ANGLO AMERICAN

1 10 OPTIMA NOVEMBER 2006 ANGLOAMERICANADVANCING THROUGHTECHNOLOGYRICHARD ROBERTSA nglo AMERICAN , asone of the majordiversified natural-resource players,has always beenunderpinned byastrong technologyand resource has served tomaintain the AngloGroup s leadership inkey areas of its coremining activities,adding significantvalue to operations. WE CAN T CHOOSE where mineral depositsare located, or what sin them it s only ourtechnology that enables us to find them in the firstplace and then exploit them more profitably thanour competitors. These words of Dave Morris,head of business improvement at ANGLO BaseMetals, sum up nicely the vital importance oftechnology to a mining group such as AngloAmerican.

2 As with any major mining group,exploration and the use of technology to turnidentified mineral deposits to account remain thelifeblood of ANGLO . Yet in many senses, the job isbecoming ever more challenging: a century or so ofextensive global exploration means that the chancesof finding a single high-grade deposit that coulddominate world output are unlikely, while thepresent commodities boom is pushing explorationjuniors and mining majors alike out towards new frontiers in often remote and inhospitableterritories. Moreover, the combination of elusive andmore complex geology and mineralogy, structuralcost pressures across the global resource industry,often-declining grades and, until recently, long-termdownward trends in prices in real terms (see graphon page 12) means that continual improvement of our technology is imperative if we are to stay inbusiness and produce the returns demanded by ourshareholders.

3 To quote ANGLO s head of metallurgyPaul Dempsey, We need to be capable of developingleading-edge technology, of applying best-availabletechnology more quickly and intelligently than ourcompetitors, and of maximising synergies across the Group to ensure ANGLO AMERICAN remains at theforefront of world mining. ANGLO PLATINUM Research tends to play a more ground-breakingrole, identifying new and emerging technologiesand developing them to pilot-plant scale before handing them over for full commercialimplementation, as well as assisting with therapid transfer of best-available technologiesacross ANGLO . ANGLO Field Services is another arm of the Division, and provides specialist non-destructive testing and materials consultancyservices to Group companies and other clients ona global the Group s operating divisions have theirown teams of specialists, and part of the challengein a global and diverse organisation such as AngloAmerican is to ensure that skills and knowledgeare disseminated across all operations that maybe able to benefit from them.

4 Knowledgemanagement is becoming a specialist field ofstudy in its own right. ANGLO has invested heavilyin new portal website technology to improvecommunication across the Group, and one of theunexpected benefits of thesource, as ANGLO sportal is known, is a feature called Ask ANGLO that enables any employee to pose a question andhave it answered by an expert from elsewhere inthe organisation. A question on steam utilisationat ANGLO Base Metals Skorpion zinc mine inNamibia has been solved by an experiencedengineer from Mondi, the Group s paper andpackaging business unit, while a query from Chile about truck maintenance procedures hasbeen answered by a person at a coal mine in South Africa more than 9,000 kilometres fundamental task for any mining companyis to find and prove new mineral deposits and, inorder to do this, ANGLO , either on its own or inpartnership, has developed an array of world-classadvanced technologies.

5 The days of the loneprospector with his pick, shovel and mule arealmost over, since few new deposits are foundoutcropping at surface, and specialised instrumentsare needed to detect valuable minerals buriedunder many metres of soil and rock. Spectrem, awholly-owned subsidiary, specialises in the airborne12 OPTIMA NOVEMBER 2006 Photograph on page 11:ONE OF THE LATESTTECHNOLOGYDEVELOPMENTSis the ANGLO PlatinumAusmelt high-intensitysubmerged-injectionfurnace installed in the converting plant at Rustenburg, South Africa. Thistechnology was pilotedat ANGLO Research25507510012515017520022525027530 0200520021999199619931990198719841981197 81975 Copper prices adjusted for costs Copper prices adjusted for inflat ion Source: ANGLO AMERICAN Metal Studies Unit ANGLO Base MetalsThe graph shows how technology reduced costs faster than the decline in the real copper price hence, copper hasremained an attractive investment for efficient producers over the periodc/lbCopper prices adjusted for inflation and costsTo the man in the street, technology usuallymeans the latest in high-tech gadgetry, but thereality is more prosaic.

6 Surprisingly, the onlineOxford English Dictionary shows that the worddates back to 1615 and means the scientificstudy of the practical or industrial arts . A simpledefinition is that science tells us why somethinghappens, while technology shows us how to makeit work. In mining terms, technology may besomething as relatively simple as choosing theright tyre for a truck so that it can carry its ratedload safely and reliably in the mine environment or as complex as deploying the latest aerialreconnaissance equipment in searching for mineralsin a remote and forbidding region of the and development can be considered aspart of the technology framework. In broad terms,research can be equated to science, whiledevelopment concentrates on the practicalapplication of that science; in other words, the ANGLO Technical Division is the custodianof some of the more specialised technologiesemployed in the ANGLO AMERICAN Group.

7 Anglosurveying of prospective areas; a host of highlysensitive instruments is used to detect magneticor conductive anomalies that are otherwiseinvisible. Miniaturisation of the on-board electronicsmeans that the equipment can now be carried byhelicopter, or even airship, to provide slowerspeed coverage and better resolution in promisingregions. The ground crews are then called in tomake a more detailed investigation, and here theDivision s Geosciences Resource Group has aunique assemblage of special tools and by liquid helium, SQUID is a superconductingquantum interference device that is exclusivelylicensed to the Division and particularly useful forfinding buried metallic deposits such as nickelsulphides that are masked by other conductingminerals.

8 As a spin-off, the sensitive magneticproperties of SQUID are being assessed forpossible use by ANGLO Field Services in rope-testinginstruments a good example of the kind oftechnology transfer across the Group that needsto be continually fostered and encouraged. ANGLO is widely acknowledged as the worldleader in hard-rock seismic exploration and thelatest Vibroseis systems, which have beendeveloped to locate geological features, greatlyextend ground-penetration capability and accuracyin determining the structure of a mineral deposit essential information when planning how to mineit and where to place the are many definitions of ore , but allof them include some reference to economics, anessential factor in evaluating the reserves of apotential mine.

9 Putting this into context, Carelde Jager of the Division s mining economicssection comments: We only have one chance tomine a deposit if we get it wrong, we can t putit all back in the ground and start again. Decisionsmade at the conceptual stage will affect the costand profitability of a project for the remainder ofits life. Studies have shown that as much asthree-quarters of a project s life-cycle costs arecommitted when only a tiny percentage of the up-front costs has been spent. OPTIMA NOVEMBER 2006 13 DEVELOPMENT OF THE WORLD S FIRST EXPLORATIONAIRSHIP will give De Beers a competitive edge inprospecting. The Zeppelin s equipment measuresmagnetic field changes faster and more cheaply thantraditional surveys.

10 Slower speed and low vibrationgive higher image resolution, and promise improveddiscovery ratesDE BEERSNot only are ore deposits of any scalebecoming harder to find, their often remote locationin harsh regions lacking in infrastructure, allied to acombination of frequently falling grades and thepresence, at times, of deleterious elements, suchas arsenic and selenium, makes for particularlychallenging conditions. A large copper project mighthave had an average grade greater than 1% adecade ago, but many new projects today havereported grades of not much more than Theresponse of the mining industry to these challengeshas been three-pronged: more accurate mining,fewer and larger pieces of equipment, andinnovative new extraction processes targeted moreprecisely at the specific minerals we wish to of mine-planning data with on-boardGlobal Positioning System (GPS) receivers andmachine controls allows the operator of a miningshovel to load just the required ore from anopen-pit face with centimetre accuracy, savingboth transport and treatment costs.