It is a pleasure to introduce this, our seventh sustainable development report, and my first as CEO of Anglo Platinum. In the past few months, and since taking office in June, I have been able to gain insight into our sustainable development programmes and the material issues we face as a Group, as we endeavour to continue to mine responsibly.

Neville Nicolau

Over the past six years we have reported consistently, using comparable data, on the progress being made towards meeting our stated sustainable development targets set in line with the requirements of the Global Reporting Initiative (GRI). In 2007, we started using the G3 reporting guidelines instead of the GRI’s 2002 guidelines used previously. Our reports for 2007 and 2008 are aligned to what the GRI describes as a B+ intermediate application level.

This year, we have gone one step further in terms of meaningful reporting, by focusing even more sharply on areas we have identified as material sustainable development issues. The independent assessment of the issues we face, by an external review panel have provided the necessary guidance in this respect, especially in terms of the often challenging task of determining ‘materiality’, as envisaged by the GRI. I would like to thank the members of the panel for their valuable contribution to how we report. Click here to read the statement produced by the panel.

While our 2008 report is again declared with a B+ intermediate application level, 2009 will see our reporting moving to the A+ application level, with the preparation for this already well under way.

OUR OVERALL SUSTAINABLE DEVELOPMENT PERFORMANCE

In 2008 we met 11 of our 26 stated key SD targets. Eight longer-term targets remain in the progress of being met, while seven targets were not met for reasons explained in this report. Please see detail of these targets in the inside cover of the report.

SAFETY

One of the most challenging aspects of my role at Anglo Platinum is to ensure that our approach to employee safety moves us towards our goal of ‘zero harm’. I firmly believe that safety is an integral part of every employee’s role at work each day. I am personally committed to integrating our enhanced safety improvement plan into the daily actions of every Anglo Platinum employee. Initiatives to achieve this integration are currently under way, based on the results of an extensive review of our enhanced safety plans, and these have been discussed in more detail in the body of the report.

Against this commitment, it is with deep regret that I report that in 2008 17 employees lost their lives while at work at our managed operations. On behalf of management, I extend our sincere condolences to their families, friends and colleagues. I have personally reviewed each of the incidents since I began my role to ensure that we learn as much as possible from past incidents and that we always treat the bereaved with care and respect.

Safety is an integral part of every employee’s role at work each day.

COMMUNITIES

We continue to play an active role in the development of our host communities, particularly by:

• empowering community members with entrepreneurial skills through the establishment of business centres;
• the implementation of HIV/AIDS and gender equality projects; and
• the development and upgrading of educational and other infrastructural facilities.

In 2008, Anglo Platinum was accused of contaminating the water at two schools near our operation at Mogalakwena and of having violated the human rights of a relocated community (the Motlhotlo community). Scientific evidence provided conclusive proof that our mining operations were not the cause of contamination of the water at the schools; and the South African Human Rights Commission (SAHRC) did not find that the company had violated any human rights. There were however, lessons to be taken away from these events. For instance, SAHRC made a number of recommendations for improvements arising from its investigation into the relocation issue. Although the commission found that the Company had not abused anyone’s human rights, it nevertheless highlighted the vulnerabilities of communities living around large-scale mining operations in rural areas. Anglo Platinum is giving the report’s recommendations consideration, with a view to enhancing the following:

• Its impact assessment procedures.
• Communication and information sharing with the host communities.
• Consultations with local people through the community representative structures.
• The ways in which it is building long-term self-reliance among people affected by its mining activities.

Anglo Platinum remains firmly committed to the concept that any resettlement should enhance the quality of people’s lives rather than undermine it. In the case of the Motlhotlo resettlement, the Company has also commissioned an independent post-resettlement review which will be completed in 2009.

While recognising that there are important lessons to be learnt from the SAHRC’s report, Anglo Platinum is also proud of its interventions in the socio-economic development of its host communities. It remains convinced that its involvement goes well beyond what is required in law; and that its role in building infrastructure, improving security of tenure for local people, creating jobs and freeing up land for agriculture are testament to this. Demonstrating that we do mine responsibly.

TRANSFORMATION

Anglo Platinum was granted new-order mining rights for Rustenburg, Amandelbult, Union, Lebowa, Mogalakwena, Twickenham and De-Brochen by the Department of Minerals and Energy in 2008. The applications for conversion of mineral rights associated with our 50:50 joint ventures − with Royal Bafokeng Resources over the Bafokeng-Rasimone mine and with the African Rainbow Minerals consortium over Modikwa Mine are being processed.

In September 2007, the Company announced two major black economic empowerment transactions, with partners Anooraq Resources and Mvelaphanda Resources. Steady progress is being made in concluding these transactions. The Mvelaphanda transaction is almost complete, with final consent awaited from the Minister of Minerals and Energy on the disposal of the Booysendal property. Owing to the global economic slowdown, certain aspects of the Anooraq transaction are being re-evaluated and the date for their fulfilment has been extended to 30 April 2009. Both parties remain committed to concluding the transaction during 2009.

During the year, we reached agreement with labour unions on the key terms and structure of the Company’s broad-based employee share participation scheme (ESOP). The Company has established the Anglo Platinum Kotula Trust to facilitate the scheme on behalf of the beneficiaries and has issued 2.5 million shares (1,008,519 ordinary shares and 1,512,780 A ordinary shares) to the trust, representing approximately one per cent of the Company’s issued ordinary share capital. More than 90% of the beneficiaries of ESOP will be historically disadvantaged South Africans.

We also reached agreement during the year with Royal Bafokeng Holdings (RBH) to restructure the Bafokeng-Rasimone joint venture. This includes the Styldrift project, whereby Anglo Platinum will retain an effective stake of 43% in the venture and receive payment for the transfer of control. The transaction will result in the creation and listing of a black economic empowerment PGM producer, controlled by RBH and independently managed. The transaction is expected to take between one and two years to complete.

ENERGY

Securing a stable and cost-effective supply of energy proved to be increasingly challenging in 2008, owing in particular to restrictions in electricity supply to the mining industry imposed by the country’s electricity supplier, Eskom. Through our implementation of a ‘footprint model’ which shows exactly how much energy we are using in what part of our business, we will reach a far better understanding of the distribution of energy within our operations and will continue our drive to reduce our use of electricity and fossil fuels.

Initiatives that were conducted during 2008 saw a decrease in energy consumption of 2%, placing us on the way to achieving our target of a 15% saving by 2014.

CLIMATE CHANGE

Climate change is a recognised, major global sustainability issue. Because our contribution to carbon dioxide emissions is linked mostly to our electricity consumption, our climate change strategy continues to focus on the reduction of electricity use.

A number of internal research projects are being conducted, particularly in the area of clean coal technology, in collaboration with Johnson Matthey and Anglo Coal, which may increase the demand for platinum and at the same time help to reduce many other industries’ emissions of carbon dioxide.

As platinum group metals are a key component in catalytic converters in cars, we see ourselves as positive contributors to a growing market assisting the automobile industry to minimise carbon dioxide emissions.

WATER

South Africa is a water-scarce country and in areas such as Rustenburg and the Eastern Limb we often find ourselves competing for water resources with local municipalities and communities. To ensure there is sufficient water and to find solutions to the water shortages, we have formed partnerships with government, water service providers and other industry bodies to address water scarcity.

In Rustenburg, water supply is increasingly becoming a concern in the wider community, and the town did experience water shortages in 2008. We have signed an offtake agreement with the Rustenburg Local Municipality to use 15 Ml per day of purified sewerage effluent from the town’s sewerage treatment plant in our processes, thereby reducing the demand for potable water in the Rustenburg area. In conjunction with the Rustenburg Local Municipality, Magalies Water, Rand Water and other industries, Anglo Platinum is currently involved with a feasibility study to assess how to increase water supply to Rustenburg. This study is likely to be completed in 2009.

On the Eastern Limb, the construction of the De Hoop Dam by the Department of Water Affairs and Forestry has commenced. This project has been a collaborative project between the various levels of government, industries and the communities in the area and will supply water to communities and mining activities in the Eastern Limb. Anglo Platinum is likely to need additional water for its Der Brochen project and has completed and submitted an environmental impact assessment for approval of the Richmond Dam.

RETENTION OF KEY SKILLS

Attracting and retaining employees with key skills has become an imperative in ensuring we have the right people in a competitive labour market. In 2008, we concluded a number of focused recruitment campaigns in order to attract skills and set us on our way to building a ‘talent pipeline’. Clearly, the retention of skilled and talented employees is also key to our business. There are various initiatives at our operations to support this, ranging from enhancing facilities at the workplace for training and development programmes.

The skills shortage is likely to ease during 2009 with the global economic crisis and resultant recessions in some of the World’s biggest economies.

OUTLOOK

Our society’s demand for development that is sustainable has been growing steadily, and continually brings new opportunities and challenges for business. We envisage that, through proactive action and the refinement of the systems we already have in place, we will be in a position to strengthen our ability to meet our challenges and make the most of our opportunities. We will ensure that we continue to mine responsibly.

We declared that this report is aligned with GRI’s B+ intermediate application level and has been third party checked.

Neville Nicolau
Chief Executive Officer

Johannesburg
5 February 2009