Ivan Glasenberg - CEO Steve Kalmin - CFO

Liam Fitzpatrick - Deutsche Bank Sergey Donskoy - Societe Generale Sylvain Brunet - Exane BNP Paribas Menno Sanderse - Morgan Stanley Myles Allsop - UBS Alon Olsha - Macquarie Chris La Femina - Jefferies Tyler Broda - RBC

You can see the adjusted EBITDA of the group is $14.8 billion, which is up 44%. And adjusted EBIT is 8.6 billion, up 118% from 2016. Net income is 5.8 billion, which is up 319%. Funds from operation, 11.6 billion, up 49% and we are pleased that we will recommend a dividend for 2018, a distribution of $2.9 billion, which is $0.20 per share payable in two tranches in May and September. Marketing once again, the differentiation of Glencore, performs very well again and as we always said at higher commodity prices, be more towards the top end of the range. We always guide between $2.2 billion to $3.2 billion on the marketing. And when markets are tight, commodity price is higher. We are up towards the top end of the range. And as you can see, we’ve got an EBIT $3 billion, which is up 3% from 2016 and like-for-like because of the adjustment for the ag business, because when you account for 50% of the ag business, during 2017, as opposed to 2016, is really 10% up. Strong performance across the board on the metals and minerals and the energy product business on the trading, up 28% and 9% respectively. And as I said, the agri business was broadly consistent on a like-for-like basis in difficult market conditions and as you can see, against our competitors who have had difficulties, the ag business performed very well. Strong point of Glencore is our strong unit costs and our margin performance has naturally boosted the industrial earnings and industrial EBITDA is up 60% to 11.5 billion. Our mine unit costs and margins are generally better than the previous year. And as you can see, our cost of production across the board on our various commodities is really at the low end of our competitors, et cetera, really tier 1 assets performing very well on the cost side of the curve. And, post credit, copper is $0.87 per pound, zinc negative $0.16 per pound post credit, $0.10 per pound excluding the credit. Nickel 191 cent and coal we’re realizing $32 margins. So exceptionally strong on the cost performance across the board, which once again proves we really have tier 1 assets, low cost and long reserves. Naturally, there were some emerging inflationary pressures and ForEx impacts across the board on the costs. However, we were fortunate these were more than offset by the higher byproduct credits, which we're getting on the various commodities that we produce and that has contracted the inflationary cost pressure, which all miners are seeing across the board. As we’ve always said, Glencore has a conviction to create value through partnerships, M&A and organic reinvestment. We are not sitting on our hands. If opportunities present themselves, we always will react and if they make sense and they fit our business model, we'll look at them, but we do have strong criteria -- investment criteria whether we do go ahead with them. We've created conservative financial policies which underpin our balance sheet strength today and but also gives us flexibility. And as you are aware, our net debt is now down at 10.7 billion and we have set a range we would like the debt to stay within the $10 billion to $16 billion range, even though we want to keep a 2 to 1 net debt maximum to EBITDA ratio. We will still want to keep it within that $10 billion to $16 billion range. So it keeps the cap, even if the EBITDA goes up, we will still not allow the debt to go above $16 billion. If you just look historically, what we did during the year and improved opportunities presented themselves to us and we invested $1.6 billion in capital efficient growth. You saw we bought the Volcan stake. We bought the Mutanda stake, but along the way, we also did other partnership type transactions and this is a strength of Glencore, because of our relationships across the board, our strong trading activities and our relationship with various parties are on the board, we were able to do these type partnership where we don't give up the entire asset. We form partnerships. We did the Trevali transaction where we merged our assets into Trevali and we sold all the 25% stake and we have the marketing rights. We did oil storage business with HNA, they’re now HG Storage and we own 49%, they have 51%, but we still utilize those storage tanks and we have the benefit of that and we have a strong partner for future growth in those businesses. We formed BaseCore, a royalty stream business with Ontario Teachers and we’ll use that as another vehicle where we can grow our business. So we'll continue to look at these partnership type operations where we can grow our business together with partners and we can utilize the strength of them. We did in agriculture business the year before. We formed the joint venture with the two Canadian pension funds and we used that as a vehicle to grow our business. So this is the strength of Glencore where we can form these type partnership opportunities to grow. Expansionary CapEx was $1 billion with a total CapEx of $4.2 billion. Safety, once again an important feature of Glencore. We do employ 146,000 employees. So we have a large amount of employees as opposed to our peers. We do operate in difficult areas around the world and what we call our focus areas where we really got to change the culture in those particular regions and we did unfortunately have 9 fatalities during the year. That is a big improvement since 2016 where we had 16 fatalities, but we -- it’s a first year without a multiple fatality incident. We continue to work in this area -- the one area we did have a lot of success is African Copper where we only had one fatality in 2017, which is the lowest in history in one of these asset regions and this is where we have spent a lot of work. It seems that we’re achieving success there, but we still have a long way to go, having nine fatalities through the group. So that gives you an idea of where we sit overall, the position of the company and Steve will take you through more financial details. Thanks.

Thanks, Ivan. Good morning, good evening to those that are on the webcast or on the call as well and I'd like to take you through Glencore’s financial performance for 2017 as well as provide some forward illustrative guidance in respect to volume, costs and EBITDA generation in the business as well. All these points on the financial highlights page are otherwise addressed on the pages to come. So not going to drill too much. It's in terms of that improving momentum and trajectory in Glencore of the 14.8 billion of EBITDA, it's quite interesting just to look at it in the two halves as well as we had during the year. So the first half of 2017 was 6.7. Second half really was 8.1 billion of that 14.8. So you can already see the trajectory in terms of margins, in terms of volumes, in terms of marketing performance, we’re on the right track. And as we look forward, particularly in the industrial side, we’ll sort of show you what the capability of this business is from obviously ’18 and beyond. If we move on to the next page, as Ivan mentioned, marketing is starting to continuously hit its straps it's done over the last couple of years. It's been a while since we've had a 3 in front of that number as well at the EBIT side, notwithstanding that we sold 50% of the agricultural business effective 1 December, 2016. So this sort of [indiscernible] we just converted it also like-for-like to show you that there's been underlying, at least in the metals and the energy side, we've seen some decent growth, good like-for-like had we still had 100% of agricultural this year, if you just double the 192, you would have seen a 10% improvement year-on-year there. Metals and minerals, as you can see, continues to be the engine room with sort of 2 billion. That does reflect the fact that underlying that sort of engine, there is many different facets and many different businesses and many different commodities. You've got very big scale, global franchises within that business across copper, across zinc, across aluminum, across nickel, increasingly iron ore, you've got the cobalt, you've got ferroalloys, you've got manganese, there's many facets of that particular business, some of which have been sort of contradicting at levels not seen in recent periods of time. So good performances generally across the board. Energy also solid performances across both coal and oil with meaningful contributions in that close to $1 billion performance. Pleasingly, we've seen some volume kickers come through, having been a little bit more slow in terms of volume growth in as much as the market itself was sort of slow on our own suspension and curtailment of some facilities in zinc and copper which we did through ’15 and ’16, ferroalloys, low planks, some of those things to some extent. This year, if you look through the marketing attributes, you can see some good volume growth. Copper 14% up, zinc 40% up, ferroalloys, 14% and on the crude oil side, we saw a 33% increase of course transactions and partnerships like we had with Rosneft and that structure with Qataris that was formed last year. Some of the African business development opportunities that we've had as well across the board is contributing meaningfully on the volume side. Agricultural side, it's not particularly material in the overall scheme of things, but just to sort of shine a little bit of a light on it, given the market dynamics and the general challenging environment. At the cash generation aspects of this business, at an EBITDA level, you actually saw year-on-year improvement. You can see a 7% there if we just double up 2016 to 2015. There was additional depreciation this year. So at the EBIT level, you can see the contraction of 26%, because as part of the accounting for that 50% retention of that stake we had in December 2016, we effectively have to re-measure the historical base of the business to the same entry price that the Canadians brought in that business. So we have got an artificial extra depreciation charge, non-cash that's coming through like for like in the marketing side that's just a feature, a little bit of a way that the business is going to bear relative to its historical cost. But on an EBITDA level, we’ve actually seen a 7%, which is quite pleasing in the context of that business as well. If we look then at the marketing, just another page on it, you've seen that sort of 3 billion. We’re maintaining the guidance, 2.2 to 3.2 that is supposed to be an all season guidance range. As we sit now in 2017, you would say there would be an instinct to say we’ll chop off the bottom, maybe increase the bottom, but it is supposed to be there for all seasons. Memories are still fresh in terms of cycles that can happen in this industry, 2.2 to 3.2. We’re suggesting that based on these current conditions, we should certainly be towards the upper end of that range as we look in 2018. And we've always pointed to a few factors that would get us to it that would lend support to that upper end of the range, all of which we can now put a tick next to those factors. We've said production and volume growth. We’re seeing that come through as I've said on the previous slide tied to physical market conditions. We're seeing that in many commodities, deployment of additional working capital. I'll show you a little bit of a slide and talk a little bit about RMI and higher interest rates, which is starting to come through in terms of some tightening cycles, all of that's factoring into attributes that will take us more towards the upper end and this is a business that has consistently produced very high returns on equity, continues to do so notwithstanding sort of discussions and debates around at some point, barriers to entry, when do people want to come and grab that sort of, I think we've created quite a unique franchise around high barriers to entry and ability to generate consistently high returns on equity in that business. If we just turn over to the industrial side, as Ivan said, we're up 60% to 11.5 billion. We'll look at some cost and production numbers on the next few slides as well as you would expect given the scale and franchises we have, particularly in coal and some of the bigger metal businesses, that's where we've seen the increases on that particular side. So clearly high commodity prices is the primary driver. There's no denying that clearly there's that leverage to that businesses, of course, higher prices is going to have, what you take in one hand, you're going to give away a little bit on the other hand through some inflation as those very high commodity prices themselves are feeding through into some of your input costs. So we are a big consumer and procure of the likes of diesel and explosives and general CPI is going to work its way through the system, cost of construction material, steel, development projects if you like as well. So that's the nature on the way down. We sort of say, well, you're getting some sort of relief from lower cost inputs now using some of that stuff, but we'd still categorize it as a fairly modest, as not particularly tight, as not something that is overly material in terms of the business and we'll talk about that cost trajectory as we go through as well. Very strong EBITDA margins. So we've followed the 38%. That's a blend across the metals and mining business, of course, there is highs and lower depending on the structure of those markets. We've got copper and zinc at higher levels, something ferroalloys and nickel might be slightly low, which brings the blend to 38%. And of course, prices has had a big factor. You can see on the waterfall chart, 6.3 billion of pricing variance that is made up in the copper/cobalt, which is where that commodity that more than doubled this year is manifested in terms of results. That was 1.9 billion. Zinc, 1.1 billion of price variance, nickel 0.3, ferroalloys, 0.4, coal, 2.5 and other 0.1. So 6.3 is clearly the big factor that's gone in to those. As we'll work through some of the numbers on the next chapter on that graph from the top right, we would expect to be here through August and hopefully in 12 months’ time, on spot illustrative 2018 prices towards the end of January and volume guidance, we’re showing 16.8 billion of industrial EBITDA for 2018 on an illustrative sense. That would be another 46% potential tick up based on spot price at the moment and the volume guidance, which we'll talk about a little bit on the next page. The industrial bridge, there were some negative factors of course on volume and cost volume was primarily copper and coal, 8% down in copper. Factors that have been well reported on and discussed during the ongoing production performance. We saw lower production through consumable and power available in Africa [indiscernible] little bit slower on that side and coal, down 3%, primarily due to weather and strike related actions. So that clearly is going to have a volume impact and the associated cost impacts, but you can see, unit performance, it’s still been very solid as we work our way through the system. If we then look at what our cost trajectory, I think Paul, if you can just go to page 21, I think it's important to just look at volume, which is clearly a driver of that. It's in the appendix, but I think it's important enough just to focus for a minute as well. Nothing's changed here in terms of volume and production guidance we gave at the investor update back in December last year. So the near term volume pick up, which is going to have a factor in terms of both performance EBITDA and value is in near term, we've got copper, 1.31 up to 1.465. That’s up 12% volume growth, primarily due to Katanga now coming online with its first train, 150,000 tonne copper, 11,000 tonnes Cobalt. Performance is great. There’s been a successful commissioning down there. We've also got material volume growth in cobalt clearly, up 42% this year, 27% to 39%, given the pricing environment there that’s quite material catalyst. That's primarily Katanga, 11,000 a little bit of it Mutanda and some of the other operations as well and coal itself, if we look a second from the bottom, up around 11% from 120 to 134. You've got HVO that's baked in there, 49% share, which would be between 7 million and 8 million tonnes on an annualized basis. We've assumed we're going to get about nine months or so of that coming in plus the restoring of normal operations post some weather and strike related action during the course of 2017. Longer term, which will also feature into some of the modeling and thinking, so you've got more 2017 to 2020 production outlook. At the bottom right, you can see copper, 25%, cobalt, 133%, zinc, 19%, lead, 25%, nickel, 30%, ferrochrome, 6%, coal, 14% and oil, 39%. So quite material volume growth across all the commodities. We went through this back in December. I'm not going to repeat it, but you can see the projects that we did spend a bit of time on some of the projects and we gave a page on each of those to do with in Kazakhstan, the iron ore and the nickel side, of course, the African business as well. So if we then jump back to the unit cost, which is clearly a factor as well, you can see some improvements generally in mine cost and margins across the businesses from 16 to 17 and continuing on through 2018. Some of that inflationary pressure, some of which is passive. I would regard as sort of good inflation, because it's really getting offset through the price and that's a function of just the CPI impact, the weaker US dollar on the currencies that's coming through some of the diesel and fuel costs that’s coming through, nothing we can do about that. That's a factor. It's as good as we run the businesses and it’s a good efficiency drive as you do. You can have that coming through, but as I said, you sort of get three in one hand and pay out one in the other. So, copper, we were flat, unit cost, this is as we've discussed, there's a feature of Glencore’s building blocks that we've given over the last few years. These are fully loaded, fully baked in numbers from which to sort of mathematically calculate the volume times price expectations you have for a full EBITDA. So, it captures all the cash costs, all the ancillaries, all the royalties, all the freight costs, the TCRCs, the smelting businesses that we have within the business as well. So copper was sort of steady year-on-year, clearly help us on the byproducts, both in zinc and cobalt. We've seen quite a material downshift from $0.87 to $0.80. Katanga, of course through volume and others is a factor, byproducts is helping there. The only change we've done relative to December is that, now Katanga is finally a part of this unit cost blended calculation at the 1.5 million tonnes or so we’ve done. We’ve previously had it, excluding those given their ramp-up phase and we had a placeholder I think of around 5 million, but that's fully in those numbers as well. The coal, the other big part of the business now based on some Newcastle benchmarks, pricing the end of January and our mix, we're looking at around a 37% margin there. You've got some cost increases, but again, it's really passive, coming through royalty related increases, which is based on the price itself. That is just a flow through as you add that to the prices as well. We could maybe separately itemize that in the future as well, just to show the linkage against that. You've got the higher diesel costs, you've got currency movements clearly there. You've seen quite big strength in rand, which is sort of a double-edged sword there. It's good in terms of what's happening down in the country, but the strength of the rand is clearly having a material impact down there in a market where it's not necessarily the price set, like it is in ferrochrome. You would expect ferrochrome potentially to be able to pass that additional cost benefits on. Nickel also improving through byproducts and some increased volumes, which we’ll see coming through in 2018 and zinc continues to power along byproducts, it's a big factor there. Lead and the various precious metal streams as well. So if we look at actuals and then later on in the slides, you’ll see [indiscernible] using those volumes, you will see a big shift. We've got copper, 4.4 billion with the EBITDA industrial 2017 going to 7.1 billion, illustratively 2018. Zinc goes 2.6 to 3.5. Nickel, 0.6 to 1 billion, which is a nice movement and starting to present itself in a more positive light and coal, 3.9 up to about 5 billion as well. If we look on the next page, just to highlight the CapEx. Nothing new beyond what was said at the investor update in December last year. We're looking at a 4.5 billion average CapEx 2018 to 2020 to deliver, to sustain the business and that growth that we were talking about on the previous slides. That was lifted up from the previous about 4 billion. We gave the reasons back in December and highlighted the various projects that were part of that particular projects. 2017 CapEx on the industrial side was 4 billion, which is bang in line with where we've been guiding throughout the year. So nothing to add there, unchanged from the December. Obviously from a financial perspective, a nice slide to look at. And presiding over, my day job is getting very easy in this company. As you can see, very conservative capital structure, high liquidity levels, manageable maturity profiles. No debt maturing in terms of maturities more than about 3 billion. The shape of net funding and net debt from where it peaked in about 2013-2014 to where it is at the moment, we maintained our financial policies around commitment to strong BBB, AA. I think we're on target with these metrics to get there. S&P, we’re BBB with a positive outlook, Moody's at Baa too. I would suspect these ratios would -- and trajectory and financial policies would be rerunning the numbers in the next month or so post the thing. Just to spend a couple of minutes just on RMI. You would have seen that go up the sort of 5 billion. If you looked at pricing movements during the course of 2017, from the start of the year to the end of the year, collectively, you would have to come up with a number that says it's not going to stay at 17. We've got prices in our coal commodities. Copper was up 30% during the year, start to finish. Zinc, 30%, cobalt, 130%, aluminum, 32%, nickel, 28%, lead, 24%, oil about 25%. These are big movements. They all blend out to anywhere between 25% and 30%. RMI itself was up 30% during the year. So there's a very strong correlation between pricing and where we ended up the year. We've attributed and calculated RMI down to -- of that increase of around 5 billion, 3.5 would be passively attributable based on volumes in your core sort of supply chain than working through the system at roughly 45 days. If you take the volumes, we even give the volumes in copper, nickel and everything that we do, take annual volumes, put 45 days or so as an average sort of conversion cycle across this and you time to the movement, you're going to get to a number of sort of around 3.5 billion in terms of the RMI. That’s reflecting the price environment at the end of December. It was around 1.5 billion, which we would attribute to deploying some inventory funding around some attractive risk adjusted opportunities that invariably happen in markets also from time to time. Some of the timing can also equally present themselves during 31 of December period when you've got the industry itself is looking to do a little bit of housekeeping and you find some loose tonnes and there is clearly an opportunity temporarily, go in there, the returns on equity from a Glencore business in terms of our coal companies take that inventory, fund it for a few months and eventually generate some meaningful EBIT. There was some of this clearly contributes into that good marketing performance, the 3 billion performance we were sitting at the beginning of December and still sort of talking towards a 2.8. You've got all these positive effects that were coming that were hitting us towards the end of the year as we ultimately delivered at the 3 billion. If prices stay where they sort of are at the end of January, driving that 19.7 billion of spot EBITDA, we were generating about free cash flow towards the 10 billion. There would be no reason and nor would we allow RMI to sort of go up from these levels. If anything, I think that's a cyclical cap. If prices go up, copper is 10,000, oil is 140, well different story, better off, you're going to see that, but our EBITDA will be 25 billion or so at that stage. So these are the factors we have had that's a natural consequence. We've seen the reverse side of that as we’ve gone through the last couple of years. A couple of years ago, I was standing up here and saying, there's been a sort of a 5 billion release of working capital by the same factor in those business. So that free cash now is going to flow through. We're at these periods that reflect now the prices of the day. Even as we look towards, this was a particular point at the end of December, as we closed at the end of January, we'd already reduced RMI by about 1.5 billion or so, just from that one month and as we rolled out some of these opportunities that were there at the end of the year. If we go onto the next page, again a slide that would be reasonably familiar. The capital allocation slide and the cycle, the circle, it's more of a square now as we’ve gone. Martin, thanks for squaring it up. 2017, those factors Ivan alluded to some of those, we had paid out the fixed distribution last year. We did 1.6 billion acquisitions, made up of Mutanda, Volcan and the like. So, bit of Yancoal as well that was part of the two tier transaction that we did with the purchase of HVO. It was also to put 300 million into a capital raising that they've done. So, we’re still the proud holder of about 7% of Yancoal as well, which is nicely in the money at the moment. And our net debt, 4.8 billion of the free cash flow generation aside from those few things we've done has move towards debt reduction, getting us down to the lower end of the 10 billion to 16 billion range. As I've always said, that would be a trigger getting through 10 would be a trigger, a catalyst in the absence of some other deployment opportunities that may present themselves, but irrespective of that, the numbers are just going to be big by virtue of applying the billion and 25% of industrial free cash flow. That would be a catalyst to potentially materially increase the payout ratios beyond what they've been. And already now, it went from 25% to just 36%. The potential would be to materially increase and conceivably it could be 100% payout ratios. There's no upper limit here in terms of that we've seen other ones, say 40% to 60% or no more than 50% whatever, it could be 100%. Let's see how we sort of present going forward. So we've got all the equity cash flows bottom right, 7.7 billion and it just flows it so from the circle as we've, which is translated into those improved graphs around that trajectory, debt coverage ratios, our net debt to EBITDA is now at 0.7. It's going to be sort of, it will be [indiscernible] in terms of being able to mathematically calculate that ratio. Ivan is probably working out, 20 billion net debt times 2. There's a lot of surplus capital that currently being generated relative to financial targets as well. Clearly, there's an opportunity come the interim results in August to look at the top-up of that distribution of the $0.20 we've come up with, given that financial strength and how we see the world at the moment, but we can take -- August is always going to be a live date, also in terms of looking at some of those distributions. As a sort of mechanical payout ratio, as a percentage of net income, it's come out at 52%, but at the end of the day, you're paying distributions out of cash flow, not net income, which is how our approach tends to work. But just mathematical, if you want to look at that and some people focus on it, it is a number out there. Just to close it out there, just to add a little bit of complexity to the team here and how we’re looking at balance sheet and numbers. If we go to the next page, just to show you the Volcan. So the accounting mechanics and the treatment of this particular acquisition, as we said, as Ivan mentioned on the 9 of November, there was a tender process for us to secure a decent chunk of the voting shares, which we had already pre-agreements to almost go beyond the 50% as part of that tender. The voting class A, we moved from 21% to 63%. There is a huge non-voting float within the Volcan continuing. So with all that at the Volcan moving up to 60 odd percent, we still only have an ultimate economic interest in the business and moved up from 7.7% to 23%. So it's still a relatively low economic participation. There is a big free float. It's a public company, as you all know, listed on the Lima Stock Exchange. It has all the checks and balances. It is not a Glencore entity for purposes of financial inclusion. They have their own structure, they’re ring fenced, they need to fund themselves and we’ll be a participant for the foreseeable future in a financial sense through some dividends. Not too dissimilar if you like from Century Aluminum in which we have the 50% stake. We had an equity accounted from our own business and that's where you see it coming in the numbers themselves. By virtue of having moved over the 50% threshold on the voting shares on to IFRS, we've had to consolidate the business into our and the financial impact, if you just look at that page, on the right there, it has had the effect of having quite a material explosion in a couple of areas of the balance sheet as well. So despite only putting 730 odd million towards the purchase of those shares, we've had to take in financially on to IFRS 4.6 billion in property, plant and equipment, consolidate the whole lot and you can see a very big 1.7 billion non-controlling interest, which reflects the big 77% free float there. By virtue of the ring-fence nature and because it was, I mean for cash flow and EBITDA, there was nothing that came into Glencore’s financials in 2017. We booked a bit of revenue, but EBITDA, net income was 0. Through the course of 2018, our current intention is, yes, we would go to IFRS consolidate, but we’ll desegregate that and present this business as if it's an associate. So just picking up, our share of the 23% of that business through the net income, through the cash flows of that business and you've seen, we've made the adjustment then to the statutory net debt numbers, we've included our -- we would have been 703 million higher, but we've taken out the 703 million, which is the Volcan net debt. That's found its way on to our balance sheet at the end of December. We're not doing this from mainly being clever or through magic. In fact, Volcan’s – it’s a zinc business at the moment and silver is generating a lot of cash. It has 700 of net debt, sort of for a while, it's going to continue. If it continues in that vein, this business is going to be net debt free in a little while as well. So as a mathematical translation and contributing to our business, it could be -- it's just not appropriate for us to be bringing 350 million, 400 million worth of EBITDA into Glencore’s business, when we've got this 23% economic ownership. So that's where we're going to be in the foreseeable future. It's obviously a watching fall in terms of whether there is some increases in terms of how the governance actually functions in that particular company as to whether it starts looking and feeling like a Glencore entity overtime. At the moment, we’re clearly integrating. We’ve got board representation. We’re parachuting in people to help across various financial, technical and operational sides. We would hope that that adds. It was clearly a synergy angle to this business and where we can work closely with this company, we have operations in Peru. We've been a commercial partner with these guys as well, but this again provides all the building blocks and how we've treated it and how we internally look at this business as well, which is how the financials are ultimately there to present to everyone. So with that, we will hand back to Ivan for some closing remarks. Thanks.

Now that we've all had an accounting exercise on Volcan, let's look at the overall business of Glencore. As you can see, I think we've got a great commodity mix. It's very compelling going forward. We believe we are in the right commodities, what we have now determined tier 1 commodity mix. We used to talk about tier 1 assets. Now we can talk about tier 1 commodities which I believe is very important. With mostly exposed to the mid or late cycle commodities and it's clear that’s the area we're moving into. So we’re going into the mid cycle commodities, copper, zinc, nickel, aluminum and the late cycle commodities, cobalt, thermal coal, agricultural products. We don't have the PGMs and diamonds, but we definitely have a compelling commodity mix. And breaking down the different commodities, if we look at where the markets are sitting, et cetera, copper, it's clear there's a looming supply challenge. We all know that demand for copper is going to go up, but the copper market today around about 23 million tonnes. If we get 2%, 3% growth around the world, it depends on what happens in China, but you're talking about another 500,000 tonnes, 600,000 tonnes of copper is required per year. If you look at the supply, we all know there's been a massive underinvestment in new mines in copper. The only new mine that we see coming is in Panama and that should come on stream, but besides that, there has been a total underinvestment in new copper mines. We all know the grade D clans which is occurring around the world and we know the elevation of strike which will occur in Chile, especially during this year. So the risk of supply disruptions, but no new supply is very relevant in copper. And if demand does grow there 500,000 tonnes, it will be an interesting outcome there. Cobalt is clear, the electric vehicle story. We all know the studies that have been done on the growth of electric vehicles and where it will end up being. We've seen investments, the motor car companies are making in electric vehicles and they will need battery supply. So the demand for electric vehicles is strong. It will require a lot of cobalt and we all know the geographical -- geological scarcity of cobalt. You can’t mine pure cobalt. It’s not like lithium. It's a byproduct mainly of copper and nickel around the world and the bulk of it comes from the DRC. So we know the demand for cobalt and this is an alternative method of making batteries, will be strong and the supply is relatively constrained. Zinc demand is increasing in the emerging markets. We know that for galvanizing and there's been an underinvestment in new zinc mines. The growth that we were expecting in China did not occur because of the environmental restrictions taking place at the zinc mines in China. So therefore, the big growth that people were thinking would come in zinc is not coming and the demand grows, so once again, a commodity we believe there is supply restraints. Lead, the same applies to lead, with a robust battery and energy story dynamics and once again mainly also byproduct of the zinc mines, under investments and once again the environmental restrictions, which are occurring in China. Nickel, demand, once again, electric vehicle batteries, critical alloys, or stainless steel growth, et cetera, where that’s occurring in the world. And once again, no new nickel mines have been opened around the world, but which you’re getting in Indonesia, the pig iron production that's occurring, nickel pig iron occurring in Indonesia, but it's taking time and not growing as fast as people expected. So limited supply coming in nickel. Sulfides are declining around the world. So therefore, we see it already there's a shortage, reducing the stockpiles around the world and we believe there's going to be an under supply once again during this year and we're going to have to reduce the stock piles around the world in order to feed the demand for nickel that's occurring around in the markets. So once again under supply there. Thermal coal, I know there's not a loved commodity, but once again it is powering the Asian growth and urbanization, which is occurring in the emerging markets. Demand continues to grow in emerging markets and once again underinvestment in supply. You don't see new coal mines being built around the world. And where you do see the increase of new production of coal, it is occurring in Indonesia, however, in volume term, in metric tonnes, it is growing, but in heating value, in fact, there's no growth because we're getting declining value being mined from these various mines and the CV is reducing considerably. So really when you see production increase, it's not really heating value increase, which the world needs. So it looks very good. Also we see what's happening in China where they did restrict the amount of coal being produced because of the pricing. We now have higher prices in China. It’s up, they put a cap on around about 750 renminbi that accounts, if you work back and do the adjustments for quality, it gets back to Australia around about $100 if they maintain the 750 renminbi in China. So looking pretty strong in thermal coal. And one thing I emphasize, you got to remember, there's no new mines being produced around the world, develop besides in Indonesia, which is lower heating value and you do have declining production because the mines eventually will come to an end and they have a life of 20, 25 years and some of them are soon coming to an end. So we see it in South Africa, we see it in various parts of the world where you will have reduction of coal production occurring there. Okay. Looking at the next slide, the business of Glencore once again resilient and proven cash generated business. I talk about industrial tier 1 assets and tier 1 commodities. It is a new term that we've introduced. We always used to talk about tier 1 assets, and I believe tier 1 commodities is important. As I emphasized on the previous slide, Glencore is diversified by geography and commodity mix. You've seen it. We are today and you saw the numbers Steve showed the production numbers going forward whereby copper will grow to 1.6 million tonnes, coal 134 million tonnes, cobalt, 65,000 tonnes. So really, we are the major producer of cobalt in the world. Cobalt, zinc, nickel, we may a bit lowered our number three, thermal coal, seaborne thermal coal, the largest in the world. So we're really a major producer of what I believe are the tier 1 right commodities that the world's going to need going forward. And as I said before, these commodities have persistent industry supply challenges and robust underlying demand, which therefore deemed for the company. We have sustainable low cost. You saw the numbers where our costs are going and with the byproduct credits, so we have low cost, lowest, I believe, the lowest cost in most of those commodities produced in the world and we have long life assets. There was always concerns. We don't have long life assets and our reserve base is not as long as people expected, but you can see we have long life, low cost assets and clearly tier 1 assets and tier 1 commodities. I’d only talk much more about the marketing. It's been proven that it is a high return on equity type of business. It's unique. We won other few mining companies who have this alongside our production side business, which assists us in all part of the business. It helps us recognize asset opportunities for future growth. We know what is happening in the markets and it gives us a lot of insight and once again is resilient and as we said, the $2.2 billion to $3.2 billion EBIT to the business and these very defensive. As you can see in the slide on the right, it’s resilient even when commodity prices fall, drop. It has been resilient and it is not linear to commodity prices. The big future, as we said, at today's spot prices are on the forward curve, more towards the forward curve on the coal price. We would generate around about $19.7 billion of EBITDA, generate $9.6 billion of free cash. And that's how we look for 2018 posted out to 2019 as Steve indicated with higher production figures that are occurring in 2019 that will even be higher than that level. So very cash generative at current commodity prices and very high EBITDA going forward. So what is our outlook? I think I’ve summed up most of it in this discussion. And as I say, leading tier 1 commodities, once again, we have great assets at the tier 1 commodity outlooks is underpinned by this limited supply. We don't see where the supply is coming from and we believe the demand is there, the demand in China continues to grow, whilst the Chinese consume close to 50% of most of the commodities that we produced, what’s happening in the electric vehicle industry, we’re the best place for that out of all the large caps. We get that advantage, what’s going to happen in electric vehicles with the demand that's required for them in copper, cobalt and nickel. Cash generative, a unique business model as I said, tier 1 industrial assets, very low cost producing, long term life, marketing highly generative and once again emphasize how the EBITDA will look during this year at these current commodity prices and the free cash flow that is going to generate. We've always said we are able and willing and we wish to grab business. We're not going to sit on our hands. We see a lot of opportunities because of the trading side of the business where we know what everyone, what's happening in the business. We see what opportunities are around and when they do come around, we will react on them. You just go to look last year, Volcan, because of our strong relationship with the people in Volcan when the family was ready to sell, we knew about it and we were able to pounce and take advantage of that situation. We look at growth. We don't just look at growth for growth sake. It's going to be cash flow generative and we look at cash flow. We will look to grow our business. That’s why we are more M&A, rather than building green fields. You know my feeling about building new assets and green fields, you don't get the cash flow for a while. And eventually when you do get it, you may have overspent and it doesn't generate the true turns you want. We've always said we – I will cut back a passive, we think we’re oversupplying a market and we'll do the same on the other side and we'll reactivate the idle capacity as you saw we did with our zinc corporations. We may believe it's appropriate, we have a lot of low cost brownfield options that we can add to our existing business, bolt-on acquisitions. We always look at different synergies we can have with next door neighbors, as you saw, with Hunter Valley, the opportunity occurred last year to purchase the Hunter Valley operations. The main reason to purchase the Hunter Valley, we have the mines next door. We all know about the synergies that exist there. So we're always looking for those opportunities. And if you look at our track record on investments, it's been pretty good in the past. So we'll continue to look opportunistically, see what opportunities come out there. There is no big situation to the company, we want to grow just for growth sake. We wait if the opportunity presents itself. We will look at it and provide it is cash flow generative and reach our high hurdle rates that we have within the company, we’ll go forward with it. And as you can see, 2017 was a good example of which opportunities presented itself to us and we reacted on them and they’re very good cash generative assets we added to the group during 2017. As Steve mentioned, we will have a conservative -- we have a conservative financial policy today. Optimal net debt 10 to 16, net debt to EBITDA less than 2. Steve said we won’t have ourselves rated and he's not allowing me to have that big dividend, because as you can see, he’s put the cap on the net debt at 16 billion and we'll maintain the dividend type policy, 1 billion on the marketing. A minimum 25% on the free cash flow from the industrial side of the business. And as you saw this year, we delivered a 36% free cash flow. And as Steve says, later on in the year, we'll have a look at the balance sheet and we'll see what we do whether we increase at all, what type of investment opportunities present themselves. So I think that gives you a summary of how the group operates and how we intend looking at the future. Looking very strong with the right commodities, very low cost production as you saw on the cost production slide, growth going forward in those commodities. So I think we are well placed for the future. Thank you. Q - Liam Fitzpatrick: It’s Liam Fitzpatrick from Deutsche Bank. Two questions. Firstly, the obvious one on the DRC. Post the news, can you just give us an update on the situation timeline from here and so on. And also linked to that, have you seen any reaction from your cobalt customers to that news? And then separately on zinc, the market's very tight. So far, you've only restarted Lady Loretta. Is the 2018 volume guidance setting stone or is the potential for further restarts as we go through the year?

Yeah. On the DRC, it's what you read. It's clear they wanted to change the mining code. We've seen the ideas that they got in the mining code, the industry have got together and believe it should be consultation with us, the mining industry. It's been sent to the President from what we hear, I’m not sure, but from what we’re hearing, he has not signed it yet. Hopefully, there will be consultation in the mining industry and the DRC has got together to discuss this with him and it's a wait and see situation. So we don't know much more than you’re hearing in the press as well. How, the motor vehicle companies feel about it. It's a concern, I'm sure. We haven't heard, but I'm sure they got to look at it and monitor just like what we’re doing because it's going to create underinvestment in the country, of course, if the code comes in at the way that it's been drafted the way we see it. And yeah, that will be a concern that can the world produce as much cobalt that is going to need if the belief is that electric vehicles, by the year 2030 will be 30% of the vehicles produced, you'll need a lot of cobalt for that. So what happens in the DRC is going to be very important going forward. On zinc, Steve?

Well, I don't think anything in 2018 now, Liam, because, you've got some lag times in these sort of things as well. So I think the 2018 is largely baked in with the lady Loretta restart through the first half of this year and we said 100,000 tonnes that that sort of features in. Obviously, we sold the African assets to Trevali, which is why we're net-net flattish. But in sort of like to like, we would have been about 100,000 or so up. Antamina is also going through some higher zinc areas. So the other areas is really Peru and some other Australian sort of options that will weight up as time goes on. So I think as we get towards, when May we’ll give our Q1 production, that would be an opportunity to the extent that there's any material adjustments, we’d obviously do that. But as we stand at the moment, even we’re holding the zinc production for 17 to 20.

Sergey Donskoy, Societe Generale. Two more questions on DRC if I may. One, if you could provide some color on how the ramp up of Katanga is progressing and if you could provide any updated cash cost guidance. And second question on DRC, more generally, there are reports of political situation becoming less stable and some parts of the country are becoming less – becoming more violent, maybe, what is the situation around your operations there. Do you see any risk of disruptions because of all this instability?

I mean, just in terms of Katanga, it’s a separate listed company. So we're obviously limited to what we can say beyond their own reporting requirements they have there -- they'll be reporting their own full year results with 60 days Canada. So by the end of February, they'll have their own results. So you'll need to go by their latest guidance, which is still the 150, 300, 11,000 tonne cobalt this year, 34 and being able to average around that period. They are under the same continuous obligations as anything. So that if there's anything material to update beyond that, they would have done that already. So you can assume that that's still the way it is in terms of their cost guidance. Again, we can't give specific cost guidance beyond what they may give as a standalone entity, but from what numbers have fed up, we've baked in their cost performance and numbers into our $0.80 as we look into 2000, but we’re not able to go into more granularity on the Katanga in terms of news on the ground.

And news on the ground, you go to remember, Katanga, we set down in the Lubumbashi region. It's right down in the south of the Zambian border. We haven't seen disruptions over there. So there is no -- even when there have been further problems in the northeast of the country, that's been -- it's happened there, very little happened on in the Lubumbashi area. So we haven't seen it for the moment. Now it's clear we cannot talk about the politics, what's going to happen there? So we just go to wait and see whether the elections take place at the end of the year.

Just two quick ones from me. First on the dividend, so Ivan, last year, you were talking about 20 billion. Just the other one for me is on the marketing. You did three, four acquisitions last year. A lot of those seemed to be designed to feed into marketing. So I’m surprised with Volcan, with the HVO operations that you're not raising the guidance spend on those marketing earnings.

Look, the dividend as we said, where I said 2 to 1 net debt to EBITDA that was where the joke occurred, we have said the earnings would be, EBITDA would most probably be 15 billion, the 14, 15 whatever we said on this. So two times could have allowed us to pay a 20 billion dividend. That was the joke. But now, we have said we want the debt around between 10 billion to 16 billion, net debt. We will still maintain the 2 to 1 net debt to EBITDA. So that gives you an idea. Yeah, it could be stingy because so we will generate $10 billion free cash this year. We will take the debt down to zero, but then you do have the dividends and you do have, we still got to pay for HVO, potentially the Chevron asset in South Africa. So most probably, net debt would be down in 5 billion unless we do nothing else. And if you work on Steve’s 16, yeah, it does give you room of course. But we got to sit tight. We will wait and see what happens in August, what other M&A may or may not occur in the company and then Steve will have to review the dividend in August you said.

Which I say is also a matter of priorities. I mean, we've said our sort of sequence of priorities. Let's get the debt down to the 10. That's the catalyst to lift it. Let's get the BBB, the strong BBB sort of locked in. So you can sort of looking after your, obviously the different constituents of the structure, the cash is not going anywhere. I think we're as good as stewards of that cash for now in terms of internal holding on. We've got the opportunity in August then to come back and say, the outlook, let's see the cash flow generation, let's see the sort of opportunity set as well around what happens if that's a more benign environment, which it is difficult to buy assets today that meet one’s return and you do generate that sort of cash flow. Then, the top up is, as I said, well and truly alive in the August period. The money is not going anywhere. I mean, we currently – we’re on a free cash flow yield, I don’t know, 12.5%, 13%, 14% whatever money, I mean the dividend yield is moving to 4%. That gap is now. We've gone through 10 billion that’s locked in the positioning around the structure. That gap has the potential to significantly narrow and it's not a matter of years. This is live in in a matter of sort of months.

Lot more enormous. We’ll have a look. Is our $20 billion real? Is our free cash flow $10 billion real? Do these commodity prices hold? And then, we can assess it. Marketing, why wouldn’t we? Look, let's see. We got the Volcan, we got the Hunter Valley. Of course, they would present opportunities, basically Hunter Valley, the blending opportunities, et cetera with our tonnes, third-party tonnes, et cetera and we just got to really get to grips with it and see what it does give us. We don't know about it yet. We're just getting to grips with Volcan and we'll see how it will affect that.

Yeah. I mean I think the key thing is ultimately the scale of business that would be at the time you sort of say you've got meaningful appreciation and scale the business from one point to the next and is that the trigger then to take a sort of 2.2 up to 3.2. So, you’re starting to see signs of that scale improving, clearly in zinc and I mean we always had baked in the organic side of the business. These were latent capacity that we had in Africa and some the shuts in zinc. So that was never incremental, but your sort of Volcans and HVOs and you do Chevrons and you have some of these things at some point and let's see where the agricultural business goes. I mean, I'm sure there will be a question on that at some point, so I’m just printing that. That sort of question is going to come at some point. If that business itself sort of changes a bit over time and we keep 50% where that we end up, does it do something, does it do nothing, I mean obviously, we're obviously alive to opportunities there. That would be another sort of volume scale catalyst to potentially move things up at some particular point in time. But for now, it's still a sensible range, given cyclicality in this business, but we’re pointing towards a delivery in the upper end.

Sylvain Brunet with Exane BNP Paribas. You talked about the ROE of marketing. In the past, we had the equity based work out the numbers, could you confirm we took in probably more than 30% ROE as a guide. The second question on cobalt debottlenecking, would there be other opportunities to add more as the one you've announced or was that more of a one-off without requiring more CapEx. And lastly perhaps on the DRC, of course, moving situation there. But what would you say is an acceptable -- would be an acceptable outcome for the mining court?

Firstly, the last question, I cannot comment what's acceptable. We go to get into this negotiation. If the negotiation takes place just like what's happening in South Africa, where the new President has agreed that the mining industry will discuss the new code together with the minister of mines, I hope the same occurs in the DRC. And if it does happen, all of us as a group will get together the mining minister and try find a resolution. Exactly, what that is naturally, I cannot say today well and it's what we would all accept we would have to get together and see what is reasonable to adjust it if we do want to just it, because we do have an agreement in place already. The other question I think was to you on the ROE, Steve.

30% plus. We haven't given a specific number on that, but you can -- I mean you can see the sort of the marketing working capital and we've sort of historically had your 80-20 percent type we’ve shown on the dividend sheet at the back around the sort of earnings that sort of come from that. So certainly 30% plus comfortably on the marketing ROE this year.

On the Cobalt, I think what we set out in the growth of the cobalt taking to 65,000 tonnes was the figure, I think that's about it. I wouldn't expect that to expand much more. With our existing, if we buy something or something like that happens, that's different.

It’s Menno at Morgan Stanley. Three short ones. First, if you surveyed the field out there, you see clearly no greenfield as you pointed out, but quite a bit of Brownfield, including your own. Is that starting to concern you a little bit in terms of the momentum that is, all those Brownfield expansions are creating. So not only your own, but also the others. Secondly, do you think as a company you're now too big in certain commodities to take the next step in terms of M&A, or do you think given the growth in the markets since the Xstrata deal, you now have sufficient room to act in all of those? And finally on China, clearly the environmental measures you mentioned a couple of times, they must have some positive outcomes also for your smelter fleet in the rest of the world as they start clamping down. Is that business under earning at the moment within Glencore? Is there a big opportunity from these smelters going forward?

The smelters are doing well. They definitely, with China, with the cutbacks in China, they're suddenly smelting in the west, it’s not as bad as it used to be. So smelting is good. We also – they’re still tight, these CRCs, but the smelters give us good trading opportunities or so and that's where we like the smelters having that advantage today. But going forward, let's see what happens with the shutdowns and how many smelters do really shut down in China and let’s see what happens in the TCRCs going forward. Other one, too big in certain commodities that could we grow, let’s just go to your brownfields. We have some brownfield opportunities, not they are good. We're not going to bring them on unless as we said we will always look at the markets. We don't want to be the one to bring on capacity and push down market. So we'll be conservative and ascertain when is the right time to bring them on. I don't believe the industry has massive brownfield opportunities, I don't know where you see them. If you look at cobalt, they definitely don't have them. If you look at copper, I don't know where is there, zinc, no one has them. So there is not many brownfield opportunities in these commodities. Of course, the brownfield opportunities in some of the other commodities we see it in iron ore, et cetera, but I don't see those brownfield opportunities that you talk about in these commodities and that's what I say, in most of these commodities, there is limited supply. We have always said, we will look opportunistically and you saw what happened in 2017, opportunities presented themselves to us. Now if you had told me this, that the beginning of the year, in 2017, would those opportunities come, were they there, we didn't know. The opportunity occurred was Volcan because of our relationship with the family, et cetera that came. Yes. Hunter Valley, our economy exactly when we did the deal, but yeah, we're trying to do the deal, but when it was uncertain, we'd do it. We did a deal with the Chinese eventually after they were the winning bidder. So that opportunity came. Chevron, the opportunity came, you didn't know. So I don't know what's going to come going forward. Are we too big in certain commodities? What's big? So as long as you don't have antitrust problems, there are certain mines where you can't grow because of antitrust and then we'd have to assess it and see where the difficulties would occur. When we did buy Xstrata, because of antitrust the Chinese did, we did have to dispose of Las Bambas and the same with [indiscernible]. So yeah, it could happen, but let's see. Copper was still 1.6 million tonnes in the 23 million tonne market. I think we will have room to grow, put it that way.

It’s Myles Allsop at UBS. Couple of questions. First of all, can you talk about your ambitions in the agri space? So you’re still as keen as ever to grow in US area, obviously, there is some moving parts. And secondly, maybe going back to the DRC because everyone seems to ask the question, but what's your relationship with Gécamines like at the moment and is contract review, is that something we should be concerned about and what come back do you have, if they do implement a new mining code as it is, do you have to go through the codes and what's plan b for you guys?

Yeah. In the DRC, what is our relationship with Gécamines, it's a partner in Katanga as you are aware. They still own 25% of Katanga. We are talking to them on the recapitalization. So, we'll see where that gets to. We cannot comment much more on that. I mean you said on the Katanga board, not much more we can say about that. It is a separate company as Steve said earlier. What can we do? Yeah. You do have the proceeds go to the code. So we do have agreements in place and if the new mining code changes, the existing agreement, which is in place, there is an opportunity to go to court. Hopefully we won't have to go there and I hope we will find a resolution. This is similar to what happened in Australia with the mineral -- in mineral resource tax, which came in place. The mining industry got together and we eventually did have a discussion with the government and there was a solution for it and so I'm hoping that the same will occur here. But as you say, I cannot give you guarantees. We will see where it ends up. Ambitions in ag, sorry, forgot that, trying to avoid that probably. Ambitions in ag, we did set up ag business with a joint venture partners with the two Canadian Pension funds. The idea is to grow that business and we continue to look at opportunities. We have clearly said we would like to grow in the States, but as we said earlier, it's not growth for growth sake. It's got to make economic sense. The ag business is in a poor state. It does need consolidation. We would like to be part of that consolidation and we'll wait for opportunities like the rest of our business, if and when they come.

Alon Olsha, Macquarie. Just three questions. Two related to costs. Cost inflation obviously establishing itself as a big theme now. That's part of the cycle, certainly with your peers. Could you highlight areas in the business where you're feeling I guess the most acute cost pressures, what you're monitoring the most closely? And just the second part of that question is could you provide some of the assumptions underlying your cost audience around some of the key byproduct prices and currencies? And then the third question is just on South Africa, new political dispensation there that’s emerged, potentially very positive. It's still early days, but are you thinking potentially differently about South Africa, if things do develop in a positive direction. Could you see yourselves reinvesting back in the country.

Steve can talk about costs. I'll take the first part of the question, South Africa. Yeah, it is positive. It looks, we all are sitting positive with Cyril Ramaphosa coming in as the president. It should be good for the country. Unfortunately, it is going to affect your cause, because the rand has got stronger. So, it’s a win loss on each side, but that is good for the country. So it does bode well for the country going forward. And so yeah we are happy to invest in South Africa, even under the old regime, we still continue to believe South Africa would be okay as an investment opportunity. We did Chevron still under the old regime. So we’re always happy to continue investing in South Africa. Of course, now you get more confident about the future with a new President, but we never pulled back out of South Africa and we continued, we have big investments there with our coal, with our ferroalloys business over there and hopefully with oil refinery day and distribution units.

Alon, on the costs, for the cost guidance that was used, it was all the macros of the assumptions at the end of January. So if you look at what all the prices were in the January currencies, at the end of January, that sort of set the set the markup from both a byproduct and a currency factor and all the other cost inputs frankly of which probably the oil price as a factor into the pricing of diesel and all the other attributes was clearly coming in. So it's a fairly up to date number around those cost assumptions. I would say all the cost pressures that we’re seeing is generally those passive currency and commodity flow through, which is having that inflationary side in terms of dollar cost. We’re not seeing any other particularly notable rampant areas of and CPI linked, CPI is going up and some of your agreements are linked to CPI adjustments that might be in contract, things that might be in some of the wage agreements that you might have as well, but the fact although the commodity prices are high, it's not a, given the capital that's being sent on this to the sort of competition for labor and work and intensity and the sort of normal factors that would feed into it is no way near where things were back in the 2007, 2008 sort of period as well where you were having to scramble around, just to get basic sort of talent around in a technical or geological sort of fashion that you have as well. So I would -- nothing particularly notable. It's 90% plus would be just as passive sort of flow through. So it would mathematically work through the system. We're not seeing anything that -- and individual countries of course to the extent that I mean Australia's obviously got energy, got high energy inflation down there, because of some arguably some bad policy management around how it’s managed sort of transitions and these things. So things like the refinery in towns, what we have there have to go towards sort of getting a new long-term power agreement, which could have been worse, but it did -- it was quite a big increase because of what happened down there.

It’s Chris La Femina from Jefferies. I have a question about your EBITDA waterfall chart on exhibit 9 and unit cost on exhibit 10 and also a question about the cycle. So first on the EBITDA waterfall chart, if we take 2016 EBITDA, 7.2 billion, add the impact of price, that gets you the 13.5 billion. But then you have $2 billion of reductions due to cost inflation, et cetera, which is a little surprising when your unit costs in each of your segments other than coal are either flat or down. And when we think about kind of 2018 on spot prices, that $19.7 billion of EBITDA, are we expecting and what portion of that increase from 2017 to 2018 EBITDA is a function of price and then what portion of it is a function of those other factors like volumes and costs actually being a tailwind for you rather than a headwind. That's the first question. Does that make sense? Second question on the cycle, maybe kind of related to what Jason was asking about projects. The fact that we're maybe entering a higher interest rate, higher inflationary environment, does that -- is there a danger here that mining companies begin to focus more on growth and less on capital returns when we think about the benefit of a 5% dividend yield, but when interest rates at zero, that's great. When interest rates are at 3%, 4%, suddenly, there's maybe more incentive to invest in growth rather than capital returns. And ultimately, do you think there's a risk here that higher interest rates, higher inflation is a catalyst to kill the cycle or is that not something that we really should be worrying about at this point yet?

Okay. Quite detailed questions there, Chris. We probably need a few hours to run through, if we want to get into the weeds of some of those questions. I mean, 2017 was a period where we were still adjusting volumes to being in sort of containment and supply constraints around sort of looking to sort of accelerate markets, getting to a more sort of tighter period. So we, if you take ferrochrome and some of these things, you've seen if you look quarterly across our different volumes, there, you've got a very volatile market and from time to time, you’re able to accelerate maintenance, you’ll bring things forward, then, you'll sort of turn things on. So we went through a period over the last couple of years across most of our commodities, where some of it was clearly also focusing on optimizing around the book. So we had to see -- we did see some -- there was some volume reductions as we went from ’16 to ’17, which did feed into that. Some of which was planned, some of which was unplanned. I mean, these things happen from time to time in an industry. I'm pretty confident about our volume guidance this time around as being sort of more on the conservative end. So let's see how we deliver there and we’ll come through in quarter one. So the volume impact we had there was, there was power issues down in Zambia, which that operation then lowered output for a while, which in turn had the flow-on effect of reducing asset supply across the border into Mutanda, which then impacted some cobalt and some copper production down there. So you've seen quite a material impact through that supply chain come through. You've seen the strike impact over in Australia. I think we've quantified that across the New South Wales one that’s relatively short, we still have one up at Oakey creek. I think that was the best part of 6 million, 7 million tonnes at least, some weather related issues in Colombia, a few sort of great things. So those, I would say sort of parked it down to specifics of the ’17 and now we are going copper, coal, cobalt in particular, you'll see that not acting as a tailwind. And the two of them work together. When you have those volume reductions, you will have some impact on your costs as well. What we've had to do also in Australia during periods where you have some strike action like you bringing in temporary work forces and contractors and the likes of it. So you’re just keeping the lights on in a sensible way ultimately. But that's incurring shorter term some added cost to the business as well. You've also got these other, which I would categorize as positive -- more passive cost impacts, which would -- which we put into that cost line. Arguably, you can put net of pricing. Some of the royalty adjustments if you like in coal as well. So we think higher royalties Colombia, South Africa and Australia. They are feeding into our costs. They’re totally linked to that improvement in the coal price. Arguably, you can push that revenue linked over into there as a net cost impact as opposed to some sort of headwind that you have. The increase in fuel costs in passive and diesel and the weaker US currencies which also contributed the sort of 322, I would also argue that that's in the sort of that good consequential cyclical passive inputs that come through. So that should, I'm and obviously the byproduct helps in our business and maybe we more endowed in some of the byproducts. It's a function of fuel geology and these things and you have it or you don't have it and we happen to have a good portfolio mix across there, which is sort of as we then march from ’17 and hopefully moving up 46%, you're going to see, I don't think, I mean, you shouldn’t see, other than that positive revenue linked inflation passive flow through, I think you're going to see green, green, green, green, green, as we sort of look towards that box in 2018.

[indiscernible]

I can’t give you specifics on that at the moment, but it's not going to look like the shape in terms of these things. It's going to have positive volume clearly. Cost is only going to be a function of inflation and those factors that come through. Byproducts which we said is the way that we've held our unit cost is going to come through the price line. The Cobalts, the zincs, the leads, all these products and zinc and the likes is going to come through price and not through the -- in terms of unit costs, that's how the industry tends to report these things. Now, we can report in a variety of ways, but that's how we look at these particular projects and the quality of the cash generation from a zinc, from a Katanga, from a Antamina, from all these other businesses that are contributing with significant byproducts and that FX is going to be a bit of a tailwind for now. Let's see what happens with the dollar.

And then on the other part of your question, the growth and higher interest rates, higher interest rates naturally improves inflation. So we've get higher commodity prices. So that’s the upside. So maybe with higher commodity prices, yes, our competitors and everyone is going to look to grow and you will eventually have the greenfields starting. And it's going, well, it's going to have to have it at some stage. If you believe what we've said earlier with the demand growth, copper going 500,000 tonnes, et cetera and what’s going to happen in a lot of the commodities and the decline rates in a lot of the existing assets today, we're going to have to have greenfield at some stage. However, if you look at the various different, firstly everyone is being put on hold. You guys have -- investors have ensured that now it’s all about cash flows, return of cash to shareholders, which everyone is disciplined and is doing that today and there is not a big rush to build new operations. And it's one of the first times I've seen in the industry where if you look across the industry, how many new mines are being built today in all commodities. We talk about Panama, where else is the new mine coming on stream. There are a few brownfield opportunities, which we discussed earlier, but not many. There is not many, maybe 9 or there is, but in our commodities in copper, in zinc, in nickel maybe, there is stuff where people can expand on in Indonesia et cetera, there is a nickel or nickel pig iron can be produced. Thermal call, Indonesia is tougher as I said earlier. So I don't know where you’re going to get these big, okay, brownfield is not there, big greenfields, not that many, who owns those reserves. So it's getting tougher and most of these greenfields are going to be in the more difficult countries, look where you got to go today. We're not going to the easy countries, we’re not going Australia, you’re not even going South Africa. There is greenfields down there. So where do you have to go, you're going to go to DRC. Yes, and you have Ivanhoe over there, trying to develop Kamoa, you’re going to get Mongolia, you are going to Russia, there will be potentially growth in Russia. When does it eventually get to develop, but I don't see many of the big money companies running to those areas today. So people are going to have to have courage, but it's going to be difficult, because you're going to areas, limited infrastructure, harder to develop the mines and more difficult regions and with the mining code, potential of mining code is changing as we’re just experiencing in the DRC today. You don't have the same stability that you get in the better countries. So I don't see many people running to these Greenfield areas today, so it's going to get tougher.

Tyler Broda from RBC. Just a quick one for me. Just on the coal portfolio mix, I see in the EBITDA reconciliation for spot that it's a $16 impact at the end of January versus 10 at the full year. You mentioned at the footnote, it’s the hard coking coal and as well as HVO, but could you just talk about some of the dynamics going on there.

That's a mathematical thing, Tyler. I mean for us, it's -- I mean we're trying to give a sort of putting into right buckets. So everyone sort of can see a Newcastle price on their screen, but coal is hugely segmented across different qualities, different markets, different grades, different blends, different origins, some markets stronger, some markets weaker in any particular time. So you've seen some of the premiums and discounts between certain types of coal that’s been -- I'm not going to say record levels but they're at much higher levels than maybe would have been either expected or even historically I mean witnessed, you're seeing in iron ore, you’re seeing it in various other grade factors. So what we do? We could have just given you an average realization and it could be done, but we always like to start at a Newcastle, a benchmark price because that drives a significant part of our volume, but that doesn't necessarily drive the Colombian realizations. It doesn't drive all of the South African realizations, it doesn't drive all the Australian realizations either. I mean, the thing about HVO is actually it does tend to take you more towards -- way too more towards that market, which is ours. So it’s just a mathematical calculation when we do all our numbers, run all our pricings at a particular point in time, we started at a Newcastle benchmark, I mean, work our way. So the high that number may come at any point in time, clearly, it's reflecting some of the indices and discounts between different origins and different realizations and also the way what we do inside that number as well, we effectively treat the -- because we're a small player in the coking coal market, it's almost treated like a byproduct for the purpose of that build up in EBITDA. So where you had the higher prices that we saw in -- towards last year when you saw what -- close to the high 300s or something, now, we're in the sort of 200s or something, the semi soft, and that's been a very volatile market clearly as well. That the high of that is it also mathematically now is a discount there in terms of the byproduct, the sort of net realization if you apply it over the 130 or so tonnes. So it is a complicated overall build-up of cash generation given qualities and exposures and blends at the time and it just reflects the byproduct of coking and the different quality at a particular point in time and we’d look to -- that's why we do try and guide in that area as well we sort of can because it's not easy, I mean we obviously model it. We have all the drivers to be able to do that. It is the hardest one for you guys at the room in the marketplace itself to be able to, at any point in time, appreciating exactly what's happening across all the different blends and realizations and some of that is lagging because you've got pricing that might be quarterly, you've got some annual -- this sort of reflects also some of the realizations that we expect.

And there is so many different brands of coal within the group, even just within South Africa. If you talk API 4, that's a guideline but then we've got many different coals, which is shown traded API4 and the discount to API4 and you’re selling today into India 4800 kilo of coal as opposed to API4 which is a much higher kilo of coal. So the discounts and the discounts vary from time to time. So, that's the tough one to sort of get to the right number.

And we'll try and guide an upgrade as regularly as it makes sense because that is the one that one needs more of a steer around how things are developing that market compared to the other, so much simpler.

And just as a follow-up, there's no real correlation then between higher prices, meaning, a higher portfolio mix discount in thermal prices, if they go up. It's just been a dynamic about the markets?

It's a dynamic relative to the gap between the higher and lower pricing and what the coking coal impact is having in that particular mix as well.

Just on zinc. Could you just give us a sense as to how you see the market evolving over the next couple of years, because we have got Gamsberg, Dugald River, New Century and yourselves ramping up. There is quite a lot of supply it feels, more than we've seen for the last 5, 10 years sort of coming into the market, so the outside of China. And then just the recent starts of domestic ore produced in China seems to have stepped up a bit. Do you think China has sort of addressed some of the environmental issues and would your base case be that China keeps grinding down in terms of mine supply?

Look, you got to look at the zinc market, 13 million tonnes, what is growth over the emerging markets and galvanizing which we spoke about, assuming it grows 3%, et cetera. So you do need more supply. Now the question is you talk about, we've gone up, we haven't gone up much. What we are adding this year, besides the thing, a 90,000 tonnes around about there. And we will be cautious on the balance. What else is coming up? You do have the one mine shutting in South Africa and the other mine coming on from Vedanta that will add a bit, but nothing big, because you do have the one shutting down, what’s it called, Gamsberg. So there's not. At Century, we talk about Century, let's see what happens with Century. I don't want to talk about another company, but they are taking an old pit, I don't know the exact numbers, they’re talking they're going to be producing. Let's see what eventually happens there. We talk about China, look, commodity prices, zinc rallied last year. We got up to where we got 3,500, et cetera and everyone was expecting Chinese production to increase. It didn't, in fact, decreased. So the environmental restrictions are taking its toll. Going forward, hard to predict. We’re just starting, okay, we’ve hit Chinese New Year. Let’s see Post Chinese New Year, we had high zinc prices, do we expect them to continue to grow. Talk to our zinc guys, it’s hard one to call anything that happened in Chinese, more difficult to call, but we don't see it right now.

One quick question on hedging, any thoughts about especially in the case of thermal coal, with the forward curve is pretty robust right now. Any thoughts about hedging future production there?

Look, we took their hedge a while ago when the balance sheet was in the top of shape it's in. We wanted to -- the cash flow is there, de-risking. We also sold a lot on index and we wanted to lock out the next. We do have fixed pricing today. We continue having fixed price. You don't see it on the hedging, in the mark-to-market, the Japanese settlement is fixed pricing. It’s not mark-to-market, because you're selling the actual physical coal. It's not the index. The other one was where we sold into Europe and a large amount of coal was sold on index and you wanted to hedge it. We continue selling a large amount of coal on index. So I don't see anyone -- we have no reason to it from a financial point of view where we see the market, we don't think it's necessary to hedge. So we’re pretty relaxed we don't have hedges right now, but we do have a lot of index sales and the time may come where you may want to lock out some of those index sales and then you will have your mark-to-market on hedge, but we have a lot of -- we will have, as we fix our Japanese pricing, we've done a certain amount. We will do more. I think it's towards April or whatever it is, we will do our next pricing. That will be locked in at a price. You won’t see it. It will be announced as usual, but you won't see it on the mark-to-market on the hedge. So, there is a bit of hedged coal in that type of area.

But the drivers that sort of led to that sort of hedging de-risk decision back in, what was at the middle of second quarter 2016 or so, at the time, are sort of completely different with where we are today. So if there is any other things, it’s more likely they will be short term, more tactical sort of things that happened, but nothing on that.

Thank you. Thank you very much.