainty over the renewal of three concessions that expire in 2012 and over the renewal of 13 concessions that have been cancelled, an accelerated depreciation charge of $84 million (2010: $73 million) has been recorded in relation to Loma de Níquel assets. This has been recognised as an operating special item. Refer to note 4 to the Condensed financial statements. A range of scenarios is being considered in respect of the conditions for renewal of Loma de Níquel's three remaining concessions, due in November 2012, and for access to the cancelled concessions.

Codemin's production of 9,500 tonnes was 12% higher than in 2010, when the operation was impacted by the planned relining of a furnace. The impact of lower grades in 2011 was more than offset by process improvements that increased throughput capacity.

Projects

The Barro Alto project delivered first metal on schedule in March 2011 and is expected to reach full capacity rates at the beginning of 2013.

Our Nickel business's promising unapproved projects in Brazil, Jacaré and Morro Sem Boné, have the potential to increase production by more than 66 ktpa, with further upside potential, which would leverage the Group's considerable nickel laterite technical expertise. Jacaré, with Mineral Resources of 3.9 Mt (of which 2.6 Mt are Inferred Resources) of contained nickel, will enter the pre-feasibility study phase in 2012 and has the potential to significantly strengthen Anglo American's position in the worldwide nickel market.

Outlook

Nickel production from the Nickel business unit is expected to be significantly higher in 2012 as a result of the ramp-up of Barro Alto.

The nickel market is expected to be in surplus in 2012, with increasing supply coming on line from new projects. However, there is a possibility that the surplus could be mitigated by supply falling short of expectations, mainly from projects using new technologies, such as high pressure acid leaching. The nickel price in 2012 is expected to be heavily influenced by the delivery of these new projects and the development of the European economic situation. High cost NPI supply will continue to support a price ceiling or floor.

The long term outlook for nickel is positive, underpinned by stainless steel demand driven by economic growth and urbanisation in emerging economies.

PLATINUM

$ million (unless otherwise stated)	Year ended 31 Dec 2011	Year ended 31 Dec 2010
Operating profit	890	837
EBITDA	1,672	1,624
Net operating assets	11,191	13,478
Capital expenditure	970	1,011
Share of Group operating profit	8%	9%
Share of Group net operating assets	25%	31%

Platinum recorded an operating profit of $890 million, a 6% increase, mainly due to an 8% rise in the average realised basket price. This was offset by above inflation labour and power costs.

Sales volumes of refined platinum were 3% higher than 2010 at 2.6 million ounces.

Markets

The average dollar realised price for platinum was $1,707 per ounce in 2011, a 6% increase compared with $1,611 per ounce in the prior year. The average realised prices for palladium and rhodium sales were $735 per ounce (2010: $507) and $2,015 per ounce (2010: $2,424), respectively. The average realised price on nickel sales was $10.50 per pound (2010: $9.70). The overall average realised dollar basket price was 8.3% higher at $2,698 per platinum ounce sold.

The global platinum market displayed resilience in 2011 with muted growth in autocatalyst and jewellery demand, a strong increase in industrial demand and significantly lower investment demand. Gross platinum demand remained unchanged in 2011 while a small increase in recycling and a 5% increase in mined supply resulted in the platinum market in 2011 remaining in balance.

The palladium market in 2011, however, saw a 19% supply surplus in the year, as significant declines in jewellery and investment demand were only partly offset by the solid increases in demand for palladium in autocatalysis and industrial applications. The rhodium market saw its fourth consecutive surplus as recycle volumes remained high.

Platinum continued to work with industry partners and stakeholders to develop the platinum markets to maintain existing, and develop new industrial applications and through Platinum Guild International, maintain the health of jewellery markets.

Autocatalysts

Demand for light vehicles increased by 1% in 2011 to 75 million units. Vehicle production was constrained by the earthquake and tsunami in Japan and by flooding in Thailand. Vehicle production in Europe increased by 3%, buoyed by Germany and export markets. Gross autocatalyst demand for platinum increased by 2% to 3.15 million ounces and for palladium by 5% to 5.8 million ounces. Autocatalyst demand for rhodium was slightly lower year-on-year at 705,000 ounces.

Industrial

Gross industrial demand for platinum reached a new record high of 1.96 million ounces, largely due to growth in the glass and petroleum industry. Wider application of process catalysts in the chemical industry saw platinum demand increase proportionately higher than the corresponding increase in chemical demand. High fuel cell unit growth driven by competitive stationary applications continued in 2011. Palladium process catalyst use for plastic bottle feedstock increased as new capacity increased. Rhodium content in rhodium/ platinum catalysts for glass manufacturing increased owing to low rhodium price levels.

Jewellery

Platinum jewellery demand increased 2% in 2011, despite higher average prices during the year. Platinum and gold price volatility increased in the last quarter of 2011 and the platinum price fell to below that of gold. Increased platinum demand resulted from consumer preference over gold and in China the increased platinum demand improved retail profits, leading to an increase in the number of new retail stores, increasing platinum stockholding and sales.

Investment

Ongoing macro-economic uncertainty continues to dampen investment sentiment and in the last quarter of 2011, platinum and gold suffered the consequences of the risk averse trades by global investment and hedge funds. Although there was little change in physical demand for platinum, the increased platinum trading liquidity greatly exaggerated the consequent fall in the platinum price. Since then reduced investor participation, particularly by gold investors who previously held both metals, continues to keep the platinum price at depressed levels, with the rand basket price currently below the incentive price of the majority of production. Trade in non-visible or over-the-counter metal continues to have a material impact on short term prices and higher levels of price volatility is expected in 2012, with a bias to higher prices if investment sentiment improves.

Operating performance

Safety

Twelve employees lost their lives during the year, a very disappointing performance. We extend our sincere condolences to their families, friends and colleagues. Platinum had 81 Section 54 Department of Mineral Resources safety stoppages in 2011 compared to 36 in 2010. Platinum is continuing to work with government and labour departments towards zero harm.

Production

Equivalent refined platinum production (equivalent ounces are mined ounces expressed as refined ounces) from the mines managed by Platinum and its joint venture partners for 2011 totalled 2.41 million ounces, a decrease of 3% compared to 2010.

Wholly owned mines (including Union and Western Limb Tailings Retreatment) produced 1,601,600 equivalent refined platinum ounces, in line with the prior year. A strong performance from Mogalakwena and Unki was offset by lower volumes from the Rustenburg, Tumela and Dishaba mines. Unki was delivered successfully, on schedule and within budget, in January 2011 and contributed 51,600 additional equivalent refined platinum ounces. In addition, Mogalakwena, a low cost, open-pit mine continued to perform strongly. Mogalakwena mine increased production by 18% due to a 12% improvement in 4E built-up head grade, a 4% increase in tonnes milled and a 16% improvement in recoveries at North concentrator during the second half of 2011.

Refined platinum production of 2.53 million ounces for 2011, was 2% lower than the prior year.

Projects

Capital expenditure for 2011 was $970 million, of which $451 million was spent on projects, $443 million on stay-in-business capital and $76 million on waste stripping at Mogalakwena.

Project capital expenditure for 2011 related mainly to the Twickenham project ($95 million), Mortimer furnace upgrade ($58 million), Thembelani 2 shaft replacement project ($57 million), Unki ($40 million), the Base Metals Refinery 33,000 tonnes nickel expansion project ($34 million), and the Khuseleka ore replacement project ($25 million).

The Unki Platinum Mine Project was handed over to operations in January 2011 and has reached steady state production of 120,000 tonnes milled per month during the fourth quarter of 2011, a year ahead of schedule. The Base Metal Refinery 33,000 tonnes nickel expansion project has produced its first metal in line with expectations and reached steady state production during the fourth quarter of 2011 as planned.

Outlook

Growth in platinum demand is expected to be driven by increased global vehicle production, ongoing tightening of emissions legislation and strengthening jewellery demand. Primary supply challenges are expected to escalate during 2012, with increased risk of supply disruptions from power shortages, industrial actions and safety stoppages in South Africa. The ongoing constraint on capital investment posed by low prices continues to limit South African output growth and 2012 may exhibit the compounding effects of similar capital constraints in recent years.

Consequently, Platinum expects the platinum market to remain in balance in 2012. We believe the expected growth in platinum demand and the ongoing challenges faced by platinum miners will be key drivers of the recovery in the platinum price in 2012. Platinum plans to refine and sell between 2.5 and 2.6 million ounces of platinum in 2012, subject to market conditions. In 2011, Platinum had forecast growth to 2.7 million ounces of platinum in 2012, however, given the current circumstances, the forecast has been reduced. Although the 2012 sales volume target is unchanged from that achieved in 2011, Platinum believe this is an appropriate level to meet forecast demand.

Platinum maintains a relentless focus on mitigating industry-wide cost pressures, primarily through an increase in production volume from our underground mines, increase in utilisation of smelting and refining capacity through the introduction of some secondary material, reduction of redundant labour through mechanisms that avoid retrenchment, adjustment of overhead and shared services labour to the needs of the business, freezing of all recruitment in non-production jobs and the continued focus on asset optimisation and supply chain management, benefiting from Anglo American's global initiatives.

Platinum's project ranking and prioritisation to focus on less capital intensive projects in the near term, is expected to reduce capital expenditure for 2012 from $1.16 billion to up to $1.10 billion, excluding capitalised interest.

DIAMONDS

$ million (unless otherwise stated)	Year ended 31 Dec 2011	Year ended 31 Dec 2010
Share of associate's operating profit	659	495
EBITDA	794	666
Group's associate investment in De Beers⁽¹⁾	2,230	1,936
Share of Group operating profit	6%	5%

⁽¹⁾Excludes outstanding loans owed by De Beers, including accrued interest of $301 million (2010: $355 million).

Anglo American's share of operating profit from De Beers totalled $659 million, an increase of 33%, reflecting De Beers' deliberate and targeted approach to maximise margins and capture the full benefit of significant price growth in 2011.

On 4 November, Anglo American announced its intention to acquire the Oppenheimer family's entire 40% interest in De Beers for $5.1 billion cash. Under the terms of the existing shareholders' agreement between Anglo American, CHL Holdings Ltd (representing the Oppenheimer family) (CHL) and the Government of Botswana (GRB), the GRB has a pre-emption right in respect of a pro rata portion of the CHL's interest in De Beers, enabling it to participate in the transaction and to increase its interest in De Beers, on a pro rata basis, to up to 25%. In the event that the GRB exercises its pre-emption rights in full, under the proposed transaction, Anglo American would acquire an incremental 30% interest in De Beers, taking its total interest to 75%, and the consideration payable by Anglo American to CHL would be proportionately reduced.

Markets

In 2011, the Diamond Trading Company (DTC) achieved its second highest ever level of sales ($6.5 billion), a 27% increase over the prior year (2010: $5.1 billion). The first half of the year saw exceptional consumer demand growth which, when coupled with lower than historical levels of global diamond production, resulted in very strong polished and rough diamond price growth. While reflecting the robust market fundamentals, rough diamond prices in this period included an element of speculative buying in the trading centres.

During the second half of the year, both retail and cutting centre sentiment was impacted by the challenging macro-economic environment, restricted liquidity in the cutting centres and a slowdown in the rate of growth of consumer demand at retail. As a result, De Beers experienced lower levels of demand for its rough diamonds and prices receded slightly from the highs seen in the middle of the year. However, in total, 2011 was a very strong year on the demand side, with record levels of consumer demand growth estimated at between 11% and 13% over the full year, and DTC price growth of 29% from 1 January 2011 to 31 December 2011.

De Beers Diamond Jewellers reported good growth in sales across all regions, with Greater China particularly strong. The China opportunity is a priority for De Beers, with further 2012 expansion plans following the opening of stores in Beijing, Tianjin, Dalian and a second Hong Kong store in 2011. Forevermark continued its expansion both in its existing markets of China, Hong Kong and Japan, and in the second half of the year launched in India and the US. Forevermark is now available in 658 retail stores across nine markets, an increase of 89% compared with 2010.

Operating performance

De Beers reported an LTIFR of 0.15 (2010: 0.24) but, regrettably, there were seven loss of life incidents in the year. Comprehensive safety reviews are being carried out at all De Beers operations.

De Beers' production was 5% lower than the prior year at 31.3 million carats (2010: 33.0 million carats). During the first half of the year, in spite of a number of challenges, including heavy rainfall in southern Africa, maintenance backlogs, poor contractor performance, skills shortages, and protracted labour negotiations, De Beers produced 15.5 million carats, in line with the first half of 2010 (15.4 million carats). During the second half of the year, De Beers produced another 15.8 million carats despite a shift in its operational focus, in light of prevailing rough diamond market trends in the fourth quarter. De Beers utilised this period to address maintenance and waste stripping backlogs in order to better position the mines to increase their rate of production as demand from Sightholders increases. This is likely to continue for several months into 2012.

In 2011, De Beers Exploration spent $40 million (2010: $43 million) on work programmes focused on 11,347 km² of ground-holdings in Angola, Canada, India, Botswana and South Africa, supported by laboratory and technical services centralised in South Africa.

A new $2 billion multicurrency international credit facility was concluded in October, comprising an $800 million term loan and a $1.2 billion revolving credit facility with tenors of March 2015 and October 2016 respectively.

Projects and restructuring

Debswana's Jwaneng Mine Cut-8 extension project is progressing satisfactorily, largely on schedule and on budget. More than 40 million tons of waste has been stripped to date, and infrastructure construction is over 90% complete, with the remaining work forecast to be completed during 2012.

The underground feasibility study to extend the life of Venetia Mine in South Africa is underway, and scheduled for consideration by the De Beers Consolidated Mines (DBCM) board in 2012.

De Beers Canada completed an Optimisation Study at Snap Lake Mine in mid-2011, securing a mining solution to economically access this promising long life but challenging orebody, and thereby achieve its forecast 20-year life of mine. Per the NI 43-101 Technical Report issued by Mountain Province Diamonds Inc. in 2010, Gahcho Kué (GK) is identified as commencing in 2013 with production from 2015. The GK Environmental Impact Statement has been submitted and the review process is currently underway and ultimately the final project schedule will be dependent on progress with obtaining environmental permits and regulatory approvals.

In September, DBCM completed the sale of Finsch Mine, as a going concern, to a Petra Diamonds-led consortium for a consideration of R1.425 billion ($210 million), plus assumption of rehabilitation liabilities. In May, DBCM announced that it had entered into an agreement to sell Namaqualand Mines to Trans Hex in a transaction valued at R225 million ($33.5 million), subject to the fulfilment of a number of conditions precedent.

In September, a new 10 year contract for the sorting, valuing and sales of Debswana's diamond production was announced by De Beers and its joint venture partner, the GRB. As part of the agreement, De Beers will transfer its London-based rough diamond aggregation and sales activity to Botswana by the end of 2013. From its new base in Botswana, the DTC will aggregate production from De Beers' mines and its joint venture operations worldwide, and sell to local and international Sightholders.

In November, De Beers and the Government of the Republic of Namibia (GRN) finalised an agreement to increase the GRN's effective shareholding in De Beers Marine Namibia from 15% to 50% through the establishment of a new 50:50 joint venture holding company. This will not change current marketing arrangements and all diamond production from Namdeb will continue to be sorted, valued and marketed exclusively by the DTC together with Namibia DTC.

In December, the DTC announced the provisional qualification of 72 Sightholder applicants for the upcoming Supplier of Choice sales contract period, which begins on 31 March 2012 and runs to 30 March 2015.

Outlook

In spite of uncertainty, and barring a global economic shock, continued growth in global diamond jewellery sales is expected, albeit at lower levels than the growth experienced in 2011. This will be driven by the overall strength of the luxury goods market, improving sentiment in the US (the largest diamond jewellery market), continuing growth in China, and the positive impact of the 2011 polished price growth on retail jewellery prices.

On the production front, De Beers will continue to prioritise waste stripping and maintenance backlogs, and we therefore do not expect a material increase in carat production in 2012. This focus, which began in the second half of 2011 and will continue during the first quarter of 2012, will position De Beers to ramp-up profitable carat production as Sightholder demand dictates. In the medium to longer term, the industry fundamentals remain positive with consumer demand, fuelled by the emerging markets of China and India, outpacing what will likely be level carat production.

OTHER MINING AND INDUSTRIAL

$ million (unless otherwise stated)	Year ended 31 Dec 2011	Year ended 31 Dec 2010
Operating profit	195	664
Copebrás	136	81
Catalão	54	67
Tarmac	(35)	48
Scaw Metals	40	170
Zinc	20	321
Other	(20)	(23)
EBITDA	393	894
Net operating assets	3,201	3,393
Capital expenditure	152	206
Share of Group operating profit	2%	7%
Share of Group net operating assets	7%	8%

⁽¹⁾ Catalão and Copebrás, reported in the Other Mining and Industrial segment, are now considered core to the Group. Tarmac and Scaw, which were identified for divestment as part of the restructuring programme announced in October 2009, remain non-core to the Group. Until February 2011, this reporting segment also included the zinc operations. In 2011 Peace River Coal has been reclassified from Other Mining and Industrial to Metallurgical Coal, to align with internal management reporting. Comparatives have been reclassified to align with current year presentation.

Other Mining and Industrial - Copebrás and Catalão

Markets

Copebrás

Phosphate sales increased by 24% in 2011, as a result of strong domestic demand early in the year due to the 'mini crop' (a smaller secondary crop, mainly corn, grown in the first half of the year), demand for fertilizers by sugar cane farmers and farmers purchasing fertilizer ahead of the summer crop as a result of competitive fertilizer prices relative to grain prices.

The balance between supply and demand for phosphates tightened further through the year owing to reduced supplies from China and Saudi Arabia; this contributed to the average phosphates price for the year increasing to $700/t (2010: $510/t). From October, however, grain prices started declining from their peak on the back of continuing global economic uncertainty, taking fertilizer prices with them, which led to lower demand for both.

For the year as a whole, fertilizer sales totalled 955.7 kt, 4.2% below 2010. Dicalcium Phosphates (DCP) sales were 124.5 kt, in line with 2010, while phosphoric acid sales were 4.8% higher at 100.2 kt.

Catalão

Niobium demand and prices have remained generally stable, notwithstanding volatility across world markets and uncertainty about the global economy, particularly the sovereign debt situation in Europe and the lacklustre pace of economic recovery in the US.

As an alloying agent, niobium brings unique properties to steels, such as increased formability, corrosion resistance, weldability and strength under tough working environments including extreme high or low temperatures. Such steels are known as High Strength Low Alloy (HSLA) steels. Around 90% of total world niobium consumption is used as an alloying element, in the form of ferro-niobium in high strength steels, such steels being used in the manufacture of automobiles, ships, high pressure pipelines, as well as in the petroleum and construction industries. The product is exported to the main steel plants in Europe, the US and Asia.

In 2011, world crude steel production rose by 6.8% to reach a record 1,527 Mt. Total demand for niobium rose in tandem to more than 70 kt of Nb content in FeNb form for 2011, which eclipsed the previous record figure of 65.8 kt achieved in 2008.

Operating performance

Copebrás

Copebrás generated an operating profit of $136 million, representing a 68% increase on the previous year. This performance reflected higher international and local market prices, coupled with operational gains from asset optimisation initiatives in particular. The strong performance was partially offset by increased input costs, particularly from sulphur and ammonia, combined with the strengthening of the Brazilian currency.

Catalão

Catalão's operating profit declined by 19% to $54 million. The company's financial performance was negatively affected by lower production and sales volumes, higher costs related to Catalão's reintegration into the Anglo American Group, local inflationary pressures, and the impact of the Brazilian currency's appreciation against the dollar.

Production for the year of 3,900 tonnes represented a 3% decline (2010: 4,000 tonnes) following a significant change of production profile as the mine advanced further into the transition ore between weathered material and unoxidised ore, resulting in lower Nb recoveries. Set against this, improvements in the concentration and metallurgy processes at the Boa Vista plant led to higher recoveries. This, combined with higher average grades, and the inclusion of the Copebrás tailing from Mine 2, with its higher contained Nb grade, allowed Catalão to offset the impact of the transition ore.

Projects

Copebrás

A debottlenecking project, designed to increase capacity of Granulated Mono-Ammonium Phosphate (MAP) by 60 kt and of DCP by 25 kt by 2015, is under review. The project is estimated to increase annual EBITDA by more than $35 million, through increased capacity and cost savings.

Given the phosphate market's sound fundamentals, the original Goiás 2 expansion project undertaken in 2008 and designed to increase phosphate production by more than 100%, may be re-assessed from a different product-mix perspective

Catalão

The Boa Vista Fresh Rock (BVFR) Project was approved in October. The existing plant will be adapted to process new rock instead of oxidised ore, leading to an increase in production capacity to approximately 6.5 kt of Nb per year from the current 3.8 kt.

Outlook

Copebrás

Prices for agricultural commodities in Brazil remain at healthy levels, resulting in good margins for farmers. Although international fertilizer prices softened towards the end of the year owing to the global economic uncertainty, they remain relatively high.

Nonetheless, the uncertain global economic outlook affected demand in the Brazilian market late in the year, as farmers decided to postpone purchasing fertilizer. Prospects are, however, positive and the current higher inventories of imported fertilizers may preclude further imports early in 2012, improving the overall dynamics for domestic fertilizers later in the year.

Catalão

Despite the record levels of sales and prices in 2011, growth rates for niobium are likely to remain capped worldwide in the near term. The European sovereign debt crisis is likely to have a significant negative bearing on sales to Europe.

In the short term, additional niobium sales are likely to be diverted on a spot basis to China and, to lesser extent, to the US. Prices are expected to come under pressure from a stronger Brazilian real and the uncertain economic outlook in Europe and North America.

Other Mining and Industrial - Tarmac and Scaw

Tarmac

Tarmac reported an operating loss of $35 million, compared to a profit of $48 million in 2010. On a directly comparable basis, however, taking into consideration the impact of European businesses that were sold in 2010, Tarmac's operating profit showed a reduction of $55 million. Tarmac's directly comparable EBITDA performance was 32% lower.

Quarry materials

Asphalt volumes benefited from carry-over of demand resulting from the severe weather at the end of 2010, as well as some continuing government infrastructure investment, particularly in respect of Local Authority road maintenance. In comparison to 2010, concrete volumes decreased reflecting a reduction in demand from major projects such as the Olympic Village and Gatwick Airport, and reduced housing and other building expenditure. Cement production levels improved over 2010 as a result of the ongoing efficiency programme. Management efforts continue to be focused on mitigating the significant impact of rising input costs, in particular hydrocarbons, through initiatives such as increasing the use of recycled asphalt materials to recapture bitumen.

The outlook for the year ahead remains uncertain and dependent to a large extent upon the UK government's response to weak domestic growth and wider economic uncertainty across the Euro zone. Against this background, volume declines are anticipated across major product categories in 2012, reflecting announced reductions in public sector spending, exacerbated by declining private sector spending. The proposed UK JV with Lafarge is proceeding through the required regulatory processes.

Building products

Performance was severely impacted by the closure of the Precast business, one-off non-recurring separation costs and the continuing decline in housing, retail and commercial markets, which affected all products. Volumes suffered as a consequence of both the general market decline and a competitive pricing environment, where customers and competitors remain more focused on price and less on other value drivers.

Cost-reduction initiatives remain a high priority. Several key projects are also under way to enhance quality and improve customer service.

The underlying market outlook continues to remain challenging in the short term.

Scaw Metals

Scaw Metals generated an operating profit of $40 million, a 76% decrease compared with 2010, largely as a result of the sale of Moly-Cop and AltaSteel that was concluded in December 2010. On a directly comparable basis, however, taking into consideration the impact of the sale of Moly-Cop and AltaSteel in 2010, Scaw Metals' operating profit showed a reduction of $23 million. Scaw Metals' directly comparable EBITDA performance was 24% lower.

A strong performance was recorded by Grinding Media in spite of margin pressure owing to the strong rand. At Wire Rod Products, performance improved on the back of strong demand for offshore and mining products and improved business efficiencies. At Rolled Products, performance was affected by weak demand from the construction sector and selling prices not fully recovering rising input costs, resulting in reduced margins. At Cast Products, a number of foundries suffered from a lack of demand for larger castings in the year, as well as a strong rand, significantly impacting the business' results. The situation improved towards the end of the year as the demand for railway, power generation and general engineering components saw the securing of important orders for the forthcoming year. A strong focus by management on cost-saving initiatives in all operations and sales to downstream businesses has mitigated the effects of weak margins. In addition, the closure of loss-making operations and a focus on pursuing new markets with higher margins has enabled Scaw Metals to lessen the impact of weak economic conditions. Total production of steel products at Scaw South Africa was 677.4 kt, a decrease of 5% over the prior year.

Please click on the link to read the Anglo American FY11 Preliminary Results announcement:

http://www.rns-pdf.londonstockexchange.com/rns/6042X_1-2012-2-16.pdf

This information is provided by RNS

The company news service from the London Stock Exchange

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