De Beers Overview

Anglo American Analyst Presentation13 April 2010

2

Agenda

1. Industry Overview & De Beers Introduction Gareth Penny

(CEO)

2. 2009 Operating & Financial Review Stuart Brown

(CFO)

3. 2010 & Beyond Gareth Penny

(CEO)

4. Venetia Overview Martin Preece

(GM –Venetia Mine)

Q&A

3

Diamonds are a luxury product

1. Diamonds are a luxury product with unique attributes which are very distinct from the commodities

2. Whilst also a natural resource, diamonds are the main feature of an end consumer product, as distinct from more fungible commodities

3. From a consumer perspective, diamonds have both emotional and physical attributes which influence purchase behaviour

4. Diamond jewellery competes with other discretionary services and products for the share of consumers wallet

5. Because of their aspirational and discretionary nature, diamonds are more vulnerable to reputation threats than other raw materials

4

…in comparison with precious metals

Source: De Beers Group analysis; World Gold Council Gold Demand Trends, February 2009; Angloplat 2008 Annual Report, page 20.

99%

58%

23%

12%

30%

29%

6%

1%

43%

0%

20%

40%

60%

80%

100%

D iam o n d s G o ld P la tin u m

J e w e lle ry In d u s tr ia l In v e s tm e n t Au to c a ta ly s t

Demand sources for Diamonds, Gold and Platinum - 2008

5

Note: Data is for the USA – world’s largest gemstone market; Prices are for 1-carat stonesSource: US Geological Survey; The Guide (Prices); DTC (volume)

Increasing Rarity

Sapphires

RubiesEmeralds

Diamonds

Marketing and distribution is key to driving value

Price change ’97-’07

0

2,000

4,000

6,000

$8,000

0 10 20 30 40 50

Price per carat in 2007 (polished stones)

-23%

Volume in 2007 (rough carats)

+26%

-39%

-38%

6

Diamond value chain

Overview of the diamond industry24

2008 Diamond Pipeline

Rough Production

Share of world

production

Share of world

distribution

Polished Manufacturing

& Dealing

Jewellery Manufacturing

Jewellery Retail

De Beers

Other

DTC

Other

CO

NSU

MER

Exploration41%

59%

42%

58%

ALROSARough

Distribution& Dealing

Description• Finding new

deposits of diamondiferous kimberlites that can be mined economically

• Carats recovered through mining

• Rough Distributor –selling rough diamonds purchased from primary source

• Rough Dealer – trades diamonds purchased from rough distributors or other rough dealers

• Cutting and polishing rough diamonds ready for inclusion into jewellery

• Crafting jewellery which incorporates polished diamonds

• Selling diamond jewellery to end consumers

Note 1: PWP is the price of a polished diamond at Cutting Centre before any additional mark-ups. It denotes the diamond content of a piece of diamond jewellery sold at retail. Source: DB Group Strategy estimates.

$14.8bn $14.2bn $19.6bn Retail $70.3bn

PWP1 $19.1bnn.a.

De Beers as market leader De Beers as participant

7

Diamond pipeline profitability

Source DB estimates 2007

Rough production and distribution and diamond jewellery retail produce the largest profit pools in the pipelineHowever, in retail:– Profit margins are variable

(reflecting different business models and risks)

– Profit pool is shared by a highly fragmented base (est. 250,000+ retailers globally)

Estimated pipeline profitability

Range of EP Margin

-20%

-10%

0%

10%

20%

0

Econ

omic

Pro

fit M

argi

n

Rough Production and

Distribution

DJ Retailing

DJ Manufacturing &

Distribution

Polished Manufacturing

& Dealing

Rough Dealing

Size of bubble = Indication of absolute net profit

N. of Companies 100s 50s 1,000s 10,000s >250,000

Degree of segment fragmentation

8

World Production Growth

0

20

40

60

80

100

120

140

160

180

1914

1918

1922

1926

1930

1934

1938

1942

1946

1950

1954

1958

1962

1966

1970

1974

1978

1982

1986

1990

1994

1998

2002

2006

2010

2014

2018

Car

ats

(m)

Sierra Leone

Tanzania Russia

Botswana (Orapa)

Botswana (Jwaneng

)

Australia (Argyle)

S. Africa (Venetia)

Canada (Ekati)

Canada (Diavik)

No new material production is expected to come online in the near future

9

World Diamond Production

Russia21%

DRC4%

Botswana28%

Australia3%

Canada19%

Angola10%

South Africa11%

All others4%

Russia24%

DRC21%

Botswana21%

Australia9%

Canada9%

Angola6%

All others2%

South Africa8%

Gem diamond production by country (value)Gem diamond production by country (volume)

Total 150mcts Total US$14.8bn

Botswana is the largest producer of rough diamonds globally

Sources: Kimberley Process 2008 Statistics; De Beers Group Strategy

10

Diamond Production

Source: De Beers estimates 2008

De Beers33%

Harry Winston

2%

BHP2%Rio Tinto

14%

Alrosa16%

Other (highly

fragmented)33%

De Beers40%

BHP4%

Rio Tinto6%

Alrosa19%

Other (highly

fragmented)27%

Harry Winston

4%

Other (fragmented) includes:Artisanal & Illicit (8%)Juniors (25%)

Other (fragmented) includes:Artisanal & Illicit (8%)Juniors (19%)

Gem diamond production (value)Gem diamond production (carats)

1

1

•The five largest producers contribute over two-thirds of global diamond production•De Beers and Alrosa contribute c.60% of global production by value

Total 150mcts Total US$14.8bn

De Beers share of global gem diamond production is estimated at c.40% by value

11

Diamond Cutting and Polishing

India58%

Thailand/China etc13%

Israel11%

South Africa5%

Russia5%

Beligium3%

USA4%

Botsw ana1%

502,000Israel

751,000Belgium

751,800South Africa

15-3529,000China/Thailand

6-50850,000India

Average Manufacturing Cost

WorkforceCutting Centre

502,000Israel

751,000Belgium

751,800South Africa

15-3529,000China/Thailand

6-50850,000India

Average Manufacturing Cost

WorkforceCutting Centre

India is the largest cutting centre by value and number of employees

Share of Cutting Value by Country

Source: De Beers 2008 Estimates

12

Cutting Centre Debt Levels

Source: DTC Estimates

0

10

20

30

40

50

60

70

80

90

10020

03

2004

2005

2006

2007

2008

2009

2010

2011

Cos

t of D

ebt p

er m

onth

($m

n)

0

1

2

3

4

5

6

LIB

OR

%

Total Debt ServiceLibor

13

De Beers Activities

14

Geographical Locations

Business locations

15

Diamond exploration challenge

0

500

1,000

1,500

5,000

Diamond exploration results fromthe last 140 years

Kimberlitessampled

5,000

Diamond-iferous

850

Economic

50

>100B incontained revenue

3

Source: De Beers Exploration data

16

Focused exploration

Advanced Stage (deposit)

Early Stage (recce-discovery)

18,000km2

2,000km2

6,000km2

900km2

9,000km2

Total De Beers Exploration Spend ($mm)1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

70 66 73 68 77 90 109 108 129 94 46

18

De Beers has an unrivalled resource and reserve base

The SSV Value^ of The De Beers Family of Companies' Resources*, Business Plan and Reserves**

as at 31/12/09size of bubble = Revenue^ (U$ bn)

NMDamtshaaNamdebMarine

Kimberley

SASA

Voor- spoed

Jwaneng

Letlhakane

Orapa Snap Lake

Victor NamdebLand

Finsch

Venetia

FoC

GahchoKue

^ using Business Plan Average $/¢ @ June 2008 DTC Price Book for Life of Mine absent time value effects* Resource ¢ x Business Plan average $/¢** Reserve ¢ x Business Plan average $/¢

$185bn$76bn$36bn

$61bn$34bn$17bn $33bn

$18bn$10bn

$10.8bn$5.9bn$0.1bn

$20bn$6bn$5bn

$29.6bn$5.4bn$0.4bn

$3.3bn$2.5bn$2.1bn

$1.6bn$1.1bn$0bn

$2.0bn$0.9bn$0.5bn

Business Plan

Reserve**

Resource*

$5.4bn

$18.1bn$3.2bn$0.9bn

19

Project Pipeline

20

Agenda

1. Industry Overview & De Beers Introduction

2. 2009 Operating & Financial Review

3. 2010 & Beyond

4. Venetia Overview

21

Financial Summary

Y/e December - $m 2004 2005 2006 2007 2008

SalesDTC 5,695 6,539 6,150 5,920 5,930Other 717 732 745 786 768

Total sales1 6,412 7,271 6,895 6,706 6,698

EBITDA 1,317 1,403 1,232 1,216 1,222Underlying earnings 652 850 425 483 515Cash generated by operating activities 985 472 809 844 700Capital expenditure 416 638 752 1,612 442Total assets2 6,258 6,846 7,599 8,381 7,093Shareholders' interests 3,933 3,701 3,834 3,392 2,628

Gross debtThird party 1,339 2,175 3,037 4,075 3,622Shareholder preference shares 642 428 214 161 107Shareholder loans - - - - 248Cash 393 241 307 179 177

Net debt 1,588 2,362 2,944 4,057 3,800

Financial summary 2004 - 2008

22

Constricted liquidityConstricted liquidity

Drop in consumer demandDrop in consumer demand

Inventory overhangInventory overhang

Three factors affecting diamond market in 2009

23

Maximise demand opportunities: DTC

DTC SalesUS dollar millions

H1 H2 2009 2008DTC Sales 1,431 1,809 3,240 5,930

• Protecting diamond equity

• Selling flexibility

• Liaison with diamond banks and trade to bolster confidence

• Increased price and volume of sales as year progressed

25

Produce in line with client demand

Carats recovered: 2009 vs 20082009 2008 Variance

DBCM 4 797 11 960

Debswana 17 734 32 276Namdeb 929 2 122

De Beers Canada 1 146 1 640

Carats 000’s 24,600 48,132 (49%)

26

Create operating efficiencies

Global headcount: 2009 vs 20082009 2008 Variance

Headcount 15,814 20,464 (23)%

• Undertook a programme of de-layering and decentralisation

• Identified synergies across company• Efficiencies are part of new normal way

of operating

27

Income Statement

Income Statement (US$ millions)

H1 2009 H2 2009 Total 2009 Total 2008

Total sales 1,711 2,129 3,840 6,888

Gross profit 123 204 327 1,363

Gross profit % 7% 10% 9% 20%

EBITDA 297 357 654 1,222

Interest 98 127 225 240

Tax 48 77 125 304

0 696 696 0

Underlying (loss) earnings (164) (56) (220) 515

Impairment of Canadian mining assets

28

Cost Savings

H1 2009 H2 2009 Total 2009 Total 2008 Savings

Production costs 326 399 725 1,224 499

Operating overhead costs 153 249 402 817 415

Capex 86 95 181 403 222

565 743 1,308 2,444 1,136

Savings (US$ millions)

Total

29

Balance Sheet – Pre-Equity Injection

Balance Sheet (US$ millions)2009 2008

Fixed assets 2,795 3,100

Shareholder loans 759 248

Other net interest bearing debt 3,200 3,552 Cash (751) (147) Preference Shares 107 107 Bank borrowings 3,844 3,592

1,118 1,060Net Current Assets

30

Cash Flow

Cash Flow (US$ millions)H1 2009 H2 2009 Total 2009 Total 2008

(31) 257 226 700

Cash utilised in investing activities 95 96 191 442

Free Cash flow (126) 161 35 258

Less: Financing Activities74 31 105 358

Cash flow (200) 130 (70) (100)

Shareholder Loans 553 0 553 264

Non cash movements (forex) (130) (1) (131) 341

223 129 352 505

Cash (consumed by) / available from operating activities

Dividends (including outside shareholders)

Decrease in net interest bearing debt

31

Agenda

1. Industry Overview & De Beers Introduction

2. 2009 Operating & Financial Review

3. 2010 & Beyond

4. Venetia Overview

32

De Beers Activities

33

5 Strategic Levers

Secure De Beers Secure De Beers leadership position

Strategic Lever 1Strategic Lever 1 Strategic Lever 2Strategic Lever 2 Strategic Lever 3Strategic Lever 3 Strategic Lever 4Strategic Lever 4 Strategic Lever 5Strategic Lever 5

Sustainably maximise value for

rough diamonds

Operate, optimise and invest in

superior mines

Invest in value-creating

downstream opportunities

Continually identify and embed cost and efficiency

gains

Invest in and protect De Beers

FoC reputation and diamond equity

Sales Build relationships

Costs Protect reputation

EBITDA Drive org effectiveness

Free Cash FlowCommunicate

effectively with all stakeholders

Retain / attract best talent

Safety of our people & security of our product

34

Strategic Lever 1Strategic Lever 1Sustainably maximise value for rough diamonds

Maximise price for production while assisting in the creation of viable downstream industries in producing countries

Build upon beneficiation success during new contract period

Build upon beneficiation success during new contract period

Maximise current opportunities in selling to non-Sightholder community and explore new opportunities

35

Strategic Lever 2Strategic Lever 2Operate, optimise and invest in superior mines

• Progress advanced exploration work in Angola and at Victor (Canada). • Operational cost containment and strategic business plans . • DebTech to progress new technology for the Gahcho Kue feasibility study

• Finalise operations review across Debswana and ensure Cut 8 is delivered on time and below budget

Maximise value of land and sea operations

Achieve the new mining plan for Snap Lake, while optimising current resource and completing resource extension project at Victor

• Enhance cash flow, especially at Venetia Mine. • Agree solution with the State Diamond Trader • Optimise Voorspoed ramp up • Identify assets for disposal/sale

36

Strategic Lever 3Strategic Lever 3Invest in value-creating downstream opportunities

Determine the brand vision and consumer proposition, and agree commercial expansion strategy

• Deliver strong growth and margin expansion across abrasive businesses and E6 market share gains. • Successfully commercialise focused portfolio of unique new Technologies for diamonds

Drive Organisational upgrade and focus on new collections, pricing, and retail performance / store productivity

37

Strategic leaver 4Strategic leaver 4Cost efficiencies

Cost of production improvement. Focus on cost per ton mine and cost per ton treated

Security of product

Capital efficiencies and new project build

Exploration and rapid deployment plant

38

Safety remains our number 1 priority

Fatalities

Lost Time Injuries40 LTIs in 2009

LTIFR:0.2vs.

66 in 2008 LTIFR:0.19

0: 2009vs.

6 in 2008

39

Increasing production in 2010

Production (Tons and Carats)

98,81695,687 94,664

92,740

84,610

35,110

24,600

48,13251,11351,13549,01147,012

-

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

2004 2005 2006 2007 2008 2009 2010E 2011E 2012E

Tons treatedCarats Recovered

41

De Beers – Industry leader

Mining LeaderMining Leader Marketer & Distributor LeaderMarketer & Distributor LeaderLeading EmployerLeading Employer Diamond Technology LeaderDiamond Technology Leader

43

Worldwide 2009 Diamond Jewellery Retail Sales

2009 Diamond Jewellery Sales Growth %

Source: De Beers commissioned studies; Group Strategy analysis

Overall result slightly above De Beers’ own forecasts due to better than expected performances in China and India + favourable exchange rates in Japan (and Europe)

US market results reflect the impact of the worst economic recession experienced since the end of WWII – but results improved steadily throughout the year

Market DJ Retail Growth %

2009 2008

LC Retail USD PWP USD PWPUSA -5% to -7% -7% to -9% -10%

Japan -10% to -13% Flat to -4% -5%India +12% to 14% +0.5% to 2.0% +8%

China (Shanghai/ Beijing only) +12% to 14% +15% to 17% +19% (China)

World Growth Trend -3.0% - -4.0% -3.5%

Total Estimated World PWP Approx. $18bn Approx. $19bn

4444

Growth of emerging markets

China and India promise to be the next engines of growth for the industry

2008 2016

Taiwan, 2%

Rest of World, 19%

Italy, 4%

India, 7%

Japan, 11%

China, 5%

Gulf, 8%

USA, 41%

Hong Kong, 2% Taiwan, 3%

Rest of World, 15%

Italy, 3.5%

India, 11%

Japan, 9%

China, 9%Gulf, 9%

USA, 37%

Hong Kong, 2%

Source: De Beers Estimates

Note: Excludes currency effects

45Strictly Confidential 45

Creating a market for diamonds in Japan…

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Japan market growth (% new brides who receive diamond only engagement rings)

1966 1970 1980 1990 2000

6%

77%

1965

A Diamond is Forever

1968 Three months salary intro

46

…and more recently in China

0% 0% 0% 0% 0%

33%

0%

13%

0% 0%

59%

45%

23%

0% 0%

62%

39%

18%15%

38%

0%

10%

20%

30%

40%

50%

60%

70%

Shanghai Beijing Guangzhou Chengdu Dalian

1993 1997 2000 2006

China DER (Diamond Engagement Ring) acquisition rate

47

International Diamond BoardInternational International Diamond BoardDiamond Board

World class capabilities to distribute and market our diamonds

Market Market DemandDemand Consumer DemandConsumer Demand

Consumer Consumer ConfidenceConfidence

Big IdeasBig Ideas

48

Summary (1/2)

Diamonds are a luxury product – competing directly with other discretionary items for share of wallet. As such, Marketing is key to driving value

The industry pipeline is global in nature and covers exploration, mining, rough diamond distribution, polished manufacturing and wholesale, jewellery manufacturing and wholesale and jewellery retail

The largest profit pools in the industry are at rough diamond production and distribution, and at diamond jewellery retail

Rough production and distribution has been the most attractive segment in normal times given the relative concentration of this upstream segment compared to the high fragmentation of retail

No material new production is expected in the near future

Botswana and Russia are the largest diamond producers by value; De Beers Group and Alrosa the largest companies

India is the largest cutting centre by value and number of employees

49

Summary (2/2)

De Beers operates in the most profitable areas of the pipeline and in Exploration, its engine for growth in the upstream segment – with a world class portfolio of mines and an unrivalled resource base

Its selective distribution system and marketing activities support diamond jewellery demand and equity

From Q4 2008, simultaneous shocks in liquidity, consumer demand and high polished inventory affected rough demand and prices

De Beers reacted promptly to the crisis by implementing aggressive production and cost cutting, capital reduction and other measures to ensure sustainable future growth

De Beers strategy aims at securing De Beers leadership position in future

DeBeersGroup.com/ofr2009