OUR BUSINESS STRATEGY

OUR BUSINESS STRATEGY

OUR PURPOSEResponsibly sourcing the commodities that advance everyday life.

OUR STRATEGYTo sustainably grow total shareholder returns while maintaining a strong investment grade rating and acting as a responsible operator.

LIVING OUR VALUESOur values reflect our purpose, our priorities and the beliefs by which we conduct ourselves. They define what it means to work at Glencore, regardless of location or role. They are the heart of our culture and the way we do business.

SAFETY INTEGRITY

We never compromise on safety. We look out for one another and stop work if it’s not safe

We have the courage to do what’s right, even when it’s hard. We do what we say and treat each other fairly and with respect

We work efficiently and focus on what’s important. We avoid unnecessary complexity and look for simple, pragmatic solutions

RESPONSIBILITY OPENNESS ENTREPRENEURIALISM

We take responsibility for our actions. We talk and listen to others to understand what they expect from us. We work to improve our commercial, social and environmental performance

We’re honest and straightforward when we communicate. We push ourselves to improve by sharing information and encouraging dialogue and feedback

We encourage new ideas and quickly adapt to change. We’re always looking for new opportunities to create value and find better and safer ways of working

glencore.com

SIMPLICITY

Map key Head office Industrial assets Marketing office/other

Integrating sustainability throughout our business

CO2e Scope 1million tonnes

15.02019: 18.3

CO2 Scope 2million tonnes

9.32019: 11.0

CO2e Scope 3million tonnes

2712019: 343

Targeted reduction in total emissions

40%on 2019 levels by 2035

Our Financial Highlights

Adjusted EBITDA◊US$ million

$11.6bn

Net (loss)/income attributable to equity holdersUS$ million

($1.9)bn

Cash generated by operating activities before working capital changesUS$ million

$8.6bn

Net purchase and sale of property, plant and equipment◊US$ million

$3.9bn

202020192018

11,601 11,560

15,767

202020192018

(404) (1,903)

3,408

202020192018

10,346 8,568

13,210

202020192018

4,966 3,921

4,899

One of the world’s largest natural resource companies

6continents

35countries

c.145,000employees and contractors

>40offices

OUR BUSINESS AT A GLANCE

Glencore Our buisness strategy 2020 2

Total borrowingsUS$ million

$37.5bn

Net debt◊US$ million

$15.8bn

202020192018

37,043 37,479 34,994

2020201920180.00x

0.50x

1.00x

1.50x

202020192018

17,55615,84414,710

Net debtNet debt to AdjustedEBITDA ratio

Two business segments

Industrial Marketing

Adjusted EBITDA◊ Industrial 2020

Adjusted EBITDA◊ Marketing 2020

● Metal● Energy

● Metal● Energy

$7.8bn2019: $9.0bn

$3.7bn2019: $2.6bn

Total Adjusted EBITDA 2020◊

$11.6bn2019: $11.6bn

Lost time injury frequency rateper million hours worked

0.942019: 0.99

Total recordable injury frequency rate per million hours worked

2.652019: 2.86

Annual Report cross reference guide

Page in this document

Page in 2020 Annual Report

Our purpose/values/ at a glance

1-3 IFC1-IFC3

Investment case 4 5

Business model 5-6 8-9

Our strategy for a sustainable future

7-10 10-13

3 Glencore Our buisness strategy 2020

INVESTMENT CASEOur unique portfolio enables the transition to a low carbon economy. As a CO2e total emissions reduction leader, our strategy is Paris aligned across key milestone dates, with the ambition of achieving net zero by 2050

Strong diversification by commodity,

geography and activity

A major supplier of energy and

mobility transition materials

Well-capitalised, low-cost, high return assets to facilitate the

transition to a low carbon economy

• Fully integrated from extraction to customer

• Presence in over 35 countries• Responsibly producing

and marketing more than 60 commodities

• Diversified across multiple suppliers and customers

• Future demand patterns are likely to favour the commodities that facilitate the decarbonisation of energy usage

• We are a major producer of the commodities (copper, cobalt, nickel and vanadium) that currently underpin the infrastructure and battery chemistry likely to power electric vehicles and energy storage systems

• Our overall metals’ asset portfolio is low-cost and long-life, supporting the transition to a low carbon economy

• Our high-quality coal portfolio is expected to generate healthy levels of cashflow as production reduces over time, in line with our decarbonisation commitments

A unique marketing business that extracts value across the entire

supply chain

Significant cash flow generation and shareholder

distribution potential

Be a decarbonisation

leader while meeting everyday metals demand

and today’s energy needs

• As a marketer of commodities, we can extract value from the full-range of physical arbitrage opportunities

• We create value through economies of scale, our extensive (including third parties) supply base, our logistics, risk management and working capital financing capabilities

• Adjusted EBITDA◊ $11.6 billion in 2020, flat year-on-year

• Net debt/adjusted EBITDA◊ of 1.37x• Base distribution policy represents

a fixed payout of prior year cash flow, comprising $1 billion from Marketing and 25% of Industrial asset attributable free cash flows

• “Top-up” capital returns, as appropriate, from accumulation of balance sheet surplus capital

• Leading climate strategy: targeting a 40% reduction in total CO2e emissions by 2035, and 2050 net zero ambition for Scope 1+2+3 emissions

• Responsible stewardship of declining coal business over time as industry decarbonises

• Decarbonisation pathways require our transition enabling commodities

Financial statementsGovernance Additional information


Strategic report

SAFETY OPENNESS

INTEGRITY SIMPLICITY

RESPONSIBILITY ENTREPRENEURIALISM

BUSINESS MODELAs a global producer and marketer of commodities, we are uniquely diversified by geography, products and activities. Integrating our marketing and industrial business sets us apart from most of our competitors in creating an enhanced entrepreneurial focus on value generation

Exploration, acquisition and development

Our focus on brownfield sites and exploration close to existing assets lowers our risk profile and lets us use existing infrastructure, realise synergies and control costs.

Extraction and production

We mine and beneficiate minerals across a range of commodities, mining techniques and countries, for processing or refining at our own facilities, or for sale.

Processing and refining

Our expertise and technological advancement in processing and refining mean we can optimise our end products to suit a wider customer base and provide security of supply as well as valuable market knowledge.

Our recycling business

Inputs and resources on which our business model dependsASSETS AND NATURAL RESOURCES• Our resources and reserves

feature many long-life and high quality assets

• We are a disciplined producer, seeking to align supply with demand and value over volume

• Our established marketing operations have global reach and deep understanding of their respective markets

OUR PEOPLE AND PARTNERS• We have established long-term

relationships with a broad range of suppliers and customers across diverse industries and geographies

• c.145,000 employees and contractors spread across over 35 countries in both established and emerging regions for natural resources

FINANCIAL DISCIPLINE• We seek to deploy capital

in a disciplined manner, seeking to create value for all our stakeholders

• Our hedging strategies protect us against price risks and ensure that our marketing profitability is primarily determined by volume-driven activities and value-added services rather than absolute price

UNIQUE MARKET KNOWLEDGE• As a significantly integrated

commodity producer and marketer, we are uniquely positioned to generate value at every stage of the commodity chain

Our values reflect our purpose, our priorities and the beliefs by which we seek to conduct ourselves and carry out our business activities. They define what it means to work at Glencore, regardless of location or role.

Our industrial businessOur industrial business spans the

metals and energy markets, producing multiple

commodities from over 65 assets

We recycle key commodities fuelling the circular economy


Our commodities in everyday products

Logistics and delivery

Our logistics assets and capabilities allow us to handle large volumes of commodities, both to fulfil our obligations and to take advantage of demand and supply imbalances. These value added services make us a preferred counterparty for customers without such capabilities.

Blending and optimisation

Our ability to blend and optimise allows us to offer a wide range of product specifications, resulting in an ability to meet our customer specific requirements and provide a high-quality service.

Outputs and impact on key stakeholders

INVESTORS

$11.6bn2020 Adjusted EBITDA◊

$4.4bnFree cash flow (FFO less net purchases of property, plant and equipment)

OUR PEOPLE

7%Decrease in total recordable injury rate

COMMUNITIES AND SOCIETY

$95mCommunity and Covid-19 support

PAYMENTS TO GOVERNMENTS

$5.8bn

Our marketing businessWe move commodities

from where they are plentiful to where they are needed

The products we produce and market play an essential role in modern life

Financial statementsGovernance Additional information


Strategic report

OUR STRATEGY FOR A SUSTAINABLE FUTURE Aligned with our purpose, our portfolio enables the transition to a low-carbon economy, while meeting society’s energy needs as it progresses through the transition

To be a leader in enabling

decarbonisation of energy usage and help meet

continued demand for the metals needed in everyday

life while responsibly meeting the energy

needs of today

OUR PURPOSE STRATEGIC OBJECTIVE

Responsibly sourcing the commodities that advance everyday life


Responsible production

and supply

Responsible portfolio

management

Responsible product use

Integrity, responsibility and safety are our core values that are embedded in everything we do. We are committed to operating ethically, responsibly, and to contributing to socioeconomic development in the countries where we operate. We will continue

to focus on reducing the carbon footprint of our operations and will allocate financial returns towards fullfilment of our business strategy. Our commitment is delivered through our operational excellence, health and safety

and ethics and compliance programmes, advancing our environmental performance, respecting human rights and by developing, maintaining and strengthening our relationships with all of our stakeholders.

We will prioritise investment in metals that support the decarbonisation of energy usage as well as help meet demand for metals needed in everyday life. We will also reduce our coal production in line with our various climate action commitments and the electrification and

decarbonisation of energy systems. Our capital allocation supports this strategy through the optimal balance of debt and equity, distributions to shareholders and business reinvestment in transition commodities and value

accretive Scope 1+2 abatement opportunities that help achieve medium-term Paris alignment and our 2050 net-zero ambition.

A low-carbon future requires responsibly produced low-carbon metals. We will seek opportunities to increase the proportion of green metals we can supply to customers from our own operations and through our extensive marketing activities.

We will participate in global efforts to improve abatement technologies and availability, as well as resource use efficiency by contributing to the circular economy.

STRATEGIC PRIORITIES

Strategic report Additional informationFinancial statementsGovernance


OUR STRATEGY FOR A SUSTAINABLE FUTUREcontinued

Strategic priorities

Performance in 2020 Priorities going forward KPIs Principal risks

RESPONSIBLE PRODUCTION AND SUPPLY

Operational performanceAfter allowing for managed production adjustments, targeting margin over volume, the majority of our key assets performed in line with expectations. Our copper, zinc, and coal portfolios maintained their first quartile cost/margin positions, while the nickel portfolio (ex-Koniambo) again recorded a second quartile cost position. Calculated copper, zinc and nickel EBITDA margins increased year-on-year while coal’s margin decreased in line with lower coal prices.

SafetyRegrettably, there were eight fatalities during the year. We implemented our enhanced fatality reduction programme, and have overhauled our “SafeWork” programme for relaunch in 2021.We continue to work towards the elimination of fatalities from our business.Our TRIFR and LTIFR decreased by 7% and 5% respectively compared to 2019.

Climate changeWe recognise our responsibility to contribute to the global effort to achieve the goals of the Paris Agreement by decarbonising our own operational emissions footprint. In line with the ambitions of the 1.5-degree Celsius (ºC) scenarios set out by the IPCC, we have set ourselves the target of reducing our total (Scope 1, 2 and 3) emissions by 40% by 2035 on 2019 levels. Post 2035, our ambition is to achieve, with a supportive policy environment, net zero total emissions by 2050.

Water managementOperations continue to implement our Water Management Guideline, focused on responsible water management, in alignment with the International Council for Mining & Metals’ (ICMM) position statement on water and its water management framework.

Community engagementOur community development programmes are an integral part of our community and stakeholder engagement strategies. In 2020, we spent $95 million on these and Covid-19 support programmes (2019: $90 million).

Operational excellenceContinued focus on operational efficiencies and improvements to minimise operating costs and maximise margins.

SustainabilityWe continue to implement activities that promote integration of sustainability throughout our business to support our commitment to continuously improve our standards of health, safety, environmental and community and human rights performance.

Managing emissionsWe are working with global specialists and draw on local expertise within our operational teams to identify value accretive abatement opportunities to further reduce our carbon footprint.

Under all credible scenarios, fossil fuels (coal, gas and oil) will continue to be a part of the global energy mix for many years to come. We will responsibly steward the decline of our coal business as it meets society’s energy needs through the energy transition.

TransparencyWe are committed to operating transparently, responsibly and meeting or exceeding applicable laws.

• Value for our shareholders – Adjusted EBIT/EBITDA, Net income attributable to equity holders

• Safe and healthy workplace – fatalities, TRIFR, LTIFR and occupational disease cases

• Environmental performance – water withdrawn, Scope 1 and 2 emissions, meeting our commitments on climate change

• Long-term value for communities – community investment spend

• Health, safety and environment

• Climate change• Community

relations and human rights

RESPONSIBLE PORTFOLIO MANAGEMENT

Conservatively positionedCapital structure and credit profile managed through targeting a maximum 2x Net debt/Adjusted EBITDA throughout the cycle, augmented by an upper Net debt cap of c.$16 billion excluding Marketing-related lease liabilities.Year-end Net debt and Net debt to Adjusted EBITDA were $15.8 billion and 1.37x respectively. Net loss attributable to equity holders for 2020 was $1.9 billion.

BondsWe issued $2.0 billion, EUR 950 million and CHF 225 million of bonds across a range of maturities from 5 to 10 years. Post-2020 maturities are capped at c.$3 billion in any one year.

ReinvestmentOur net 2020 cash capital expenditure of $3.9 billion was weighted towards transition commodities with c.82% of our expansionary capital invested in our metals business, including the Katanga copper/cobalt operation, INO life extension projects (nickel) and the Zhairem zinc project.

Credit ratingThe Group’s credit ratings are currently Baa1 (negative outlook) from Moody’s and BBB+ (stable) from Standard & Poor’s.

Credit facilityThe Revolving credit facilities were refinanced and slightly increased in 2020 to $14.625 billion. Committed available liquidity of $10.3 billion at year-end covers more than three years of upcoming bond maturities.

Balance sheetWe are committed to strengthening our balance sheet to ensure it is capable of supporting our purpose and strategy

Investment grade ratingWe will preserve a robust capital structure and business portfolio that reflects our commitment to targeting, receiving and maintaining a strong BBB/Baa investment grade rating. In this regard, we continue to target a maximum 2x Net debt/Adjusted EBITDA through the cycle, augmented by an upper Net debt cap of c.$16 billion, excluding Marketing-related lease liabilities.

In the medium term, we target leverage at the low end of our $10-$16 billion Net debt guidance range (below the midpoint by end of 2021), including a Net debt/Adjusted EBITDA ratio closer to c.1x.

ReinvestmentPrioritise investment in transition commodities and value accretive Scope 1+2 abatement opportunities that help achieve our medium-term Paris alignment and 2050 net-zero ambition.

• Returns to shareholders – Funds from operations, Net funding and Net debt and annual capital return / distributions


• Supply, demand and prices for the commodities we produce

• Currency exchange rates

• Liquidity• Counterparty

credit and performance

RESPONSIBLE PRODUCT USE

Marketing green metalsWe are one of the largest suppliers of aluminium to global markets. Significant offtake agreements with low-carbon producers results in more than 60% of our ex-China marketing book currently being low-carbon. We will continue to focus on expanding this footprint.

Responsible sourcingGlencore became a member of the Fair Cobalt Alliance (FCA) in 2020. Through the FCA, we will support legitimate artisinal and small-scale mining (ASM) cooperatives in their endeavours to transform their practices and align with international human rights practices, especially in the prevention of child labour.

In addition to our new partnership with the FCA, as a member of the Responsible Minerals Initiative, we also participate in programmes to develop frameworks and standards that support responsible ASM.

PartnershipsWorking with our customers and supply-chain to enable greater use of low-carbon metals and support progress towards technological solutions

AbatementSupporting uptake and integration of abatement – an essential contributor to achieving low or net zero carbon objectives

Circular economyLeverage our value chain to expand the volume of recyclable commodities for processing through our global network of metallurgical assets.

Responsible sourcingPursue strategic long-term agreements to provide a reliable supply of responsibly-produced commodities essential to the low-carbon economy



• Geopolitical, permits and licence to operate

• Laws and enforcement

• Operating risk


Strategic priorities

Performance in 2020 Priorities going forward KPIs Principal risks

RESPONSIBLE PRODUCTION AND SUPPLY

Operational performanceAfter allowing for managed production adjustments, targeting margin over volume, the majority of our key assets performed in line with expectations. Our copper, zinc, and coal portfolios maintained their first quartile cost/margin positions, while the nickel portfolio (ex-Koniambo) again recorded a second quartile cost position. Calculated copper, zinc and nickel EBITDA margins increased year-on-year while coal’s margin decreased in line with lower coal prices.

SafetyRegrettably, there were eight fatalities during the year. We implemented our enhanced fatality reduction programme, and have overhauled our “SafeWork” programme for relaunch in 2021.We continue to work towards the elimination of fatalities from our business.Our TRIFR and LTIFR decreased by 7% and 5% respectively compared to 2019.

Climate changeWe recognise our responsibility to contribute to the global effort to achieve the goals of the Paris Agreement by decarbonising our own operational emissions footprint. In line with the ambitions of the 1.5-degree Celsius (ºC) scenarios set out by the IPCC, we have set ourselves the target of reducing our total (Scope 1, 2 and 3) emissions by 40% by 2035 on 2019 levels. Post 2035, our ambition is to achieve, with a supportive policy environment, net zero total emissions by 2050.

Water managementOperations continue to implement our Water Management Guideline, focused on responsible water management, in alignment with the International Council for Mining & Metals’ (ICMM) position statement on water and its water management framework.

Community engagementOur community development programmes are an integral part of our community and stakeholder engagement strategies. In 2020, we spent $95 million on these and Covid-19 support programmes (2019: $90 million).

Operational excellenceContinued focus on operational efficiencies and improvements to minimise operating costs and maximise margins.

SustainabilityWe continue to implement activities that promote integration of sustainability throughout our business to support our commitment to continuously improve our standards of health, safety, environmental and community and human rights performance.

Managing emissionsWe are working with global specialists and draw on local expertise within our operational teams to identify value accretive abatement opportunities to further reduce our carbon footprint.

Under all credible scenarios, fossil fuels (coal, gas and oil) will continue to be a part of the global energy mix for many years to come. We will responsibly steward the decline of our coal business as it meets society’s energy needs through the energy transition.

TransparencyWe are committed to operating transparently, responsibly and meeting or exceeding applicable laws.


• Safe and healthy workplace – fatalities, TRIFR, LTIFR and occupational disease cases

• Environmental performance – water withdrawn, Scope 1 and 2 emissions, meeting our commitments on climate change

• Long-term value for communities – community investment spend

• Health, safety and environment

• Climate change• Community

relations and human rights

RESPONSIBLE PORTFOLIO MANAGEMENT

Conservatively positionedCapital structure and credit profile managed through targeting a maximum 2x Net debt/Adjusted EBITDA throughout the cycle, augmented by an upper Net debt cap of c.$16 billion excluding Marketing-related lease liabilities.Year-end Net debt and Net debt to Adjusted EBITDA were $15.8 billion and 1.37x respectively. Net loss attributable to equity holders for 2020 was $1.9 billion.

BondsWe issued $2.0 billion, EUR 950 million and CHF 225 million of bonds across a range of maturities from 5 to 10 years. Post-2020 maturities are capped at c.$3 billion in any one year.

ReinvestmentOur net 2020 cash capital expenditure of $3.9 billion was weighted towards transition commodities with c.82% of our expansionary capital invested in our metals business, including the Katanga copper/cobalt operation, INO life extension projects (nickel) and the Zhairem zinc project.

Credit ratingThe Group’s credit ratings are currently Baa1 (negative outlook) from Moody’s and BBB+ (stable) from Standard & Poor’s.

Credit facilityThe Revolving credit facilities were refinanced and slightly increased in 2020 to $14.625 billion. Committed available liquidity of $10.3 billion at year-end covers more than three years of upcoming bond maturities.

Balance sheetWe are committed to strengthening our balance sheet to ensure it is capable of supporting our purpose and strategy

Investment grade ratingWe will preserve a robust capital structure and business portfolio that reflects our commitment to targeting, receiving and maintaining a strong BBB/Baa investment grade rating. In this regard, we continue to target a maximum 2x Net debt/Adjusted EBITDA through the cycle, augmented by an upper Net debt cap of c.$16 billion, excluding Marketing-related lease liabilities.

In the medium term, we target leverage at the low end of our $10-$16 billion Net debt guidance range (below the midpoint by end of 2021), including a Net debt/Adjusted EBITDA ratio closer to c.1x.

ReinvestmentPrioritise investment in transition commodities and value accretive Scope 1+2 abatement opportunities that help achieve our medium-term Paris alignment and 2050 net-zero ambition.



• Supply, demand and prices for the commodities we produce

• Currency exchange rates

• Liquidity• Counterparty

credit and performance

RESPONSIBLE PRODUCT USE

Marketing green metalsWe are one of the largest suppliers of aluminium to global markets. Significant offtake agreements with low-carbon producers results in more than 60% of our ex-China marketing book currently being low-carbon. We will continue to focus on expanding this footprint.

Responsible sourcingGlencore became a member of the Fair Cobalt Alliance (FCA) in 2020. Through the FCA, we will support legitimate artisinal and small-scale mining (ASM) cooperatives in their endeavours to transform their practices and align with international human rights practices, especially in the prevention of child labour.

In addition to our new partnership with the FCA, as a member of the Responsible Minerals Initiative, we also participate in programmes to develop frameworks and standards that support responsible ASM.

PartnershipsWorking with our customers and supply-chain to enable greater use of low-carbon metals and support progress towards technological solutions

AbatementSupporting uptake and integration of abatement – an essential contributor to achieving low or net zero carbon objectives

Circular economyLeverage our value chain to expand the volume of recyclable commodities for processing through our global network of metallurgical assets.

Responsible sourcingPursue strategic long-term agreements to provide a reliable supply of responsibly-produced commodities essential to the low-carbon economy



• Geopolitical, permits and licence to operate

• Laws and enforcement

• Operating risk


Strategic report Additional informationFinancial statementsGovernance

Glencore plc Baarermattstrasse 3 CH-6340 Baar SwitzerlandTel: +41 41 709 2000 Fax: +41 41 709 3000 E-mail: [email protected]

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OUR BUSINESS STRATEGY