Anglo American Annual Report 2012

OPERATING AND FINANCIAL REVIEW PLATINUMSTRATEGYIn reformulating its strategy,Platinum has reviewed the businessacross the entire value chain toaddress structural challenges thathave eroded profitability over timewith the intention of creating a safe,sustainable, competitive and profitableplatinum business for the long termbenefit of all its stakeholders.This will be achieved through thealignment of baseline productionwith long term demand expectations,focusing on a high quality portfolioof operations to produce PGMs onan economically sustainable basis.An organisational design has beendeveloped to ensure that theoperations are supported by anappropriate level of overhead, whilethe commercial strategy aims toensure value and stability for Platinumand customers, while promoting newPGM applications. Operationally, thebusiness intends to increase exposureto lower risk, higher margin, lesscapital intensive mines, supporting asignificant reduction in the cost baseand a more efficient allocation ofcapital. Flexibility for long termgrowth options will nevertheless beretained, ensuring Platinum is wellpositioned should demand increaseabove expectation.Platinum continues to take its socialresponsibility seriously, particularlyto its employees and surroundingcommunities. The implementationof the strategy aims to deliver a stable,competitive and profitable businessthat will be best placed to sustain andcreate employment over the long term.Operating safely, sustainablyand responsiblyThe journey to zero harm remains akey strategic objective. Although thecompany’s safety strategy remainssound, it continues to review andadjust it in order to ensure that itspecifically targets the major causesof injuries and fatalities. Platinum isalso working tirelessly with its partnersin government and its workforce toimplement more effective meansof addressing major risks andnon-compliance with standards.Platinum’simplementationof its strategyaims todeliver a stable,competitiveand profitablebusiness thatwill be bestplaced tosustain andcreateemploymentover thelong term.Platinum price$ (oz)2,0001,8001,6001,4001,2001,000800H1 2011 marketprice: $1,792/ozH1 2011 achievedbasket price:R20,194/ozH2 2011 marketprice: $1,650/ozH2 2011 achievedbasket price:R19,061/ozJan 11Jun 11Rand Pt. basketPlatinumSource: Anglo American Commodity ResearchGross platinum demandby application’000 oz20082009201020112012Dec 110 4,500 9,000AutocatalystJewelleryChemicalElectricalGlassinvestmentIncorporating:Medical and BiomedicalPetroleumOtherSource: Johnson Matthey Interim Review 2012H1 2012 marketprice: $1,558/ozH1 2012 achievedbasket price:R20,086/ozJun 12H2 2012 marketprice: $1,551/ozH2 2012 achievedbasket price:R19,504/ozGross platinum supplyby country’000 oz2008200920102011201225,00020,00015,00010,0005,0000Dec 12Rand (oz)0 3,500 7,000South AfricaRussiaNorth AmericaZimbabweOthersSource: Johnson Matthey Interim Review 201278 Anglo American plc Annual Report 2012