John Groom Thursday 7 September 2007

1. John GroomThursday 7 September 2007 ETHICS, ENGINEERING & THE MINING SECTORAN ANGLO AMERICAN PERSPECITIVE The Future of Teaching Engineering Ethics

2. Agenda • Introduction • Ethics and Sustainable Development • Overview of Anglo American • “Good Citizenship”: Our Business Principles • What SD means in practice for mining sector: • International Level • National/Regional Level • Local/Site Level The Future of Teaching Engineering Ethics

3. Ethics and Sustainable Development • I.Chem.E views “Sustainable Development as the most significant issue facing society today” • The Melbourne Communiqué: 20 Chem. Eng Organisations committing to SD • I.C.E “believes Sustainable Development is central to civil engineering and ICE and the profession… must organise themselves accordingly” The Future of Teaching Engineering Ethics

4. Anglo American & Leadership • 192 000 employees and contractors in 60 countries • A FTSE 10 company with $80bn market capitalisation • Committed to building SD into the way we do business • We have to play a leading role for our own corporate SD! The Future of Teaching Engineering Ethics

5. A focused mining group Anglo American Industrial minerals Paper and Packaging Base Metals Ferrous Metals Platinum Diamonds Coal Gold Mondi to be separated and listed on LSE in 2006/2007 Shareholding in AGA reduced to 41.8% Precious metals and minerals Bulk and Base Metals The Future of Teaching Engineering Ethics

6. Future growth – strong project pipeline Project pipeline $5.8bn of approved projects $10 -15bn of future projects MEREBANK $174m SASA marine $52m SADDLER’S CREEK Coal COLLAHUASI EXPANSION Copper CERREJÓN 2 $43m ISIBONELO $65m INYANDA $30m MAFUBE $132m TICOR 2 $54m SOUTH AFRICA EXPANSION Coal MONASH ENERGY Coal SISHEN SOUTH Iron ore LEBOWA $179m EL SOLDADO $80m BLACK MTN $110m MARIKANA JV $18m FINSCH $130m VICTOR $356m BARRO ALTO Nickel LOS BRONCES EXPANSION Copper QUELLAVECO Copper CUIABÁ $51m BODDINGTON $181m MOAB KHOTSONG $288m CERREJÓN 1 $50m BUNDOORA $49m KROONDAL $138m MORANBAH SOUTH Coal VOORSPOED $80m DAWSON $426m GROSVENOR Coal MORRO SEM BONE Nickel PPRUST NORTH expansion $692m MPONENG $80m TICOR 1 $137m CHAGRES $21m UNKI $84m FALEME Iron ore GAMSBERG Zinc TWICKENHAM Platinum PPRUST NORTH replacement $230m SNAP LAKE $230m MOTOTOLO JV $100m GRASSTREE $107m GROOTEGELUK $55m CULLINAN EXPANSION Diamonds GAHCHO KUE Diamonds XIWAN Coal SISHEN EXPANSION $559m LAKE LINDSAY $361m 2006 2007 2008 2009 Anglo Platinum Diamonds AngloGold Ashanti Coal Ferrous Metals Industrial Minerals Paper & Packaging Base Metals Selected major authorised projects. Selected future projects unshaded. 100% of subsidiaries and AA plc’s share of JV’s and associates. Full production dates. The Future of Teaching Engineering Ethics

7. “Good Citizenship”: Our Business Principles We have a clear set of principles which apply:- • To every business we manage, everything we do and to every part of the world in which we operate. • Our business success brings with it obligations of good stewardship and ethical behaviour. • Conducting business now with an eye to the needs of the future is the essence of sustainable development. • In an era of globalisation people have fears about the pace of change and the perceived motivations and power of international corporations. In response, companies need to be transparent and accountable. • Anglo American plc and its subsidiaries have an established tradition of community involvement and social investment. • Whilst we operate in many countries and in widely differing conditions, our values and principles have universal application. The Future of Teaching Engineering Ethics

8. This is not new…. “The aim of this group is, and will remain, to make profits for our shareholders, but to do it in such a way as to make a real and lasting contribution to the communities in which we operate." Ernest Oppenheimer 1954 The Future of Teaching Engineering Ethics

9. Our responsibilities to our stakeholders Our primary responsibility is to our investors. We will seek to maximise shareholder value over time. We believe that this is best achieved through an intelligent regard for the interests of other stakeholders including our employees, the communities associated with our operations, our customers and business partners. A reputation for integrity and responsible behaviour will underpin our commercial performance through motivating employees and building trust and goodwill in the wider world. The Future of Teaching Engineering Ethics

10. Principles of Conduct - 1 Business Integrity & Ethics • We support free enterprise as the system best able to contribute to the economic welfare of society. However, our investment criteria are not solely economic. They also take into account social, environmental and political considerations. • We will comply with all laws and regulations applicable to our businesses and to our relationships. • We are implacably opposed to corruption. • We prohibit employees from trading securities illegally. • We require our employees to perform their duties conscientiously, honestly and with due regard for the avoidance of conflicts. • We will maintain high standards of planning and control to identify and monitor risks. • We will promote the application of our principles by those with whom we do business. • We encourage employees to take personal responsibility for ensuring that our conduct complies with our principles. The Future of Teaching Engineering Ethics

11. Principles of Conduct - 2 Corporate Citizenship • We respect human dignity and the rights of individuals and of the communities associated with our operations. • We recognise the sensitivities involved in addressing issues which relate to the cultural heritage of indigenous communities. • We believe we have the right and the responsibility to make our positions known to governments on any matters which affect our employees, shareholders. • Where it is within our power to do so, we will seek to promote the observance of human rights in the countries where we operate. We support the principles set forth in the Universal Declaration of Human Rights. Employment & Labour Rights Safety Health & Environment Stewardship • We are committed to the principles of sustainable development, by which we mean striking an optimal balance between economic, environmental and social development. We will strive to innovate and adopt best practice, wherever we operate, working in consultation with stakeholders. The Future of Teaching Engineering Ethics

12. Anglo American, Mining & SD We’re on a journey: • International journey • Mining industry journey • Anglo and mining sector leadership The Future of Teaching Engineering Ethics

13. The Road to the Johannesburg 2002 World Summit on SD The International Journey 1960s Waves of local protests in many developed countries. 1972 UN Conference on the Human Environment – Stockholm. 1983 UN General Assembly forms the “World Commission on Environment and Development”. (Brundtland Commission). 1987 Brundtland Report “Our Common Future”: Sustainable Development enters everyday language. 1987 The Montreal Protocol. • Rio Earth Summit - Rio Declaration - Agenda 21 - Climate Convention - Forest Principles - Biodiversity Convention 1996 “Our Stolen Future”. 1997 Kyoto Protocol. 2001 Doha – Conference on Trade and Development. 2002 Monterrey – Conference on Aid and Poverty Reduction. 2002 Johannesburg World Summit on Sustainable Development- Political Declaration – Partnerships - Plan of Implementation 2012 More …….! Progress with Millennium Development Goals. The Future of Teaching Engineering Ethics

14. WSSD: Key Areas for Action Millennium Development Goal’s reinforced - halving the number of people (1.1 bn) living on less than $1 per day by 2015. - providing access to clean water and sanitation for the +2 billion people who do not have it. - improving access to energy for development. - improving access to education. • Increasingly business and industry seen as part of the solution, but increased calls for more accountability and focus on governance – and transparency (reporting). The Future of Teaching Engineering Ethics

15. The Mining Industry Journey • 1991: Formed the International Council on Metals & the Environment (ICME). • 1998: 10 CEO’s recognised growing threat to land and market access, and began the Global Mining Initiative (GMI). • 1999: Mining, Minerals & Sustainable Development project began: an independent multistakeholder view of the role of mining minerals & metals in Sustainable Development: A WBCSD / IIED led project. • 2001: ICME Dissolved. International Council on Mining and Metals (ICMM) founded with a broader Sustainable Development mandate. • 2002: GMI Toronto Conference: Our industries respond to the challenges (May) of Agenda 21 – in the run-up to Johannesburg. • 2002: ICMM and the mining sector are active players in BASD and WSSD. (Sept) • GMI was one of four Global Partnerships given honourable mention at a UNEP awards ceremony. The Future of Teaching Engineering Ethics

16. The Challenges • Land Access • Market Access • Legion of uncoordinated industry organisations The greatest barrier to tackling these was our image and reputation The Future of Teaching Engineering Ethics

17. Mining – an ‘image’ problem The Future of Teaching Engineering Ethics

18. Mining – an ‘image’ problem The Future of Teaching Engineering Ethics

19. The Solution • Three-track approach: • Analytical (role of industry): MMSD • Conference: platform with governments and NGOs • Industry associations • 1999-2002: 25 “Sherpa” meetings: • ICMM established • MMSD completed • 2002 GMI conference • Costs US$10m The Global Mining Initiative The Future of Teaching Engineering Ethics

20. The Mining Industry Journey • 1991: Formed the International Council on Metals & the Environment (ICME). • 1998: 10 CEO’s recognised growing threat to land and market access, and began the Global Mining Initiative (GMI). • 1999: Mining, Minerals & Sustainable Development project began: an independent multistakeholder view of the role of mining minerals & metals in Sustainable Development: A WBCSD / IIED led project. • 2001: ICME Dissolved. International Council on Mining and Metals (ICMM) founded with a broader Sustainable Development mandate. • 2002: GMI Toronto Conference: Our industries respond to the challenges (May) of Agenda 21 – in the run-up to Johannesburg. • 2002: ICMM and the mining sector are active players in BASD and WSSD. (Sept) • GMI was one of four Global Partnerships given honourable mention at a UNEP awards ceremony. The Future of Teaching Engineering Ethics

21. Global Response: The ICMM Charter ICMM Principles • Maintain ethical business practices and sound corporate governance. • Recognise SD considerations in our corporate decisions. • Uphold fundamental human rights and respect cultures, customs and values. • Implement risk management strategies based on valid data and sound science. • Seek continual improvement of our health and safety performance. • Seek continual improvement of our environmental performance. • Help conserve biodiversity and use land sensitively. • Encourage responsible product design, use, recycling and disposal. • Contribute to the development of communities in which we operate. • Engage in open and honest dialogue with our stakeholders. The Future of Teaching Engineering Ethics

22. SD Framework Projects I C M M • Extractive Industries Transparency Initiative • IFC Performance Standards / Equator Banks • Security & Human Rights • Mine Certification and CRJP • Resource Endowment The Future of Teaching Engineering Ethics

23. Anglo American Response ANGLO SD INTERNATIONAL PARTNERSHIPS Industry • International Council on Mining and Metals (ICMM) • World Business Council for Sustainable Development (WBCSD) • Euromines and Eurometaux NGOs • WWF • UNEP/WCMC Government and IGOs • EITI • IFC / World Bank Group The Future of Teaching Engineering Ethics

24. UN Global Compact • Anglo American became a signatory to theUN Secretary-General’s Global Compact in 2004. • The Global Compact asks companies to embrace, support and enact, within their sphere of influence, a set of core values in the areas of: • Human rights • Labour standards • The Environment • Anti-corruption The Future of Teaching Engineering Ethics

25. What are the issues? • Safety • Occupational / community health • Carbon Emissions • Energy Usage • Sustainable Communities • Air Quality • Water Usage • Waste Management • Biodiversity • Land Stewardship • Materials stewardship/ market security The Future of Teaching Engineering Ethics

26. Safety Safety is our imperative! The Future of Teaching Engineering Ethics

27. 2005 Safety Trends The Future of Teaching Engineering Ethics

28. Anglo’s Response: Safety Our Safety Principles Culture: Zero Mindset • ALL injuries and occupational illnesses are preventable. • NO-ONE should tolerate unsafe behaviour or conditions. Learning: No Repeats • ALL unsafe practices and incidents will be investigated • ALL necessary steps will be taken to prevent a recurrence. Standards: Simple and Non-Negotiable • Common, simple, standards and rules that apply group-wide. • Divisional line management implement and maintain the standards and rules. The Future of Teaching Engineering Ethics

29. Anglo’s Response: Energy Energy & Carbon Management • working to reduce our use of energy by 15% • and to reduce carbon emissions by 10% between 2004 – 2014 • carbon sensitivity exercise for $20m+ capital projects • Centralise carbon trading The Future of Teaching Engineering Ethics

30. Anglo’s Response: Energy Investing in technology - FutureGen The Future of Teaching Engineering Ethics

31. Anglo’s Response: Energy Investing in technology - MONASH The Future of Teaching Engineering Ethics

32. Anglo’s Response: Energy Investing in technology - MONASH The Future of Teaching Engineering Ethics

33. Anglo’s Response: AIDS The Future of Teaching Engineering Ethics

34. Anglo’s Response: AIDS The pandemic The Future of Teaching Engineering Ethics

35. Anglo’s Response: AIDS Growing Challenge South African Public Ante-natal ClinicHIV Seroprevalence Survey 2004 The Future of Teaching Engineering Ethics

36. Anglo HIV/AIDS Strategy - Summary • Pursue HIV prevention programs with vigour • Vigorously promote VCT as the entry point for a comprehensive HIV and AIDS response • Set targets for annual VCT uptake • Implement wellness programs for HIV +ve employees • Set targets for wellness programme enrolment • Provide access to antiretroviral therapy (ART) at company expense when clinically indicated • Extend workplace programs into surrounding communities in partnership with government, unions, NGO’s and international donor agencies • Monitor and evaluate outcomes The Future of Teaching Engineering Ethics

37. HIV/AIDS data at end 2005 The Future of Teaching Engineering Ethics

38. Voluntary Counselling and Testing Our main strategic thrust is getting all employees to know their HIV status through VCT. The Future of Teaching Engineering Ethics

39. Current Response Challenges • Increasing VCT uptake • Enrolling more employees on HIV wellness programmes • Initiating ART before the onset of illness • Viral resistance monitoring • Access to care, support and treatment for partners • Ensuring access to continued treatment for leavers • Community outreach • Improving data capture The Future of Teaching Engineering Ethics

40. Measuring Success The Goedehoop Story : 2004 • Goedehoop Colliery - 1177 employees • Manager created a climate of trust • 90% VCT uptake in 2004! • 191 employees tested HIV positive : 18% • 176 of these enrolled in wellness programme : 92% • 65 found to be needing ART & started : 37% • 63 of these back at normal work : 97% The Future of Teaching Engineering Ethics

41. Anglo Coal: Fewer Deaths! The Future of Teaching Engineering Ethics

42. Anglo Coal: TB under control again The Future of Teaching Engineering Ethics

43. Anglo’s Response: Communities The Future of Teaching Engineering Ethics

44. Anglo’s Response: Communities Managing the impact of operations S.E.A.T “Anglo American, whose Socio-Economic Assessment Toolbox (aimed at existing operations) is a structured way of ensuring that consultation with, and contribution towards local communities are effectively delivered.” Citigroup Report 14 March 2006 The Future of Teaching Engineering Ethics

45. Communities Case Study and Challenges • Konkola Copper Mines Resettlement Resettlement • Need to enlarge the tailings dam • Two communities near the current shoreline would be inundated • 750 affected persons • Resettlement Action Plan (RAP) developed • Key principles: • Restoration of livelihoods, i.e. not merely replacement of physical infrastructure. • Extensive consultation to establish community needs and preferences The Future of Teaching Engineering Ethics

46. Communities Case Study and Challenges • Outcome: • Construction of a new settlement near an existing town: US $ 2 million • Houses, churches, market, clinic, classroom block at existing school • Construction of a new extension to the low cost township • Key technical issues: • Appropriate technology for water and energy supply, & housing design • Replacing scattered informal dwellings with formal houses • Key non-technical issues: • Livelihoods restoration • Preventing colonisation of resettled areas • Preventing opportunism The Future of Teaching Engineering Ethics

47. Anglo’s Response: Biodiversity • One of five global issues • Protection of natural habitats • Basis of our ecosystem The Future of Teaching Engineering Ethics

48. Anglo’s Response: Biodiversity What are we planning? • Refine biodiversity policy • Biodiversity Action Plans • Review operations • Include in EMPs • Mine closure planning ‘toolkit’ • Work with ICMM, WWF etc • Define Offsets The Future of Teaching Engineering Ethics

49. A challenge: the drivers • Sensitive valley – centre of endemism • Long time frame: 80 years, 4 generations of mining engineers • Other companies involved in the Der Brochen valley • Legal requirements • MPRDA • Any prospecting or mining operation must be conducted in accordance with generally accepted principles of sustainable development.

50. The drivers • National Environmental Management Act • Environmental management must place people and their needs at the forefront of concern. • Development must be socially, environmentally and economically sustainable. • The environment is held in public trust for the people, the beneficial use of environmental resources must serve the public interest and the environment must be protected as the people’s common heritage. • Sensitive, vulnerable, highly dynamic or stressed ecosystems require specific attention in management and planning procedures.