Anglo American announces approval of the Zondagsfontein coal project

Anglo American plc is pleased to announce the approval of the US$505 million Zondagsfontein coal project in South Africa, the first major project for Anglo Inyosi Coal (AIC).

AIC, 73% owned by Anglo Coal and 27% by Inyosi, is a Black Economic Empowerment company created earlier this year as part of Anglo Coal’s second wave of empowerment. Inyosi’s shareholders will include the Lithemba Consortium, Pamodzi Coal, WDB Investment Holdings and local mine community trusts. The project is situated near the town of Ogies in the Mpumalanga Province of South Africa.

The Zondagsfontein project comprises the following:

* A multi-product operation, positioned in the lowest quartile of the cost curve, delivering 6 million tons per annum (Mtpa) from its underground mine and opencast pit over a life of 20 years, consisting of 3 Mtpa of thermal export product and 3 Mtpa of domestic product; coal reserves are in excess of 250 million tons;
* A washing plant, known as the Phola Coal Processing Plant, a 50:50 joint venture between AIC and BHP Billiton Energy Coal South Africa Limited (BHP Billiton). The plant will be fed equally from the Zondagsfontein Project and BHP Billiton’s Klipspruit Colliery. It will be constructed by Anglo Coal and jointly managed by AIC and BHP Billiton.

Preparation of the site has begun, and construction is planned to start in early 2008, with production commencing in the second half of 2009, reaching full production by 2011.

It is envisaged that this project will create employment for more than 1,000 people when completed, in addition to contributing substantially to the economic development of the region through infrastructure development and providing procurement opportunities for local businesses.

John Wallington, CEO of Anglo Coal, said “This is indeed a vote of great confidence by Anglo American in this first Anglo Inyosi Coal project and in Anglo Coal’s growth strategy in South Africa”.

For further information, please contact:

London

Investors:
Anna Poulter
Tel: +44 20 7968 2155

Media:
James Wyatt-Tilby
Tel: +44 20 7968 8759

Johannesburg

Media:
Pranill Ramchander
Tel: +27 11 638 2592
Mobile: +27 82 330 4053

Notes for editors:

Anglo American plc is one of the world’s largest mining and natural resource groups. Together with its subsidiaries, joint ventures and associates, it is a global leader in platinum group metals and diamonds, with significant interests in coal, base and ferrous metals, as well as an industrial minerals business and a stake in AngloGold Ashanti. The Group is geographically diverse, with operations in Africa, Europe, South and North America, Australia and Asia. (www.angloamerican.co.uk)

Anglo Coal, a wholly owned division of Anglo American plc, announced earlier this year that it had created Anglo Inyosi Coal, an empowered coal company housing key current and future domestic and export focused coal operations. Anglo Coal signed the transaction completion agreements with Inyosi, a broad-based BEE consortium on 28 November 2007. In terms of the agreement, Inyosi will acquire 27% of Anglo Inyosi Coal, creating a company valued at R7 billion and incorporating several key Anglo Coal assets, namely Kriel Colliery (an existing mine) and the Elders, Zondagsfontein, New Largo and Heidelberg projects.

Inyosi is led by the Lithemba Consortium and Pamodzi Coal and has a beneficiary base that will benefit in excess of 27,000 individuals, the majority of whom are female historically disadvantaged South Africans (HDSA’s). WDB Investment Holdings will also be a shareholder and Anglo Inyosi Coal will create an independent broad-based community trust that will benefit HDSA communities around its operations and other marginalised and impoverished communities in South Africa. These broad-based groups will receive an annual allocation of up to R5 million to enable the initiation of socio-economic community based projects.