Re: Anglo Platinum Review

Anglo American PLC
04 December 2003


News Release


4 December 2003



                          Anglo American notification:

               Anglo Platinum expansion review and trading update



Anglo American plc ("Anglo American") wishes to draw attention to an
announcement made by Anglo Platinum regarding the Anglo Platinum expansion
review and trading update.




MEDIA AND SENS RELEASE


Anglo Platinum expansion review and trading update


Background


On 16 May 2000 Anglo Platinum announced a major expansion programme to increase
mining production from the 1999 base of some 2 million ounces to 3,5 million
ounces of refined platinum by the end of calendar year 2006. In that year some
3,4 million ounces of platinum were expected to be produced. In November 2002
more details regarding specific projects and capital expenditure to reach this
target were announced.

At the half year results presentation on 30 July 2003, shareholders were advised
that the much stronger than anticipated rand and lower US dollar prices for the
basket of metals sold, had severely affected operating cashflows. Moreover, if
such prices and exchange rates were to persist, project returns and funding
requirements would be further impacted.

Consequently, the Group has reviewed all aspects of its strategy and expansion
programme against a backdrop of:

•  The impact of a 26 percent increase in South African producer price
   inflation on mining costs over the past three years.

•  Over the same period, despite an increase in the platinum price, a net
   decrease of 14 percent in the US dollar value of the basket of metals 
   produced by the Group.

•  A 50 percent appreciation in the value of the rand from its low of over R13 
   to the US dollar in December 2001.


Supply / demand

The review confirmed that current and future demand for platinum remain robust.
Anglo Platinum remains firmly committed to expanding its production base.
However, as a result of the factors discussed above, in particular because of
the uncertainty of the rand's future movements, Anglo Platinum intends to slow
down the rate of implementation of its expansion projects. The effect of this
slowdown on the expected ongoing platinum supply deficit is likely to be
lessened by an increase in palladium usage in autocatalysts and a softening of
platinum jewellery offtake.  Anglo Platinum's long-term strategy to grow markets
for platinum group metals, expand production to meet the increased demand and
optimise operations remains in place.


Project progress in 2003

During 2003 significant progress has been made with the expansion programme.
The Polokwane smelter, designed to process concentrate from Eastern Limb
operations, was successfully commissioned in March.  The slag-cleaning furnace
at Rustenburg was commissioned. The ACP converter plant was brought on stream
and continues to increase throughput in line with its commissioning schedule.
Phase 1 of the Rustenburg tailings project is being commissioned ahead of
schedule.  Agreement was reached with Aquarius Platinum to jointly mine
contiguous properties in the Kroondal area from which revenue benefits are
expected in 2004. The Bafokeng-Rasimone and Modikwa projects have continued to
increase production levels.


Impact of the review

The impact of the review on Anglo Platinum's project suite is to slow down the
implementation of a number of mining projects by between one and three years.
Ore treatment, smelting and refining projects will continue to be expanded to
meet the requirements of the build up in the mining profile.  In addition,
rationalisation of existing operations will be undertaken to improve operating
margins.

Consultations with stakeholders have commenced regarding the implementation of
operational interventions and the project slowdown.  Anglo Platinum will
endeavour to soften the impact of actions taken and every effort will be made to
minimise job losses.

The Group is budgeting to increase production of refined platinum from 2,3
million ounces in 2003 to approximately 2,45 million ounces in 2004. This
represents a 2,0 % decline from the previously targeted production level for
2004 and is based on a rand / US dollar exchange rate of R7,0 to the US dollar.
The production targets may be revised from time to time, as they remain
dependent on the rand / US dollar exchange rate and the prices of the metals
produced and sold by Anglo Platinum.  Should the outlook improve, Anglo Platinum
has the flexibility to accelerate project implementation. The production of
refined platinum is now planned to increase to approximately 2,9 million ounces
in 2006 compared to the 3,4 million ounce level originally envisaged.

In terms of announced projects, the Bafokeng-Rasimone and Modikwa ramp-up
operations are unaffected. The Twickenham and Der Brochen projects will be
slowed down.  Anglo Platinum remains in discussion with its black economic
empowerment partners on the Paschaskraal and Booysensdal projects and will
complete bankable feasibility studies in due course, following which a joint
announcement on each project will be made. The Pandora JV implementation may be
slowed down in agreement with our partners.  The UG2 project at Rustenburg,
which sources ore from new declines and existing shafts, will be optimised to
include more of the higher platinum content Merensky ore than originally
envisaged in the short term.  The second phase of the Rustenburg tailings
project will be slowed down.  The Kroondal venture will continue as originally
planned.


Capital expenditure

Total capital expenditure in 2004 is now expected to be R6,2bn, comprising
R2,3bn for ongoing capital expenditure, R1,8bn for production replacement
projects, R1,8bn for expansion projects and R0,3bn for capitalised interest.  In
terms of the revised implementation programme expansion capital expenditure over
the period 2003 to 2006 will reduce from R15,3bn to R11,0 bn.  All capital
expenditure figures are stated in 2003 money terms.


Funding

Anglo Platinum is evaluating all financing options to fund the expansion
programme and expects to finalise proposals by the end of the first quarter of
2004.  Anglo American has indicated that it remains supportive of Anglo
Platinum's expansion plans.



Black Economic Empowerment

Anglo Platinum has established significant joint ventures with historically
disadvantaged South African groupings.  The Group is pleased with the progress
it has made regarding black economic empowerment.  This progress includes
facilitating the purchase of 22,5% of Northam Platinum by Mvelaphanda Platinum,
a 50:50 joint venture with African Rainbow Minerals in respect of the Modikwa
platinum mine and, subject to the fulfilment of certain suspensive conditions,
the 50:50 Bafokeng-Rasimone joint venture with the Royal Bafokeng Nation
incorporating the Styldrift project area. Anglo Platinum remains in discussions
with the Pelawan and Khumama consortia on the Paschaskraal and Booysensdal joint
venture projects respectively.  The revised project scheduling will not in any
way affect Anglo Platinum's black economic empowerment commitments or ability to
comply with the requirements of the Mining Charter.



Trading statement

Anglo Platinum advised shareholders on 30 July 2003 that it expected earnings
for the year ending December 2003 to be significantly below those for the year
ended December 2002 as a result of the stronger rand / US dollar exchange rate.

As a result of the continued strengthening of the rand and in compliance with
the revised listings requirements (Section 3.4 (b)) of the JSE Securities
Exchange South Africa ("JSE"), which became effective on 1 September 2003, the
Company wishes to advise shareholders that headline earnings for the year ending
December 2003 are expected to be substantially lower than those for the year
ended December 2002.

Furthermore the Company has observed that the market consensus of forecast
headline earnings for the year ending December 2003 is materially higher than
the Group's current forecast.

The difference appears to be mainly as a result of the market assuming a weaker
average rand / US dollar exchange rate for the year to December 2003 than the
company expects to achieve when rates are matched to the fluctuating metal sales
profile for the year. Should the rand remain at current levels, the Company
expects the effective average rand US / dollar exchange rate to be around R 7,4
to the US dollar for the year.

In addition, and as a result of the steady strengthening of the rand over the
year, the Company expects foreign exchange losses to be materially higher in the
second half of the year when compared to the first half, assuming R6,6 to the US
dollar on 31 December 2003. These losses arise due to the difference in exchange
rate between the date of sale of metals in US dollars and the date of conversion
to rand when those revenues are repatriated.

Anglo Platinum has submitted an accountant's report in relation to this trading
statement to the JSE in accordance with the listings requirements of the JSE.
The accountant's report is available for inspection at Anglo Platinum's offices
at 55 Marshall Street, Johannesburg.

The forecast in this trading statement has been prepared using accounting
policies consistent with those applied at 31 December 2002 except for the change
in the inventory accounting policy as advised to shareholders on 30 July 2003.


For further information please consult the Company's website
(www.angloplatinum.com)
or contact Mike Mtakati
011 373 6865
083 455 7887

4 December 2003



                      This information is provided by RNS
            The company news service from the London Stock Exchange