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Exploration

Anglo American continued its exploration activities in a range of frontier areas to more mature greenfield locations globally as well as in brownfield environments in close proximity to the Group's existing operations. The Company's exploration geoscientists are also involved in the identification and evaluation of properties for potential acquisition or alliance opportunities.

Anglo American teams continued to advance exploration on recent discoveries, sole funded projects and alliances with other companies. Through 2009, the Group, excluding De Beers, spent $172 million (2008: $212 million) on exploration in 21 countries. De Beers' own exploration expenditure amounted to $48 million (2008: $96 million).

Anglo Platinum exploration costs of $17 million were incurred during 2009, with a specific focus on supplying geological information and mitigating resource risk on current operations. Although partly curtailed owing to the current economic downturn, exploration activities included considerable surface diamond drilling. 3D seismic surveys continue to provide exceptional detail on the structural deformation of the orebodies, which is not discernible from borehole data alone. Aeromagnetic surveys, geophysical logging and borehole radar are also used to supplement geological knowledge. Foreign exploration continued in 2009, with projects in Brazil, Canada, Russia and Zimbabwe. Exploration operations in China were shut down during 2009, while options to dispose of the organisation's interest in the Canadian projects were being reviewed at year end. Extensive exploration continues on the Great Dyke in Zimbabwe to supply resource information especially in the Unki area.

Copper exploration across the Group totalled $43 million with focused exploration around its Chilean copper mines. Advanced project work further evaluated the West Wall and Michiquillay copper projects in Chile and Peru respectively. Near mine exploration efforts centred on the San Enrique-Monolito and Los Sulfatos copper projects in Chile as well as other near mine opportunities.

Nickel exploration of $22 million was incurred strengthening the project pipeline, with continued work around a nickel-copper discovery in Finland, while advanced project works further evaluated the Jacaré project in Brazil and West Raglan in Canada.

Iron Ore exploration expenditure was principally at the Minas Rio project in Brazil and the Kumba Iron Ore projects in South Africa. In Brazil, programmes tested iron ore targets close to the principal resources as well as evaluation targets within the project's infrastructure corridor.

In South Africa, pre-feasibility resource evaluation drilling of the Zandrivierspoort project in the Limpopo Province was completed and exploration activities for the Kolomela (formerly Sishen South) project in the Northern Cape Province were concluded, with mine construction commencing in 2009. A number of brownfield targets between the Sishen and Kolomela mines were explored as part of the Falcon/Sibelo project. Pre-feasibility drilling and exploration activities on the Phoenix project at the Thabazimbi Mine in the North West Province commenced at the end of the third quarter of 2009. Greenfield exploration activities on the project in Guinea ceased in early 2009 and the project was terminated.

Coal exploration expenditure of $35 million was concentrated on evaluating, assessing and extending resources for export thermal and coking coal, domestic thermal coal and coal bed methane (CBM).

In South Africa, further exploration was undertaken on the South Rand, Standerton East and Kriel East projects, with new project drilling commencing on the Elders Underground Extension and Vaal Basin projects. Feasibility related drilling was carried out on the New Largo resource, planned to supply Eskom's Kusile power station. Exploration drilling was also intensified in Thermal Coal's Limpopo area for coking coal, as well as in the Waterberg Coal project area. The Lephalale CBM resource continued to be evaluated utilising results from gas yield testing and regional exploration drilling. The project is currently generating approximately 140 kW of electricity from a fuel cell pilot project, which represents a clean energy technology initiative between Thermal Coal and Anglo Platinum. CBM exploration activities in Botswana continued to evaluate the prospectivity of the Eastern Karoo Basin through a reconnaissance drilling programme which has identified areas for future exploration.

In Australia, exploration targeted coking coal and export thermal coal in the Drayton South (Saddlers Creek), Moranbah South, Grosvenor, Rolfe and Carlo Creek Projects.

In Canada, Peace River Coal remained focused on defining hard coking coal in the Roman Mountain project adjacent to the existing Trend colliery. Additional resource definition exploration was carried out on the Belsax project south east of the colliery.

Zinc exploration expenditure of $10 million related to exploration conducted on a recent discovery in Namibia as well as works adjacent to operations in Ireland and advanced project works at the Gamsberg East zinc project in South Africa.

Other activity included exploration around the Brazilian phosphate mines.

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Annual Report 2009