Statement on shareholding

Anglovaal Mining Limited (Avmin) shareholders are referred to the announcements today indicating that Harmony Gold Mining Company Limited (Harmony) and African Rainbow Minerals Gold Limited (ARMgold) will acquire a significant shareholding in Avmin.

The shareholding is being purchased from Anglo South Africa Capital (Proprietary) Limited (Anglo American) and Arctic Resources Limited (Arctic) for a cash consideration of R43,50 per Avmin share. Harmony and ARMGOLD, which together will own 34.5% of Avmin, will consolidate their holdings on a 50:50 basis in a new structure. Subject to approval by the Avmin Board of Directors, this transaction will result in the three Anglo American-nominated directors on the Avmin board being replaced by directors nominated by Harmony and ARMgold.

Avmin welcomes this development as it has been a strategic objective of the Board and management for some time to accelerate transformation of the company by achieving a significant black shareholding. The inclusion of ARMgold as a major shareholder achieves this objective and will also make a major contribution towards meeting the five-year requirements for Avmin and its subsidiaries under the new Mineral and Petroleum Resources Development Act, thereby protecting shareholder value and promoting growth.

In volatile markets, particularly for the rand exchange rate, Avmin is well placed compared with its peers in the South African mining industry to deliver value through earnings and growth for all its shareholders. This will be accomplished through its strengths, which include:

Avmin Debt-Free
The recent strong exchange rate has provided the opportunity for Avmin to repay all debt related to Chambishi Metals Plc on favourable terms. This debt amounted to R1,44 billion in June 2002, and has reduced by R440 million to R1,00 billion currently due to the strengthening of the rand. With cash of R1,08 billion (including proceeds of US$73 million from the recent sale of 13,3% of Avgold), Avmin is now entirely debt-free on a net basis at the centre. Major subsidiaries Assmang Limited and Avgold Limited carry low levels of debt, with no support required from Avmin.

Superior Assets
Avmin’s disposal of non-core assets and major capital spending programmes over the last five years have resulted in a portfolio consisting entirely of low-cost, high-margin mining and smelting operations in precious, ferrous and base metal sectors. The proposed sale of Chambishi Metals and ETC (by Avgold) will complete this process. This portfolio provides resilience in earnings to uncertainties in exchange rates, product markets and new legislation.

New Projects
Two major new projects � Two Rivers Platinum and the Nkomati Nickel expansion await approval � and a major new gold project at Target North is under investigation. Avmin chairman Rick Menell comments: “With a strong balance sheet, a well-diversified portfolio of attractive mines and exciting new projects, we look forward to working with Avmin’s new shareholders in pursuing our strategy of optimising operations and head-office structures, and generating attractive new investment opportunities in all our chosen businesses.”

Ebrahim Takolia
General Manager, Investor Relations