Investors

Thank you Chairman. I would like to start with a few words about strategy, then to review the financial and operational highlights of 2005 and to update you on how we are addressing the issue of safety at our operations.

Before moving to the substance of my remarks may I thank you for your kind words regarding my planned retirement next year. As you know, I suggested this timescale with the clear intention of first completing our strategic restructuring programme. This will be done with due dispatch after which it seems to me that it will be a good moment, at the age of 58, to hand over to a new leadership team so that they can oversee the next phase in the development and growth of the Group.

Strategy

Over the seven years since Anglo American plc was listed in London, we have pursued a consistent, but steadily evolving, strategy designed:

• To simplify our shareholding structure, especially through the unravelling of the cross-holding with De Beers, and to increase our transparency;
• To develop a strong project portfolio as the foundation for value-enhancing growth;
• To increase the synergies available to the Group in areas like information management, technology, procurement, sustainable development and human resources;
• To further advance our strong sense of corporate social responsibility in the countries in which we operate; and
• To improve the focus of our business through the disposal of non-core assets for value;

In 2005 and the early months of 2006 we have continued to implement this strategy and we have disposed of Boart Longyear, our mining equipment business, Samancor Chrome and a number of smaller business interests in our Ferrous and Industries division for $1.1 billion. More fundamentally, at the end of October, we announced the outcome of our strategic review that had at its heart the intention to focus increasingly on our core mining business. This will entail:

• The listing of Mondi, our paper and packaging business on the London Stock Exchange;
• The disposal of our South African steel and vanadium business, Highveld;
• The restructuring of Tongaat Hulett, in which we own a 52% stake, so as to list separately its aluminium operations;
• A strategic review of Tarmac's businesses with a view to improving its overall returns;
• Reducing our stake in AngloGold Ashanti; and finally
• Buying back $2 billion of our own shares.

On each front progress is being made.

Some shareholders may question why, given our planned focus on mining assets, we have chosen to reduce our exposure to AngloGold Ashanti at a time of rising gold prices. It is important to note the relatively small share of our earnings – some 3% in 2005 - that now comes from gold. But more particularly, gold companies have a distinctive group of investors and trade on different multiples compared with diversified mining companies. Thus, the value of our stake in AngloGold Ashanti has not been fully reflected in our overall market capitalisation. Already, through reducing our stake to some 41.8% we have realised some $1 billion in cash. The announcement of our strategy on AngloGold Ashanti and the steady progress with its implementation has been well received by the markets.

We will continue to support value creating opportunities in Mondi leading up to a separate listing. We can take credit for having built Mondi, through a combination of organic growth and shrewd acquisitions, into a major player in both business papers and packaging. Nevertheless, the time is now appropriate to prepare Mondi for a listing in its own right.

In regard to Tarmac – the core of our industrial minerals division – there are significant overlaps and synergies between its extractive businesses and many of the disciplines involved in mining. It also adds stability and geographical diversity to our earnings. Thus we continue to regard it as a core business whilst seeking to improve its margins and returns on capital. This process has already begun, with a number of smaller businesses having been identified for disposal, and recent acquisitions in Romania, Poland and the Czech Republic adding to its growing European base.

Financial Performance

During 2005, Anglo American continued its track record of strong earnings growth, of increasing dividends to shareholders, of identifying and developing projects to underpin our future growth; and of rigorous cost control.

We reported record underlying earnings of $3.7 billion, an increase of 39% compared with 2004. We also achieved record production levels in coal, diamonds, iron ore, vanadium, nickel, zinc and platinum group metals and Base Metals, Ferrous Metals and Coal each generated their highest ever contribution to earnings. EBITDA was up by $1.9 billion at $9 billion - enabling us to reduce debt by almost 40% to $5 billion and to return some $2.5 billion to shareholders through a special dividend and buy-back programme.

These good results were driven by strong commodity prices and the continuing expansion of the Group's production base. Compared with 2004, the average prices in 2005 for a number of our key commodities were up 300% for vanadium, 71% for iron ore, 28% for copper; 32% for zinc; 6% for platinum and nickel and 9% for gold. This strength has continued into 2006 with copper up 51% at the end of the first quarter compared with a year before, zinc up 70%, platinum up 20% and gold up 29%. Moreover, the relative robustness of the performance of, and confidence in, the global economy has led most commentators to expect prices to remain firm during 2006. This is underpinned in the case of a number of commodities by relatively restricted supply growth and the steep increase in many mining and processing input costs, not least of which are rising energy cots. The increasing involvement of investment funds does, however, add a greater element of unpredictability to the markets and we have seen considerable price volatility in recent weeks.

But the scale of our earnings growth did not result from passivity in the face of rising prices. A number of measures that we have put in place over the last two years significantly enhanced our performance. An example of this was our ability to deliver $730 million in cost and efficiency savings in 2005, up 32% on 2004. Whilst preserving the entrepreneurial flexibility of our business units we have increasingly sought to leverage the resources of the Group more effectively across disciplines including procurement, talent management, and technical and research support. We are currently embarking upon a similar process in relation to Information Technology through a major infrastructure consolidation process. We are also planning a significant drive to support knowledge sharing and collaboration across business units and disciplines through our new global information portal.

In relation to growth opportunities, the most cost effective route is through the development of our own greenfield projects or brownfield expansions and we have one of the largest project pipelines in the industry. In 2005 we authorised several new platinum projects and Anglo Platinum expects to increase production from 2.45 million ounces last year to between 2.7 and 2.8 million ounces in 2006.

In coal we have agreed the expansion of the Dawson project and the go-ahead for the new Lake Lindsay colliery - both in Australia. These metallurgical coal projects represent an investment of $1.4 billion. I visited the Australian coal operations last month with the Chairman and the Safety Committee and we were most impressed with the potential for further expansion. In South Africa, and subject to regulatory clearances, we expect to see the $264 million Mafube project get under way and in Colombia an expansion at Cerrejon Coal from 28 million to 32 million tonnes per annum has been approved.

In 2005, the Board also approved a $559 million expansion of iron ore operations at Kumba's Sishen mine. This will increase production from the mine by 10 million tonnes by 2009. Our associate company, De Beers, is proceeding with the Snap Lake and Victor projects in Canada, and the Voorspoed project in South Africa. Our Base Metals operations are progressing feasibility studies for the new Barro Alto nickel project in Brazil; and for a major expansion at the Los Bronces copper mine in Chile.

In total, the Group has a current approved project portfolio of $6.7 billion with a further $10 billion to $15 billion of projects under consideration. These will underpin our growth prospects across the board.

Black Economic Empowerment

Chairman, you referred to the importance of companies working with our host societies to address their major socio-economic challenges. This is particularly relevant for Anglo American in South Africa where a great deal still needs to be done to address the legacies of the apartheid era. Anglo American has been at the forefront of business attempts to spread opportunities to new black entrepreneurs. At the grassroots level this is reflected in our drive to procure more from BEE companies – this expenditure has grown from R800 million in 1999 to R9 billion in 2005. Last year we had the honour of hosting President Mbeki at an exhibition that he asked us to stage about the work of our Anglo Zimele, our business development incubator. At any one time this is invested in some 25 to 30 companies supporting over 2,000 jobs.

I am pleased to note that AngloGold Ashanti has been granted its new order mineral rights. In relation to equity ownership, the Anglo American Group has helped to catalyse the emergence of several major South African black-owned mining companies. Over the last year, we have facilitated, through our subsidiary, Kumba, the creation of the largest black-owned, managed and controlled mining company in South Africa and we have supported De Beers' genuinely broadly-based empowerment deal with Ponahalo.

We are also proud of the progress that is being made in establishing wider employee share ownership schemes across our Group in South Africa. We are making good progress too in increasing the proportion of historically disadvantaged South Africans in our management ranks.

BRICs

We are looking at opportunities arising from new geographies. The balance of power in the world economy has been shifting dramatically over the last five years – a process which seems certain to accelerate – as the BRIC economies, Brazil, Russia, India and China, come increasingly to the fore. These economies and their material intensive growth patterns are to a large extent driving commodity markets – as did the demands of Japanese growth in the 1960s and 1970s.

We have a long-established presence in Brazil with identified expansion opportunities. In Russia our most significant asset is Mondi's Syktyvkar mill but we have also established a representative office in Moscow and are looking at further opportunities. India is already a significant market for a number of our products and we are looking to establish a representative office during 2006 to bring us closer to operational opportunities. In China, which is already a major market for our products, Tarmac, Kumba and Mondi each have small operations and AngloGold Ashanti and Anglo Platinum have active exploration programmes. Anglo Coal has a number of significant opportunities under review.

During 2005, we acquired a small stake in major Chinese coal producer, Shenhua. We intend to look not only at conventional opportunities to acquire and develop mines but also at new partnerships both within the BRIC economies and internationally with the significant companies that are emerging from these countries.

Safety and Corporate Social Responsibility

One of our greatest challenges has been to improve our safety record. We have made a lot of progress since 1999 with a major reduction in both our number of fatalities and our lost time injury frequency rate. It has been a consistent priority at all levels from the board room to the stope. We have many examples of excellence with Base Metals, for example, not having had a fatality in over 16 months anywhere in the world. Over the last two years we have, nonetheless, seen a slowing in the momentum of improvement. We continue to suffer injuries and fatalities amongst our 128,000 employees and 44,000 contractors at our managed operations.

Over the last few months we have introduced a new framework of non-negotiable standards – the Anglo Safety Way. All senior managers, including myself, have attended a new safety training module, developed by Du Pont, as the start of a cascade process. We have also introduced a new safety peer audit process that has been successfully introduced around the Group and in terms of culture we are determined that lessons are captured and learned more effectively from safety incidents and that our managers accept that 'zero harm' is a realistic goal in our operations. I hope to be able to report on a much improved safety performance at next year's meeting.

Chairman, in your remarks you referred to a number of the important initiatives which we are pursuing in relation to sustainable development. I can confirm that the executive team see these challenges as central to the long-term future of our business including our access to capital, to talent and to land and resources. Our recently released "Report to Society", which is available to shareholders at this meeting, clearly sets out the many exciting programmes we have underway at our operations - and the progress that is being made on this front.

Conclusion

Ladies and Gentlemen, 2005 was a year of significant achievement. We achieved record earnings, production was up, costs were contained, projects were delivered on time, and further organic growth prospects were added. We have also set ourselves clear strategic targets for refocusing the Group to realise value and to provide the foundation for future growth.

In terms of risks, Chairman you have referred to issues of resource nationalism and higher taxes in some jurisdictions. There are also major cost pressures bearing upon a number of our key inputs which we have, to date, been largely successful in containing. Although there are also clearly concerns in the world economy arising from trade imbalances, the scale of the US deficit and the inflationary pressures which may result from higher energy prices, the overall outlook remains encouraging, with leading indicators signalling continuing strong global growth and robust underlying demand. If prices and demand continue at, or near, current levels the Group can expect another strong year.