Paul Smith - Head of IR Ivan Glasenberg - CEO Steven Kalmin - CFO

Liam Fitzpatrick - Credit Suisse Menno Sanderse - Morgan Stanley Rob Clifford - Deutsche Bank Research Sylvain Brunet - Exane BNP Paribas Jason Fairclough - BofA Merrill Lynch Tyler Broda - RBC Capital Markets Andrew Keen - Haitong Research

Good morning. What we're doing today is, as we said, we're delivering on our early decisive action which we said we're going to take after our half year results.

So all this Company is about now is deliver what we said we're going to do and put the Company in a great position going forward. So what has occurred?

We all know that we've had softer markets in 2015, very difficult commodity markets with the prices coming down on the back of China, weakness in China, etc., oversupply in the markets. We've had a very challenging market and we all know with commodity prices what they did in 2015.

However, even against this backdrop, we delivered an EBITDA of $8.7 billion. That's 32% down on the previous year.

And if you look at the industrial assets, the EBITDA is $6 billion. That's 38% down.

The marketing, $2.5 billion, once again displays the resilient nature of the marketing business, which we've always said is not linear to commodity prices. And, even when you have commodity prices coming off, the marketing is still pretty resilient.

And, because of the array of the different commodities we have, and Steve will talk later about the different commodities, how they performed in the different sectors, you will see the diversification definitely works in the marketing, where ags was down on the previous year, you had the oil business very strong and, therefore, that assisted overall in the marketing. Also, as you can see during our first half, it's not a business that really can run over the full year the same result.

And, as you will recall, the first half we only had a marketing EBIT of $1.1 billion affected a bit by the premiums, the stainless steel market being a bit down and naturally the ags business, the issues in Russia during the first half. However, the second half it picked up in all parts of the business.

In the second half we had a $1.4 billion EBIT on the marketing and that's where we ended up on the $2.5 billion and against the industrial side of the business to only 12% down, whilst the industrial was 38% down. So we continue to say that marketing gives you resilience against the downfall of commodity prices.

Net income $1.3 billion and solid cash flow generation with an FFO of $6.6 billion and we end the year with around $15.2 billion of liquidity available to the Company. Very important, as we said after the half year results, we would deliver rapidly on capital preservation and our debt reduction measures, which we put in place.

We indicated to the market what we intended doing and we reduced the net funding by $8.5 billion down to $41.2 billion and net debt of $25.9 billion at December 31. Like all other mining companies, we had to reduce our CapEx and very important to reduce the CapEx profile of the Company.

And in 2015 reduced the CapEx by 31% down to $5.7 billion and reduced working capital by $6.6 billion. As we said, we would deliver on asset disposals and we gave an indication of what asset disposals we would do within the Company.

And during 2015 we delivered $1.1 billion of asset disposals. As you are well aware, $900 million of that is the sale of the precious metals stream from the Antamina mine to Silver Wheaton and some smaller asset sales, which we did at the small copper operations around the world.

The good thing about our asset disposals, we are not selling assets which this Company does not wish to sell. So precious metals streams, we don't trade the precious metals ourselves.

So it makes good sense to sell these precious metals streams, bring the cash into the Company. And you're aware that we also announced a further precious metals stream from our other mines in Peru and we did a $500 million precious metals stream to Franco Nevada and that we did during the first months of this year.

So what is the Company prepared for going forward? As we said, we are preparing the Company and we're putting the balance sheet in shape for the current weak prices.

And, even if prices go lower, we believe we will have the balance sheet in shape for even lower commodity prices. However, what is interesting, even at today's weak commodity prices, we will have an annualized EBITDA of $8.1 billion.

This will generate at least more than $3 billion in free cash flow to the Company. Simple calculation, as we talk about in the second line.

We talk about our CapEx for 2016. We will reduce our CapEx down to $3.5 billion.

This was previously at $3.8 billion. We'll take it down to $3.5 billion.

So if you look at current prices, current spot prices, we'll have an annualized EBITDA of round about $8.1 billion, less $3.5 billion of CapEx, less $1.5 billion of tax and interest. This is one of the few companies that can generate this amount of free cash flow even in this weak commodity environment.

We keep emphasizing about our Tier 1 assets. We have a great set of assets, Tier 1 assets.

You will have a look. Steve will take you through our costs later on and our various assets.

Today copper we average round about $1.04 cost of copper production average around all our operations. We will give you a breakdown of those operations.

And this is the true cash costs of the copper. That's after TCs, after RCs, after delivery charges, etc., taking those necessary adjustments in hand, and that gets us down to those levels.

We talk about our zinc production round about $0.27. Margins on our coal, we'll talk about.

Nickel production round about $2.95, so really low-cost producing assets, long-term assets, we definitely have these Tier 1 assets in our portfolio. What we also said, and we spoke about and which we did and we implemented very rapidly, production costs, we will cut production at our various assets.

And that's what we're going to do. If our assets don't deliver the right returns and they're not giving us the returns that we believe those assets deserve, we will cut production.

This is clear. It does two things.

First, you are not wasting the asset where you're not getting a decent return. This material can be dug out of the ground at a later stage when you get better returns and you get the required returns that you want from these assets.

Secondly, and I have been a proponent and I continue to state, there's no reason to dig more material out of the ground and supply it in to an oversupplied market. So, hopefully, these type cutbacks have a positive effect on the commodity price.

And this is what we've done. It's no secret.

We cut large amounts of production at our African copper assets in both Katanga, in the DRC and in Zambia. And we will be still building these mines and building them up.

And, delivering on the production profiles, we will have a much lower cost when they finally come in to operation. And Katanga we said will come back in to operation in second half 2017 and Mopani will slowly come back when we deliver on these three new shafts, which we are building.

And then they will be a low-cost producer and that's when we'll dig this material out the ground. And, hopefully, we will be delivering in to a higher priced copper market and, therefore, getting the right returns on these assets.

So we believe this is a very important strategy of Glencore. We will continue looking to cut production at any one of our operations where we believe we are not getting the right returns and where we believe the markets are oversupplied.

Very important part of Glencore's strategy going forward and we will continue to look at that. On the asset sales we've done the asset sales which we've spoke about, the $1.41 billion plus the $500 million.

And we will deliver during the first half of 2016 a further incremental sale. Steve will take you through the details of $4.5 billion.

Now what are these? We've spoken about the ag sales.

We will sell a large portion of our ag business. Once again, this is not a forced disposal.

This is an idea we've had for some time, is to bring partners in to our ag business, to have partners in to our ag business, which will give us the power and the base to continually grow our ag business. We have strong interest in the ag business.

We're dealing with various companies and I feel very confident we will have that sale concluded definitely before the first half of this year. We've spoken about other further smaller asset sales, both Cobar and Lomas Bayas, and those will also occur during the first half of this year.

And we're looking at various other precious metal-type transactions, which we can do at our precious metals operations which we have around the world. There's also various infrastructure-type ideas that we're looking at where we can sell part of infrastructure.

And these are all asset sales which don't affect our ongoing business. They're not asset sales that are going to affect our trading business.

Precious metals streams don't affect us doing any transactions on the precious metals business; don't affect us because we don't trade precious metals. It's not part of our trading business and it's not affecting our ongoing business.

And, as I say, anything we do on the ag side of the business, on the ag part, is really something for future growth where we're going to bring in partners, and they're going to be strong partners, where we can utilize that to grow the Company going forward. So talking about the targeting of the net debt and where we would like the net debt of this Company, we're now targeting net funding of less than $30 billion and net debt of $15 billion by the end of 2017.

That equates round about $32 billion to $33 billion and $17 billion to $18 billion by the end of 2016. And that's what we've said before.

We'd like our debt down at those levels; $15 billion by the end of 2017 and round about $17 billion to $18 billion by the end of this year. So, if you look at that, that's putting you in a position.

We spoke about EBITDA at current commodity prices today; EBITDA of $8.1 billion at today's spot price level. So that's giving you a net debt-to-EBITDA of round about 2 to 1.

Now that is a position this Company has not been in before, so in a very strong position. And, once again, you've seen how fast we reacted.

We have flexibility to do further. If we believe commodity prices could fall further or if we believe we're in a more difficult situation we'll continue reacting and we'll be proactive in this area to move fast if anything further happens against that type of backdrop.

So clearly the Company is getting itself in good shape to take it forward. And we'll see what commodity prices do and then we'll decide what we do going further.

On another note, our sustainability and governance, regrettably, we've had 10 fatalities at our operations around the world. Once again, we have certain focus assets which we've got to focus on in this Company because, of these 10 fatalities, seven of these fatalities occurred at our focus assets and six of them, in fact occurred at our African operations in Mopani.

So this is an area we know where the problems are. This is an area where we are solving, we continue to solve.

And, even in places like Kazzinc, which used to be one of our focus assets, we had 18 months fatality free at Kazzinc. So we're really getting there on these focus assets and I'm proud to say the Company is improving substantially in those areas.

And in a country like Australia we had zero fatalities. So, we're really doing well in the easier countries.

But the focus assets, we continue working there and we continue improving that. So that gives us an idea how we're performing in that area.

And, with that, I think Steve can take over and take you through the financials.

Morning, everyone or evening or very early morning, for those that may have decided to dial in from the U.S. as well.

I think some of the themes, just to highlight and Ivan did mention, in terms of delivering on Glencore's journey over the last six, seven months or so, I think marketing has clearly delivered and we got $2.5 billion there. The debt reduction targets and trajectory is coming together nicely.

The free cash flow and repositioning and cost outs and CapEx outs for the business, such that we're generating significant and comfortable free cash flow with a de-risked production base in terms of the sourcing and cost of that structure. Liquidity has improved and has strengthened out to about $15 billion at the end of 2015 as well.

We announced a few weeks ago the refinancing of our one year RCF as well. That was well received.

So that's part of buttressing and enhancing liquidity and augmenting this position. And, as Ivan said, the disposal program is delivering on schedule.

And we're confident around the Q2 now 2016 period to make further progress around ags and the like. So I think a couple of headlines there coming through where, I think, we've scored pretty well in that regard.

Some of the points have clearly been covered by Ivan. But quickly down some of the points, EBITDA, as Ivan mentioned, down 32%.

The clear benefit of the marketing part of the portfolio was to limit the overall reduction in cash flow and EBITDA beyond what a pure play mining upstream industrial oil mining company or so would have been. So 38% down on the industrial side.

Marketing, in fact, only down 11%. Second half performance would have even exceeded 2004 basis that run rate.

So that's kept overall EBITDA down to 32% or so. And that follows the cash flow during the business as well, which is then EBITDA at 32%.

The cash flow then down 35% or so, which, again, relative to peers relative to industries. The overall portfolio we've seen reductions in, of course, copper and nickel, where you've seen reductions of anywhere between 40% and 50%.

But coal actually held up reasonably well for us industrially in 2015, we'll see those numbers, which was only down about 14%. EBIT, of course is going to take a hit given the fixed nature of the depreciation charge.

We had around $6.5 billion of depreciation come through in 2015. As a guidance number, 2016 should be no more than $6 billion of depreciation for 2016 as well, which basis the EBITDA split would still keep the industrial business fairly mute in terms of any contribution at the EBIT level but, of course, generating the sizeable EBITDAs and the sizeable cash flows, which, ultimately, I think you would all agree, is the most important number to look at anyway.

Marketing EBIT was a good result, of course 2.5 billion. And generally through the presentation you'll see we've reaffirmed the 2006 range of 2.4 billion to 2.7 billion.

And $1.3 billion net income pre-exceptional's. For those that haven't already done so, there's quite a bit of disclosure as to what that 6.3 billion of exceptional items that we have reported.

And notes 4 and 5 and page 115 in the financials will run through those various numbers. So the 6.3 billion was, in fact, there were some gross amounts but then there's minority interest as well, because if you take something like Koniambo, where we have booked a gross impairment of around $4 billion, we only owned 50% of that.

So you have the takeout below the net income of the minority share of that write down. So impairments in its totality was 7.1 billion but there was a minority share of 2.7 billion.

So 4.5 billion was impairments and there's that note, as I said, on page 115. The three main areas was clearly Koniambo.

No surprises, I think, in this room around the technical and delays, challenges as well as nickel price environment that's come through there. So that's come.

And we've taken that asset down to a carrying value about 700 million, 800 million. Those numbers are in the financials.

And then, of course, the upstream E&P business around West Africa. Where you've got assets that are close to carrying values with the market price, if you have any particularly in the near end of prices, it's like mark-to-market accounting in respect of those things.

You have to effectively take the hit on those. So there's about a $1 billion write down on the E&P, principally Chad.

Most of that was, in fact booked in the first half of 2015. And the other amount contributing to the exceptional charge was the loss and deconsolidation of Optimum coal.

That, of course was a second half last year saga, if you can call it that, in South Africa. And the asset, through its domestic coal challenges, went into business rescue.

As you all know it's since been sold and we've deconsolidated that, it's out of the books and the net effect was around 600 million on that, although we do show close to 1 billion because there was an FX loss that was booked in previous years, translation loss, that had to be recycled back through the P&L. So those three amounts, if you think Optimum, upstream E&P and Koniambo, account for the vast majority of any of the exceptional charges as well.

As Ivan mentioned, the CapEx has been coming down a lot already this year; 31% to 5.7 billion in line with the guidance we gave in early December, as you would expect. And we're looking to bring that down to 3.5 billion in 2016.

The FFO is just -- you would expect it to pretty much follow the EBITDA through, although tax and interest does also come down in this environment. We're bringing down debt.

And the lower earnings you've got, of course, you're going to generate pay less taxes in that environment as well. From a balance sheet adjustment and changing to market conditions as well, there was significant reduction in the net funding, we'll do a chart on that later on, 8.5 billion, including 5.4 billion of inventories and 6.6 billion overall in working capital.

And the movements in the net funding, there was 0.7 billion of free cash flow, which was just a function of the funds from operations less overall CapEx, which is closer to 6 billion. There was some marketing CapEx of about 250 million that will come down to about 100 million or so maximum in 2016.

So 0.7 billion of free cash flow for those looking to work out where the 8.5 billion -- the Silver Wheaton proceeds came in. That was 0.9 billion.

The equity raise, less the distributions and a little bit of buyback that was tail end, which was the beginning of last year, that, in fact, was a 0.3 billion net outflow still, while we were still paying distributions and net of the equity raising that was done in September there was net 0.3 billion and then the big working capital reduction of 6.6 billion. So that allows -- the net other was about 0.6 billion.

So that's a big reduction from the 49 billion down to the 41.2 billion in terms of the net funding. And, as we said, net debt of 25.9 billion at the end of yearend, both broadly in line with some targets that we gave in early December around the net funding for the $15 billion, $25 billion net debt.

Of course, there was the Antapaccay timing of the [500 million] we were at that stage still hopeful of being able to conclude something before the end of the year. We knew the amount was going to be [500 million] all the way through.

The delay was very much in what does 500 million [volume] and we spent the time making sure that Glencore ultimately got a fair deal there and we think we've ultimately delivered a good deal. That's all closed now.

500 million is in the bank in respect of Antapaccay. And we think all those actions have been positive in terms of both stabilizing and maintaining our investment grade current rating status from both major agencies, with stable outlook BBB minus Baa3 that's quite a unique position currently in the industry in terms of both IG and stable across both parts there.

Over time we are targeting upgrades to strong BBB, Baa3. I think the trajectory, the financial metrics, even on spot, that we're looking at coming through as we get through '16 and '17 is certainly going to put some upside pressure around those levels as well.

As we said, we're looking to position the business with very high probability to maintain, as a maximum any ratio not exceeding 3 times, but getting closer to the 2 times and even below 2 times, as we obviously work through some of those numbers. If we then just go into -- I don't want to spend too much time, you've seen this chart 1,000 times over the years.

So, just the movements between marketing 2015 and 2014 between the various segments. Overall good second-half performance of 1.4 billion coming off a relatively slower start for us in the first half at 1.1 billion to give the 2.5 billion, which is where we're guiding throughout.

Of course, annualizing that, if that was to project forward to 2.8 billion, that's a nice number as well, clearly achievable in what was a tough second-half period as well. But part of the reflection down to the range of 2.4 billion, 2.7 billion is a reflection of then the lower working capital levels and the impact that that will have on EBIT.

But, of course less tax, less interest and it was clearly the more marginal business. As I stood up here, I think, last time and I said, yes, we can bring working capital down, what would the impact be?

Some impact but not of any material magnitude so as to affect that business in terms of its core earnings, its core franchise value and the likes as we move forward. So the oil business.

In terms of any particular comments, of course, oil had a good year. It was flagged already, I think, this time last year to say that we were looking towards a good 2015, the way that looks shaping up in terms of oil, so, above-average performance there.

But, by the same token, there were a few commodities that flagged, aluminum particularly in the first half, coal generally in terms of market conditions in 2015 that would have performed below cruising speed. So, as we go into this year, can oil hold its levels of last year?

Maybe, maybe not but you've got the slack that's clearly going to pick up in some of the other commodities that are looking to gear up, hopefully, back to a more normal contribution as well, so very comfortable and again shows the strength of that model and diversification across what's ultimately 91 different profit centers that we have within those core segments. Agricultural is probably 15 different products.

Within oil there must be 20 different products. Coal is multiple segmentations.

Copper and zinc is metals, concentrates, blisters, all sorts of stuff as well that we have. If we then just follow through on marketing as well you would see this slide is very familiar.

A lot of slides frankly are quite familiar with the December 10 update that we did as well. So some of it is just about converting estimates into actual which is essentially what this slide does, reaffirming the guidance there.

Again, the key thesis of the marketing business: highly cash-flow generative business, quite unique within our sector and is putting us in very good stead at the moment in terms of allowing for both cash flow generation, the natural hedge around working capital reduction and the resilience of that business with lower effective tax rates, minimal fixed assets/CapEx. So, a high conversion from EBIT or EBITDA down into cash flow as well and all within a VaR that was lower in 2015 than what it was in 2014.

And in fact continues to trend lower as we started in 2016 as well. So a slide that you would have seen and right down the end we have shown as well that EBIT is only one part of the equation.

You've also then got to look at interest and tax below as to what cash flow generation returns on equity that are particular to this business. And in between those years when you're running more working capital and the interest rates were higher, you've got $150 million difference just between some of those levels.

So that was one of the things again flagged on the call last year. That at some point, were we to start seeing some more normalization of US interest rate policy, which keeps on seeming to get pushed out somewhat, is that that's a pass-through business for us.

But you'll have a pickup in the EBIT. One of the things that's also currently constraining us down at say these levels here and not higher up within those bands as well that we would expect as well.

On the industrial side of course this is where the big impacts were. And this is where of course you've seen some earnings, some cash flow contraction just through the lower prices as well.

But again a little bit of containment through a moderate diversification there. EBITDA fell 38% but energy was much more contained for us, which is primarily our big coal business and small oil business as well.

That itself was only down 14% in coal, down 20% overall in energy and that was a function of a pricing environment that was a bit more stable. Of course, you see some gyrations in derivative markets but that's not how a lot of pricing in the coal business is done; through annual contracts, Japanese contracts, premium business, domestic business in various countries as well.

So the coal business had a very strong and focused relentless cost-out cost-reduction program. You'll see in the chart that we have later on, you'll see some of the cost savings.

A lot of that in fact came from the coal business and they continue to make good strides in that as well. And, even in the metals and minerals of course you've got the likes of copper and nickel, in particular that came off.

But something like ferroalloys for us, zinc, were far more stable in terms of those particular products and now we're starting to see some byproduct credit enhancements as well. The agricultural side is somewhat weaker for those reasons explained.

We will see a pickup in agricultural industrial contribution as well, with some minor investments that we made in Germany, Brazil, Canada; a few plants that were acquired during the year, all at pretty good cash flow yields and earnings contribution. So we should see that coming through now in 2015.

If we then look at that bridge on the EBITDA of industrial of course the price side was the major impact, although 37% of that was offset with cost reductions and favorable FX movements via that natural negative correlation you see between commodity prices generally and the US dollar basket against commodity country currencies as well. On that 5.8 billion just a little bit of background into that.

You've got 4 billion of that from metals and copper 2.2 billion, zinc 0.8, nickel 0.7, alloys 0.3 and the energy was 1.7 billion pricing impact of which coal 1.3 and oil was 0.4. The volume side, this is where we slammed on the brakes across the business as well, would have been a bit higher, but clearly thinking that that's a sensible proposition both in oil, in coal, in zinc and copper, having particularly curtailed production, both through some high-cost production but in some cases through also curtailing profitable production, particularly in zinc and coal, around being able to sensibly manage supply and demand over a period of time.

Exactly what Ivan said. So the net effect on volume was a little bit higher on oil and a little bit lower on coal.

And you've seen some of those volume statistics. On cost 643 million of cost savings, as I said, a lot of that came from the coal business, about 0.5 billion with about 150 million on the metals side.

The metals story doesn't tell the full picture because there is then some significant savings. We'll see over a lot of the slides of some unit cost reductions happening in our various assets as well, but you can have year-on-year movements particularly an operation like Alumbrera and will also explain why Alumbrera looks very different between 2015 and 2016.

It went through a period in 2015 of much lower grades and higher investment generally in that business. So its unit cost was naturally higher but now it's going to jump the other way.

We'll see that in terms of the copper cost out. But that's really just got a year or two left in terms of life.

So it's very variable and your cost movements are really ramping down. But this particular year 2015 saw a high unit cost as you'd then need to access what we're now doing is just pulling out material for cash as we move forward.

So Alumbrera itself was actually a negative 150 in there, in terms of cost out. So you keep adding some of the positive cost outs that we've got as well and we'll see a big step down in unit cost from 2015 to 2016.

Inflation at 619 across our cost base. It represents about 1.7%, which is again a blend between somewhere inflation is particularly contained and zero in some cases.

But we, of course have some operations in higher inflationary environments but you tend to get the FX relief in some of those places. Argentina, South Africa, Kazakhstan, those are countries that come to mind there.

But overall a blend of 1.7%. The FX offset of 2.1 billion, 1.4 metals, 0.7 in energy.

And that's countries, of course Australia for us is the big currency, South Africa, Kazakhstan, Canada. Colombia is, of course another important country for us as well.

If we then look towards that the building blocks, if you like the key slide to get to 8.1 billion spot EBITDA around our four main industrial bases of cooper, zinc, coal, nickel. The same slide we gave in December, which feedback said it was very useful.

And we've tried to build it up with full model ability to calculate cash generation EBITDA. So exactly as Ivan said, around the 1.04.

Compared to maybe some other numbers that you may see that's a fully baked in number including all TCRCs, freight charges, everything else that would drive headline EBITDA within that particular business based on the number of tonnes that we are producing of those commodities. And we gave the denominators at the bottom.

Of course, we produce our zinc assets, also produce some cooper. So we've said for copper, take the guidance of the 1.39 and then take out 150,000 tonnes of copper that comes from a little bit in nickel, a little bit in zinc.

And you take your spot prices where they are the moment, pick your number add a cost of 1.04 copper you're looking at, on a spot base, around 2.8 billion of EBITDA at the moment. So if we work through all those numbers, and it's similar across zinc and coal, we've done it on a margin per tonne basis in coal.

As you would appreciate, there is export business, there's some domestic business, there's some coking coal business that we have as well. So that is working off a Newcastle spot of a few days ago.

I think its ticked maybe up to about 50 or so now. And just taking down there and looking at over 130 million tonnes of production, at $10 a tonne margin you're looking about a $1.3 billion blended margin across our entire portfolio.

Of course, there's tonnes that are generating much higher, sometimes generating much less, but that's a good way of looking at calculating it. So a buildup, if you look at that compared to where we were back in December.

You get copper EBITDA around 2.8, zinc 1.1, coal 1.3, nickel a touch over 200. Everything else call it square, which is the positives of alloys, agricultural, bean oil, less some of the SG&A, a bit in the aluminum, which is breakeven or so at the moment, you get 5.4 billion industrial and 2.75 marketing at the midpoint of the EBIT range plus 200 of depreciation and that gets 8.15 billion.

And then the CapEx that Ivan mentioned, 3.5 billion industrial, 100 million CapEx in marketing and 1.5 billion interest and tax and a little over 3 billion of free cash flow. Now how's that up?

We had 2.3 billion at December. So we've added 700 million spot cash flow, 300 million of course comes through CapEx reduction and the 700 million to 800 million on the EBITDA side, 7.7 up to 8.1, the 400 million has come through some lower cost reductions, but also and part of those lower cost reductions is some by product benefits that we've got from gold and silver in particular.

When we were back in December, I think gold was maybe about 1,040, 1,050. It's around 1,150.

Silver was maybe $1 or $2 a pound less as well. You can see that's the buildup of the copper.

Alumbrera itself, we're looking at 1.01. And that's quite a big reduction from where it was, both this year, clearly and again when we were in December we were 1.58 on Alumbrera.

And that's just when you get an operation with another year or so to run, knowing exactly that last bit of copper and gold and your costs and everything else. So there is more gold that we're going to get.

Gold price is higher. The volume base is not particularly big so you can have quite a big effect there.

But that's part of being able to push it down to the 1.10, together with some currency. Zinc has got quite of benefit through the Kazak tenge, which is clearly depreciating.

You can see that in any other companies that you follow as well. Just a quick note.

Ivan mentioned that there's 400 million now new OpEx reduction targets that where looking in for 2016. We know where to go and hunt.

We know where there is still the ability to generate some of those savings across the business, The focus is in all across the business. None of that has been built into any of the base numbers.

So any delivery on that and execution thereof is going to, prima facie dollar for dollar, add to the cash generation of the business once it is locked in and delivered as well. If we then go to -- again, some charts you'll be familiar with, some big reductions in funding of peaks of 52 billion down to 41 billion, trajectories lower there.

Now, of course, we have something like a 35% reduction in cash flows, EBITDAs you're going to fill that in some of those numbers. But our numbers are much more balanced and contained than you'd find in some other producers, A, because you've got the marketing balance that's coming through and, B, because you've been able to bring down the leverage in an environment where leverage generally has been going up in this particular sector.

So just a few headlines, strong liquidity, we've spoken about that as well. This is somewhat of a snapshot, which is somewhat meaningless.

I think you need to pro forma for where we are today and where debt is moving to and creditability of the debt reduction plan, which we'll talk about as well. Re-financing is -- we obviously had a lot of re-financing in 2015.

The one-year RCF is done. We've bought back a few bonds and Ivan mentioned those targets as well.

No financial covenants and modest near-term maturities as we look forward. Not too much to talk about CapEx, the only thing that's changed is it was 3.8 billion, now it's 3.5 billion.

There was 2.8 billion, 2.7 billion and there was 1 billion down to 800 million. So, just the continuous focus on CapEx and the cost-out and scoping and pricing and renegotiations and all those things that everyone's, frankly, doing in the sector as well.

2.7 billion at current volumes should be a level at which we can sustain this business into perpetuity at the current level, assuming that level of production. Of course, there is latent capacity in coal, copper, zinc.

As and when, subject to market conditions, some of those were to find their way back in the market, of course that's going to creep back up but at that point and later we've done with an eye on what's the cash flow enhancement of doing that, what's the NPV of doing that and can the market -- is it going to be supportive to the overall business as well? So I think we'll take a responsible and disciplined approach towards bringing back supplies moving forward.

Just a chart, then, to finish up and hand back to Ivan, around those targets of funding and trajectory. We've seen the 8.5 billion net funding reduction, we've spoken about that, that's the bridge to where we're starting this year to the end of 2016, the stream is done, the Antamina.

The 4 billion to 5 billion is the incremental disposals for where we stand at the moment. That is a pickup from what was 3 billion to 4 billion of guidance in early December and that's reflecting we're now two months later on.

We've gathered a lot more knowledge around the processes that we're doing as well and we've introduced, we take into account these were processes that we were always thinking about but more behind the scenes these weren't public things but we were looking at additional monetization as Ivan said, across precious metals. We still produce significant gold and silver non-core for us in South America, North America, Kazakhstan, Australia and we're looking at further monetization there.

Again, the types of discount rates return on capital redeployed and cash flow makes a lot of sense for us to be doing at the best of times. Similarly, on some infrastructure, logistics, around vessels, ports, rail, all things that we've owned and accumulated over Glencore's 40 years of existence, which the asset register is enormous, as you can imagine.

There's good demand for some of that and, again, it's a good, sensible redeployment of capital as well. The ag minority sell Ivan mentioned.

This will be a mixture of all or any to get to the 4.5 billion. I think you can certainly assume the ag sale is on track and we'll do, we'll execute on that given the plans to take that business forward.

We're talking about a significant minority stake there. That's going to provide a reasonable anchor to that.

And then we'll see whatever makes sense across all these other assets to complement to delivering that 4.5 billion, so the 4 billion to 5 billion which we're very comfortable of. And, of course, there's your free cash flow generation and you just keep going down to those levels and maybe '17, we can look at what normal companies look at when we at that particular point in time around distributions and the likes and see how we go.

So that's where we go, focused on preserving investment grade ratings. I think we've done pretty well there.

Scope and commitment to do more, as Ivan said. Just a quick comment, you'll see a footnote down there.

Just a quick comment on the RMI at the end of December the $15 billion, these were our guidance that we gave. Obviously December we said we think we're going to need 40 billion net funding, 15 billion, 25 billion net debt.

That was reflecting where we were at that particular point in time. I think this slight miss, if you can call it that, was thinking well that [0.5] we were hoping that might sneak in.

And I think around working capital, generally, some of you would have seen that, which we again at worked about in our planning was to see there was a big release of working capital particularly through receivables payables in the first half. Some of that has partially reversed out in the second half of about $1 billion as well, so pretty close on those numbers as well just in terms of RMI, what we flagged as well there is that a big part, particularly in the metals side, of Glencore's trading environment and its trading tools is its custom smelters.

It applies to zinc. It applies to copper.

It applies to nickel. These are not industrial assets in the sense that we have the mining guy responsible.

They are actually managed and fully controlled commercially and managerially out of headquarters in Switzerland. So this is around the customs whether it's in Philippines, Pasar, Altonorte, Canada, Asturiana.

Nikkelverk we have a lot of these assets as well. And these are increasingly and have always been but increasingly they are trading entities in their own right.

So as legal entities they buy the inventory, they handle it, they store it, they are part of our strategies. It's all positioned within the marketing business as well.

It's hedged. It's re-exported.

So they're doing things far beyond, within those legal entities, beyond just the normal buy something, process it and sell it like a typical company might be. So whereas historically there was a bit more of an arbitrary allocation to some of the -- in terms of non-RMI, if there was some inventory that was owned by a smelter I just came up out of our systems arbitrarily and said, because it's an industrial entity we're going to treat it as non-RMI.

Whereas now we've had a closer look at the nature of that material, how it actually works and particularly in the early part of 2016 what was a catalyst, if you like, to making sure we got it right in this area, because there was -- each day as well Glencore might be buying and selling a product to these entities and suddenly you had a tonne of metal or a tonne of concentrate from one day to the next was becoming RMI and non-RMI because of that arbitrary allocation that we're doing across the board. And internally on our zinc business, in early parts of 2015 we actually in turning from a structural perspective, moved some of our European smelters to Tulving [ph] operations, where Glencore International and so was the marketing entity was then taking all that inventory onto its books and just using those smelters, those Tulving operations that were generating fees in those particular business.

So all of that inventory suddenly got hoovered into the marketing books. It was always there.

It was always known. It was always controlled.

But previously it was sitting in a Spanish entity or a German entity, whatever the case may be. So that also created a thing from one day to the next inventory was non-RMI, it became RMI.

It showed the absurdity of that arbitrary nature. We've moved to a proper inherent looking at the real effect of what's obviously supporting these businesses as well.

So that was brewing. It was starting to affect that through all the reporting that we did through 2015.

And, of course, with full-year results there's just more disclosure around what it amounts to. And if you can look down there in respect of the smelter-owned inventory that's supporting the marketing inventories compared to an historical more arbitrary allocation it's pushed around 1.5-or-so billion into what is genuine RMI into an RMI category, where historically the arbitrary method of working this out was too conservative in how we were coming up with RMI.

So it's all been properly built up now and worked through in 2016. It is part of our guidance that we gave.

The RMI anyway has come down significantly in between 2015 and 2016. And it treats these custom smelters as they really are which is part of the marketing business, and they are doing a lot more.

They themselves are trading entities, which is how we are doing that particular business. So just to obviously highlight that.

And I think in closing we can have Ivan for some closing comments.

Thanks. I think most of these points we've covered, but just to highlight a few of them.

As I said, we're prepared for current and even lower prices. The business is sustainable, even if the market drops further than where we are today.

But as Steve and both myself have indicated even at these lower commodity prices which we are experiencing today and current spot prices, we've got this $8.1 billion of EBITDA. We're generating $3 billion of free cash flow.

We gave indications how we get to that $3 billion of free cash flow. It's a good position.

We aren't paying dividends at the moment, so all the free cash flow is being utilized to pay down the debt. We said we're going to be cutting our CapEx down to $3.5 billion.

We believe this is a real figure. We will be there $2.7 billion of sustaining CapEx.

That should not hinder the business. That is enough to keep the business going in its current form and will not affect the business going forward.

This puts the Company in a very good position in that respect. And as I said we will get our debt down net debt down at the end of 2017 to $17 billion; at the end of 2016 $17 billion to $18 billion.

At those levels with the current EBITDA at the spot price 8.1 billion, 2 times EBITDA to net debt levels, very strong position. And, as Steve said earlier, we're pushing to upgrade the rating with both the rating agencies as we go forward and we can prove these figures come into effect.

We continue pushing our costs down, we can push our costs down and, as I said, as we mentioned that we will get $400 million of operating costs down. However, I keep emphasizing this is important, very important to push costs down.

And the Company will continue doing that. But, more important is we will continue doing it and we will keep looking at it.

We will look at volumes and what volumes we put into the market. And if we believe the markets are over supplied and it makes more sense to cut volume, we believe you get more effect on that, where you can have a more favorable effect on the pricing in the market not pushing down pricing by over supplying a market with too many tonnes.

That is the backbone. Glencore will continue looking at that.

Because of our marketing business, we have good insight into what's happening in the markets. We believe we have a good idea.

So we will not just chase tonnes for tonnes sake. It may reduce our operating costs by producing more tonnes.

I know economies of scale it gives that too, but we won't only be focusing on that. We will continue focusing to say, yes you may reduce operating costs with economies of scale, reducing your costs down.

But the effect you have on the prices in the oversupplying too many tonnes into an oversupplied market has a big effect on the overall effect of the Company. So, as a Company we will continue monitoring that.

So, in finalizing, as we said we are a Company, we acted decisively after the half year. We worked very quickly to ensure that if commodity prices stay at these depressed levels, even if they go further, the balance sheet will be set up to with stand even these low commodity prices.

And, as I said we've delivered on that. We continue to deliver on that.

The $4 billion to $5 billion that we said on asset sales, these are real. They will occur.

We know how far we are in the progress with these asset sales. And a few of them will be announced shortly.

But definitely by the half year results, definitely by June this year, they will be announced and we will be delivering the $4 billion to $5 billion on the disposals. So the $17 billion to $18 billion is a real figure and we believe, with those figures this Company is in a very strong position moving forward, even at these depressed commodity prices.

So I think that's it. I think we are open for questions, Paul.

Liam Fitzpatrick from Credit Suisse. Two or three questions.

Firstly, on the ag stake sale. Given you've now given us fairly clear timing, is it safe to assume that that will be a stake in the entire business?

And do you have any indications from the rating agencies how they'll treat that sale? I.e., will you still consolidate all of the EBITDA?

And secondly, just on marketing disclosure. As you said in the presentation, it's your key differentiator but we haven't really seen the disclosure improve over the last five years.

Is it something that you still think about, giving more data to the market? Or is it or what is the reason to not do that?

On the ag sale, we will sell for the it depends. There's interest.

There's interest from various parties. We'll see what percentage they want.

We are also deciding how many partners we want in the ag sale. The idea of the ag sale, as I said before, is to utilize it as a vehicle with a strong partner or partners to grow forward and grow the ag business.

We will not be selling more than 50%. It will be below 50%.

So we'll continue consolidating the EBITDA of the ag business into the accounts. So that's the amount that will be sold.

On the marketing business, to disclose more. I think we give a pretty good insight into the marketing business.

I don't know, Steve, I don't know if you believe. We show the energy.

We show the metals. We show the ag part of the business.

We've given an idea how the money is made. We've been on road shows.

We've explained to a lot of investors where we make the money, how we make the money. And I think we've displayed to the market, since we've been listed, I think we're hitting five years since listing, we gave that range, if you go back pre Xstrata, post Xstrata, but in mines 2.7 billion to 3.7 billion, we've been pretty much in that range.

Okay, now with commodity prices going down, utilizing less working capital in the trading side business and keeping up the tail part of some of the trading deals, because it utilizes a certain amount of capital, which you don't want to use we've been pretty much in that range. Even, this year as I say 2.5, a bit below the 2.7, 3.7, but we've given the reason and next year we'll take it to the 2.4 to 2.7.

So we've been pretty much in the range we've told the market for the last five years. So I think the market's getting to understand what the trading business is, how it performs, its resilience and the diversification of the different commodities in the trading business.

I think it's delivering the results. I don't know about disclosure, Steve.

Anything else you want to add?

We're happy to take on board ideas, of course anything that doesn't overly expose anything particularly commercially sensitive or others. It's not, I think disclosure through risk and VaR and the differences and qualitatively has certainly got us to where we are at the moment.

But if there's any particularly useful ideas, we're obviously open to providing more if that's helpful and useful there. As far as discussions with as Ivan said, the ag business would continue to be controlled and continue to be consolidated.

The agencies haven't been consulted per se on treatment round the ag business, but what is normally common in these things would be to continue to just treat it as part of the overall enterprise. And they would then look at just what is the distribution policy of that.

So they would obviously take out the low FFO, if you like. They would take if there's distribution to minorities or dividends to minorities, they would obviously take that out.

There's also going to be some debt as well that gets left in that business as well. That if we own, let's pick a number of 60% or 40%, whatever it is in that thing, there will be some debt in that business.

So we'll be selling equity in a business that already has an enterprise value and some debt. So there's also an argument to say that you should take out the minority portion of that debt as part of our numbers going forward.

Sorry, coming back to agriculture. Clearly four years ago, we all debated why you were in this.

And now it seems to be a fantastic business. After Viterra you have a good market position, there's growth.

In 15 years time, when you retire, this could be multiple times of the oil business. So the question is why does the Company feel now is the time to sell a stake in it, the size of the balance sheet issue, clearly?

Is it because you think others can bring you sources of supply or sources of demand? Is it capital?

Or a range of those? And secondly, clearly on the counterparties risk you've been tested as a Company aggressively in the second half of last year.

Can you -- by both your suppliers, by your clients and, clearly, investors and can you talk us through what happened on the counterparty side and the risk side? I saw letters of credit went up a little bit by year end in the marketing business.

Has there been any change? Has there been a change in payment terms?

I like the 15-year retirement part, but anyway. Look the ag business, even before commodity prices dropped and the situation that occurred during the half-year, we always thought the ag business is an important part of our business.

A lot of people said, is the ag business something that fits in with Glencore? And we tried to explain yes, it is.

It's the supply chain, exactly what we do. It's the arbitrage pricing that exists.

If you're in the supply chain and you've got that, you can buy from the farmer, it gives you the flexibility when you load the material on the boat, you have the arbitrage opportunities around the world. So it fits in, just like the mining business, you've got the mine and you deliver on the boat, the same thing.

And we've always said that, so we like the ag business, we've been in it for many years. However, with the ag business we do believe this is a business that needs to grow.

We are not active in various parts of the world and you need to grow in those parts of the world. It's no secret.

We're pretty weak in the United States but strong in other areas of the world. To grow in that business, you're going to need more financial muscle.

We did buy Viterra. Viterra is a company that was already public, so we had the financial muscle to do the Viterra stake and we could do that.

But to do stuff bigger, it's clear it's time to bring in a partner. Similar like we did when I first expanded the coal business in Colombia, we knew when we were in Colombia, we couldn't do it on our own and at the time we bought in BHP Billiton and we bought in -- well, it was first Anglo, then it was Rio Tinto and then Rio Tinto sold to BHP.

But we had partners. And utilizing the partners, we could buy the Cerrejon complex.

We were at a stage of our Company's growth profile then that Glencore could not do it on its own. So we've taken the same decision on the ag business.

This is a business we want to grow. We see potential to grow but, with the financial muscle of our Company, we don't have the real muscle.

Bring in a partner, drop down the asset. Bring in a partner with a 40% to 50% partner, whatever we end up with, one, two, three partners, whatever it may be.

Then it's a great vehicle which will have the financial muscle that we can grow. So, yes, it gives you the financial muscle.

On the counterparty risk exposure, Steve, you can comment on that.

Just back on the ag, just maybe. You don't want to -- it's quite clear that there is going to be a period of some industry consolidation coming up there and you don't want to miss out on that industry consolidation because, through the assets generally around the world, I don't think -- there's certainly synergies and generally returns and returns on capital and asset utilization and employment and optimization around the global infrastructure that's out there is not being used, in our mind, to the best of its potential.

So you want to be parked there and this gives you the ability to be part of not sitting on the sidelines. So that's a key part of that.

In terms of LCs and counterparts, yes, there is a note that we do talk about. One of the increases in the number is because we talk about its trading LCs but it's also various bank guarantees in respect of other contractual obligations we have, one of the big increases -- in fact, the normal trade LCs was very similar year on year.

The increase was, in fact, in respect of rehabilitation guarantees and performance things, particularly in Australia, around some of our sites as they've expanded their footprint and new environmental plans. McArthur River in Northern Territory is a particular one that's going through the process that we had to put up additional, which you have to do that through bank guarantees that you put up but that comes through this particular total.

So that one itself was in multiple hundreds of millions of dollars. So just in terms of rehab, it went up about 500 million to 600 million and then a little bit on the -- there's various increases, decreases you have to do in respect of pensions and there can also be guarantees in respect of CapEx and procurements and take or pays and all things that comes into that as well.

But, purely from an overall just trade, procurement side LCs, it was actually very similar year on year.

Maybe three quick questions. First of all on the performance of marketing.

Could you just give us a bit of color why coal was weaker this year and how the main business areas are performing at the start of 2016? And how -- whether the 2.4 billion to 2.7 billon looks conservative as we look at 2016 today?

Also, with your net debt target $15 billion, is that the level at which you'll be comfortable to start paying a dividend again? Do you have to get there?

Or could you reinstate the dividend earlier if you get more confident on the outlook? And also on the M&A side, thinking there are some great opportunities, potentially, coming out.

Clearly, Cerrejon is close to your heart anyway. Is, and there'll be significant synergies if you can put that volume through the Glencore machine.

Would you consider, in exceptional circumstances, some M&A? Thank you.

Firstly, the marketing for this year, hard to talk that early, we've only gone through January. Steve will have the February figures available shortly.

So I cannot talk on those. I haven't seen the full Feb figures.

But not bad, looking good. I think the 2.4 to 2.7 is a comfortable figure, from what we've seen.

What the traders see going forward and how they book their position and what they see the trading ability, especially the oil guys, they've got an idea how the markets are looking at the moment et cetera, it looks okay. We feel comfortable on the 2.4 to 2.7.

Next year. I'm always hoping it's more towards the 2.7 billion.

There's nothing there that shows me there's any problems in any of the trading divisions, so it's looking pretty good. It's looking not bad for 2016.

In respect of coal, coal was a very weak market. Markets came off unexpectedly to the levels they did.

We all know the imports into China dropped significantly. I think China dropped down last year from close to 200 million tonnes down to 150 million tonnes import.

It had an effect; mainly affected the Indonesian exports. But then again, Indonesia, we all know, dropped from 425 million tonnes around about to 340 million tonnes export.

So that had a bit of effect. But it was a very moving industry in the coal industry last year.

We all know the big effect was China and what happened in China. That's a massive drop that came off there and will continue dropping this year.

We know China's imports could even drop further to about 90 million tonnes import this year. So that's the reason coal was difficult.

What is good about coal going forward, and looks interesting on coal going forward, is no new production in the world. If anything, we've seen this massive cutback of Indonesian coal supply.

No new production. India is still looking strong.

I know certain people in the audience don't agree with us on the imports into India but we still feel comfortable on imports into India this year looking pretty strong. So it should be better this year than what happened last year.

Regarding net debt and dividend, Steve can talk on that. If we do have a 2 to 1 EBITDA debt level, I'm sure we will look at dividends.

The Board will look at the process of dividends. But no doubt if we get to those levels, we'll have to look at that again.

But Steve can make some comments on that. Regarding M&A, yes, there are opportunities out there but, up to date, if you look at the opportunities nothing that's, we're looking at everything.

Everything that comes out, we will look at it, we'll see if there is a way our balance sheet can handle it. We don't want to affect the balance sheet and all the efforts we've put in place that we speak about today.

But naturally, as you correctly point out, Cerrejon is an opportunity. Anglo have spoken that they will be selling that.

Of course, us and BHP have the right, we have an opportunity to look at that, with the agreements that are in place. And it's something that we would have to find a way to do, if we can get it at the right price.

It's something we wouldn't want to walk away from. Would we like those terms and having that as a 50%/50% if BHP wish to buy it with us as a 50%/50% joint venture?

As opposed to the one, of course, it's easier to manage on that basis. What we'd do on the marketing would still have to be a debate with the, however that ends up.

Right now, as you know, it's marketed as an independent unit. It has its own marketing unit.

But if it was a 50%/50% we'd have to look at that with BHP, if they wanted to buy it together with us.

And I think, just back on, I think as Ivan said, of course, as you move down that debt level and you've still got your, it's all about numerators and denominators and the likes, you've got to respond to what is your free cash flow and EBITDA. So we've got to be pretty sure about where things are and that you've rebuilt up your head rooms and you've built in that positive upgrade potential there.

So we are factoring in, you're balancing out the fact that we want to get upgraded still and move back into that space, with some opportunities at some point. It's more how do you build that into the trajectory as well?

We've said last year, around the debt-reduction plan, having suspended cash distributions in 2016, what does that mean by definition we're going to get? 12 months' time we'll sit in early 2017 with the Board, see where things are at and do what's appropriate at that particular point in time.

But you could certainly paint a scenario in which you would be in a position to start putting it back in 2017 at some point.

Rob Clifford, Deutsche Bank. Ivan, you talked about controlling production being an important part of Glencore's strategy.

So I guess a core competency for you guys will be ramping up and ramping down production as efficiently as possible. Now Katanga was more than 200 million negative EBITDA in the half.

Australia zinc was quite a big hit. So there is quite a few costs coming through where you are shutting.

Can you talk about how you're going to be better than competitors at mobilizing, demobilizing and managing the costs in production control?

Well Katanga, we have cut Katanga. We've cut it back substantially while we're developing the whole ore leach program.

So yes, it's going to have a cost while we bring down the production. Of course, it's going to be a more costly producer but that's what you've got to do instead of putting those tonnes on the market.

By the time the whole ore leach project is completed and Katanga will be back in production during the first half of 2017, we believe our costs there will be down at about I think they talk about 1.40, 1.50 there. So it will be back again as a low cost producer.

So that's what we're going to do. And then it will ramp up to about 290,000 tonnes production.

The zinc operations we also brought back, and when you bring them back down they're going to be more of a high cost producer but at least you're not wasting reserve at the time. And when we bring the zinc back and we Lady Loretta, in fact will be a low cost producer.

And Rob, you've also got you can't fully they're not all variable costs. It would be nice if they were all variable costs.

Some in Australia were you had some fly in fly outs, you had various other things. And part of the process, there is a cost and a trade off to saying yes, there is going to be the incurrence of some cost base.

But, overall, relative to the value for the future and that market support, which it's hopefully given, these were copper, Katanga and Mopani, at the time we said at the time of the curtailments, these were at the time because of their nature of operation with higher cost around 2.50 so through Q2 last year they did become from marginally negative to quite highly negative cash flow absorbers, at least after sustaining CapEx as well. Because part of this process is also about reducing CapEx as well as those assets.

It's not just about EBITDA and the likes in terms of cash flow. And we have been reasonably efficient and reasonably non disruptive, if you like, around the operations and at least taking down as much cost as is sensible and reasonable today, balancing all stakeholder interests.

So there will still be an outflow, particularly in Katanga, in terms of cost outflow while they go through. There is certainly some OpEx that's obviously going through.

It's part of our spot EBITDA buildup in terms of it's all built into those 3.1 billion. Australia zinc was something where they were just finding their straps, in terms of the delivery of George Fisher and McArthur River, at the point that we took some action at zinc.

So had we not done that, you would have seen some improvements but now suddenly you're turning the ship around. But we think overall, long term, medium term, it's a sensible thing to do.

George Fisher was getting to very good costs. They were really developing nicely, both McArthur River also.

George Fisher and McArthur River were developing well but with this type of zinc price, we said okay bring it back again. And, as Steve says of course then you're going to have your costs involved but rather bring it back, less production from George Fisher, definitely Lady Loretta, because it's not a real long life mine, so that doesn't make sense digging out of the ground when you had the zinc price at 1,400, 1,500.

If zinc goes up, then you'll start ramping up again. We know there's all the opinions about what the zinc market, the type of tonnes that are being pulled out of the zinc market.

Let's wait and monitor with Century, Lachine, even some of the Chinese mines shutting, let's monitor with our cutbacks, 500,000 tonnes cutbacks. Let's see what the market does.

And as soon as we see the market is picking up, and we're confident this is a sustaining market at much higher levels, and our tonnes coming back into the market won't have a negative effect on the pricing, that's what we're going to do. We definitely don't want to put tonnes in the market where the market doesn't need it.

That makes sense. You, as a Group does Glencore talk about how each of your assets, how you can flex well?

Or do you let the assets do it themselves?

No, no. We flex at the top.

I say at the top, we know even at the asset level when to flex. The decisions to cut McArthur River, to cut George Fisher, to do what we did at Lady Loretta even that we did earlier at the coal assets is done at the top.

We look at the world's supply and demand and we say, does the world need this new coal in the market? You know when we did it earlier in the coal market and we did it here in the zinc when we saw the market that's done at the top.

And then we review at the asset level which of the assets can do it, which are the higher cost assets, which make most sense to pull back the production at that asset. So that's done at the top, together with the trade and asset manager, but it's mainly the head of the trading side of the division who looks at it and says, where does it make sense?

And he works together with the operational guy.

And every operation's got nuances around take or pays and commitments and these things. So you're always looking for it's quite a complicated financials.

It's very complicated, yes. Steve points out the take or pays.

If you talk Australia, there's most probably a lot of mines where you'd like to pull back production. Ourselves we would even want to pull back production.

But you've got your take or pays, so you've got to look at the effect what it does in the market. Your loss of it, as opposed to the take or pay costs, and all that stuff's got to be weighed up.

Good morning. Sylvain Brunet with Exane BNP Paribas.

First question I had was on marketing. Given we saw a number of your competitors retrenching, not to mention banks, have you baked in your assumptions now some increasing volumes, for instance in a year like 2016?

Second question on zinc. We've started to see some premium in the markets moving in the right direction.

How much demand is there at the moment for your concentrates? And have you been able to place a significant amount already?

And lastly, on a modeling side if you could help us think about the trajectory of the corporate charges.

Okay, the trading side, have we built in incremental volume? No.

That will happen when it happens. Let's wait, I don't sit with the traders and they tell us where they're going to get incremental volume.

Yes, they've got ideas, et cetera but that hasn't been built in the figures of [2.4 billion to 2.7 billion] that's being consistent, that's just being conservative and, as I said, hopefully if we look at the first few months, we hopefully should be towards the better ends of those figures, but time will tell. So yes, we haven't built it in.

Our competitors going out of the business and the banks going out of the business that definitely leaves more opportunity. And we've always said when the banks went out of the business therefore we're competing against someone people with a higher cost of capital than we had when the banks were in the business, they got a lower cost of capital.

So yes, that is a benefit but we haven't built it into those figures. On the zinc side of the business, yes, we're not going to sit here and predict exactly what the markets are going to do or say what we think the markets are going to do.

But you've just to look at what's happening in zinc, look at the zinc metal imports into China, the results, the figures are there. During the last quarter of 2015, I think the zinc imports were something like 400,000 tonnes or something like that 300,000 tonnes to 400,000 tonnes somewhere around there, can't remember exactly, in that quarter.

Even if you look in January this year, the zinc metal imports into China have been relatively strong, far higher than January the previous year. So the import of metal into China has been strong.

The figures are there to be seen. What we've also seen is the shortage of zinc concentrates in the world and that's clearly the shortage.

You've seen the TC/RCs are coming down to really exceptionally low levels. The TC/RCs on the spot are very low and are going to be below the long-term-type levels.

So that tells you what's happening and the shortages of concentrates in the market. And we continue to see that.

Our sales book into China, et cetera is strong. We don't see any weakness on that and we definitely having strong sales of concentrate into those markets.

And then just on the corporate side, we would expect a reduction of 5% to 10% in the near term and then go forward.

Jason Fairclough, Bank of America Merrill Lynch. Two questions, just the first one is on the marketing cap -- sorry, working caps, second one is on CapEx.

On working cap, Steve, it's a huge inflow this year. Is there a lot more to come here?

Or is that the low-hanging fruit? And how should we think about the sustainability on that?

Realize it's tied to ROIs. Just secondly, it's a question I asked Rio Tinto as well.

If I look at your CapEx to depreciation 0.5 times, is this a sustainable business? Or are we really impacting the business on an ongoing basis going forward by cutting CapEx this much?

Okay. In terms of working capital, we haven't assumed any more legs, necessarily, working capital.

We've kept it pretty flat as we looked towards the debt trajectory. There was a focus on it, clearly, in 2015.

In fact, there was actually some release of what was a particular kind of working capital reduction at least in receivables payables in first half. I think second half was more of an inventory story.

First half was mostly of receivables payables. That's reversed somewhat.

So, at that level, it is clearly more sustainable than it was before that reversal and we're comfortable that that level is now where we can obviously maintain that level. That's also something that we've always said we control, working capital doesn't control us and that rings true over a very short term.

It doesn't ring true on a particular day as well, because you're also having to -- in new commodity prices, oil goes down. Let's just say it went down from 50 down to closer to 30 at a particular point in time, you need to -- suddenly in that environment, you're having short term, you're having movements in collateral, margins from hedging instruments, you're settling old payables at higher prices, you've got your new terms at lower prices.

So these things need to find their new equilibrium. And then you can take stock of where it is short term and then you can plot the next two to four weeks and say, well where do we want this thing?

If you want to hit a target, that's how you've got to do it. You cannot hit a target on literally a particular point in time but where we finished up at the end of December I'm very comfortable that that's a sustainable level around working capital, including the RMI around the 15 billion, which has come down, obviously, quite a lot.

There is scope to bring that down further but as always said, as always Ivan said, you keep starting to start getting into a little bit more juicier businesses as you work that through. But, in terms of where the balance sheet is, level of working capital, we haven't made any more assumptions around some further release thereof.

But that is a lever to pull. Where we talk about can do more, levers to pull, could do something, you've still got the best part of 10 billion of net working capital, 15 billion of RMI that's still there that doesn't all have to be there, so there's still a bit that you can pull out there.

And then on CapEx, yes, that's an interesting question. We believe the 2.7 billion sustaining, let's focus on the sustaining, can that be maintained?

Will you still keep the existing production and not hurt the asset base by maintaining your CapEx at this amount, sustaining CapEx of 2.7 billion? We believe we can.

Of course, you're pushing issues. You are extending life of some trucks, et cetera, there is a way that each mine is looking at how they can reduce sustaining CapEx without affecting the base of the business.

So we believe we can do that and we believe it can be maintained. But, as you say, you ask this question to Rio and I'm sure if you look at the CapEx of all the top 5 mining companies then I'm quite, if I looked at it the other day, if you take the top 5 mining companies, you take sustaining and expansionary, the bit that they've got, they haven't broken it down into sustaining as well.

But you're talking, I think, the top 5 mining companies over the next year are going to spend $20 billion to $25 billion in sustaining and expansionary CapEx. That's pretty low.

So that's the kind of CapEx that I think people were spending before in one year. Big mining companies were spending $20 billion.

I think even us Xstrata at its peak were spending what Steve $15 billion, say $13 billion to $15 billion in CapEx and now you have the whole industry $20 billion to $25 billion. Yes, things are going to creak sometime.

The depreciation, obviously, reflects a big part of the capital, the fair-value purchase price bringing in Xstrata assets back in 2013. So you put a value on your coal assets, you put a value on zinc, copper, nickel, whatever the case may be.

That's not now amortizing previous historical cost of assets that is more akin to your ongoing CapEx as well. This is a big 45 billion of implied value of Xstrata at the time.

And if you just take the coal business itself, we've got something like 2 billion of depreciation going through the coal business whereas sustaining CapEx is 600 million to 700 million, probably somewhere in that order of magnitude, which is fine for the current level of coal. We have cut some tones, clearly, from where were three or four years ago.

So of course if you were to bring back some of that latent capacity, both in South Africa, Colombia, potentially a little bit Australia, you'll kick start up the sustaining CapEx, but it will be done in an environment. So it is sustainable at that sort of level.

I think we somewhat have a quirkier situation around the fact that it's a big pot of depreciation, which is stemming from that particular non-cash at the time, share-for-share acquisition at the time. And of course there's another, we've done our impairment testing.

You've done your valuations. You've done all that sort of stuff.

So, clearly, an environment where you expect some steepening and some curves whether it's across coal and some other commodities, within consensus numbers. These are all things that we've obviously done.

But of course if you were to assume flat prices forever in coal or some other things then there could be potential that your value of your coal assets at this level of cash generation is too high in your books at the moment because we are assuming something. If that happens, then that reduces your accounting depreciation going forward and gets it more in line at that particular point in time.

Tyler Broda, RBC. After going through the process of realigning the RMIs and picking up some of the capital efficiencies in the marketing business, post 2017, assuming you do reach the debt-reduction targets what sort of level of RMI should we be needing to look at for the 2.7 billion to the 3.7 billion long-term guidance?

I think certainly the amount that it is at the moment should allow you to start because there's a few things that will take your 2.4 to 2.7 back up into above and it's not necessarily driven by RMI per se; one of which, as I said, interest rate environment. Let's see what that does in terms of the recharging or the recovery of interest through the EBIT line.

So that will come through at some point. I don't know.

No one knows what that shape of curve is necessarily going to be doing, otherwise it's a good trading potential in its own right. The other thing, we have curtailed production, clearly, across coal, copper, zinc, nickel, oil, across various commodities.

As and when those volumes, own source, come through as well, there's obviously the potential through the volumes and the synergies and the arbitrage that comes with that, because we have made a dent in our zinc book for now. We've made a dent in copper.

We've made a dent in coal. So these things at the margin of course as and when those volumes do come back in, that will have some pickup as we obviously move forward there in respect of that contribution.

Prices going up, at some point we've always said that is a key factor, not because you're long and have that exposure, just because when prices go up there's a reason why prices are going up and it would normally mean because of what's happening in the physical market itself. Inventory levels might be coming down.

There's a bit more tightness. Premiums are starting to go up.

These are all things that tend to be positive in terms of our own business. So I think ultimately you need an interest rate cycle to turn a little bit.

You need prices to start going up to start getting you more comfortably within that 2.7 to 3.7. And, at that particular point in time, yes, the RMI will go up from purely price driven.

Your 15 might go 17 because copper's now 5,500 and nickel is 10,000 and zinc is 2,400, or whatever the numbers are. So it may creep up there.

But then you do the math around the business and your underlying industrial business and your fundamental value and your cash generation is going to be net-net. You're going to be much more positive in that as well.

We've always said the size, so the industrial business, when it goes up, when the RMI goes up, as Steve says, that's higher commodity prices. And we've always said with higher commodity prices it means markets are tighter.

And when markets are tighter there're more arbitrage opportunities around the world and therefore our trading profits also go up. We've always seen with higher commodity prices, so we said we'll be more towards the 3.7 range as opposed to the 2.7.

So when RMI does go up because of pricing, that's a good sign on the trading business.

We look forward to reporting on that basis.

Sounds good. Thank you.

Good morning. This is Andrew Keen from Haitong.

Just one specific question for Steve. If I understand your comments correctly, you've reclassified some working capital as RMI.

Can you say how much, what size that reclassification was and whether or not it affects any of the net debt metrics that the rating agencies look at?

Thanks Andrew. I mean these are trading entities themselves.

So it is the metal and the concentrates that we're moving back and forth, re-exporting, blending and the likes as well. It was a movement of around 1.5 billion was contributing to the RMI, which historically by virtue of well this is a smelting operation therefore let's treat it as RMI, wasn't coming through on that basis.

So, in fact it was an oversight, is how I would describe it. Historically, we were too conservative in having not captured what was clearly definitionally RMI by virtue of how it's managed, where it's controlled in supporting the marketing activities.

From one day to the next, it could have been moving in and out of RMI just by virtue of that delineation because Glencore International would be buying that metal physically from that particular smelter, or delivering concentrate in there and stocking and blending and doing all sorts of things. And it does legally there's transactions going back and forth between these legal entities that had the effect of saying one day that same stockpile or that same inventory was suddenly RMI or it's not RMI, which was obviously not the appropriate and correct treatment there.

So this just gets it to where it needs to be. It reflects the trading character and nature of these particular structures and gets the position at December 2015 to where it needs to be.

Oversight historically. This was always part of then our guidance, which we gave towards the end of last year.

It was part of our 40, 15 and 25, which we spoke about. And had been progressively accounted for during the course of 2015 through half year through the numbers.

So it's just part of RMI today and it obviously has an impact and some people provide 50-50, there's haircuts, they do all those things and that will just follow the associated treatment there.

There might be two, actually. So just on nickel.

Obviously, Murrin Murrin was under review you were saying in December. Could you give us a quick update on where we are with that?

And with Koniambo, obviously another big hit in terms of the impairment. I was hearing there was some state aid, so France helping.

Are you able to get a bit of free money there, in terms of the sustainability of those assets? And also could you just give us a sense of the potential from the incremental streaming transactions and the logistics infrastructure asset sales?

I presume they're both relatively small, more like Antapaccay or lower in terms of proceeds from streaming, and less than that, I presume from logistics. Thank you.

Let's first talk Murrin Murrin. Murrin Murrin keeps looking at its cost structure.

You can imagine, at current nickel prices, it's not great. Okay, the nickel price has picked up a little recently but it's just there.

They're looking all the time how they can reduce costs, what the effects where they can get their costs down to make sure that it's cash breakeven. And they're sort of getting there.

Murrin could be pretty much cash breakeven at these levels. But we will continue reviewing it.

As I say, we've got no assets in the portfolio if we believe commodity the thing is generating negative cash. We will look to see what we can do.

What is the effect of shutting it? What is the cost of shutting it?

How long we can keep it casting. We'll always compare the cost of shutting it as opposed to keeping it open, depending where you see the future commodity price.

So it's always under review and the guys are doing a pretty good job in pushing its costs lower. Koniambo.

We clearly see it, as you correctly say it is a big write down. We knew it's a massive over expenditure on the asset.

Time to get the asset running. There is the problem on the furnaces.

We mentioned the problem on the furnaces. We've taken that down Lion 2 and Lion 1 we've redone the furnace and Lion 1 is back in operation.

Their furnace is being run and it's got to make sure that the furnace works. I don't want to be the technical expert here because I'm not, but I sit with the guys all the time.

They believe it is ramping up quite nicely. Are they 100% sure that they've overcome the problems?

No, but they believe they're getting there. And I think by midyear the idea is to have Lion 1 up running efficiently and cost effectively and then we will keep it running until the end of the year, if we do resolve all the problems that were existing.

And then, eventually if we are sure Lion 1 runs, then we'll bring up Lion 2 later on. But right now Lion 2 is shut and we're just focusing on Lion 1.

By June this year we will really know have these refurbishments which we've done to the furnaces, the problems we had on the furnaces in the past by the design problems which were done originally, are those being fixed? Is it working?

We'll know by June. If by June we don't have this thing running, it should be running, then some serious decisions we've made at Koniambo.

We have no intention to run an operation which is very cash negative and that would be if we don't overcome these problems. So, it's a work in progress, it's something we monitor very carefully.

It's one of the biggest write-downs this Company has taken and yes, we've got to get it right but if not, we will have to do something with it. Are we getting free money?

No, we haven't seen the free money yet. What was the second question on?

Across those other categories, a couple of billion, actually, so it's not [indiscernible] across the potential monetization, a couple of billion across there, that's the potential.

We're on a pretty tight schedule today, so thank you for joining us online and also physically. Thank you.

Thank you.

Thank you.