AGM Statement

Anglo American PLC
21 April 2004


News Release

21 April 2004


                Anglo American plc - Annual General Meeting 2004
         Address to shareholders by the Chairman and Chief Executive




At Anglo American plc's Annual General Meeting for shareholders in London today
(21 April 2004), Sir Mark Moody-Stuart, Chairman, and Tony Trahar, Chief
Executive, made the following remarks:



Sir Mark Moody-Stuart:

"2003 was my first full year as your Chairman. It was a year of considerable
uncertainty with international relations being dominated by the war in Iraq and
its aftermath.  This uncertainty was mirrored in the economy.  By the end of the
year, however, there was significantly greater confidence with a strengthening
of the US, and to a lesser extent Japanese, economies and continuing vibrant
growth in China.



For Anglo American, the defining feature of the macro-economic climate was the
relative weakness of the US Dollar and the notable strength of the South African
Rand.



Last year, I commented on the success of our management team in transforming the
Company since its London listing in 1999 from an essentially South African
conglomerate into a global, focussed, mining and natural resource business. Last
year this rebalancing was put to the test.



The South African export based businesses had to cope with the adverse impact of
the strength of the rand, but even so, Group earnings showed only a slight
year-on-year dip as our stake in De Beers - which we increased by over a third
to 45% in 2001 - and the most European of our business units - Paper and
Packaging and Tarmac - both returned strong performances. These results validate
our strategy of geographical and product diversity.



At last year's AGM I announced how your Board had agreed to distribute key
committee chairmanships, in response to the recommendations of the Higgs Report.
  This apportionment has worked well.



In December 2003, we were also delighted to recruit to the Board, Dr Maria
Silvia Bastos Marques.  Dr Marques brings extensive experience of the metals
industry, valuable perspectives on Latin America - an area of increasing
importance to our Base Metals, Gold and Coal businesses - and she is also the
first woman to join the Board.



Dr Marques' appointment brings Board membership to 15; consisting, excluding
myself, of seven independent Non-Executives, four Executive Directors and three
Non-Executives whom we accept as not being fully independent.  We have increased
the scope of the induction and support for updating and refreshing skills and
knowledge which we provide for Non-Executive Directors and have introduced
evaluation of Board members' performance - including my own.



During 2003 I had the opportunity to visit operations representative of almost
all our business groups in nine countries. I was impressed by the commitment and
dedication of our people of many nationalities and backgrounds to the Anglo
values and to the task of delivering high quality performance. I should like to
thank them on your behalf for that dedication.



One of my activities in the second half of 2003 was to serve on an advisory
group to Dr Emil Salim who has been conducting a review of the World Bank's
involvement in the extractive industries.



The core of the critique of those who believe that the Bank should not be
involved in the mining, oil or gas sector is the concept of the so-called
'resource curse'.



In his Report Dr Salim accepts that the Bank should remain engaged in the sector
but suggests imposing so many qualifications and conditions that the net effect
would be a virtual disengagement from, and a lessening of the Bank's positive
influence on performance standards within the industry and equally importantly
on host governments whose policies and practices are critical to ensuring
sustainable development.



There is common ground between the industry and Dr Salim about ways in which the
Bank's national programmes could be better integrated; about the need for human
rights policies; and about the necessity of establishing equitable relations
with communities in whose areas we operate. These relations need to be based on
openness and a feeling that our operations bring overall benefits. Transparency
is a key to this and that is why we in Anglo American have been prominent in our
support of the UK Government's Extractive Industries Transparency Initiative. We
will continue to work with the Bank other members of our industry and civil
society organisations on practical ways forward.



Although the IFC is a minority partner in some of our projects, Anglo American
will probably not be impacted materially by the conclusions of the Review.
Moreover, I suspect that the Bank will steer a middle course between its own
internal evaluation and Dr Salim's findings.  But the reason for my having
devoted some time to this topic today, is that it illustrates the need for
resource companies both to communicate better the benefit that we create and
also to ensure that we maximise our positive developmental contributions in the
emerging markets where we work.  We need, in short, to show that natural
resources can be a blessing rather than a curse.



Anglo American has, I believe, developed a significant competitive advantage in
this respect in a number of areas such as the experience gained by our Anglo
Zimele small business development unit in South Africa, our recently introduced
Socio-Economic Assessment Toolbox - or SEAT process - to support mature
operations in improving their interaction with communities, and the seriousness
with which the Company is addressing the sustainable development agenda. I think
it important to stress that for Anglo American and others in the sector, issues
of corporate responsibility are fundamental to our business, to our access to
resources and to our long-term licence to operate.



Lastly, a week ago we have seen South Africa's third democratic election proceed
smoothly. It is clear that after ten years of democracy the institutions of
society in that country are growing robustly and healthily in a way that has
rightly attracted much positive attention from around the world. Although it is
the general policy of Anglo American not to give party political donations, your
board decided that it should make an exception at this juncture in South
Africa's democratic transition. Accordingly a donation of six million Rand was
divided equally between on the one hand the African National Congress as the
ruling party enjoying majority electoral support and on the other hand the
various other parties including the Democratic Alliance as the official
opposition. These donations were announced publicly when they were made.



I now invite our Chief Executive, Mr Tony Trahar, to present a review of 2003
and to highlight the key challenges in the current year."



Tony Trahar:

"Thank you Chairman.  Good morning ladies and gentlemen.



Although the year finished on a more optimistic note, 2003 was, for the most
part, defined by its fragility.  Exchange rates played a key role with the Rand
strengthening more than any other major currency against the US Dollar for the
second year running.   Since our production costs are denominated in domestic
currency and our sales in US Dollars, and previous currency weakness had
resulted in a surge in domestic inflation, this applied an almost unprecedented
squeeze to the earnings of our South African and Australian operations.



Against this background, I am pleased to report that in 2003 Anglo American
achieved headline earnings of $1.694 billion - and earnings per share of 120
cents - down 4%.   The recommended final dividend of 39 cents, if approved, will
bring our total for the year to 54 cents per share - an increase of 6% which
reflects the Board's confidence in the improving outlook for our business.



Turnover increased by 22% to $25 billion.  2003 was another year of strong cash
flow, with cash generation (EBITDA) virtually unchanged at $4.785 billion.

During 2003 we achieved cost savings of $335 million - compared with a target of
$200 million as part of our continuing drive to improve efficiency and returns.
In 2004 we are targeting further savings in excess of $250 million.



Strategy

Our strategy is to achieve steady growth for shareholders across the cycle by
investing in acquisitions at prices capable of creating value and by developing
attractive greenfield and brownfield projects.



Since we established our primary listing in London we have sought to:

  • Dispose of non-core or under performing assets;
  • Strengthen our asset base; and to
  • Achieve better geographical balance in our portfolio.



In pursuit of this strategy since 1999 we have acquired some $12 billion of new
core assets and realised $8 billion from sales of non-core assets.  In recent
months we have disposed of the remainder of our stake in First Rand and, at the
end of March, sold our 20% stake in Goldfields for $1.16 billion.  We achieved a
$480 million profit on this disposal.



Strategically, the most important development of 2003 was our acquisition of a
controlling stake - currently standing at around two-thirds - of the world's
fifth largest iron ore producer Kumba Resources.  This marked the realisation of
our long-standing objective of securing a substantial presence in the iron ore
market with a base for further expansion in due course.



Other significant acquisitions in 2003 include purchases in continental Europe
and China for our Industrial Minerals business unit and assets in Europe, Mexico
and China for Anglo Paper and Packaging.  We also increased our holdings in
Anglo Platinum and AngloGold.



Recently, we have announced the acquisition of the outstanding 30% minority
stake in Frantschach - a major element in our European packaging portfolio.



The largest Group transaction announced in 2003 was the proposed merger between
AngloGold and Ashanti Goldfields.  This merger has now received all outstanding
shareholder approvals, including the full support of the Government of Ghana.
Completion of the transaction next month will allow initial evaluation of the
Obuasi Deeps project to commence.



We apply demanding standards to any acquisition proposal and have been prepared
to walk away if we felt that the price would not allow an acceptable return to
be made for our shareholders.  The EBITDA cash flow returns on our key
acquisitions of Minera Sur Andes (formerly known as Disputada) in Chile,
Cerrejon Coal in Colombia, Shell Coal in Australia, Syktyvkar in Russia and
Tarmac in the UK range between 16% and 23%. The Minera Sur Andes purchase, made
from Exxon at the end of 2002, has been particularly satisfactory since the
projected synergies have been exceeded; the operations have been earnings
accretive in their first year; significant additional reserves of copper ore
have been identified; and the recent surge in the copper price is resulting in
substantial cash generation.



Black Economic Empowerment

In South Africa the Minerals and Petroleum Resources Development Act is expected
to be promulgated in early May.  The five year period during which old order
mining rights must be converted to new order rights will then commence.  Anglo's
mining operations are working closely with the South African Government to
ensure that the transition proceeds smoothly.  We are confident that we are
making satisfactory progress towards meeting the various requirements of the
Mining Charter in such areas as ownership and control, employment equity,
procurement, social investment and so on.



A second draft of the Royalty Bill is expected to be made available by the South
African Treasury later this year for consultation before proceeding to the
Parliamentary stage.  Recent comments from senior officials appear to indicate
that the South African Government is considering lower royalty rates than
contemplated in the first draft Bill, albeit still to be levied on a turnover,
rather than a profit, basis and with implementation only in 2009.  We intend to
continue to engage government on this issue and the announced overview of the
South African mining tax regime.



Organic Growth

During 2003 we successfully commissioned a number of projects including the
Skorpion zinc mine in Namibia and the Ruzomberok paper mill expansion in
Slovakia.  We continue to have one of the strongest growth project pipelines in
the natural resource sector, involving investment of some $6 billion with
expansions planned across all of our business units.



The uplift in the quality of our assets and the expansions achieved since 1999
have led to significant volume growth - of 40% for diamonds; 17% for platinum;
67% for copper; 57% for nickel; 40% for coal; 152% for aggregates; 166% for
uncoated woodfree paper; 158% for packaging; and 346% for industrial sacks.
These volume expansions, together with a number of significant acquisitions, are
in line with our stated strategy of maintaining a balanced allocation of
resources in precious metals, diamonds, base and ferrous metals, industrial
minerals and paper and packaging.



China

Last month I visited our operations in Australia and China.  Whereas in
Australia we now have well over $2 billion invested, mainly in profitable coal
and gold operations, China is a relatively new area of investment interest.   We
have established a number of small operations and have a representative office
in Beijing.  Including both direct and indirect sales, we sell over $800 million
worth of goods into the Chinese market.  China has been having a major impact on
commodity markets.  Indeed, some commentators have suggested that Chinese - and
possibly Indian - demand may be set to exert a long-term structural uplift on
commodity markets because of the material intensity of this stage of their
growth.  On this analysis, the real decline in commodity prices experienced over
the last 30 years might be reversed.  Time will tell.



What is apparent, is that China is fast becoming a key - and increasingly
integrated - player in the world economy.   I was struck, ladies and gentlemen,
not only by the speed and sophistication of China's development but also by the
evident desire to learn from international companies in areas like safety and
sustainable development.  I hope at future events to be able to brief you on our
efforts to ensure that Anglo American is an active participant in the
opportunities presented by the Chinese economy.



Corporate Responsibility

In his introduction, our Chairman highlighted the central importance of
corporate responsibility issues to our industry and I am pleased to report that
we have recently produced our 2004 Report to Society which reflects the many
important initiatives underway around the world in terms of the Group's high
level of commitment to sustainable development.



2003 saw some progress in our determined programme to improve safety with a
further improvement in our Lost Time Injury Frequency Rate, although
disappointingly our level of fatalities was only slightly lower than in the
previous year. Improving safety is an important element in determining the
remuneration of senior managers and further improvements remain an over-riding
priority.



In August 2002, we announced our intention to make anti-retroviral treatment
available to our HIV positive employees who are at the stage of infection where
ART is most effective.  We now have some 1,300 employees on ART, as well as
having a further 3,300 HIV positive employees on wellness programmes.  We
welcome the South African Government's decision to provide ART and, where
possible, we will seek to support the public health infrastructure in
rolling-out its ambitious treatment programme.  We are working in partnership
with the ngo loveLife, the Nelson Mandela Foundation, the Henry J Kaiser
Foundation and the Global Fund on HIV to create a network of adolescent friendly
clinics. We are also in discussion with the donor community and voluntary
organisations about the most effective means of extending access to treatment to
dependents, contractors and local communities neighbouring our operations.  The
AIDS pandemic is an inescapable dimension of doing business in developing
countries, particularly in Africa.  We are seeking to manage its impacts and to
use our capacities and influence to help stabilise the societies in which we
operate.



We recognise that, especially in developing countries, we have a significant
impact upon the physical and social environment of the places in which we
typically work.  We recognise that the scale of our potential impacts carries
with it a special duty of care.  That is why we require each of our significant
operations to have in place a Community Engagement Plan.  These are based upon
an analysis of each operation's local social, economic and environmental
impacts, how contentious issues are to be managed, how complaints are to be
handled and how the effectiveness of social investment projects can be
maximised.  We hope to enrich the quality of these plans through use of our new
Socio-Economic Assessment Toolbox.  An extensive training programme is now
underway to build capacity in this critical area of risk management.



Outlook

In conclusion, ladies and gentlemen, let me say a few words about the outlook
for 2004.



The macroeconomic outlook in the United States and Asia provides an encouraging
platform for the remainder of the year, although the sustainability of the
global upswing against a background of significant macroeconomic imbalances and
exchange rate volatility remains uncertain.  Anglo American offers investors a
unique mix of geographic and product diversity which has shown an ability to
absorb some of the volatility generally associated with single product
companies.



In US Dollar terms commodity prices are strong and demand for our precious and
base metals and minerals continues at a high level, although the results of our
South African operations in particular continue to be affected by the strength
of the South African currency.  In Europe, demand in the paper and packaging
sector is steady but prices are somewhat muted while some of our industrial
minerals businesses are experiencing increased price impacts from market
competition.


Overall, we believe the company remains well positioned for profitable growth in
2004.


Thank you."


For further information:



Anglo American - London

Investor Relations                            Media Relations
Nick von Schirnding                           Kate Aindow
Tel:  [phone]                        Tel:  [phone]



Anglo American - Johannesburg

Investor Relations                             Media Relations
Anne Dunn                                      Marion Dixon
Tel:  [phone]                         Tel:  [phone]



Notes to Editors:



Anglo American plc is one of the world's largest mining and natural resource
groups. With its subsidiaries, joint ventures and associates, it is a global
leader in gold, platinum group metals and diamonds, with significant interests
in coal, base and ferrous metals, industrial minerals and paper and packaging.
The group is geographically diverse, with operations and developments in Africa,
Europe, South and North America, Australia and Asia. (www.angloamerican.co.uk).




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