Kumba Iron Ore : Results booklet

Reviewed interim results for the six months ended 30 June 2022

KUMBA IRON ORE LIMITED

Key features

Delivering sustainable value:

ROCE of

98%

Interim cash dividend of

R28.70

per share

Attributable free cash flow of

R9.7 billion

Caring for our people and our communities:

Over six years of

fatality-free

production

Zero

occupational diseases

Over seven years without any

level 3-5

environmental incidents

R31 billion

of shared value created

Resilient financial performance:

Average realised FOB export price of

US$136/wmt

15% above benchmark

Cost savings of

R604 million

EBITDA margin of

54%

Closing net cash of

R17.6 billion

For more information on our Company and its performance please scan the QR code or visit us at:

www.angloamericankumba.com

Reviewed interim results for the six months ended 30 June 2022

Commentary

Committed to sustainable delivery

Mpumi Zikalala, Chief Executive of Kumba, said:

"Kumba delivered an EBITDA of R23.1 billion and reached more than six years of fatality-free production in the first half of the year, reflecting the outstanding commitment of our people to safety and delivery, amidst challenging operational and market headwinds, including a more than 35% decrease in iron ore prices.

"Kumba achieved this performance despite

13% lower production due to adverse seasonal weather conditions, and equipment and logistics availability challenges, coupled with a safety reset initiative impacting operational activity. These operating headwinds come at a time of increased supply chain disruptions and rising cost inflation, in part due to the conflict in Ukraine, as well as weaker steel demand following extended Covid-19 lockdowns in China and a softer global economic growth outlook.

"Against this backdrop, our high-quality products, supported by focused marketing activity, continued to attract a market premium, resulting in an average realised free on board export price of US$136 per wet metric tonne, 15% above the iron ore benchmark price, contributing towards an EBITDA* margin of 54% and attributable free cash flow* of R9.7 billion. This solid financial performance reflects Kumba's business resilience, giving our Board the confidence to declare an interim cash dividend of R28.70 per share, representing a payout ratio of 80% of headline earnings.

"A key priority is executing towards the ambitious goals set out within our Sustainable Mining Plan, particularly in relation to energy efficiency and reducing greenhouse gas emissions. Kumba is part of Anglo American's regional renewable energy ecosystem, which includes the plan to develop a 65MW solar plant at Sishen. The energy ecosystem is expected to meet Anglo American's operational electricity requirements in South Africa by supplying 100% renewable electricity by 2030 - a major step towards carbon neutral operations by 2040. The provision of a clean and reliable energy supply will increase the resilience both of Kumba and the local electricity supply systems while helping decarbonise the country's energy supply and supporting our commitment to a Just Energy Transition.

"Our Kapstevel South project at Kolomela to improve production volumes and our ultra- high dense media separation technology to improve our premium product offering are on schedule for commissioning in the second half of 2023. These projects demonstrate our

Kumba Iron Ore Limited

1

Reviewed interim results for the six months ended 30 June 2022

Commentary continued

commitment to investing in our business's long- term sustainability by further enhancing product quality and output, while also contributing to a lower carbon footprint.

"There has been good momentum on initiatives to bolster an inclusive workplace where all our people feel valued, respected, and supported to be their best. We are also making good progress in improving the gender balance in the workplace, with women now representing 26% of our workforce and 29% of our management team. With the prevalence of gender-based violence in South Africa and the challenges women in mining face globally from historical systems of exclusion, we are actively driving our zero-tolerance to gender-based violence, bullying, harassment and victimisation as part of our Living with Dignity programme. These efforts are underpinned by strengthened policies, systems and procedures, and education and awareness activities to help eradicate all forms of violence at work, home, community and school.

"To further support empowerment and recognise the valuable contribution of our people who sustain our business, we are delighted with the

implementation of our new hybrid employee share option scheme, which includes a vesting and an evergreen component. This will deliver a tangible and lasting benefit to our thousands of employees whose commitment makes our business success possible.

"The first six months have confirmed that as we set the foundations for further value delivery, we need to build a business that is not only resilient but that demonstrates operational excellence.

We have robust fundamentals in the quality of our ore body and our assets. We have the infrastructure and technology in place. With the support of our people and our strategic partners, we are in a strong position to continue to enhance returns, thereby ensuring that all our stakeholders benefit from the continued success of Kumba."

*EBITDA and attributable free cashflow are non-IFRS measures used by Kumba and have been consistently applied through reporting periods.

2 Kumba Iron Ore Limited

Reviewed interim results for the six months ended 30 June 2022

Results overview

Caring for our people and our communities

Our people are central to everything we do. We are working to create a safe, inclusive, and diverse workplace that encourages high performance and innovative thinking. We want every individual to be able to bring their whole self to work and feel motivated to give their best in everything they do.

Kumba is making good progress in embedding gender diversity, with the number of women in management positions increasing from 28% to 29% and across our organisation, women now represent 26% of our workforce, up from 24% in the 2021 comparative period. Promoting gender diversity and continuing to advance toward our gender goal of 33% female representation by 2023 at all management levels is a top priority. The Bloomberg Gender Equality index recognises companies that are maintaining

a strong focus on providing an inclusive work environment, and Kumba's inclusion in the index is a testament to our progress.

Of equal importance to us is that our employees feel that their contributions are valued. To this end, we introduced a new hybrid employee share option scheme (ESOP) comprised of a vesting and an evergreen component. The intention is to create a sustainable, perpetual scheme that does not have to be replaced in the future; to align the economic interests of employees and Kumba shareholders; and deliver appropriate enduring value to our stakeholders.

The positive impact we can have across our society also continues to be a focus for us. It is an imperative that our host communities continue to thrive long after we mine. Through our Collaborative Regional Development - an innovative partnership model to catalyse scalable and sustainable development across the Northern Cape region - we are working with partners and stakeholders in the Northern Cape to catalyse development in seven focus areas, including health, education and economic development, as well as sectors outside of mining such as agriculture and tourism.

Through our involvement in the Anglo American Education Programme, we are helping to improve outcomes for learners in early childhood development sites, primary and secondary schools around our mining operations in

the Northern Cape. We currently support

26 schools, providing education for more than 16,300 learners, and we aim to extend our support to another 19 schools as part of phase 2 of our programme.

We are acutely aware of the high unemployment, poverty and inequality in South Africa, which were exacerbated by the Covid-19 pandemic. The Northern Cape, where Kumba operates, is a remote area with limited economic activity. To ensure that we play our part in supporting local livelihoods, we employ 78% of our workforce from local communities. We are also purposeful about supporting local businesses. In the first half, of the total black economic empowerment (BEE) supplier spend of R5.0 billion (H1 2021: R4.9 billion) we procured R2.1 billion (H1 2021: R1.7 billion)

Kumba Iron Ore Limited

3