Anglo American Annual Report 2012

OPERATING AND FINANCIAL REVIEW RESOURCES AND TECHNOLOGYEXPLORATIONGlobal exploration activity for 2012focused on greenfield projects acrossa number of mature and frontierlocations, as well as on adding value,through increasing resources andreserves, to our operations andadvanced projects. Our explorationexpenditure in 2012 amounted to$206 million and covered 18 countries.Iron Ore exploration expenditure of$23 million was concentrated aroundoperations and projects in Africa,Australia and Brazil. In South Africa,exploration was undertaken to supportKumba’s Sishen and Kolomelaoperations; reconnaissance drillingon high priority targets confirmedmineralisation and drilling capacity hasbeen increased to further investigatetheir potential. In Brazil, activity relatedto preliminary drilling and geologicalactivities around the Minas-Rio project.Metallurgical Coal explorationexpenditure of $18 million focusedon drilling, seismic surveys, andcoal quality analysis near existingoperations in Australia and Canadawith the aim of improving thedefinition of additional coking coalresources. In Australia, drilling andseismic activities were performed,including at the Foxleigh and RolfeCreek projects. In Canada, theexploration team was strengthenedat the Peace River Coal Trend mineand surrounding exploration leases,with the aim of defining additionalcoking coal resources.Thermal Coal exploration expendituretotalled $14 million, being spentprimarily on drilling and analysis inSouth Africa. During 2012, explorationdrilling was undertaken at 10 projectareas, with the objectives of meetingboth statutory work programmerequirement as well as providinggeological evaluation informationand geological models for projectadvancement through the variousstage gates.Exploration expenditureby commodity in 2012Iron Ore$23 mMetallurgical Coal $18mThermal Coal$14 mCopper $39mNickel $32mPlatinum $4mPhosphates and Niobium$2 mDiamonds $23mCentral exploration activities $51mCopper exploration expenditureof $39 million consisted mainly ofnear-mine and greenfields explorationdrilling in Chile where key activitiesincluded drilling at Los Broncesand Mantos Blancos. Greenfieldsexploration was also conducted inArgentina, Brazil, Chile, Colombia,Greenland, Indonesia, Peru, the USand Zambia.Polymetallic (copper-nickel-platinumgroup elements) explorationexpenditure (included within the Nickelcommodity line as disclosed in note 7to the financial statements) amountedto $28 million and concentrated onSakatti in northern Finland. Explorationat this advanced project aimed todefine the limits of the orebody andto test other surrounding high prioritytargets. Greenfields polymetallicexploration was conducted elsewherein northern Finland, western Brazil, theMusgraves region of Western Australiaand the Canadian Arctic.Nickel exploration expenditurewas $4 million and related mainlyto nickel laterite exploration in theMorro Sem Boné district in Brazil.Elsewhere, near-mine explorationwas undertaken at Niquelândia(Codemin), also in Brazil.Phosphates and Niobium explorationexpenditure was $2 million andwas focused on greenfields projectsin central Brazil and near-mineexploration at Boa Vista (niobium).Platinum exploration accountedfor $4 million and was focused oninvestigating new opportunities withinSouth Africa’s Bushveld Complexand on fulfilling of the statutory workprogramme requirements to keeptenure in good standing. Thepotential for shallow resourcesthat may be mined using opencastmethods was investigated throughdrilling programmes during the year.Platinum exploration continued atUnki in Zimbabwe.Since acquisition in August 2012,De Beers has spent $23 million($59 million for the full year, on a 100%basis) on exploration programmes inAngola, Botswana, Canada and India.The exploration team continued toprovide technical services to theresource extension programmesfor the Jwaneng and Orapa minesin Botswana, and the Victor minein Canada.40 Anglo American plc Annual Report 2012