Ivan Glasenberg - CEO Steve Kalmin - CFO Chris Mahoney - Director, Agricultural Products

Sylvain Brunet - Exane BNP Paribas Jason Fairclough - Bank of America Merrill Lynch Heath Jansen - Citi Liam Fitzpatrick - Credit Suisse Tyler Broda - RBC Capital Markets Anna Mulholland - Deutsche Bank Research Hunter Hillcoat - Investec Bank Tony Robson - Global Mining Research

Welcome to Glencore's Full-Year Results Presentation for 2016. The format will be as usual; a presentation by Ivan and Steven, followed by Q&A. With that, I'll hand over to Ivan.

Okay. Good morning. Well, it just shows what a difference a year makes. The highlights of the 2016 results, Steve will take you more through the precise details on the numbers. But as you can see, a pretty good year. Adjusted EBITDA is $10.3 billion. That's up 18% from last year. And adjusted EBIT $3.9 billion, up 81%. Net income pre-significant items, $2 billion. That's up 48%. Funds from operations $7.8 billion, up 17%. And capital expenditure, as we said last year would decrease considerably and it's down at $3.5 billion. So that was down 41% from the year before with the expansionary CapEx in the year before. The results are underpinned by great cost performance at the asset levels. And once again we keep emphasizing we have a great set of assets. We're in the real lower cost curve against other operations around the world. These costs, you've got to remember we include all costs. We include TCs, RCs. We include royalties. We include the freight. So they really show the full costs. And as you can see, we have Tier 1 assets. Look at our copper assets, we're producing copper after the by-product credits of cobalt etc., at $0.87 per pound. Zinc, after the gold credit, you can see at minus $0.05 per pound. Nickel at $2.65 per pound. And our thermal coal round about $39 per tonne and that's giving an $18 margin during 2016. These same cost structures, with slight increases, are expected to be sustained into 2017. Steve will give you further details on that, where we expect them during 2017. And naturally with higher coal prices, we will have higher margins on the coal, with the cost going up slightly to $44. Once again, we showed the resilience of the marketing business. We've kept emphasizing since the IPO that the marketing business is resilient. It's not linear to commodity prices, but naturally does perform better with higher commodity prices. But as we've proven over the years since the IPO, even with lower commodity prices this division still performs well. We're pleased to say adjusted EBIT is $2.8 billion, up 14% from the previous year and higher than the previous guidance that we gave which was $2.5 billion to $2.7 billion. And that's generally supported by healthier commodity prices. As I said earlier, when we've got higher commodity prices, tighter markets, more arbitrage opportunities and better facilities to increase the marketing business. The guidance we've given for 2017 is $2.2 billion to $2.5 billion. Naturally it's been adjusted a little -- it's been adjusted because now we've sold 50% of the agricultural business. So we'll be equity accounting the 50% of the earnings, when before we had 100% of the earnings there. As we said, we had the big debt reduction plan from September 2015. And we gave indications what we were doing, the assets we were selling, where we'd be working on to reduce the debt. As you can see we reduced the debt considerably, net funding by $14.7 billion and net debt $14.1 billion respectively over the past 18 months. And the debt has moved down, $32.6 billion; and net debt down at $15.5 billion. So a significant decrease since the implementation of the deleveraging process of the Company. As you can see the cash flow coverage ratios are exceptionally strong. FFO to net debt, 50%. And the net debt to adjusted EBITDA is 1.5 times. As we've said, we've changed, we used to run our net debt to EBITDA 3 to 1. We felt that was a comfortable structure for the investment grade ratings. However, since what occurred in 2015, where people tried to predict our EBITDA lower than we expected, they would then say our net debt to EBITDA wouldn't be 3 to 1. We've now decided to build in a cushion and we've said and we said previously, we run net debt to EBITDA maximum 2 to 1. That gives us a cushion, always the investment grade rating. And whether people want to predict our EBITDA we'll still be within the 3 to 1 based on whatever predictions they wish to have. So we believe 2 to 1 gives us a cushion to ensure we will maintain investment grade rating. And that is how we'll be running the Company. As you can see today we're at 1.5 to 1. We'll talk later on and Steve will take you through the numbers, where we expect to go to in the future and with the free cash flow that we'll generate in 2017. The net debt should go somewhat lower which will even bring the ratio lower, based on current commodity prices and where we see the EBITDA during 2017 and the free cash flow of round about $7 billion. Looking at the next slide, safety. Once again an important part of Glencore. But we sadly had two incidents in the DRC and Zambia, our key focus areas, where we had 10 fatalities, one of them when we had the slide of the pit wall, we had seven fatalities there; and three fatalities in Zambia in the underground operation. Otherwise, we had six fatalities at the rest of our operations. You've got to remember Glencore does employ 154,000 people across its asset base. We have a large amount of underground mines so we do have higher risks. However, the two focus areas which the Group have is the DRC and Zambia and that's where we've got a lot of work to do. We did have two other focus areas which was Kazakhstan and Bolivia and, I'm pleased to say, as you can see, Sinchi Wayra in Bolivia where we used to have fatalities, we've had 24 months fatality free. Kazzinc, we've had one fatality in 26 months, so therefore we've done a lot of work on those operations which were key focus areas and it looks like we've got them right. We do have work to do in the DRC and Zambia. A lot of effort has been placed into those areas and hopefully we will be fatality free moving into the future in those two areas. So that gives you a summary of the major financials. Steve will take you through in more detail and then I'll wrap it up, how the market's looking, where we see the market and how things look for the future. Thanks.

Thanks, Ivan and good morning, everyone. To a smaller room this year as well. It's nice and cozy and compact and I think works well. The first slide on slide 7, we tried to get all the key highlights onto one page and each slide then has a -- or each section, if you like, has a corresponding slide in more detail as we go through. But I think the headlines do speak for themselves. Ivan mentioned the strong 2016 financial performance across the board, industrial marketing, the debt reduction, the asset disposal program that, of course, delivered as well; the cost positioning which has been cemented in. We've seen strong improvements 2015 to 2016 in, particularly, the base metals. Coal margin improving, that's always a balance between cost and margin as you look to obviously go mine different segments and different coal qualities so we look at that business in as much as cost but it's equally important from a margin perspective. The capital structure, I think as Ivan said and as we've been speaking internally and looking through the history of this Company in terms of leverage, liquidity, cushions, capital buffers, in the history of this Company we've never seen it in a stronger financial position with the sort of capital headrooms and buffers and strength of franchise which is really starting to perform as we would hope and expect in the position of the business. The capital allocation policy which we worked through at the December 2016 update, we've made it a little bit more visually friendly in terms of a circular graphic. We'll go through that on another slide. And as Ivan said, what we do like to do and it's a feature of some of the disclosures and transparencies that we've given since, I think, the end of 2015, is a real cost volume cash flow build-up around guidance and expectations for the industrial and the marketing business which at prices as of a couple of days ago obviously is a moving target. But as of where we're, we're looking at spot annualized EBITDA across the business of around $14.6 billion. We'll provide a few more details at the back in terms of the industrial bill about copper at $4.4 billion and that zinc's around $3 billion, coal $3.8 billion and we'll give the numbers as we look at that. Cash, interest and tax, $3.6 billion. That's made up of around -- it's a little over $1 billion in interest, $1.1; $2.3 billion, interest and tax. And what we do put in that number as well is to the extent that within the EBITDA number there might be some otherwise non-cash elements to it, we then unwind it through that. So some of the streaming transactions that we did as well, that comes to about $200 million as well as we work through. So we will get through the detail on all these slides as we go through. As Ivan mentioned, the marketing performance, it's pleasing to stand up here and not be pointing to an otherwise laggard in this pa rticular part of the business. And to some extent, the range that we do put out there, historically $2.7 billion, $3.7 billion or $2.2 billion to $3.2 billion, does allow for a certain business that may not be firing on all cylinders at a time. So you're obviously aiding for that. If you have a second half like we had last year which was annualizing at $3.2 billion, it was $1.6 billion was our marketing EBIT in the second half of the year. At that sort of level, where I would say we saw most businesses performing well, conditions were pretty good, that's when you do start, even in those sort of markets, being able to generate the sort of income and cash flow and returns that we're talking about. But there was nothing to particularly point a hat on in any particular business in any segment that was otherwise below par or below cruising speed that would have maybe held us back to, say, the $2.5 billion, $2.7 billion which is still where we were guiding towards the Q4. So we've come top of the range at, even above, at $2.8 billion, $14 billion. Good second half performances across the board. And as Ivan said, we're looking at $2.2 billion to $2.5 billion purely on the back of now proportionally consolidating the 50% of Glencore Agri as we move forward and I'm sure there'll be questions about 2017 and we can maybe deal with that a little bit more in Q&A. The agricultural side, maybe just to -- a quick point on that. $461 million to $418 million, of course, a stronger second half performance. As we always said, there's a little bit of seasonality around harvesting in Canada and Australia in particular. You did have a period in 2017 where we had that cut-off of 11 months of the old 100% and one month would be 50% proportionate through. So the $461 million, $418 million, where there is quite a bit of earnings that can be quite back-ended in that business, it was pretty much a very similar result to have closed in 2015. And Chris is here to answer any questions that may transpire later on. If we look a little bit more history on this business and some of the ranges, I would say we've been chugging along, I think, quite comfortably, more around the bottom end of that range which is what you'd expect in a trough-y, cyclical backdrop, clearly, to what we've had. The 2015 undershoot, if you like, in that particular period was a conscious attempt at that particular point in time was to throttle back, release a lot of working capital. It was more the low-margin business and the nice-to-do business but not the must-do, not the core franchise business that we did obviously speak about. And for next year, we're looking at -- I would still cautiously guide into the bottom end, $2.2 billion to $2.5 billion. I think it's been a feature of Glencore in the last 18 months to tend to the under-promise, over-deliver part of the equation so we'll see how 2017 pans out. Long-term range now $2.2 billion to $3.2 billion, really reflecting the give-up of the 50% of the agricultural business as it currently stands. We would obviously hope that that business is an engine for growth as we move forward as well. In terms of industrial business, a good strong performance, 22% up. The big engine and the big driver, of course, was the strong metals performance, 50% up. Particularly copper and zinc had strong performances if you look through the various details we have given, in terms of the waterfall variation. There was no aid during that particular year by prices net-net themselves. You can see just a $46 million impact. Pricing was actually quite negative in the first half. If you go back through the first half 2016, that was all pulled back in the second half and that positive earnings momentum through prices is obviously going to continue through back in 2017. So where was the big uplift? We saw a $2 billion uplift in the metals and mining, from $4 billion up to $6 billion; a lot of that was in costs. You'll have a slide later on just looking at the unit cost trajectory; there's by-product help in that, there's a lowering of cost, there was last year some currency help as well as we work our way through. But across the metals and mining, of the $2 billion, if we break up the waterfall components, all the volume of that $0.5 billion, the $500 million was in respect of the metals business. We've given some components of that, cobalt at Mutanda. In terms of that additional volume, we saw 25,000 tonnes of cobalt come out there, an extra 8,000 tonnes or a 48% increase, in the cobalt and it really does underpin on a post by-product basis the lowering of the cash costs structures we see over at Mutanda. That was a big -- in terms of the mix of the business, as we move towards, we speak about higher margin businesses in the section, that's really been a feature of Glencore; without necessarily putting more volumes, we've been very disciplined around supply constraint. But where we've been able to, within the coal segments, within the copper, within the zinc, within by-products, ferrochrome, some of these things we've been able to enjoy quite strong margins selectively and cobalt was a big contributor there. Nickel at INO, we've seen the extra volumes come through there; it was a function of a maintenance period on nickel in 2015. Collahuasi, higher grades, you've seen Anglo's results, I think they were talking that Collahuasi as well had a very strong performance. And Kazzinc, lead is a big feature also over at Kazzinc as well and our lead volumes were doubled up in 2016. We did buy deposits, some of it coming from a Zhairem deposit which we also spoke about in our reserve results report for those more techie-minded to trawl through some of the reserve results report. We put that out about a month ago, you've seen some big conversion of resource reserve, over particularly at Zhairem, both in zinc and lead. If we then move to reinforce some of those cost structures that we're speaking about, that have been coming in a lot over the years, particularly in copper, zinc, nickel, despite some grade declines has also been holding quite well in terms of cost structures. That's been bedded in; those are sustainable as we also look forward to 2017, reflecting the volumes and cost structures. We've updated the guidance of 2017, two months after the December 2016 guidance. And in all cases, except coal which I'll speak to, you've actually seen a furthering lowering down in guidance there. So copper, I think we were about $0.94 back in December; for 2017 we're now looking at $0.89, very much helped, as I said, by some of those by-product credits coming into copper. So cobalt, for those watching that part of the market, [indiscernible] just in the last six weeks or so has doubled in price from a little over $10 a pound up to trading at about $20 a pound at the moment. We produce 30,000 tonnes of cobalt when Katanga is up and running; in 2018, our overall cobalt production goes into the 50,000 tonnes to 60,000 tonnes range. For us, sensitivities to different commodities, cobalt has now eclipsed nickel and ferrochrome and the likes; it is number four in the pecking order after coal, copper and zinc at the moment and it's definitely a commodity that's enjoying its day in the sun at the moment. So that's helping that. On the zinc side, we go further into negative territory, given by-product credits on the precious gold and silver. As I said before, lead is an important by-product, we produce 300,000 tonnes of lead, one of the largest lead producers; that's primarily a by-product, all out of our zinc operations as well. Prices on lead were up 5% in 2016 on 2015. And where we sit at the moment, spot today is 22%, the price on lead, higher than what 2016's average. Now all that's coming through in terms of reducing the overall cost within our zinc business; that's a quality business at the moment. By-products are also helping the nickel business. We were higher --previously a few months ago we were showing a tick-up in unit costs in the nickel business for 2017. It's now actually come back to the $248. Again you've got cobalt and copper, in particular, coming out of Australia and Canada in those particular businesses. Just to dwell on coal a little bit as well; coal, up to $44; again as I said, we focus that business more on a margin basis as well, so we've seen a slight tick-up in margin which is part-price driven, as you obviously prioritize that. You've also got some cost impact in coal on revenue-linked aspects, particularly royalties in Australia, Columbia and others, that the higher prices, you're paying more -- it's a variable ad valorem-type royalty structure that you have there. So you're getting a pick-up of $1 or $2 in costs, extra cost that's coming in there by virtue of the pick-up in price, with the coking coal, the thermal coal and the likes. You're also seeing, just given the size of the operational cost base, we've seen a little bit of give-back of some of those FX headwinds that we said into 2016; 2017 or since December, we've seen a slight pick-up in Aussie, rand strengthened a bit, Columbia's also strengthened a bit in currencies there, so that accounts for $1 or $2. What they have identified in coal in particular, just again given the size and scale, number of operations, operational footprint synergies, the whole supply chain; they've identified a further $300 million of savings through quite an extensive coal -- you can see a cost out, margin up, coal-move project that they've initiated. There's a whole range of projects they will then look to execute; these are bankable, these are deliverable and they'll look to bring those annual sustainable cash flow benefits of $300 million plus by the end of 2018. You take that over 135 million tonnes, that of itself should bring down unit costs around about sort of $225 or so per tonne as we look to execute on those. It's quite interesting and important to look in the rearview mirror occasionally and you can see the amount of CapEx that has gone into this business and has gone into many other businesses. I think it will be a feature of some of Ivan's comments as well, as he wraps up. You can see the peak years of 2012, 2011/2012/2013; I'm not even sure that's an exhaustive list, we ran out of space, just to show all the projects on the left that had been developed and had been brought into production. This is partly explaining where we're today also in terms of industrial footprint, sustainability, well-capitalized business as well. When you've spent $64 billion over the last eight years, 2009 to 2016; $38 billion of expansionary CapEx; $64 billion all-in including sustaining; averaging over $8 billion a year in terms of CapEx, you've now got a business. And a lot of that did come through the Xstrata's CapEx program through the 2011/2012/2013 years, essentially complete now. But across zinc, coal, copper, nickel and the likes, you've got a very well-capitalized businesses and that does feed into some of the guidance that one can now give in CapEx and how those costs -- and people try, well why use depreciation in your CapEx and why is that out? There's a lot of reasons why; in cost, different structures and things were different 2008 and 2016. I wouldn't look to why depreciation is $6 billion and CapEx is $4 billion; it is what it is and that's how it's going to play out over the future. So our CapEx in 2016 came in at industrial $3.4 billion, down 40-odd% from the 2015, bang in line with our guidance. We've said 2017 unchanged from December 2016, $4 billion. Wrapping up some of the projects that are still working their way through the transformation phases, particularly African copper, you've got Katanga, as they go through Whole Ore Leach, look to commission by the end of this year, bring-back tonnes obviously 2018. Mopani similarly transforming; it will be a totally different operation when you've got the shafts and concentrate up and running. Koniambo also as it builds the line too and ultimately becomes a fully-fledged member of the family over the next couple of years as well. And a little bit of oil drilling, as I mentioned back in December 2016. But that's the make-up of the $4 billion; $3 billion sustaining, $1 billion expansionary. We're looking to hold it at that level the next three to five years. That is still allowing a bit of headroom to just spend organically, expansions, reserves, whatnot. Because you're obviously going to see the tapering off of the CapEx in some of the projects I've just mentioned which then starts filling a bit of a buffer. And by all means I'm saying use $4 billion, but that starts introducing a little bit of buffer as we work through the CapEx. So that should be sufficient the next three to five years. That would be sufficient to allow for the levels for the full reconditioning of the full African copper volumes which we spoke about, close to 400,000 tonnes, 350,000 tonnes/400,000 tonnes there. And even within there, there will be questions I'm sure later on zinc, but as and when some of those tonnes potentially come back on some staggered basis, there's almost no CapEx or very little CapEx ultimately when those come back. So even these levels could allow for quite decent volumetric pick-ups across the businesses as well. That picture's telling a thousand words or so in terms of balance sheets, as we've repositioned and optimized the structure and does talk a bit to Ivan's moving -- particularly bottom left, you can see that targeting maximum through the cycle 2 times. We've absolutely smashed through that already at December 2016, down at 1.5 times on a spot basis; we'd be tracking comfortably below 1 times. And interesting that even at that previous level of the 3 times, had that still been a level that we were obviously not then running with as much capital cushion and buffer, that 3 times was never breached in any period as we look through the last four or five years. You can see it would have peaked at 3 times/2.9 times, is what was held at the half-year mark and now obviously smashing down in terms of those disposals that we obviously did as well. We've seen reductions, big numbers clearly, of $14.7 billion, $14 billion of reductions in net funding and net debt just in the last 18 months, that's worked its way down just in 12 months. So just during the year, net funding was down $8.6 billion; net debt down $10.4 billion from $25.9 billion to $15.5 billion, the top right graph as well. Just a waterfall again on the $10.4 billion of net debt reduction which we have page 9 in the financials, but just to reinforce; there was $7.8 billion of funds from operation, essentially EBITDA less tax of interest. We generated disposal proceeds, monetization proceeds, between streaming, agricultural, GRail and the likes of all of $6.9 billion of cash flow during 2016. CapEx was just the $3.3 billion and there was an increase in working capital, investment in working capital of net about $1 billion, that's just receivable/payables that came. So there's the $10.4 billion that we have there. We'd be looking to clearly augment and seek and hopefully prove and demonstrate external validation of that repositioning and then improvement in the Company's fundamentals on the credit side. We received obviously a positive outlook from S&P about six months ago, last year in September with a BBB- positive outlook; Moody's still stable at the Baa3. No doubt as the normally do post-release of results, they'll review the numbers and we've no doubt that we're on the right track to where we need to get to in terms of the strong Baa and BBB ratios as we work our way through. So a strong profile there Again just reinforcing the capital structure, as we work in top right of the circle there, the box 1, maintaining strong BBB/Baa; that's a driving priority in terms of financial positioning of the Company and is reinforced and backed up by obviously 2x net debt target and also financial distribution policies. Everything else is ultimately consistent and dovetails so you can see a circularity around how we do that. So we would work to do that and we've obviously -- things that we've done in blue boxes and the red boxes, those are things that ultimately support that. So M&A and other doesn't mean money going out; it also means money can come in and that's where disposals, monetizations, recycling -- Glencore tends to do a lot in that portfolio. We're still looking at areas of the portfolio where we think that we can unlock value still within the business, so potentially watch that space. The distribution policy that we came out with last year and even at the trough part of the cycle, if we look towards the lowest of the low, what was this business generating annualized based on CapEx and the low spot prices, where back in about January-February last year, we were $7.7 billion of EBITDA on our numbers. I know people can have their own models, but the truth only sits in one place. We were $7.7 billion EBITDA, we were running about $2.7 billion of free cash flow annualized at the really trough-y part of this cycle. So the ability to deleverage the cash flow throwback of this business was quite powerful and that even gave further confidence to, once the business is repositioned around its capital structure, we deliver the ratings targets that we do. We've fixed $1 billion base distribution, that is roughly 50%, let's say, of the marketing cash flows. It was 2.7 times even covered at the trough of the free cash flow generating potential. So we've gone for the $1 billion fixed and then the 25% minimum of free cash flows coming out of the industrial businesses. Now we've honored that update. Back in December, we were saying we'd look to pay the $1 billion this year. It'll come out 50/50, $500 million in the next few months, $500 million September. That works $0.07 a share. On current spot cash flows, if you run the minimum dividend based on $1 billion plus 25% would equate to roughly about $2.5 billion or so today in terms of minimum distribution. So that's part of -- if we look through to next year you'd see the equity cash flow, $7 billion, free cash flow, $2.5 billion minimum is how it would play out in terms of the distribution policy. Of course if you're doing nothing else, you can either top it up in terms of distributions as clearly the capacity, you're building surplus, you're building headroom. And the Company is clearly in a very comfortable position to look at selective bolt-on near-asset strategic deployment of capital, reinvestment growth through the M&A side, as we've done in a smaller sense even around -- so the Rosneft transaction, the Mutanda transactions that we've done in the last month or so. Just for your cash flow projections as you look out to 2017, the funding of the Rosneft transaction which was EUR300 million, that was actually in last year's numbers. It was funded just before the year-end, the EUR300 million, so that's already -- it's not a cash outflow as we look forward to 2017. That was already -- that SPV was consummated, the final transaction closed on January 3, but that was already a cash outflow and sitting in prepayments or just under short-term receivables at the end of 2016. So with that I'll hand back over to Ivan to wrap it up and tackle some Q&A.

Thanks, Steve. Right, this is something that we've been talking about at Glencore for a long time. What is underpinning prices? It's supply. We all know and I've been saying it for a long time, the demand is there, demand has been pretty strong even though people got a bit panicked on China. Yes, during 2015 we had the corruption campaign, China slowed down, demand slowed down a bit, but it wasn't that bad. In 2016 we look at most of the commodities, consumption was up; in China, was up 4%, 5%; if we take copper, it was up 4%; if we take zinc, it was up around about 3.74%; if you take nickel, it was up around about 10%, 11% in the stainless steel market, etc. So demand has been pretty good and that's what we've been saying for a while. It's not the demand side we should be worrying about. It's the supply side. So in the last 24 months and recently, we've seen better commodity prices. Why have we had better commodity prices? It was because suddenly supply -- there wasn't this new massive increase of supply. We saw voluntary cutbacks; ourselves, one of the leaders in that area. It's clear we cut back zinc production, we cut back 500,000 tonnes of zinc production; 1.5 million tonnes, we brought it down to 1 million tonnes. We cut back our copper production. We cut back copper in Katanga and Mopani and we pulled that back and we pulled back some of our coal production in Australia and various other parts of the world. And that had a very positive effect. We know when we cut back on zinc, I think the zinc price was around about $1,600 at the time we did the cutback; we now know zinc is around about $2,900, a very positive effect. The same with copper, we know 300,000, 400,000 tonnes of copper is not as big in the 23 million tonne market, but no doubt it also had an effect and the same goes with coal. Now what also had a favorable effect on commodities was a lot of involuntary -- we were one of the few guys who did it voluntary. Other people had involuntary cutbacks which in the end really helped them, whether it was strikes or it was technical issues. I don't want to go into the various operations. We all know where they were, where they had technical issues and a large amount of tonnes was pulled out of their own production. But if you do the calculations, a bit like what we did in zinc, when we cut back our zinc production, we looked at the benefit it had on the rest of our zinc production. So we cut back 500,000 tonnes, there's 1 million tonnes there; the zinc price had to move a certain amount for you to get the benefit on your 1 million tonnes. So you got the benefit on the other tonnes. The same -- if you do the calculations, a lot of these guys who are having strikes or had technical issues at their mines, do the calculations; the tonnes they lost at those operations, what effect did that have on the commodity price on the tonnes they lost and take it back to the tonnes that they are producing and see the benefit they got there. With all due respect, sometimes it's good to have these technical issues and sometimes it's good to have strikes because it benefits the rest of your business, if you're a big enough player in that business. So I think that is something people have got to look at and it's clear that had a big effect on pricing. The other thing that had an effect on pricing which, as I've always said, China, we don't understand China, exactly what may or may not happen from one day to the next and we all saw it in coal last year. The Chinese do have the ability, they can coordinate the cutbacks, they're not like us with antitrust, we can't agree with other producers. But they can, they control most of the coal mines in China and the ones they don't control they can put a law out which they did and the coal price is very low in China. The coal mines are losing money. What did the Chinese decide to do one day to the next? I don't think any of us in this room saw it coming, ourselves included and suddenly the Chinese decided they didn't like these low coal prices and they cut back coal -- the working days from 330 days to 276 days within a week. And they implemented it very quickly and we saw the effect that supply cutbacks can have on coal prices and what that did to the coal prices in China. It took it up to above RMB600. We also know during the tough times producers were higher-grading mines. We know for sure in the coal market in Indonesia, for example and many other places, people were higher-grading. Eventually that catches up on you and that's going to affect supply going into the future. So we think supply is going to be hindered in the future, so we're in a pretty good position at the moment. We've also seen -- what we also know is there's limited inventory around the world. People have really pulled down the inventory during this time and therefore there's been a rundown of inventory all throughout the system. What is also interesting, as Steve mentioned today and we all know it, the industry and I've been saying it all the time, has put too much in investments, increased supply too much, kept building new mines. There was a big thing to increase volume in the market and just the numbers say what it is. If you take the top four or five mining companies, just look what the capital investment was in 2012; 2012, I think we were around about $70 billion, $75 billion investment capital expenditure. Look what it is today. All the mining companies have come out with their results now. We're at $4 billion. I think Anglo is about $2 billion. The other guys are about $5 billion to $7 billion. Add it all up; we have capital expenditure of round about $25 billion. That is clear that we don't have new big production coming into the system, so that is pretty good. The chart at the top, the fundamentals, you can see what is happening with the supply -- what happened with the supply in 2016. If we take copper and iron ore as an example and the so-called -- what people missed -- I think got wrong in 2016, we all heard of the copper wall of supply, the massive wall of supply. That we were going to have new tonnes of it, a bigger mine of copper coming into the system. What people forgot is the existing production, who was -- what was decreasing. People forgot about us taking Katanga out of the market, taking a bit of Mopani out of the market. The grade is coming down at a lot of mines around the world. And they would talk about the new mines which were coming, the Las Bambases etc., they were adding tonnes. What they forgot about when they were doing the calculation, the so-called wall of supply, the mines that were depleting and less tonnage was coming out of the system. So 2016, the increase wasn't as big as expected; 2017, even if you take copper, we believe there's a 2% decline coming on production side because of the declining rates of a lot of the existing mines. That doesn't take into account the current strikes that we're seeing at Escondida and Grasberg and how long those may go on for. So 2017 will be an interesting year on the so-called wall of supply and how much copper comes into the market. The other graph, quite interesting, below; if you have a look and I've been in the industry for a long time, it's very few times I've seen no new big mines being planned to be built. Yes, there are some of the existing mines that are being finished around the world whether copper, zinc etc. Mines which are being built and are going to be built and they'll be in production shortly. But there's no big mine plans around the world. That's an interesting graph. If you look at the pipeline of highly probable copper mines at the end of 2016, it's now almost half of the pre-super cycle in 2001. Look at that. The amount of mines is now 50% pre in 2002/2003 that was in the drawing board that were going to come; we're now lower than 50% below that. That gives you an indication that there's no new mines being planned and coming onto the world supply over the next few years. With the declining grades at a lot of the existing operations, with no new mines coming in, that should bode well for the future. We thought we'd just put a slide on about Glencore's coal portfolio. We're the biggest producer of seaborne coal in the world. We've had the discussions on so-called stranded assets; that coal will not be consumed in the future and will decrease etc. So we thought we'd put a slide to give an idea. We all hear about demand decreasing of coal consumption in Europe etc., seaborne coal going down which is correct. And as you'll see from the slide on the right, in North America, in Europe the consumption of coal is decreasing. However, the consumption of coal and installed coal-generating capacity in Asia, you do see new installed coal capacity going up and that will need more coal going into the future. However, we do know there's renewables and the other form of energy production etc., renewables, solar, wind etc. That is increasing and we don't doubt that. But if you have a look between 2013 and 2030, a billion tonnes of coal equivalent being consumed in the world, even though coal is decreasing, no doubt coal is decreasing. It is going down from 29% of the world's energy generation down to 25%. However, in absolute numbers, we're going to still burn more coal in the world and we're going from 5.6 billion tonnes of coal being burnt in the world to 5.8 billion tonnes because of the new installed generating capacity which is required in the world. So, therefore coal will be resilient for the future. We do have this new bottom which is being set in coal by the Chinese. The Chinese have said they want to set the coal price around about RMB550. Going forward, that's where they want to keep it and we've seen the Chinese can do that, they can control it. We've seen what they've done from the 330- to 276-day productions during the year. We've seen the -- every week that we hear, we get more and more talk about it, when they're going to pull it back, when they're going to let it go, where they're going to keep the coal price. But it's clear they want to keep it at RMB550. That's what we get the feeling where they want to keep it. What does that translate to? That translates to around about -- if you take our type coals, we produce the better quality coals in Australia, South Africa, Columbia. In Australia it goes back to Newcastle coal, around about $73. That's a pretty good price for us going forward into the future. So, coming on to the last slide, Steve covered most of these points, where Glencore sit, how the Company's set for the future. What we like, we're pretty diversified. We've got a nice set of commodities. We've got a -- we're not dependent on one or two commodities. We've got the full range of commodities which -- and we're in all the various countries around the world. We're not set up in one country. We take the risk of one country, we've got less country risk and we're all over the world. So, we've got a nice base of commodities and a nice base of where we produce these commodities. As I said before, look at our costs. Our cost structures are exceptionally good. It's clear we have Tier 1 assets. We obviously hear the talk, Glencore doesn't have the Tier 1 assets, we have the second tier assets, etc. Yes, we've got a mixed range, some assets are not great, but those are used as trading tools. We run smelters, etc., refineries as trading tools. They assist us. But the bulk of our assets and the bulk of the income generation comes from major Tier 1 assets. As you can see, our costs and once again I emphasize including full cost of TCs, RCs, freight and royalties, it displays that our costs are extremely low across the base. Once again, we believe we've got the right commodity mix. We're especially a key supplier in the good commodities used for electric vehicles. We're a big supplier of cobalt and nickel and we believe that is going to bode well for the future. Even if you just look at nickel today, 100,000 tonnes of nickel is being consumed in the battery industry. Going forward we believe at least 300,000 to 400,000 tonnes of nickel will be consumed in that industry and, as you know, the market is about 2 million tonnes today, the total nickel market, so that should bode well for the future. We're in the mid or late cycle commodities such as copper, zinc and thermal coal, so therefore even towards -- when China does start getting built and they move to second-type rate commodities, we're in the right place for them. We have expansion, significant growth potential still to come onstream, as you know. We've discussed Katanga will come onstream. That will add 300,000 tonnes of copper during -- we will start that up in 2018 and it will move its way into full production between 2018 and 2019. So, Katanga will be coming onstream then. Mopani will come onstream -- the balance of Mopani, when we've finished building all the shafts will come onstream towards the end of 2018 and we have other brownfields which we could add when the time is right. We're not going to rush to do that. Once again, we're very supply-restrained. We don't want to be the ones forcing down commodity prices. We don't want to cannibalize our existing base by putting more supply on the market. So we will only put new supply on the market or develop any brownfield-type operations when we're sure we're not going to cannibalize or push down prices in our existing operations. And that's what I believe is key. Looking on the bottom, we're well capitalized. The building and all the CapEx have been spent. Steve gave details on that. We believe $3 billion sustaining CapEx, $1 billion expansion CapEx going forward, so we're comfortable at the $4 billion CapEx level. Talking about where we're going to spend the money, we're generating, as you can see on the right of the slide, we'll be generating free cash of $7 billion. Do the calculation. Our net debt at $15.5 billion, it should take our net debt down to $9 billion if we do nothing else, even after paying the dividend of $1 billion during the year. So what are we going to do going forward? Well, if there's nothing else to build, we're not big builders, as you know. If there's no M&A, there's no M&A. No reason we wouldn't kick out bigger dividends and we could kick out special dividends. So, you don't need to be a genius to do the calculation. We'll have an EBITDA around about $15 billion, your net debt will be down at $9 billion, we'll be at 0.6 net debt/EBITDA. We have room if we sit at the 2,1 net debt/EBITDA ratio. You can kick out a pretty big dividend to get you back to the $15 billion. You could take your net debt up to $30 billion, you're down at $9 billion. You have room to kick out a $20 billion dividend if you really want to get aggressive and there's nothing else to do on the M&A space. So, as you can see, we have said we'll run a 2,1 net debt/EBITDA. That's where we're going to keep the Company at a maximum. We're now down at 0.5, potentially going down to 0.6 if we do nothing else by the end of this year to the Company, as Steve said. I believe and I've been in the Company 33 years, we're in the strongest position we've ever been in. I believe the industry is a stronger position that it's ever been in and, as I said earlier, I've never seen a time in the industry where I don't know any new mines on the drawing board which are going to come and big production that is going to create a negative effect on the pricing. So I think the industry is set in a good position going forward. I think that wraps it up. We're ready for any questions. Q - Sylvain Brunet: Sylvain Brunet, Exane BNP Paribas. Just going back maybe to your outlook on zinc. Are we not even at the stage where the concentrate market is almost too strong for some of the downstream players and we're waiting for the negotiations on TC/RCs, are you not worried that if some smelters get into too much pressure, this could work more in favor of Chinese players in the longer term? Second question, as you mention safety issues, would you look into more automation at some of your operations as a way to address that? Is that applicable to some operations? And lastly, if you could maybe talk a little bit about your outlook about ferrochrome. We don't talk about that very often but that was another bit in your numbers, what you see happening there? Thank you.

Yes, okay on the TC/RCs yes, they are getting tight. Smelters are finding it tough. I think a balance has to come because we're going to need the smelters to survive, etc. so I think a balance will come there. Does it play into the favor of the Chinese? Yes, there is more smelting capacity, China is going to have to build more smelting capacity if the Western world shuts down, so that would -- I think that's what you mean. It would play into their favor, yes, maybe. But I think you may get a balance where you won't have shut-downs of too many smelters in the Western world. But it's clear, there is going to be more smelting capacity taking place in China in the future. We see it in most of the commodities already happening. So I think that's where it is. On the safety issues, I don't think automation will help. We're as much automated as we can be. Even in the problematic countries where we're, the DRC and the Congo, it's not a matter of automation's going to help; it's a matter of changing the culture and the understanding of the workforce of safety. You're dealing in an African environment and in certain places, as I've mentioned during the presentation, in Kazakhstan we sorted it out. There were problems in Kazakhstan and we did have issues and we did have safety issues but once we rolled out the safe work within the Glencore system, the Kazakh people working there, highly educated workforce, understood it, got it and they came on board and you did not have safety issues. The same will eventually -- it happened in South Africa, you had a workforce not as educated as you can say a Kazakh workforce but eventually you got it right in South Africa. So I believe you will get it right in the DRC and Zambia. It's got nothing to do with automation. We have the best equipment in the world in both places. However in Zambia it will get easier with the new shafts at Synclinorium and two new shafts being installed that you don't have so many transfer points and no doubt it will help the safety of the operation. So they are as much automated as they are, as far as mining has been, got, in those two countries and especially Zambia, when we do have these new shafts and new Synclinorium in place. Regarding -- you mentioned ferrochrome. Yes, ferrochrome's strong. It's clear, demand is good. The problem that generally happens in the ferrochrome market when prices do rally, a bit like the manganese market when prices rally, there is a lot of new ore that can be produced in places like South Africa. The same with manganese ore and once again, my situation that I talk about supply control, unfortunately when markets rally, people dig more dirt out of the ground and the problem with chrome ore and manganese ore, it's pretty easy to dig it out of the ground. There is infrastructure problems and railage infrastructure problems in South Africa which limits it a bit and hopefully that will allow the market to stay strong for a while.

Just two from me. First on latent capacity. Could you maybe frame a little bit more how you think about bringing this stuff back on in terms of timing, in terms of prices? And I guess, once you make that decision, how long does it take to ramp up? And then just super quick one on the second. Can we quote you on the $20 billion special dividend?

The special dividend, all you can say is do the calculation. That's all I can say. We said we're on around net debt to EBITDA, 2 to 1.

It's a timing issue.

I don't see my CFO allowing us to kick out a $20 billion special dividend in one shot. I'm just saying the calculation allows you to do that and I assume over time, if you're running a balance sheet 0.6 to 1, the CFO says the balance sheet's a little bit lazy, let's kick out more money. And us as a big shareholder of the Company, we're very happy to receive a bit more cash out.

But go back to that circle, where the green box is also important.

The top right. You've got to balance all those things. Just the timing.

Okay, so you can't quote me on that one exactly. The other part of your question was the zinc. Yes, the capacity. Look, what we've always said; copper we know. We've said when we're bringing on copper. That's pretty clear, it's nothing to do with the markets, nothing to do. Katanga will be fully bought by the end of this year, the Whole Ore Leach program will be completed by the end of this year and we'll start bringing on that production during 2018. How quick we'll ramp it up, let's see and we should get 300,000 tonnes ramped up over the course of 2018/2019, I don't know how quick they'll be able to ramp it up.

I think the market's got a 150/150.

150 in 2018, 150 in 2019, so I think that's where it will be by the end, we should be on 300,000 tonnes during 2019. That's pretty much said. Mopani, we'll be ramping that up at the end of 2018 or the concentrator will be built and the shafts will be completed and therefore you'll see that coming into production in 2019. So copper, we stated categorically where we will bring it onstream. On zinc, we're taking a bit more of a reserved approach. We said we will monitor the market, we'll assess the market and we'll bring it on in stages. Now you've got to remember three or four mines have got to come on and ramp up and increase. It will take a bit of time and it won't all happen, the 400,000, 500,000 tonnes won't come onstream immediately and we're assessing the market. We don't want to be the ones to bring on tonnage, as I said earlier, where it will have a negative effect on the zinc price. We'll do it at a time where we believe has no negative, the market needs those tonnes, we're not going to have a negative effective on the price. We're assessing the situation very carefully and we'll ramp it up in stages. Some parts of it will come on stream in five, six months, other parts could take longer, so we'll see. But it won't be the full 400,000, 500,000 tonnes in step, it will be stages over time.

Heath Jansen, Citi. Obviously marketing had a sensational performance in the second half, particularly in energy and also in metals. Can you give us any breakdown in terms of the energy component? I know you don't split it out between oil and coal, but just in terms of the driver. It seems volumes are up like 60% in oil and 13% in coal. Just any outlook going forward on that. Then maybe a question for Steve. Obviously we were sitting here 12 months ago and you were taking down RMIs and you were talking about a lot of low margin business that you're looking to strip out. I'm just wondering where that revised guidance now in terms of the marketing EBIT, what sort of RMI do you think you're going to settle out at in 2017?

The first part, yes, we don't split out coal and oil but they both had a good second half. Coal had a better second half definitely than the first half. Yes, they both performed well. Going forward I think the market is set up that they should perform well; coal will perform well with the higher prices, we've always said with higher prices, it's tighter markets in more arbitrage opportunities, blending opportunities, etc. The market is very arbitraged the way it is at the moment. You've got swings in the demand in India, you've got swings in the demand in China. There are three markets that really define, India, China demand, as against Indonesia production. There's a lot of arbitrage opportunity sitting there and blending opportunities. So coal performs well in that. Oil, yes, the contango is not as big as it was during 2016 and it's less today, that doesn't give the same opportunities, but as you know we've got a lot of other opportunities. We've got the Kurdistan oil, we've got the Russian oil, we've got Libyan oil, we've got a lot of new business in place where we can make decent margins. So oil looks pretty good at the moment as well. Overall there's nothing that shouldn't tell us, as we said, the $2.2 billion, $2.5 billion, we feel comfortable to hit those levels and that should not be a problem.

The RMI this year is going to reflect the price environment clearly of the day. From a volumetric perspective, we were slightly lower in volumes than we would have held at the end of last year in terms of winding back some of the contangos. Contango is a kind of cyclical trade as well, so it's a nice thing to do when markets don't offer all the other traditional constructive markets and blending and tightness and the like. It helps you get through some of the tougher parts of the cycle. Your holding balance, in terms of RMI, you may have more volumes in those times, but then you've got less in terms of carrying value because your prices tend to be lower in those environments. We did see a slight pick-up in RMI towards the end of last year which was about two-thirds oil, one-third metals, price-driven, a little bit of volume-driven. As Ivan was saying, oil pick-up in volumes, you've clearly seen that, it does come with a certain working capital carrying value that you need to work through. But we did still from the 2015, we did generally pull working capital out of that part of the business to sacrifice what we felt that overall the trade-off in terms of shrinking back, boosting liquidity, reducing perceived refinancing risk, all those things, was a sensible trade-off for giving some of that lower 8% to 10% type ROI type business. Certainly where we sit today we're in a more comfortable position to be able to take that up a little bit. I wouldn't say we've opened floodgates or anything at the moment. The $2.2 billion to $2.5 billion doesn't assume any tapping into additional RMI working capital. I'd expect levels to be the same, $2.2 billion to $2.5 billion. But we're in a position today where we can turn the tap on a little bit more.

The 2017 number that you had at the end of last year [Technical Difficulty]?

Yes, it should be, if oil prices go to $75 and copper goes to $8,000, it's going to tick up purely on pricing alone. And then our $14.5 billion of EBITDA is going to be sitting at $18 billion and you're off to the races in that thing. It's always a quality problem or a quality issue to sit here and explain some of that perspective. But volume-wise we're very comfortable with the normal volume side. It's not as if you tend to see contango opportunities open up in tighter markets. You normally would see a -- you might even see a backward-dated markets in those situations. So it's not like those things have just a pure financing, hold-store, lock-in that forward margin is necessarily going to be there. So it's going to be normal recurring business which is obviously going to come through. Comfortable on volumes. It's going to be a price thing that's going to push it up and down now.

Liam Fitzpatrick, Credit Suisse. Two questions. Firstly just on the marketing future investment requirements. What we've seen you do recently and in the past, is securing third-party offtake. And that's outside of your CapEx numbers. So is it possible for you to give us a feel for what you think the future investment requirements are, to maintain third-party offtake? And secondly, just on ag. I know Chris is sitting just in front of me, but it's now pretty small part of your business, so do you see this as part of Glencore over the longer term?

Third-party offtake is part of the backbone of our business on the trading side. And we need third-party offtakes. Some of it requires more financing, some of it doesn't; you do a lot of third party without the pre-year export finance. Some of it does. It's hard to predict exactly where it's going to be. But we're growing that part of our business with just third party anyway, because competitors are getting weaker, so our third-party trading is getting a bit bigger because of that. And some of it requires pre-finance, yes, we'll do it and we'll continue doing it. Now I can't predict how big it's going to be. And when commodity markets are higher, there's a bit less of that, because people don't need pre-payment. When the oil price is low, there is a lot of pre-payment in the oils part of the business, whereby you do get more tonnes by doing those pre-payment type situations.

And I was just about to say that we have still quite a lot of capital tied up in our long-term advances which is essentially these pre-export three- to five-year type structures. And that actually - it elevated levels. If anything, I would see them coming down, because it's in the down cycle when it's incumbent on -- there's less homes, there's less capacity to go and take on that risk. And we do need to step in carefully and manage it and bring in partners and do the stuff. But we've even seen which is an interesting transaction which we just closed about one month ago for Kurdistan, where we did look to provide some financing for them. That was all laid off. There was a high-yield emerging bond that was close to $500 million institutional private wealth markets that came into chase. Obviously a high yield. And that allowed us to secure quite a lot of extra business not on our balance sheet, as we might have otherwise through a tougher period. So, if anything, I see what we've built up over the last two or three years in a more difficult appetite for commodity risk, for sovereign risk. If things improve and we want to keep growing the business, we should be able to lighten up in that area, while still maintaining momentum.

We always come up with new ideas how we can lift that off. And as you saw, with the Kurdistan oil, as Steve says, we issued this bond which was the first time it was done. And it allows us to get more offtake with the Kurds. The second part of your question on the ag side. Chris can answer some part of it, but --

It was a shrink to grow, a shrink to grow strategy.

It was shrink to grow, as Steve says, yes, it's a smaller part of our business, because now we're only equity count 50% of it. But the idea of selling 50% was the reason that we did. It was to set up a structure where we can grow. We've always said in the ag space, we need to grow, we want to grow. We need to get bigger in the United States. It's a part of the business we miss. We don't have infrastructure in the United States in the ag part of the business. We need infrastructure. Infrastructure is the key to the business. You can't trade in the ag space without big infrastructure. So we need to buy infrastructure. We need to definitely grow South America and United States a bit more. Now we decided we didn't want to do that all on the Glencore balance sheet. It would have been big expenditure, there's big assets you'd have to buy. And, therefore, having a partner was a way to do it. Very similar to when we created Xstrata. Remember when we created Xstrata we were a private company, we needed outside capital to grow and get big in the asset base. And that's what we wanted to do. There were certain assets or certain companies we wanted to buy, but we couldn't do on the Glencore balance sheet in those days, while we were a private company. We set up a public company, where we used 60% of the public's money, 40% of our own money. We owned 40% and that was the vehicle that we used to grow Xstrata. The same in the ag space. We want to grow in the ag space, we don't want to do it all on our own balance sheet, we don't want to do it all with our own funding. So we said, let's own an asset, own a company 50%, with a strong partner. It had to be a strong partner. Xstrata, it was a strong partner, it was the public's money, a public vehicle. With this we could have either taken the ag business and made it public and taken the public's money or get a strong partner. And, as you well know, the Canadian pension fund wished to grow in this area, they had set aside a lot of capital to grow in this area. And they were the ideal partner and they came in as a partner. And they have set aside funding to grow this business. So as Steve says, the good wording is shrink to grow. And that's what it's going to be. Happy, Chris?

Yes, very happy, Ivan. You gave the right answer.

It's got a mandate to grow. That's how ---

And the industry is ripe for consolidation at the moment. The business has struggled a bit generally in the last two or three years. And I think to succeed you need to have the right scale, something in the U.S. would be good. And I think the timing is good for everything that Ivan described.

A bit like I've been talking about in the mining sector. The mining sector we're going to get it right. Consolidation actually helped, but the main thing is supply, not oversupply. And a bit the same that Chris is talking about, if you could consolidate the ag sector, you can get better return on the assets that we're not -- getting very poor returns. And as Chris said, the ag sector has struggled in the past with pretty poor returns on the big asset base they have, a bit like the mining industry. If you look, I think we once did a slide, the amount of billion -- trillions of dollars that have been spent in the mining industry since 2003 and the returns we've got on it is 2%, 3% at best. And I bet it's the same in the ag space.

Two questions, the first one would be on cobalt. We don't tend to spend too much time on cobalt and when I looked at the price the other day, I thought, well that's interesting. Doubled. Can you talk to us a little bit about what's happening there? Also, Steve, if you could just give the price that you're using for that $0.89 copper guidance. I haven't seen that. Secondly in terms of coal, with the chart you have with the supply decline happening on the supply side, do you see any opportunities within your portfolio to expand further organically here in thermal coal?

On cobalt, it's simple; demand is battery industry. The battery industry, electric vehicles is growing. We all know it's growing and there's going to be a bigger demand in cobalt for the battery industry --

All around storage and efficiencies and --?

Correct. That is growing and demand is growing. Supply is not -- it's 100,000 tonne market and as Steve says we're currently round about 32,000, 33,000 tonnes. When Katanga comes up, we'll be somewhat higher. We'll be a big percent of that market. Therefore, yes, are a major player there and we have the benefit of that and it has doubled. But remember, cobalt has been $40, $50 not long ago. I think before the crash in 2007/2008, I think that's when it was about $40, $50. Today it's doubled from $10 to $20. Let's see where it goes. But it's all back of the battery industry and that type of industry. What have you used in your $0.89?

Well, I see the commentary; I see each day it says another day, another dollar. It's been going $14, $15, $16. It's almost been like that over the last six weeks or so. When did we cut it off on probably Monday, $18 maybe? That would have been maybe around that sort of number.

That's what he's got in his figure, $18. Talk about coal, yes, you do have to declines. Coal is a very tricky market, the seaborne market. A lot of it depends upon imports into India. India is importing 160 million tonnes. It all depends upon what India does in their local coal production. If they are going to consume a billion tonnes of coal in India, well, their local -- they had about 600 million, whatever it is today. They've got to grow further their own production. Can they keep growing further to feed their own -- the growth? Coal India, can it keep growing and just leave imports at 160 million? So it's going to be an interesting thing, whether they've got to import more and how much the 160 million moves. The other big factor is China, naturally. I think China last year imported 160 million tonnes of coal. What is going to happen there? If they set the price at RMB550, what will that do to the imports? I think if you just take January and translate January into the year, you get 180 million tonnes imports. So we've got to carefully watch -- I'm talking thermal coal now, now just coking coal. We've got to see what happens in China there and what Indonesia really can produce. Do they grow, don't they grow, to feed this seaborne market. If Indonesia doesn't grow the feed the seaborne market, yes, then we may have to expand. As you say, with the declining rates going year on year, can we expand? Yes, we have certain expansion. We will go up in coal production. We will even go up in 2017 as opposed to 2016. We do have latent, not massive latent capacity, but we do have it and we can expand.

Well, there's lots of brownfield optionality.

Yes. But once again, we're not going to be the guys to put new supply in that will have a negative effect on pricing. Noting, we're the biggest elephant in the room. We have 135 million tonnes of coal production; so therefore, we don't want to add another 5 million where the benefit of the 5 million, it's going to hit and cannibalize your 135 million. That's something we really watch carefully within Glencore. The last thing we want to do is be the one that pushed down the coal price which affects our 135 million tonnes. So even though 5 million tonnes gives you a great margin, it may give you a good profit, but what people don't do when new supply, how it cannibalizes your existing tonnes and that's key.

Thank you.

Perhaps just to touch back on the cobalt point. I just wondered, you mentioned about supply elasticity with the ferrochrome and the manganese market and that intrinsic problem, that as soon as the price rises you find that the dirt if readily available. I just wondered, apart from your own footprint on the cobalt market, what your sense of that geological endowment is in the cobalt space.

Cobalt isn't a bit like ferrochrome and chrome ore etc., because it's not there. It's not there. As you know, South Africa chrome or manganese ore, it's there; you can expand it. Most of the cobalt produced in the world today, a big amount of it, is by-product. So that's where it really comes from. It's not big expansions. It's clear the DRC is where the cobalt expansion is going to have to come from --

70% of the world's reserves --

Is there. You do have the artisanal miners, but I think the artisanal miners is round about, totally -- I can't remember the exact figure but I think it's about 8,000 tonnes, I think it's round about there. Don't quote me on that figure but it's round about [Technical Difficulty] the artisanal mining and it moves very much depending upon what the cobalt price is. When the cobalt price picks up, you get more artisanal mining and then you get that exports going to the Chinese etc., who are moving that material. There are other type operations that could come in play. There's no secret that Kolwezi Tailings could produce more cobalt, these are the smaller type operations. But that -- it's a by-product, a lot of it's a by-product and it's going to take time to develop those operations. Tenke is producing but they don't have big expansion; now the Chinese in Tenke, they're producing cobalt also as a by-product but don't have massive expansions. So pretty difficult.

And the infrastructure and power are also constrained.

Yes, in a difficult country, a difficult area in which to just -- it's not like South African with manganese chrome or a little bit of infrastructure constraints but it's there, bring a few front-end loaders and you're in action.

And if you're a western company, non-Chinese, then you are restricted on where you can -- you have to establish the provenance of where that cobalt comes from so you can't buy from [indiscernible], it's got to be from us or another accredited producer.

Anna Mulholland, Deutsche Bank. Steve, could I just ask you are where you are on the coal hedge? Are you done with that now, what tonnes do you have outstanding if any? Another question on hedging you had quite a good benefit in your industrials EBITDA from currency weakening, I think you mentioned the tenge and the Argentinean peso on your slide. Are you going to look to lock in some of the current levels? I'm not sure how much of those currencies have already strengthened against you but it was quite a good boom to you last year. Yes, that's it just on hedging, thanks.

Okay. The coal hedging which we, back in June we spoke about 55 million tonnes, that was there at that time looking to have hedged a locked in pricing for 2016 and parts of 2017, so just to secure our cash flow generation. Obviously in hindsight, you could have opportunity costs of gains and losses on these things. Would it have been better off had we not done it? Yes, of course at the time but it still I think was the right decision at the time where we're, having been through a tough Q1 around energy landscape, the flattening of curves. And then you did have Chinese acceleration. Normally these things have stop/start, stop/start; it was a real boom and shock to the whole system that took it all up to the $20 up in a relatively short period of time. Of our 55 million tonnes, 44 million tonnes has all been delivered into and reflected in these results which was the opportunity cost of the $980 million that we spoke about. Coming into 2017 there's just 11 million tonnes. That's part of that. Now of course as Ivan said, this is a hedge that you see because it's in derivative sense, now it's just a fixed pricing of some coal. We also have obviously some tailwinds coming in or headwinds whichever way you think about it, as the Japanese, the last fixed price, settlements at September was done at about $94.50. Q1 of coking coal pricing was close to $300 I think, $285 or whatever that number is. Obviously spots are way below that, so you have in the real physical sense, you've always got an element of fixed and floating. But there's just that 11 million tonnes that will roll off this year, most of it by the middle of 2017 at an unrealized mark-to-market negative of around $200 million. But there's no cash impact of that per se because that's all been margined as well through these derivatives, so that's all been captured within the 2016 accounts. The hedging of currencies, no, we see this general negative correlation between prices and currencies, the dollar up, strong up and down, you see its effect even in the last day or so; that's one of the reasons that's been attributed for a 1% take down in prices in the last 24 hours, there's some tightening cycle dollar strengths and those things. But the strengthening of those currencies you speak about, Kazakh tenge and South African rand and obviously elections, there's various things coming up, let's see how these things play out. That's all been reflected in our current spot prices that we've given you, so of course we've taken the benefit in some of the price increases in zinc and copper and coal and the likes but it's been mark to market. Every six months that we come here and say these are our price on a spot annualized basis, that's all reflecting that.

Hunter Hillcoat, Investec. Now that things have improved there's a strong perception in the market, certainly amongst the big players, Glencore's the most aggressive, the most likely to pursue M&A. Do you think that's a fair assessment of the Company, given the opportunities you have or do you think the market's ascribing too much, that you're too wild in that assertion?

I don't' know. Yes, interesting. Are we wild? We haven't got much wrong, maybe Chad we got wrong, no doubt we called the oil prices up at the time. So whether you could use the word wild, I think we're a Company that started from nothing, we had to grow through M&A. We didn't like to grow through greenfields; you know my opinion about greenfields. As much as I can avoid them, I will avoid them. So we're not going to build anything. Maybe brownfields, but not greenfields. So M&A, yes. That's the way this Company grew. That's the way this Company was developed and we'll continue doing that. Not wildly. Carefully, considerably, we want to make sure we get the right returns. And as I say, in our history, if I look back, we've maybe got one or two wrong. Not many. This Company has built up to what it is today, a $60 billion company; hopefully a lot higher from M&A. That's how we did it. And the trading, of course, the trading which was generated. So we'll continue doing it. No secret we'll do it. We're always looking out. I always believe we see an opportunity before a lot of competitors because we deal with a lot of suppliers. We deal with a range of suppliers around the world. We know what they're doing. We have close relationships with all suppliers. And there may be smaller suppliers who are in financial difficulties; we do finance arrangements, pre-finance arrangements. Eventually those pre-finance arrangements we convert into equity and we take an equity stake. So opportunities come a lot more than just M&A which the banks or someone is selling or putting on the block or the banks are putting a block in a tender process. So a lot of the M&A you see we do quietly with a customer -- with a producer who we know and have a relationship. And that will continue opportunistically. Is there big M&A out there? I don't know. I don't see it right now, what makes sense to Glencore. There are certain assets, of course, no secret, we'd look at and we'd like. And we're always on the look-out. But opportunistically and at the right time and provided they give us the right returns, based on high expectation of future commodity prices.

And you also don't see -- it's about also the gel between the industrials side and obviously the marketing side. They're not -- there's no orphan assets that sit there somewhere and they don't actually plug into the overall flows and volume. So that's where you can, obviously -- the synergies with which that provides and obviously reduces your risk, in theory, should use up your returns over time as well. And a lot of things we've looked at in more recent times has been more augmented around existing assets, neighboring assets, where again the risk return profile is much more sensible there.

Tony Robson, Global Mining Research. Given that you're in danger of ending up with an A+ credit rating, jokes about $20 billion dividend aside, thoughts of special dividends versus stock buybacks. What are the implications, tax or otherwise? Most of the shareholders like that. Thank you.

Yes, I think we've taken a decision it will be dividends. Stock buybacks I believe is a risky feature because we're in a commodity cycle, so are you getting it right or wrong? So it's not like we're a stable earning base that you think, well that sort of earnings is going to be -- buyback's a smart idea because it's the right time to buy back. Of course, we can have our own opinion where we see commodity prices and think it's a smart idea and let's buy back shares rather. However, because commodities can move up and down and we've seen it, we've gone through 2015, we saw what happened, we'd rather pay out a special dividend and let the shareholders decide if Glencore is cheap to come back and buy the shares rather themselves which we may do ourselves. You've got to remember still 30% of the Company is held by management and if we think it's cheap we'll take the dividend and buy back shares. We've done that in the past ourselves personally. So I think that's the best thing in a commodity-type business, it's the better way to go.

Also, we have -- through the Swiss company, you do have through both the issue of shares with Xstrata and various other transactions that we've done, we have a big amount, multiple decile billions of these capital reserves that also allow the next $38 billion of distributions to be paid from a Swiss company free of withholding tax which obviously helps. And if you're a Swiss resident actually tax-free as well, without any leakage and transactions and friction of buying and all that sort of stuff. So it's quite a nice proposition from a shareholder perspective. So move to Switzerland, everyone. Simple. You'll juice up your returns.

Any more questions? Okay, well I think that's it then. Thank you for coming. Thank you for joining us on the Internet and we'll see you in six months, I guess.