Themba Mkhwanazi, CEO,

KUMBA IRON ORE

"In striving to ensure that our host communities are sustainable beyond life-of-mine, we place an emphasis on progressively increasing levels of procurement from localised suppliers, supported by our supplier and enterprise development initiatives."

How significant is Kumba Iron Ore to Anglo American’s regional operations?

Inspired by our purpose to re-imagine mining to improve people’s lives, we are committed to ensuring beneficial co-existence with host communities and to working collaboratively with our suppliers, communities and partners to ensure the development of thriving, healthy and inclusive communities beyond mining. In striving to ensure that our host communities are sustainable beyond life-of-mine, we place an emphasis on progressively increasing levels of procurement from localised suppliers, supported by our supplier and enterprise development initiatives. We contribute R51 billion of shared value to the region’s economic environment and to the national fiscus. In the most recent results, R1.7 billion was spent with host community businesses and R85 million on social development projects, of which R12 million was our Covid-19 contribution.

How did Sishen and Kolomela perform during the pandemic and what are your production plans for both assets in 2021 – 2022?

Our operations continued to perform well during the pandemic, contributing to our strong financial performance and reinforcing our business resilience. This is due to our WeCare Covid-19 program that we have embedded at our sites and which helps to safeguard our workforce and communities against the pandemic.

Our processing plants at both Sishen and Kolomela maintained strong performance, demonstrating the benefit of the maintenance program and improved plant availability. Despite the impact of logistical constraints and severe weather disruptions in H1 2021, we delivered a strong operational and financial performance, with production increasing by 12%. Furthermore, we delivered an EBITDA of R44.4 billion, close to the R45.8 billion achieved for the full year 2020.

Our ambition is to extend life of mine to 2040 at both mines. We recently announced Sishen’s life extension to 2039 and our objective is the same at Kolomela. We remain confident on the exploration prospects in the Northern Cape.

Our total production guidance (wet metric basis) for 2021 is 40.5 - 41.5 million mt with Sishen at ~28 million mt and Kolomela at ~13million mt. For 2022, Kumba’s total production guidance is 41.5 - 42.5 million mt.

How do you ensure your environmental footprint is minimized across your operations?

Our EIPs focus on: permitting and environmental awareness, pollution prevention and remediation, energy and greenhouse gas (GHG) emissions management, water stewardship and management: rehabilitation, mine closure and biodiversity. We set and track measurable goals for our performance, including targets on energy use, GHG emission reductions, water-use efficiency, PM10 dust emissions and high potential hazards. We measure our progress through structured auditing to ensure compliance and continual improvement.

Our Chief Executive’s scorecard includes performance on energy and carbon. Kumba's general managers are financially rewarded for achieving operational-level energy-reduction targets. In future, we aim to incentivise individuals based on their team’s performance against climate, energy and water targets. This will contribute to the whole workforce being incentivised to meet our GHG targets.

In line with the Paris Agreement’s 1.5 scenario and the Anglo American sustainability strategy, we are working towards 2030 climate-change stretch goals and we have committed to achieving carbon neutrality across our operations by 2040.

Operational site-specific targets are aligned with our mine plans and diesel and electricity usage forecasts have been cascaded and monthly progress per site is reported. Two key processes guide how we manage climate-change risks: the Operational Risk Management (ORM) program for operations, and investment development model for projects.

We manage the relationship with our host communities through our social performance management system, the Anglo American Social Way. It sets out the requirements all our managed or operated sites need to meet. It also covers how we engage with communities, mitigate adverse social impacts, and pursue development opportunities

We have a strong record of supporting transformation and contributing to South Africa’s growth and development and will continue to do so. Our approach has always been to “go beyond compliance” in all of our efforts to transform our business.

Climate change is one of the defining challenges of our time. Recognising the complex global challenge it poses and understanding the implications is a critical strategic issue for us.