Mining Indaba 2009

1. Mining Indaba 2009 Exxaro … Harnessing or Weathering the Storm Presentation by Ernst Venter Executive General Manager, Business Growth 10 February 2009

2. Contents • Introduction • The storm • The impact • Is it happening again? • What will help us survive? • How will the future look? • What do we need in Sub-Saharan Africa … notwithstanding the storm • What are the positives about this event? • What is Exxaro doing? • Our track record … and committed growth • Conclusion

3. Introduction • Exxaro, powering possibility with a sound asset base and an exciting growth portfolio • Will we be able to deliver in the current global economic context? • Are there even more possibilities for Exxaro in this storm? • Or should we all adopt a “wait and see” approach?

4. Introduction to Exxaro Our commodities … At a glance … COALthe fourth largest coal producer in South Africa, one of the largest suppliers to Eskom MINERAL SANDSone of the world's top three producers of zircon and chlorinatable TiO2 slag BASE METALS AND INDUSTRIAL MINERALSthe only zinc producer in South Africa IRON ORE 20% holding in Sishen Iron Ore Company • One of the largest South African baseddiversified resources company • An ALSI Top 40 company, listed on the JSE • Over 9 000employees • Revenue: R5,8bn* • Net operating profit: R806m* • Operations in South Africa, Australia, Namibia and China • 53% BEE ownership * H1 2008 (6 months) results

5. The Storm …World GDP growth rates Source: Global Insight

6. The impact … Stock exchange indices JSE Industrial Index Dow Jones Industrial Index Source: I-Net

7. The impact … Copper, zinc coal and oil prices Source: I-Net

8. The impact … Copper and zinc LME stocks Source: I-Net

9. The impact … Zinc smelter production cuts 7% of world production Similar and even worse cutbacks in steel, nickel and ferro alloy sectors … Source: CRU

10. Is it happening again? • Ultra-long term real zinc and copper prices • Showing the major cycles and the fact that even during super cycles, prices are cyclical • Is history repeating itself? • Can we expect a slow or strong recovery? • Should we invest now to have a 90% probability to get a return of 35% plus?

11. Is it happening again? Oil price shocks Great Depression ? Sources: Barclays Capital, AME

12. How deep and how long … “Uncertain” may seem like an understatement to describe the current mood in many quarters of the mining industry. The precipitous fall in prices for every metal but gold, the freezing of credit, and the big question marks over the future of the world economy have been enough to send most of us for the antacids, the Scotch, or the subscription medication of choice. Younger people relatively new to the mining business have painfully learned that, yes, there is always a downturn. On the positive side, those of us who have been around longer remember that there is always an upturn, sooner or later, and that its sharpness and duration are largely a function of what happens during the downturn. Source: Michael Chender, CEO Halifax

13. What will pull us through this storm … Source: Deutsche Bank

14. What will pull us through this storm … Economic growth in China and other emerging economies Source: Global Insight

15. Future outlook … Index of consensus commodity price forecasts Sources: Citigroup, Barclays Capital, Brook Hunt, Deutsche Bank, JB Were, Macquarie, Standard Bank

16. The carbon economy … Still with us … Source: Promethium Carbon 2006

17. What do we need in Sub-Saharan Africa … and what can we offer? Needs: • Energy • Logistical integrity • Rail transport • Capital equipment • Financing • Skills • Security of tenure • Alliances and strong collaboration between State, private sector and utilities

18. Energy … Who will make up the gap? IPPs?

19. Alternative forms of energy … Inga? • Hydro electricity … long lead • Nuclear … delayed, expensive • Renewables … - solar - wind • Coal bed methane/LNG

20. Logistical infrastructure and rail capacity Morupule 3+ bn tonnes of coal Kang Mariental Mmamabula 4+ bn tonnes of coal Waterberg 74 bn tonnes of coal Aus NWC Iron ore resources RBCT • Giving Botswana another rail route to the sea, especially for coal exports • Getting TFR capacity in line with RBCT expansion, i.e. 91 Mtpa • Expanding Sishen-Saldanha rail capacity

21. What can we offer?

22. Southern Africa … Everything under the sun!

23. “Chindia” - Staking out its claims in Africa Copper, oil and gas, ferro alloys, platinum, iron ore

24. Africa’s newest species … Bears and Pumas! The other two BRICs – Brazil and Russia – are active in Africa too

25. What are the positives about this event? • A process of rational filtering ito asset quality • Strong catalyst for synergistic alliances and collaboration • Strong incentive to form an Africa Incorporated mindset to strengthen resilience • Diversification potential • Skills retention

26. What is Exxaro doing? • Protect integrity of current assets • Cost discipline • Minimise value losses across value chain • Improve efficiencies • Spend cash wisely on high quality initiatives • Create alliances • Develop logistical solutions for coal business • Improve our skills base

27. Protecting and improving quality of current asset base … The challenge for exploration and mining companies and their suppliers is how to respond to the new circumstances of the downturn while positioning themselves for an eventual rebound. Companies have been forced to look hard at costs, cash positions, financing possibilities, merger and acquisition possibilities, exploration strategy, personnel issues, and legal, social, and ethical obligations. Exactly how they conduct these examinations may make all the difference to their future success. Source: Michael Chender, CEO Halifax

28. Products Market So, how are we protecting our value chain? Mineral Deposit/ Rights Mineral Resource Conversion through Technology Mineral Reserve Logistics Mining Beneficiation ROM Losses Losses Losses Losses Losses Losses Losses Losses 2 3 6 1 4 Typical OC Mine 5 Typical UG Mine 6 1 4 2 3 5

29. Focused execution of high quality initiatives… Belfast 3.0Mtpa Waterberg mine 16Mtpa Moranbah South 3.5Mtpa Medupi 14.6Mtpa Char 160ktpa Market Coke 450ktpa Eerstelingsfontein 1.0 Mtpa Mafube 5.0Mtpa Turkey exploration Diepspruit 1.3Mtpa Toliara Sands* 560ktpa Inyanda 1.5Mtpa Dongara* 200ktpa Blesbok expansion 2.4Mtpa Kwinana 40ktpa Port Durnford* 550ktpa* Fairbreeze* 300ktpa Alloy Stream 20ktpa Pre-feasibility Feasibility Construction Ramp-up/Operation Energy Ferrous Coal Mineral Sands

30. Where to from here? If the past is any guide, several years from now we will be looking at major new players whose names we haven't yet heard of, and marveling at the unexpected growth of companies we hardly notice today. These companies will have done things with costs that no one believed possible, made deals that seemed counterintuitive at the time but that positioned them perfectly for the upturn, and created new business models that seemed to anticipate changes in the landscape. Source: Michael Chender, CEO Halifax

31. Our track record … • Improved production volumes in 2008 • Two new coal projects successfully commissioned in 2008 (Inyanda and Mafube) • Massive Grootegeluk Medupi expansion on track • High quality project pipeline … viable with current conditions • Sintel Char plant being commissioned • Increased presence in coal export market

32. Conclusion • Harnessing is the right way • All is not doom and gloom … create the capability to look through the storm - there is a blue ocean out there • Be diligent, rigid and disciplined ito new investments • The opportunities are still out there …

33. THANK YOU