Obligation Anglo American Holdings PLC 3.625% ( US034863AN08 ) en USD

Anglo American Holdings PLC

100 % ⇌

Afrique du Sud

US034863AN08 ( en USD )

3.625% par an ( paiement semestriel )

13/05/2020 - Obligation échue

Prospectus brochure de l'obligation Anglo American Capital PLC US034863AN08 en USD 3.625%, échue

1 000 USD

850 000 000 USD

034863AN0

Anglo American Capital PLC est une société holding britannique qui détient des participations dans diverses entreprises, principalement dans le secteur des matières premières, notamment le secteur minier.

L'Obligation émise par Anglo American Holdings PLC ( Afrique du Sud ) , en USD, avec le code ISIN US034863AN08, paye un coupon de 3.625% par an.
Le paiement des coupons est semestriel et la maturité de l'Obligation est le 13/05/2020

L'Obligation émise par Anglo American Holdings PLC ( Afrique du Sud ) , en USD, avec le code ISIN US034863AN08, a été notée NR par l'agence de notation Moody's.

L'Obligation émise par Anglo American Holdings PLC ( Afrique du Sud ) , en USD, avec le code ISIN US034863AN08, a été notée NR par l'agence de notation Standard & Poor's ( S&P ).

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The original company document has been reformatted for "as reported data" transparency.
PROSPECTUS
US$1,500,000,000
Anglo American Capital plc
US$850,000,000 3.625% Senior Notes due 2020
US$650,000,000 4.875% Senior Notes due 2025
Guaranteed by Anglo American plc
This prospectus is being published by Anglo American Capital plc (the "Issuer") in connection with
Admission (as defined below) of its US$850 million of its 3.625% Senior Notes due 2020 (the "2020 Notes")
and US$650 million of its 4.875% Senior Notes due 2025 (the "2025 Notes" and, together with the 2020 Notes,
the "Notes") with such Notes to be guaranteed (the "Guarantees") by Anglo American plc (the "Company",
"Guarantor" or "Anglo American" and, together with the Company's subsidiaries, joint ventures and associates,
"Anglo American Group", the "Group", "we", "us" or "our"). Interest will be paid on the Notes semiannually
and in arrears on May 14 and November 14 of each year, commencing on November 14, 2015. The 2020 Notes
and the 2025 Notes will mature on May 14, 2020 and May 14, 2025, respectively.
The Issuer has the option to redeem all or a portion of the Notes at any time at the redemption prices set
forth in this document.
The Notes will be unsecured senior obligations of the Issuer and will rank equally with all of its other
existing and future unsubordinated indebtedness.
The Notes will be issued in fully registered form and only in denominations of US$200,000 and integral
multiples of US$1,000 in excess thereof.
For a more detailed description of the Notes, see "Description of the Notes and the Guarantees"
beginning on page 141.
An investment in the Notes involves risks. See "Risk Factors" beginning on page 15.
Offering Price for the 2020 Notes: 99.778% plus accrued interest, if any, from May 14, 2015
Offering Price for the 2025 Notes: 99.578% plus accrued interest, if any, from May 14, 2015
Application has been made to the Financial Conduct Authority in its capacity as competent authority
pursuant to Part VI of the Financial Services and Markets Act 2000 (the "UK Listing Authority") for each series
of the Notes to be admitted to the official list of the UK Listing Authority (the "Official List") and to the London
Stock Exchange plc (the "London Stock Exchange") for each series of the Notes to be admitted to trading on the
London Stock Exchange's Regulated Market ("Admission"). References in this document to the Notes being
listed (and all related references) shall mean that the Notes have been admitted to trading on the London Stock
Exchange's Regulated Market and have been admitted to the Official List. The London Stock Exchange's
Regulated Market is a regulated market for purposes of Directive 2004/39/EC (the "Directive on Markets in
Financial Instruments"). The securities to which this document relates have not been recommended by the
United States Securities and Exchange Commission (the "SEC") or any other US federal or state securities
commission or regulatory authority nor have such authorities confirmed the accuracy or adequacy of this
document. Any representation to the contrary is a criminal offense in the United States.
The Notes and the Guarantees have not been registered, and we do not intend to register the Notes or the
Guarantees, under the US Securities Act of 1933, as amended (the "Securities Act"), or any securities laws of
any other jurisdiction. Accordingly, the Notes are being offered and sold in the United States only to qualified
institutional buyers in accordance with Rule 144A under the Securities Act ("Rule 144A") and outside the United
States to certain nonUS persons in accordance with Regulation S under the Securities Act ("Regulation S").
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Prospective purchasers that are qualified institutional buyers are hereby notified that the seller of the
Notes and the related Guarantees may be relying on the exemption from the provisions of Section 5 of the
Securities Act provided by Rule 144A. For further details about eligible offerees and transfer restrictions, see
"Plan of Distribution" and "Transfer Restrictions".
The Company's credit ratings have been issued by Moody's Investors Service Ltd. ("Moody's") and
Standard & Poor's Credit Market Services Europe Limited ("S&P") and are Baa2 (negative outlook) and BBB
(stable outlook), respectively. In general, European regulated investors are restricted from using a rating for
regulatory purposes if such rating is not issued by a credit rating agency established in the European Union and
registered under Regulation (EC) No. 1060/2009 (the "CRA Regulation"), unless the rating is provided by a
credit rating agency operating in the European Union before June 7, 2010 which has submitted an application for
registration in accordance with the CRA Regulation and such registration is not refused. S&P and Moody's have
each been registered under the CRA Regulation by the European Securities and Markets Authority as of
October 31, 2011.
Citigroup Global Markets Inc., J.P. Morgan Securities LLC, RBC Capital Markets, LLC, nabSecurities,
LLC, Scotia Capital (USA) Inc., TD Securities (USA) LLC and Westpac Banking Corporation (ABN 33 007 457
141) (collectively, the "Joint Bookrunners" or the "Initial Purchasers") expect to deliver the Notes to purchasers
on or about May 14, 2015 through the facilities of The Depository Trust Company including its participants
Euroclear Bank S.A./N.V. and Clearstream Banking,
société anonyme.
Joint Bookrunners
Citigroup
J.P. Morgan
RBC Capital Markets
nabSecurities,
Scotiabank
TD Securities
Westpac Banking
LLC
Corporation
Prospectus dated May 8, 2015
TABLE OF CONTENTS
OVERVIEW............................................................................................................................................................... ...2
RISK FACTORS ....................................................................................................................................................... ..15
IMPORTANT INFORMATION .................................................................................................................................2
4
STABILIZATION ...................................................................................................................................................... .24
NOTICE TO INVESTORS ......................................................................................................................................... 24
NOTICE TO INVESTORS IN THE EUROPEAN ECONOMIC AREA ...................................................................25
MISCELLANEOUS INFORMATION .......................................................................................................................2 5
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NOTICE TO NEW HAMPSHIRE RESIDENTS........................................................................................................25

MARKET AND INDUSTRY DATA..........................................................................................................................25

FORWARDLOOKING STATEMENTS ...................................................................................................................26

CAUTIONARY NOTE TO US INVESTORS CONCERNING ESTIMATES OF MEASURED, INDICATED AND
INFERRED RESOURCES FOR MINING OPERATIONS .........................................................................26
PRESENTATION OF FINANCIAL INFORMATION ..............................................................................................28
NONIFRS FINANCIAL MEASURES ......................................................................................................................3 1
SERVICE OF PROCESS AND ENFORCEMENT OF CIVIL LIABILITIES ...........................................................33
AVAILABLE INFORMATION..................................................................................................................................3 3
EXCHANGE RATE DATA........................................................................................................................................3 4
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE .................................................................35
CAPITALIZATION ................................................................................................................................................... .36
USE OF PROCEEDS ................................................................................................................................................ ..37
BUSINESS DESCRIPTION........................................................................................................................................ 38
FIRST QUARTER 2015 PRODUCTION RESULTS.................................................................................................69
ORE RESERVES ...................................................................................................................................................... ..80
SELECTED FINANCIAL INFORMATION ..............................................................................................................9 1
OPERATING AND FINANCIAL REVIEW ..............................................................................................................92

REGULATION..........................................................................................................................................................1
20
SUSTAINABLE DEVELOPMENT (INCLUDING SAFETY, HEALTH, ENVIRONMENT AND SOCIAL) ......125

MANAGEMENT OF ANGLO AMERICAN PLC ...................................................................................................131
RELATED PARTY TRANSACTIONS....................................................................................................................139
DESCRIPTION OF THE NOTES AND THE GUARANTEES...............................................................................141
BOOKENTRY SETTLEMENT AND CLEARANCE ............................................................................................159
UK TAX CONSIDERATIONS.................................................................................................................................16 1
MATERIAL US FEDERAL TAX CONSIDERATIONS .........................................................................................164
PLAN OF DISTRIBUTION......................................................................................................................................1 66
TRANSFER RESTRICTIONS..................................................................................................................................1 69
LEGAL MATTERS...................................................................................................................................................1
72
INDEPENDENT AUDITORS...................................................................................................................................17
3
DESCRIPTION OF ANGLO AMERICAN CAPITAL PLC ....................................................................................174
GENERAL INFORMATION....................................................................................................................................17
5
DEFINED TERMS....................................................................................................................................................1
78
i
OVERVIEW
This overview highlights certain information contained in this document. This overview does not contain all the
information you should consider before purchasing the Notes. You should read this entire document carefully,
including the sections entitled "ForwardLooking Statements", "Risk Factors", "Business Description", and
"Operating and Financial Review" included elsewhere in this document and the financial information and the notes
thereto incorporated by reference as outlined in the section entitled "Incorporation of Certain Information by
Reference." Other than under "Description of the Notes and the Guarantees" or where the context indicates
otherwise, references herein to "us", "we", "our" and similar terms are to the Group.
THE ANGLO AMERICAN GROUP
Anglo American plc is the holding company of the Group, a global leader in mining, whether measured by
market capitalization, revenue or net income. The Group has a range of high quality, core mining businesses with
balanced participation across precious, base and bulk commodities, and diamonds. The Group is geographically
diverse, with operations across the world. Anglo American is a public limited company incorporated under the laws
of England and Wales under the name "Anglo American plc" and is registered in England and Wales.
Our businesses' (excluding Corporate and other) contribution to underlying EBIT (underlying EBIT is earnings
before interest and tax before special items and remeasurements and includes the Group's attributable share of
associates' and joint ventures' underlying EBIT) in 2012, 2013 and 2014 is summarized in the table below:
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Yearended December 31,
2012 (1)
2013
2014
(US$m)
Iron Ore and Manganese . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,011
3,119
1,957
Coal (2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,198
587
458
Copper. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,736
1,739
1,193
Nickel. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
26
(44)
21
Niobium (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
81
82
67
Phosphates (2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
88
68
57
Platinum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(120)
464
32
De Beers (2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
474
1,003
1,363
Corporate and other (2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(241)
(398)
(215)
6,253
6,620
4,933
(1) Changes in accounting policy relating to International Accounting Standard 19 (revised)
Employee Benefits ("IAS 19R"), IFRS
Interpretations Commit ee Interpretation 20 Stripping Costs in the Production Phase of a Surface Mine ("IFRIC 20") and International
Financial Reporting Standard 11 Joint Arrangements ("IFRS 11"), resulted in the restatement of financial results for the yearended
December 31, 2012. See "Presentation of Financial Information" and note 41 of the Group 2013 Consolidated Financial Statements, which
are incorporated by reference into this document, for more details.
(2) To align with changes in the management structure of the Group's coal businesses and the way their results are internal y reported, Coal
South Africa and Coal Colombia (formerly the Thermal Coal segment) and Coal Australia and Canada (formerly the Metal urgical Coal
segment) are now reported together as the Coal segment. Niobium and Phosphates are now reported as separate segments, having previously
been aggregated and the Diamonds segment is now referred to as De Beers. The Other Mining and Industrial segment is no longer considered
to be individual y significant to the Group and is therefore now shown within `Corporate and other' together with unal ocated corporate costs
and exploration costs. Exploration costs represent the cost of the Group's exploration activities across al segments, and were previously
reported separately. Comparatives have been reclassified to align with current year presentation.
Business Overview
The Anglo American business segments are:
Iron Ore and Manganese. This business segment's iron ore operations are represented in South Africa by
a controlling interest of 69.7% in Kumba Iron Ore Limited ("Kumba"), a company listed on the
Johannesburg Stock Exchange, and in Brazil by a 100% interest in Anglo American Minério de Ferro
Brasil SA ("MinasRio") and a 50% interest in LLX MinasRio Logística Comercial Exportadora SA
("Ferroport" formerly referred to as "LLX MinasRio"), together with MinasRio, the "MinasRio
Project"). Ferroport owns and operates the iron ore handling and shipping facilities at the port of Açu
(currently completing final construction), from which iron ore from MinasRio is exported. The business
segment's manganese operations (manganese ore mining and alloy production) are represented in South
Africa and Australia by a 40% interest in Samancor Holdings Proprietary Limited ("Samancor Holdings"),
Groote Eylandt Mining Company Pty Limited ("GEMCO") and Tasmanian Electro Metallurgical Company
Pty Limited ("TEMCO", together with Samancor Holdings and GEMCO, "Samancor"), respectively.
2
Coal. Coal Australia and Canada. This business is Australia's second largest metallurgical coal producer
and the third largest global exporter of metallurgical coal, according to Wood Mackenzie. It operates seven
mines, two wholly owned and five in which it has a majority interest. Six of the mines are located towards
the east coast of Australia five are in Queensland's Bowen Basin, and one in the Hunter Valley in New
South Wales. One mine is located in British Columbia, Canada. In addition, the business includes the
Grosvenor project, which is wholly owned.
Coal South Africa and Colombia. In South Africa, the business owns and operates seven mines and has a
50% interest in the Mafube colliery and a 73% interest in Anglo American Inyosi Coal, which operates the
Kriel Colliery, Zibulo and various other projects as well as holding a 50% interest in the Phola washing
plant. This business also has a 23.2% interest in the Richards Bay Coal Terminal through which South
African export thermal coal is routed. Its Colombian operations are represented by a 33.3% interest in
Carbones del Cerrejón Limited, Cerrejón Zona Norte S.A. and CMC Coal Marketing Company Limited
(collectively known as "Cerrejón").
Copper. We have interests in six copper operations in Chile. The Mantos Blancos and Mantoverde mines
are wholly owned, and we hold a 50.1% interest in Anglo American Sur ("AA Sur"), which includes the
Los Bronces and El Soldado mines and the Chagres smelter. We also hold a 44% interest in the Collahuasi
mine. In Peru, we have an 81.9% interest in the Quellaveco project.
Nickel. This business segment comprises two ferronickel operations, Barro Alto and Codemin in Brazil.
The business segment has two notable but unapproved projects in Brazil: Jacaré and Morro Sem Boné.
Niobium. Our wholly owned Niobium business, located in Brazil's Goiás state, accounts for approximately
8% of global production of the metal. The Boa Vista Fresh Rock ("BVFR") project produces and exports
approximately 4,700 tonnes of niobium per year. The project is expected to reach full nameplate capacity in
2017. When fully ramped up, production from existing operations is expected to increase to 6,800 tonnes of
niobium per year.
Phosphates. Our wholly owned Phosphates business is the second largest phosphate fertilizer producer in
Brazil based on installed production capacity. Its operations are vertically integrated, from the mining of
ore to processing into final product.
Platinum. Our subsidiary, Anglo American Platinum Limited ("Anglo American Platinum"), a company
listed on the Johannesburg Stock Exchange and located in South Africa is the world's leading primary
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De Beers. De Beers is Anglo American's 85%owned diamond business, with mining operations in
Botswana, South Africa, Namibia and Canada. In 2014, De Beers, with its joint venture partners, was
responsible for the production of approximately onethird of global rough diamond primary supply by
value. De Beers operates across key parts of the diamond value chain, including exploration, production,
sorting, valuing and selling of rough diamonds. It also markets polished diamonds under its proprietary
diamond brand, Forevermark, licenses the Forevermark brand and has a 50:50 retail joint venture with
LVMH Moët HennessyLouis Vuitton ("De Beers Diamond Jewellers").
Corporate and other. This business segment includes the noncore businesses previously reported under
Other Mining and Industrial and currently comprising the quarry materials companies operating under the
Tarmac brand ("Tarmac") (including Tarmac Middle East and a 50% interest in the Lafarge Tarmac
Holdings Limited ("Lafarge Tarmac") joint venture).
Strategy
Anglo American aims to become the investment of choice, the partner of choice and the employer of choice
through the operation of world class assets in the most attractive natural resources, and through a resolute
commitment to the highest standards of safe and sustainable mining.
Our leading exploration teams strive to find the resources we will mine in the future and we engage with a
broad range of stakeholders, from governments to local communities and NGOs, to secure our right to mine those
resources. Many of the natural resources we mine are processed and refined before we seek to apply our market
knowledge to deliver a quality product our customers value.
Our immediate strategy is focused on our Driving Value program, to achieve at least an attributable 15% Return
on Capital Employed ("ROCE") by 2016 (at June 30, 2013 exchange rates and prices), and set the business up for
longterm success and sustainable returns through the mining cycle. An extensive review of our asset portfolio was
initiated and completed in 2013, and the Group is now focused on four strategic priority areas to help to deliver this
target:
3
Capital allocation Achieving our target of an attributable 15% ROCE by 2016 (at June 30, 2013 exchange
rates and prices) will require a focus on capital discipline, our capital deployment to be directed towards high value,
low risk projects, and ensuring we manage the balance between growth and shareholder returns. We will continue to
allocate capital to our most value accretive options and pursue a syndication approach for major greenfield
developments, in line with managing individual risk exposures and achieving our longterm net debt target of
US$10US$12 billion, assisted by our asset disposal program.
Within our diversified portfolio, we are increasingly focused on higher quality resources and assets which can
deliver consistently highmargins through commodity cycles. While we manage all holdings in this portfolio to the
best of our ability, the clear focus is on Priority 1 ("P1") assets. P1 assets command the most attention of the
business unit and Group management time and are prioritized for capital allocation to ensure they reach their full
potential.
We determine asset priority through a careful assessment of strategic attractiveness and ultimate value creation
potential. We consider and analyze a number of factors, including cost position, endowment and resource scale and
quality, life and specific risk, alongside relevant qualitative factors. We then overlay our view of commodity
attractiveness.
Our 16 P1 assets contributed 90% of our underlying EBIT in 2014. Furthermore, the majority of our capital
expenditure related to P1 assets.
Priority 2 ("P2") assets are those which we believe have exciting cash generation potential, though not on the
same scale as P1 assets. We nurture these assets and resource positions to deliver material contributions to returns,
or redeploy our efforts and capital where this is not possible. We typically provide `lighter touch' support to P2
assets which often act as a good training ground for talent and innovation.
Through our asset review process, we identified a number of assets principally in our Platinum, Copper and
Coal businesses that are likely to deliver greater value under different ownership, enabling us to concentrate our
resources on our most attractive priority assets. The assets with respect to which we plan to pursue divestment
options include:
Platinum-- Rustenburg and Union mines
Copper --Mantos Blancos and Mantoverde and the El Soldado mine and Chagres smelter where we are in
consultation with key stakeholders and
Coal--Dawson, Foxleigh, Callide and Dartbrook mines.
We have also been conducting a process to sell our Tarmac Middle East business, as part of our exit from the
Tarmac assets. As a number of sales processes are under way, our value hurdles will need to be met prior to
divestment, in what is a challenging environment for asset sales.
Business execution We have a high quality asset base with the potential to deliver better margins and returns.
The asset review process has identified operational improvement opportunities and we are working towards
executing our plans while remaining committed to the highest standards of safe and sustainable mining.
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Stakeholder engagement We understand that we must work together with our stakeholders to partner with
them to reach their potential. Our ability to build effective and mutually beneficial partnerships with host
communities and governments is of particular importance to us and is a prerequisite for investment.
Organization structure We believe that having the right people, in the right roles, doing the right work is
critical to achieving our ambition, and so, we are redesigning our organization to enable our people and our business
to be successful.
We will also seek to create value through commercial initiatives. These include strategies to realize higher
prices by changing our product mix to respond to market developments and customer needs, as well as improving
returns by diversifying our customer base, establishing more direct customer relationships, and eliminating fees
previously given to fabricators and other intermediaries.
Despite the economic downturn in 2008 and 2009, we decided to continue the development of four key near
term strategic growth projects -- the MinasRio and Kolomela iron ore projects in Brazil and South Africa,
respectively, the Barro Alto nickel project in Brazil and the Los Bronces copper expansion project in Chile. The
Barro Alto project, with a competitive position in the lower half of the industry cost curve, commenced production
in the first half of 2011 and produced 25,100 tonnes in 2013. Both the Los Bronces copper expansion project and the
Kolomela project commenced production in the second half of 2011. The Los Bronces copper expansion reached
full design capacity in the second half of 2012 and Kolomela reached full design capacity in 2013. In 2012 at Minas
4
Rio, we completed a detailed cost and schedule review of the project in light of the then development progress and
disruptive challenges faced and increased the project's capital expenditure estimates to US$8.8 billion. First iron ore
shipment was achieved on October 25, 2014 and capital expenditure was again revised and is currently estimated at
US$8.4 billion (US$ 0.4 billion lower than the previous budget). What sets MinasRio apart is its magnitude and
quality. One of the world's biggest undeveloped iron ore resources, its Ore Reserves are currently estimated to be
approximately 2.8 billion tonnes (at 34.4% Fe). The Grosvenor metallurgical coal project in the Bowen Basin of
Queensland, Australia, was approved in December 2011 and is in development with first longwall production
expected from 2016. See "Business Description--Major Growth and Replacement Projects".
As part of the restructuring announced in October 2009, we identified certain of our businesses for divestment
and began separately reporting those in the Corporate and other business segment. That divestment program is now
complete and generated cumulative proceeds of US$4 billion on a debt and cashfree basis as announced, which
excludes US$7.4 billion cash generated from the sale of 49.9% of Anglo American Sur ("AA Sur"). The divestment
program included the sales of our zinc portfolio, the Scaw Metals business, several of Tarmac's European and other
businesses, five undeveloped coal assets in Australia, and the formation of the Lafarge Tarmac joint venture.
The formation of the Lafarge Tarmac joint venture was completed in January 2013, creating a leading UK
construction materials company.
Following the announcement on July 7, 2014 of an agreement in principle, the Group reached a binding
agreement on July 24, 2014 to sell its 50% ownership interest in Lafarge Tarmac to Lafarge SA ("Lafarge") for a
minimum value of £885 million (approximately US$1.38 billion at 2014 yearend spot rate) in cash, on a debt and
cashfree basis and subject to other customary working capital adjustments. The sale is subject to a number of
conditions, including the completion of the proposed merger of Lafarge and Holcim Limited. For further
information see "Business Description--Corporate and other--Tarmac Quarry Materials' UK businesses".
In December 2012, Anglo American agreed to sell its 70% interest in Amapá to Zamin Ferrous Ltd ("Zamin").
On March 28, 2013, a major geological event occurred at the Santana port of Amapá. In light of these
circumstances, Anglo American entered into further discussions with its partner Cliffs Natural Resources, Inc.
("Cliffs") and Zamin. Anglo American subsequently entered into an agreement with Cliffs to acquire its 30%
interest in Amapá and agreed to the sale to Zamin of a 100% interest in Amapá. These transactions completed on
November 1, 2013. For further information see "Business Description--Significant Transactions and
Restructuring".
In January 2013, Platinum had announced its proposals to reduce costs and reconfigure marginal operations
following an extensive review of its business which commenced in February 2012. On August 16, 2013, Platinum
concluded consultations with key stakeholders and unions on the plans to restructure its business. The review is
aimed at restoring Platinum's profitability to ensure its longterm sustainability and increase its competitiveness in
the global platinum mining industry.
We have made substantial progress towards creating a platinum business fit for the future. We have defined the
shape of our future platinum portfolio, taken the hard decisions to close down a number of shafts, restructured the
assets that we plan to divest to demonstrate their longterm commercial viability, set disposal processes under way
and, most importantly, aligned our plans with government and with our employees. For further discussion of major
divestment transactions see "Business Description--Platinum".
Significant Transactions and Restructuring
We have undertaken significant transactions including:
AA Sur: In November 2011, the Group announced the sale to Mitsubishi Corporation ("Mitsubishi") of a
24.5% interest in AA Sur for cash consideration of US$5.39 billion. In August 2012, the Group announced the
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sale of a 25.4% interest in AA Sur, in addition to certain undeveloped mining tenements to the east of
Codelco's Andina mine, to a Codelco/Mitsui & Co., Ltd. ("Mitsui") joint venture company for a cash
consideration of US$1.9 billion. See "Business Description--Copper--Disposal of Interests in AA Sur and
Settlement with Codelco".
De Beers: On August 16, 2012, the Group completed the acquisition of an additional 40% interest in De
Beers from CHL Holdings Limited ("CHL") and Centhold International Limited ("CIL", together with CHL,
the "CHL Group"), for a total cash consideration of US$5.2 billion (following adjustment under the relevant
agreement). The purchase price was funded from cash on hand. See "Business Description--De Beers--
Acquisition of Shareholding".
5
In November 2014, a refinancing transaction was carried out in respect of Ponahalo Holdings, the fully
consolidated black economic empowerment partner that holds 26% of the equity in De Beers' South African
mining and sales operations. In terms of this transaction, certain external debt was brought on balance sheet,
the maturity of balance sheet debt and external debt to banks was extended. External debt to banks was reduced
by approximately ZAR1.5 billion.
Kumba Iron Ore: On July 20, 2012, the Group increased its shareholding in Kumba by 4.5%, from 65.2%
to 69.7%, through the exercise of options acquired in 2011 and 2012, at a total cost of US$948 million.
We have undertaken several other significant transactions since the beginning of 2012, including a number
entered into for the purpose of actively restructuring the Group in order to focus on our core businesses. These
transactions included:
Atlatsa Resources Corporation (formerly Anooraq Resources Corporation):
In 2009, Platinum sold a
51% interest in Bokoni Platinum Mines Proprietary Limited ("Bokoni") and a 1% interest in certain
undeveloped projects to Atlatsa Resources Corporation ("Atlatsa") in a BEE transaction. Platinum retained
49% of Bokoni, and in addition acquired an effective 27% interest in Atlatsa as part of the sale consideration.
Both Atlatsa and Bokoni are associates of the Group.
Between 2009 and December 2013, Platinum provided Atlatsa and its subsidiaries, including Bokoni, with
additional debt and equity funding, and, in 2012, Platinum and Atlatsa agreed to restructure, recapitalize and
refinance both Atlatsa and Bokoni. The first phase of the refinancing transaction completed in December 2013,
whereby Platinum acquired certain properties from Bokoni and in return the level of debt outstanding from
Atlatsa was reduced. A charge of US$37 million was recorded in 2013 within nonoperating special items
relating to this transaction.
In January 2014, Platinum completed the second and final phase of the refinancing transaction for Atlatsa
Resources Corporation (Atlatsa). Platinum sold its existing 27.0% indirect equity interest in Atlatsa to the
controlling Black Economic Empowerment (BEE) shareholders and subscribed for equity shares in Atlatsa
representing a 22.8% direct interest. In return the level of debt outstanding from Atlatsa was reduced. These
transactions resulted in an increase in `Investments in associates' of US$69 million, a net decrease in `Financial
asset investments' of US$47 million and a net gain of US$22 million recorded within `Nonoperating special
items'.
Pebble project: On September 16, 2013, we announced our withdrawal from the Pebble copper project in
Alaska and concluded our exit on December 13, 2013. The Group's 50% interest in the project was written off
in full, resulting in a charge of US$311 million, including exit costs.
Michiquillay project: In December 2014, the Group also gave notice to the Peruvian government to
terminate the 2007 privatization agreement, which has resulted in Anglo American withdrawing from the
exploration phase Michiquillay copper project.
Scaw Metals: In November 2012, we completed the final stage of the Scaw Metals divestment with the
sale of Scaw SA, for a total consideration of US$440 million on a debt and cashfree basis as announced.
Peace River Coal: In September 2014, the Group announced that it had decided, in view of the subdued
hard coking coal price environment, to place the Peace River coal mine in British Columbia, Canada on care
and maintenance to preserve the longterm future of the operation.
Amapá: On January 4, 2013, Anglo American announced that it had reached an agreement to sell its 70%
interest in Amapá to Zamin. On March 28, 2013, a major geological event occurred at the Santana port of
Amapá, which resulted in the loss of five lives, with a further person still missing, as well as the loss of the port
operation. In light of these circumstances, Anglo American entered into further discussions with its partner
Cliffs and Zamin. Anglo American subsequently entered into an agreement with Cliffs to acquire its 30%
interest in Amapá and entered into an amended sale agreement with Zamin, to reflect Anglo American's
disposal of a 100% interest in Amapá to Zamin.
On November 1, 2013, Anglo American completed the acquisition from Cliffs and simultaneously
completed the sale of the 100% interest in Amapá to Zamin for a total initial consideration of approximately
US$134 million, net of certain completion adjustments.
As part of the transaction, Anglo American has assumed responsibility for, and the risks and rewards of
certain insurance claims including those relating to the Santana port incident, through the purchase of the claims
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from Amapá at the full claim value.
6
See "Business Description--Corporate and other".
Tarmac Quarry Materials' UK businesses: On January 7, 2013, Anglo American and Lafarge announced
the completion of their 50:50 incorporated joint venture which combined their cement, aggregates, readymix
concrete, asphalt and asphalt surfacing, maintenance services and waste services businesses in the UK
(excluding Tarmac Building Products). The joint venture company is known as Lafarge Tarmac. Completion of
the Lafarge Tarmac joint venture followed final clearance from the UK Competition Commission ("CC"),
predicated on the completed sale of a portfolio of Tarmac Quarry Materials and Lafarge UK construction
materials operations in the UK, which also occurred on January 7, 2013. On November 14, 2013, Anglo
American announced that it had reached an agreement to sell Tarmac Building Products Limited to Lafarge
Tarmac, and the sale completed on March 31, 2014.
Following the announcement on July 7, 2014 of an agreement in principle, the Group reached a binding
agreement on July 24, 2014 to sell its 50% ownership interest in Lafarge Tarmac to Lafarge SA ("Lafarge") for
a minimum value of £885 million (approximately US$1.38 billion at 2014 yearend spot rate) in cash, on a debt
and cashfree basis and subject to other customary working capital adjustments. The sale is subject to a number
of conditions, including the completion of the proposed merger of Lafarge and Holcim Limited. For further
information, see "Business Description--Corporate and Other--Tarmac Quarry Materials' UK businesses".
Palabora Mining Company Limited ("Palabora"):
On July 31, 2013, we completed the sale of our 16.8%
interest in Palabora in South Africa for ZAR938 million (approximately US$95 million).
Sishen Mine: Significant progress has been made in the progression of the Sishen Western Expansion
Project ("SWEP"). Project development remains within budget, and construction activities have been
completed. A major milestone in the development of the project was the relocation of the Transnet SOC Ltd's
("Transnet") railway line from its previous position to the west of the current Sishen pit, to the far western
extent of Kumba's Sishen Iron Ore Company (Proprietary) Limited ("SIOC") property. The relocation of the
railway line was completed in May 2013.
As a consequence of Transnet having previously held the surface rights over the SWEP rail properties, the
rail properties were excluded from the Sishen Mining Right area. SIOC applied to the South African
Department of Mineral Resources ("DMR") to obtain the necessary rights in relation to the rail properties,
which were granted by the DMR on February 11, 2014. The granting of the Mining Right gives SIOC access to
approximately 33% of the Sishen Ore Reserve included in the SIOC's Life of Mine plan. This portion of the
Ore Reserve, which had been classified as Probable, can now be reclassified as Proved. SIOC accordingly
proceeded with the implementation of its mining plan and started waste stripping in the affected area from the
second half of 2014.
SIOC Iron Ore Supply Agreement: On November 5, 2013, Kumba announced an agreement (the "Iron Ore
Supply Agreement") regulating the sale and purchase of iron ore between ArcelorMittal South Africa Limited
("ArcelorMittal S.A.") and SIOC, effective January 1, 2014. The Iron Ore Supply Agreement settles various
disputes between the parties. For further discussion about the Iron Ore Supply Agreement, see "Business
Description by segment--Iron Ore and Manganese--SIOC Iron Ore Supply Agreement".
21.4% undivided share of the Sishen mine mineral rights: SIOC has not yet been awarded the 21.4%
Sishen Mining Right, which it applied for in early 2014 following a Constitutional Court judgment on the
matter in December 2013. The Constitutional Court ruled that SIOC held a 78.6% undivided share of the Sishen
Mining Right and that, based on the provisions of the South African Minerals and Petroleum Resources
Development Act 2002 ("MPRDA"), only SIOC can apply for, and be granted, the residual 21.4% share of the
Mining Right at the Sishen mine. The grant of the Mining Right may be made subject to such conditions
considered by the Minister of Mineral Resources to be appropriate, provided that the proposed conditions are
permissible under the MPRDA. Kumba Iron Ore is actively continuing its discussions with the DMR in order to
finalize the grant of the residual 21.4% share.
Other Recent Developments
First Quarter 2015 Production Results: On April 23, 2015, we published the Group's production report
for the first quarter ended March 31, 2015 ("Q1 2015"). For production data, see "First Quarter 2015 Production
Results".
Kumba Iron Ore tax dispute: Kumba Iron Ore has certain unresolved tax matters that are currently under
review with the South African Revenue Service ("SARS"). Kumba Iron Ore's management has consulted with
external tax and legal advisers, who support the positions taken. Nonetheless, Kumba Iron Ore management is
actively discussing these matters with SARS with a view to seeking a resolution. See "Risk Factors--Risks
7
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Related to Our Business--Tax laws and regulations in some of the countries in which we operate may be
subject to change, varying or adverse interpretation or inconsistent enforcement."
Developments and Outlook
Global real gross domestic product ("GDP") increased by 3.25% in 2014, the same as in 2013, and is projected
to have 3.5% growth in 2015, according to the International Monetary Fund ("IMF"). There was a notable
divergence in performance, however, between the world's major economies.
At the start of 2014, there was growing optimism about prospects for the US economy, but the extreme winter
weather contributed to a contraction in real GDP in the first quarter. The strong recovery in the spring and summer
led to annualized GDP growth of more than 4½%. Improvements in the labor and housing markets and a steep fall in
oil prices later in the year supported significant gains in consumer confidence. Business sentiment also improved,
encouraging increases in capital spending. After a significant tightening in 20122013, the fiscal squeeze moderated
in 2014, imparting a smaller drag on growth. The Federal Reserve gradually wound down its quantitative easing
program, completing it in October.
In the first six months of 2014, China's economy grew in line with the government's 7½% target, which was a
little below the rate in the second half of 2013. The People's Bank of China ("the Bank") injected liquidity into
distressed sectors of the economy and the government accelerated some infrastructure projects. In the second half of
2014, growth dropped below the government's target, mainly reflecting the negative impact of a weakening property
market and slower industrial activity. In response, the Bank cut interest rates and allowed the renminbi to drift
lower, and the government eased house purchase restrictions and loosened mortgage terms in order to stimulate the
market.
The European economy and growth in the region remained fragile in 2014, especially in the Eurozone's largest
economies. Following two years of output contraction, the Eurozone registered modest growth as the heavily
indebted economies stabilized, with Germany being the strongest of the larger economies. After robust gains early in
2014, the German economy weakened appreciably later in the year, reflecting the slowdown in its main export
markets and the impact of a stronger euro, especially against the Japanese yen. The French economy stagnated and
the Italian economy contracted again in 2014, with fiscal austerity and impaired banking systems compounding the
effects of a stronger euro. The European Central Bank announced significant easing measures in the summer and has
since announced a policy of quantitative easing in 2015.
After strong growth in the first quarter of 2014, the Japanese economy slumped in the subsequent six months.
The government's decision to increase the consumption sales tax in April had a bigger negative impact than
expected and, as a result, the Bank of Japan announced an aggressive scaling up of its quantitative and qualitative
easing. The Abe government subsequently decided to postpone the second stage of a planned tax increase.
After the turmoil of 2013, many emerging economies experienced greater stability in 2014. Financial market
sentiment improved significantly in India following the election of Narendra Modi as prime minister, who is
considered to be probusiness and foreign investment, boosting infrastructure and modernization. While
improvements in the real economy have been patchy, confidence is improving regarding India's medium to longer
term prospects. In Brazil and South Africa, growth finally stabilized after significant slowdowns. Russia's economy
weakened sharply in response to the escalating Ukrainian crisis, a significant fall in oil prices and sanctions.
Commodity and Diamond Markets
Throughout 2014, the prices of the commodities we produce displayed marked trend differences, as well as
recording high volatility around those trends. Individual price performance reflected changing expectations of the
macroeconomic context, in particular, global growth and the relative strength of the US dollar, the outlook for
supply (which exceeded expectations in some key commodities) and the underlying industry cost structure of each
commodity.
As expectations of growth in China were progressively revised downward and confidence was eroded in the
outlook for the EU and Japan through the year, demand forecasts were lowered, which impacted the price
performance of the bulk commodities in particular.
Iron ore prices experienced significant downward pressure in 2014, with the price dropping by almost 50% over
the course of the year. This reflected a fundamental oversupply in the market as the industry expanded output
rapidly, even compared with guidance earlier in the year. Australia and Brazil, for example, increased output by an
estimated 140 million tonnes. This substantially exceeded incremental growth in demand, which almost halved in
2014, primarily as a result of a marked slowdown in key steel consuming sectors in China, particularly construction.
8
In the metallurgical coal markets, prices declined, with the hard coking coal spot price falling from an average
of US$147/tonne in 2013 to US$113/tonne in 2014. Despite yearonyear growth in steel production in the key
demand regions of northeast Asia, India and Europe, import demand from China stalled on the back of slowing
steel output growth and increased domestic production. At the same time, a depreciating Australian dollar, the ramp
up of new projects and a productivity focus at existing operations supported overall yearonyear hard coking coal
supply growth from Australia. These largely offset the impact of announced capacity closures there and elsewhere.
Manganese, as a steelmaking raw material, also faced challenging conditions in 2014. Infrastructure constraints
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in South Africa were loosened, which eliminated a key bottleneck from the market, and made South African
production the relevant price driver.
Thermal coal also had a difficult year, with prices moving down from an average US$84/tonne Platts FOB
Newcastle during 2013 to below US$65/tonne by 2014 yearend, a new fiveyear low. Weak Chinese buying
continued to weigh on AsiaPacific prices, with flagging Chinese domestic coal demand growth offset only partly by
Indian demand growth. Weaker currencies in coal producing countries helped support production levels despite low
price levels, while there was no significant slowing in project execution, notably in Indonesia, which put further
pressure on prices through the year.
Copper prices came under pressure from around midyear 2014. Demand suffered from destocking in China,
principally from bonded warehouses as a result of the financing scandal centered in the port of Qingdao, where a
Chinese company used the same batches of copper and aluminum stored at the port as collateral to secure multiple
loans from different creditors. Concerns over potentially strong supply growth weighed on sentiment, as did the
uncertain outlook for global growth and particularly that of the Chinese construction sector. However, support for
prices was provided by strategic purchases made by the Chinese State Reserve Bureau, significant destocking from
Chinese bonded warehouses reaching an end, exchange stock levels remaining relatively low, and by expectations
that unfulfilled power infrastructure budget spending in China might begin to accelerate. The copper price fell by
almost US$700/tonne by midJanuary 2015, with reports that some large Chinese hedge funds had played a role in
the sudden weakness by selling large amounts of copper futures, forcing the price much lower.
Nickel prices were strong through most of the first six months of 2014 on expectations that the ban on exports
of nickel ore from Indonesia would lead to the global market moving into deficit. Prices plummeted in the second
half, however due to unexpectedly high levels of ore exports from the Philippines, lower than expected stainless
steel demand and by an increase in highly visible LME inventories. This essentially delayed the still widely forecast
tightness in the global market for the metal.
Phosphate fertilizer prices in Brazil were broadly unchanged yearonyear.
Niobium prices decreased slightly, due to production capacity increases running ahead of relatively flat demand
and the strength of the US dollar.
Platinum and palladium prices exhibited converse trajectories in 2014. In the 12 months to December 2014,
platinum prices dropped 11% while palladium prices rose by 12%.
Although demand for platinum was higher in aggregate for autocatalysts, industrial and jewelry applications, it
was offset by weaker investment demand. The fivemonth South African strike in 2014 had a major impact on
supply and reduced global platinum supply by 573,000 ounces. The positive price response on account of the
apparent deficit was more muted than expected, partly owing to the existence of above ground stocks.
The palladium price, supported by a tighter supplydemand balance than platinum, as well as concerns over
Russian supply, reached a 13year high of US$911 per ounce in early September 2014, but thereafter followed
platinum prices down.
End consumer demand for diamonds is estimated to have grown globally in 2014, in dollar terms. Increased
economic activity and consumer confidence in the US reinforced demand for diamonds, while in China, growth in
diamond jewelry demand continued, albeit at more modest levels, reflecting slowing economic growth. Polished
prices suffered in the last quarter of 2014 due to unexpectedly slow demand during the end of the year gifting season
in the US. De Beers' own underlying rough spot price index indicated an increase of 7% over the course of 2014.
Outlook
According to the IMF, it is anticipated that the world economy should strengthen in 2015 and 2016, with real
GDP growth forecast to increase to around 3½3¾% per year, close to its historical average. Lower oil prices should
support activity in many oil consuming countries. The US is expected to lead the recovery, with GDP growth of at
least 3% per year. In Europe and Japan, growth is expected to remain more modest given continuing concerns
around government finances and the fragility of their banking systems and corporate sectors.
9
The turbulence in emerging economies has led to a more cautious assessment of their mediumterm growth
prospects. With a less favorable external environment and increasing domestic challenges, the IMF has recently
revised down its forecasts for growth over the next three to five years. Lower commodity prices could undermine
activity in commodity producing economies, although convergence in living standards suggests there is considerable
growth potential, especially in Asia and Africa. There is a great onus on domestic policymakers to implement much
needed reforms to unlock this potential.
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