Anglo American Annual Report 2012

FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS35. CONTINGENT LIABILITIESThe Group is subject to various claims which arise in the ordinary course of business. Additionally, and as set out in the 2007 demerger agreement,Anglo American and the Mondi Group have agreed to indemnify each other, subject to certain limitations, against certain liabilities. Anglo American has alsoprovided Mitsubishi Corporation LLC with indemnities against certain liabilities as part of the sale of a 24.5% interest in AA Sur. Having taken appropriatelegal advice, the Group believes that a material liability arising from the indemnities provided is unlikely.The Group is required to provide guarantees in several jurisdictions in respect of environmental restoration and decommissioning obligations. The Group hasprovided for the estimated cost of these activities.No contingent liabilities were secured on the assets of the Group at 31 December 2012 or 31 December 2011.OtherKumba Iron Ore (Kumba)Sishen Supply Agreement ArbitrationA dispute arose between Sishen Iron Ore Company Proprietary Limited (SIOC) and ArcelorMittal South Africa Limited (AMSA) in February 2010, in relationto SIOC’s contention that the contract mining agreement concluded between them in 2001 had become inoperative as a result of the fact that AMSA had failedto convert its old order mining rights. This dispute has been referred to arbitration. On 9 December 2011 SIOC and AMSA agreed to delay the arbitrationproceedings in relation to the Sishen Supply Agreement until the final resolution of the mining rights dispute. This arbitration is only expected to commence inthe fourth quarter of 2013, with possible resolution only expected in the third quarter of 2014 at the earliest.An Interim Pricing Agreement (IPA 2) between SIOC and AMSA was in place until 31 July 2012 and was extended to 31 December 2012.In December 2012 a further interim agreement was concluded, after negotiations which were facilitated by the Department of Trade and Industry (DTI).The further interim agreement will govern the sale of iron ore from the Sishen mine to AMSA for the period 1 January 2013 to 31 December 2013, or untilthe conclusion of the legal processes in relation to the 2001 Sishen Supply Agreement (whichever is the sooner), at a weighted average price of $65 per tonne.Of the total 4.8 Mt, about 1.5 Mt is anticipated to be railed to Saldanha Steel and the rest to AMSA’s inland operations.21.4% undivided share of the Sishen mine mineral rightsOn 3 February 2012 both the Department of Mineral Resources (DMR) and Imperial Crown Trading 289 Proprietary Limited (ICT) submitted applications forleave to appeal against the High Court judgment. SIOC applied for leave to present a conditional cross-appeal, in order to protect its rights. The Supreme Courtof Appeal (SCA) hearing will be held on 19 February 2013, and the SCA judgment is expected to be received early in the second half of 2013.The High Court order did not affect the interim supply agreement between AMSA and SIOC. SIOC will continue to take the necessary steps to protect itsshareholders’ interests in this regard.Anglo American South Africa Limited (AASA)AASA, a wholly owned subsidiary of the Company, is a defendant in 24 separate lawsuits in South Africa each one on behalf of a former mineworker (or hisdependents or survivors) who allegedly contracted silicosis working for gold mining companies in which AASA was a shareholder and to which AASA providedvarious technical and administrative services. In addition, AASA is a defendant in one lawsuit filed in the High Court in London, England on behalf of 19 formermineworkers or their dependents, a second lawsuit filed there on behalf of 1,106 named former mineworkers or their dependents and also as a “representativeclaim” on behalf of all black underground miners in “Anglo gold mines” who have been certified as suffering from silicosis and related diseases, a third lawsuitfiled there on behalf of 630 named former mineworkers or their dependents and a fourth lawsuit filed there on behalf of 1,232 former mineworkers or theirdependents. AASA is also named as one of 30 defendants in a class certification application filed in South Africa purportedly on behalf of 17,000 claimants.The aggregate amount of claims in the 24 South African lawsuits is less than $5 million. No specific amount of damages has been specified in the claims filed inEngland or the class certification application filed in South Africa.If the individual claims are determined adversely to AASA there are a substantial number of additional former mineworkers (or their dependents or survivors)who may seek to bring similar claims or whose claims could become part of the representative claim filed in England or the class action claim in South Africa.The arbitration hearing for 11 of the individual South African claims is expected to begin in October 2013.AASA is contesting the jurisdiction of the English courts to hear the claims filed against it in that jurisdiction and will oppose the application for classcertification in South Africa.PlatinumAt 31 December 2012 Platinum has certain unresolved tax matters that are currently under dispute with the South African Revenue Service (SARS). Platinummanagement has consulted with external tax and legal advisers, who support the positions taken. Nonetheless, Platinum management are actively discussingthe issue with SARS with a view to seeking resolution and believe that the accounting for these matters is appropriate in the results for the year ended31 December 2012.184 Anglo American plc Annual Report 2012