BMO Capital Markets2017 Global Metals & Mining Conference

27 February 2017

Mobile equipment, Raglan Nickel, Canada

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2

Ivan GlasenbergChief Executive Officer

Tweefontein coal, South Africa

Summary

• 2012-2015 Commodity price weakness resulted from over-allocation of capital between 2006-2012• Obscured that underlying demand growth remained robust in most commodities• Most investment went into reasonable quality assets … but has depleted the next generation of projects

• 2016 turning point for the mining sector• Demand/supply expectations and market positioning expectations too bearish in spite of years of underperformance

• Future performance will largely be dictated by actions from here• Sector commodities are key to facilitating future economic growth/improved living standards• Glencore has recognised and demonstrated that capital allocation based on average not marginal NPV adds value• Glencore has recognised that growth in cash flows is what counts, not volumes– The supply we generate helps set the price we have to take as a producer

• Structurally lower capex looks likely to persist into the medium term• Memories of 2015/16 remain fresh for shareholders and management• Reduced opportunities to invest on reasonable terms – little or no new economic assets discovered in the past decade

• Glencore is well positioned• Genuinely diversified but with focus on “best” commodities• Unique ability to scale production in our commodities when appropriate– We cut production in 2015 to preserve resources and help balance markets– Abundant brownfield opportunities• Credit metrics repositioned to strong investment grade levels

4

Post 2006 – sector chased expected volume growth

15

20

25

30

35

40

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

F

2022

F

• Excessive focus on demand forecasting• Metal demand assumed to almost double 2005-2020• Emerging market urbanisation• 2x long-term historic growth trend

• Bubble charts became the norm• Many shareholders/analysts were cheerleaders• Increasingly marginal projects proposed and approved

• “If I don’t someone else will” supply mantra• Fear of missing out on higher prices/market share• Market rewarded growth pipelines however tenuous

• 8%-12% CAGR volume growth targeted• To match expected volume growth• Everyone else’s supply assumed to be “constrained”• Managements failed to notice the contradiction

5

The global copper market was forecast to double in size by 2020 (Mt Cu)

2008 Forecast global copper market (1)

2016 Q4 Forecast global copper market (2)

Notes: (1) Source industry peer presentation. (2) Wood Mackenzie Global copper long-term outlook Q4 2016, annual copper demand

Resulting in a sustained period of over-investment …

6

0

200

400

600

800

1000

1200

2003 2005 2007 2009 2011 2013 2015

Precious: $211bnBase Metals: $206bnBulks: $149bnDiversifieds: $496bn

Sector invested more than $1 trillion of capex ($bn)(1)

...

2003 2005 2007 2009 2011 2013 2015

… and significantly increased supply in most commodities ($bn)(2) …

+110% Aluminium

+80% Iron ore+79% Thermal coal+72% Lead

+79% Coking coal

+47% Copper+47% Nickel+45% Zinc

Notes: (1) Cumulative capex from 2003 segmented by company type, Source: Citi Research, Morgan Stanley. (2) Annual supply indexed to 2003, Source Citi, Morgan Stanley, Wood Mackenzie, USGS

… leading to sustained deflation 2011-2015 …

2003 2005 2007 2009 2011 2013 2015 2003 2005 2007 2009 2011 2013 2015

7

… helping to lower mining unit costs (1) ... … along with commodity prices (2) …

Copper

Iron ore

Zinc

Thermal coal

Copper

AluminiumNickel

Met Coal

Iron ore

Thermal CoalZinc

Notes: (1) C1 cash costs (50th percentile) indexed to 2003, Source Bernstein, Wood Mackenzie, Morgan Stanley. (2) Indexed to 2003, Source: Citi, Morgan Stanley, Bloomberg, Wood Mackenzie. (3) Sector annual free cash flow from 2003 to 2015 defined as operating cash flow less reported capex. Source Citi Research, Factset

0%

1%

2%

3%

4%

5%

6%

7%

Alu

min

ium

Cop

per

Zinc

Lead

Nic

kel

Iron

Ore

Ther

mal

Coa

l

2003-2015 CAGR 2011-2016 CAGR

8Notes: (1) Sector annual free cash flow from 2003 to 2015 defined as operating cash flow less reported capex. Source Citi Research, Factset. (2) Annual demand growth, Source: Wood Mackenzie, Morgan Stanley, Citi Research, Glencore estimates.

-20

0

20

40

60

2003 2005 2007 2009 2011 2013 2015

… generating just $370bn of free cash flow(1) …$bn operating cash flow less capex

… despite demand growth (2)

… and weak cash flows, despite healthy demand growth

Around this time last year … commodities apparently faced the apocalypse …

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Today … cautious optimism has returned

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What has changed? … demand conditions in 2016 better than forecast

• Sentiment proved too bearish• Some forecast that China’s demand for mined

commodities would more than halve in 2016• Expected emerging market deleveraging and continued

deflation of mining costs were forecast to pressure commodity prices lower

• Overshoot of sentiment following sustained underperformance

• Actual 2016 demand surprised positively• Underpinned largely by Chinese stimulus and supply-side

structural reforms aimed at removing overcapacity in the coal and steel sectors

• Demand outlook now appears constructive• Global growth momentum in the USA, Europe and

emerging markets is close to multi-year highs, as is consumer confidence in the US and Eurozone

-0.3% 0.5%

-3.1%

0.1% 2.0%

2.5% 2.7%3.5%

5.1%

7.8%

11.0%

Copper Zinc Iron Ore Aluminium Nickel ChineseThermal

Coalimports

ForecastActual/Estimate

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Surprisingly strong(1)

-19%

Notes: (1) 2016 Forecast source for copper, iron ore and aluminium: Redburn – From the Sky Down – 10 February 2016, forecast source for zinc and Nickel: Goldman Sachs - 'Capex‘ - heavy metals slow to adjust, set to underperform oil 2H16/17 – 8 February 2016, Forecast source for Chinese thermal coal imports: Macquarie – Commodities Compendium – 18 January 2016. 2016 Actual/Estimate source for copper, iron ore, zinc: Wood Mackenzie – Global short-term outlooks January 2017, Actual/Estimate source for Aluminium, Nickel and Chinese thermal coal imports: Macquarie – Commodities Compendium – 19 January 2017.

Actual/estimated 2016 demand growth vs early 2016 forecast

What has changed? … supply growth was also weaker than feared

• Years of low prices have induced stresses on the supply side …• Voluntary supply cuts• Involuntary supply cutbacks (strikes/technical problems)• Chinese supply side structural reforms• High grading to enhance cash flows

• … helping to rebalance markets at a faster than anticipated pace• Copper deficit brought forward to 2017 compared to

oversupply through the end of the decade – Accelerated by stronger demand, voluntary cutbacks

inc. Katanga & Mopani as well as the growing impact of high grading orebodies to maximise cash flows

• Our zinc supply cuts have preserved the value of our scarce resources and helped rebalance the refined zinc market

– A portfolio view of volume rather than an asset view can create better returns

• Iron ore, aluminium and coal have been buoyed by reforms to tackle Chinese domestic overcapacity

2014 2015 2016 2017 2018 2019 2020

Q4 2015 ForecastQ4 2016 Forecast Surplus

Deficit

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Copper rebalancing accelerated (1)

1400

1900

2400

2900

Jan 15 Apr 15 Jul 15 Okt 15 Jan 16 Apr 16 Jul 16 Okt 16 Jan 17

A portfolio view of volumes can create better returns

500kt Zn production cut announcement(3)

H1 2016 Zinc Adjusted EBITDA: $770M(4)

H2 2016 Zinc Adjusted EBITDA:

$1,146M(5)

LME Zinc($/t)(2)

Notes: (1) Source Bloomberg. (2) Q4 2015 Forecast – Wood Mackenzie Global copper long-term outlook refined copper balance Q4 2015, Q4 2016 Forecast – Wood Mackenzie Global copper long-term outlook refined copper balance Q4 2016. (3) Glencore press release “Glencore to reduce mine production by 500,000 tonnes of zinc metal per annum” 9 October 2015. (4) Glencore 2016 Half-Year Report 2016 – 24 August 2016. (5) Glencore Preliminary Results 2016 – 23 February 2017

Outlook continues to justify optimism for major commodities

• Structurally lower capex will limit new supply growth• From a peak of c.$71bn in 2012, capex spend by the major

diversified miners shrunk to c.$25bn in 2016• No material new abundance of low-cost base metals

supply has been discovered over this period– Particularly evident in copper where the mine project

pipeline in volume terms is now less than that seen in the depressed pre-super cycle trough

• Lack of new supply is seeing the raw material end of the value chain starting to tighten

• Declining opportunity set for future projects on reasonable price and capex assumptions

• Maintaining existing supply challenging in many commodities• Aging mines and falling grades• Energy, water and infrastructure shortages• “Social licence to operate” challenges• Growing sovereign/political risks

• Demand also remains constructive

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0

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2001 2003 2005 2007 2009 2011 2013 2015

Copper mine project pipeline now less than half of depressed pre-super cycle levels(1)

Notes: (1) Copper mine project pipeline comprises the total production volume of projects categorised as highly probable and probable by Wood Mackenzie’s Global copper long-term outlooks from 2001 to 2016, indexed change from 2001. (2) Annual average LME cash copper price, source Wood Mackenzie and Bloomberg.

Copper mine project pipeline

(RHS indexed2001=100)(1)

LME Copper

(LHS $/t)(2)

The future can be different

Tweefontein coal mine, South Africa

Lessons learnt

• Most key commodity markets have rebalanced or are rebalancing

• Cyclical swings that characterise this industry do not have to be as large as they are

• Glencore recognises that earnings potential can be vastly improved by accepting lessons from 2003-15• Volume growth adversely impacts price– focus on average not marginal NPV• Volume growth is not an end in itself– value creation requires cash flow• Capital allocation needs to be more conservative and

based on actual cash flows• The starting point should be that doing nothing on growth

is often the best outcome

15Lomas Bayas copper, Chile

Glencore uniquely positioned for the challenges and opportunities that lie ahead

16

Earnings diversified by commodity and geography(1)

NorthAmerica

SouthAmerica

South Africa

CISAustralia

EuropeOther Africa

Coal

Copper

Zinc

Nickel

Ferroalloys

Agri

Oil

Marketing

The right commodity mix to feed the changing needs of maturing economies

Outstanding costs for our key commodities – 2017F(2)

Significant growth potential: capacity awaiting restart

Well capitalised asset base: modest go forward capex

Strong IG balance sheet:less risk/more stability

Maximizing value creation through capital allocation

FCF generative across the cycle and highly so at spot annualised prices(3)

Cu+c.400ktpa

Zn+c.500ktpa

Cu

NiZn

Coal

$4.4bn$2.8bn$0.6bn$3.8bn

Spot EBITDA $14.6bnSpot FCF $6.9bn

50%ND/Adj.EBITDA

FFO/ND

2013 2014 2015 20161.5x

Maintain strong

BBB/Baa

Equity cash flows

$1bn fixed Marketing distribution

Min. 25% Industrial

distribution

M&A + Other

Cu Zn

Ni ThermalCoal

89c/lb

247c/lb $28/tmargin @ $44/t

Notes: (1) 2016 Adjusted EBITDA split calculated pre-coal hedging impact and corporate overheads. Geographic split based on operating asset EBITDA. (2) Refer to Preliminary Results 2016 presentation slide 21 for production volumes underlying 2017 cost forecasts. (3) Refer to Preliminary Results 2016 presentation for spot prices slide 11 and production from slide 21. LME spot prices as at 20 February 2017 for metals, Cal17 NEWC forward curve for thermal coal as at 20 February 2017. Spot annualised FCF calculated from Spot EBITDA after deducting cash taxes and interest of $3.6bn, capex of $4.1bn. Excludes working capital changes and distributions.

• Key supply positions in the commodities (cobalt/nickel) that underpin the battery chemistry likely to power future EV and storage batteries

• Major producer of other mid and late cycle commodities such as copper, zinc and thermal coal

02468

101214

2006

2007

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2009

pf20

10pf

2011

pf20

12pf

2013

pf20

1420

1520

16+2

017

c.$4bn

• plus multi-commodity brownfield growth options when the time is right

-10c/lb10c/lb pre Au

Other $0.6bnMktg $2.4bn

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Power generation, Raglan Nickel, Canada

Q&A

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Power generation, Raglan Nickel, Canada