Technical and Innovation Update 2021: Transcript

Technical and Innovation

Update

11 May 2021

Anglo American Technical and Innovation Update	11 May 2021

Welcome

Paul Galloway

Group Head of Investor Relations, Anglo American

Afternoon all, thanks very much for joining us. Today is an update on our technology journey. Technology is a key part of our core capabilities. It is integral to our holistic sustainability and it is making our world-class assets even more competitive. Tony and the team will take about 65 minutes to run through the slides. Then we'd be very happy to take questions - Stephen Pearce will join us for that. In many ways this presentation is building on the sustainability presentation which we hosted from a couple of weeks ago.

The next slide is from the lawyers and with that Tony, over to you please.

Technical & Innovation Update

Tony O'Neill

Group Technical Director, Anglo American

Welcome everybody. Before I start the presentation proper I will introduce the team of presenters that I have with me today. Firstly Matt Daley, Group Head of Mining; Dave Palmer, Group Head of Business Improvement; Rohan Davidson, Group Chief Information Officer; Arun Narayanan, Group Chief Data Officer; Donovan Waller, Group Head of Technology Development; and finally Pierre Herben, Group Head of Carbon Neutrality.

Re-imagine mining to improve people's lives

All our work is built around our fundamental company purpose. That is to re-imagine mining to improve people's lives. That is the context that we will place everything around. Technology and innovation are central to how we are creating a fundamentally more sustainable business. If we step back to around 2015 when we started FutureSmart MiningTM we talked about changing the footprint of mining, changing the inputs around water, around energy, the way it looked, the way that we interacted with the people around us and with our workforces.

We also talked precision. We talked innovation. We talked step-change - ambitious and transformational. We talked about reliability, performance, best-in-class and basically setting ourselves up for a future 15-20 years of leadership and success. It also needs to be noted that we are talking about end-to-end systems. Not pieces of a system - it goes across our entire business. It is clear that the boundaries between FutureSmart MiningTM and our sustainability programme actually don't exist. The two areas are inherently interconnected and part of the same purpose and ambition.

FutureSmart MiningTM today continues to develop, mature and morph at real pace. I would like to thank you and take the opportunity to update you and bring you along on our journey. We will take you through some broad headings. Firstly: operational excellence; digitalisation; innovation; carbon neutrality. They are the core of the broader programme that I talked about and ambition. There is a lot of other activity and a lot of other focus areas, but that is too much for today's programme, and perhaps the topic of a future event with you.

With that, I would like to hand over to the Group Head of Mining, Matt Daley, who will take you through delivering our full potential through P101.

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Anglo American Technical and Innovation Update	11 May 2021

Delivering our Full Potential Through P101

Matt Daley

Group Head of Mining, Anglo American

Today, we are really excited to share some of the significant progress we have made in our full potential P101 programme; a programme underpinned by the Anglo American Operating Model.

P101 takes a systems approach, looking at the value chain to ensure our improvement initiatives are targeted, leveraged and accelerated for maximum impact. When we commenced this programme in late 2017 we completed a self-assessment using available industry benchmark data to establish our baseline position against our industry peers. We had some strong areas, some not so strong but by and large we were sitting around the sixtieth percentile. Now fast forward to the start of 2021 and across the company we have moved up the curve significantly. A great result, but our work is not done. The foundation is strong and confidence levels are high that we will close the gap to benchmark and beyond over the next 18-24 months. So let us start with a couple of operational examples in Mining and Processing to explain how we are delivering these results.

Delivering our full potential through P101: Mining

P101 tactical mine design

Tactical mine design is foundational to equipment productivity and hence moving material safely at the lowest unit cost. Utilising 3D design tools to visualise equipment operating parts we are optimising equipment activities and interactions and providing ideal geometries to deliver benchmark productivity. Now, we have taken this approach into life-of-mine planning as well as short and medium-term design, ensuring across all timeframes planning decisions deliver the right material to the right place at the right time whilst locking in P101 equipment performance over the mine's life. This work has been a key contributor to seeing shovel productivity increase since the start of the programme. The before and after photo you see on the screen is an example of one of our operations in South Africa where best-in-class tactical mine design has produced a very different looking pit; we have different geometries, eliminating multiple vertical interactions, enabling step-changes in productivity.

Blasting design

Another key area of focus in the P101 programme has been drill and blast. With a focus on value, blasting has been key to improved equipment performance and concentrated milling rates. It also is delivering improved safety and social performance at our operations. There are two key areas of focus. The first is blast design, and Los Bronces is a great example where we have delivered a 14% improvement in fragmentation through design changes targeted to deliver optimal downstream milling benefits. Changes to blast design have also allowed us to eliminate trim, or buffer, blasts that are usually designed to sit against a pit wall. This improvement has reduced the frequency of our blasts, providing more productive hours in a week, and improved our shovel loading rates.

Blasting practices

The other key area of focus has been drill and blast execution. The best designs in the world are only useful if we can execute them with precision. To support this we have rolled out across the entire Group a standard real-time,in-field digital platform that tracks compliance to all aspects of drill and blast performance and enables designs to be modified using real-time accurate data as field conditions change. This platform is also integrated with our autonomous drilling fleets.

Haul road digital twins

The final example for mining - and I should mention that this is just a small subset of the P101 work programmes underway - is how we are using digital twins to optimise haul roads and improve operating

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Anglo American Technical and Innovation Update	11 May 2021

performance. Digital twins allow us to model theoretical truck and operator performance and measure it against actual in-field performance. We can then simulate modifications to roads before making changes in the field or we can address training and performance with operators to improve productivity. Such training is delivered through truck simulators that have been tailored specifically to our P101 objectives and we combine that with in-field coaching and mentoring. The example on this slide from Mogalakwena illustrates the power of these tools - we were able to deliver a 23% reduction in haul cycle times. That kind of improvement provides optionality to either use that additional capacity to move more material to increase revenues or if there is a higher value case we focus on efficiencies and parking up equipment, dropping unit costs and hence future capital requirements.

Delivering our full potential through P101: Processing

Maximising processing value drivers: throughput

I would now like to talk through some of the P101 examples for processing where the focus has been on the key value drivers of throughput, run time and recovery. Starting with throughput, Minas-Rio in Brazil is a great example where we have seen a 7% improvement in plant performance driven by systematic de- bottlenecking and circuit reconfiguration. This is basically changes to pumping and piping to modify the circuit, ensuring we eliminate bottlenecks and set the plant up to run as efficiently as possible utilising the existing infrastructure. This means we are banking the improvements for close to zero capital costs.

Run time

Run time is another key driver and we are seeing the application of our P101 asset maintenance strategies and tactics provide more operating hours per year. The Moranbah plant in Queensland is a great example where a 12% improvement in run time has been delivered through this targeted P101 focus.

Recovery

Recovery in processing plants is critical and the P101 programme is focused on delivering recovery in line with the full ore body potential. On the previous slide I talked about the system reconfiguration and de- bottlenecking at Minas Rio to improve throughput, what is really great about this programme of work is it also delivered a 2% improvement in mass recovery and when added to throughput this saw an overall 9% improvement in plant performance post the P101 work programme.

Revenue

Finally I'm going to touch on revenue. Kumba is a great example of where multiple disciplines have come together to deliver an outcome. In this example we had Geology, Geotech and Mining involved with new blast designs and then processing and maintenance engineers implementing modifications to the plant, crushers and screens. When all combined together this delivered a 5% improvement in the lump/fine ratio across the two mines at Kumba. With lump iron ore attracting a higher premium than fines, we saw an increase in revenue for the site post this work.

Delivering our full potential through P101

P101 best practice principles

We all know that improvement programmes can deliver short-term benefits due to the added management attention and focus and then sometimes we see performance drop away when attention is diverted to the next issue. The P101 programme is different. It was designed from day one to change the way we work. It is fully integrated into the Operating Model. We have ensured best practice principles are embedded into management routines and they have been documented and supported by flexible, modern training programmes that are part of our governance practice and standards. P101 is becoming our normal. To that end, we believe this programme uniquely positions us to take the same P101 approach as technology is deployed and we redefine the industry benchmarks. We are planning for new ways of mining and

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Anglo American Technical and Innovation Update	11 May 2021

processing as part of the FutureSmart MiningTM programme, and we are going to be positioned at the top of the curve as the industry changes.

P101 operational improvements

The final slide here highlights some further P101 examples. We have seen improvements in truck performance that deliver increases in material movement or further reduce our haulage costs. We have seen loading performance improve across the Group and an example of that is in our PGM business which saw a 25% increase in annual volumes at Mogalakwena with their rope shovel, allowing us to park up other high cost loading equipment. A very similar story across our processing plants. We have seen improvements across the board in key focus areas of run time, throughput and recovery. Now, the operational improvements are important and they are worth celebrating but what really matters is how this translates into value. And at that point I am going to hand back to Tony O'Neill.

Tony O'Neill: As an aside, Matt and a couple of cohorts, Andrew Marxsen and Andrew McClelland, have taken P101 as an idea and a catchy slogan from concept in 2017 to part of the everyday language across the business today. It has been a fascinating exercise of when you can click at the right idea with an organisation.

Today, the operations look at and learn from each other and that is not without a little bit of competition between them - all helping the equation. The benefits of P101 at $2 billion, and that is rounded and gross, clearly are significant. Capital intensity has improved roughly 30%. The planning and analysis, as Matt said, of each aspect of the operations are at levels that we haven't seen before. And that is giving us a really different insight and understanding of the business, particularly around value flows, pluses and minuses. There is further opportunity particularly around another layer of stability and that drives further value unlock. It is all built around the Operating Model and with that I would like Dave Palmer, the Group Head of Business Improvement, to talk about the Operating Model and value release.

Tangible Value Delivered

Dave Palmer

Group Head of Business Improvement, Anglo American

As you just heard from Matt, we have made significant progress in the implementation of the P101 programme, which is underpinned by the deployment of the Anglo American Operating Model right across the business. These operational improvements across safety, productivity and cost performance have delivered material value. As we presented in the annual results earlier this year, we have now delivered over $2 billion in gross annual improvement as at the end of 2020 through a variety of initiatives that span right across our commodities. Now, Covid has certainly had an impact, and it continues to do so. However, we have taken a range of actions to ensure we can stay the course.

On our current projections, we still see significant further value from the P101 programme over the next few years, with significant contribution coming from a number of key initiatives across throughput at Los Bronces, further optimisation of Minas-Rio, as well as significant improvement from the longwalls in Australia as we return to normal operations. With all this in mind we foresee the gross potential actually delivering up to $3 billion by the end of 2022.

Stability is the key to sustaining our full potential

As we continue to ramp up the improvements that we are delivering, we also need to look at the challenges that we face in converting this to the bottom line. And we need to understand how do we sustainably unlock that full potential and deliver that full value? Turning our minds to that, while by 2020 we delivered over $2 billion in gross improvement across P101, Operating Model and technology and innovation, about half of

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