Anglo American : Tax and Economic Contribution Report 2021

Tax and Economic Contribution Report 2021

Overview

Re-imagining mining to improve people's lives

Transforming the very nature of mining for a safer, cleaner, smarter future.

At Anglo American, we are working to make this future a reality - combining integrity, creativity and smart innovation, with the utmost consideration for our people, their families, local communities, our customers and the world at large - to better connect the resources in the ground to the people who need and value them. We are working together to develop better jobs, better education and better businesses, building brighter and healthier futures around our operations in our host countries and ultimately for billions of people around the world who depend on our products every day. We include here key metrics that highlight the tax and economic contributions of our operations.

Total tax and economic contribution(1)	$m	Taxes and royalties borne(2)	$m		Number of employees(3)
	2021		2020(4)			2021	2020(4)				2021	2020(4)
Australia	2,261.8	2,305.6	Australia	244.0	135.6		Australia	2,000	2,000
Botswana	1,041.7		726.9	Botswana	398.3	234.9		Botswana	3,300	3,200
Brazil	1,931.9	1,342.8	Brazil	465.0	148.5		Brazil	4,100	3,900
Canada	196.1		471.3	Canada	8.5	9.4		Canada	650	700
Chile	3,226.2	2,890.1	Chile	849.6	370.3		Chile	4,300	3,800
Namibia	538.5		484.0	Namibia	76.8	132.2		Namibia	1,500	1,400
Peru	1,333.8	1,307.1	Peru	5.8	9.5		Peru	750	400
Singapore	551.9		132.3	Singapore	36.3	13.2		Singapore	350	300
South Africa	9,134.7	6,627.4	South Africa	3,710.6	1,560.5		South Africa	41,450	44,500
United Kingdom	1,597.0	1,689.3	United Kingdom	199.6	120.6		United Kingdom	1,900	1,500
Zimbabwe	348.7		214.9	Zimbabwe	109.7	28.9		Zimbabwe	1,600	1,400
Other	250.7		174.2	Other	38.4	26.8		Other	1,700	1,900
Total	22,412.9	18,365.9	Total A	6,142.6	2,790.5		Total	63,600	65,000

1. Total tax and economic contribution comprises of the sum of total taxes and royalties borne, taxes collected, corporate social investment, wages and related payments, and total country procurement, (including capital investment).
2. Taxes and royalties borne are payments in respect of taxes directly incurred by Anglo American as a result of its economic activity. This amount is made up of corporate income tax, royalties and mining taxes, and other payments borne.
3. Average number of Group employees, excluding employees of contractors, associates' and joint ventures' employees, and including a proportionate share, based on percentage shareholding of employees within joint operations.
4. 2020 data has been rebased in order to provide like-for-like comparability as per the updated basis of preparation outlined on page 5.

1. The figures $6,142.6 million and $2,790.5 million have been subject to limited assurance by Pricewaterhouse Coopers LLP and is referred to as the 'Selected Information', in their assurance report on page 33. Basis of preparation as per page 32.

Total cash value distributed to stakeholders of $30.4 billion(5)

12,000

10,000

About this report

This report demonstrates the importance to Anglo American of responsibility, compliance and transparency in relation to our tax and economic contributions as we strive to be a Trusted Corporate Leader.

To be a trusted leader it is important to listen to our stakeholders and regularly reassess ourselves against, not only our standards, but also best practice. This philosophy guides us in our journey of being open, honest and transparent.

The purpose and impact of a business cannot be assessed without understanding its tax and economic contributions, and the true value of these contributions cannot be assessed in isolation of their broader role in society. Transparency is not a destination that we want to get to, it is a dialogue we want to lead.

Our Tax and Economic Contribution Report is not just an opportunity to publish detailed breakdowns of our tax and economic contributions for all our major operating jurisdictions, it is also an opportunity to explain the principles and values that underpin our broader approach to tax, how we govern that approach, and how we engage with

our stakeholders.

This, our eighth Tax and Economic Contribution Report, is our second to be explicitly prepared in accordance with GRI 207 disclosures for tax; although we had substantively met or exceeded many of the requirements prior to its formal adoption. This year, we have sought to provide additional explanation on how tax contributes to our Sustainable Mining Plan, including specifically in relation to our approaches to external engagement and tax risk governance.

We have also improved and amended the basis of preparation of the report this year; our Finance Director Stephen Pearce explains these differences on page 5. We have included prior year data in line with the new basis, where relevant.

Cover Image

After five years of drought, and poor serviced delivery, the people in Limpopo's Mapela villages were in critical need of a reliable water supply. Recognising this need, Platinum and Hall Core Drilling, together with the Mapela Task Team (as a community stakeholder group), developed a more sustainable plan under the umbrella of Hall CoreWater Mapela (HCWM), to provide the region (comprising 42 villages) with a combined total of about 70,000 residents) with 50 litres of water per person, per day.

01

8,000
6,000
4,000
2,000
0
Australia	Botswana	Brazil	Canada	Chile	Namibia	Peru	Singapore	South	Africa	Kingdom	Zimbabwe
			United
Wages and related payments		Corporate social investment	Total taxes collected	Dividends		Financing
Total procurement		Total taxes and royalties borne				Share buyback

1. Further information provided on pages 6-7and pages 20-30.

	countries			Shareholders		of	capital
Other		Plc	providers
	AA	Other

Scope of the report

The purpose of this report is to provide an overview of the tax and economic contribution made by the Anglo American Group, and further transparency on how tax is managed as part of the Group's overall commercial activities. See page 32 of this report for more details.

Computational discrepancies may occur due to rounding.

Other sources of information

More information about sustainability at Anglo American, including an Excel download of our sustainability data, business unit sustainability reports, and historical reports, can be found in our Integrated Annual Report and online at www.angloamerican.com

Anglo American plc  Tax and Economic Contribution Report 2021

About this report

Contents

06. Total cash value distributed to stakeholders

Here we demonstrate how our stakeholders benefit from the total cash value generated and distributed.

09. Living our Tax Strategy in 2021

03  Our business at a glance 04  Chief Executive's statement 05  Finance Director's statement

06  Total cash value distributed to stakeholders 08  Tax Strategy and our approach

09  Living our Tax Strategy in 2021

10  Tax governance and risk management - 2021 developments 11  GRI 207: Tax

12  Tax and economic contribution through the value chain 13  Our approach to sustainability

14  Sustainable Mining Plan

15  Tax and the Sustainable Mining Plan

Our reporting suite

You can find this report and others including our Integrated Annual Report, Sustainability Report (including our wider GRI disclosures), and the Tax and Economic Contribution Reports for previous years (alongside the country-by-country reporting appendices) on our corporate website:

• For more information, visit:angloamerican.com/investors/annual-reporting

Integrated Annual Report 2021

Read how we bring our Tax Strategy to life through examples from 2021.

11. GRI 207: Tax

Here we set out how we fulfil the GRI disclosures on tax. The full suite of wider disclosures under GRI Principles can be found in the Sustainability Report.

15. Tax and the Sustainable Mining Plan

We set out how our Group Tax Strategy and Values align to our Sustainable Mining Plan and give examples from 2021.

16  Healthy Environment

17  Thriving Communities 18  Trusted Corporate Leader

19  Country highlights

31  Reconciliation of 2021 corporate income tax 32  Basis of report preparation

33  Assurance report 34  Glossary of key terms

FutureSmart MiningTM

FutureSmart MiningTM - Our innovation- led pathway to sustainable mining

• is fundamentally changing the way we extract, process and market metals and minerals, providing our next step- change in operating and financial performance.

• For more information, visit:angloamerican.com/futuresmart/futuresmart-mining

Social channels

AngloAmerican	@angloamerican	Anglo American
angloamerican	angloamericanplc

02	Anglo American plc  Tax and Economic Contribution Report 2021

Tax and Economic Contribution Report 2021

Our business at a glance

		Base Metals
Diamonds	Copper	Nickel	PGMs
$1,100 million	$4,011 million	$320 million	$7,099 million
Underlying EBITDA◊	Underlying EBITDA◊	Underlying EBITDA◊	Underlying EBITDA◊

Anglo American is a leading global mining company, with a world class portfolio of mining and processing operations and undeveloped resources, with more than 106,000 people working for us around the world, in 15 countries.

We provide many of the essential metals and minerals that are fundamental to the transition to a low carbon economy and enabling a cleaner, greener, more sustainable world, as well as meeting the growing consumer-driven demands of the world's developed and maturing economies. And we do so in a way that not only generates sustainable returns for our shareholders, but that also strives to make a real and lasting positive contribution to society as a whole.

• Our overview video gives a complete introduction to what we do and our ambitions for the future Seehttps://youtu.be/6TKaHzCT4YY

	5%	19%			2%	34%
	Group underlying EBITDA◊		Group underlying EBITDA◊		Group underlying EBITDA◊		Group underlying EBITDA◊
	32.3 Mct									4,299 koz
		2 greenfield projects		41.7 kt
	Production (100% basis)(1)		Peru (Quellaveco) and Finland		Production: Nickel		Production: PGMs
			(Sakatti)
			647 kt
			Production
				Bulk Commodities
	Iron Ore		Metallurgical Coal		Manganese		Crop Nutrients
	$6,871 million		$962 million		$315 million		$(41) million
	Underlying EBITDA◊		Underlying EBITDA◊		Underlying EBITDA◊		Underlying EBITDA◊
										Woodsmith is a greenfield project
	33%	5%			3.7 Mt

North America

800 employees(2)

$69 m wages and benefits paid(3) $42 m taxes and royalties(4) $112 m local procurement spend(5)

Canada 1

Group underlying EBITDA◊

Group underlyingEBITDA◊

Production: Manganese ore

Corporate and other

40.9 Mt

14.9 Mt

$(3) million

Production: Iron ore - Kumba

Production: Metallurgical

Underlying EBITDA◊

→ More detailed information and maps can be

22.9 Mt

found in the business unit reviews

Production: Iron ore - Minas-Rio

See pages 76-100 of the

Integrated Annual Report 2021

Finland

United Kingdom 1

Europe

2,800 employees(2)

Brazil

$452 m wages and benefits paid(3)

$402 m taxesand royalties(4)

4,100 employees(2)

$619 m local procurement spend(5)

Shanghai

$120 m wages and benefits paid(3)

Australia/Asia

$524 m taxes and royalties(4)

$1,029 m local procurement spend(5)

2,800 employees(2)

Other Africa

$484 m wages and benefits paid(3)

Product groups*

  Diamonds

  Copper

Nickel

  Platinum Group Metals

  Iron Ore

  Metallurgical Coal

Manganese

Crop Nutrients

*  Number within dot denotes number of operations, shown by product.

Peru

750 employees(2)

$57 m wages and benefits paid(3) $22 m taxes and royalties(4) $1,176 m local procurement spend(5)

Chile

4,300 employees(2)

$378 m wages and benefits paid(3) $959 m taxes and royalties(4) $1,829 m local procurement spend(5)

South Africa

$416 m taxes and royalties(4)

6,600 employees(2)

$1,570 m local procurement spend(5)

41,450 employees(2)

$334 m wages and benefits paid(3)

Singapore

$1,813 m wages and benefits paid(3)

$721 m taxes and royalties(4)

$4,049 m taxes and royalties(4)

$495 m local procurement spend(5)

$3,148 m local procurement spend(5)

1 Peru

Brazil 2 1

Zimbabwe 1

Australia 1 5

3 Chile

2 Botswana

2 Namibia

South Africa 1 2 5 1

→ For footnotes

See page 101 of the

Integrated Annual Report 2021

03	Anglo American plc  Tax and Economic Contribution Report 2021

Tax and Economic Contribution Report 2021	Chief Executive's statement

Re-imagining mining to improve people's lives

"I am deeply proud of the contribution that Anglo American, and the mining industry more broadly, makes to the countries and communities in which we operate.

As our Finance Director, Stephen Pearce, sets out on page 5, this year our full suite of reports is better aligned to provide a more cohesive and comprehensive view of the sustainable value that our activities generate for all our stakeholders, and the context within which each of those contributions sit. I recommend you read this Tax and Economic Contribution Report together with our Integrated Annual Report and our Sustainability Report for more detail on the wide range of meaningful initiatives and other societal investments we have made across our business footprint. There is also a wealth of information on our website about the full breadth of our sustainability performance, including our work with host communities, and how we are Re-imaginingmining to improve people's lives.

In early 2018 we set out a series of stretching goals spanning the full breadth of sustainability, in the shape of our Sustainable Mining Plan (SMP) - integral to our FutureSmart MiningTM programme. We are making good progress towards the delivery of those goals, but we also recognise that the world moves on, as do society's expectations of us. Our commitments must be relevant and stretching, so we will continue to evolve them across our business. Likewise, we have raised the bar again in terms of social performance, through our Social Way 3.0 - a rigorous management system to drive consistently better outcomes for host communities. Just as financial performance presents an opportunity for differentiation, we see sustainability

no differently - it is integral to how we all work and to our overall business performance.

Anglo American's Purpose of Re-imagining mining to improve people's lives guides our delivery of sustainable value to our shareholders, our employees, and our broader business and societal stakeholders, and once again this report demonstrates the breadth of our significant financial and other contributions.

In this report, we set out our Total Tax and Economic Contribution of $22.4 billion for 2021, and place it into its full context, by demonstrating the additional $8.1 billion of returns to providers of capital too.

During our interim results presentation in July, Stephen explained how proud he was of the large amount of taxes and royalties that we pay and the broader financial contributions we make. This report demonstrates that we pay our taxes in the countries where the profits arise, that is, in our host countries. Therefore, when metal and mineral prices rise, so of course do our tax payments and royalty contributions. We believe this is a sure sign that the tax systems are working as they should in relation to our activities, resulting in significantly increased benefits for our stakeholders.

The need to reform the international tax system in light of the impacts that digitalisation and globalisation have had on businesses is a very live topic, and global agreements in 2021 to reform the international framework are welcome. Anglo American has continued to play an active and forward-looking role in these discussions, advocating for greater transparency and improvements to policy and regulations

• just one example of the way in which we seek to be a Trusted Corporate Leader. This year we have provided case studies that

give more context on the significant contribution our specialist tax team makes through their specific sustainability commitments on pages 15-18. It's not just what we do that's important, it's also the way that we do it and why.

When we first delivered our Tax and Economic Contribution Report, two years after I was appointed Chief Executive of Anglo American, we believed we were a front runner in developing the best practice metrics in this area, for which we were recognised. Over the years, we have added to, and improved, our reporting and considered and discussed with stakeholders the best ways to add meaningful information to the debate. This year, in the final Tax and Economic Contribution Report of my tenure, we have decided to once again proactively enhance our tax transparency reporting by setting best practice principles from those stakeholder discussions at the heart of our reporting and reporting how the value that we generate is shared in cash terms with all of our stakeholders.

We make a real difference to the lives of local people, acting as catalysts for positive change. I do not think many industries can demonstrate such a positive contribution to the countries where they earn their profits as mining does."

This, our eighth Tax and Economic Contribution Report, demonstrates the continuing progress we have made in our journey of transparency in tax reporting, built on already strong foundations. It sets out the enduring and broad-based nature of our economic contribution to society and our commitment to our host countries and communities with both the numeric data, as well as examples of initiatives and practices which exemplify Anglo American's Values.

Mark Cutifani

Chief Executive

04	Anglo American plc  Tax and Economic Contribution Report 2021