Annual Report
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CORPORATE PROFILE AUSTRALIA Diversified. Dedicated. Driven. About Glencore Highly diversified Active at every stage of the commodity chain to maximise value +90 50 COMMODITIES COUNTRIES Global scale 90 150 155,000 OFFICES SITES PEOPLE Unique market insight Long-term relationships with broad base of suppliers and customers 4,000 40+ for bindingShort page EMPLOYEES IN MARKETING YEARS EXPERIENCE Glencore is one of the world’s largest and most diversified producers, processors and marketers of natural resources. We market commodities sourced from our own and third party production and deliver these to a global customer base, which includes the automotive, steel, power generation, oil and food processing industries. Our business covers three broad sectors: Metals and Minerals, Energy Products and Glencore Agriculture, which are all supported by our extensive global marketing network. More information is available at www.glencore.com www.glencore.com.au Contents ABOUT GLENCORE 1 Our Australian operations’ contribution 2 The history of our business in Australia 3 Our role and focus areas 4 A unique business model METALS AND MINERALS 7 Copper 9 Zinc 10 Nickel 11 Glencore Technology ENERGY PRODUCTS 13 Coal 15 Oil 17 AGRICULTURE 18 MARKETING OUR PRODUCTS IN SOCIETY 19 Copper 20 Zinc 21 Nickel 22 Coal 23 Agriculture 24 Supporting regional Australia Short page for bindingShort page Our Australian operations Australia is an important part of our global business. We’ve operated here for nearly 20 years and hold significant interests in a range of commodity industries across all mainland states and the Northern Territory. Headquartered in Sydney, we are a major Australian Most of our investments are highly capital intensive, employer, with about 15,600 people working across long-term and require a stable and predictable industries that include coal, copper, cotton, grain and investment environment. oilseeds, nickel, oil and zinc. We are focused on creating value for our shareholders Our business has grown steadily through acquisition, and operating in a safe, efficient, responsible and including Viterra’s agriculture business in 2012 and sustainable manner. Xstrata’s mining business in 2013. Many of our Australian operations are vertically integrated across the supply chain. We engage in exploration and origination, production, processing and refining, marketing and blending, handling, storage and transport. Darwin Bing Bong LoadingBorroloola Facility Cairns Townsville Bowen Mount Isa Mackay Gladstone Brisbane Kalgoorlie Perth Cobar Kwinana Newcastle Sydney Adelaide Port Kembla ( Regional headquarters) Melbourne Metals and Minerals: Agriculture: Copper Farms Nickel Key upcountry storage sites Zinc Container packing and processing facilities Energy Products: Oil City/Town Coal Port facilities and storage Technology Corporate Profile Australia 1 During 2016 in Australia, we contributed more than $12 billion to the regional, state and national economies. Our most significant economic contribution comes from our core business activities: employing people, sourcing from local communities, and paying taxes to our host governments. JOBS TAXES & ROYALTIES 15,600 $1.3 b DIRECT EMPLOYMENT PAID TO STATE AND ACROSS AUSTRALIA FEDERAL GOVERNMENTS WAGES CAPITAL $1.7 b INVESTMENT ANNUAL WAGES AND SALARIES PAYMENTS $895 m ON SUSTAINING AND EXPANSIONARY INVESTMENT ACROSS OUR AUSTRALIAN BUSINESSES SPEND COMMUNITIES $8.2 b $8 m ON GOODS AND SUPPLIERS, INCLUDING REGIONAL COMMUNITY SUPPORTING OUR LOCAL SUPPLIERS INVESTMENT INITIATIVES All figures are for 2016 and in Australian dollars 2 GLENCORE Diversified. Dedicated. Driven. The history of our business in Australia Glencore has been investing in Australia for nearly 20 years. Over that time our business has successfully navigated commodity cycles, including both booms and downturns. From a small start through the acquisition of the Cumnock and Mount Owen coal mines in 1998, we have steadily grown our Australian operations. The majority of our growth has come through acquisition, both global and local, but we have also invested in new operations and expanded existing production. We have continued to invest throughout the commodity cycle – when commodity prices are high and when they are low. Every investment we make must represent value for shareholders. Our operations and investments have created and continue to sustain thousands of jobs both directly and indirectly. MIM Holdings Limited MIM Mount Holdings Isa Mines Limited Jubilee Mines Ernest Mount Henry Isa Mines Mining JubileeSinclair Mines United Wambo CopperErnest Refi Henry neries Mining CosmosSinclair UnitedClermont Wambo TownsvilleCopper RefiPort neries Operations Cosmos Clermont Xstrata acquisition Bowen Townsville Coke Port Operations Tahmoor CSA Mine Xstrata IPO McArthurBowen RiverCoke Mining Tahmoor Xstrata acquisition Ulan West CSA Mine Xstrata IPO OakyMcArthur Creek River Mining Teralba Newlands Liddell RavensworthUlan North West Cook Oaky Creek (expansion) West Wallsend Collinsville Liddell RavensworthRolleston North Teralba NaramaCook Newlands (expansion) Westside Rolleston (expansion) Rolleston West Wallsend RavensworthNarama Collinsville Resource Pacifi c McArthur Liddell (expansion) Westside Ravensworth Rolleston ResourceRavensworth Pacifi c River Mining United Glencore Grain Underground (expansion)McArthur Chemoil Liddell Ravensworth River Mining United Glencore Grain Underground (expansion) Chemoil 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Bulga Lady Loretta Viterra BeltanaBulga McArthur RiverLady Mining Loretta Glendell Viterra (expansion) (expansion) BulgaBeltana South McArthur River Mining Glendell Ulan OC Ernest Henry Mining (expansion) BaalBulga Bone South (expansion) (expansion) Ulan OC (underground extension) Mount Isa Mines Baal Bone Ernest Henry Mining (expansion) (underground extension) (George Fisher Mine Minara Resources Mount Margaret Mining expansion) Mount Isa Mines (George Fisher Mine MinaraMurrin MurrinResources Mount MargaretMangoola Mining expansion) Murrin Murrin Blakefi eldMangoola South Integra Cumnock Coal Blakefi eld South Integra Mt CumnockOwen Coal Mt Owen Operations OperationsCopper Zinc Nickel Coal Oil Agriculture Copper Zinc Nickel Coal Oil Agriculture Corporate Profile Australia 3 Our role and focus areas OUR PRODUCTS FOR A WORLD-CLASS EMPLOYER TODAY AND TOMORROW Our people are fundamental to our success We make a significant contribution to some of and growth. Australia’s most important industries. As well Employing locally where we can is a priority as servicing domestic markets, we export our for our business and an important part of our products all over the world. socio-economic contribution to the communities These natural resources help maintain and that surround our operations. enhance the living standards of millions of people We employ a broad range of experts in their and lift others from poverty. As the world’s chosen fields, including geologists, engineers, population grows to almost 10 billion people by accountants, IT professionals, mechanics, 2050* and living standards continue to rise across environmental scientists and lawyers. many emerging economies, demand for many key commodities continues to rise. We choose the best people for each position; people who think and act like entrepreneurs, are Many of our products play a critical role in willing to learn, are passionate about their work, creating a more sustainable future. Materials and strive to be leaders in their field. We invest like copper, nickel and cobalt make large-scale in our people through ongoing training and battery technology possible for electric vehicles. development opportunities to grow their skills, Resources like coal, copper, nickel and zinc go expertise and experience. into the production of solar panels. Our employees are also ambassadors We compete in a global marketplace to supply, for our values, which include a focus on trade and transport products to consumers, and protecting the health and safety of our people; in doing so, we create value for our shareholders an entrepreneurial spirit; openness, our and make a positive contribution to local responsibilities to society and the environment; communities and the economy. and our commitment to achieving our key deliverables simply and efficiently. SUSTAINABILITY INFORMS EVERYTHING WE DO We are proud of the work we do and are committed to continuously improving our performance in health, safety, environmental stewardship and community engagement. EVERY SINGLE INDIVIDUAL HAS THE AUTHORITY TO STOP We recognise that our agricultural and mining UNSAFE WORK operations have an impact on the environment and our neighbouring communities. The health and safety of our people is our top priority. Our ambition is to be a leader Our ambition is to reduce our environmental in safety and to create a workplace free from footprint, including more efficient use of resources fatalities, injuries or occupational diseases. such as energy and water, wherever possible. In 2014 we commenced the implementation We aim to foster sustainable growth wherever we of our SafeWork initiative, first developed operate, creating shared value for our business, as SafeCoal by our Australian coal business local communities, government and other in 2009. This global program focuses on stakeholders. This is central to our values and changing attitudes towards