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SUSTAINABLE DEVELOPMENT & FINANCIAL REPORT 2010 ANgLO AMERICANCOPPER BUSINESS UNIT

Sustainable Development & Financial Report 2010 - Anglo American Copper Business Unit

Our aim is to become the leading global mining company by being the investment, the partner and the employer of choice. We will achieve this by continuing to develop our portfolio of world-class mining assets; operating an efficient, streamlined business model; embedding sustainability and safety in everything we do; and attracting and retaining the best people.

This report provides an overview of how we have delivered against our strategy this year and made a real difference.

OUR COMMITMENT

Introduction

Sustainable Development & Financial Report 2010 - Anglo American Copper Business UnitIntroduction

“Our strategic challenge is to attain production of 1.5 million tonnes of fine copper by 2020. This entails having the capacity to develop our entire pipeline of projects in a socially and environmentally responsible fashion to add value to all our stakeholders.” John MacKenzie, Copper CEO.

4 strategic elements

billion

jOhN MACKENZIE

INVESTINg – IN WORLD CLASS ASSETS IN ThE MOST ATTRACTIVE COMMODITIES

ORgANISINg – EFFICIENTLY AND EFFECTIVELY

OPERATINg – SAFELY, SUSTAINABLY AND RESPONSIBLY

EMPLOYINg – ThE BEST PEOPLE

Real Mining. Real PeoPle. Real DiffeRence.

PROFITS IN 2010

The El Soldado mine management reached five million hours without any lost-time accidents in July 2010.

Sustainable Development & Financial Report 2010 - Anglo American Copper Business Unit

Community investment increased by 92% in 2010.

AMOUNT DONATED TO ChILE’S RECONSTRUCTION AFTER ThE EARThQUAKE

OF FINE COPPER PRODUCTION

623,294 tonnes

$10 million

67.873 Million M3QUANTITY OF WATER RE-USED AT OPERATIONS

Introduction

1 Sustainable Development & Financial Report 2010 - Anglo American Copper Business Unit

16,956JOBS CREATED

“The new Copper business unit structure was consolidated in 2010 after the Anglo American Group completed a restructuring process in late 2009. This process entailed moving the headquarters of the Copper business from London to Santiago, Chile. For the first time, this report therefore includes information on projects being carried out in Peru and the United States, along with that concerning operations in Chile.”

John MacKenzieCopper business unit CEO

“At Anglo American we have always stressed the importance of our people and that we act daily in accordance with our values, driving towards the target of being the leading global mining company.”

Alejandro Mena Vice-president of human resourcesCopper business unit

CONTENTSPerformance scorecard

Chief executive’s statement

Scope

Anglo American Group 14 Our four strategic elements15 Corporate guiding principles16 Highlights of the Anglo American Group

Copper Business Unit20 Impact and scope of our operations25 Anglo American in figures26 Our strategy28 Corporate governance32 Operating structure34 Regulatory compliance35 Communication mechanisms36 Membership of associations 38 Awards and accolades

Financial Capital 42 Economic performance

Human Capital56 Management approach57 What we did in 201060 Our people74 Safety and occupational health80 Occupational health

Social Capital 86 Highlights95 Social programmes100 Initiatives by operation

Natural Capital 111 Environmental management 118 Climate change and greenhouse gas emissions120 Waste management121 Biodiversity management124 Managing water 126 Main issues by operation

Man-made Capital 142 Progress in 2010143 Our value chain143 Suppliers and sustainability145 Audit plan145 Local procurement146 Supplier development

Financial Statements 152 Anglo American Norte S.A.168 Anglo American Sur S.A.

Appendices181 PWC verification report182 GRI content index 188 Feedback questionnaire

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TAXES PAID BY THE COMPANY FOR ITS OPERATIONS IN CHILE ROSE 90% ON 2009

$1.107 billion


OUR SCORECARD Target achieved Target not achieved Continual improvement

MAN-MADE CAPITALSAFETY

Zero fatalities

Zero lost-time accidents.

Make a formal versus continual maturity analysis and update the improvement plans at each operation.

Disseminate and implement action plan management (GPA) and Deviation Reporting (REPDES). Develop the navigation system in Documentum.

Attain 100% compliance with the target of corporate guidelines defined in The Anglo American Fatal Risk Standards (AFRS).

Undertake the second stage of the sleep disorder study. Answer the fatigue self-assessment in accordance with corporate guidelines.Supervisors to implement the fatigue checklist. Implement the safety programme for transport leaders.

Complete Safety Risk Management Programme (SRMP) A3 courses for managers and risk prevention officers of service companies and for staff functions.Launch A2 courses for first line supervisors of the Copper business unit and service companies. Hold the Risk Champions course in Spanish.

Reinforce the Visible-Felt Leadership (VFL) programme with two-hour supervisor site visits scheduled for every Tuesday and Thursday. Implement weekly VFL step compliance controls of 25%, 50%, 75% and 100%.

Anglo American has had no incident involving loss of life for over three years at its copper operations.

Despite all the safety efforts, Anglo American’s operations ended up 2010 with a total of 52 lost-time incidents, including contractors, which was a frequency rate of 0.25 for 200,000 hours worked.

The safety and occupational health strategy was updated for the 2010-2011 period. The safety maturity model of the Copper business unit was considered.

The modules of the action plan management and Deviation Report were implemented in the AngloSafe database.

98.6% of the AFRS were implemented.

Transport material was adjusted to the business unit, and the corporate fatigue standard is being developed.

Seven SRMP A3 courses were held attended by 150 trainees; 20 risk management courses were held for supervisors with a total of 450 trainees. A three-week Risk Champions training course was held, in which 20 risk management leaders received a diploma.

The VFL programme had 97.2% compliance with the number of activities target, and 98% with the duration of each activity target.

Attain no loss of life.

Zero lost-time accidents at all operations.

Maintain 100% standard implementation.

Carry out transport workshops at each operation and implement the fatigue standard.

Continue with training courses for managers and supervisors (A3, A2). Develop and hold A1 risk management courses for workers.

Carry out an annual assessment of the safety and occupational health strategy.

Maintain these applications as support for those managers, supervisors and employees whose activities need to be registered.

100% compliance with the VFL programme targets.

Our Scorecard

FOCUS 2010 TARGET TARGET ACHIEVED 2010 PERFORMANCE 2011 TARGETS



MAN-MADE CAPITALSAFETY

Align the risk management process with Anglo American’s new corporate guidelines.

Carry out a safety environment survey based on the Copper business unit guidelines.

Maintain ISO 14001 certification and update the OSHAS 18001 certification to the new 2007 version.

Extend the application of management tools to construction projects.

Align the accident investigation process with Anglo American’s new Learning from Incidents (LFI) corporate guidelines.

No people with occupational diseases. Diagnosis/assessment by an independent consultant of the effectiveness of the programme.

100% implementation of the Anglo American Occupational Health Way.

Three corporate risk management procedures and two development guidelines were drawn up to support risk management.

An organisational environment survey was held in the Los Bronces Development Project.

All operations maintained certification of these standards.

The safety and occupational health management system for projects continues to be developed.

The new LFI procedures were distributed.

There were no occupational diseases according to the definition of local laws. An occupational health diagnosis was carried out at each operation by an independent consultant.

93% compliance with the Anglo American Occupational Health Way.

Audit implementation of the risk management processes at each operation. Assess risks for at least five of the material hazards identified at each operation.

Remediate the gaps found in the occupational health review. Implement new noise and dust standards. No people with any occupational disease.

100% implementation of the Anglo American Occupational Health Way.

Continue with the survey programme to assess the organisational environment at each operation.

Continue with the programme to maintain this certification.

Complete the document for business units, which outlines the safety and occupational health management system for projects.

Implement LFI procedures and adopt the Incident Cause Analysis Method (ICAM) methodology for incident investigation. Hold workshops to facilitate implementation of this process.

OCCUPATIONAL HEALTH


NATURAL CAPITAL


Achieve a similar level to that of the company workforce concerning compliance with Anglo American’s hygiene and occupational health standards.

Maintain ISO 14000 certification.

Make progress with attaining 76% average compliance with The Anglo Environment Way standards at the five operations.

Continue construction of the Los Bronces Development Project works for start-up scheduled for 2011.

1. Maintain operation of the wetting system on the main wall slope.

2. For the particulate matter (PM10) and suspended particulate matter (SPM) concentrations on the boundary of the property to remain below the reference levels.

Maintain discharges fully compliant with the quality standards of Supreme Decree Nº 90.

Undertake/commit new initiatives to align the company with the 2014 targets of the Anglo American Group.

Maintain consistency of the unit water consumption of the operations and alignment with the corporate target.

There was 93% compliance with the Anglo American Occupational Health Way management system.

All five operations maintained their ISO 14001 certification.

Various activities of the action plan were undertaken. Compliance verification scheduled for July 2011

Underway

1. The operation of the wetting system near the crest of the wall slope was maintained so as to keep the sand surface wet; it was not possible to permanently operate the system covering the entire slope downstream of the wall. 2. The PM10 and SPM concentrations on the boundary of the property were consistently kept below the reference levels.

The discharge of sewage water treated at all operations is compliant with the standard limits, as well as the refrigeration water from the Chagres smelter.

The global targets of the Anglo American Group were redefined.

A pilot project was launched at Los Bronces.

100% compliance with the Anglo American Occupational Health Way.

Maintain ISO 14000 certification.

Complete activities scheduled for the 2010-2012 cycle regarding 2011.

Complete the Las Tórtolas water recirculation facilities of Los Bronces in September 2011.

Request an environmental qualification ruling (RCA) based on the results of the particulate matter monitoring to date to eliminate the wetting system requirement for the whole wall slope and the installation of a Rachel mesh on the crest,maintaining crest wetting.

Maintain discharges fully compliant with the quality standards of Supreme Decree Nº 90.

Energy consumption is expected to be reduced by 5.3%.

Water consumption is expected to be reduced by 7.3%.

Certification

Environmental management system

Productive/alternative use of tailings water

Particulate matter emissions

Discharge of processed water in compliance with Supreme Decree Nº 90

Energy consumption

Water consumption

OCCUPATIONAL HEALTH

MAN-MADE CAPITAL

Our Scorecard

Target achieved Target not achieved Continual improvement



NATURAL CAPITAL

SOCIAL CAPITAL

1. Secure environmental approval for the Sustainable Operation Continuity Project of El Soldado.

2. Start the construction of Phase I of the Las Tórtolas management plan.

Conduct the studies identified in the latest 2010 update of the closure plans.

All community plans and management measures necessary to comply with the Anglo American Social Way were put in place in 2010. The plans to be implemented in 2011 must also be updated.

The “Open Door” programme continued to be applied, as needed.

Publish the sixth Sustainable Development Report.

Bicentenary targets were met, entailing having at least 6,800 small-sized entrepreneurs supported with micro-loans, and over 200 medium-sized entrepreneurs supported with business training.

All operations shall have a social and community improvement plan in place, with indicators for each social programme to manage information on social incidents by means of a management system.

1. The Sustainable Operating Continuity Project of El Soldado was approved in the environmental impact assessment system.

2. The design of phase 1 of the Las Tórtolas management plan was outsourced and carried out, but the start of construction has been delayed to 2011.

Only some studies identified in the 2009 update of the closure plans were conducted.

All operations put measures in place to comply with the Anglo American Social Way. Work also started on the Anglo American Projects Way in 2010 to manage government relations and social affairs related to project design stages. The plans to be implemented at each operation in 2011 were updated.

The “Open Door” programme continued to be applied, as needed.

The sixth Sustainable Development Report was published, and was ranked as the runner-up in the Acción RSE best report awards.

In 2010, a total of 2,333 small-sized entrepreneurs were supported, giving a total of 8,270 entrepreneurs supported since 2007. There were 58 medium-sized enterprises supported in 2010, giving a total of 149 supported.

All operations in Chile have a community engagement plan (CEP) based on the latest application of SEAT II as a management and support tool for the effective achievement of the objectives set.

Attain 50% progress with the Las Tórtolas management plan.

Update the closure plans, adding the requirements of the bill going through Congress.

Exceed the level of compliance with the Anglo American Social Way, particularly improving contractor management and local procurement strategies for each operation.

Publish the seventh Sustainable Development Report

Implement a common complaints and query management process, guaranteeing timely investigation, action and response.

Align social investment project indicators with the UN millennium objectives.

Develop a social strategy for the business unit and align CEP 2012 based on this strategy.

Implementation of key biodiversity action plans

Closure plans

Community engagement plans


CHIEF EXECUTIvE’S STATEMENT

The new Copper business unit structure was consolidated in 2010 after the Anglo American Group completed a restructuring process in late 2009. Such process entailed moving the headquarters of the Copper business from London to Santiago, Chile. For the first time, this report therefore includes information on projects being carried out in Peru and the United States, along with that concerning operations in Chile.

Including all the copper business information in one single report has been a large challenge, as these operations and projects are not only in very varied geographies but are also in different development stages. Nevertheless, we apply the same sustainability standards at each of these operations and it is therefore fitting to present them together.

2010 was focused on addressing the challenge of consolidating the new Copper business unit, establishing common structures, processes and procedures to take on the challenge of continuing to

grow in the global mining industry. Our strategic challenge is to attain production of 1.5 million tonnes of fine copper by 2020. This entails having the capacity to develop our entire pipeline of projects in a socially and environmentally responsible fashion to add value to all our stakeholders, i.e., the shareholders, employees, communities and countries where we operate. A core aspect of our management is concern for the safety of our employees. In 2010, we continued to bolster our policies and plans to achieve our target of zero harm. Unfortunately we did not manage to achieve the objective of eliminating accidents at our operations, which means we must carry on working harder to attain this.

Another major objective was to enhance the diversity of our workforce and we are therefore putting different initiatives in place to be the employer of choice and thereby attract more women to our organisation. A more diverse

workforce is more productive and efficient and we will therefore continue to make progress in this area.

In operating terms, copper production was affected by different situations inherent to mining, some of which were in our plans. However, we expect production to increase significantly in the next few years, particularly as of 2012, due to the start-up of initiatives like the Los Bronces Development Project, which is expected to come on stream in the last quarter of 2011.

Profit after tax for Anglo American’s Copper business unit was 37% higher in 2010 than in the previous year. The key aspect explaining this increase in 2010 was the price of copper and some by-products, such as molybdenum. Another very important contributing factor was the effort we have made to attain greater efficiency and productivity, containing costs and optimising the performance of our assets and supply chain.

Chief executive’s statement


CHIEF EXECUTIvE’S STATEMENT

Taxes paid by the company for its operations in Chile also rose sharply to $1.107 billion, which was a 90% increase on 2009. This percentage, along with local procurement and remuneration to our employees, bear out the large economic impact the company generates. All this can be seen in the financial capital chapter which presents these figures in more detail.

To raise our productivity rate, we are working very hard on a dedicated asset optimisation programme to improve the performance of investments we have already made. People are another key factor in being more productive, and our aim is therefore to get the best professionals in the industry, which entails working on training, coaching, attraction and retention.

In the social area we continued to enhance our community engagement plans, which are led by each operation and for each project. We are convinced we will only be successful if the

John MacKenzieCopper CEO

communities around our operations develop with us. We have therefore driven the development of enterprise in the communities to give them tools so they can continue to progress even after the closure of operations. To the same end, we are also investing in supporting the improvement of education.

The $10 million donation made by Anglo American to Chile’s reconstruction after the earthquake that hit the country in 2010 should be particularly mentioned. This donation went towards building six schools in three months, supporting small entrepreneurs and the construction of 450 houses.

We commissioned PricewaterhouseCoopers (PWC) to undertake a limited independent verification of this report. The content and data reported were checked against the scope outlined in the verification statement appended at the end of this report.

As in previous reports, this report was drawn up based on the guidelines of the Global Reporting Initiative (GRI). We also drew on different sources of information, studies and recommendations to detect the main issues of interest for stakeholders.

Please review the content and let us know your comments and suggestions, which will be very useful in improving the reporting process and our general work.


Scope

SCOPE

This Sustainable Development Report is part of Anglo American’s commitment to report its performance transparently to its priority stakeholders and society in general.

This is the seventh report on the economic, environmental and social performance of Anglo American’s copper operations. For the first time, this year’s report includes information on the projects that the Copper business unit is undertaking in Peru and the United States. The reporting period is from 1 January to 31 December 2010.

The report covers the company’s five operations in Chile, i.e., Los Bronces, Mantos Blancos, El Soldado, Mantoverde and Chagres, along with the Santiago office and the two projects in Peru: Quellaveco and Michiquillay. Concerning the joint venture Pebble Partnership in the United States, in which Anglo American’s Copper business unit has a 50% interest, this will be reported in the financial capital and human capital sections. Collahuasi’s results were considered in the financial and operating performance items, based on the company’s 44% interest, to present the company’s real contribution in Chile. There is no information on Collahuasi in other sections, as it draws up and manages its own sustainability reports.

It should be noted that by including the projects in Peru in the human capital section of the report, it is not possible to comply with the principle of year-to-year comparability, because there is no comparable information.

We used the G3 guidelines and the latest draft of the Mining and Metals Supplement of the Global Reporting Initiative (GRI), published in 2010, to draw up this report. We also considered compliance with the principles of the International Council on Mining and Metals (ICMM). Although the company adheres to the Global Compact principles, it did not present this report as Communication on Progress

(COP), because the Anglo American Group does this in its own consolidated report, which includes the performance of all its operations.

This report also includes the 2010 financial statements of companies operating in Chile. The Annual Report and Sustainability Report have therefore been merged into one single document, which affords a fuller and clearer vision of the company’s performance during the year.

CONTENT DEFINITION

To define the content, we hired an expert consultant on the implementation of the GRI, who guided us on the information materiality process.

The first task was to assess the indicators reported on in the previous report to find room for improvement. Interviews were then held with the human resources, finance and administration, marketing and corporate affairs, and safety and sustainable development vice-presidents. Lastly, meetings were held with each of the managements to raise the economic, environmental and social performance issues, in which the GRI indicators to be reported and the material issues for the company were defined.

External insights and concerns were raised from reviewing the following sources:

The final reports of the socio-economic assessment toolbox (SEAT) II process to detect the most significant issues for the communities around operations.

Press articles in the year to establish the main issues of the mining industry covered by the media.

Internal memos, the corporate magazine and company documents.

The comments for improvement made by the judges of the Acción RSE-organised Best Sustainable Development Report Awards 2009.

The review report made by Acción RSE on the principles and content of the Sustainable Development Report 2009.

Studies conducted by the Reputation Institute.

Based on this information, all the main indicators, the additional indicators that Anglo American deemed appropriate, and the indicators of the Mining and Metals Supplement of the GRI were selected for reporting.

vERIFICATION

We commissioned PricewaterhouseCoopers (PWC) to carry out limited independent verification of our report. The content and information reported by the Copper business unit were checked against the scope outlined in the Verification Report and this report obtained an A+ rating.

The financial statements were audited by Deloitte & Touche. Both letters are enclosed at the end of this report to guarantee the principles of information transparency, balance, clarity and reliability.


ANGLO AMERICAN GROUP

Anglo American Group


ANGLO AMERICAN HAS EXPLICITLY EMBRACED SUSTAINABLE DEvELOPMENT vARIABLES AS PART OF ITS MANAGEMENT, AND SUCH COMMITMENT RESULTS IN ONGOING POLICIES, STRATEGIES AND PRACTICES FOR THE COMPANY.

ANGLO AMERICAN HAS STRIvEN TO EMBED SUSTAINABLE DEvELOPMENT IN ALL ASPECTS OF THE BUSINESS TO MINIMISE THE NEGATIvE AND MAXIMISE THE POSITIvE IMPACTS OF ITS OPERATIONS. THE CRITICAL FACTOR FOR THE SUCCESS OF THIS STRATEGY IS PARTNERSHIP WITH PUBLIC-PRIvATE INSTITUTIONS AND THE GENERAL PUBLIC. THE COMPANY CONSIDERS THAT ETHICS, TRANSPARENCY AND CORPORATE RESPONSIBILITY ARE vALUES THAT SHOULD BE EMBODIED IN ALL THE COMPANY’S ACTIvITIES AND DECISIONS. THESE GUIDING vALUES ARE BORNE IN MIND IN OPERATIONS AND INCLUDE PROJECT DESIGN AND ASSESSMENT, MINE PLANNING AND ACCESS TO CAPITAL TO FINANCE INITIATIvES.


Anglo American is a multinational mining company with headquarters in London, England, and operations on the five continents.

It has seven business units - platinum, diamonds, copper, nickel, iron ore, metallurgical coal and thermal coal. Its shares are traded predominantly on the London stock exchange.

A GLOBAL OPERATOR

Corporate and representative offices

Platinum

Diamonds

Copper

Nickel

Iron ore and manganese

Metallurgical coal

Thermal coal



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Anglo American aims to become the leading global mining company – the investment, the partner and the employer of choice – through the operational excellence of world class assets in the most attractive commodities and a resolute commitment to the highest standards of safe and sustainable mining.

OUR FOUR STRATEGIC ELEMENTS

INVESTING: World class assets in the most attractive commodities

BECOMING THE LEADING MINING COMPANY :

Investment, partner and employer of choice

EMPLOYING: The best people

OPERATING: Safely, sustainably and responsibly

Efficiently and effectively

ORGANISING:



Sustainable development is a core part of Anglo American’s business strategy. All our operations are focused on making the company’s economic growth compatible with the well-being of our employees, the social development of surrounding communities and environmental protection.

The Good Citizenship Business Principles were defined by Anglo American to guide all operations worldwide in accordance with the highest global standards on sustainable development. These are the guiding principles for all the major areas of Anglo American’s operations and are an important source of information on business conduct for investors, employees and their families, the surrounding communities and the government.

Good Citizenship Business Principles These set out Anglo American’s accountability to its stakeholders:

Shareholders/investors Employees Communities Customers and business partners Governmental bodies Non-governmental organisations

They also outline the codes of conduct governing Anglo American in the following areas:

The Good Citizenship Business Principles were defined by Anglo American to guide all operations worldwide in accordance with the highest global standards on sustainable development.

Business ethics and integrity, which states support for free enterprise and outlines Anglo American’s economic commitments to shareholders, employees and society in general.

Community development and human rights, in which Anglo American supports the principles set out in the Universal Declaration of Human Rights and makes a commitment to contribute to the economic, social and educational well-being of communities near operations.

Employment and labour rights, in which Anglo declares its commitments to its employees, mainly regarding fair labour practices, equality, right to freedom of association and continuous development.

Safety, health and environmental management, which establishes the commitment of developing new programmes to address these issues.

It should be highlighted that in 2010 the Good Citizenship Business Principles were re-launched in a document called Living Our Values (for further information please see Our Strategy).

CORPORATE GUIDING PRINCIPLES

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HIGHLIGHTS OF THE ANGLO AMERICAN GROUP

FINANCIAL CAPITAL

FINANCIAL CAPITAL

FINANCIAL CAPITAL

HUMAN CAPITAL HUMAN CAPITALHUMAN CAPITAL

$4.976 billionPROFITS IN 2010

$111 million AMOUNT INvESTED IN SOCIAL PROJECTS

21%PERCENTAGE OF FEMALE ANGLO AMERICAN MANAGERS

14%OF THE WORKFORCE ARE WOMEN

17,200NEW JOBS WERE CREATED IN 2010 DUE TO BUSINESS DEvELOPMENT INITIATIvES SUCH AS THE EMERGE AND ZIMELE PROGRAMMES

68%DROP IN DEATHS FROM WORK ACCIDENTS SINCE 2006


TOP PLATINUM PRODUCER IN THE WORLD


FINANCIAL CAPITAL

SOCIAL CAPITAL

HUMAN CAPITAL HUMAN CAPITAL

NATURAL CAPITAL

$179 millionAMOUNT INvESTED IN EXPLORATION IN 2010

$10 millionDONATION FOR RECONSTRUCTION PROJECTS IN CHILE AFTER THE EARTHQUAKE OF 27 FEBRUARY 2010

25 millionLITRES OF POLLUTED WATER DESALINATED EvERY DAY AT THE MALAHLENI WATERRECLAMATION PLANT IN SOUTH AFRICA

94%PERCENTAGE OF EMPLOYEES IN SOUTHERN AFRICA WHO PARTICIPATED IN vOLUNTARY HIv/AIDS COUNSELLING AND TESTING

$3 million AMOUNT OF MONEY PLEDGED TO THE GLOBAL FUND TO FIGHT AIDS, TUBERCULOSIS AND MALARIA

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COPPER BUSINESS UNIT

Copper Business Unit


IMPACT AND SCOPE OF OUR OPERATIONS


The Copper business unit mines, develops, processes and markets copper cathodes, anodes, blister and concentrate; molybdenum and sulphuric acid. Its headquarters are in the city of Santiago, Chile, and it has five operations in Chile (Los Bronces, Mantos Blancos, Mantoverde, El Soldado and Chagres), and a 44% interest in Compañía Minera Doña Inés de Collahuasi. It also has two projects in Peru (Quellaveco and Michiquillay) and a 50% interest in The Pebble Partnership in Alaska, United States.

PRODUCT COMPOSITION, REGISTRATION AND LABELLING

In 2010, the Copper business unit continued to participate in corporate information and documentation exchange forums on the use of chemicals, and at the same time worked with contractor companies to develop studies and testing to meet the Regulation on the Registration, Evaluation and Authorisation of Chemicals (REACH) requirements. In 2010, the co-ordination of the Copper business unit was also extended to the London-based affiliate which Anglo American established specifically to co-ordinate and represent the entire company on this issue.

In accordance with the requirements of this regulation and the plans of the Copper business unit, in the second half of 2010 the company submitted the first product and materials characterisation record to the European Chemicals Agency (ECHA). Anglo American thereby met the ECHA requirements on registering the metallic copper production of the business unit.

Although minerals and concentrates are exempt from REACH registration, the Copper business unit has developed a common classification system that

establishes their specifications, composition and related risk profile. EU legislation on the classification, labelling and packaging of chemicals and mixtures also lays down standards that have been adjusted to those of REACH and to the UN provisions with international scope on this issue. Anglo American is addressing this issue in the same global plan designed for REACH, for which it uses standard systems and formats that meet all the regulations involved.


QUELLAVECO

MICHIQUILLAY

COLLAHUASI

MANTOS BLANCOS

MANTOVERDE

EL SOLDADOCHAGRES LOS BRONCES

PERU

CHILE

ALASKA (USA)

PEBBLE

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LOS BRONCES, CHILE

This is located in the Andes mountains, 3,500 metres above sea level and 65 kilometres from Santiago. It is an open-cut copper mine containing molybdenum. It has a grinding plant to treat sulphide ore and two leaching plants which produce copper cathodes by means of electro-winning. The ore is transported down a 56-kilometre ore slurry pipeline to Las Tórtolas. The Las Tórtolas concentrator plant and the tailings dam are located in Colina, where the flotation process is undertaken to obtain copper and molybdenum concentrates.

MANTOS BLANCOS, CHILE

This is located 800 metres above sea level in the Antofagasta Region, 45 kilometres northeast of Antofagasta. It is an open-cut mine with crushing plants and facilities for processing oxide and sulphide ore.

EL SOLDADO, CHILE

This is 600 metres above sea level, 132 kilometres from Santiago in the district of Nogales, Valparaíso Region. It has an open-cut mine, with crushing plants and facilities for processing oxide and sulphide ore.

MANTOvERDE, CHILE

This is 900 metres above sea level in the Atacama Region, 56 kilometres from the city of Chañaral. It is an open-cut mine with crushing plants and facilities for processing oxide ore.

CHAGRES, CHILE

This is 400 metres above sea level in the district of Catemu, Valparaíso Region, 100 kilometres north of Santiago. The smelter’s productive process uses low-emission flash furnace technology, which makes Chagres a leading smelter in environmental terms in Chile.

COMPAñíA MINERA DOñA INéS DE COLLAHUASI, CHILE

This is in the Tarapacá Region, 185 kilometres southeast of Iquique and at an altitude of 4,400 metres above sea level. It produces and markets copper concentrate and cathodes and molybdenum concentrate.

QUELLAvECO, PERU

This is in the Asana River valley in the district of Moquegua, 1,000 kilometres southeast of Lima. The project is currently waiting to get the final permits to be presented for the approval of the Anglo American board.

MICHIQUILLAY, PERU

This is in the northern region of Cajamarca and is one of the most important unmined copper deposits in the world. Anglo American acquired this project in 2007 and since then has been working to improve the geological data of the deposit and reach a social agreement with the Michiquillay and La Encañada communities.

PEBBLE, UNITED STATES

This is in the Bristol Bay region in southwest Alaska, United States. It is one of the largest reserves of copper, gold, molybdenum and silver in the world. It is now in a pre-feasibility study stage.



2010 2009 2008

Total copper production (tonnes) 221,410 238,423 235,792

Copper concentrate (tonnes) 174,699 189,999 190,012

Copper cathodes (tonnes) 42,569 45,490 43,679

Molybdenum production (tonnes) 1,927 2,768 2,578

C1 direct cost (USc/lb) * 94 83 67

LOS BRONCES

EL SOLDADO

2010 2009 2008




C1 direct cost (USc/lb) 240 229 173

MANTOS BLANCOS

2010 2009 2008





CHAGRES

2010 2009 2008

Anode/blister production (tonnes) 137,934 137,652 146,144

Sulphuric acid production (tonnes) 466,729 457,621 486,616


COLLAHUASI**

2010 2009 2008


Copper concentrate production 204,691 216,800 182,585

Copper cathodes production 17,088 18,975 21,732

Molybdenum production (tonnes) 1,970 1,118 1,087

C1 direct cost (USc/lb) * 94 100 102

MANTOVERDE

2010 2009 2008

Copper cathode production (tonnes) 61,058 61,515 62,501


* C1 cost: mine cost, plant cost, overheads, smelting, refining and freight cost (in US cents per pound).** Accounts for 44% of the production that is attributable to Anglo American.

Note: Los Bronces produced 4,141 tonnes of copper sulphates in 2010 and 2,934 tonnes of copper sulphates in 2009.

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ANGLO AMERICAN IN FIGURES

SALES MARKETS

2010 2009

Nº of employees

Company workforce (at year-end) 3,237 3,208

Operations contractors 2,580 3,988

Project contractors 11,139 3,967

Total contractors (at year-end) 13,719 7,955

Year-end total 16,956 11,163

Total revenue (given in millions of $) $4,877 $3,967

COPPER CONCENTRATE SALES MARKETS 2010 (%)

Americas: 65%Asia: 25%Europe: 10%

COPPER ANODE SALES MARKETS 2010 (%)


TOTAL SALES MARKETS (AMERICA BREAKDOWN) 2010 (%)

South America: 37%Asia: 33%Europe: 17%North America: 13%

TOTAL SALES MARKETS2010 (%)


COPPER BUSINESS UNIT SCOPE

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Sustainable development is a core aspect of the strategy of Anglo American’s Copper business unit

OUR STRATEGY

Our aim is to become the leading global mining company, by being the investment, the partner and the employer of choice. We will achieve this by continuing to develop our portfolio of world class mining assets; operating an efficient, streamlined business model; embedding sustainability and safety in everything we do; and attracting and retaining the best people.

This is always first on our agenda – and with very good reason. We truly believe that ALL injuries are preventable and that by working together we can make safety a way of life, inside and outside the workplace.

We always treat people with respect, dignity and common courtesy – regardless of their background, lifestyle or position. And we’re building trust through open, two-way communication every single day.

We take ownership of our decisions, our actions and our results. We deliver on our promises and acknowledge our mistakes. Above all we never pass blame.

Challenging the way things have always been done is a key priority for us. By actively developing new solutions, encouraging new ways of thinking and finding new ways of working, we are dramatically improving business.

No one here is on their own. We are one company with a joint ambition – all working together to make decisions and get things done more effectively.

This means taking an honest, fair, ethical and transparent approach in everything we do. It’s not about being popular; it’s about always doing the right thing.

Safety

Care and Respect

Integrity

Accountability

Collaboration

Innovation

GUIDING vALUES

In line with this and the corporate strategy, the sustainability model is based on managing and creating value in the following five areas called capital: financial capital, human capital, social capital, natural capital and man-made capital. Managing this capital by means of internationally renowned standards will enable Anglo American to achieve its target.



LIvING OUR vALUES

Since the Good Citizenship Business Principles were launched in 2002, they have underpinned Anglo American’s values, conduct and way of operating. After a necessary review and adaptation stage, the Company has now launched an updated version, which maintains the original guidelines but with large modifications that reflect the changes in the organisational structure of the Anglo American Group, and adds those international codes and conventions to which the Company has committed worldwide.

The new Good Citizenship Business Principles are the basis of documents on sustainable development, i.e., safety, health, occupational health, environment and social responsibility. The same applies to HIV/Aids, human rights, and anti-competitive behaviour policies, and the new standards of the business integrity policy and prevention of corruption.

This target entails embracing a global strategy based on common behaviour underpinned by the following principles:

Business ethics and integrity: We are implacably opposed to corruption. We will not allow our employees, or those acting on our behalf, to offer, solicit, pay or accept bribes.

Safety and sustainable development:We believe that robust processes for the management of safety, health, environmental and social issues are a fundamental element of good management practice and a source of competitive advantage.

Employment and labour rights:We are committed to fair labour practices and our conditions of service will comply with applicable laws and industry standards.

Community development and human rights:We respect human dignity and the rights of individuals and of the communities associated with our operations.

POLICIES AND STANDARDS

Anglo American’s business conduct is guided by its Business Principles, which envisage business integrity, safety and sustainable development; employment and labour rights, community development and human rights.

To develop its corporate strategy, Anglo American’s operations are underpinned by the following standards and policies. To find out about each of them, please refer to the corresponding chapter of this report:

MANAGEMENT SYSTEMS

To assure the permanence of its sustainability focus at all operations, the company has management structures like the integrated risk management system, the safety and sustainable development database, community engagement plans and the integrated health, safety and environmental management system. These have enabled all the company’s operations in Chile to secure and maintain the ISO 14001 and OHSAS 18001 certification, and accordance with the ISO 9001 standard at Mantos Blancos and Mantoverde.

Human capitalThe Anglo American Safety Way.The Anglo American Occupational Health Way.Anglo American Group Human Resources Principles and Policies.Anglo American Human Rights Policy.Anglo American Group HIV/AIDS Policy.

Natural capitalThe Anglo American Environment Way.

Social capitalThe Anglo American Social Way.

Man-made capitalSustainable Development in the Anglo American Supply Chain.Anglo American Supplier Sustainable Development Code.

Our companyAnglo American Business Integrity Policy and Prevention of Corruption Performance Standards.

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The corporate governance of the Copper business unit is structured based on limited companies in Chile and Peru.

CHILE

It is organised based on two closely-held and operating limited companies:

Anglo American Norte S.A., which owns:

Mantos Blancos, located in the district of Antofagasta, Antofagasta Region.

Mantoverde, established in the district of Chañaral, Atacama Region.

CORPORATE GOvERNANCEAnglo American Sur S.A., which is the owner of:

Los Bronces, located in the district of Lo Barnechea in the Metropolitan Region.

El Soldado, located in the district of Nogales in the Valparaíso Region.

Chagres, in the district of Catemu, Valparaíso Region.

There is also the limited partnership Anglo American Chile Ltda, which provides administration services to the operative companies. Its only partners are Anglo American Sur S.A. holding 70% of the capital stock and Anglo American Norte S.A. with 30%.

The only shareholders of Anglo American Sur S.A. as of 31 December 2010 were Anglo American Sur S.A. with 99.99% of the capital stock and Clarent Ltd with the remaining 0.01%, both subsidiaries of Anglo American plc. Its administration is vested in a board comprising three incumbent directors and three deputy directors. The following directors were elected for a three-year term in the Ordinary General Shareholders’ Meeting held on 18 April 2008:



It should be noted that Anglo American Norte S.A. has 56 minority shareholders, who hold 0.03% of the shareholding. As of 31 December 2010, the majority shareholder was Anglo American Norte S.A. with a 99.97% shareholding.

Both boards operate in accordance with current regulations and what is laid down in their respective articles of association. According to what was agreed on by both Shareholders’ Meetings, the directors are unpaid and there are no directors’ committees as they are closely-held limited companies. Their decisions and all the current company principles and policies are based on the Good Citizenship Business Principles, which also includes strictly complying with current legislation in the case of a conflict of interests of one or more directors.

It should be stressed that all the directors are company executives.

INCUMBENT DIRECTORS DEPUTY DIRECTORS

Miguel Ángel Durán Vergara (chairman) Noelle Duronea Burgalat

Alejandro Mena Frau* (Vacant)

Felipe Purcell Douds Ignacio Quiñones Sotomayor

INCUMBENT DIRECTORS DEPUTY DIRECTORS

Miguel Ángel Durán Vergara (chairman) Noelle Duronea Burgalat

Alejandro Mena Frau (Vacant)

Felipe Purcell Douds Ignacio Quiñones Sotomayor

* On 13 January 2011, Alejandro Mena resumed as an incumbent director and replaced Álvaro Aliaga.

All the companies undertake full accounting, an annual report, balance sheet and financial statements, which are reviewed by external auditors each year. Deloitte & Touche was the auditing company in 2010. These financial statements are sent quarterly to the Superintendency of Securities and Insurance (SVS) in accordance with the SVS regulation on the specific mining tax, article 11 of Decree Law 600 of 1974 and the exempt resolutions issued by the SVS on the obligation of releasing financial statements quarterly and yearly and annual reports with regard to foreign investors subject to the rights set forth in such article of the Foreign Investment Statute.

PERU

The Quellaveco project is owned by Anglo American Quellaveco S.A., and its shareholders are Anglo Quellaveco SARL with an 81.9% shareholding, International Finance Corporation (IFC) with 18.1% and Anglo American Norte S.A. with a 0.000000015% interest in the project.

The Michiquillay project is owned by Anglo American Michiquillay S.A., whose majority shareholder is Anglo American Michiquillay Peru SARL with a 99.9% shareholding, and Anglo American Exploration Luxembourg with 0.0000213865%.

Minority shareholders attend Ordinary and Extraordinary Shareholders’ Meetings and can hold direct talks with the company. The board, elected for three years in the Ordinary General Shareholders’ Meeting held on 29 April 2008, is composed of the following directors:

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WHISTLEBLOWING

The confidential telephone and email service called Speakup is one of the main tools to supervise adherence to the Good Citizenship Business Principles of Anglo American. The aim of this tool, managed by an external company, is to receive complaints about possible conduct on issues like:

Breach of any legal obligation. Abuses or robbery of company resources. Bribes, corruption and fraud. Damage to the environment or injustices with the local communities. Safety and health threats. Conflicts of interest. Improper accounting practices.

In the period covered by this report, Speakup received 14 alerts in Chile and 13 in Peru.

With regard to adherence to the Good Citizenship Business Principles, five company employees and ten contractor company employees were dismissed for breaching the company’s code of conduct and policies.

To comply with the new regulatory challenges reported on in 2009, the company commissioned PricewaterhouseCoopers to draw up the prevention model of Law 20.393 for the legal entities of Anglo American Chile Limitada, Anglo American Sur S.A, Anglo American Norte S.A. and the Anglo American Foundation. This led to an implementation plan, which will be submitted for board approval in March 2011. The plan will also be put in place in 2011.

TRANSPARENCY MECHANISMS

Anglo American Chile has an Anti-trust Compliance Programme, which is based on the policy and manual drawn up by the Anglo American Group to regulate the commercial practices of all its operations, which it applies and supervises each year. These guidelines prohibit entering into agreements that might prevent, restrict or distort competition in the domestic or international market, and practices of abuse from a dominant position in certain activities.

A total of 88 people matching the “significant employee” profile participated in the programme in 2010, entailing meetings, videoconferences, telephone conferences and the corporate intranet. As a sign of commitment to anti-trust compliance practices, 79 employees who attended the 2010 programme signed the annual self-certification letter on this issue.

88 employees matching the “significant employee” profile participated in the anti-trust compliance programme and 79 of them signed the self-certification letter.

27COMPLAINTS RECEIvED BY SPEAKUP



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CYNTHIA CARROLLANGLO AMERICAN GROUP CEO

JOHN MACKENZIECOPPER CEO

MIGUEL ÁNGEL DURÁNCHILE CEO

BARRY MURPHYVICE-PRESIDENT PROJECTS

JAMES BEAMSVICE-PRESIDENT FINANCE

ALICE FOXVICE-PRESIDENT STRATEGY

FELIPE PURCELLVICE-PRESIDENT MARKETING AND CORPORATE AFFAIRS

ALEJANDRO MENAVICE-PRESIDENT HUMAN RESOURCES

MARCELO GLAVICVICE-PRESIDENT TECHNICAL SERVICES

VICENTE IRARRÁZAVALVICE-PRESIDENT EXPLORATION

JUAN CARLOS ROMÁNVICE-PRESIDENT ASSET OPTIMISATION

LORENZO MENÉNDEZVICE-PRESIDENT SAFETY AND SUSTAINABLE DEVELOPMENT

LUIS MARCHESEPERU MANAGER

SAMUEL RASMUSSENLOS BRONCES GENERAL MANAGER

SERGIO PARADAMANTOS BLANCOS GENERAL MANAGER

ALEJANDRO VÁSQUEZEL SOLDADO GENERAL MANAGER

EDGARDO RIFFOMANTOVERDE GENERAL MANAGER

PEDRO REYESCHAGRES GENERAL MANAGER

ENRIQUE RODRÍGUEZMICHIQUILLAY PROJECT DIRECTOR

MARCO HERRERAQUELLAVECO PROJECT DIRECTOR

PAUL HENRYPEBBLE PROJECT COO

OPERATING STRUCTURECOPPER BUSINESS UNIT



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REGULATORY COMPLIANCEThe following were the fines paid and reprimands received in 2010:

1. Mantos Blancos: payment of a 100 UTM1 fine in sanitary investigation Nº066-02-2010 in Antofagasta, related to inspection of the cafeteria facilities at Mantos Blancos, which had problems that were not rectified in the timescale set by the authority.

2. Los Bronces Development Project: reprimand by the Health Department over the operation of the cafeteria in the Pérez Caldera area, Lo Barnechea.

3. Los Bronces Development: payment of a 40 UTM fine by the Lo Barnechea Police Court for starting construction works without a building permit in the Confluencia sector.

It should be noted that Anglo American has adopted all the necessary measures so these kinds of situations are not repeated at its operations and projects.

Our commitment is to operate with the highest environmental standards and as a good corporate citizen. This entails making a contribution to the social development of the country and communities around our operations and adhering to our Business Principles and the safety, health, environmental and quality policy (the Anglo American Way).


1 Monthly tax unit. One UTM is about Ch$39,000.


The company has the following communication systems: internal publications, digital media and graphic and audiovisual material, to which all the areas and divisions have access. Communication meetings are also held quarterly at each operation and at the headquarters in Santiago, in which employees of projects in Peru participate via video conferences. In addition, meetings are held with unions and other groups of employees to promote dialogue on matters of common importance.

COMMUNICATION MECHANISMS

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INTERNATIONAL COMMITMENTS

As part of the Anglo American Group we adhere to the following international agreements on sustainable development:

Ten principles of the UN Global Compact This is an initiative that asks companies and institutions to embrace, as a comprehensive part of their strategies and operations, ten principles of conduct and action in the areas of human rights, labour standards, the environment and anti-corruption

Voluntary Principles on Security and Human Rights This is an operating framework for companies in the extractive sector to guarantee the safety of their employees and respect the human rights of people who live around their productive facilities.

Extractive Industries Transparency Initiative (EITI) This asks countries, international finance institutions, NGOs and investors to promote transparency in the generation of employment and resources in those countries where extraction is undertaken, by means of good practice and open dialogue on how to generate and invest corporate resources.

Global Reporting Initiative (GRI) This is a global initiative for sustainability reporting, the mission of which is to provide a reliable and credible framework for drawing up these reports, which can be used by organisations of any size, sector or location.

The GRI guidelines on sustainability reporting have become the most used and renowned reference model, as they provide a common working framework worldwide.

MEMBERSHIP OF ASSOCIATIONS



Memberships in Peru:Anglo American in Peru actively participates in the Mining Dialogue Group, which is a forum of representatives of the private-state sectors and civil society on mining issues in a context of sustainable development. Anglo American in Peru is also participating in implementing the national working group of the Voluntary Principles on Security and Human Rights, and founding the Peruvian-South African Chamber of Commerce. Anglo American is currently a member of:

Procobre Perú

Sociedad Nacional de Minería Petróleo y Energía - SNMPE

Cámara Peruano - Británica - BPCC

Cámara de Comercio Americana del Perú - AMCHAM

Instituto de Ingenieros de Minas del Perú

AGREEMENTS:

Agreements: Anglo American has signed the following sustainable development agreements in Chile:

Chilean section of the World Business Council for Sustainable Development (WBCSD) This is part of a large global network of more than 180 international companies committed to economic growth, environmental equilibrium and the social progress of countries in which they operate. Anglo American joined this network as co-founder in 2004.

Clean Production Agreement This was signed with the government of Chile as a member of the Mining Council, which is a trade association of which large Chilean mining companies are members. Its aim is to catalyse efforts to apply a preventive environmental strategy to productive processes, services and the organisation of work.

Memberships in Chile:Anglo American in Chile is a member of various Chilean bodies focused on sustainable development, mainly trade associations of the mining industry, safety associations and corporate social responsibility entities:

Sociedad Nacional de Minería (SONAMI) Consejo Minero de Chile A.G. Instituto de Ingenieros de Chile A.G. Consejo Nacional de Seguridad de Chile Comité Regional de Seguridad Minera (CORESEMIN) Acción RSE Cámara Chileno – Norteamericana de Comercio (AMCHAM) Cámara Chilena - Sudafricana de Industria y Comercio

Cámara Chileno Británica de Comercio A.G. (BRICHAM) Corporación de Desarrollo Productivo de la Región de Antofagasta Asociación de Industriales de Antofagasta Corporación para el Desarrollo de la Región de Atacama (CORPROA) Corporación pro Til Til Corporación para el Desarrollo de Colina Instituto Libertad y Desarrollo Instituto Libertad Instituto Chileno de Administración Racional de Empresas (ICARE) Centro de Estudios Nueva Minería Centro de Estudios Públicos (CEP) UDP - Expansiva Corporación de Desarrollo Ciudadano de Chañaral

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AWARDS AND ACCOLADES The Copper business unit received the following awards in 2010:

Runner-up in the Acción RSE Best Sustainability Report Awards 2010.

Good Labour Practices. Anglo American was one of the 37 companies distinguished in Chile for successfully exceeding the IGUALA Gender Equality Model, which acknowledges good labour practice with a gender perspective in companies. The Presidency of the Republic and the National Women’s Service (SERNAM) gave the awards.

Anglo American’s exploration team won the Thayer Lindsley Award for discovering the Los Sulfatos deposit, considered to be one of the most important ore discoveries in the world. The award was given by the Prospectors and Developers Association of Canada (PDAC).

Mantos BlancosIt received the National Geology and Mining Survey (SERNAGEOMIN) Category A award in the annual mining safety awards. This award is given to companies that have excellent performance with looking after employees, assets and resources.

Chagres It was distinguished with the Honourable Mention award in the SERNAGEOMIN Category B award in the annual mining safety awards 2009.

It was awarded the John T. Ryan Safety Trophy. This is given to the runner-up mining company with the best safety indexes in Chile in 2009.

Pedro Reyes, the general manager, was named an honourable citizen of Catemu.



RISK PREVENTION EXCELLENCE AWARDThis is awarded to those companies, industries, institutions or services which have managed to maintain a zero frequency for 2 years running or more. This award is also given to the participant that has managed to maintain the lowest significant frequency rate for 3 years running or more among the participants of its group.

Group Nº4 “Mine and Quarry Exploitation” Category C: Mantos Blancos, mine management

Category C: Mantoverde

“RISK PREVENTION EFFORT” AWARD This is awarded to those companies that have managed to reduce the frequency index of the year of participation by 25% or more compared to the average of the last two immediate and consecutive years of participation in the contest.

IN THE 49TH NATIONAL SAFETY AWARDS 2010, the operations of Mantos Blancos, El Soldado, Mantoverde and Chagres won awards in the different categories.

NATIONAL SAFETY COUNCIL AWARDThis is awarded to those companies that have attained the lowest significant frequency rate in their group-category.

Group Nº4 “Mine and Quarry Exploitation” Category C: Mantos Blancos, mine management

Category D: Mantos Blancos, plant management

Category C: MantoverdeGroup Nº45 “Mining Services”Category B: El Soldado, contractorsGroup Nº21 “Smelting and Metallurgy”Category B: ChagresCategory C: Mantoverde

Group Nº4 “Mine and Quarry Exploitation” Category C: Mantos BlancosCategory D: Mantos Blancos, management

Group Nº21 “Smelting and Metallurgy” Category B: Chagres

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FINANCIAL CAPITAL

BY ANALYSING ITS FINANCIAL IMPACT, ANGLO AMERICAN CAN PLAN THE SUSTAINABLE DEvELOPMENT OF ALL ITS BUSINESSES IN THE DIFFERENT COUNTRIES AND LOCATIONS WHERE IT OPERATES.

Financial Capital


Note: Considering what the Copper business unit reports in 2010.(1) Only includes operating earnings according to the company’s standards of reporting to its headquarters in London.(2) To maintain the consistency of what was reported by the Copper business unit in 2010, only the 2009 data considers the intercompany adjustment.(3) C1cost: mine cost, plant costs, overheads, smelting, refining and freights costs (in US cents per pound).

These figures are stated in accordance with the company’s standards of reporting to the headquarters in London and, in some cases, might have differences with the figures stated in the audited financial statements at the end of this report. In any case, the variances are only due to different ways of presenting the information.

2010 2009 2010 v/s 2009

Anglo American’s revenue 3,148 2,555 23%

Collahuasi’s revenue (44%) 1,729 1,412 22%

TOTAL COPPER REVENUE (1) 4,877 3,967 23%

Anglo American’s income tax 269 157 71%

Anglo American’s royalty tax 67 39 72%

Collahuasi’s income tax (44%) 160 143 12%

Collahuasi’s royalty tax (44%) 65 22 195%

Profit remittance tax paid 440 163 170%

Other company tax 43 16 169%

Other tax collected (2) 62 44 41%

TOTAL TAX 1,107 584 90%

Anglo American’s revenue 1,433 1,037 38%

Collahuasi’s revenue (44%) 889 679 31%

Project revenue (Peru and the United States) -65 -58 12%

TOTAL PROFITS (2) 2,257 1,658 36%

Anglo American’s fine copper production (tonnes) 401,515 434,039 -7%

Collahuasi’s fine copper production (44%) (tonnes) 221,779 235,775 -6%

TOTAL FINE COPPER PRODUCTION 623,294 669,814 -7%

C1 average unit cost (US$/lb) (3) 1.11 1.04 7%

OPERATING AND FINANCIAL OVERVIEW (given in millions of $)

$2.257 billionIN PROFITS

An overall analysis of the financial results of the copper business in 2010 has an impact on the figures reported in 2009, as the project development costs in Peru and the United States are reflected in the figures of this report.

For a better understanding of these figures, the reader should bear in mind that Peru and the United States are in a development and installation stage and operations have not started up, so in economic terms profits have not been generated at these facilities and they have only received investment so far.

Financial Capital


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COPPER PRICE

The price was a decisive factor in achieving the 2010 result. The closing price in 2010 increased sharply by 33% from 333 c/lb in late 2009 to 442 c/lb at the end of 2010, reflecting the better global economic conditions. The annual average price rose 46% from 235 c/lb in 2009 to 342 c/lb in 2010. The realised price was 32% up on 2009.

33%INCREASE IN THE COPPER PRICE TO 442 C/LB

OPERATING COSTS

The C1 unit cost - defined as the sum of the mine costs, plant costs, overheads, smelting, refining and freight costs – was $1.11/lb, i.e., 7% higher than in 2009 ($1.04/lb). This increase is mainly explained by higher energy costs, the appreciation of the Chilean peso and lower production.

The copper sales forecast is positive for the long term. Demand from China is expected to continue to grow, despite government measures to restrict loans. Demand from North American and Europe will show signs of recovery.

87%INCREASE IN THE ECONOMIC vALUE DISTRIBUTED TO $5.189 BILLION

COPPER PRICE VARIATIONS (2010-2011 / 2009-2008 )

0 20-20-40 40 60 80 100 120 140 160

Closingcopper

price

Realisedprice**

Annualaverage

price*

2010 v/s 20092009 v/s 2008

33%

46%-26%

32%-3%

152%

* Expresses the weighted average copper price in a year**Indicates the price at which commercial transactions were actually closed

Financial Capital


ECONOMIC vALUE GENERATED AND DISTRIBUTED*

There was a very significant evolution of the main aspects of this indicator in 2010. The economic value generated (EVG), which refers to all kinds of revenue generated (some of which is unrelated to mining operations, such as for example financial investments or divestments), increased 22% and amounted to $4.898 billion against the $4.006 billion in 2009. This is explained by the good operating results of the company mentioned above.

The economic value distributed (EVD), which indicates how the EVG is distributed among the different stakeholders, rose 87%, amounting to $5.189 billion against $2.778 billion in 2009.

* Note: This indicator shows how the company has generated wealth for its stakeholders.

2010 2009

ECONOMIC VALUE GENERATED 4,898 4,006

ECONOMIC VALUE DISTRIBUTED -5,189 -2,778

ECONOMIC VALUE WITHHELD -291 1,228

ECONOMIC VALUE (expressed in millions of $)

2010-2009 VARIATION

0 604020 80 100 120 140-60 -40 -20-80-100-120-140

EconomicValue

Generated

Economic Value

Distributed

Economic Value

Withheld

2010 v/s 2009

22%

87%

-124%

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Stakeholders 2010 2009

B) Operating costs Suppliers -1,706 -1,543

C) Employee salaries and benefits (2) Employees -237 -189

D) Payment to capital suppliers (3) Shareholders & creditors -2,116 -450

E) Payment to the State (4) State -1,107 -584

F) Investment in the community Community -23 -12

TOTAL ECONOMIC VALUE DISTRIBUTED -5,189 -2,778

*Note: Approximate values / figures include projects in Peru and the United States. (2) Excludes training as an employee benefit.(3) Considers the interest paid on loans received, minority interest (paid to minority shareholders) and dividends paid (majority shareholders).(4) Please see the tax table in the operating and financial overview.

92%INCREASE IN COMMUNITY INvESTMENT

$10 MillionDONATION TO CHILE’S RECONSTRUCTION

ECONOMIC VALUE DISTRIBUTED (expressed in millions of $) (*)

Financial Capital


NOTES(1) Includes operating and non-operating earnings.(2) Excludes training as an employee benefit.(3) Considers the interest paid on loans received, minority interest (paid to minority shareholders) and dividends paid (majority shareholders).(4) Please see the tax table in the operating and financial overview.

* These figures are stated in accordance with the company’s standards of reporting to the headquarters in London and, in some cases, may be different from the figures stated in the audited financial statements at the end of this report. In such cases, the variances are due to different ways of presenting the information.

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Chile (44% base) (Peru & USA) business unit

B) Operating costs -1,176 -472 -58 -1,706

C) Employee salaries and benefits (2) -165 -67 -5 -237

D) Payment to capital suppliers (3) -1,410 -706 0 -2,116

E) Payment to the State (4) -847 -260 0 -1,107

F) Investment in the community -16 -6 -1 -23

ECONOMIC VALUE DISTRIBUTED -3,614 -1,511 -64 -5,189

ECONOMIC VALUE WITHHELD -464 237 -64 -291

ECONOMIC VALUE DISTRIBUTED 2010(expressed in millions of $) (*)



A) Earnings (1)

Gross sales 3,148 1,729 0 4,877

Net income from financial investments 2 1 0 3

Net income from sales of fixed assets and others 0 18 0 18

ECONOMIC VALUE GENERATED 3,150 1,748 0 4,898

ECONOMIC VALUE GENERATED 2010(expressed in millions of $) (*)



A) Earnings (1)

Gross sales 2,555 1,412 0 3,967

Net income from financial investments 3 0 0 3

Net income from sales of fixed assets and others 0 36 0 36

ECONOMIC VALUE GENERATED 2,558 1,448 0 4,006

ECONOMIC VALUE GENERATED 2009(expressed in millions of $) (*)



B) Operating costs -1,070 -425 -48 -1,543

C) Employee salaries and benefits (2) -136 -51 -2 -189

D) Payment to capital suppliers (3) -356 -92 -2 -450

E) Payment to the State (4) -420 -164 0 -584

F) Investment in the community -6 -5 -1 -12

ECONOMIC VALUE DISTRIBUTED -1,988 -737 -53 -2,778

ECONOMIC VALUE WITHHELD 570 711 -53 1,228

ECONOMIC VALUE DISTRIBUTED 2009(expressed in millions of $) (*)

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PAYMENTS TO AND FROM THE STATE

The tax paid to the government is revenue that can be spent on social infrastructure, schools, roads, public services, conservation, and application of laws. This forms part of Anglo American’s socio-economic impact. The Company’s effect on many local economies goes well beyond operations and jobs, with direct and indirect benefits which encompass, for example, suppliers of the Group’s operations.

To this end, Anglo American has a board-approved tax strategy, which is put in place by a team of professionals who act in accordance with Anglo American’s guiding values and the Good Citizenship Business Principles.

It is important to note that all the tax generated by the Company in the countries in which it operates is not only income tax and royalties paid in each country but also all the other tax generated at Group level, including import and export duties,

withholdings and other tax. This tax, which is a cost for the Group, amounted to $1.045 billion in 2010. On the other hand, there is tax that arises due to operations, although it is not a cost for the Group, which is collected by Anglo American and paid to the government. This includes payroll tax and value-added tax (VAT), which was $62 million in 2010. The total tax burden in Chile was therefore $1.107 billion.

Payment by the State of Chile to Anglo American was mainly for the training grant of the National Training and Employment Department (SENCE) and tax relief for some donations.

Governments recognise the large benefits the responsible extraction of natural resources can have for the economy. Tax revenue is an important part of those benefits, along with diversification of the local economy, generation of employment, construction of infrastructure, social programmes and an increase in the country’s gross domestic product.

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Anglo American Collahuasi Proyects Copper

Chile (44% base) (Peru & USA) business Unit

Tax credits and rebates:

SENCE (1) 820 270 0 1,090

Credit and donations (2) 2,335 992 0 3,327

Mining licence, credit against PPM2 39 42 0 81

6% fixed assets credit (3) 79 18 0 97

TOTAL 3,272 1,322 0 4,595

FINANCIAL AID RECEIVED FROM THE STATE 2010 (expressed in thousands of $)

Anglo American Collahuasi Proyects Copper

Chile (44% base) (Peru & USA) business Unit

Tax credits and rebates:

SENCE (1) 854 130 0 984

Credit and donations (2) 401 704 0 1,105

Mining licence, credit against PPM 42 39 0 81

6% fixed assets credit (3) 95 21 0 116

TOTAL 1,392 893 0 2,285

FINANCIAL AID RECEIVED FROM THE STATE 2009 (expressed in thousands of $)

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2 Provisional monthly tax payment.


With regard to the total production data, fine copper output dropped 7% in 2010.

The strategic objective is to attain output of 1.5 million tonnes a year by 2020, when the Los Bronces development project and remaining pipeline of projects come on stream.

OPERATING OvERvIEW

2010 2009

Anglo American’s fine copper output (tonnes) 401,515 434,039

Collahuasi’s fine copper output (44%) (tonnes) 221,779 235,775

TOTAL FINE COPPER OUTPUT (tonnes) 623,294 669,814

TOTAL FINE COPPER OUTPUT

Total fine copper output was 623,294 tonnes

INFORMATION BY OPERATION

Fine copper production was 7% down on 2009 and amounted to 623,294 tonnes, with copper cathodes accounting for 164,578 tonnes, copper concentrate for 454,575 tonnes, and copper sulphate for 4,141 tonnes. Chagres produced 137,934 tonnes of copper anodes by processing the copper concentrates produced at Los Bronces and El Soldado.

Production at Los Bronces was 221,410 tonnes, which was a 7% decrease on record production in 2009. That was mainly due to processing harder ore and a lower copper grade, which was according to schedule. The earthquake that hit Chile in February 2010 did not have a large impact on production rates, except for power cuts throughout the country and because the SAG mill had to be realigned.

Collahuasi accounted for 221,779 tonnes of fine copper, which was Anglo American’s share of its 44% interest in that operation. Production was 6% down on that in 2009. In addition to the lower ore grades, output was affected by an illegal strike of contractor workers in May with a negative impact of 5,000 tonnes, and a 33-day strike in November during the collective bargaining process, which reduced production by a further 5,000 tonnes. Nevertheless, these impacts were partly offset, due to specific improvements and the elimination of bottlenecks, which optimised the production at the concentrator plant.

Output at Mantos Blancos was 13% down on that in 2009 and amounted to 78,590 tonnes, mainly explained by no solutions being purchased from

third parties as in previous years, the lower ore grade and the impact of a conveyor failure in the first quarter.

El Soldado produced 40,458 tonnes, a 2% decrease on 2009. Mantoverde had an output of 61,057 tonnes, which was similar to that of the previous year.

Financial Capital


2010 2009

Anodes/blister (tonnes) 137,934 137,652*

Sulphuric acid 466,729 457,621

2010 2009

Copper concentrate content (tonnes) 454,575 487,944

Copper cathodes (tonnes) 164,578 176,353

Sulphates (tonnes) 4,141 2,934

TOTAL FINE COPPER PRODUCTION (tonnes) 623,294 669,814*

COPPER BUSINESS UNIT PRODUCTION

CHAGRES PRODUCTION

2010 2009

Los Bronces molybdenum production (tonnes) 1,927 2,768

Collahuasi molybdenum production (tonnes) 1,970 1,118

TOTAL MOLYBDENUM PRODUCTION 3,897 3,886

MOLYBDENUM PRODUCTION

2010 2009

Los Bronces 221,410 238,423

Mantos Blancos 78,590 90,153

Mantoverde 61,057 61,515

El Soldado 40,458 41,365

Collahuasi 221,779 235,775

TOTAL FINE COPPER PRODUCTION (tonnes) 623,294 669,814*

PRODUCTION BY OPERATION (fine copper)

* Includes 2,583 tonnes of copper anodes produced at Chagres by processing third-party material.



0 105 15-10 -5-15

2010 v/s 2009

-7%

-7%

-6%

-13%

-1%

-2%

2010 VERSUS 2009 VARIATION

Los Bronces

Mantos Blancos

Mantoverde

El Soldado

Collahuasi

TOTAL FINEPRODUCCTION (tonnes)

0 2010 30 40-20 -10-30

2010 v/s 2009

41%

-7%

-7%

-7%


Copper concentrate

content (tonnes)

Coppercathodes (tonnes)

Sulphates (tonnes)

TOTALFINE COPPER

PRODUCCTION (tonnes)

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$159 million was invested in stay-in-business projects in 2010, which was a 34% increase on the $119 million invested in 2009.

This figure excludes the additional $998 million invested in the Los Bronces Development Project and other expansion studies and projects, and nor does it include projects developed by Collahuasi.

The main projects carried out in 2010 included initiatives arising from corporate strategies of commitment to safety (Anglo American Fatal Risk Standards Programme) at an investment of over $3.2 million.

MAJOR PROJECTS IN THE YEAR

2010 2009 2008

Los Bronces 101 63 86

Mantos Blancos 19 14 31

Mantoverde 12 8 10

El Soldado 17 20 29

Chagres 7 9 8

Santiago office 3 5 2

TOTAL INVESTMENT 159 119 166

AMOUNTS INVESTED IN STAY-IN-BUSINESS (SIB) PROJECTS (given in millions of $)

$159 million was invested in stay-in-business projects

0 40-40 20-20 60-60 80-80

2010 v/s 2009

60%

-15%

-7%

-40%

34%

36%

-22%


Los Bronces

Mantos Blancos

Mantoverde

El Soldado

Chagres

Santiago Office

TOTAL SIB INVESTMENT

50%

0 20-20 60-60 100 140 180 220

2009 v/s 2008


Los Bronces

Mantos Blancos

Mantoverde

El Soldado

Chagres

Santiago Office

TOTALSIB INVESTMENT

-27%

-28%

-31%

150%

-55%

13%

-20%

Note: As of 2010, Anglo American started to report the investment figures based on the actual cash outlay. The 2009 figures have therefore changed to state them according to the same criterion.

Financial Capital


AMOUNTS INVESTED IN STAY-IN-BUSINESS (SIB) PROJECTS (given in millions of $) LOS BRONCES

The company invested $101 million in stay-in-business projects at Los Bronces in 2010. The following were the main initiatives:

$23 million in the purchase of a new shovel to replace the current one that had come to the end of its life.

Twenty-six kilometres of 24”-diameter piping of the ore slurry pipeline were replaced as this had come to the end of its life. The expense accumulated in 2010 was $23 million. This initiative was undertaken jointly with the assembly of the ore slurry pipeline of the Los Bronces Development Project.

Around $11 million were invested to replace critical spare parts of mine equipment.

MANTOS BLANCOS

The company invested $18.5 million in Mantos Blancos in projects such as the following:

Completion of the $3 million tailings dam expansion project.

Purchase of mining equipment, such as wheel dozers and four truck engines costing $5.4 million.

EL SOLDADO

The company invested $16.8 million in the following projects at El Soldado in 2010:

Due to the normal growth of the El Torito tailings dam, $7 million was invested to boost the tailings conveyance system between the plant and the dam.

$3.6 million was invested in relocating the cyclone station to a higher elevation.

The dam sides were sealed at an investment of $1.6 million.

The sand flotation plant project was also completed at an investment of $1.3 million. MANTOvERDE

Mantoverde spent $11.6 million on the following projects in the year:

The main initiatives arose from corporate strategies of commitment to safety, health and the environment at a cost of $2 million.

Stage I was completed of implementing the second level of gravel waste dumps at an investment of $1.7 million.

The project was carried out to increase wetting of the north and south dump.

CHAGRES

The company invested $7.2 million at the Chagres smelter:

To improve the operating conditions.

To replace a slag truck.

Investments arising from initiatives related to corporate strategies of commitment to safety.

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HUMAN CAPITAL

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TO BE THE EMPLOYER OF CHOICE, THE COMPANY FOCUSES ON ITS CURRENT AND POTENTIAL EMPLOYEES AND UNIvERSITY STUDENTS.


MANAGEMENT APPROACH

Anglo American is committed to the development of its employees. To this end, it provides a safe and healthy workplace where the country’s legal and industrial standards prevail, along with business ethics and a culture in which recognition is given for objective performance and not for other considerations.

The priority is to guarantee the safety and health of people in their workplace, for which there are policies, programmes, procedures and standards that safeguard the work of company employees, including contractors. Moreover, Anglo American not only seeks to hire and retain the best professionals but also to attract the best talent available by means of training programmes, professional practice and dual education.

The vice-presidency of human resources is accountable for driving policies, programmes and action in this area, with a special focus on the cohesion of all the people who are part of the organisation.

Having people of excellence is of great strategic value for Anglo American.

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INCORPORATION OF THE ANGLO AMERICAN PEOPLE DEvELOPMENT WAY

The Anglo American People Development Way is the corporate competencies model which came into force in 2010. The aim is to standardise how things are done in the company, taking into account all the procedures, i.e., how employees are employed and trained, bearing in mind culturally distinctive elements in each of the business units.

One of the key aspects of this model is to show how employees perform according to the values to make sure that whoever fails to comply with the values does not remain in the company.

WHAT WE DID IN 2010INCORPORATION OF THE ANGLO AMERICAN PEOPLE DEvELOPMENT WAY

WE USE THIS AT ANGLO AMERICAN TO...

WE ARE GUIDED BY...

REAL DIFFERENCE.

WE PROVIDE...

BE THE LEADING GLOBAL COMPANY

POTENTIAL

EXPERIENCE KNOWLEDGE SKILLS

A B C

OUR VALUES, OUR BRAND AND OUR BUSINESS PRINCIPLES

This is what we represent. We live our commitments which in turn shape the company’s culture and reputation.

We use these qualities to analyse whether we show we have the conduct that will collectively comprise Anglo American’s strategy.

We articulate the experience with the knowledge and skills of each function to define a job and eliminate the gaps that prevent people from working optimally and safely.

We use these qualities to understand how people can progress and make a contribution to Anglo American now and in the future.

WE SEEK TO UNDERSTAND AND REALISE OUR...

DETERMININGTHE STRATEGY

MOTIVATINGPEOPLE

DELIVERINGRESULTS

BROAD VISION ESTABLISHING THE DIRECTIONLEADING THE CHANGE

INSPIRING OTHERS COLLABORATIONIMPACT & INFLUENCE

DECISION-MAKINGDRIVING PERFORMANCEBUSINESS VISION

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COMPETENCIES AS THE BASIS AND COMMON UNIVERSAL DENOMINATOR

COMPETENCY

Performance management

Function planning

Talent management

SelectionDevelopment

Assessment

OnboardingFeedback

The benefits of this new model for Anglo American are:

It creates a common global standard, and therefore a congruent approach to support “Real Mining. Real People. Real Difference.”

It helps to hold and attract people with the behaviour, experience, knowledge, skills and potential needed for the future.

It guides and strengthens the Anglo American brand by defining behaviour that adds vitality to our values and Business Principles.

It helps the company operate in a more unified and integrated way.

PROGRESS WITH GENDER DIvERSITY AND EQUALITY

One of the elements of progress achieved with this in 2010 was to eliminate questions in employee selection interviews that might be construed as some form of discrimination, and only questions about the job position are asked.

Another major advance is that the company has an Alcohol and Drugs Policy, which supports people in need with rehabilitation treatment. To comply with the policies on this issue, 5% of the workforce is randomly tested.

Despite this, one of the pending issues is greater inclusion of the disabled.

IMPORTANCE OF WOMEN AT ANGLO AMERICAN

One of Anglo American’s objectives is to have more women working in the company as at present they only account for 6.8% of the company workforce. To achieve this objective, the company is working with the best global practice; it is promoting equal opportunities for men and women and offering special benefits to attract more women to the mining industry. At the same time, Anglo American is focused on driving women having a share of the different tiers of job responsibility (including the most senior positions).

The following progress has been achieved so far:

A woman on each list of 3 people or “short-list”.

Equality of remuneration.

Flexible postnatal working hours – part-time work.

Facilities during breastfeeding.

Flexibility to use the crèche allowance to look after children at home.

Benefit for the spouse regarding complementary health plans (men and women).

Flexible working hours (Santiago office).

Parking availability for pregnant women (Santiago office).

APPLAUSE PROGRAMME

This corporate initiative acknowledges the outstanding performance and behaviour of people and teams who adopt Anglo American’s values.

Applause has four categories: safety, sustainability, innovation and collaboration. A person and team are recognised in each of these based on quantifiable achievements of each of these issues.

Employees themselves nominate their colleagues based on the practical experience and knowledge of those people they consider to be great examples of behaviour that needs to be highlighted.

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OUR PEOPLE

Our people are as vital to our success as our mining assets.

To be the employer of choice, the company embraces fair labour practices in the workplace. This focus must become reality to promote practices of equal opportunities in the workplace, non-discrimination, continual improvement, freedom of association, collaborative work relations and strengthening of internal communication.

WORKFORCE

The total workforce as of December 2010 amounted to 16,956 employees, comprising company employees and contractors at the five operations in Chile and the Santiago office, along with those in projects in Peru and the United States.

Human Capital


“At Anglo American we have always stressed the importance of our people and that we act daily in accordance with our values, driving towards the target of being a leading mining company.” Alejandro Mena, vice-president of human resources, Copper business unit.

2010 2009 NUMBER OF EMPLOYEES NUMBER OF EMPLOYEES BY OPERATION/PROJECT BY OPERATION/PROJECT

Los Bronces 2,202 Los Bronces 1,997

Mantos Blancos 1,276 Mantos Blancos 1,330

El Soldado 1,419 El Soldado 1,858

Mantoverde 864 Mantoverde 873

Chagres 443 Chagres 463

LBDP 9,846 LBDP 3,329

Santiago 221 Santiago 220

Michiquillay 143 Michiquillay 685

Quellaveco 444 Quellaveco 328

Lima 48 Lima 18

Pebble ** 50 Pebble 62

TOTAL 16,956 TOTAL 11,163

2010 2009

Company employees 3,237 3,208

Operations contractors 2,580 3,988

Project contractors 11,139 3,967

TOTAL WORKFORCE 16,956 11,163

AREA NUMBER OF WOMEN PERCENTAGE

Company workforce 219 6.8%

Vice-presidents or senior manager level 4 4.7%

Manager level 7 6.6%

TOTAL COMPANY WORKFORCE 925 5.5%

EMPLOYMENT GENERATED

EMPLOYMENT BY DEPENDENCE

WOMEN’S SHARE OF THE WORKFORCE 2010

** Note: Anglo American’s employees assigned to the Pebble project

Note: the percentages were calculated with respect to the total of each category.

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The labour turnover was 8.5% in 2010 and higher than previous years, due to the inclusion of projects being undertaken in Peru, which affected the entire Copper business unit. On separating the data, there was a 6.9% labour turnover at operations in Chile and 38.4% at projects in Peru.

Total N°

Supervisors 794

Employees 2,443

TOTAL 3,237

TYPE OF COMPANY EMPLOYEE CONTRACTS 2010

By gender Men 7.5%

Women 1.0%

By years in the company 0 to 5 years 5.5%

6 to 15 years 0.7%

16 to 25 years 0.9%

26 years and more 1.4%

By workplace Los Bronces 2.0%

Mantos Blancos 0.9%

El Soldado 1.4%

Mantoverde 1.2%

Chagres 0.3%

Santiago office 0.7%

Michiquillay 1.1%

Quellaveco 0.6%

Lima office 0.2%

By work level Supervisors 4.4%

Employees 4.1%

Average labour turnover rate 8.5%

LABOUR TURNOVER

We aim to create a working environment which encourages innovation and collaboration across our businesses and geographies. To encourage accountability, a performance culture and the monitoring of individual development needs, an increasing proportion of employees, either individually or as members of a team, will have performance targets which will be regularly reviewed (Living Our Values).

Human Capital


There is no restriction on the local hiring of senior executives. Local managers account for 65% and foreigners 35% of the senior level of the organisation.

REMUNERATION

Anglo American has a salary system based on the People Development Way competencies model, which safeguards fairness and transparency and makes no discrimination whatsoever.

To define the salary level, variables such as the job position, its complexity, the degree of responsibility, the person’s competencies to do that job and the performance level are considered.

2010

Nº of male vice-presidents or senior managers 76

Nº of female vice-presidents or senior managers 4

Nº of vice-presidents or senior managers 80

Nº of male managers 99

Nº of female managers 7

Nº of managers 106

EXECUTIVE STAFF BY GENDER

Remuneration is based on the People Development Way competencies model.

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CHALLENGE: TRANSPARENCY

COMPETITIVENESS

FAIRNESS

Business Objectives

Individual development plan

Personal ObjectivesSupervisor agreement Supervisor evaluation

PERFORMANCE-BASED REMUNERATIONS ADJUSTMENT:

The minimum wage Anglo American paid its employees in Chile was 2.7 times higher than the minimum legal wage in Chile. The wage paid in projects in Peru was 2.1 times the minimum legal wage for the mining sector.

Human Capital


In line with this, the wage differences between the different operations are related to the particular nature of the business of each of them. Comparative industry surveys are conducted, and the wage varies depending on the location and scope of the operation.

With regard to contractor personnel, the company established the “Anglo American Mine Site Minimum Monthly Wage” policy in July 2008, which applies to any contractor and/or subcontractor workers who provide permanent services at any of its divisions and at the head office in Santiago. This monthly net wage was set at Ch$250,000.

The minimum wage Anglo American paid its employees in Chile was 2.7 times higher than the minimum legal wage in Chile. The wage paid in projects in Peru was 2.1 times the minimum legal wage for the mining sector.

We will promote diversity and will not tolerate unfair discrimination or the inhumane treatment of employees including through any form of forced labour, physical punishment or other abuse. Our workforce has the right to work in an environment free from harassment or intimidation (Living Our Values).

Men and women have the same base salary and benefits at Anglo American according to the job position classification level, i.e., base salaries for employees are established in collective bargaining agreements and there is no distinction whatsoever according to gender. For supervisors, salary ranges are established by operation and the different job position classification levels, which are exactly the same for men and women. Salary increases are indexed to market variables and mainly depend on the employee’s performance.

It should also be noted that all supervisors (including Peru) have a performance contract, and this is due to the implementation of The Anglo American People Development Way competencies model, and it is uniform for all business units. All employees also have a performance evaluation.

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TRAINING AND DEvELOPMENT

*Note: excludes data of projects in Peru.

*Note: Man-hours

WORK LEVELS Number of employees Total training hours Average annual hours of training per work level 2010* per work level 2010 /coaching (man-hours/year) 2010

Vice-presidents or senior managers 10 221 22.1

Managers 75 3,501 46.7

Supervisors 570 25,911 45.5

Employees 3,631 70,437 19.4

TOTAL 4,286 100,070 23.3

2010 TRAINING AREA M-H* Nº of people

Safety, occupational health, environment and quality 10,714 1,120

Management 14,905 925

Technical 74,139 2,225

Others 252 16

TOTAL 100,070 4,286

TRAINING/COACHING HOURS BROKEN DOWN BY WORK LEVELS 2010

ANGLO AMERICAN CHILE WORK TRAINING & COACHING AREA

To be the employer of choice, it is necessary to develop our employees. In 2010, 100,070 hours of training were held benefitting 4,286 employees as shown below:

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2010 2009

Nº of men 12 13

Nº of women 2 7

Total trainee engineers 14 20

Spend ($) $598,105 $825,542

2010 2009

Nº of men 37 40

Nº of women 7 16

Total thesis students 44 56

Spend ($) $160,301 $197,120

2010 2009

Nº of men 68 80

Nº of women 59 51

Total apprentices 127 131

Spend ($) $621,746 $619,641

2010 2009

Nº of men 113 110

Nº of women 23 35

Total practices 136 145

Spend ($) $176,991 $182,322

SKILLS MANAGEMENT PROGRAMMES HELD IN 2010

TRAINEE ENGINEER PROGRAMME

THESIS STUDENT PROGRAMME

APPRENTICE PROGRAMME

PROFESSIONAL PRACTICE PROGRAMME

We will invest in employee development and ensuring that their careers are not constrained by discrimination or other arbitrary barriers to advancement (Living Our Values).

127NEW GRADUATES ON THE APPRENTICE PROGRAMME

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COURSE NAME

ENGLISH PROGRAMME

SPANISH PROGRAMME

MBA FOR THE AMERICAS

RISK PREVENTION EXPERT COURSE OF THE NATIONAL EXTRACTIVE MINING INDUSTRY

DIPLOMA IN INTEGRAL MANAGEMENT IN THE COMPANY

DIPLOMA IN NEGOTIATION AND RELATIONS

APPRENTICE PROGRAMME

INTEGRAL MANAGEMENT OF OXYGEN THERAPY AND PATHOGENIC CONTAMINANTS (OPC)

HYDRAULICS – INTERMEDIATE LEVEL

COMMUNICATIONS AND INTERPERSONAL RELATIONS

Regarding security staff training on human rights issues at Anglo American, security guards receive training on the Voluntary Principles on Security and Human Rights.

WELFARE AND BENEFITS

Anglo American has taken measures which help to give its employees a better quality of life, focused on the welfare and family-work balance areas. The objective is to attain benefits shared by the company and its employees from the standpoint of productivity, work environment, meeting corporate targets, shared work, commitment to the organisation and strengthening of the internal framework, among other aspects

The following are the social benefits the company gives its employees and supervisors, which exceed the requirements of current legislation:

Work benefits:

Five days more holiday than the legal requirement. Flexible working hours in Santiago.

Special leave for personal and family emergencies. Emergency loans for illness or unforeseen personal and/or family issues.

Years of service recognition programme.

Additional contribution (above the legal requirement) to the employee pension fund system to increase their pensions and improve the retirement benefits for all employees. Complementary benefits plan with the Caja de Compensación3.

Moreover, employees who are subject to collective bargaining agreements receive the following benefits laid down in the respective agreements:

MAIN TRAINING COURSES 2010

Safety incentive. Performance and results bonus (Mantos Blancos and Mantoverde). Performance incentive (Los Bronces, El Soldado and Chagres). Housing allowance. Holiday allowance. Complementary health plan. Work at altitude allowance (Los Bronces). School expense allowance. Night shift allowance. Allowance for working on public holidays.

OPERATION AND MAINTENANCE APPRENTICE PROGRAMME

EMERGENCY BRIGADE PROGRAMME

L1850 LOADER MAINTENANCE – SERVICE LEVEL

WELDING AND OXYACETYLENE CUTTING PRACTICE

TRAINING ON PASSENGER TRANSPORT - CLASS A-2 LICENCE

TRADE UNION TRAINING COURSE

ADVANCED LEADERSHIP

Human Capital

3 Private agency that pays family allowances, workers’ compensation, disability pensions on behalf of the State.


HEALTH BENEFITS:

Complimentary health insurance for employees and their direct family group.

Catastrophe insurance to cover elevated health costs.

Employee aid programme (PAT). Psychologist counselling programme for personal and family problems.

Counselling programme for employees and supervisors affected by HIV/AIDS, for which the company bears the treatment cost.

As part of the alcohol and drugs policy, the company pays the rehabilitation costs of any employee or supervisor who admits he or she is dependent on addictive substances, and also an education programme for employees and their families.

Gymnasium at all operations.

Balanced diet catering service at all operations and in Santiago.

FAMILY BENEFITS:

Student bursary programme for employees’ children with an excellent academic record.

Christmas gifts for all employees’ children of 12 years or younger.

Christmas party for employees and their families (this includes the personnel of partner companies and their families).

Sports club with joint company/employee contributions where employees and their families can enjoy sports, recreational and cultural activities

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LABOUR RELATIONS MANAGEMENT

Anglo American recognises the right of its employees to freedom of association and to collective bargaining, and honours what is laid down in the law.

As of December 2010, the company had 11 trade unions in Chile (two at each operation, except Mantoverde where there are three) with 98% union representation of the company workforce (excluding supervisors).

Projects in Peru are still in the design and engineering stage and no unions have been formed yet.

The agreement by the company and the operations unions to hold these early collective bargaining processes is based on both parties adhering to a labour relations model underpinned by four areas of dialogue:

Business sustainability. Management of people. Quality of life. Cultural characteristics of the company.

As a sign of this commitment, the wording of the collective agreements contains a statement of principles called “Building the vision together of being one of the most valued and respected copper operations in the world,” which declares the need of maintaining the long-term co-operative relations model between both parties, based on mutual respect, trust and integrity.

In 2010, this vision led to increased teamwork developed since 2009, with the following initiatives:

Courses for union leaders.

Monthly result analysis meetings.

Half-yearly review and analysis process of the remuneration and incentive systems.

Definition of incentives for both company employees and contractors.

Development of specific campaigns in significant areas for employees, their families and the communities around operations. The early collective bargaining process was carried out with the five trade unions of Mantos Blancos and Mantoverde in April and May 2010. This was conducted with teamwork, collaboration and no strikes, and excellent work by union leaders.

Both sides expressed their interests and the bargaining process remained focused on productivity, i.e., the variable incentives were redesigned with greater benefits in education and health. These agreements came into force in May 2010 and will remain effective until December 2013. A voluntary bonus was given for good results in 2010.

As a way of motivating good safety performance, there is a safety incentive in the collective agreements of all operations consisting of: An individual bonus for two accident-free months. A collective bonus for two accident-free months at the operation. An additional bonus for two months without accidents involving company employees and contractors at the operation. COMPANY-UNION DIALOGUE An annual meeting is held with all the company’s union leaders, chairmen and vice-chairmen, area managers and general managers of each operation, and the aim is to review the year’s results and future challenges.

The company’s results are presented in this meeting and then there is discussion.

The early collective bargaining process was carried out with the five trade unions of Mantos Blancos and Mantoverde in April and May 2010. This was conducted with teamwork, collaboration and no strikes, and excellent work by union leaders.

11TRADE UNIONS OPERATE IN THE COMPANY

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Anglo American’s safety vision is to achieve zero injuries through the effective management of safety at all the operations it runs.

MANAGEMENT APPROACH

Three principles of conduct were established for safety, occupational health and risk management:

All accidents and professional and occupational diseases are preventable.

Drive all the action needed to avoid accidents and diseases and prevent repeats.

The uniform application of Anglo American’s policies and standards on these issues at all the company’s operations.

ANGLO AMERICAN SAFETY IMPROvEMENT PLAN (SIP)

The Anglo American Safety Improvement Plan (SIP) is the framework for a major change in safety performance in the business to achieve zero injuries in all activities.

The plan includes seven main pillars and is designed to build on the current safety efforts, according to the maturity model of the Anglo American organisation:

SAFETY AND OCCUPATIONAL HEALTH

Sharpen and improve leadership and the culture. Substantially improve risk management across the business. Enhance the learning from incidents process. Optimise the monitoring and assurance process. Fine-tune the contractor management strategy. Improve project safety. Accelerate the learning process.

It should be noted that the entire management group has adhered to the principles of this plan and there is a collective commitment to put it in place for the benefit of all employees. Each person in the Copper business unit has a role to play in achieving zero harm.

ANGLO AMERICAN’S SAFETY, OCCUPATIONAL HEALTH AND ENvIRONMENTAL MANAGEMENT POLICY ESTABLISHES THAT ACHIEvING ZERO HARM MUST BE UNDERPINNED BY EFFECTIvE MANAGEMENT AT ALL OPERATIONS, CONSIDERING PEOPLE AS THE MAIN ASSET.

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PROCESS PROGRESS

Sharpen and improve leadership and culture 100%

Substantially improve risk management in the company 100%

Improve our learning from incidents process 70%

Improve supervision and the assurance process 80%

Rationalise the contractor management strategy 70%

Improve project safety 60%

Accelerate the learning process 75%

SIP COMPLIANCE LEVEL 2010

We believe people are our main asset and we will not tolerate them having accidents or injuries while working for us. Everyone who works in Anglo American has the right to go home without injury.

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OPERATION OHSAS 18001 COMPLIANCE COMPLIANCE WAS A RISK & RISK & CERTIFICATION WITH FATAL RISK WITH SAFETY ASSURANCE AUDIT ASSURANCE STANDARDS MEASURES CARRIED OUT IN AUDIT % % 2010?

Los Bronces Yes 98 85 Yes – 2 ASW

Mantos Blancos Yes 98 100 - -

El Soldado Yes 98 96 Yes -1 Dust, noise

Mantoverde Yes 99 95 - -

Chagres Yes 99 95 Yes – 1 Dust, noise

TOTAL 100% 98 94 N/A N/A

OPERATION ANGLO SAFETY WAY COMPLIANCE LEVEL

Chagres 95%

El Soldado 96%

Mantos Blancos 100%

Mantoverde 95%

Los Bronces 84%

TOTAL 94%

ANGLO AMERICAN SAFETY WAY

The Anglo American Safety Way (ASW) has 12 standards with their corresponding performance requirements, and it is fully aligned with the requirements of the OSHAS 18001 standard.

ANGLO AMERICAN SAFETY WAY COMPLIANCE

Based on internal and external audits, the Copper business unit average was 94.2% compliance with the Anglo American Safety Way

Chagres had no lost-time injuries in the year

SAFETY PERFORMANCE

The total injury frequency rate was 0.7 for 200,000 man-hours worked, which was 16% lower than the previous year. The high potential incident frequency rate dropped 50% on 2009.

It should be highlighted that the operations managed by Anglo American had no fatalities, and have now logged 31 months of continuous work without any fatal incidents.

OPERATION 2010 2009

Los Bronces 1.28 1.84

Mantos Blancos 0.12 0.06

El Soldado 0.67 0.49

Mantoverde 0.57 0.58

Chagres 0.31 0.52

Santiago and Lima 0.21 0.00

Projects 0.69 0.86

TOTAL 0.70 0.83

ANGLO AMERICAN POLICY COMPLIANCE

TOTAL INJURY FREQUENCY RATE

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LTIFR

2010 COMPANY EMPLOYEES CONTRACTORS TOTAL

Los Bronces 0.29 0.19 0.22

Mantos Blancos 0 0.16 0.12

El Soldado 0.22 0.2 0.21

Mantoverde 0 0.15 0.1

Chagres 0 0 0

Los Bronces Development Project 0 0.32 0.32

Quellaveco 0 0 0

Michiqullay 2.29 0 0.67

TOTAL 0.16 0.27 0.25

LOST-TIME INJURY FREQUENCY RATE (LTIFR)

CATEGORY 2010 2009 TOTAL

Handling of materials 16 7 23

Falling 12 0 12

Collapse of ground 1 0 1

Moving machinery 5 5 10

Falling objects 8 0 8

Transport 1 1 2

Fire/Explosion 1 - 1

Electricity 2 - 2

Other causes 7 10 17

TOTAL 52 23 75

PRIMARY RISKS RELATED TO THE LOST-TIME INJURY FREQUENCY RATE

The lost-time injury frequency rate (LTIFR) per 200,000 man-hours worked at operations managed by Anglo American was 0.25, which makes the company one of the safest in the mining industry, based on the statistics of the National Geology and Mining Survey (SERNAGEOMIN).

Lost-Time Injury Frequency Rate- LTIFR: Lost-time accidents per 200,000 man-hours of work.

LTISR

2010 COMPANY EMPLOYEES CONTRACTORS TOTAL

Los Bronces 256 241 246

Mantos Blancos 0 80 57

El Soldado 170 132 150

Mantoverde 0 70 43

Chagres 0 0 0

Los Bronces Development Project 0 157 156

Quellaveco 0 0 0

Michiqullay 2,054 0 599

TOTAL 138 150 148

LOST-TIME INJURY SEVERITY RATE (LTISR)

Lost-Time Injury Severity Rate – LTISR: Number of work hours lost every 200,000 man-hours worked.

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CATEGORY 2010 2009 TOTAL

Handling of materials 7 5 12

Other causes 8 11 19

Falling 3 2 5

Collapse of ground 7 5 12

Moving machinery 3 5 8

Falling objects 6 7 13

Transport 24 35 59

Fire/Explosion - 5 5

Electricity - - -

TOTAL 58 75 133

Total number of employees 3,241

Days foreseen 725,713

Absenteeism for all reasons (days) 28,060

Absenteeism rate 4 %

LEARNING FROM INCIDENTS (LFI)

This is the outcome of the communication and training programme of the Learning From Incidents (LFI) tool, which enhances the instruments and practices of investigation, analysis and change in behaviour from cases of accidents. The following activities were carried out in 2010:

The procedures of the LFI programme were formally adopted. These are the LFI procedure, the incident reporting and investigation procedure, and the procedure for sharing the lessons learned.

The company adopted the James Reason methodology, also known as the Incident Cause Analysis Method (ICAM), which will help to standardise the cause analysis process across the company.

Planning of training on incident investigation for key leaders in the organisation.

ABSENTEEISM RATE

HIGH POTENTIAL INCIDENTS

2010

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RISK MANAGEMENT LEADERSHIP

Anglo American continued to develop its Visible Felt Leadership (VFL) at all its operations, attaining 98% compliance.

In 2010, the partnership was maintained with the Catholic University of the North to develop the risk management strategy in the organisation, with the aim of improving decision-making at the different organisation levels. Seven risk management courses (A3) were given to managers and 20 risk management courses (A2) to supervisors with a total of 150 and 450 participants, respectively.

A Train the Trainers – Risk Champion course was held and another Risk Champion Course with the participation of 29 people.

OPERATION MH/2010 MH/2009

Los Bronces 40,447 65,956


El Soldado 19,796 21,434


Chagres 15,072 13,404

LBDP 250,155

Quellaveco 1,442 -

Michiquillay 5,160 -

NUMBER OF MAN-HOURS (MH) ALLOCATED TO SAFETY AND OCCUPATIONAL HEALTH TRAINING

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MH/2010 MOST IMPORTANT COURSES

1. Firefighting

2. First Aid

3. Dissemination of Supreme Decree Nº0552010 (mining safety and occupational health regulation)

4. Defensive driving and 4x4

5. General and specific induction

Michiquillay 5,160 6. Dissemination of the master emergency plan

7. Anglo Safety Way

8. Presentation of the Anglo American Safety Risk Management Programme (SRMP)

9. Golden rules

10. Visible Leadership

11. Planned inspections

12. Compulsory weekly talks for all staff

MH/2010

1. Internal auditors course SGI. Bureau Veritas

2. Best practice for mining projects. IPA Institute

3. Undertaking successful large mining projects. IPA Institute

Quellaveco 1,442 4.Tools for continual improvement. Bureau Veritas

5. Integrated management systems. Bureau Veritas

6. Training the trainers. Bureau Veritas - ISEM

7. Diploma in safety and health. San Agustín University

TRAINING AT MICHIQUILLAY

TRAINING AT QUELLAVECO

ANGLO AMERICAN OCCUPATIONAL HEALTH WAY

The Anglo American Occupational Health Way comprises 12 standards and their corresponding performance requirements. They are aligned to the requirements of the OHSAS 18001 standard and industry best practice.

93%COMPLIANCE WITH THE

ROLL-OUT OF THE ANGLO AMERICAN OCCUPATIONAL

HEALTH WAY

OCCUPATIONAL HEALTH

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VISION: Our vision is to achieve zero harm and a healthy and productive workforce through the effective management of occupational health risks at all our operations.

We believe our people are our key asset and we do not accept that it is necessary for people to become ill whilst working for us. All employees should be able to return home fit and well at the end of their work.

ENHANCING OUR OCCUPATIONAL HEALTH PERFORMANCE

A complete diagnosis was made in 2010 by an independent consultant of the occupational health at all copper operations, which led to an action plan that was drawn up and validated in an occupational health workshop run by the chief medical officer. New corporate standards arose in the area from the work undertaken.

Based on the results of the diagnosis, noise and dust (silica) are the main agents of exposure in the workplace. After the new corporate definition contained in the noise standard, there were 11 new cases of noise-induced hearing loss.

The professional diseases in this reporting period included two cases of musculoskeletal disorders and one case of dermatitis.

CONTINUAL IMPROVEMENT

Policy1. Policy, Leadership and Commitment.

2. Risk and Change Management.3. Legal and Other Requirements.4. Targets, Objectives and Performance Management.

5. Training, Awareness and Fitness for Work.6. Communication, Consultation and Involvement.7. Document and Data Control.8. Operational Control.9. Emergency Preparedness and Response.10. Contractor and Business Partner Management.

Planning

Checking and corrective action

Management review

Implementation and operation

11. Occupational Health Reporting and Investigation.

12. Monitoring, Audits and Reviews.

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HYGIENE AND SAFETY PARITY COMMITTEES

Anglo American’s hygiene and safety parity committees (HSPC) continued work to support the vision of zero injuries at operations in Chile and work areas in Peru. The committees made a large contribution to safety excellence by means of their work plans, which include inspection, incident investigation, observation and training, among other activities.

There are currently 10 parity committees at Anglo American, 7 in Chile and 3 in Peru with 100% representation.

The parity committees work in areas such as: workplace inspection, incident investigation, safety audits, observation of conduct, employee training, support of safety campaigns, safe driving and safety awards, among others.

WORK WITH CONTRACTORS

Anglo American has a comprehensive management plan for contractor companies, the objective of which is to boost their commitment to Anglo American’s values, policies and programmes.

It also sets out the conditions for supervision of accommodation, food, transport, equipment and protection, which are complemented with a system of financial incentives tied to achieving the individual and collective safety and competency improvement objectives.

Contractors are thereby integrated to Anglo American’s planning. The work done in the last few years has led to a steady decrease in the performance shortcomings on safety, occupational health and risk management.

Contractors who enter mine sites must, like company employees, meet a series of entry requirements guaranteeing their safety and compliance with the work conditions. Contractor company workers are required to deliver several documents and, if everything is in order (this includes medical exams, social security sheets, work contract, etc), these are entered into a system allowing them to work at the mine sites.

10PARITY COMMITTEES7 IN CHILE AND 3 IN PERU

Anglo American’s hygiene and safety parity committees (HSPC) continued work to support the vision of zero harm at operations in Chile and work areas in Peru.

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This system provides safety, labour and social security certification, which controls the requirements of contractors, related to managing compliance of contractor companies. It also guarantees the worker some aspects of labour certification.

Operations contractors receive a safety bonus, which consists of an additional incentive for two accident-free months at the operation. This incentive encourages self-care and concern for others on work safety issues. The bonus is paid by Anglo American.

In 2010, the traditional awards ceremony was held for the safety and sustainable development performance of contractor companies in the categories of Presidency Award, Safety Professionals Award and awards for outstanding companies at each of the operations.

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SOCIAL CAPITAL

THE FOCUS OF ANGLO AMERICAN’S SOCIAL ACTION IS BASED ON “THE ANGLO AMERICAN SOCIAL WAY: MANAGEMENT SYSTEM STANDARDS,” WHICH ESTABLISHES HOW TO ADDRESS SOCIAL AND COMMUNITY RELATIONS WITH STAKEHOLDERS. THESE GUIDELINES ARE ROOTED IN CORPORATE vALUES AND THE GOOD CITIZENSHIP BUSINESS PRINCIPLES. PLANS AT ALL OPERATIONS ARE BASED ON THE RESULTS OF ANGLO AMERICAN’S SOCIO-ECONOMIC ASSESSMENT TOOLBOX (SEAT), WHICH IS APPLIED EvERY 3 YEARS.


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OUR STAKEHOLDERS

We improve our understanding of society, and of our place within it, through active engagement with those around us. We recognise the value of partnerships in building capacities, improving governance and promoting sustainable development. To achieve this, it is necessary to enter into commitments with each of the stakeholders to thereby promote a socially responsible culture.

INVESTORSWe will ensure full compliance with relevant laws and rules.

We will observe high standards of corporate governance and are committed to transparency and fair dealing.

EMPLOYEESWe are committed to the safety of our employees and to treating them with care and respect.

We will invest in their development and ensuring that their careers are not constrained by discrimination or other arbitrary barriers to advancement. We recognise the importance of family life and of allowing our employees to achieve a satisfactory work-life balance. We will deal honestly, and maintain regular two-way communication with our workforce.

The Social Development Committee was created, whose function is to generate the guidelines, assessment, validation and determination of action to improve projects in the company’s social area.

Work started on the Anglo American Projects Way in 2010 to manage government relations and social affairs related to project design stages. Co-ordination is made at corporate level and considers the exploration phase.

HIGHLIGHTS

GOVERNMENTAL BODIESWe will comply with the laws of our host countries whilst observing, across our activities, the best practice standards developed by the leading inter-governmental organisations. We aim to be an investor and partner of choice.

COMMUNITIESWe aim to create and maintain strong and respectful relationships with the communities of which we are a part.

We will seek regular engagement about issues that may affect them. We aim to contribute to the creation of more prosperous, empowered and adaptable communities. We will regularly assess our operations’ impact upon local social and economic development and report on it. We will provide local mechanisms for the consideration and resolution of complaints and grievances in a fair, timely and accessible manner.

BUSINESS PARTNERSWe seek mutually beneficial relationships with our customers, contractors, suppliers and other business partners, based on fair and ethical practices, including prompt payment within the negotiated terms. We require our supply chain to strive to meet the standards set out in these principles.

NON-GOVERNMENTAL ORGANISATIONSCivil society can play a crucial role in promoting pluralistic and more adaptable societies.

We aim for constructive relations with relevant non-governmental organisations.

Their input may improve our understanding of society and of host communities.

(GOOD CITIZENSHIP BUSINESS PRINCIPLES)


Anglo American recognises the value of partnerships in building capacities, improving governance and promoting sustainable development (Living Our values).

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In line with the definition of corporate stakeholders updated in 2010, operations and projects in Chile and Peru have identified those stakeholders directly affected by Anglo American’s business, and they have been classified into the following categories:

Political groups Institutional organisations Neighbourhood associations Economic instances Labour bodies Environmental bodies Project beneficiaries

The Anglo American Group has a proven record of making a positive difference to the countries and communities where we work. We are ambitious and committed to being a leader in the mining industry and to achieving excellence in all that we do. We believe that our objective of providing superior returns to our investors is best achieved through operating our businesses in a socially and environmentally responsible way (Living Our Values).

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An opinion leader group was defined based on the stakeholder map of the Michiquillay and Quellaveco projects in Peru, which was asked about its insight, expectations and risks of the Michiquillay and Quellaveco projects currently under development.

All the interviewees had a good opinion, in that the projects can improve the labour (social), economic (generation of new enterprise and jobs) and environmental (use of water resources and relationship with local agriculture) conditions, and the development expectations of new services or infrastructure (indirect impacts). They did, however, show a certain degree of mistrust, due to

experiences with another project in the area and because of the concerns of environmental organisations.

On the other hand, the interviewees believed that projects should have a positive impact on communities, if water is managed and shared with the local agricultural economy, and if the flora and fauna is protected too. Finally, a key requirement is for dialogue to have the expected result.

Social investment is a major expectation, as opinion leaders expressed, especially in areas of enterprise, education and culture. Regarding this, the relations

the company establishes with the communities are greatly valued, for which the company was asked to have good communication with the different age and community groups of Quellaveco and Michiquillay.

CASE STUDY

INTERVIEW WITH OPINION LEADERS – PROJECTS IN PERU

INSIGHT EXPECTATIONS INTERESTS

“Projects are needed in our communities to generate employment for the local people.”

“The company needs more heterogeneous communication to reach the different groups of the surrounding communities.”

“The company has good practice elsewhere in the world and we hope this is also applied here.”

“There are environmental groups that are not interested in projects succeeding.”

“The main issue is water and the needs of local farmers.”

Employment for youngsters who account for around 70% of the community population.

Better dissemination to stakeholders of the project mitigation objectives and plans.

Apply technology, standards and experience used at other company operations.

Listen to the different opinions and current requirements.

Manage the water resources of rivers and watersheds.

Generate employment.Promote new undertakings.Inhibit migration from the country to cities.

Communication and information that consider the different people and stakeholders.

The Michiquillay and Quellaveco projects should be undertaken with the international experience the company has gained elsewhere.

Citizen participation.Effective round table discussions.

Not to affect rural/local agriculture.Manage water.Not to affect the native flora and fauna.

Prepared by: Consultora AxisRSE S.A.

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THE ANGLO AMERICAN SOCIAL WAY

The Anglo American Social Way (ASW) requirements are met with an annual self-evaluation, which is validated by Anglo American’s social development manager. The self-evaluation has a score of 0 to 5 for each of the requirements. Score 3 indicates the requirements have been met and 5 is world class practice.

In the case of the Copper operations, the self-evaluation applied in 2010 indicated that on average they all met the ASW requirements, but certain weaknesses were detected with contractor management and community involvement in emergency preparedness, which will be addressed next year.

Compliance with the ASW requirements (self-evaluation):

COMPLIANCE WITH THE REQUIREMENTS OF THE ANGLO AMERICAN SOCIAL WAY (SELF-ASSESSMENT)Operation Score Average

Los Bronces 3.6

Mantos Blancos 3.0

El Soldado 3.2

Mantoverde 3.2

Chagres 3.2

TOTAL 3.2

Anglo American’s social and community management is based on the conviction that it is not possible to have a long-term sustainable business if the social and economic aspects of the communities around operations are not developed over time.

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APPROACH

The Anglo American approach to social issues is based primarily on seeking to leverage our core business impacts, including areas like human resources, procurement and contractor management, in such a way as to enhance our development outcomes, in addition to conventional social investment.

To meet Anglo American’s commitment to managing social impacts, policies and tools have been developed which cover the exploration, development, operational, closure and post-closure phases of its operations. Anglo American thereby seeks to minimise the risks associated with its projects and operations, generating ties of trust with its stakeholders.

Vision: to make a lasting positive contribution to the communities associated with our operations, and to be a partner of choice for host governments and communities as well as an employer of choice.

ENGAGEMENT ANDACCOUNTABILITY

ANGLO AMERICAN SOCIAL MANAGEMENT PRINCIPLES

We will engage in a culturally appropriate and respectful manner with stakeholders throughout the project cycle.

We will publish clear goals for our performance and enable stakeholders to make us accountable for meeting the high standards to which we aspire.

Implementation of this principle is a responsibility for all executives and managers and we expect all employees to conductthemselves respectfully towards community members.

We will make a positivecontribution to host communities through the operation of our core business; and throughenterprise developmentactivities, social investments and other contributions.

In managing any adverse impacts, we will apply the mitigation hierarchy of avoiding, minimising and mitigating any negativesocial impacts arising from our activities, products and services.

We will regularly review our social performance and improve our management of social issues.

We will respectfully consider feedback from stakeholders, address issues raised and respond in a timely fashion.

We will draw on the expertise of other stakeholders and workin partnership to enhance our development outcomes.

We will adopt a common, simple set of non-negotiable standardsand rules throughout the Group.

Corporate and divisional line management at all levels has responsibility to implement and maintain the standards and rules.

We will at all times manage our business in compliance with the standards set out in “Good Citizenship: OurBusiness Principles.”

BENEFITING HOSTCOMMUNITIES

LEARNING FROMEXPERIENCES

ENGAGEMENT ANDACCOUNTABILITY

The Anglo American Social Management Principles set out the desired corporate culture, expected behaviour and the performance standards with respect to social issues. Each principle has supporting elements to assist in realising Anglo American’s vision.

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We hold our leaders accountable for managing the social impacts of our activities, including activities undertaken on our behalf by contractors.

We expect our line managers and supervisors to provide effective leadership in the management of social issues whilst recognising that avoiding adverse impacts is the responsibility of all who work for us.

SEAT

For all operations plans should be based on the results of Anglo American’s socio-economic assessment toolbox (SEAT) study, applied every three years.

The annually updated community engagement plan (CEP) should build on the SEAT results and detail: the annual programme of stakeholder engagement, key issues and impacts to be managed, resources and accountabilities, and initiatives to improve social performance.

The community expectations, priorities and perceptions are the main input for drawing up CEPs, and arise from SEAT application and the direct community engagement of the teams at each operation, continual and trusting relations with the local authorities and analysis of complaints and grievances. The outcome is aligned with business objectives and the corporate initiative approach.

40COMMUNITY COMPLAINTS WERE MADE IN 2010

Managers are responsible for the full implementation of the Anglo Social Way at all managed operations.

This requires:

−The allocation and efficient management of appropriate resources, including staff, training and assurance resources.

POLICY:

COMPLAINTS AND GRIEvANCE PROCEDURE

To establish a culture of integrity, openness and accountability, each operation and project has a complaints and grievance procedure for receiving, managing, investigating and responding to stakeholder complaints in a timely and respectful manner.

Due to the need for implementing a system in 2009 to record complaints and grievances of surrounding communities, a document was drafted with the requirements of SEAT 2 and of the Anglo American Social Way and was used in 2010. This document contains all the information needed to describe the complete content of complaints or grievances made to the company, including a general outline of them, their nature, severity and the action taken. There were 17 complaints and grievances at Los Bronces, 14 at El Soldado and 9 at Chagres in 2010.

−The development, implementation and maintenance of social policies, programmes and procedures.

−Effective, proactive social impact identification, assessment and control consistent with the objective of minimising negative, and maximising positive, impacts.

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SOCIAL PROGRAMMESAs part of its social strategy, the company has been developing global programmes and initiatives and specific local plans at each of the areas where it operates. Community investment increased 92% on 2009 to $23 million.

RECONSTRUCTION RELIEF

“We are deeply committed to supporting those who are suffering because of this earthquake. We hope to work in very close co-ordination with the Chilean authorities so that this donation provides relief to the people affected,” said John MacKenzie, CEO of the Copper business unit.

Chile had one of the largest earthquakes ever in February 2010, which deeply affected the country, in which Anglo American has been investing for the last 30 years.

A few days after the disaster, the company announced a donation of $10 million, which was allocated to different projects to rebuild houses and schools, and to clearing up and removing debris in the areas hit worst by the earthquake.

This contribution was managed by the company itself as a way of providing management ability too. The company also donated Ch$100 million, raised from the “1+1” campaign held internally with the company’s employees.

Among the activities undertaken by the company, the work focus was on its social programmes, i.e., education, quality of life and entrepreneurship. The company thereby continued to drive community development, seeking to make a contribution to the country’s social progress with the aim that the people affected could resume their normal lives as soon as possible, which was carried out in co-ordination with the local and national authorities.

The company’s main social impacts concern the generation of employment and more job opportunities, the contribution to improving education and initiatives to enhance the quality of life of the surrounding communities.

Projects and programmes are therefore mainly focused on generating tools to give the community skills and further sustainable development of the operating environment over time.

This contribution envisaged a first stage of construction and implementation of six modular schools at the Tumbes cove, Constitución, Quirihue, Yungay and Cocholgüe, which enabled over 4,500 schoolchildren to return to classes.

Support was then given to the construction of 450 houses for families of Cocholgüe, in the district of Tomé, of which 150 are already being built, and a contribution was made so 2,000 entrepreneurs hit by the earthquake in the Bío-Bío Region could recover their undertakings by means of an agreement signed with Fondo Esperanza called Juntos Volvemos a Emprender (Getting Back to Business Together).

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EDUCATION

Enseña Chile: Anglo American is a strategic partner of this initiative, which aims to create an impact on education in the country’s high-risk sector, which in 2 years of operation has reached more than 8,000 students. The company channels its commitment through the financial contribution and participation in the different management instances of this project, like the Management Council. The mission is to build a movement of champions committed to the quality of education, for which professionals of excellence in different university disciplines are selected, trained and accompanied to work for two years as full-time teachers, employed by high-risk state schools or subsidised private schools. The aim is to transform classrooms and commit professionals to changing the educational system for their future professions and areas of influence. Enseña Chile professionals currently teach at 41 schools in the country, located in the Metropolitan (26), La Araucanía (10) and Los Ríos (5) Regions.

Anglo American seeks to incorporate these teachers in the districts around its operations. In 2010, 11 professionals taught at schools in the Colina and Lo Barnechea districts in the Los Bronces area of influence.

Elige Educar: the company also supports this initiative, which started in 2009 and whose main objectives are to motivate the most talented youngsters throughout Chile to read education at university and significantly improve the social valuation of the teacher and the teaching career.

Year 2010 2009

Professionals participating in the first year 46 29

Professionals participating in the second year 21 0

Total Enseña Chile professionals 67 29

Students reached 8,040 3,480

Predecessors 0 0

Applications received 720 320

Offices 2 1

Human resources (FTE) 23.5 13.5

The project is co-ordinated by the faculty of education and public policy centre of the Catholic University of Chile. In late September 2010, a mass advertising campaign was launched on TV, radio, in the press and outdoors. The aim of this campaign was to give the teaching profession greater value and show its opportunities to youngsters belonging to the target public. The goal is for 20% of the best secondary education school leavers deciding to study education-related courses in 2014.

The Emerge programme is an Anglo American initiative, the aim of which is to make a contribution to the economic development and well-being of the communities around its operations in Chile.

Enseña Chile has benefitted over 8,000 students.

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QUALITY OF LIFE

No more shanty towns in Santiago: In January 2010, Anglo American and the Un Techo Para Chile (A Roof For Chile) Foundation signed the “No More Shanty Towns in Santiago” agreement, the aim of which is to boost the development of social empowerment and make progress with the eradication of shanty towns in the Metropolitan Region. Under this agreement, Anglo American committed to providing financial support for the management of 48 housing projects, which will provide a definitive and dignified solution to 4,532 families living in shanty towns in the region.

ENTREPRENEURSHIP

Emerge: the Emerge programme is an Anglo American initiative, the aim of which is to make a contribution to the economic development and well-being of the communities around its operations, supporting small- and medium-sized entrepreneurs to generate self-sustainable businesses that do not depend on mining operations.

The Emerge programme is currently available in Iquique, Antofagasta, Sierra Gorda, Chañaral,Copiapó, Colina, Til-Til, Nogales, Catemu, Llay Llay, Panquehue, San Felipe and Lo Barnechea.

Small-sized enterprise: small-sized enterprise is driven by means of a partnership with Fondo Esperanza, which provides joint micro-loans and entrepreneurial education. The agreement envisages ongoing teamwork to give the right support to entrepreneurs in the different districts where the programme is held. The working methodology undertaken by Fondo Esperanza entails providing individual micro-loans to entrepreneurs grouped into community banks. A community bank is a group of 18-25 people who live in the same sector and partner to secure micro-loans. This methodology encourages the organisation and solidarity of families to achieve common objectives by means of a weekly work meeting, improving their living conditions.

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2007 2008 2009 2010

INITIAL PROJECT FOR SURROUNDING COMMUNITIES

QuillotaSan FelipeColina1,246 female members

AntofagastaCopiapó

2,701 male members

Alto HospicioVallenar

5,933 male members

Quinta Cordillera Norte6,420 male members

ValparaísoViñaSan Antonio1,080 female members

ValparaísoViñaSan Antonio1,800 female members

Region VIII2,080 female members

QUINTA COSTA PROJECT

EARTHQUAKE PROJECT*

In 2010, 2,333 small-sized enterprises were supported, taking the total enterprises to 8,270 (including 2010).

96%OF THE BENEFICIARIES ARE WOMEN

PROGRAMME PROGRESS BY COvERAGE & PARTNERS

Medium-sized enterprise: this segment is focused on entrepreneurs above the subsistence level who are developing and addressing the challenge of growing. Anglo American has been working on a methodology of direct support for them, which entails four key aspects:

1. Business development training.

2. Commercial assistance to draw up and implement a business plan.

3. Financial contribution.

4. Follow-up of the enterprises financed.

To train entrepreneurs, Anglo American works in partnership with the eClass programme of the Adolfo Ibáñez University (UAI) business school, which offers a diploma course with an interactive-training education model and ongoing advice on the management of their enterprises. At the end of the courses, entrepreneurs who have passed all

the subjects receive a UAI diploma in business development. At the same time as the training process, entrepreneurs draw up a business plan with technical advice. The idea is to plan the business, setting objectives, timescales and results. The business plan is the instrument that allows them to show the economic feasibility of their enterprise. In 2010, 58 medium-sized enterprises were supported, taking the total beneficiaries of this initiative to 149 since 2007.

Based on a study conducted by the company in 2010, each of the entrepreneurs in the medium-sized business segment who have benefitted from the Emerge programme has generated an average of 1.3 jobs and increased sales by at least 20%. Although this is an initial measurement, the plan is to design a permanent process to assess the impacts of the programme.

*Note: the earthquake project is not part of the initial project. It was implemented in 2010 due to the earthquake in Chile on 27 February 2010.

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INITIATIvES BY OPERATION

LOS BRONCES

Los Bronces makes an active contribution to the well-being and development of the Til-Til, Colina, Los Andes and Lo Barnechea districts, which are its direct neighbours.

Education accounted for 85% of the Los Bronces social investment budget, due to the greater support need and work required for the communities around operations. The other work areas were health, environment, social and cultural development.

The following were the initiatives undertaken by Los Bronces in 2010:

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LO BARNECHEA:

Refurbishment and equipping of the mechanical workshop of the Eduardo Cuevas Valdés School.Purchase of laptops for teachers.Development of the apprentice programme.

Organisation of social events in the district. Support of different activities for the elderly.

Support of the Lo Barnechea Youth Orchestra and Choir. Summer programme with entertaining culture. Bicentenary folklore programme.The 2nd Photo History Competition was held Publication of the book Myths and Legends

Training courses for trades.

EDUCATION /SCHOOL IMPROVEMENTS

SOCIAL

CULTURE

TRAINING

COLINA:

Construction of the Camina Alto Language School.Construction of the Sports Centre for student recreation.Purchase of musical instruments for the municipal school orchestra.Construction of the second stage of the Tres Ositos crèche.

Construction of the Rehabilitation Centre for teenage girls.

The preliminary project was undertaken to restore the large house of Quilapilún.


EDUCATION

PREVENTION

CULTURE

TRAINING

TIL TIL:

Refurbishment of the Manuel Rodríguez municipal boarding schoolConstruction of a multi-court and changing room at the Santa Matilde School.Development of the apprentice programme.

Participation in recreation and celebration activities in the district.

The second household composting programme was held at Huertos Familiares and Santa Matilde

Environmental education programme for municipal high schools.


EDUCATION

DIRECT RELATIONSHIPWITH THE ENVIRONMENT

SOCIAL

EDUCATION / ENVIRONMENT

TRAINING

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MANTOS BLANCOS

Mantos Blancos has Antofagasta and Sierra Gorda as its area of influence. Social investment in 2010 was focused on education and entrepreneur support.

The following were the main initiatives undertaken by Mantos Blancos in 2010 by action areas:

Catholic University of the North (UCN) Developing and Leading Academic Talent (DeLTA) programme.ITEP project implementation.Support of the Baquedano Astronomy Academy. Higher education bursary for apprentices at the Mantos Blancos operation.

National Crèche Board (JUNJI) high-risk crèche sponsorship programme.Infrastructure and access road improvements of the GEN community.Community support activities in the Sierra Gorda district.Performance of plays for all the community. Sponsorship of various scientific fairs and activities for young students in Antofagasta.

Enterprising youth

EDUCATION / TRAINING

SUPPORT OF ENTREPRENEURSHIP

REGIONAL COMMUNITY DEVELOPMENT

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EL SOLDADO

El Soldado’s area of influence is the district of Nogales, particularly including the following sectors and towns: Collagüe, Los Caleos, Chamizal, Garretón, El Melón, Macal and Cordillera el Melón. The activities undertaken were focused on improving the standard of life of inhabitants in the area of influence of its operations. Action in 2010 was focused on education (environmental and training), social development, entrepreneurship and the environment.

Refurbishment of the municipal gymnasium at Nogales.Fencing of the El Melón gymnasium.Implementation of the El Polígono library.Apprentice programme.School and university transportation grant.

School environmental certification.


Funds put up for tender. Improvement of El Melón drinking water Improvement of community infrastructure: Reconstruction of the municipal gymnasium at Nogales. Works to improve and implement technical workshops at the Felipe Cortes high school in El Melón. Infrastructure works at the Juan Rusque de Nogales high school. Reconstruction and works to improve the El Melón family health centre. Infrastructure equipping of the family health centre (former El Melón homestead). Trade courses were held with social scholarships from the National Training and Employment Department (SENCE). Equipping of the Sembradoras de Sueños cultural centre in the rural sector of La Peña. Improvement of rural roads and paving. Construction of the El Polígono community library. Works to rebuild and improve the Christa Mock agricultural high school. Restoration and implementation of the old house of Casona cultural centre in El Melón.

EDUCATION

EDUCATION / ENVIRONMENT

TRAINING

SOCIAL

Funds put up for tender Work with the Agriculture and Livestock Development Institute (INDAP) to promote productive projects of small farming families in the district of Nogales.Hiring of people in the district.

ENTREPRENEURSHIP AND DEVELOPMENT

Composting and recycling using sustainable technology. Lining of channels.ENVIRONMENT

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CHAGRES

The districts of Catemu, Llay Llay, Panquehue are in the direct social development influence area of Chagres, and San Felipe and Valparaíso are districts of importance from the administrative standpoint. The most focused work was carried out at: Chagres, La Estancilla, Reinoso, San Carlos Alto, San José, Santa Isabel, Santa Margarita and Villa Lo Campo, with round table discussions with base organisations for the social development of such areas.

The social investment of Chagres was focused on providing development tools by means of its 3

Advice to local municipalities on how to manage specific issues with professional consultants to develop certain programmes.Funds put up for tender for social organisations of Catemu, Panquehue and Llay Llay.Development workshops for base social organisations.Supplier development programme.Champion training programme.

Prevention workshops: “Alcohol and Drugs,” Prevention at Home,” “Highway Traffic.”School enterprise programme at Panquehue and Catemu. Junior Achievement with the Futuro Emprendedor Foundation.Scholarships to continue studies for apprentice technicians.Apprentice programmeSan Felipe trade school with Universidad Autonoma del Chile (UAC).503 boys and girls, and 45 teachers were trained in the science investigation methodology education programme of the University of Chile with the Catemu Education Department.Sponsorship of the Cinema for All programme in Llay Llay.Open Door programmeTraining by means of seven trade courses in Catemu, Panquehue and Llay Llay. 140 people benefitted

Cooking and organic orchard workshops for women household heads in Catemu.Environmental certification process at 16 primary schools in Llay Llay, Catemu and Panquehue. A participative environmental education manual for primary school level and didactic educational material for pre-school environmental teaching were developed for Panquehue.

STRENGTHENING OF SOCIAL ORGANISATIONS

IMPROVEMENT OF THE SURROUNDINGS AND ENVIRONMENT

EDUCATION AND CULTURE

MANTOvERDE

The Mantoverde area of influence includes the districts of Chañaral, Caldera, Copiapó and Diego de Almagro, particularly including the following sectors and towns: Barquito, Chañaral, El Salado, Flamenco, Diego de Almagro, Copiapó and Caldera.

Funds put up for tender for Chañaral and El Salado.Supplier development programme.

Prevention workshops: “Alcohol and Drugs” with the National Narcotics Council (CONACE).English programme, Programa Condorito 10%, for kindergarten to 4th grade of primary education children at 5 municipal primary schools in Chañaral and El Salado. Sponsorship of the cultural activity programme in the district.Complementary education programme for 3rd and 4th year secondary education students at the Federico Varela high school in Chañaral.Training activities for entrepreneurial women in the district of Chañaral.Support of the International Writers’ Forum in the district of Chañaral.

ENTREPRENEURSHIP

EDUCATION AND CULTURE

Support of the Santa Ana girls’ home.Local summer activity programmes.Partnerships with public organisations and services: PTI Turismo Chañaral, PTI Hídrico, National Forestry Corporation (CONAF), Fire Department, among others.Sponsorship of sports and cultural events in the district.

SOCIAL

Mantoverde’s social investment was focused on social development, entrepreneurship, education and culture.

The following were the main initiatives undertaken:

strategic pillars, which entail the strengthening of social organisations, education and culture, and improving the quality of life and the environment. Chagres works on each of these pillars based on ongoing training, joint execution of high-impact projects of local priority, systematic, flexible and adaptive work of the community engagement plan, and aimed at the sustainability of each action undertaken, which generates strategic partnerships with the local municipalities, NGOs or other civil society and community bodies.

The following were the main initiatives carried out:

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QUELLAvECO

The aim of the social projects undertaken in the Quellaveco area, located in the region of Moquegua in the south of Peru, is to have a direct impact on the area of influence of Anglo American’s project. The zones involved are mostly located in the provinces of Ilo and Mariscal Nieto in the southern region of Moquegua and include the districts of Torata, San Cristóbal, Carumas and Cuchumbaya; the farming community of Tumilaca, Pocata, Coscore and Tala with their respective hamlets; and the cities of Ilo and Moquegua

Develop entrepreneurial and business skills of small enterprise in the cities of Ilo and Moquegua to create new undertakings and improve existing ones.

The aim is to design, build in participation and validate the agreed development plan for the Chen Chen community, Mariscal Nieto province, Moquegua.

Provide an accessible, relevant and sustainable education service for youngsters and adults in the Coscore and Calientes hamlets of the Tumilaca, Pocata, Coscore and Tala farming community.

The aim of the project is to promote the commercial co-ordination of producers and/or suppliers in the Mariscal Nieto province with the demand for products and services generated by the Quellaveco project and other local markets.

Give the Tumilaca, Pocata, Coscore and Tala farming community in the Calientes and Pocata hamlets two hydroponic greenhouses with hi-tech irrigation systems, infrastructure and suitable equipment.

BUSINESS TRAINING AND DEVELOPMENT IN THE CITIES OF MOQUEGUA AND ILO

DESIGN OF THE AGREED DEVELOPMENT PLAN FOR THE CHEN CHEN COMMUNITY, MARISCAL NIETO PROVINCE, MOQUEGUA

OPERATION OF THE ALTERNATIVE PRIMARY EDUCATION OUTREACH SERVICES (CEBA) IN THE HAMLETS OF COSCORE AND CALIENTES

LOCAL SUPPLIER DEVELOPMENT PROGRAMME IN THE QUELLAVECO PROJECT INFLUENCE AREA

INSTALLATION OF 2 HYDROPONIC GREENHOUSES IN THE FARMING COMMUNITY OF TUMILACA, POCATA, COSCORE AND TALA

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MICHIQUILLAY

The social projects undertaken at Michiquillay, located in the northern region of Cajamarca, aim to forge a relationship of trust with the surrounding communities. Projects in 2010 were focused on Michiquillay and La Encañada, and addressed aspects to improve the quality of life of neighbours.

Michiquillay sports club

2,296 boys and girls of 0 to 12 years old participated.

47 children of the Sogorón Alto crèche participated.

15 primary education schools participated in the 1st Christmas Drawing Competition in the communities.

931 students of the kindergarten, primary and secondary education levels participated.

Two leaders participated in the Local Leaders course of the senior management programme of the University of Piura

15 students of the 2010 graduation class of the Chamcas school participated.

47 secondary education students of the Chamcas school participated.

SPORTS / ARTICLES CAMPAIGN

CHRISTMAS / ARTICLES CAMPAIGN

SOGORÓN ALTO CRÈCHE IMPROVEMENT

DRAWING COMPETITION

SCHOOL / ARTICLES CAMPAIGN

COMMUNITY LEADER TRAINING

GRADUATION CLASS CELEBRATION SUPPORT

SEWING WORKSHOP TRAINING

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NATURAL CAPITAL

THE ANGLO AMERICAN ENvIRONMENT WAY HAS BEEN IN FORCE SINCE 2009. THIS IS AN ENvIRONMENTAL MANAGEMENT SYSTEM STANDARD AND SET OF ENvIRONMENTAL PERFORMANCE STANDARDS. THE STANDARD CONSIDERS vARIABLES SUCH AS THE SOCIAL AND ENvIRONMENTAL IMPACT ASSESSMENT OF OPERATIONS, WATER, AIR QUALITY, MINING AND NON-MINING WASTE, HAZARDOUS SUBSTANCES, BIODIvERSITY, REHABILITATION AND CLOSURE PLANS. AN ENvIRONMENTAL MANAGER IS IN CHARGE OF ENvIRONMENTAL PERFORMANCE, WHO REPORTS TO THE vICE-PRESIDENT OF SAFETY AND SUSTAINABLE DEvELOPMENT. EACH OPERATION ALSO HAS AN ENvIRONMENTAL MANAGER.

THE ENERGY AND CLIMATE CHANGE MANAGER IS IN CHARGE OF THE ENERGY EFFICIENCY PROGRAMME AND ALSO REPORTS TO THE vICE-PRESIDENT OF SAFETY AND SUSTAINABLE DEvELOPMENT. THIS STRUCTURE WAS ADOPTED IN JANUARY 2010, WITH THE CREATION OF THE vICE-PRESIDENT OF SAFETY AND SUSTAINABLE DEvELOPMENT, WHO REPORTS DIRECTLY TO THE CEO OF THE COPPER BUSINESS UNIT AND ISSUES GUIDELINES TO SAFETY, ENvIRONMENTAL, AND ENERGY AND CLIMATE CHANGE MANAGERS.

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THE ANGLO AMERICAN ENvIRONMENT WAY

The Anglo American Environment Way (AEW) is applicable to the complete management lifecycle, from business identification, project assessment and implementation, operations and mine site closure.

In 2010, all operations implemented different action to make progress with complying with the AEW and the next compliance assessment is scheduled for July 2011. They all maintained certification of their integrated management system in accordance with the OHSAS 18001 and ISO 14001 standards, with no nonconformities. Mantos Blancos and Mantoverde also maintained their ISO 9001 certification. As part of this process, each operation undertakes an environmental risk analysis that is consolidated into a risk record, which considers the impacts, action plans, controls, results and recommendations that need to be applied and controlled at operations.

VISION: Our vision is to minimise harm to the environment by designing, operating and closing all our operations in an environmentally responsible manner.

PRINCIPLES:We shall apply the measures needed to avoid, minimise and mitigate environmental impacts arising from our activities, products and services.

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Regarding regulatory compliance, two penalty processes were started in 2010 by the National Environmental Agency (CONAMA) for potential breach of the environmental qualification rulings for Los Bronces. One was for seepage due to irrigation of a forest plantation in the Las Tórtolas area which, according to the permit given, is used to dissipate excess process water. This affected the local aquifer, causing the sulphate concentration to exceed the irrigation water quality standard. The operation, in agreement with the authorities, terminated this irrigation and hydro-geological studies were started to find a solution to return the groundwater to a quality fit for irrigation. The second incident was the upwelling of acid drainage from a gravel deposit. In this case, Los Bronces implemented a temporary in situ neutralisation system while the final solution is designed.

REGULATORY COMPLIANCE

All the divisions have closure plans which comply with what is laid down in Supreme Decree Nº 72 of the Mine Safety Regulation and the Anglo American Mine Site Closure Toolbox, which contains social and environmental variables to terminate activities.

The following are the estimated closure dates of operations:

CLOSURE PLANS

OPERATION ESTIMATED CLOSURE DATE

Los Bronces 2046

Mantos Blancos 2020

El Soldado 2030

Mantoverde 2017

Chagres 2046

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All necessary steps will be taken to learn from environmental impacts, incidents, audit findings and other non-conformances to prevent their recurrence (Anglo American’s safety, occupational health and environmental management principle).

ENvIRONMENTAL INCIDENTS

Anglo American classifies environmental incidents according to their environmental impact and effect..

Classification of environmental incidents

Level 1: Minor impact, short-term effects.

Level 2: Moderate impact, medium–term effects.

Level 3: Major impact, long-term effects.

The level 1 environmental incidents at the Company’s operations in Chile are shown in the table below:

YEAR LOS BRONCES MANTOS BLANCOS EL SOLDADO MANTOVERDE CHAGRES TOTAL

2010 10 1 1 5 27 44

2009 14 6 5 7 15 47

2008 2 4 7 3 14 30

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ORE DISPATCHED FOR PROCESSING (IN THOUSANDS OF TONNES)

CONCENTRATE SMELTED (IN THOUSANDS OF TONNES)

RAW MATERIALS

OPERATION 2010 2009



El Soldado 8,708 9,172


TOTAL 45,146 47,969

OPERATION LUBRICATING AND EXPLOSIVES HYDRAULIC OIL (m3) (TONNES)


Mantos Blancos 122 8,456

El Soldado 1,031 12,626

Mantoverde 446 6, 992

Chagres 34 -

TOTAL 2,740 47,960

OPERATION 2010 2009

Chagres 528.6 524.6

Anglo American’s main raw material is the ore extracted from its mines. The total ore dispatched for processing in 2010 was 45.1 million tonnes, which was a 6% decrease on 2009.

Anglo American uses various raw materials to process the ore mined at each of its operations, and these are shown below:

STRATEGIC RAW MATERIALS

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FIRST SOLAR PANEL INSTALLATION AT CHAGRES

In line with the corporate policies of innovating and implementing new energy technologies,Chagres developed a project to install 24 cutting-edge solar panels to heat water in the worker changing rooms at an investment of $38,000.

An important factor in the decision to use these solar panels was the social benefit, as prisoners at the Colina 1 prison had been making them for three years and they are certified by the Federico Santa María University.

ENERGY EFFICIENCY

Solar panels now feature a laminated copper absorbent sheet, which provides a smoother surface and reduces heat dissipation, thereby providing a world-class collector.

The second stage is to install 47 additional solar panels to provide hot water for the changing rooms of Anglo American’s employees.

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Commensurate with the corporate policies of innovating and implementing new energy technologies, the aim of the company’s energy supply strategy is to include non-conventional renewable energy (NCRE) in its operations, for which it has been working on different projects such as:

Including NCRE electric power generating companies in energy tenders.

Adding specific clauses to electric supply contracts to encourage implementation of and compliance with Law 20.257 on NCRE, by including NCRE generator supply.

Formation of a NCRE team to boost the development of NCRE generating companies and add them to Anglo American’s power grid.

Signing an agreement with Norvind to acquire NCRE attributes. The agreement considers an amount equivalent to the injection of 80 GWh of the Totoral wind farm in 2011 and is one of the first to be implemented in the mining industry.

Signing a memorandum of understanding with Seawind to take wind measurements for six months at Los Bronces and Mantos Blancos to assess the feasibility of being able to set up wind farms at these facilities.

Project to repair and start up the Anglo American-owned Lo Ermita hydroelectric power plant, with a capacity of 1-2 MW.

CORPORATE ELECTRIC POWER SUPPLY STRATEGY

ENERGY EFFICIENCY PROJECTS

The following activities were carried out in 2010 to improve energy consumption:

The energy reduction target was set at 7% by 2015 for the Copper business unit.

The corporate standard was published on Energy and Emissions (AA GTS 023) and Water (AA GTS 021) Management. It is expected to be put in place in the Copper business unit in 2011.

An internal energy efficiency course was held at El Soldado, Mantos Blancos and Mantoverde.

The NCRE team was expanded to an Energy Committee, which includes assessment of the strategic energy and fuel supply.

A contract is being negotiated with Gasco to supply liquefied petroleum gas (LPG) to the solvent extraction and electro-winning (SX-EW) plant at Mantos Blancos, which will explore other potential use in mining equipment.

A vertical wind generator was installed at Chagres, which is undergoing final tests before being connected to the grid.

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2010 TOTAL 2009 TOTAL

OPERATION FUEL ELECTRICITY TOTAL ENERGY FUEL ELECTRICITY TOTAL ENERGY CONSUMPTION GJ* CONSUMPTION GJ* CONSUMPTION GJ* CONSUMPTION GJ* CONSUMPTION GJ* CONSUMPTION GJ*

Los Bronces 1,798,290 2,942,914 4,741,204 1,781,605 2,918,303 4,699,908

El Soldado 1,349,240 963,347 2,312,587 1,433,727 911,067 2,344,794

Mantos Blancos 1,248,410 845,090 2,093,500 1,188,147 912,500 2,100,647

Mantoverde 733,648 683,076 1,416,724 711,319 710,772 1,422,091

Chagres 503,560 507,422 1,010,982 489,172 503,339 992,511

Santiago 329 7,931 8,260 268 7,198 7,466

TOTAL 5,633,477 5,949,780 11,583,257 5,604,238 5,963,179 11,567,417

ENERGY CONSUMPTION

*Gigajoules.

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The focus in 2010 was on the “Certify Save” campaign, which aims to certify energy, emissions and water consumption reductions, documenting the savings attained in the company at operation and administrative office levels. This records the contribution by each person to achieve the saving targets agreed.

CLIMATE CHANGE AND GREENHOUSE GAS EMISSIONS

certifYSAVe

We certify our reductions: they all contribute to the target, however small.

REDUCTION IN CO2 EMISSIONS (GREENHOUSE GASES)Our reductions in CO2 emissions help to directly fight climate change. Let’s prevent the earth’s temperature from continuing to rise. Each of our actions is important.

REDUCTION IN ELECTRIC ENERGY CONSUMPTIONReducing electric energy consumption is costless and has immediate benefits. Change your habits and help to improve your quality of life and that of the planet.

REDUCTION IN FRESH WATER CONSUMPTIONGlobal water consumption has multiplied in the last 50 years. If we do not look after it, by 2050 a fourth of the world’s population will be water-stressed. Water is scarce. Look after it.

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OPERATION ON-SITE AIR DUST FALLEN SO2** FROM NO2*** FROM QUALITY MEASURED SPECIFIC PROCESSES MONITORING SOURCES

Los Bronces Yes Yes 0 0

Mantos Blancos Yes Yes 0 0

El Soldado Yes No 0 0

Mantoverde No No 0 0

Chagres* Yes No 13,863 0

TOTAL - - 13,863 0

AIRBORNE EMISSIONS (TONNES) 2010

*Note: SO2 emissions are only measured at Chagres as it is the only operation with airborne emissions.

** Sulphur dioxide***Nitrogen dioxide

4 Central Interconnected Grid.5 Great North Interconnected Grid.

CARBON FOOTPRINT MEASUREMENT

There is currently a carbon footprint measurement for Scopes 1 and 2. The Company decided not to include Scope 3, because it involves having full control of the emissions of all Anglo American’s suppliers.

Concerning greenhouse gases, a 6% reduction target was set for the Copper business unit by 2015. The use of biodiesel was also assessed at Chagres.

Note: the emission factors used were: SIC4 =284 tonnes of CO2/GWH, SING5 =912 tonnes of CO2/GWH

CO2 SF6 CH4 N2O HFCs PFSs

THREE LEVELS OR SCOPES ARE USED TO MEASURE, MANAGE AND REPORT THE CARBON FOOTPRINT

SCOPE 2Indirect emissions from purchasing electricity for own use, which emitted CO2 to be produced.

SCOPE 1Direct emissions generated by burning fuel at the company’s operations, use of own vehicles, etc.

SCOPE 3Indirect emissions arising from raw materials purchased, employee business trips, waste disposal, contractor vehicles, outsourced activities, use of the product and transport, etc. This Scope 3 is very difficult to quantify.

SCOPE 1 SCOPE 2 TOTAL 2010 TOTAL 2009 (TONNES) (TONNES)OPERATION CO2 FROM CO2 FROM FOSSIL CO2 ELECTRICITY PROCESSES FUELS (TONNES) BOUGHT (TONNES)

Los Bronces 136,593 232,163 368,756 365,119

El Soldado 5,000 102,176 75,997 183,173 186,433

Mantos Blancos 39,946 93,970 214,066 347,982 353,023

Mantoverde 61,723 55,558 53,887 171,168 162,318

Chagres - 36,683 40,030 76,713 76,402

Santiago - 18 626 644 583

TOTAL 106,669 424,998 616,769 1,148,436 1,143,878

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Anglo American has a hazardous and non-hazardous waste management system. One of the main waste management initiatives was replacing diesel oil used in the explosive mixture with the used oil from the equipment at Los Bronces, El Soldado and Mantos Blancos. In 2010, 482 tonnes were used which, despite being a small fraction of the total used oil generated, is the largest amount that can be added to the mixture without affecting the explosive’s power. This is the only hazardous waste that is recycled internally.

MASS MINING WASTE

Mining generates different types of waste. Anglo American’s mass mining waste mainly comprises mine gravel, low-grade ore that is not processed in plants, tunnel bases and underground excavations, leaching gravel, tailings and slag.

HAZARDOUS WASTE (TONNES) NON-HAZARDOUS WASTE (TONNES) OPERATION EXTERNAL MANAGEMENT INTERNAL MANAGEMENT EXTERNAL MANAGEMENT RECYCLING FINAL DISPOSAL RECYCLING FINAL DISPOSAL RECYCLING FINAL DISPOSAL

Los Bronces 672.2 255.14 - - 1,518.4 3,579

Mantos Blancos 466.7 214.8 16.9 - 646.9 155.0

El Soldado 207.6 242.5 - - 2,175.0 520.8

Mantoverde 254.3 114.1 - - 1,389.4 21

Chagres 21,944.0 292.5 - - 506.8 140.3

TOTAL 23,544.8 1,119.04 16.9 0 6,236.5 4,416.1

NON-MINING WASTE MANAGEMENT

WASTE MANAGEMENT

We recycled 23,544.8 tonnes of hazardous waste.

We have a hazardous and non-hazardous waste management system

OPERATION WASTE & GRAVEL WITH AND TAILINGS SLAG WITHOUT LEACHING Thousands of tonnes Thousands of tonnes Thousands of tonnes

Los Bronces 40,673 18,252 --

Mantos Blancos 34,544 3,576 --

El Soldado 57,110 7,002 --

Mantoverde 15,492 -- --

Chagres -- -- 334

TOTAL 147,819 28,830 334

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The Yerba Loca Nature Sanctuary is close to Los Bronces and covers the entire Yerba Loca valley and the San Francisco valley. The operation currently has no impact on this area.

El Soldado is in the El Melón mountain range, which is an unprotected zone but deemed to be of interest for biodiversity. Some protected tree species, like the Belloto del Norte (Beilschmiedia miersii), grow in the area and interference with the operation has made it necessary to relocate some of these trees.

In 2010, the environmental authorities approved a project to continue the operation of the El Soldado mines, besides making a contribution to recovering native forest and a protection plan, which are in addition to the conservation area for Mediterranean forest in central Chile. The total area covered by this plan is 1,055 hectares and will be the second largest conservation area in central Chile. This plan is in addition to the scientific research projects with universities and other institutions and community participation in protecting natural habitats.

BIODIvERSITY MANAGEMENT

The Copper business unit is accountable for the direct and indirect impacts that operations might cause on the ecosystems intervened, as are all the operations of the Anglo American Group worldwide. We have adopted a series of measures to protect vulnerable species that are on or near the lands of our operations.

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REHABILITATED LAND

There was no new land disturbed by ore extraction operations in 2010. No new hectares of land were therefore rehabilitated in the year.

* Note: the difference regarding what was reported in 2009 is due to the fact that on this occasion land under rehabilitation was not considered.

None of Anglo American’s operations and projects are on or near World Heritage sites. Nevertheless, Los Bronces is next to sites declared by the International Union for Conservation of Nature (IUCN) as being in an endangered species status. El Soldado, Mantoverde and Quellaveco in Peru are on land next to areas with high biodiversity value.

DISTURBED LAND REHABILITATED LAND

COMPANY LAND TOTAL LAND TOTAL LAND FULLY LAND REHABILITATION DISTURBED BY ORE REHABILITATED PLAN MINING OPERATIONS

OPERATION HECTARES YES/NO HA (ACCUMULATED HA (ACCUMULATED TOTAL) EXCLUDING LAND SOLD TOTAL) EXCLUDING LAND SOLD

Los Bronces 35,405 Yes 4,710 0

Mantos Blancos 6,800 Yes 1,888 0

El Soldado 8,155 Yes 1,230 70*

Mantoverde 13,600 Yes 1,357 0

Chagres 253 Yes 46 0

Quellaveco 35,191 Yes 0 0

TOTAL 99,404 - 9,231 70

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Mining operations use water in the grinding, flotation, and leaching processes and for smelting, mainly in the refrigeration system. Water continued to be optimised in 2010 with 26.4 million m3 of fresh water consumed, which was a 5.26% reduction.

OPERATION 2010 (IN THOUSANDS OF CUBIC METRES) 2009 (IN THOUSANDS OF CUBIC METRES)

WATER USED FOR WATER USED FOR PRIMARY ACTIVITIES PRIMARY ACTIVITIES

Los Bronces 14,436 14,776*

El Soldado 4,300 5,064*



Chagres 1,190 1,173

Santiago 8 7

Quellaveco 10 -

TOTAL 26,365 27,828

OPERATION WATER FROM GROUNDWATER SURFACE WATER TOTAL EXTERNAL SUPPLIER EXTRACTED EXTRACTED THOUSANDS THOUSANDS OF M3 THOUSANDS OF M3 THOUSANDS OF M3 OF M3

Los Bronces - 685 13,751 14,436

El Soldado - 4,300 - 4,300

Mantos Blancos 3,760 - - 3,760

Mantoverde - 2,661 - 2,661

Chagres - 1,190 - 1,190

Santiago 8 - - 8

Quellaveco - - 10 10

TOTAL 3,768 8,836 13,761 26,365

MANAGING WATERWe reduced fresh water consumption by 5.26% to 26.4 million m3.

FRESH WATER CONSUMPTION

WATER IMPOUNDMENT BY EXTRACTION SOURCES

* The variation at Los Bronces and El Soldado was due to a review of the water balances.

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CONSOLIDATED DATA OF WATER RE-USED IN MINING PROCESSES BY OPERATION:

The different operations obtain water from surface water and groundwater sources, as shown in the table below:

OPERATION THOUSANDS OF M3 RE-USED

Los Bronces 51,062

Mantos Blancos 2,792

El Soldado 14,012

Mantoverde No water is re-used

Chagres 7

TOTAL 67,873

OPERATION IMPOUNDMENT/WATERSHEDS TYPE

Los Bronces Mapocho / Maipo Surface water

Los Bronces Chacabuco Groundwater

El Soldado Aconcagua / Los Litres Groundwater

Mantos Blancos Loa Surface water

Mantoverde Copiapó Groundwater

Chagres Aconcagua Groundwater

67.873 million m3OF WATER RE-USED

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Each operation has its own different scenarios and therefore undertakes specific environmental management based on its surroundings. The main environmental aspects of each operation are outlined below:

LOS BRONCES

The key environmental aspects of this operation are water quality and consumption, atmospheric emissions, biodiversity, mass mining deposits (tailings dams and waste dumps) and energy consumption. The previous report dealt with all these aspects, and this year the main results are reported, mainly concerning water and waste management.

WATER MANAGEMENTLos Bronces gets its water from different sources. It obtains fresh water from the watershed of the San Francisco River in the district of Lo Barnechea; from the Riecillos brook at the first section of the Aconcagua River in the Valparaíso Region; from the Colina River in the district of Colina and from seven deep wells in the Quilapilún sector in the Metropolitan Region.

It has also constituted 3,850 l/s of non-consumption water rights in the San Francisco River for hydroelectricity. The table below shows the water consumption by source in the last three years:

WATER CONSUMPTION (GIVEN IN THOUSANDS OF M3) 2010 2009 2008

Fresh groundwater 685 326 448

Fresh surface water 13,751 14,450 15,848

Water from external water utilities 0 0 0

Process-recycled water 51,062 66,220 59,715

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WASTE MANAGEMENT

Los Bronces had a process water spill of 214 m3. It generated 6,024 tonnes of waste in 2010, and disposal of this is outlined in the tables below:

2010 HAZARDOUS WASTE (TONNES) NON-HAZARDOUS INDUSTRIAL WASTE (TONNES)

Operation Internal disposal External disposal Internal disposal External disposal

Los Final disposal Recycling Final disposal Final disposal Recycling Final disposal

Bronces -- 672 255 -- 1,518 3,579

MANTOS BLANCOS

One of the large environmental highlights at Mantos Blancos is compliance with Anglo American’s environmental policies by means of the Anglo American Environment Way (AEW) and the ISO 14001 standard, whose recertification audit will be conducted in 2011 and effectiveness will be up to November 2013.

WATER MANAGEMENTMost of the water used is recirculated from processes and complemented with fresh water to make up for loss.

Mantos Blancos has been a pioneer in water management issues, as it has implemented a plant to reclaim water from the flotation process tailings as part of its sulphide exploitation project via grinding, flotation and thickening. This system has enabled Mantos Blancos to achieve one of the best reduction rates of fresh water consumed in cubic metres per tonne of ore treated. This is currently 0.45 m3 of fresh water per tonne of ore processed.


Fresh groundwater 0 0 0

Fresh surface water 0 0 0

Water from external water utilities 3,759 3,817 4,009





Bronces - 567 353 - 1,341 2,929




Bronces - 3,837 449 - 1,304 2,413

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Mantos Recycling Final disposal Final disposal Recycling Final disposal

Blancos 36 466.7 214.18 0 646.9 155




Blancos - 51.2 237 0 241 155




Blancos - 490 106 278 446 0

Monitoring plan for breathable dust, particulate matter (PM10).

Concerning waste control at Mantos Blancos, there are plans to improve waste handling, treatment and management.

External waste disposal considers the recycling of used oil (573 m3) and final solvent extraction (SX) sludge disposal (70.8 m3).

EMISSIONS AND WASTE MANAGEMENT

The following are the main programmes developed for emissions management:

Control of airborne emissions of the fine oxide crusher: to reduce the fine dust generated in the ore reduction process (which reduces the size of ore particles) and during ore screening and transport, a series of measures have been put in place, such as installing plastic buckets which seal the dust escape exits. Rubber covers have been installed that absorb the vibrations of the screen and isolate the surface without harming it, and they reduce fine material escaping from the screen into the air. The guide

plates and rubber shields have been improved on the mechanical conveyors and they have various dust suppression systems.

Improvement of the dust suppression system on the fine sulphide and oxide crushers.

Improvement of the main roads.

Binder substances have been applied to the coarse tailings sides and deposit.

Replacement of transfer chutes on finely crushed sulphide and oxide.

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RECYCLING TYPE UNIT TOTAL

Non-hazardous waste for external recycling Recycled metal Tonnes 2,144

Recycled plastic Tonnes 31

Hazardous waste for external recycling Recycled oil Tonnes 208

EL SOLDADO

El Soldado’s ISO 14001-certified environmental management identifies and controls the environmental impacts of its operations as part of the continual improvement of environmental performance. It is periodically inspected by state authorities with environmental, social and sanitary competence, like for example the general water board (DGA), the environmental assessment department (SEA), the national geology and mining survey (SERNAGEOMIN), the regional ministerial secretary (SEREMI) of health, the agricultural and livestock department (SAG), and the national


Fresh groundwater 4,300 5,064 5,538





To control any potential impact on the surrounding communities, the company continuously monitors the air quality in the area. It has a measurement station at Los Caleos, which is remotely operated by a certified external institution that sends the data directly to the competent authorities. There is ongoing work with a series of controls to reduce the

forestry corporation (CONAF). The main environmental issues of this operation are biodiversity, water and management of spills and waste.

El Soldado has the El Torito tailings dam, which is currently operating and is compliant with national and international standards, so there are no stability or operation issues. It is regularly certified by external bodies and continuous monitoring, which are required by the competent authority (SERNAGEOMIN).

WATER MANAGEMENTEl Soldado reuses around 75% of the water required by the productive processes. It undertakes systematic monitoring of the quality of groundwater, noise and air quality, and the results are periodically reported to the authorities and surrounding communities. All the fresh water for the process mainly comes from a network of wells in the El Melón and Los Litres sectors.

emissions of particulate matter from mining operations to a minimum. An innovative automatic irrigation system has been installed on the mine roads, which has significantly reduced the dust in these areas. As a result of this monitoring, the amount of dust generated by the operation has no material environmental impact and the levels are lower than the limits of the Chilean air quality standard.

There are strict management procedures and a general emergency plan is in place for potential risks of soil, surface water and groundwater contamination.

Waste is recycled and disposed of by a duly authorised external company.

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BIODIvERSITY CONSERvATION IN THE EL MELÓN MOUNTAIN RANGE

El Soldado is in a Mediterranean ecoregion which only exists in five places in the world. The division’s land is in the El Melón mountain range, which has been classified as top priority for the biodiversity conservation of the land ecosystems in the Valparaíso region. Regarding this, El Soldado is driving an unprecedented initiative in Chile to recover and protect historically degraded forest, improving its quality and adding a conservation zone which also includes scientific support activities. This is a unique contribution in the area, which will increase the environmental value of the El Melón mountain range. The following are the main features of this initiative:

The creation of the first Natural Park for the protection, recovery and tourism of the El Melón mountain range, to which 1,055 hectares of Anglo American’s private land will be allocated, will be the second largest after the La Campana National Park.

Implementation of an El Melón native forest recovery plan, which includes recovering around 700 hectares with the following species: belloto del norte

(Beilschmiedia miersii), guaiacum (Porlieria chilensis), naranjillo (Citronella mucronata), peumo, quillay (soapbark), boldo, lingue, pepper tree, lilén, litre and hawthorn, among others.

Planting 80,000 plants of native species a year, including endangered species, to become the second largest native forest plantation in Chile.

Development of the project with the Nogales community and the Christa Mock high school by implementing tree nursery techniques and planting native species.

Generation of scientific research with Chilean universities to contribute to the knowledge of the native forest.

As part of the voluntary public-private agreement, a plan for the sustainable use of the El Melón mountain range will be carried out, which will promote tourism in the area and the rational use of its resources.

The creation of the first Natural Park for the protection, recovery and tourism of the El Melón mountain range, to which 1,055 hectares of Anglo American’s private land will be allocated, will be the second largest after the La Campana National Park.

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MANTOvERDE

The priority issue for Mantoverde is water consumption due to the current shortage in the north of Chile. Atmospheric emissions and the management of waste from mining processes are also considered to be material issues to be addressed by the environmental management.

The groundwater of the Copiapó River watershed is running dry due to impoundment for different needs, particularly agriculture in the Copiapó valley. Due to this, Mantoverde is analysing a desalination plant, which will be implemented soon.

Mantoverde obtains water from the following sources:





Process-recycled water 0 24.7 21.4

2010 SUPPLY (GIVEN IN THOUSANDS OF M3)

Adduction 1,572

Mine discharge 1,053

P1730 well 36

TOTAL 2,661

WATER MANAGEMENT Due to this operation being located in the north of Chile, water management is one of the major issues. The change from wetting leaching heaps with sprinklers to water droplets was a highlight in 2010. The table below shows the water consumption by source:


Mantoverde’s operations emitted 171,000 tonnes of CO2 in 2010.

The total hazardous waste disposed was 114.1 m3, with solvent extraction (SX) sludge (lead dregs) accounting for 18 m3.

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CHAGRES

Chagres undertakes its productive process of smelting copper concentrate using a flash furnace with low emissions. Besides emissions, the main environmental issues of this operation are water management, discharges, and waste management.

WATER MANAGEMENTChagres makes a monthly water balance based on ongoing measurement of its consumption and discharges. Water is extracted from three deep wells, which have the necessary authorisation and controls, with no records of water courses being affected, according to the studies made. Extraction,

Chagres is the only operation that discharges water. The table below shows the quantity of cubic meters discharged in the last three years:

WATER CONSUMPTION

(GIVEN IN THOUSANDS OF M3) 2010 2009 2008


Fresh surface water (including wetlands,

rivers, lakes, oceans) 0 0 0


Process-recycled water 7 189.8 6.6

WATER DISCHARGE

(GIVEN IN THOUSANDS OF M3) 2010 2009 2008

Water discharged into the river 274 582 346

which is lower than that allowed by the water rights constituted, is gauged by flow metres and the pump power consumption. It also makes periodic water quality controls by means of sampling and analysis of the physical and chemical parameters. This not only records the water extracted from the wells but also the water courses upstream and downstream of the smelter to verify there is no decline in quality.

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EMISSIONS MANAGEMENT

Chagres has four sulphur dioxide (SO2) air quality monitoring stations and two particulate matter (PM10) stations, as shown in the table below:

*Note: Pursuant to Supreme Decree 22/2010, the hourly standard shall be deemed exceeded when the arithmetic average of 3 years running using the 99.73 percentile value is higher than or equal to 1,000 ug/m3, or when the 99.73 percentile value in one year is higher than or equal to double the peak.

**Note: Pursuant to Supreme Decree 113/2002, the daily standard shall be deemed exceeded when the arithmetic average of 3 years running using the 99 percentile value is higher than or equal to 250 ug/m3. The primary air quality standard for sulphur dioxide as an annual concentration shall be deemed exceeded when the arithmetic average is higher than 80 ug/m3.

MONITORING STATION PEAK PER HOUR PEAK PER DAY ANNUAL AVERAGE SUPREME DECREE 22/10 SUPREME DECREE 113/02 SUPREME DECREE 113/02 REGULATION 1,000 250 80 99.73 MAX. 99 PERCENTILE 99 PERCENTILE MAX. 2010 MOVING PERCENTILE VALUE (2010) ( 3-year average) VALUE AVERAGE

Santa Margarita 502 703 158 156 208 69 63

Lo Campo 322 1083 75 74 126 24 25

Catemu 166 393 35 36 37 13 15

Romeral 206 536 38 39 70 15 16

SO2 CONCENTRATION (REGULATED BY SUPREME DECREE 113/02 AND SUPREME DECREE 185/91)

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EMISSIONS (in tonnes)

2010 2009 2008

Yearly arsenic emissions (regulation: 95 tonnes/year) 2.69 16.9 8.9

Yearly sulphur emissions 6,932 7,076 5,754

There were no breaches of the hourly and daily SO2 standard at Chagres in 2010. Pursuant to Supreme Decree 22, breaches of the hourly standard are based on the 99.73 percentile. According to this

SPILLS OF SUBSTANCES (m3) 2010

Nº of EVENTS VOLUME

Process water 3 Estimate of 150 m3 each

Acid/refine solutions 10 0.8

Oil/fuels 2 0.1



Chagres Final disposal Recycling Final disposal Final disposal Recycling Final disposal

0.0 21,944 292.5 0 506.8 140.3

WASTE MANAGEMENT

The solid waste is managed according to the plans for solid industrial waste and hazardous waste. It is weighed and dispatched to authorised companies.

criterion, the 1,000 ug/m3 level was only exceeded once in the year (1,083 ug/m3) at the Lo Campo station, which does not mean the standard was breached.

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PM10 CONCENTRATION (ug/m3)

Monitoring station 24-hour peak 2010 3-year moving average 2010

Regulation 150 50

98 percentile Max. Value

Lo Campo 65 123 41

Catemu 119 77 62


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0.0 20,621 219 0 1,141 173




- 24,417 314 0 0 181


MAN-MADE CAPITAL

ANGLO AMERICAN’S vISION IS TO GENERATE SUSTAINED vALUE BY SUITABLE AND EFFICIENT MANAGEMENT OF SUPPLIER/CONTRACTOR RELATIONS.

IT IS THE RESPONSIBILITY OF ALL THOSE WHO ENGAGE WITH SUPPLIERS/CONTRACTORS ON ANGLO AMERICAN’S BEHALF TO ACTIvELY PROMOTE AND IMPLEMENT THE SUSTAINABLE DEvELOPMENT IN THE ANGLO AMERICAN SUPPLY CHAIN POLICY.

IT IS COMPULSORY FOR ANY ANGLO AMERICAN SUPPLIER/CONTRACTOR TO DEMONSTRATE COMMITMENT TO SUSTAINABLE DEvELOPMENT AND TO FOLLOW THE COMPANY’S SUPPLIER SUSTAINABLE DEvELOPMENT CODE.

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PROGRESS IN 2010

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The main progress with sustainable development in the company’s supply chain is outlined below:

ANGLO AMERICAN RELEASED ITS LOCAL PROCUREMENT POLICY, WHICH IS APPLICABLE TO ALL THE COMPANY’S OPERATIONS AND PROJECTS.

SECOND LATIN AMERICAN SUSTAINABLE DEVELOPMENT WORKSHOP FOR THE SUPPLY CHAIN AREA, WHICH WAS HELD FOR THE SECOND YEAR RUNNING IN CHILE.

GLOBAL LAUNCH OF THE GIFTS, ENTERTAINMENT AND DONATIONS PROCEDURE IN THE SUPPLY CHAIN. THIS PROCEDURE IS BASED ON THE PRINCIPLES OF ANGLO AMERICAN’S BUSINESS INTEGRITY POLICY.

GLOBAL LAUNCH OF THE SUSTAINABLE DEVELOPMENT IN THE SUPPLY CHAIN POLICY AND THE SUPPLIER SUSTAINABLE DEVELOPMENT CODE. BOTH ARE BASED ON ANGLO AMERICAN’S BUSINESS PRINCIPLES AND WERE DESIGNED TO HELP SUPPLIERS UNDERSTAND ANGLO AMERICAN’S EXPECTATIONS ON SUSTAINABLE DEVELOPMENT.

THE FIRST LOCAL PROCUREMENT WORKSHOP WAS HELD IN PERU, ATTENDED BY SUPPLY CHAIN AND COMMUNITY RELATIONS PROFESSIONALS. THE OBJECTIVE OF THIS WORKSHOP WAS TO LEVERAGE ANGLO AMERICAN’S EXPERIENCE TO STRENGTHEN THE LOCAL PROCUREMENT FOCUS, WITH THE COMPREHENSIVE INCLUSION OF COMMUNITY AND SUPPLIER DEVELOPMENT PROGRAMMES IN THE QUELLAVECO AND MICHIQUILLAY PROJECTS.

THREE SUPPLIERS/CONTRACTORS OF ANGLO AMERICAN IN CHILE WERE FINALISTS IN THE ANGLO AMERICAN SUPPLIER CONFERENCE, HELD IN LONDON IN NOVEMBER 2010. NOMINATIONS WERE RECEIVED IN THE SAFETY, INNOVATION AND COLLABORATION CATEGORIES, OF WHICH FE GRANDE WAS THE WINNER IN THE INNOVATION CATEGORY AND FINNING CHILE IN THE SAFETY CATEGORY FOR ITS EXCELLENT PERFORMANCE.

COMPLETION OF THE ENVIRONMENTAL AND REMEDIATION ASSESSMENT PROCESS FOR FUEL TANKS INSTALLED AT OUR OPERATIONS.


The sustainable development of the Anglo American supply chain is a priority for embracing the common framework of values and standards of the Anglo American culture. The main characteristics of the Anglo American Supply Chain (AASC) project were presented in the Sustainable Development Report 2008, the objective of which is to make supply chain management the leader in the industry and a global benchmark on creating value, adding sustainable development management to this strategic function. To achieve this, it has made progress with continual improvement processes, which are based on a balanced focus in four areas:

Value creation: This entails driving value creation in the organisation by means of process optimisation, commercial and financial risk management, the development of strategic agreements with suppliers and contractors, and systematic and sustainable innovation, related to the supply of goods and services.

The creation of value from man-made capital is one of the five factors of Anglo American’s sustainable development focus. By means of this, the Company seeks to optimise the materials, services and infrastructure management to generate the final products it sells.

It is therefore necessary to have a highly developed and efficient supply chain, for which a key aspect is to work with each of the participants, including suppliers and contractors.

The Good Citizenship Business Principles state that Anglo American seeks mutually beneficial relationships with its business partners based on “fair and ethical practices, including prompt payment

OUR vALUE CHAINOperational excellence: This includes service delivery, transparency and decision-making by means of standardised approval processes and structures. It also considers the management of safe, reliable and high quality goods and services, and efficient services and operations.

Suppliers and customers: This is related to close work with suppliers and customers, measured transparently and consistently, so they show interest in embracing product and service innovation and developing the respective commercial agreements.

Organisation and personnel: To assure a performance-focused culture, based on excellence, competencies, teamwork and accountability, multifunctional work and integration of business units.

SUPPLIERS AND SUSTAINABILITYwithin the negotiated terms”. They also stress that it is necessary to work with them so the sustainable development focus promoted is present in supply chain management.

The Anglo American culture assumes this vision, seeking to be the “partner of choice” for companies that engage with the company’s operations. Anglo American’s sustainable development policy in the supply chain and sustainable development code establish how to achieve this objective.

There is also implementation of the content and guidelines set out in the Anglo American Supply Chain (AASC) project.

So that Anglo American’s suppliers can be aligned with its principles, the updated Good Citizenship Business Principles of Anglo American were sent to all suppliers and contractors in 2010. This update is the first major review of this policy since it was launched in 2002.

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Sustainable development audits were implemented globally as of 2010, which condition Anglo American’s work with its suppliers and contractors to satisfactorily pass this audit. These audits are undertaken at the supplier’s facilities and are not limited to those of the company.

There is also the risk matrix, which identifies the risks related to various aspects, including environmental factors. Based on the results of this assessment, the company submits an action plan as an acceptance commitment. Anglo American then follows this up as part of the process.

Two of Anglo American’s explosive suppliers were audited in 2010, and there were no material findings. Nevertheless, both companies delivered improvement plans to resolve the minor findings detected, which have been monitored to assure compliance.

Commensurate with the Supplier Sustainable Development Code, a local procurement policy was launched in 2010, which is expected to be in place next year.

Local procurement accounted for 5.1% of Anglo American’s spending. This percentage is expected to increase when the new policy is in place.

The table below provides a breakdown of the spending at the different operations in Chile:

Local supplier: suppliers and contractors located in the operation or project influence areas.

Regional supplier: suppliers and contractors located in the region of the operation or project.

Domestic supplier: suppliers and contractors located in Chile.

2010 SPEND (%)

Operations Local Regional Domestic

2010 2009 2008 2010 2009 2008 2010 2009 2008

Los Bronces 3.1% 2.7% 2.6% Unappraised Unappraised Unappraised 90.0% 85.7% 86.4%

Chagres 2.3% 3.4% 6.2% 6.8% 10.5% 12.2% 87.9% 92.1% 94.0%

Mantos Blancos 18.1% 36.4% 23.4% 18.5% 36.8% 23.7% 91.0% 97.7% 96.4%

Mantoverde 7.0% 8.7% 8.0% 7.0% 8.8% 8.0% 79.7% 78.2% 67.2%

El Soldado 3.2% 3.0% 2.6% 4.1% 3.8% 4.6% 96.3% 99.1% 97.8%

Anglo American in Chile Total 5.1% 8.2% 7.3% 3.5% 7.0% 6.4% 89.9% 88.5% 87.4%

AUDIT PLAN

LOCAL PROCUREMENT

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To train suppliers in business management areas by means of on-site training workshops.

To generate incentives so that participating companies bolster their adherence to and action on the Supplier Sustainable Development Code.

To get companies to apply a continual improvement system on quality, safety, labour rights and environmental protection.

CORFOAnglo AmericanChagres Smelter

Business transferManagement and innovation capacity

(continual improvement applied to businesses and processes)

Suppliers

Compliance / Follow-up

COMPETENCIA

Brain Consulting

& Research

CORFO Funding (50%)Chagres (40%)

Suppliers (10%)

Sustainable development of the supply chain entails establishing strategic relations with commercial partners to create value. The supplier development programmes (SDP), driven by the Mantoverde and Chagres divisions since 2007, have been a work focus to make progress towards this goal.

These initiatives of co-operation and continual improvement, whose financing is shared by the company, Chile’s Economic Development Agency (CORFO) and participating companies, have the following general objectives:

SUPPLIER DEvELOPMENT

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Implementation of the ISO 9001 standard. This is complemented with the instrument called “FOCAL” of Chile’s Economic Development Agency (CORFO).

2. Design, build and implement a system of corporate social responsibility (CSR) based on safety and occupational health, energy efficiency and clean production, adding economic, social and environmental value:

Draw up a suite of CSR-focused management policies, practices and programmes.

CSR workshop.

Environmental workshop

Diagnosis of clean production and energy efficiency issues

In 2010, this programme was also extended to the Quellaveco project in Peru to generate community abilities and raise the competitiveness of local suppliers.

The Chagres Supplier Development work focused on the following areas, which will continue to be implemented in 2011:

Design and implementation of the customer focus.

Implementation of leadership management.

Staff administration – implementation of marketing techniques.

Implementation of the indicator system in accordance with Anglo American’s protocol.

Development of an innovative business spirit.

1. Implementation of quality models that certify suppliers:

Include companies in the area of certifiable international standards.

Sharpening of the supplier assessment, analysis and improvement process.

It should be highlighted that a total of 266 companies and local suppliers were identified in phase 2, giving rise to the Moquegua Emprendedora programme and other initiatives to draw up local and regional development plans, along with the Moquegua and Ilo Chamber of Commerce. The catering and hotel service, Emprende Moquegua and Piscigranja were some of the successful experiences.

IDENTIFICATION OF OPPORTUNITIES

1

IDENTIFICATION OF LOCAL BUSINESS

RESOURCES AND CAPACITIES

DISSEMINATION OF OPPORTUNITIES

TO COMMUNITIES

TRAINING ON ANGLO’S STANDARDS

MONITORING AND EVALUATION

IMPROVEMENT AND EVALUATION

CONTRACT TENDERS AND AWARDS PROVISION OF

FINANCING CHANNELS

2 3 4

5678

Anglo American G

roup C

opper Business Unit

Financial Capital

Hum

an Capital

Social Capital

Natural C

apital M

an-made C


ents Appendices


MOQUEGUA EMPRENDEDORA PROGRAMME

This is an initiative inspired by Anglo American Zimele, a successful small- and medium-sized business development support programme in South Africa.

In 2008, Quellaveco selected four enterprising companies, gave them initial capital and the tools needed to start their undertakings.

Two of them already have new customers and are developing their business management skills with APRENDA.

They improved their quality of life, developed skills, generated jobs and are ready to be self-sustainable.

A new cycle will start in 2011, identifying and developing new initiatives with a redesigned programme.

TYPE COMPANY NAME

AREA USED

COMMUNICATION

COMMUNICATION

COMMUNICATION

COMMUNICATION

COMMUNICATION

MOQUEGUA / ZID-ZII

MOQUEGUA / ZID-ZII

MOQUEGUA / ZID-ZII

MOQUEGUA / ZID-ZII

MOQUEGUA / ZID-ZII

COMUNICACIÓN Y ARTE S.C.R.L.

FB GROUP

DEPORSERVIS

MUSCCUYTAMUNAMI

OPEN SERVICE

INTERVENTION AREA

EMPRENDIENDO MOQUEGUA

DESIGN AND ADvERTISING

SUPPORT TO PQ

MEDIA SUPPORT AND MONITORING TO PQ

SPORTS-RELATED EDUCATION SERvICE

THEATRE/SENSITISING EDUCATION SERvICE

EvENT PRODUCTION SERvICE OF THE PQ

ACTIVITY/PROJECTNº

1

2

3

4

5

COMPANIES RELATED TO EMPRENDE MOQUEGUA

2008THE YEAR WHEN ANGLO AMERICAN SELECTED FOUR ENTERPRISING COMPANIES AT QUELLAvECO, GAvE THEM INITIAL CAPITAL AND THE TOOLS NEEDED TO START THEIR UNDERTAKINGS.

They improved their quality of life, developed skills, generated jobs and are ready to beself-sustainable.

A total of 266 companies and local suppliers were identified in phase 2 of this programme, giving rise to the Moquegua Emprendedora programme and other initiatives to draw up local and regional development plans, along with the Moquegua and Ilo Chamber of Commerce. The catering and hotel service, Emprende Moquegua and Piscigranja were some of the successful experiences.

Man-made Capital


Anglo American G

roup C

opper Business Unit

Financial Capital

Hum

an Capital

Social Capital

Natural C

apital M

an-made C


ents Appendices


Description Page ICCM Reported Principles PROFILE DISCLOSURE Strategy and Analysis 1.1 Statement from the most senior decision-maker of the organisation. 6 &7 P2 1.2 Description of key impacts, risks and opportunities. 2-5 P10 Organisational Profile

2.1 Name of the organisation. 18 P10 2.2 Primary brands, products and/or services. 20 2.3 Operational structure, including main divisions, operating companies, subsidiaries and joint ventures. 20 2.4 Location of the organisation’s headquarters. 20 2.5 Number of countries in which the organisation operates. 20 2.6 Nature of ownership and legal form. 28 2.7 Markets served. 25 2.8 Scale of the reporting organisation: employees, net sales, total capitalisation, quantity of products and services. 25 2.9 Significant changes during the reporting period regarding size, structure, or ownership. 6 2.10 Awards received in the reporting period. 38 & 39

3 Report Parameters Report Profile

3.1 Reporting period for information provided. 8 P1 3.2 Description of key impacts, risks and opportunities. 8 P1 3.3 Reporting cycle. 8 P1 3.4 Contact point for questions related to the report or its content. Back P1

Report scope and boundary

3.5 Process for defining report content. 8 P1 3.6 Boundary of the report. 8 P1 3.7 State specific limitations on the scope or boundary of the report. 8 P1 3.8 Basis for reporting on joint ventures and subsidiaries. 8 P1 3.9 Data measurement techniques and the bases for calculations. 8 3.10 Explanation of the effect of any restatements of information provided in earlier reports. 8 3.11 Significant changes from previous reporting periods in the scope. 8 3.12 GRI content index. 220-225 3.13 Verification. 8-219

4 Governance, Commitments and Stakeholder Engagement Governance

4.1 Governance structure of the organisation. 28 4.2 Indication of whether the Chair of the highest governance body is also an executive officer. 28 4.3 Number of members of the highest governance body that are independent or non-executive members. 28 4.4 Mechanisms for shareholders and employees to provide recommendations or direction to the highest governance body. 30 4.5 Linkage between payment for members of the highest governance body, senior managers, executives, and the organisation’s performance. 28 4.6 Procedure in place to avoid conflicts of interests. 30 4.7 Processes for determining the qualifications and expertise of the members of the highest governance body. 28-29 4.8 Mission, vision, codes and principles relevant for the social, economic and environmental performance. 26 & 27 4.9 Mechanisms to identify and assess risks and opportunities. 30 4.10 Evaluation of the environmental, social and economic performance of the members of the highest governance body. Not evaluated due to the characteristics of the boards

APPENDICES/GRI CONTENT INDEX

AppendicesREPORTING LEVEL

Complete

Partial


Anglo American G

roup C

opper Business Unit

Financial Capital

Hum

an Capital

Social Capital

Natural C

apital M

an-made C


ents Appendices

Description Page ICCM Reported Principles Commitments to external initiatives

4.11 Explanation of whether and how the precautionary approach or principle is addressed by the organisation. 27 4.12 Externally developed economic, environmental, and social charters, principles, or other initiatives to which the organisation subscribes or endorses. 36 4.13 Memberships in associations and/or national/international organisations supported. 37 Stakeholder Engagement

4.14 List of stakeholder groups engaged by the organisation. 86 P10 4.15 Basis for identification and selection of stakeholders with whom to engage. 86 P10 4.16 Approaches to stakeholder engagement. 86 P104.17 Key topics and concerns that have been raised through stakeholder engagement and how the organisation has responded. 89 P10

ECONOMIC Management Approach and Performance Indicators Disclosure on Management Approach 40 Economic performance

EC1 Direct economic value generated and distributed, including revenues, operating costs, employee compensation, donations and other community investments, retained earnings, and payments to capital providers and governments. 45-47 P9 EC2 Financial implications and other risks and opportunities for the organisation’s activities due to climate change. 116 & 118 EC3 Coverage of the organisation’s defined benefit plan obligations. 70 & 71 EC4 Financial assistance received from government. 48 & 49 P9 Market Presence

EC5 Range of ratios of standard entry level wage compared to local minimum wage at significant locations of operation. 64 EC6 Policy, practices and proportion of spending on locally-based suppliers. 145 P9 EC7 Procedures for local hiring and proportion of senior management hired from the local community. 63 Indirect Economic Impacts

EC8 Development and impact of infrastructure investments and services provided primarily for public benefit through commercial, in-kind or pro bono engagement. 95-107 ENVIRONMENTAL Disclosure on Management Approach 108 & 111 Materials

EN1 Materials used by weight or volume. 114 P6 EN2 Percentage of materials used that are input materials. 120 P6 Energy

EN3 Direct energy consumption by primary energy source. 117 P6 EN4 Indirect energy consumption by primary source. 117 P6 EN5 Energy saved due to conservation and efficiency improvements. 115 & 116 EN7 Initiatives to provide reductions in indirect energy requirements and reductions achieved. 116

REPORTING LEVEL

Complete

Partial


Description Page ICCM Reported Principles Water

EN8 Total water withdrawal by source. 124 EN9 Water sources significantly affected by withdrawal of water. 125 EN10 Total percentage and volume of water recycled and reused. 125 Biodiversity

EN11 Description of lands adjacent to, or located in, natural protected areas or areas of high biodiversity outside protected areas. Indicate location and size of land owned, leased, managed in, or adjacent to, protected areas and areas of high biodiversity value outside protected areas. 121 P7 EN12 Description of significant impacts of activities, products and services on biodiversity in protected areas and areas of high biodiversity value outside protected areas. 123 EN13 Habitat protected or restored. 123 EN14 Strategy and actions in place and future plans for managing impacts on biodiversity. 121 P7 MM1 Amount of land (owned or leased, and managed for production activities or extractive use) disturbed or rehabilitated. 123 MM2 The number and percentage of total sites identified as requiring biodiversity management plans according to stated criteria, and the number (percentage) of those sites with plans in place. 122 EN15 Number of IUCN Red List species and national conservation list species with habitats in areas affected by operations, by level of extinction risk. 123 Emissions, Effluents and Waste EN16 Total direct and indirect greenhouse gas emissions, by weight. 119 P6 EN17 Other indirect greenhouse gas emissions, by weight. P6 EN18 Initiatives to reduce greenhouse gas emissions and reductions achieved 119 P6 EN19 Emissions of ozone-depleting substances, by weight. P6 EN20 NO, SO and other significant air emissions, by type and weight. 119 P6 EN21 Total water discharge by quality and destination. 136 P6 EN22 Total weight of waste by type and disposal method. 120 EN23 Total number and volume of significant accidental spills. 113 P6 MM3 Total amounts of overburden, rock, tailings, and sludge and their associated risks. 120 EN24 Weight of transported, imported, exported or treated waste deemed hazardous under the terms of the Basel Convention. 120 Regulatory Compliance EN28 Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with environmental laws and regulations. 112 SOCIAL Disclosure on Management Approach 56 Labour practices and decent work Employment

LA1 Total workforce by employment type, employment contract and region. 60 P3 LA2 Total number and rate of employee turnover by age group, gender and region. 62 P9 LA3 Social benefits provided to full-time employees which are not provided to temporary or part-time employees, by major operations. 70 P9 Company–Employee Relationship LA4 Percentage of employees covered by collective bargaining agreements. 72 P3 LA5 Minimum notice period(s) regarding significant operational changes, including whether it is specified in collective agreements.. 35 P3

This information is unavailable because it is

scope 3.

Information is unavailable

REPORTING LEVEL

Complete

Partial

Appendices


Anglo American G

roup C

opper Business Unit

Financial Capital

Hum

an Capital

Social Capital

Natural C

apital M

an-made C


ents Appendices

Description Page ICCM Reported Principles MM4 Number of strikes and lock-outs exceeding one week’s duration, by country. There were no strikes Health and Safety at Work LA6 Percentage of total workforce represented in formal joint management-worker health and safety committees who help monitor and advise on occupational health and safety programmes. 82 P5 LA7 Rates of injury, occupational diseases, lost days and absenteeism, and number of work-related fatalities by region. 76-78 P5 LA8 Education, training, counselling, prevention and risk-control programmes in place to assist workforce members, their families, or community members regarding serious diseases. 79 LA9 Health and safety topics covered in formal agreements with trade unions. 72 Training and Education LA10 Average hours of training per year per employee by employee category. 67 LA11 Programmes for skills management and lifelong learning that support the continued employability of employees and assist them in managing career endings. 67-70 LA12 Percentage of employees receiving regular performance and career development reviews. 65 Diversity and equal opportunity LA13 Composition of governance bodies and breakdown of employees per category according to gender, age group, minority group membership and other indicators of diversity. 63 P3 LA14 Ratio of basic salary of men to women by professional category. 63 Human Rights Investment and Procurement Practices HR1 Percentage and total number of significant investment agreements which include human rights clauses or have undergone human rights screening. 145 P3 HR2 Percentage of significant suppliers and contractors who have undergone screening on human rights and actions taken. 145 P3 HR3 Total hours of employee training on policies and procedures concerning aspects of human rights relevant to operations, including the percentage of employees trained..

Non-discrimination HR4 Total number of incidents of discrimination and actions taken. 30 P3 Freedom of association and collective bargaining HR5 Operations identified in which the right to exercise freedom of association and collective bargaining may be at significant risk, and actions taken to support these rights. 27 P3 Child Labour HR6 Operations identified as having significant risk for incidents of child labour, and measures to contribute to the elimination of forced or compulsory labour 27 P7

There is no formal training at Anglo American but the company’s values are directly related to this

issue and all employees are informed in their induction process of the corporate values and

policy on human rights.

REPORTING LEVEL

Complete

Partial


Description Page ICCM Reported Principles Forced Labour HR7 Operations identified as having significant risk for incidents of child labour, and measures to contribute to the elimination of forced or compulsory labour. 27 Security Practices HR8 Percentage of security personnel trained in the organisation’s policies or procedures concerning aspects of human rights relevant to operations. Security guards at the operations are trained on the Voluntary Principles on P8 Security and Human Rights. Indigenous People’s Rights HR9 Total number of incidents of violations involving rights of indigenous people and actions taken. No incidents to report. MM5 Total number of operations taking place in or adjacent to indigenous people’s territories, and number and percentage of operations or sites where there are formal agreements with indigenous people’s communities. There are no operations related to indigenous people’s territories. MM6A Number and description of significant disputes relating to land use, customary rights of local communities There are no operations and indigenous people. related to indigenous people’s territories. MM6B The extent to which grievance mechanisms were used to resolve disputes relating to land use, customary There are no operations rights of local communities and indigenous people, and the outcomes. related to indigenous people’s territories. Social Performance Community SO1 Nature, scope, and effectiveness of any programmes and practices that assess and manage the impacts of operations on communities, including entering, operating, and exiting. 90 P4 Corruption SO2 Percentage and total number of business units analysed for risks related to corruption. 30 P1 SO3 Percentage of employees trained in the organisation’s anti-corruption policies and procedures. Anglo American does not provide formal training on anti-corruption procedures as they are included in the induction P1 processes, in which the Good Citizenship values and principles are informed. SO4 Actions taken in response to incidents of corruption. 30 Public policy SO5 Public policy positions and participation in public policy development and lobbying. Anglo American does not undertake any lobbying SO6 Valor total de las aportaciones financieras y en especie a partidos políticos o a instituciones relacionadas por países. Contributions are not made. Anti-competitive Behaviour SO7 Total number of legal actions for anti-competitive behaviour, anti-trust and monopoly practices and their outcomes. 30

REPORTING LEVEL

Complete

Partial

Appendices


Anglo American G

roup C

opper Business Unit

Financial Capital

Hum

an Capital

Social Capital

Natural C

apital M

an-made C


ents Appendices

Description Page ICCM Reported Principles Compliance with Laws and Regulations SO8 Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with laws and regulations. 34 MM9 Number and percentage of operations with closure plans. 112 MM10 Significant incidents affecting communities during the reporting period, and grievance mechanisms used to resolve the incidents and their outcomes. 92 MM11 Number and description of incidents affecting employees, communities or the environment in which the emergency preparedness procedures were activated. None Product Responsibility PR1 Lifecycle stages in which health and safety impacts of products and services are assessed for improvement, and percentage of significant products and services categories subject to such procedures. 20 PR2 Total number of incidents of non-compliance with regulations and voluntary codes concerning health and safety impacts of products and services during their lifecycle, by type of outcomes. None MM12 Programmes and progress relating to materials stewardship.. 20 Product and service labelling PR3 Type of product and service information required by procedures and percentage of significant products and services subject to such information requirements. 20 Marketing Communications PR6 Programmes for adherence to laws, standards and voluntary codes related to marketing communications, including advertising, promotion, and sponsorship. 20 PR7 Total number of incidents of non-compliance with regulations and voluntary codes concerning marketing communications, including advertising, promotion and sponsorship by type of outcomes. None Compliance PR9 Monetary value of significant fines for non-compliance with laws and regulations concerning the organisation’s provision and use of products and services. None

Note: the indicators not in the index were deemed not material.

REPORTING LEVEL

Complete

Partial


We are interested in your opinion about our Sustainable Development Report 2010 to improve the process of the next report we will release in 2011. Please send your comments, concerns or requests to our website www.angloamerican-chile.cl or by fax to (56 2) 230 6180 or by email to [email protected].

1. Stakeholder to which you belong:

Company employee Community Government/authorities NGO Customer Other groups, which ones? Supplier/contractor

2. What is your opinion about our Sustainable Development Report 2010?

Very good Average Good Bad

3. What do you think about the format of our Sustainable Development Report 2010? (Consider length, clarity, colours, artwork, etc).

Very good Average Good Bad

4. Does the information presented in our Sustainable Development Report 2010 give you a good idea about the economic, environmental and social performance of Anglo American’s Copper business unit in 2010?

Yes No. Why?

5. Which issues addressed do you consider are more important for this industry? (Choose 3, where 1 is of greater interest and 3 of less interest).

Business ethics Employee benefits Company description Community relations Labour relations Environment Economic value generated and distributed

6. Which chapter did you like most? Why?

7. What in your opinion was the weakest chapter? Why?

8. What information would you like to see in the next Sustainable Development Report?

Thank you for taking the time to help us improve our reporting process in 2011.

APPENDICES/FEEDBACK QUESTIONNAIRE


PRODUCTION AND EDITINGConsultora AxisRSE S.A.

DESIGN AND LAYOUTVial Lambiasi

PLEASE SEND YOUR COMMENTS ON THIS REPORT TO:

Marcelo Esquivel External Affairs and Communications [email protected]

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