Memorandum of Understanding

Anglo American PLC
17 December 2002


The Government of the Republic of South Africa ("the Government"), through the
Departments of Trade and Industry  ("DTI"), Public Enterprises ("DPE") and
Minerals and Energy Affairs ("DMEA") and Anglo American Corporation of South
Africa Limited ("Anglo American") announce the signing of a Memorandum Of
Understanding ("MOU") regarding the Kalahari Iron Ore resource.


1.      Introduction



The Government and Anglo American are pleased to announce the signing of an MOU
regarding the development of the Kalahari iron ore resource in the Northern Cape
region.



Alec Erwin, the Minister of Trade and Industry, said "the Government wishes to
ensure that the iron ore resources and supporting infrastructure in the Kalahari
region are developed to their full potential in a globally competitive manner
and recognises that any such development needs to be carried out in an
environmentally sensitive manner and in accordance with the recently agreed
Broad Based Socio Economic Charter."



Anglo American shares the vision of the Government and both parties wish to
co-operate with each other to give effect to this common vision.





2.      Objectives of the partnership



Anglo American has sought to strengthen its existing mining interests with a
considerable initial investment in the iron ore sector, by virtue of its
recently acquired shareholdings in both Kumba Resources Limited ("Kumba") and
Anglovaal Mining Limited ("Avmin") which holds 50.3% of Assmang Limited 
("Assmang"). Together Kumba and Assmang manage a substantial portion of the
Kalahari iron ore assets. The Government, through the IDC holds 14% of Kumba and
through Transnet, owns and operates the Orex railway line (owner of the Sishen
Saldanha railway line) and related port facilities in Saldanha which are
primarily utilised by the Kalahari iron ore industry.



Anglo American and Government wish to co-operate with each other to establish a
public private partnership to ensure that the iron ore resources and supporting
infrastructure in the Kalahari region are developed to their full potential.



Furthermore the partnership's objectives are to:



•         Create a framework within which the partners will co-operate to
develop the iron ore and related assets in the Northern Cape region on a
globally competitive basis to their full potential;

•         Co-operate within this framework to:

-        optimise the production and beneficiation of the Northern Cape iron ore
deposits;

-        optimise associated infrastructure investment to achieve Government's
developmental objectives and both parties logistical cost reduction objectives;

-        create opportunities at different levels within the broad framework of
the Northern Cape iron ore assets to facilitate participation by appropriate
partners in meaningful and sustainable empowerment initiatives, in terms of the
Broad Based Socio Economic Charter;

-        maximise local procurement where it is practical to do so;

-        develop the skills of, and work towards the upliftment of, people in
the Northem Cape region and the Kgalagadi region in particular, in a structured
manner taking account of the Broad Based Socio Economic Charter and Local
Economic Development initiatives that involve amongst others, national and local
government; and

-        approach environmental matters in an appropriate manner.



•         Use their position to ensure that the corporate entities which own or
operate the Northern Cape iron ore assets will maintain their head office in
South Africa and maintain or establish their primary listing on the JSE
Securities Exchange S.A.



Jeff Radebe, Minister of Public Enterprises is confident that "there is major
potential for the Orex line, Saldanha port facilities and the Postmasburg to
Coega and associated port facilities to make a significant contribution to the
global competitiveness of the iron ore industry in South Africa".





3.      Timing



The partners will work together with immediate effect to achieve the objectives
of the partnership within a reasonable time frame.



A two stage approach has been agreed where the first stage will focus on
unlocking the full potential of the Northern Cape iron ore assets' and the
second stage on optimising the Orex line and Saldanha Port facilities.





4.      Conclusion



Tony Trahar, Chief Executive of Anglo American said "Anglo American is fully
committed to achieving the objectives outlined in the MOU, using its financial
and technical resources to work with all stakeholders to develop the Kalahari
iron ore mines and supporting infrastructure and to create a globally
competitive iron ore industry within the parameters of the Broad Based Socio
Economic Charter."



The Minister of Mineral and Energy Affairs, Phumzile Mlambo-Ngcuka, commented 
"this MOU outlines Government's dedication to create a globally competitive
mining industry that draws on the human and financial resources of all South
Africa's people and offers real benefits to all South Africans."





Cape Town

17 December 2002











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