Annual Report 2023
Annual Report 2023
Energising today
Energising today
Advancing tomorrow
Advancing tomorrow
Energising today, advancing
tomorrow: As the world moves
towards a low-carbon economy,
we are focused on supporting the
energy needs of today whilst
investing in our portfolio of
transition-enabling commodities.
Read more about our role:
Page 10
Explore the Annual Report, Climate
Action Transition Plan and Basis of
Reporting at: glencore.com/publications
Explore our Group Reporting Glossary
online at: glencore.com/publications
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Contents
Strategic Report
Performance highlights
Our business at a glance
Chairman’s introduction
Chief Executive Officer’s review
Energising today,
Advancing tomorrow
Our business model
Our value chain
Investment case
Our market drivers
Our strategy for a sustainable future
Key performance indicators
Stakeholder engagement (s.172)
TCFD
Sustainability
Ethics and compliance
Our people
Financial and operational review
Marketing activities
Industrial activities
Risk management
1
2
4
5
8
12
13
14
15
17
21
23
29
62
71
75
78
85
92
105
Corporate Governance
Chairman’s governance statement
Directors and officers
Corporate governance report
Audit Committee report
ECC Committee report
HSEC Committee report
Nomination Committee report
Directors’ remuneration report
Directors’ report
Financial Statements
Independent Auditor’s report
to the members of Glencore plc
Consolidated financial statements
Additional Information
Alternative performance measures
Other reconciliations
Production by quarter –
Q4 2022 to Q4 2023
Independent sustainability
assurance report
119
120
123
129
131
132
133
134
161
165
180
282
288
290
295
Please refer to the end of this document for an
important notice concerning this report, including
forward-looking statements.
◊ Alternative performance measures
Adjusted measures referred to as alternative
performance measures (APMs) which are not
defined or specified under the requirements of
International Financial Reporting Standards; refer
to APMs section on page 283 for definitions,
explanation of use and reconciliations and note 2
of the financial statements for reconciliation of
Adjusted EBIT/EBITDA.
Δ Selected ESG information
Selected Environmental, Social and Governance
(ESG) metrics (Selected Information) in this report
have been subject to independent limited
assurance under ISAE 3000 (Revised) by Deloitte
LLP. The Selected Information is identified by the Δ
symbol. The scope and limitations of Deloitte LLP’s
assurance are set out in their unqualified report on
page 295. Please also see the Basis of Reporting
2023 online at glencore.com/publications.
‘Glencore’s emissions’, ‘industrial emissions’ or ‘our
emissions’ means CO2e emissions from our
industrial assets (including Scope 1, 2, and 3) which is
defined by reference to our organisational boundary
of operational control as set out in the About our
emissions calculations and reporting section on
page 53 and the Basis of Reporting 2023. Where we
refer to our aim and/or efforts to achieve ‘net zero
emissions’ we are referring to a net zero ambition
in relation to our emissions. The basis for our
approach and further information about the
definitions and underlying processes applied for the
collection and verification of specific Environmental,
Social and Governance (ESG) metrics is set out in
the About our emissions calculations and reporting
section on page 53 and in the Basis of Reporting
2023. To assist the reader’s understanding of
climate-related terms contained in this Annual
Report, reference can be made to the Group
Reporting Glossary for the 2023 reporting suite
which, together with the Climate Action Transition
Plan and Basis of Reporting, is available on our
website at glencore.com/publications.
Performance highlights
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Net income attributable to
equity holders (US$ billion)
Total borrowings
(US$ billion)
CO2e Scope 1 and 2 market-based
industrial emissions (Million tonnes)
“Aided by healthy Adjusted
EBITDA, we reported net
income attributable to equity
holders of $4.3 billion in 2023
and continue to enjoy
significant financial
headroom and strength.”
Gary Nagle
Chief Executive Officer
20
15
10
5
0
1
7
3
.
4.3
2022: 17.3
.
5
0
4
3
.
2021
2022
2023
35
30
25
20
15
10
5
0
2021
2022
2023
3
4
6
.
2
8
8
.
3
2
2
.
32.2
2022: 28.8
27.0Δ
2022: 29.2 (restated)
Adjusted EBITDA◊
(US$ billion)
Shareholder returns
(US$ billion)
Net debt◊
(US$ billion)
35
30
25
20
15
10
5
0
3
4
.
1
17.1
2022: 34.1
2
1
.
3
1
7
.
1
2021
2022
2023
Financial review
Page 78
10.1
2022: 7.3
12
10
8
6
4
2
0
.
3
6
6
5
.
.
2
5
4
8
.
0
8
.
2
.
1
2021
2022
2023
Distributions
Buybacks
8
6
4
2
0
4.9
2022: 0.1
.
6
0
4
9
.
0
.
1
2021
2022
2023
CO2e Scope 3 industrial emissions
(Million tonnes)
406
2022: 368 (restated)
Targeted reductions in our
Scope 1, 2 and 3 industrial emissions
against restated 2019 baseline1
15%
end-2026
25%
end-2030
50%
end-2035
Lost time injury frequency rate
per million hours worked
0.76Δ
2022: 0.84
Total recordable injury frequency rate
per million hours worked
2.16Δ
2022: 2.22
1. For further information refer to the About our
emissions calculations and reporting section
beginning on page 53.
Sustainability review
Page 62
2023 Glencore Annual Report
1
Our business at a glance
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Our Purpose
… influences our
strategic priorities
… which we deliver through
our business model
Responsibly
sourcing the
commodities
that advance
everyday life
Responsible and
ethical production
and supply
Our Values are embedded
in everything we do. We are
committed to operating
ethically, responsibly, and to
contributing to socio-
economic development in the
countries where we operate.
Responsible portfolio
management
We intend to prioritise
investment in transition-
enabling commodities that
support the decarbonisation of
energy usage and help meet
the commodity demands for
everyday life. We will also
reduce our thermal coal
production over time.
Responsible
product use
The world needs a reliable
source of strategic
commodities. We will seek
opportunities to increase the
supply of transition-enabling
commodities from our own
industrial operations and
through our extensive
marketing activities.
… while engaging with
our stakeholders and
creating value
Investors,
financial
analysts and the
media
Our people
Industrial
business
Communities
Marketing
business
Suppliers and
customers
Governments
and regulators
NGOs
Unions
Read more about our strategy
on page 17
Read more about our business model
on page 12
Read more about our stakeholders in
‘Section 172’ on page 23
2
2023 Glencore Annual Report
RecyclingCarbon solutions Our business at a glance continued
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Our global operations
… delivered through two
business segments
… supported by our Values
Industrial activities
Our industrial business spans
the metals and energy markets,
producing multiple commodities
from over 60 industrial assets
Adjusted EBITDA ◊ Industrial 2023
Metal
Energy
41%
59%
$13.2bn
2022: $27.3bn
Head office
Office
Industrial asset
Marketing activities
We move commodities from
where they are plentiful to where
they are needed
Adjusted EBIT ◊ Marketing 2023
One of the world’s largest natural resource companies
6continents >30countries
>150k
employees and contractors
>50offices
Metal
Energy
50%
50%
$3.5bn
2022: $6.4bn
For further information, see glencore.com/en/
who-we-are/purpose-and-values/
Safety
We never compromise on safety.
We look out for one another and
stop work if it’s not safe
Responsibility
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
Simplicity
We work efficiently and focus
on what’s important. We avoid
unnecessary complexity and look
for simple, pragmatic solutions
Integrity
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
Openness
We’re honest and straightforward
when we communicate. We push
ourselves to improve by sharing
information and encouraging
dialogue and feedback
Entrepreneurialism
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
2023 Glencore Annual Report
3
Chairman’s introduction
Strategic Report
Corporate Governance
Financial Statements
Additional Information
An active and progressive year
for Glencore, with continued
improvements across the Group
Health and safety
Safeguarding the health and safety of
our people is the first priority for the Company.
The report from our HSEC Committee (see
page 132) sets out the continued extensive
work we are carrying out to improve our
performance. Despite our continued efforts, we
are disappointed and saddened to again report
fourΔ tragic occupational fatalities across our
business. We are determined to meet our
ambition of achieving zero work-related
fatalities and continue to look to see how we
can improve our systems and processes and
further embed them across our operations.
Our efforts in respect of our tailings storage
facilities (TSFs) are also very significant and
important. During 2023, we reported on our
conformance to the Global Industry
Standard on Tailings Management (GISTM)
for our TSFs with ‘Very High’ or ‘Extreme’
Consequence Classifications, meeting the
deadline set by the ICMM. Based on our
ongoing TSF management systems and the
independent third-party assessments that
we have in place, we believe that we have
identified the relevant gaps and are seeking
to manage these appropriately.
Climate strategy
The Board remains committed to
implementing our climate strategy.
Alongside this Annual Report, we are today
publishing our updated Climate Action
Transition Plan, which will be put to an
advisory vote of shareholders at the 2024
Kalidas Madhavpeddi
Chairman
Dear Shareholders
The key mission of our Board is to promote
a sustainable Company which can generate
long-term value for our stakeholders in
accordance with our Purpose and Values.
When we announced our financial results
for last year, the headlines reflected the
comparison between the 2023 outturn with
that of a record 2022. It was clear on a
comparative basis that the 2023 financial
results were going to be more of a return to
normal, however, not only was the financial
outcome healthy but in overall terms our
Company continues to make good progress
on key objectives.
4
2023 Glencore Annual Report
AGM in May. This plan is the result of
extensive engagement last year with
stakeholders, who voiced broad support for
our climate approach, recognising the
importance of maintaining a strategy that
remains resilient to the risks and
opportunities of the evolving energy
transition. We are pleased to have introduced
an additional emissions reduction target for
2030 and will continue our efforts to achieve
our existing targets and long-term ambition.
Investigations and monitorships
The two independent compliance monitors
mandated by our resolutions with the US
Department of Justice began their work in
mid-2023. We have dedicated substantial
effort and resources to enable constructive
engagement with the monitors and their
teams and will continue our active
cooperation throughout the coming year.
Over the last number of years, we have
invested heavily to improve our Ethics and
Compliance Programme and are committed
to continuing to enhance the Programme. We
will provide further information in our separate
Ethics and Compliance Report for 2023.
The work of the Investigations Committee
remains a Board priority with regard to the
ongoing investigations by the Swiss and
Dutch authorities. The timing and outcome
of these investigations remains uncertain.
Business strategy
The Company believes that the best
approach for growth in our industrial
business is to consider promising acquisition
opportunities while progressing potential
organic growth opportunities in our existing
transition metals portfolio.
In M&A, newsflow was inevitably dominated
last year by our interactions with Teck
Resources Limited (Teck). The Board was
disappointed that we were unable to engage
on our proposal for a complete merger/
demerger of our two companies. We were
pleased, however, that we were able to then
enter into constructive discussions for the
acquisition of Teck’s steelmaking coal business,
Elk Valley Resources (EVR), which led to the
agreement for the purchase of a 77% stake in
EVR announced last year. The acquisition of EVR
unlocks the potential, subject to shareholder
approval, for a value accretive demerger of our
combined coal and carbon steel materials
business. We will undertake a consultation
process following the close of the transaction to
assess shareholder views.
In addition, we acquired a 30% equity stake in
the Alunorte alumina operation in Brazil
alongside a 45% equity stake in Mineracão Rio
do Norte S.A. Further, we continued our efforts
to develop a leading pipeline of development
opportunities in copper, acquiring the
remaining interest in the MARA brownfield
copper project in Argentina, as well as the
balance of the shares in PolyMet.
Reporting suite
Our updated Climate Action Transition Plan
was also published today and further
publications in our annual reporting suite will
include our Review of Our Direct and Indirect
Advocacy, Ethics and Compliance Report,
Sustainability Report and Modern Slavery
Statement, which reflect our commitment to
transparency and which will provide further
detailed information about our business
and performance.
We look forward to continuing our work to
achieve sustainable progress in 2024.
Kalidas Madhavpeddi,
Chairman
See further information at
glencore.com/publications
Chief Executive Officer’s review
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Focused on creating
sustainable long-term value
for our stakeholders
Gary Nagle
Chief Executive Officer
Commodity prices trended
lower in 2023, feeling the impact
of higher interest rates on
consumer and industrial
demand and more
normalisation of energy markets
from 2022’s extreme disruption.
As a counterweight, increasing demand in
China, supported by the energy transition
and related infrastructure investment, was
instrumental in offsetting softer demand in
developed markets, keeping most key
commodity prices at levels well above prior
cycle lows.
From a turbulent 2022, energy markets
largely normalised in 2023, pulling oil, natural
gas and coal prices lower and helping to
reduce global inflationary pressures. Europe,
in particular, has emerged from the acute
energy crisis in 2022, with high gas
inventories and relatively stable markets,
despite the ongoing global geopolitical
tensions. However, thermal coal’s high-
quality pricing benchmark remained
supported at a c.100% premium to its 10-year
average (2012–2021), with China importing an
additional >100Mt of coal in 2023 to replenish
inventories and feed its growing thermal
power generation.
Both China’s demand growth and broader
industry supply constraints in many key
markets (nickel, cobalt and lithium being the
clear exceptions), played an important role in
supporting metals markets in 2023,
particularly in copper, which continued to see
significant mine disruption and
underperformance throughout the year.
Together with copper’s high exposure to
energy transition demand, these factors kept
the market tightly balanced and supported
average prices just modestly below 2022. In
aluminium, China’s power constraints kept
smelter production growth in check, while in
zinc, the combination of lower prices and cost
inflation prompted a supply response from
miners, which stabilised the market around
the mid-$2,000’s/t.
In the nickel market, Indonesia’s output
expanded 26% year-on-year in 2023, with
further growth expected for 2024. Nickel
production from Indonesia largely feeds
China’s stainless steel industry, however
recent expansion of high-pressure acid leach
operations and matte conversion facilities has
seen this output gain a growing share of the
high-grade market, including for battery raw
materials. Despite continued strong growth
in global electric vehicle sales, nickel’s price
dropped 45% over the course of the year, with
a market rebalance not expected to occur for
quite some time.
2023 Financial scorecard
Against this backdrop, earnings from our
Marketing and Industrial segments declined,
with Group Adjusted EBITDA of $17.1 billion in
2023, down 50% period-on-period. Net
income before significant items declined 65%
to $6.7 billion, while significant items, mainly
comprising impairments, reflecting lower
cobalt price assumptions on Mutanda and
macro assumption revisions at several zinc
assets, decreased Net Income attributable to
equity holders to $4.3 billion.
Marketing posted a robust result, with
Adjusted EBIT of $3.5 billion, above our
$2.2–3.2 billion p.a. long-term guidance
range, but 46% below last year’s
exceptionally strong performance. A
substantially calmer energy market
environment saw Adjusted EBIT from
Energy Products fall 67% to $1.7 billion, while
generally more supportive trading
conditions in Metals and Minerals lifted
Adjusted EBIT 5% to $1.7 billion.
Industrial Adjusted EBITDA declined 52% to
$13.2 billion, impacted primarily by lower
pricing, particularly in energy coal, as well as
inflationary cost impacts across the asset
base, much of it having lagged and been
heavily influenced by the surge in energy
prices during 2022. Coal Adjusted EBITDA
decreased 56% to $8.0 billion, while weaker
gas markets, partially offset by higher
refining margins, were largely responsible
for a 29% reduction in Oil Adjusted EBITDA
to $479 million.
Similarly for Metals and Minerals, lower
period-on-period prices at our industrial
metals’ assets were largely responsible for a
41% decline in Adjusted EBITDA to
$5.4 billion, with significantly weaker nickel,
zinc, and cobalt hydroxide pricing weighing
on earnings.
Aided by healthy operational cash
generation, after funding $5.6 billion of net
capex and $10.1 billion of shareholder returns,
the 2023 year-end Net debt outturn was
contained to $4.9 billion vs. $0.1 billion in
2022. Net funding increased to $31 billion, up
a lesser $3.6 billion, owing to a $1.3 billion
reduction in Readily Marketable Inventories.
With a Net debt/Adjusted EBITDA of 0.29x,
we continue to enjoy significant financial
headroom and strength.
2023 Glencore Annual Report
5
Chief Executive Officer’s review continued
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Shareholder returns
The shareholder return journey must be
contextualised by the significant
announcement in November 2023 that we
had entered into a binding agreement with
Teck Resources Limited (Teck) to acquire a
77% effective interest in its steelmaking coal
business, Elk Valley Resources (EVR) for
$6.93 billion in cash. These are world-class
assets, expected to meaningfully
complement our existing thermal and
steelmaking coal production in Australia,
Colombia, and South Africa. EVR also
supports the transition as an input into steel
production needed for certain renewable
energy infrastructure. The transaction is
subject to mandatory regulatory approvals
and, while closing could occur earlier, it is
expected no later than Q3 2024.
Year-end net debt◊
$4.9bn
Shareholder returns
$20.3bn
since 2020
6
2023 Glencore Annual Report
As also announced, the acquisition of EVR
unlocks the potential, subject to shareholder
approval, for a value-accretive demerger of
our combined coal and carbon steel
materials business and, in support thereof,
we advised that Glencore could demerge
the combined company, only once Glencore
had sufficiently delevered towards a revised
$5 billion Net debt cap, expected to occur
within 24 months from close.
Over the past few years, Glencore’s capital
structure and credit profile has been
managed around a $10 billion Net debt cap,
with sustainable deleveraging (after base
distribution) below the cap periodically
returned to shareholders via special
distributions and buybacks. Under this
framework, we announced $20.3 billion of
shareholder returns since 2020, comprising
$10 billion of base distributions and
$10.3 billion of ‘top-up’ returns. Following the
EVR announcement, as noted above, we are
now managing the balance sheet around a
revised $5 billion Net debt cap, alongside our
continued commitment to minimum strong
BBB/Baa ratings.
The lower Net debt cap framework requires
us to allocate surplus cashflows (after base
distribution) towards accelerating
repayment of EVR acquisition funding. As
before, sustainable deleveraging below this
revised $5 billion Net debt cap will be
periodically returned to shareholders,
as appropriate.
For 2024, basis 2023 cash flows, we are
recommending to shareholders a $0.13 per
share (c.$1.6 billion) base cash distribution,
comprising $1 billion from Marketing cash
flows and 25% ($0.6 billion) of Industrial
attributable cash flows. The base distribution
will be paid in two equal payments in June
and September this year. Given 2023 Net
debt of $4.9 billion and committed debt-like
outflows expected in 2024, including the
$1.6 billion base distribution and $6.9 billion
purchase of EVR, Net debt exceeds $5 billion,
resulting in no ‘top-up’ returns at this point.
The business, however, is expected to be
highly cash generative at current spot
commodity prices, which augers well for
top-up returns to recommence in the future.
Our climate ambition
At our 2023 AGM, shareholders gave broad
support for progress on our three-year
Climate Action Transition Plan, with c.70%
voting in favour of our 2022 Climate Report,
recognising the importance of maintaining a
strategy that remains resilient to the risks and
opportunities of the evolving energy transition,
along with encouragement to continue
making progress towards our various targets
and long-term ambition of achieving net
zero industrial emissions by 2050, subject to
a supportive policy environment.
We have engaged extensively with
shareholders during the year on a range of
climate matters, including seeking views on
anticipated changes to our updated Climate
Action Transition Plan that will be put to
shareholders at the upcoming 2024 AGM.
This process has given us valuable insights
into the evolution of shareholders’ views and
voting approach.
The principal areas of shareholder interest
included a comparison of our targets and
ambition to various relevant IEA scenarios,
including Net Zero scenarios, understanding
progress on industrial emissions reduction
between our short-term 2026 target and
medium-term 2035 target and integration of
the recently announced, but still to close (as
it is going through various regulatory
approvals), EVR steelmaking coal acquisition
into the climate strategy.
Chief Executive Officer’s review continued
Strategic Report
Corporate Governance
Financial Statements
Additional Information
In response to the constructive
recommendations received, we have, among
other actions, maintained our commitment
to reducing our industrial emissions footprint
and report on progress against our targets
and ambition, updated our assessment of the
resilience of our portfolio and expanded
analysis of our targets and ambition against a
range of climate policy scenarios.
Responsible and ethical
production and supply
We strive not only to deliver financial
performance but also make a positive
contribution to society and create lasting
benefits for stakeholders in a manner that is
responsible, transparent and respects the
rights of all.
The implementation of our relaunched
SafeWork framework in mid-2021 has been a
key focus for our industrial assets and
commodity departments. Good progress has
been made Group-wide, but I am saddened
to report that we recorded the loss of fourΔ
lives at our industrial assets in 2023. We
believe that consistent application and
reinforcement of our SafeWork framework,
through strong visible leadership, can drive
and deliver the safety culture and operating
discipline we are looking for, and get all our
people home safe.
Aligned with our business strategy of
supporting the energy needs of today, whilst
investing in our transition metals portfolio,
we believe the likely scale and pace of global
mine project development required in
certain minerals will ultimately struggle to
meet the commodity demand that the
transition is expected to generate.
Glencore is well placed to participate in
bridging this gap in supply through the
flexibility that exists in our business to
respond to global needs. In 2023, we directed
most of our capital expenditure, in large part
funded through the earnings of our energy
business, towards development of our
transition-enabling commodities portfolio.
During 2023, we acquired a 30% equity stake
in Alunorte alongside a 45% equity stake in
Mineracão Rio do Norte S.A., securing
low-carbon and -cost alumina units for our
Marketing business. In copper, we acquired
the remaining 56.25% interest in the MARA
brownfield copper project in Argentina that
we did not already own, as well as the balance
of Polymet shares (c.18%). Polymet formed a
50:50 JV with Teck, establishing the New
Range Copper Nickel venture in Minnesota.
These copper acquisitions complement the
muti-year reset of our copper business unit
to prepare it for growth. We have disposed
of non-core assets and sought to align
around large, long-life, low-cost resources in
key copper producing regions. Crucially, our
copper portfolio offers capital-efficient
growth possibilities, with most of our copper
projects leveraging existing infrastructure.
The addition of MARA and formation of the
New Range JV, along with a near doubling of
El Pachon’s resource, added more than
5 billion tonnes of resource to our copper
resource inventory in 2023.
During 2023, we also concluded an
agreement to merge our c.50% stake in
Viterra with Bunge in a cash and stock
transaction to create a premier diversified
global agribusiness solutions company.
Glencore will receive $1.0 billion in cash and
c.$3.1 billion in Bunge stock (basis Bunge's
stock price at the date of announcement).
The merger, subject to ongoing approval
processes, is expected to close in mid-2024.
The two independent compliance monitors
mandated by our resolutions with the
Department of Justice commenced their
work in mid-2023. We have had constructive
engagement with them throughout the
process, with the first review period having
recently completed. Glencore continues to
cooperate with the previously disclosed and
ongoing investigation by the Office of the
Attorney General of Switzerland into
Glencore International AG for failure to have
the organisational measures in place to
prevent alleged corruption and an
investigation of similar scope by the Dutch
Public Prosecution Service. The timing and
outcome of these investigations
remain uncertain.
Outlook
Although the current macroeconomic
environment remains challenging, global
economic growth is forecast to bottom out
in 2024. Expected interest rate cuts and
corresponding restocking along the supply
chain are likely to bring an improvement in
demand conditions in Western markets later
in the year.
Supply constraints and energy transition
demand prevented large inventory increases
in most commodities during this cyclical
trough, leaving markets well-positioned for a
strong recovery as demand conditions
improve. This is particularly the case for
copper, where the closure of a major mine
and various cuts to production guidance
through the second half of 2023 have
highlighted the persistent supply challenges
facing the industry. These are likely to keep
the market tight throughout 2024 against
previous expectations of oversupply.
The strength of our diversified business
model across industrial and marketing,
focusing on metals and energy, has proved
itself adept in a range of market conditions,
giving us a solid foundation to successfully
navigate the near-term macroeconomic
uncertainty, as well as meet the resource
needs of the future. I would like to thank all
our employees for their efforts and significant
contribution during the year. As always, we
remain focused on operating safely, responsibly
and ethically and creating sustainable
long-term value for all our stakeholders.
Gary Nagle,
Chief Executive Officer
The Strategic Report was approved
by the Board and signed on its behalf
by Gary Nagle
2023 Glencore Annual Report
7
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Energising
today
As the world moves towards a
low-carbon economy, we remain
focused on supporting the
energy needs of today while
investing in the metals that are
key components of current
energy transition technologies.
The energy transition remains a gradual
process and represents far greater change
than a simple switch from one energy source
to another. Traditional energy sources including
coal, oil and gas remain important in
supporting sufficient, reliable and affordable
energy supply during the transition to increased
electrification and renewable energy forms.
Economic and population growth are two key
underlying factors driving energy demand,
with the global economy forecast by the
International Energy Agency (IEA) to grow at
an average of 2.6% per year to 2050
and global population expanding from 8 billion
today to 9.7 billion by 20501. Next to meeting
the supply challenge, efficiency gains on the
demand side, beyond those achieved in the
past, will be required to meet global
decarbonisation targets.
Energy transitions take time and the
geopolitical events observed over the past two
years underscore the need for energy security
in protecting global stability and development.
Thermal coal and other forms of fossil fuels are
expected to continue to play a part in
supporting energy system stability. The share of
fossil fuels in global energy supply, which has
remained at around 80% for several decades, is
forecast by the IEA to peak in the mid-2020s,
before declining to an estimated 62–73% by
20302 across the various transition scenarios.3
8
2023 Glencore Annual Report
Energising today continued
Strategic Report
Corporate Governance
Financial Statements
Additional Information
40
35
30
25
20
15
10
5
0
100
90
80
70
60
50
40
30
20
10
0
Coal-fired electricity generation as % of total
IEA SPS
IEA APS
IEA NZE
2022
2030
2035
2040
2045
2050
Global steel production by process %
Basic Oxygen Furnace
Electric Arc Furnace
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
2022
Under the same scenarios, coal-fired
electricity, which currently accounts for c.36%
of total energy generation, is forecast to drop
to 4–17% by the mid-2030s.
While some of the immediate pressures on
the energy systems seen in 2022 eased in
2023, bringing an alleviation of commodity
market imbalances and price volatility across
the energy complex, the risk of further
disruption remains elevated.
Glencore’s role in energising today
In 2023, Glencore produced 113.6 million
tonnes of coal, the majority of which was sold
into the c.1.3 billion tonne seaborne coal
market. The seaborne market itself typically
accounts for around 12%–16%4 of the
approximately 8.3 billion tonnes of coal
consumed annually worldwide, the majority of
which is mined and consumed domestically.5
The seaborne thermal coal market, in
particular, provides an important balancing
mechanism for global energy security by
moving coal from where it is mined to where it
is needed, including markets without
indigenous supply sources and markets which
require coals with particular energy and
quality characteristics.
China and India are the largest importers of
thermal coal, typically accounting for almost
half of total seaborne demand. Although
decarbonisation is underway in these markets,
their scale, existing infrastructure, and cost
factors mean coal is expected to continue to
play a role in meeting their energy needs into
the long term. Recent increases in Chinese
coal demand, for example, were partially
driven by lower calorific values of coal
produced in China5 compared with higher-
quality, low-ash thermal coal currently traded
on the seaborne market.
Glencore also produces steelmaking coal, used
in the manufacture of steel in blast furnaces.
The announced acquisition of EVR should lift,
on completion, Glencore’s steelmaking coal
production to c.30Mt per year. When assessing
the merits of the transaction, we
acknowledged the important distinction
between thermal coal and steelmaking coal.
Together with its traditional applications, steel
also has an important role to play in the
energy transition – with end-use applications
in utility-scale solar installations, wind turbines,
and power grids. The acquisition therefore
presented a unique opportunity to strengthen
our position further across the products
necessary for the energy transition as well as
everyday life. Refer to the TCFD section on
page 29 for further details.
Decarbonisation of the steelmaking process is
underway in developed economies, but
requires substantial investment in renewable
electricity generation, high-quality recycling,
and/or green hydrogen capacity that is not
projected to be available at scale for several
years. In the meantime, steel production
remains dependent on high-quality
metallurgical coal to support current,
predominantly blast furnace, production.
1. IEA 2023, World Energy Outlook 2023, https://www.iea.org/reports/world-energy-outlook-2023/context-and-scenario-design#abstract, License: CC BY 4.0
2. IEA 2023, World Energy Outlook 2023, Pathways for the energy mix: https://www.iea.org/reports/world-energy-outlook-2023/pathways-for-the-energy-mix , License: CC BY 4.0
3. Net Zero Emissions (NZE) scenario: This is one of the three scenarios which the International Energy Agency explores in the 2023 World Energy Outlook. In the NZE by 2050 scenario, the temperature increase peaks in
mid-century and falls to around 1.4°C in 2100 whereas the Stated Policies Scenario (SPS) shows the trajectory implied by today’s policy settings, forecasting the temperature to rise by 1.9°C in 2050 and 2.4°C in 2100. This is
0.1°C less than projected in the SPS from the World Energy Outlook-2022, but far above the levels of the Paris Agreement. The Announced Pledges Scenario (APS) assumes that all aspirational targets announced by
governments are met on time and in full, including their long-term net zero and energy access goals, predicting the temperature rise in 2100 is 1.7°C. IEA’s 2023 World Energy Outlook 2023, Secure and people-centred
energy transitions, https://www.iea.org/reports/world-energy-outlook-2023/secure-and-people-centred-energy-transitions, CC BY 4.0
4. IEA 2023, Coal Market Update July 2023, https://www.iea.org/reports/coal-market-update-july-2023/trade, License: CC BY 4.0
5. IEA 2023, Coal Market Update July 2023, https://www.iea.org/reports/coal-market-update-july-2023/demand, License: CC BY 4.0
2023 Glencore Annual Report
9
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Advancing
tomorrow
An energy system based on
renewable energy technologies
will look fundamentally different
to the current hydrocarbon-
reliant model.
The metals and minerals we produce,
recycle, source and market are essential
components in the technologies and
infrastructure required to harness renewable
sources of energy and support ever-growing
levels of connectivity.
Wind turbines, solar photovoltaic plants and
electric vehicles (EVs) generally require
greater volumes of critical minerals than
their fossil fuel-based equivalents. The
impact of growth in demand for renewable
energy products and technologies is
expected to continue to expand over the
coming years as the journey towards a net
zero world accelerates.
During 2023, the traditional manufacturing
and construction sectors, which had
underpinned demand growth over most of
the last decade, were subdued. However, the
energy transition – particularly strong growth
in solar power installations – contributed to
global metals demand growth, including
aluminium, copper and zinc, while EV
batteries underpinned demand for cobalt
and nickel. Investments in solar- and
wind-generating capacity, electricity grids
and stationary energy storage batteries, EVs
and charging facilities more than offset
slower growth and, in some cases, decline
from traditional demand sectors.
10
2023 Glencore Annual Report
Advancing tomorrow continued
2023 estimated demand growth from
energy transition vs. traditional
applications (including secondary)
(kt)
2,500
2,000
1,500
1,000
500
0
-500
-1000
-1500
Strategic Report
Corporate Governance
Financial Statements
Additional Information
In a future scenario where fossil fuels make
up a lower share of the energy mix, energy
security would be much more heavily
dependent on critical minerals. Building and
safeguarding the supply chains that provide
access to such minerals as well as associated
infrastructure for refining and processing
has already become a priority for many
governments around the world. In a truly
low-carbon economy, this would become an
even more important objective, in order to
provide the same level of overall system
resilience and energy security as provided by
fossil fuels today.
Our 2023 capital deployment reflected our
focus on investing in metals that are key
components of current renewable energy
technologies. Outside of capital expenditure
on our existing portfolio, we spent
$1.25 billion, mainly on purchasing the
remaining stake of the large, long-life MARA
copper project in Argentina and acquiring a
minority stake in Alunorte in Brazil, an
alumina refinery providing Glencore with
long-term exposure to low-carbon alumina.
Beyond primary production, the importance
of recycling critical minerals to relieve stress
on supply chains and support sustainability
and climate-related objectives continues to
grow. Glencore is a major recycler of
end-of-life electronics, batteries and battery
metals. Narrowing the gap between
resource use and recycling is essential to
promoting a circular economy. Looking
ahead, we see significant opportunities for
our recycling business. By 2040, more than
3TWh of forecast battery scrap per year has
the potential to contribute raw materials to
around 40% of the future demand for
batteries6, underpinned by accelerating
passenger EV scrappage rates which are
expected from 2030 onwards7. This should
generate significant volumes of recoverable
metals8,9 including cobalt, nickel and lithium;
while copper recovered from end-of-life EVs
is expected to reach over 3Mt per year
by 204010.
We believe building capacity and capability
today to source and process a diverse range
of global recycling feeds for conversion into
the commodities needed to develop, sustain
and support the world’s decarbonisation
efforts is vital to support a low-carbon future.
No one player can scale and lead across the
breadth of the value chain covering scrap
and pre-processing to processing and
refining. To this end, Glencore helped define
and launch the Circular Electronics
Partnership11 to promote leadership on
furthering battery circularity in North
America and Europe.
Glencore is further working with
international organisations and policy
makers to raise awareness and find solutions
that accelerate circularity without diluting
oversight and compliance. At the same time,
we are exploring ways to increase capacity
worldwide – in core as well as new markets,
across key streams such as batteries,
end-of-life electronics and automotive
shredder residue.
Grid investment, estimated
average annual investment
($bn)
800
600
400
200
0
2016-2022
2023-2030
2031-2040
Actual
IEA SPS
IEA APS
Aluminium Copper
Zinc
Demand growth from EVs
Demand growth from wind/solar
Implied other demand growth
6. Benchmark Mineral Intelligence Recycling Forecast Q2 2023
7. Rho Motion Battery Recycling Outlook Q3 2023
8. Benchmark Mineral Intelligence Recycling Forecast Q2 2023
9. Market size data from IEA Critical Minerals Demand Dataset Jul 2023, NZE Scenario
10. Rho Motion Battery Recycling Outlook Q3 2023, International Copper Association
11. Circular Electronics Partnership: http://www.cep2030.org/
2023 Glencore Annual Report
11
Our business model
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Our inputs and resources
… which drive our business model
Assets and natural resources
• Many long-life and high-quality
industrial assets
• Value over volume approach
• Embedded network and knowledge
in marketing activities
Our people and partners
• Established long-term relationships
with customers and suppliers
• >150,000 employees and
contractors globally
Financial discipline
• Capital deployed in disciplined
manner
• Marketing hedges a significant
majority of its price risk
• Marketing profitability driven by
volume-based economies of scale,
value-added services and arbitrage
opportunities
Unique market knowledge
• Finding value at many stages in the
commodity chain
Industrial business
Our Industrial business spans
the metals and energy markets,
producing multiple commodities
from over 60 industrial assets
• Exploration, acquisition
and development
• Extraction and production
• Processing and refining
Marketing business
We move commodities from
where they are plentiful
to where they are needed
• Logistics and delivery
• Blending and optimisation
Industrial
Industrial
business
business
Marketing
business
… and deliver positive impact
for our key stakeholders
Investors
2023 Adjusted EBITDA◊
$17.1bn
$3.9bn
Equity free cash flow (FFO◊ less net
purchases of property, plant and
equipment and dividends to minorities)
Our people
3%
Reduction in total recordable injury
frequency rate (2023 vs. 2022)
Payments to governments
$12.7bnΔ
Investment case
on page 14
12
2023 Glencore Annual Report
Underpinned by:
Market trends and
opportunities
on page 8
Stakeholders
on page 23
Risk Management
on page 105
Governance
on page 119
Financial and operational review on page 78
RecyclingCarbon solutions Our value chain
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Our recycling
business
We recycle key
commodities to
support the circular
economy
Industrial
business
As a global producer and marketer
of commodities, we are 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
Our commodities in
everyday products
The products we
produce and market
play an essential role
in modern life
Marketing
business
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
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 often
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
2023 Glencore Annual Report
13
Investment case
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Glencore is well placed to deliver growth with a clear and differentiated strategy
Our markets
Our business
Our strength
• Many markets are underinvested relative to the forecast
• Positioned to produce, recycle, source, market and
• Flexible business model that adapts quickly to changing
commodity needs of the energy transition
• Vital for urbanisation, electrification of mobility and
decarbonisation of energy
• Higher commodity prices are generally needed to
encourage sufficient supply growth to help meet forecast
demand needs of the future
distribute the commodities that enable the transition
• Portfolio of energy and transition-enabling commodities
necessary to meet the needs of today and tomorrow
• Pipeline of growth options in transition metals, with a
majority of these being brownfield
• Progressing our climate strategy with reduction targets
for our Scope 1, 2 and 3 industrial emissions and long-term
net zero ambition by the end of 2050, subject to a
supportive policy environment1
conditions
• Experienced management team focused on maximising
value creation
• Positioned to be highly cash generative through the cycle
1. Significant global technological evolution and advancements, and coordinated government policies, including incentives to drive accelerated uptake of lower-carbon and decarbonisation technologies, and
market-based regulations governing industrial practices that drive a competitive, least-cost emissions reduction approach, much of which is not within our direct control or ability to materially influence but is
critical to our ability to achieve our net zero emissions ambition by the end of 2050.
14
2023 Glencore Annual Report
Our market drivers
Strategic Report
Corporate Governance
Financial Statements
Additional Information
We are dependent upon the supply, demand and pricing for our commodities.
Responsible and ethical
production and supply
Responsible portfolio
management
Responsible
product use
Key market driver 1
Key market driver 2
Net zero emissions by the end of 2050
Future commodity supply
Efforts to limit global temperature
rises will impact fossil fuel demand
• Momentum to decarbonise the global
economy has accelerated in recent
years as nations increasingly
coordinate efforts aimed at reducing
greenhouse gas emissions, including
efforts to achieve net zero emissions
by the end of 2050
• The Paris Agreement aims to hold the
increase of global average
temperatures to well below 2°C above
pre-industrial levels and to pursue
efforts to limit temperature increase
to 1.5°C above pre-industrial levels
Impact on our industry
• This transition is likely to increase
the cost for fossil fuels, impose levies
for emissions, increase costs for
monitoring and reporting and
reduce demand
• Third parties, including potential
or actual investors, have introduced
policies and may introduce further
policies that are materially adverse
to Glencore
• Technological advances are making
renewable energy sources
competitive with fossil fuels, which will
increase renewable energy’s market
share over the longer run
How we are responding
• We recognise the role we can play to
contribute to the global effort to achieve
the goals of the Paris Agreement by
taking measures to decarbonise our
own operational footprint
• We believe that our contribution should
take a holistic approach and have
considered our commitments and goals
through the lens of our Scope 1, Scope 2
and Scope 3 industrial emissions
• Against a restated 2019 baseline, we are
targeting a reduction in our Scope 1, 2
and 3 industrial emissions of 15% by the
end of 2026, 25% by the end of 2030 and
50% by the end of 2035 and we have an
ambition to achieve net zero industrial
emissions by the end of 2050, subject to
a supportive policy environment. Our
2030 target has been introduced as part
of our updated Climate Action Transition
Plan, which will be put to a shareholder
vote at our 2024 AGM
Link to strategy
Timing within the economic cycle is
very important when bringing new
mine supply to market
• The pro-cyclical nature of mining
investment means that new mines are
usually approved when commodity
prices are higher
• Given the long development time
frames required to bring new mine
supply online, the timing as to when this
supply becomes available in the
economic cycle is difficult to predict and
it could become available at low points
in the economic cycle, creating excess
supply in the market
Impact on our industry
• Over-investment creates over-supply
and, with it, potentially prolonged
periods of low commodity prices
• Although most commodity prices have
increased from the lows seen in early
2020, the experience of prior economic
cycles has increased investor pressure
on companies to be more cautious
about investing in new supply
• Balancing a finite declining resource
base along with heightened country and
operational risks with the need to grow
to meet expected future demand, is an
inherent challenge for companies in the
resource sector
How we are responding
• Our disciplined approach to capital
allocation seeks to reflect market supply
and demand dynamics
• Given the unpredictability of costs, risks
and timing of large-scale greenfield
projects, we prefer to add supply via
targeted brownfield expansions which
are generally more capital efficient /
lower-risk. We may also look to develop
a suitably derisked greenfield project if
we believe that there is strong enough
demand and bringing on that supply
will not oversupply the market
• With the expectation that growth
drivers in the global economy will
become weighted towards
decarbonisation spending, in addition to
the commodities currently needed for
everyday life, our large-scale metals
portfolio is well placed to benefit from
this transition
Link to strategy
2023 Glencore Annual Report
15
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Emerging drivers
Substitution
Higher commodity prices and
resource scarcity increase the
likelihood of material substitution
• Widespread adoption of renewable
energy sources as a means of
decarbonising energy supply is
expected to create significant new
demand for the current key enabling
commodities, including copper, nickel
and cobalt
• The quantum of potential new demand
is generally large relative to the current
annual production of such commodities
Impact on our industry
• Revenue and earnings of substantial
parts of our industrial asset activities,
and to a lesser extent, our marketing
activities, are dependent on prevailing
commodity prices
• Under a rapid decarbonisation scenario,
a significant increase in demand for the
commodities that currently underpin
renewable technologies is likely to result
in higher prices for those commodities
• Higher sustained commodity prices will
increase the risk of accelerating efforts
to either reduce the quantity of material
needed for a certain application or
substitute an alternative that provides
similar performance at a lower price. For
example, demand for cobalt could fall if
newer battery technologies provide similar
results with less or no cobalt content
How we are responding
• Diversification of our portfolio of
commodities, currencies, assets and
liabilities can mitigate the financial
impact of a negative demand shift in
the event of substitution of
a particular commodity
• Our market research teams continue to
assess the underlying demand for our
commodities as well as the new
materials that could impact current
renewable technology solutions
Our market drivers continued
Responsible and ethical
production and supply
Responsible portfolio
management
Responsible
product use
Key market driver 3
Demand for the commodities we produce
• Accelerated shift in energy demand
from fossil fuel sources to electrification,
and continued population growth,
particularly in Africa and South East Asia,
could generate additional demand
for commodities
How we are responding
• Energy transition commodities such
as copper, nickel, cobalt, zinc, vanadium
and aluminium could become
substantially more important given their
roles in the technologies and
infrastructure that underpin low- or
no-carbon energy sources
• We are a major producer of metals that
enable low-carbon technologies
• We are investing in transition
commodities, including our South
American copper assets and projects, our
African copper / cobalt operations,
Kazakhstan polymetallic and Brazilian
bauxite/alumina investments and
our Canadian INO nickel life-
extension projects
• All energy demand decarbonisation
pathways will require the type of
transition-enabling commodities that
Glencore produces
Decarbonisation demand,
population growth and
industrialisation of developing
economies has an impact on
commodity demand
• The industrialisation and urbanisation
of developing economies over the past
two decades has driven significant
growth in commodity demand
• China’s rapid growth over this period
now means that it accounts for up
to half of global demand for many
commodities
• Looking forward, the world is forecast
by the United Nations to add
c.1.7 billion people by 2050, with much
of this growth in highly populous
industrialising economies
• All potential decarbonisation
pathways require significantly more
non-fossil fuel commodities
Impact on our industry
• Current levels of industrialisation
and urbanisation suggest, in isolation,
that demand growth rates for
commodities could be lower in
the future
• In the short to medium term, inflation,
economic instability related to rising
geopolitical tensions and a drag on
growth in China could constrain or
reverse commodity demand growth
16
2023 Glencore Annual Report
Link to strategy
Link to strategy
Our strategy for a sustainable future
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Aligned with our Purpose, the
commodities in our portfolio
help support both the transition
to a low-carbon economy and
society’s energy needs as it
progresses through the transition.
Our Purpose
Responsibly sourcing the
commodities that advance
everyday life.
Strategic priorities
Responsible and ethical
production and supply
We seek to embed our Values in everything
we do. We are committed to operating
ethically, responsibly, and to contributing
to socio-economic development in the
countries where we operate.
We will continue to focus on reducing the
emissions of our operations and will allocate
financial returns towards fulfilment of our
business strategy.
Our commitment is delivered through our
operational excellence, the promotion of
health and safety, acting ethically, advancing
our environmental performance, respecting
human rights and by developing,
maintaining and strengthening our
relationships with our stakeholders.
Responsible portfolio
management
We intend to prioritise investment in
transition-enabling commodities that
support the decarbonisation of energy usage
as well as help meet the commodity
demands for everyday life. The announced
purchase of EVR, which remains subject to
regulatory approvals, will further enhance
our steelmaking coal activities, which
supports steel production needed for,
among other things, renewable energy
infrastructure. We will reduce our thermal
coal production over time to meet our
decarbonisation targets.
Our capital allocation supports this strategy
and we seek to balance shareholder returns,
credit ratings, and business reinvestment in
transition-enabling commodities and
value-accretive Scope 1 and 2 abatement
opportunities that can help us achieve our
emissions reduction targets and ambition.
Responsible product use
The world needs a reliable source of strategic
commodities. We will seek opportunities to
increase the supply of transition-enabling
commodities from our own industrial
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.
Read more on page 18
Read more on page 19
Read more on page 20
2023 Glencore Annual Report
17
Our strategy for a sustainable future continued
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Our ambition is to become a leader in safety
and create a workplace free from fatalities
and injuries.
Our Total Recordable Injury Frequency Rate
(TRIFR) and Lost Time Injury Frequency Rate
(LTIFR) decreased by 3% and 10% respectively
compared to 2022.
Climate change
We recognise the contribution we can make
to the global effort to achieve the goals of
the Paris Agreement by decarbonising our
emissions footprint and responsibly managing
the depletion of our thermal coal portfolio.
We have set ourselves the target of reducing
our Scope 1, 2 and 3 industrial emissions in
the short term by 15% by the end of 2026 and
in the medium term by 50% by the end of
2035 against our restated 2019 baseline. We
have also introduced a further industrial
emissions reduction target of 25% by the end
of 2030 as part of our updated Climate
Action Transition Plan. Post-2035, our
ambition is to achieve net zero industrial
emissions by the end of 2050, subject to a
supportive policy environment.
During 2023, the Scope 1 and 2 market-
based emissions of the industrial assets
within our operational control, were 27.0Δ
million tonnes CO2e. This represents a 7%
decrease from the 29.2 million tonnes
recorded in 2022 (restated).
Our Scope 3 emissions in 2023 were
406 million tonnes CO2e, compared to
368 million tonnes CO2e in 2022 (restated).
As of the end of 2023, our Scope 1, 2 and 3
industrial emissions were down 22%
compared to our restated 2019 baseline.
Detailed information on our restatements in
respect of our emissions is set out in the
About our emissions calculations and
reporting section on page 53.
Priorities going forward
Operational excellence
We continue to focus on operational
efficiencies and improvements to optimise
operating costs and margins.
Sustainability
We 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,
social and human rights performance.
Managing emissions
We are working with global specialists and
draw on local expertise within our
operational teams to identify value-accretive
abatement opportunities to further reduce
our emissions.
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 thermal coal business as it supports
society’s energy needs through the
energy transition.
Ethics and transparency
We are committed to operating
transparently, responsibly and ethically and
meeting or exceeding applicable legal
requirements. We resolved investigations by
the US, UK and Brazilian authorities and
continue to work to resolve the outstanding
Swiss and Dutch investigations. The
independent compliance monitors
mandated under our resolutions with the US
Department of Justice (DOJ) commenced
their work in 2023.
KPIs
• Value for our shareholders – Adjusted
EBIT/EBITDA, Net income attributable
to equity holders of the parent
• Safe and healthy workplace – fatalities,
FFR, TRIFR, LTIFR and occupational
disease cases
• Environmental performance – reducing
our industrial emissions in line with
our targets
Key performance indicators:
page 21
Financial and operational review:
page 78
Sustainability: page 62
Principal risks
• Health, safety and environment
• Low-carbon economy transition
• Community relations and human rights
Risk management: page 105
TRIFR
2.16Δ
Down 3% (2022: 2.22)
LTIFR
0.76Δ
Down 10% (2022: 0.84)
Responsible
and ethical
production
and supply
Performance in 2023
Operational performance
2023 production volumes were generally
moderately down on 2022. Such year-over-
year declines reflected the disposals of the
Cobar copper mine and various South
American zinc operations, together with the
subsequent impact of strike action at Raglan
(nickel) in 2022, which led to a higher mix of
third-party nickel units processed in 2023.
2023 coal production was 3.6 million tonnes
(3%) higher than 2022, mainly reflecting
abnormally wet weather in the prior period,
which constrained operations.
Safety
We require an effective safety management
system at each industrial asset to ensure the
integrity of plant and equipment, structures,
processes and protective systems, as well
as the monitoring and review of critical
controls. Regrettably, there were fourΔ
occupational fatalities during the year.
18
2023 Glencore Annual Report
Our strategy for a sustainable future continued
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Year-end Net debt was $4.9 billion. After
taking account of committed debt-like
outflows in 2024, including the proposed
$1.6 billion base distribution and c.$7 billion
for the purchase of EVR, no top-up
shareholder payments have been proposed
in order to help accelerate the return of Net
debt towards the $5 billion cap.
Bonds
We issued $3.5 billion of bonds in 2023 across
a range of maturities from 5 to 10 years.
Maturities are managed around a cap
of c.$3 billion in any one year.
Reinvestment
Our net 2023 cash capital expenditure of
$5.6 billion was weighted towards transition-
enabling commodities, as illustrated in the
Industrial Activities section.
Credit rating
The Group’s credit ratings are currently Baa1
from Moody’s and BBB+ from Standard
& Poor’s.
Credit facilities
During the year, the Group’s $13.0 billion
committed syndicated revolving credit
facilities were refinanced. Committed available
liquidity was $12.9 billion at year end.
Priorities going forward
Balance sheet
We are committed to maintaining a strong
balance sheet capable of supporting
our strategy.
Investment grade ratings
We will prioritise preservation of a robust
capital structure and business portfolio,
reflecting our commitment to maintaining
a minimum strong BBB/Baa investment
grade ratings.
Our revised optimal Net debt target around
a $5 billion cap provides significant balance
sheet flexibility, with Net debt/Adjusted
EBITDA levels comfortably at <1x.
Reinvestment
We intend to prioritise investment in
transition-enabling commodities that
support the decarbonisation of energy usage
and help meet the commodity demands of
everyday life, over investment in our energy
fossil fuels portfolio, with the majority of
that investment, following the acquisition
of EVR, being directed to our transition
metals portfolio.
Responsible
portfolio
management
Performance in 2023
Balance sheet
Over recent years, Glencore’s capital
structure and credit profile has been
managed around a $10 billion Net debt cap,
with sustainable deleveraging (after base
distribution) below the cap periodically
returned to shareholders via special
distributions and buybacks.
Following the November 2023
announcement of our acquisition (subject to
regulatory approval) of a 77% interest in
Teck’s steelmaking coal business, EVR, for
c.$7 billion, given the potential demerger of
our combined coal and carbon steel
materials business (subject to shareholder
approval), the capital structure and credit
profile is now being managed around a
revised $5 billion Net debt cap, alongside our
continued commitment to minimum strong
BBB/Baa ratings. Sustainable deleveraging
below this revised cap will be periodically
returned to shareholders via special
distributions/buybacks as appropriate.
KPIs
• Returns to shareholders – Funds from
operations, Net funding and Net debt
and annual capital returns/distributions
• Value for our shareholders – Adjusted
EBIT/EBITDA, Net income attributable
to equity holders of the parent
Key performance indicators:
page 21
Financial and operational review:
page 78
Principal risks
• Supply, demand and prices
of commodities
• Currency exchange (FX) rates
• Liquidity
• Counterparty credit and performance
Risk management: page 105
Year-end 2023 net debt◊
$4.9bn
2022: $0.1bn
Committed available liquidity
$12.9bn
2022: $13.0bn
2023 Glencore Annual Report
19
Our strategy for a sustainable future continued
Strategic Report
Corporate Governance
Financial Statements
Additional Information
KPIs
• Returns to shareholders – Funds from
operations, Net funding and Net debt
and annual capital returns/distributions
• Value for our shareholders – Adjusted
EBIT/EBITDA, Net income attributable
to equity holders of the parent
Key performance indicators:
page 21
Financial and operational review:
page 78
Principal risks
• Geopolitical, permits and licence
to operate
• Laws and enforcement
• Operational delivery
Risk management: page 105
biggest medium- to long-term challenges in
the sector, recycling of lithium-ion batteries
through the establishment of a purpose-
built facility.
Priorities going forward
Partnerships
Working with our customers and supply
chain to provide transition-enabling
commodities and support progress towards
technological solutions.
Abatement
Supporting uptake and integration of
abatement – an essential contributor to
achieving low or net zero emissions objectives.
Circular economy
Leveraging our value chain to expand the
volumes of recyclable commodities,
including for processing through our global
network of metallurgical assets.
Responsible sourcing
Pursuing strategic long-term agreements
to provide a reliable supply of responsibly
produced commodities essential to the
low-carbon economy.
Performance in 2023
Collaborating with our value chains
Our industrial assets provide a consistent
source of volumes for our marketing
operations, which are supplemented by
third-party production. Our marketing
teams use our scale and capabilities to
extract additional margin throughout our
business model and provide a high-quality
service to our customers and a reliable
supply of quality product.
As a vertically integrated industrial and
marketing business, we will seek to leverage
our own carbon reduction efforts and market
expertise to help meet the increasing needs
for attestable low-carbon products.
Adjusted EBITDA contribution from the
Industrial segment was $13.2 billion and
mining margins were 23% and 49%,
respectively, in our metals and energy
operations, down on 2022, reflecting price
declines notably in coal, cobalt, nickel
and zinc.
Adjusted EBIT contribution from the
Marketing segment was $3.5 billion, down
on the record 2022, reflecting the return to a
more stable market environment, notably
in energy.
Strategic partnerships
Recognising the need for strategic
partnerships between providers of raw
materials and manufacturers, we continue
to pursue opportunities for long-term supply
agreements, including with providers who
supply products that can help accelerate the
energy transition.
In 2023, we announced an intention to
partner with FCC Ámbito and Iberdrola to
provide lithium-ion battery recycling
solutions at scale for Spain and Portugal. The
aim of this partnership is to tackle one of the
Responsible
product use
20
2023 Glencore Annual Report
Key performance indicators
Our financial and non-financial
key performance indicators
(KPIs) provide a measure of
our performance against the
key drivers of our strategy.
Strategic priorities
Responsible and ethical production
and supply
Responsible portfolio management
Responsible product use
For a detailed definition of our
industrial assets, refer to our Group
Reporting Glossary see:
glencore.com/publications
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Selected non-financial key performance indicators
Safety: number of fatalities
Scope 1, 2 and 3 emissions
(million tonnes CO2e)
FourΔ
2022: Four
Link to strategy
433
2022: 398 (restated)
Link to strategy
Approach
We take a proactive, preventative approach
towards health and safety. We require an
effective safety management system at each
industrial asset to ensure the integrity of
plant and equipment, structures, processes
and protective systems, as well as the
monitoring and review of critical controls.
We believe that every work-related incident,
illness and injury is preventable and we are
committed to providing a safe workplace.
2023 Performance
With deep regret, we recorded fourΔ
work-related (occupational) fatalities at our
operations in 2023 (2022: four). The incidents
were unconnected. Each one has been
thoroughly investigated by an internal team
with root cause analysis and
recommendations for improvement shared
with senior management and the Board. We
believe that consistent application of our
SafeWork initiatives, through strong, visible
leadership, can drive a culture of safe
operating discipline and get our people
home safe.
The 2023 fatality frequency rate, the total
number of fatalities from incidents and
occupational diseases per 1 million man-
hours worked, was 0.013 (2022: 0.013).
Approach
We have set ourselves the target of reducing
our Scope 1, 2 and 3 industrial emissions in
the short term by 15% by the end of 2026,
and in the medium term by 50% by the end
of 2035, both on a restated 2019 baseline. We
have also introduced a further industrial
emissions reduction target of 25% by the end
of 2030 as part of our updated Climate
Action Transition Plan. Post 2035, our
ambition is to achieve net zero industrial
emissions by the end of 2050, subject to a
supportive policy environment.
2023 Performance
During 2023, the Scope 1 and 2 market-
based emissions of the industrial assets
within our operational control, were 27.0Δ
million tonnes CO2e. This represents a 7%
decrease from the 29.2 million tonnes CO2e
recorded in 2022 (restated), and is largely
attributable to planned maintenance
shutdowns of three ferroalloys smelters in
South Africa.
Our Scope 3 emissions in 2023 were
406 million tonnes CO2e, compared to
368 million tonnes CO2e in 2022 (restated).
The increase over 2022 is due primarily to the
restart of the Astron Energy refinery and 3%
higher industrial assets coal production,
which resulted in an increase in sold coal
and refined oil volumes.
Overall 2023 Scope 1, 2 and 3 emissions are
down 22% on our 2019 restated baseline,
reflecting coal mine closures over the period
including Calenturitas, La Jagua, Hlagisa1,
Newlands and Liddell.
We remain committed to managing our
operations to deliver our emissions
reduction targets.
In accordance with the GHG Protocol’s
standards for emissions reporting, including
its guidance on adjustments to baseline
emissions, significant changes to the
portfolio or emissions calculation methods
require a restatement of reported emissions
back to the baseline year. The most
prominent restatement we are making in
2023 results from the implementation of our
updated Scope 3 methodology, which
extended coverage of our reported
emissions to include all Scope 3 categories
and emission sources that we consider
material and relevant to our industrial assets’
inventory. Our emission reduction targets
and ambition remain unchanged in the
context of these restatements. Detailed
information on our Scope 3 method and our
restatements in respect of our emissions is
set out in the About our emissions calculations
and reporting section on page 53.
1. An independently managed joint venture
in which we have a 23.12% equity interest.
2023 Glencore Annual Report
21
Key performance indicators continued
Financial key performance indicators
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Adjusted EBITDA◊
(US$ billion)
Net debt◊
(US$ billion)
Funds from operations (FFO)◊
(US$ billion)
Net income attributable to
equity holders of the parent
(US$ billion)
17.1
2022: 34.1
Link to strategy 4.9
Link to strategy 9.5
Link to strategy 4.3
Link to strategy
2022: 0.1
2022: 28.9
2022: 17.3
Policy
Adjusted EBIT/EBITDA provide insight
into our overall business performance
(a combination of cost management,
seizing market opportunities and growth),
and are the corresponding flow drivers
towards our objective of achieving industry-
leading returns.
Adjusted EBIT is the net result of revenue
less cost of goods sold and selling and
administrative expenses, plus share of
income from associates and joint ventures,
dividend income and the attributable share
of Adjusted EBIT of relevant material
associates and joint ventures, which
are accounted for internally by means
of proportionate consolidation, excluding
significant items.
Adjusted EBITDA consists of Adjusted EBIT
plus depreciation and amortisation, including
the related Proportionate adjustments.
2023 Performance
Adjusted EBITDA was $17.1 billion, reflecting
a level of normalisation from the extreme
price dislocations seen in 2022, particularly in
relation to energy. Notwithstanding the 50%
year-over-year decrease in Adjusted EBITDA,
this was still a relatively strong year, bettered
only in 2021 and 2022 over the past decade.
Policy
Net funding/Net debt demonstrates how our
debt is being managed and is an important
factor in ensuring we maintain
strong investment grade rating status and
a competitive cost of capital.
Net funding is defined as total current and
non-current borrowings less cash and cash
equivalents and related Proportionate
adjustments. Net debt is defined as Net
funding less readily marketable inventories
and related Proportionate adjustments.
The relationship of Net debt to Adjusted
EBITDA is an indication of our financial
flexibility and strength.
2023 Performance
Net funding at 31 December 2023 was
$31.1 billion, while Net debt stood at $4.9 billion.
In the context of the announced EVR
acquisition (subject to regulatory approvals),
Net debt is now being managed around a
$5 billion cap, requiring us to allocate surplus
cash flows (after base distribution) towards
accelerating repayment of the pending EVR
acquisition funding.
After taking account of committed debt-like
obligations for 2024, Net debt exceeds
$5 billion, resulting in no ‘top-up’ shareholder
returns at this point.
22
2023 Glencore Annual Report
Definition
Funds from operations (FFO) is a measure
that reflects our ability to generate cash for
investment, debt servicing and distributions
to shareholders.
It comprises cash provided by operating
activities before working capital changes,
less tax and net interest payments plus
dividends received and related
Proportionate adjustments, as appropriate.
2023 Performance
FFO was $9.5 billion, reflecting the effect of
lower prices on operating cash flows, also
significantly impacted by the lag effect of
taxes calculated on 2022 earnings, but paid
in 2023.
Final income tax payments in Australia and
Colombia, paid in H1 2023 in respect of 2022,
were $2.7 billion. Total cash taxes including
this were $7.1 billion in 2023.
Net interest payments were $0.2 billion higher
year-over-year, as base floating rates increased.
Definition
Net income attributable to equity holders of
the parent is a measure of our ability
to generate shareholder returns.
Reconciliations of gross significant charges
to net significant charges attributable to
equity holders of the parent, after taking into
account the effects of tax and non-
controlling interests, are presented in the
Alternative Performance Measures section.
2023 Performance
Net income attributable to equity holders of
the parent before significant items was
$6.7 billion, equivalent to $0.53 per share.
Significant items totalled $2.4 billion,
principally comprising $1.7 billion of
impairments (attributable to equity holders)
and $0.5 billion additional rehabilitation
provisioning on closed sites.
Net income attributable to equity holders of
the parent was $4.3 billion, equivalent to
$0.34 per share.
Section 172 Statement and stakeholder engagement
Strategic Report
Corporate Governance
Financial Statements
Additional Information
The UK Corporate Governance Code (the
Code) requires the Board to understand the
views of the Company’s key stakeholders
and report how their interests and the
matters set out in section 172 of the UK
Companies Act 2006 have been considered
in Board discussions and decision making.
The Board considers the interests of a range
of stakeholders in its discussions, decision
making and development of strategy, and
considers the impact of decision making on
the long-term success of the Group.
During the year, the Directors consider that
they have acted in a way and have made
decisions that would most likely promote
the success of the Group for the benefit of
its members as a whole, with particular
regard for:
• the likely consequences of any decision in
the long term: see Strategy on pages 17 to
20, and Risk management from pages
105 to 118;
• the interests of the Group’s employees:
see Our people section on pages 75 to 77,
ECC Committee report on page 131 and
Directors’ remuneration report on pages
134 to 160;
• the need to foster the Company’s
business relationships with suppliers,
customers and others: refer to the next
pages where we provide further details
on stakeholder engagement;
• the impact of the Company’s operations
on the community and environment: see
our Sustainability section on pages 62 to
70 and our Sustainability Report (to be
published later in 2024), TCFD section on
pages 29 to 61 and Risk management
section on pages 105 to 118;
• the desirability of the Company to
maintain a reputation for high standards
of business conduct: see our Ethics and
compliance section on pages 65 to 68,
our 2023 Ethics and Compliance Report
(to be published later in 2024), TCFD
section on pages 29 to 61, Sustainability
section on page 62 to 70 and
Sustainability Report, and discussion of
risks around permitting, licence to
operate, and laws and enforcement on
pages 111 to 117; and
• the need to act fairly between members
of the Company: see the Corporate
governance section, from pages 123 to
128, and specifically the Interactions with
shareholders description on page 128,
which outlines the material ways in
which the Board and management
interact with and communicate
to shareholders.
Explore these reports online at
glencore.com/publication
When adhering to the Code requirements as
to Section 172, the Directors have focused on
mapping out the Company’s key
stakeholder groups and reviewing our level
of engagement with them. We operate
assets in more than 30 countries and have
over 150,000 employees and contractors.
Engaging and responding to our
stakeholder groups, regardless of their
location or opinion, is a fundamental input
into how we operate. In addition to direct
Board engagement, engagement by
management at different levels of the Group
with stakeholders, with appropriate
feedback and reporting to the Board,
enables the Board to understand the
perspectives of our stakeholders and
consider the likely consequences of
decisions in the long term.
To enable and ensure stakeholder
considerations are reflected in our decision
making, the Board:
• oversees a strategy that can achieve
lasting success and generate sustainable
returns for business, whilst maintaining
our licence to operate;
• has standing agenda items at Board
and committee meetings that consider
our main stakeholder groups’ interests;
• remains focused on its stakeholder
awareness and strengthening its
understanding of the broad range of views
expressed by Glencore’s stakeholders; and
• holds management to account on the
Company’s commitments, particularly in
relation to matters which are of significant
interest to our stakeholders such as
climate, local communities, health and
safety and ethics and compliance, thereby
also ensuring that management acts in
accordance with our Purpose and Values.
The competing interests of diverse
stakeholder groups are integral to the
Board’s decision making. The Board
challenges management’s approach to
understanding, evaluating and, where
necessary, mitigating adverse impacts on
particular stakeholder groups.
Further details on key topics considered and
principal decisions taken by the Board in the
year are detailed on pages 27 to 28.
2023 Glencore Annual Report
23
Section 172 Statement and stakeholder engagement continued
Strategic Report
Corporate Governance
Financial Statements
Additional Information
The following pages outline our key stakeholder groups, how
we interact with them and how the Board considers their
interests and opinions during its discussions and decision-
making processes. In each section, the paragraph ‘Why they
are important to the Company’ outlines why these
stakeholders play an important role in the Company’s
pursuit of success, implying how events negatively affecting
these relationships can be detrimental to the Company.
Our people
Why they are important to the Company
The success of our business would not be possible
without the dedication of our workforce
What these stakeholders have indicated is important
• Health, safety and wellbeing
• Training, compensation and career opportunities
• Company culture and reputation
• Industrial relations
How the Group maintains engagement
• Intranet, emails, newsletter updates
• Posters and leaflets
• Town hall meetings and forums
• Pre-shift ‘toolbox’ talks
• Employee surveys
• Focus groups, webinars and trainings
• Raising Concerns platform and other whistleblowing
channels
How the Board takes account of these interests
• Workforce engagement by designated Directors
• Regular updates from corporate functions such as
Human Resources and HSEC&HR
• Regular updates on Raising Concerns programme
and material internal or external investigations by the
General Counsel and Head of HR
• Results of employee surveys and focus groups
• Site visits to various operations
24
2023 Glencore Annual Report
Communities
Investors, financial analysts and the media
Why they are important to the Company
Mutually beneficial relationships with communities are
crucial to maintaining our social licence in the regions in
which we operate
What these stakeholders have indicated is important
• Local employment and procurement opportunities
• Health, safety and wellbeing of workers
• Operational impacts
• Socio-economic development projects
• Environmental management
• Tailings storage facilities
• Potential site closure
• Security and its engagement with the community
• Artisanal and small-scale mining (ASM)
How the Group maintains engagement
• Community liaison teams
• Various meetings in different formats to reflect local
expectations and gather community input
• Radio and television broadcasts
• Social media channels and industrial assets’ websites
• Industrial asset-specific publications
How the Board takes account of these interests
• Group HSEC&HR provides the Board HSEC Committee
with regular updates on Glencore’s impact on the
communities living around its operations and other
relevant matters relating to these communities, such
as the security situation and the levels of artisanal and
small-scale mining
• Industrial asset management provides details of
community considerations as input into Directors’
discussions on operational matters, where relevant
Why they are important to the Company
Our strategy and long-term success depend on the
support of our investors. Financial analysts and the
media are important stakeholders for ensuring investors
have equal access to quality information
What these stakeholders have indicated is important
• Financial and operational performance
• Climate change
• Compliance with laws and regulations
• Company culture and reputation
• Transparent payments to governments
• Health, safety and human rights
• Industrial relations
How the Group maintains engagement
• Regular calls, one-on-one meetings and Group events/
presentations
• Corporate Affairs teams regularly speak to media at
global, national and local levels
• Site visits
• Webinars and online Q&A sessions
• Annual Report, Half-Year Report, Climate Action
Transition Plan, Ethics and Compliance Report,
Payments to Governments Report and other reports
and presentations
• AGM
• Website, social media channels, media releases, and
regulatory announcements
How the Board takes account of these interests
• Financial results meetings
• AGM
• Meetings with shareholders, analysts and key media
• Group Investor Relations provides the Board with
sell-side analyst analysis and investor feedback on
corporate activities and events
• Following major announcements, Group Corporate
Affairs provides feedback on stakeholder responses to
the Board
Section 172 Statement and stakeholder engagement continued
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Governments and regulators
Suppliers and customers
Why they are important to the Company
Governments and regulators provide the legal and
policy framework that supports our businesses and
ensures that our communities and people are protected
Why they are important to the Company
Well-established relationships with suppliers and
customers are essential to the long-term viability of our
business model
How the Board takes account of these interests
• Periodic updates from the Head of Human Resources
and Head of Industrial Assets on material workforce
issues
What these stakeholders have indicated is important
• Tax and royalty payments
• Compliance with laws and regulations
• Local employment and procurement
• Operational environmental management, including
tailings storage
• Climate change
• Socio-economic development projects
• Transparency and human rights
• Public health
• Security
How the Group maintains engagement
• Provide information and updates on key topics, either
directly or as part of industry associations
• Participation in multi-stakeholder organisations,
initiatives and roundtables, such as the Voluntary
Principles on Security and Human Rights, the OECD
and the Extractive Industries Transparency
Initiative (EITI)
• Direct engagement with national, regional and local
government on key topics
• Industrial site visits by government stakeholders
• Public reporting
How the Board takes account of these interests
• Group Legal and other Group functions, as applicable,
report on material regulatory issues and emerging
legislation to the Board
• Group Corporate Affairs report on material
engagement with governments and regulators
What these stakeholders have indicated is important
• Responsible sourcing and supply
• Transparency and due diligence in the supply chain
• Procurement spend
• Human rights
• Compliance with laws and regulations
• Competitive pricing
• Reputation
How the Group maintains engagement
· Regular meetings and updates
· Customer industrial site visits
· Participation in commodity-specific responsible
sourcing initiatives
· Local procurement initiatives
How the Board takes account of these interests
• Oversight of the implementation of the Responsible
Sourcing Policy
Unions
Why they are important to the Company
Unions represent our workforce in a number of regions
and our workforce is critical to our success
What these stakeholders have indicated is important
• Health, safety and wellbeing
• Negotiation of workplace agreements
• Industrial relations
How the Group maintains engagement
• Regular meetings with industrial asset management
• Union participation in asset safety committees
NGOs and civil society groups
Why they are important to the Company
Maintaining effective engagement with NGOs supports
our efforts to operate responsibly and ethically
What these stakeholders have indicated is important
• Human rights
• Climate change
• Tailings storage facilities
• Social incidents and public health
• Operational and environmental management
• Socio-economic development projects
• Transparency in payments to governments
• Security and its engagement with community groups
• Compliance with laws and regulations
How the Group maintains engagement
• Direct engagement with global and local NGOs and
civil society groups
• Sustainability reporting, including Sustainability
Report, Modern Slavery Statement and Climate Action
Transition Plan
• Social media channels and corporate website
• External forums and organisations, such as the
Voluntary Principles on Security and Human Rights,
the OECD and the EITI
• NGO site visits
How the Board takes account of these interests
• Group Sustainability provides regular updates on the
opinions and activities of NGOs and civil society groups
• Regular discussions on major issues of concern to
NGOs and civil society groups and our engagement
with them
2023 Glencore Annual Report
25
Section 172 Statement and stakeholder engagement continued
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Reflecting stakeholder views in our Board decision making
As a global resources business, we recognise that robust, respectful and
two-way relationships with stakeholders are essential for our social
licence to operate.
Commitment to recycling
Glencore has been a participant
in the recycling business for over
30 years, centred at the Horne
and Sudbury smelters in Canada.
The demand for recycled metals
has increased significantly and is
expected to become increasingly
important in the coming years
given possible constraints on
supply and the lower
environmental footprint of
secondary versus primary material.
More information on our website at
glencore.com/what-we-do/recycling.
Shareholder returns
Providing shareholders with
appropriate shareholder returns is
an important part of our approach
to capital allocation. During 2023,
the Company paid a total of
$0.52 per share: $0.44 approved
by shareholders at the AGM
on 26 May 2023; and $0.08 per
share approved by the Board on
5 August 2023 following review of
the Company’s half-yearly financial
position. Combined with our
$2.7 billion cumulative share
buyback programmes announced
in February and August, total
returns to shareholders exceeded
$10 billion in 2023.
The Board regularly reviews
the balance sheet position and has
recommended a distribution of
$0.13 per share for 2024, in respect
of 2023 cash flow generation.
Our commitment to
responsible sourcing
We expect our suppliers to share
our commitment to ethical, safe
and responsible business practices
in line with our Purpose and
Values. Responsible sourcing is our
commitment to take into account
social, ethical and environmental
considerations with regards to our
products and supply chains and
when managing our relationships
with suppliers. We facilitate this
through our policies, standards,
and processes, including our
Responsible Sourcing Policy
and Supplier Code of Conduct
and these documents have
been approved and endorsed by
the Board through the
HSEC Committee. Where feasible,
we also seek to leverage our
business relationships to promote
dialogue with other stakeholders
to advance these commitments
and industry best practice.
Workforce engagement
Our Directors engage with the
workforce directly via site visits
and through management reports
from engagement activities
including employee surveys and
focus groups. During 2023, the
Directors visited a number of
industrial assets and offices,
including in Colombia, Kazakhstan,
and Spain and received
comprehensive reports relating to
numerous focus groups across the
globe focused on identifying
attitudes to the Ethics and
Compliance Programme and
people’s day-to-day experience of
and engagement with the
Programme across Glencore
industrial and marketing businesses.
This feedback is a useful indicator of
areas of strength and weakness in
the Programme and provided the
Directors with insight into future
areas of improvement for the
Programme, while also providing
general insight into the culture at the
relevant industrial assets and offices.
Climate
Our Board is responsible for
oversight of overall performance
and strategic direction, including
with respect to climate change,
and considers climate-related issues
when reviewing and guiding major
acquisitions and disposals, overall
risk management, capital
expenditure and budgeting, setting
the Group’s performance objectives
and other strategic matters.
As part of our update to our
Climate Action Transition Plan and
following the outcome of votes at
our 2023 AGM on two resolutions
relating to our climate-related
disclosures, we undertook an
extensive consultation with
shareholders, including on a range
of climate matters and views on
updates to our Climate Action
Transition Plan, which will be put
to a shareholder vote at the 2024
AGM and is available on our
website at glencore.com/
publications.
26
2023 Glencore Annual Report
Section 172 Statement and stakeholder engagement continued
Strategic Report
Corporate Governance
Financial Statements
Additional Information
The following are examples of key decisions that the Board discussed and approved during 2023.
Key topic/decision
Submission of a
proposal to the board of
directors of Teck to
merge with Glencore
and simultaneously
demerge our combined
metals and coal and
carbon steel businesses
Submission of an
alternative proposal for
the acquisition of EVR
from Teck, and possible
demerger of combined
coal and carbon steel
materials business
Board discussion
• Following the announcement by Teck in early 2023 of its
intended separation of its metals business and
steelmaking coal business, EVR, discussion and approval
of an all share merger proposal.
• Creation of two standalone companies with substantially
larger and more diversified portfolios of assets than those
of the proposed Teck and EVR.
• MetalsCo would be a world-class standalone base metals
business with a diversified portfolio and a leading position
in the critical minerals required for the energy transition.
• CoalCo would be a leading, highly cash-generative,
diversified coal producer that would be able to sustain an
attractive cash flow payout to investors through the cycle.
Stakeholder considerations and impacts
• Glencore and Teck shareholders would own approximately 76% and 24% of the merged
entities, respectively, and would be well positioned to participate in valuation re-rating
over time.
• Proposed merger/demerger would create significant value for both Teck and Glencore
shareholders.
• Glencore intends that CoalCo would oversee a responsible decline of its thermal coal portfolio
production in line with Glencore’s ambition to achieve net zero emissions by 2050, subject to
a supportive policy environment.
• Glencore would agree to:
– ensure that Canadians continue to serve in the management of MetalsCo’s and CoalCo’s
Canadian assets and provide ongoing and long-term employment in Canada for Canadians
– honour all of Teck’s commitments to local Canadian communities as well as to Indigenous
communities to ensure their interests are acknowledged and protected
– honour all of Teck’s social, labour and environmental programmes in Canada
• Following Teck’s withdrawal of its separation proposal,
• Continued strong support from shareholders for a transaction between Glencore and Teck
discussions, negotiations and approval of an
alternative proposal.
• The high-quality steelmaking coal mined in the Elk Valley
is an essential input to steelmaking in its current form.
Steel is necessary for constructing transportation and
infrastructure such as ocean-going vessels, rail, bridges
and buildings, as well as energy transition infrastructure
including wind turbines, all such products being critical to
our current and future way of life.
• Possibility to form a standalone company containing
combined coal and carbon steel materials business,
including Glencore’s stake in EVR, which would be well
positioned as a leading, highly cash-generative bulk
commodity company, likely attracting strong investor
demand given such yield potential.
• Glencore intends that demerged company would
continue to oversee the responsible decline of its thermal
coal operations in line with Glencore’s current targets and
ambition to achieve net zero by 2050, subject to a
supportive policy environment.
relating to EVR, with shareholders having the ability to weigh in on and ultimately approve a
subsequent demerger.
• Proposed commitments to Canadian government as part of Investment Canada Act process
to demonstrate net benefit to Canada, including:
– EVR will maintain significant employment levels in Canada with no net reduction in the
number of employees in the business in Canada as a result of the transaction
– EVR will increase capital expenditures in Canada such that they will amount to over
C$2 billion (excluding deferred stripping) over three years
– EVR will increase its contributions to Canadian sponsorship, community and
charitable programmes
– EVR will participate as a major funding partner with up to C$15 million for the proposed
renal/oncology addition to the East Kootenay Regional Hospital in Cranbrook
– EVR will develop and implement a climate transition strategy
– EVR will have a goal to become a nature-positive business by conserving or rehabilitating
at least three hectares for every one hectare affected by its mining activities going forward
– EVR will honour the existing agreements between EVR and Indigenous Nations and will
work with local Indigenous Nations to identify opportunities to increase participation in
benefits from the activities of EVR
2023 Glencore Annual Report
27
Section 172 Statement and stakeholder engagement continued
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Key topic/decision
Merger of Bunge and
Viterra
Amendments to the
Group’s VaR limits
Top-up shareholder
returns
Board discussion
• Discussion and approval of agreement to merge Bunge
and Viterra in a cash and stock transaction.
• The combination of Viterra and Bunge would create a
uniquely diversified supply chain operator across the key
global export origins for grains and oilseeds, as well as
major processing markets.
• The combination would have a higher proportion of
processing and value-added earnings and higher returns
on investment than Viterra standalone, in addition to
increased scale and diversification.
Stakeholder considerations and impacts
• Creation of value for our stakeholders as the new group would have the capacity to benefit
its suppliers and customers, invest in growth, and deliver improved returns to shareholders.
• Creation of a new group that would be ideally positioned to contribute solutions to the
pressing challenges of the agrifood chain in the 21st century and create improvements for all
stakeholders: food security, market access for farmers, efficiency and affordability, and the
sustainability of food production.
• Active monitoring of the Group’s risk appetite and related
• Robust balance sheet and risk limits are important to many stakeholder groups, including
VaR limits (see page 107).
equity and debt holders and relevant regulatory bodies.
• The Board considered variations to the VaR limit in context of the strong business
opportunities available, and the still relatively small weighting relative to total equity.
• The Board concluded that the risks in the increased VaR limit were commensurate with the
potential benefits.
• Half-year financial results allowed for ‘top-up’ returns of
• Returns to shareholders were considered in the light of commitments to other stakeholders,
c.$2.2bn in 2023.
in particular debt holders.
• The Board considered the impact of shareholder returns on the Group’s liquidity needs in
the short to medium term.
• The Board also considered the Group’s financial leverage in the longer term.
• The Board concluded that the shareholder returns were appropriate in light of the Group’s
other financial commitments.
28
2023 Glencore Annual Report
TCFD
Strategic Report
Corporate Governance
Financial Statements
Additional Information
As one of the world’s largest
diversified natural resource
companies, we have an important
role to play in supporting the
global transition to a low-
carbon economy.
Our route to net zero emissions
Our first Climate Action Transition Plan
(CATP) was published in 2020 and we
committed to review this plan every three
years. The disclosure in this section of the
Annual Report is in respect of the 2020
Climate Action Transition Plan, and
constitutes a report on our progress against
this plan in 2023.
Over the past year, we have conducted a
rigorous process to review and refresh our
CATP. This update was informed by a review
of the evolving market landscape – including
upcoming regulatory requirements, changing
stakeholder expectations, peer approaches
across the mining and energy sectors, the
latest modelling from the International Energy
Agency (IEA), and emerging insights from
the most recent United Nations Framework
Convention on Climate Change (UNFCCC)
dialogue. The process was led by our Climate
Change Taskforce (CCT), supported by a
working group with key members from across
our business that sought input and challenge
from the full Glencore leadership team as well
as external stakeholders. The review process
coincided with a shareholder consultation
process that we conducted following the
outcome of the votes relating to our climate
reporting at our AGM held on 26 May 2023.
During this process we sought shareholders’
views on updates to our CATP and, in
December 2023, we provided an update to the
market on the views received from
shareholders and actions to be taken.
Our refreshed CATP, which is published
separately, retains the core elements of our
previous three-year strategy – including a
re-commitment to our 2026 and 2035
decarbonisation targets and our 2050 net zero
ambition, which is subject to a supportive
policy environment. We are also introducing a
new interim target of reducing our industrial
emissions by 25% by the end of 2030 against
the restated 2019 baseline (see the About our
emissions calculations and reporting section
on page 53, and, in particular, the Baseline
emissions restatement subsection on page
57). The refreshed CATP will be put forward for
an advisory shareholder vote at our 2024 AGM.
The Task Force on Climate-related Financial
Disclosures (TCFD) was established by the
Financial Stability Board to improve reporting
of climate-related risks and opportunities. We
recognise that disclosures on our climate-
related risks and opportunities support our
shareholders in making long-term investment
decisions. As such, we continue to structure
our Annual Report’s climate disclosures
according to the TCFD Recommendations,
taking steps to provide greater granularity
of content over time.
Acquisition of EVR
Following the announcement by Teck in early
2023 of the intended separation of its metals
business and steelmaking coal business, EVR,
we recognised a compelling opportunity for
the development of our own business. In April
2023, we announced that we had submitted a
proposal to the board of directors of Teck to
merge with Teck and simultaneously separate
our combined metals and coal businesses.
Following Teck’s withdrawal of its separation
proposal, we announced in June 2023 that
we had submitted an alternative proposal
to acquire only EVR. We successfully reached
an agreement with Teck for the acquisition
of a 77% interest in EVR in November 2023.
2023 Glencore Annual Report
29
We believe that the disclosures in this
section of the Annual Report are
consistent with the four
Recommendations and eleven
Recommended Disclosures of
the TCFD.
TCFD continued
Strategic Report
Corporate Governance
Financial Statements
Additional Information
When assessing the merits of the transaction,
we acknowledged the important distinction
between thermal coal and steelmaking coal.
We concluded that while not a metal,
steelmaking coal is an important transition-
enabling commodity as it is an essential input
into much of the world’s steelmaking in its
current form. Steel is necessary for
constructing transportation and
infrastructure such as ocean-going vessels,
rail, bridges and buildings, as well as energy
transition infrastructure including wind
turbines. The acquisition therefore presented
a unique opportunity to further strengthen
our position across the products necessary for
the energy transition as well as everyday life
and also unlocks the potential, subject to
shareholder approval, for a value-accretive
demerger of our combined coal and carbon
steel materials business. We will undertake a
shareholder consultation process following
the close of the acquisition to assess views on
a potential subsequent demerger.
Our position on climate change
We continue to believe a holistic approach to
reducing our emissions, which considers our
Scope 1, 2 and 3 industrial emissions, is the best
way in which Glencore can make a meaningful
contribution to address climate change.
We are committed to responsibly managing
the phase down of our thermal coal
production to meet our Scope 1, 2 and 3
emissions reduction targets, including our
newly introduced 2030 target. These targets
comprise: a 15% reduction by the end of 2026,
a 25% reduction by 2030 and a 50% reduction
by the end of 2035, in each case against our
2019 restated baseline (see the About our
emissions calculations and reporting section
on page 53), with a longer-term ambition of
achieving net zero emissions by the end of
2050, subject to a supportive policy
environment. Our targets and ambition cover
the emissions from our industrial assets. We
chose to adopt an absolute reduction metric
as this delivers a specified reduction in
our emissions.
In setting our targets and ambition, we took
into consideration the goals of the UNFCCC
and the aims of the Paris Agreement (Article
2, UNFCCC; and Article 2, Paris Agreement).
We also recognise that to achieve our 2050
net zero ambition there is a need for
significant global technological evolution and
advancement, and coordinated and
supportive government policies, including
incentives to drive accelerated uptake of
lower-carbon and decarbonisation
Our 2020 seven actions to Net Zero
World energy supply
technologies, and market-based regulations
governing industrial practices that drive a
competitive, least-cost emissions reduction
approach, most of which are not within our
direct control or ability to materially influence.
For that reason, we have expressed it as an
ambition rather than a target, as we consider
the latter is more appropriate for activities
and actions deemed within our direct control
or ability to materially influence.
Our capital allocation strategy for our
industrial assets is aligned with the
achievement of our short- and medium-
term climate targets and our ambition of
achieving net zero industrial emissions by
the end of 2050, subject to a supportive
policy environment.
Responsible decline of our
coal portfolio
Glencore remains committed to reducing
coal production in our existing coal portfolio
in accordance with our emissions reduction
targets and ambition.
As part of our CATP update, we considered
the usefulness of also maintaining the coal
production cap that was introduced in 2019.
1. Managing our operational footprint
2. Reducing our Scope 3 emissions
3. Allocating capital to prioritise
transition metals
4. Collaborating with our value chain
5. Supporting uptake and integration
of abatement
6. Utilising technology to improve
resource use efficiency
7. Transparent approach
100
90
80
70
60
50
40
30
20
10
0
30
2023 Glencore Annual Report
2022
2050
SPS
2050
APS
2050
NZE
Other
Solar
Wind
Trad biomass
Modern biomass
Hydro
Nuclear
Gas CCS
Gas
Coal CCS
Coal
Oil
Source: graphic generated by Glencore using data
from International Energy Agency (2023), World
Energy Outlook 2023, IEA, . Licence: Creative
Commons Attribution CC BY-NC-SA 4.0.
Since 2019:
• We have introduced a set of industrial
emissions reduction targets that include
Scope 3 emissions, which are largely
associated with our thermal coal
production;
• Our updated CATP introduces an
additional target for 2030;
• Our thermal coal production has
decreased; and
• We are not progressing greenfield thermal
coal investments.
Based on the combination of these factors and
feedback from shareholder consultations, we
determined that this previously stated
production cap may now only serve to cause
confusion. We have therefore decided to
remove the production cap, anticipating that
our production of thermal coal should continue
to decrease over time, reflecting our
decarbonisation targets. We will continue to
provide regular updates and guidance on our
expected production as part of our quarterly
Production Reports.
Beyond our emissions reduction targets, our
approach to reducing emissions will also
depend on the pace of the global energy
transition: if the global adoption of renewable
energy significantly accelerates (supported in
part by our supply of transition metals), we
may need to review and accelerate our
current plans for the responsible phase down
of thermal coal.
In 2023, the IEA published its updated Net
Zero Roadmap and the World Energy
Outlook (WEO) to take into account actions
taken, policies planned and adopted globally
in the intervening period from its prior
reports, and the availability of updated data
on the status of global energy demand and
emissions. The IEA scenarios show that
energy demand continues to grow with
TCFD continued
economic and population growth and even
as the use of thermal coal in advanced
economies is declining, the rate of such
decline in developing economies,
particularly in Asia Pacific, is considerably
slower. For some developing nations,
seaborne-traded coal volumes are a growing
energy source.
We do not expect the phasedown of our coal
production to be linear. We have not
committed to reducing production in line
with a particular scenario or pathway, due to
the uncertainty inherent in global efforts to
progress toward the energy transition.
Scenarios are not forecasts of future demand
and therefore the scenarios developed by the
Intergovernmental Panel on Climate Change
(IPCC) and IEA are among several inputs into
our climate strategy and are not in-and-of
themselves determinative of our strategy.
For instance, if the global adoption of clean
energy technologies and carbon capture
technologies do not sufficiently advance, we
see a role for unabated thermal coal for
electricity generation beyond 2040.
Therefore, and in support of our strategy of a
managed phasedown of our current global
coal portfolio, we are developing our own
approach to abatement beyond 2040, which
may include using offsets, as well as carbon
capture technologies. We acknowledge that
this does not directly align with the IEA Net
Zero 2040 phase-out of unabated thermal
coal for electricity generation.
Continued geopolitical uncertainty has
heightened energy security vulnerabilities
and, while some countries are seeking to
accelerate renewables uptake, the associated
short- to medium-term impacts to energy
security may delay the pace of the transition
away from fossil fuels in certain other regions.
Governance of climate-related
risks and opportunities
TCFD Recommendation: Disclose the
organisation’s governance around
climate-related risks and opportunities.
Recommended Disclosures:
a. Describe the Board’s oversight of climate-
related risks and opportunities.
b. Describe management’s role in assessing
and managing climate-related risks
and opportunities.
Our Board is responsible for oversight of our
overall performance and strategic direction,
including with respect to climate change,
and considers climate-related issues when
reviewing and guiding on major acquisitions
and disposals, overall risk management,
capital expenditure and budgeting, and
other strategic matters.
The Board is responsible for overseeing the
Group’s climate strategy and progress
against Glencore’s climate commitments.
Implementation of our climate strategy is led
by the management team via our Climate
Change Taskforce (CCT). Progress on this
topic is a standing item on the Board agenda,
and is discussed in Board meetings at least
twice yearly, including in relation to the
Group’s progress against its goals and targets
for addressing climate-related issues. Where
appropriate, certain climate-related matters
may be discussed by Board Committees.
Further information on the role of the Board is
set out in the Corporate governance report,
available on page 119. For further details on
each level of governance on climate-related risks
and opportunities, see the following pages.
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Overview of governance of climate-related risks and opportunities and key
activities during 2023
Board
Informing
Reporting
ECC
Committee
HSEC
Committee
Audit
Committee
Nomination
Committee
Remuneration
Committee
Chief Executive and management team
Climate Change Taskforce (CCT)
Industrial Climate
Working Group
Marketing Climate
Working Group
Data Climate
Working Group
External Climate
Working Group
Commodity department responsibilities
2023 Glencore Annual Report
31
TCFD continued
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Glencore Board
During 2023, the Board undertook the following climate-related activities:
• oversaw the Group’s climate strategy and response to climate-related risks and
opportunities that affect our business;
• monitored progress against Glencore’s climate strategy, including our Scope 1, 2 and 3
emissions performance, and the ongoing development of our Group marginal abatement
cost curve (MACC);
• considered climate-related issues, with information provided by management, when it
reviewed strategic decisions relating to major capital expenditures;
• through the Chair and CEO, consulted with shareholders on climate-related matters;
• provided our shareholders at our 2023 AGM with their third advisory vote on the progress
against our three-year Climate Action Transition Plan;
• reviewed climate-related disclosures in our reporting suite and other external engagement;
• oversaw the review and development of the updated Climate Action Transition Plan,
including receiving feedback from the shareholder consultation and discussing and
approving the steps taken in the plan to respond to the feedback;
• participated in annual training on climate change led by external experts, covering duties
as directors, legal risks, external expectations and regulatory requirements, as well as
evolving climate issues. The training also emphasised the importance of effective
integration of climate change into the Group’s risk management processes and related
Board oversight;
• received reports on emerging industry trends relating to climate-related litigation and
‘greenwashing’ allegations; and
• reviewed the outcome of the climate-related risks and opportunities assessment.
Acquisition of a 77% interest in Teck’s steelmaking coal business
The Board considered how the transaction with Teck aligned with Glencore’s climate
commitments. The transaction presented a unique opportunity to complement Glencore’s
existing portfolio with high-quality steelmaking coal, an essential input into steel that is
necessary for critical industries and systems such as energy transition infrastructure,
transportation and construction. If the transaction closes, a climate transition strategy will be
developed for EVR that reflects the risks and opportunities associated with its business as a
significant producer of steelmaking coal. As per our November 2023 announcement, this
strategy would include:
• medium-term targets in respect of Scope 1 and Scope 2 emissions at EVR’s operations
which will seek to achieve or enhance the existing goals or targets set by EVR having
regard to what is practical and feasible given existing technologies;
• a long-term goal to net zero in respect of Scope 1 and 2 emissions by 2050; and
• a commitment to work with partners towards an ambition to achieve net zero Scope 3
emissions by 2050, recognising that achievement is uncertain and we cannot ensure the
outcome alone.
Engagement with shareholders
In 2023, a group of shareholders requisitioned a resolution at the AGM entitled Projected
Thermal Coal Production. On review, the Board considered that the resolution, read together
with its supporting statement, was unclear, unnecessary and undermined the Board’s
responsibility and accountability for the Company’s strategy, and was therefore not in the
best interests of the Company and recommended a vote against the resolution. The Board
oversaw engagement with the shareholders filing the resolution. Following the resolution
obtaining 29.2% support from shareholders, the Board also oversaw further engagement
with shareholders where matters pertaining to the resolution were discussed as part of the
broader consultation on the update of our Climate Action Transition Plan.
Informing
Reporting
Ethics, Compliance and
Culture (ECC) Committee
Health, Safety, Environment,
Community (HSEC)
Committee
Audit Committee
Nomination Committee
Remuneration Committee
32
2023 Glencore Annual Report
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Health, Safety, Environment,
Community (HSEC)
Committee
• Met four times during 2023.
• Reviewed our stakeholder
engagement, including on
climate-related matters.
• Considered material climate-
related matters that may impact
our operations, such as the
implementation of the revised
Baseline Safeguard Mechanism
in Australia.
Audit Committee
Nomination Committee
Remuneration Committee
• Met six times during 2023.
• Reviewed the Group’s financial
risk management, including
those financial risks relating to
climate change.
• Oversaw the Group’s financial
statements and reports,
including climate-change
related financial disclosures.
• Met three times during 2023.
• The Committee did not discuss
any climate-related matters
in 2023.
• Met six times during 2023.
• Supported the delivery of our
climate strategy through the
inclusion of climate-linked
metrics and targets within
performance-related pay for
Glencore’s CEO.
TCFD continued
Ethics, Compliance and
Culture (ECC) Committee
• Met four times during 2023.
• Reviewed our stakeholder
engagement, including on
climate-related matters.
• Considered the significant
matters on which the Group has
made political representations
and our use of lobbyists and the
conduct and positions of our
industry organisations during
2023 on material issues, in line
with our Political Engagement
policy – glencore.com/who-we-
are/policies/political-
engagement-policy
Read more on page 131
Read more on page 132
Read more on page 129
Read more on page 133
Read more on page 134
Informing
Reporting
Chief Executive and management team
2023 Glencore Annual Report
33
TCFD continued
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Chief Executive and management team
The CEO is the named executive for driving the climate strategy within the Board and has
responsibility for implementing the decisions of the Board and its Committees, as well as
leading Glencore’s operating performance and day-to-day management.
The CEO, CFO, Head of Industrial Assets and General Counsel lead our management team
and are supported by the rest of our Group leadership, comprising our Head of Corporate
Affairs, Head of Human Resources and Head of Sustainability, and departmental leadership
comprising the heads of each marketing department and our industrial leads.
The CEO is Chair of the CCT, which is responsible for overseeing the climate strategy and
progress against Glencore’s climate commitments. He also has oversight of the CCT’s four
working groups and provides support and information to the Board for making strategic
decisions, including those relating to capital allocation and portfolio management.
The CEO’s 2023 scorecard for annual variable compensation includes 30% relating to ESG
matters, of which half is for safety performance and half for progress towards our 2026 and
2035 industrial emissions reduction targets.
2023 climate-related KPIs included: (1) demonstrating progress on our emissions reduction
strategy to deliver the 2035 industrial emissions reduction target of 50% against the restated
2019 baseline and, (2) for each department, creating an inventory of Scope 1 and Scope 2
emission reduction actions and a Group MACC based on the inventory to develop and
support our strategy for emissions reduction.
Senior managers from core Group corporate functions, as well as our industrial and
marketing teams, participate in the four working groups that support the work of the CCT.
This facilitates the provision of climate-related information relevant to a particular
commodity or function, which the CCT then consolidates into a Group-wide approach.
Climate-related topics are addressed regularly by our Head of Industrial Assets with
industrial leads. Topics may include opportunities to reduce our emissions through
operating efficiencies and emission reduction schemes, as well as approaches to advocacy
on climate-related matters such as carbon pricing.
Data collected by each industrial asset is consolidated to provide a commodity department’s
emissions. Each year, during our industrial asset planning and budget cycles, each Industrial
Lead presents the department’s emissions with accompanying workstreams and action
plans to manage, mitigate and minimise emissions.
Informing
Reporting
Climate Change Taskforce (CCT)
34
2023 Glencore Annual Report
TCFD continued
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Climate Change Taskforce (CCT)
- Met five times during 2023.
The CCT is accountable to the Board and is led by the CEO. Its other members include the
CFO, Head of Industrial Assets, General Counsel, Head of Corporate Affairs and Head of
Sustainability, as well as representatives from other key corporate functions including
investor relations and finance.
The CCT has responsibility for and oversight of the work streams and coordination of
workflow for the delivery of Glencore’s climate strategy and commitments, including
activities relating to:
• decarbonisation of industrial activities;
• internal reporting standard development and data quality and consistency review;
• capital allocation and portfolio management;
• macroeconomic assessments including Group carbon pricing; and
• external engagement, communication and advocacy.
The CCT has four working groups to drive the delivery of our emissions reduction targets and
net zero ambition. It is through these working groups that we assess initiatives to reduce our
emissions, identify and leverage carbon marketing opportunities, design and implement
systems to support complete, accurate and attestable reporting and monitor external
trends, while coordinating and overseeing advocacy and communication efforts.
These working groups report to the CCT and play an important role in helping inform
management about climate-related issues that need to be monitored. Their primary areas of
responsibility are as follows:
Informing
Reporting
Industrial climate working group
Marketing climate working group
Data climate working group
External climate working group
• Climate change risk assessment
• Energy and emissions reduction
• Life of asset planning and budgeting
• Group data validation and reporting
• Group data reporting procedures
procedure
• Research, innovation and governance
• Data model definition and integration
• Market execution
and standards
• Carbon pricing and modelling
• Carbon accounting
• Monitoring emerging climate topics
• External advocacy
• Legal
• Disclosures
The CCT is supported by a management-level ESG Committee, which provides guidance on
Glencore’s ESG programmes and approves Group ESG policies, standards and procedures,
including those relating to climate – see page 72 for further details.
In 2023, the CCT oversaw the development of the revised Climate Action Transition Plan,
including engagement with external stakeholders.
Informing
Commodity department responsibilities
Reporting
During 2023, the commodity departments undertook the following activities:
• participated in the Industrial and Marketing Climate Working Groups to increase
knowledge sharing and enable acceleration of the adoption of decarbonisation
action Group-wide;
• continued to work on the decarbonisation of the industrial assets through identifying
carbon abatement opportunities that are inputs for the Group MACC;
• maintained rolling four-year climate action plans, supporting their decarbonisation
planning;
• collaborated with industry organisations to strengthen the understanding of a
commodity’s emissions through developing life-cycle analysis;
• identified environmental products and power supply opportunities that support a more
efficient approach to carbon and energy markets and our Scope 2 emissions
reduction efforts; and
• assessed and revised climate-related risks and opportunities.
2023 Glencore Annual Report
35
TCFD continued
Strategic Report
Corporate Governance
Financial Statements
Additional Information
It also refers to climate-related acute and
chronic physical risks and opportunities.
Risks in each of these categories have been
identified using a risk management process
that our industrial assets are required
to follow.
We welcome the development and
publication of the recommendations for the
Taskforce on Nature-related Financial
Disclosures (TNFD). We have already
incorporated various elements, such as the
TNFD’s Locate, Evaluate, Assess, Prepare
(LEAP) risk process into our environmental
governance framework for implementation
at our industrial assets. We continue to
evaluate the recommendations of the TNFD
and their application to our business.
A description of the process used to identify
the climate-related risks and opportunities
that could have a material financial impact
on the Group is described in more detail on
page 45.
Strategy
Recommended Disclosure:
a. Describe the climate-related risks and
opportunities that the organisation has
identified over the short, medium, and
long term.
When developing Glencore’s climate
strategy, we considered climate-related risks
and opportunities across three time horizons:
S
1. short term (to the end of 2026): the
first six years following the
publication of our climate strategy at
the end of 2020, which aligns with
business and financial plans
developed to deliver our 2026 target;
M 2. medium term (to the end of 2035):
the mid-point between 2020 and
2050, being the date of our 2035
target; and
L
3. long term (to the end of and beyond
2050): our longer-term ambition is to
achieve net zero emissions by the
end of 2050, subject to a supportive
policy environment.
TCFD categorises climate-related transition
risks as:
A. Transition Risks: policy and legal, market,
reputation, technology
B. Physical Risks
36
2023 Glencore Annual Report
TCFD continued
Strategic Report
Corporate Governance
Financial Statements
Additional Information
We have identified the following climate-related risks and opportunities as having the potential to impact the Group:
A. Transition Risks
Policy and legal
Affected commodity/process/region
• All producing commodities
• Industrial and marketing activities
• Africa, Australia, Canada, Europe, Kazakhstan, New Caledonia, South America
Risks and opportunities
Our ability to operate or develop industrial assets can be affected by regulatory and policy
developments, such as carbon and corporate taxes, project approvals (or lack thereof or
delays to project approvals), emissions caps or limits on emissions intensity, energy
regulation, carbon trading and use of carbon offsets1. In addition, changing regulations and
the uncertainties associated with project approvals may increase operating costs and reduce
profitability, impacting operational viability and future investments.
Time
horizon
M
S
There are increasing moves to introduce carbon import taxes, such as the European Union’s
Carbon Border Adjustment Mechanism. These have the potential to affect our products’
export markets and trade flows. Policies relating to cost of carbon and emissions may also
have an impact on our operations, for instance those in Australia and Canada. In particular,
earnings may be impacted by lack of availability, increased pricing or limitations on the use
of carbon trading, as well as due to limits on absolute greenhouse gas (GHG) emissions put
in place as a result of government policies.
Further impacts to earnings may arise from cost impacts associated with policies affecting
technology rollout and adoption, as well as increased taxation on energy. These have been
identified as risks by our zinc and coal departments in Germany and Colombia, respectively.
There is the potential for legal risks during project approval processes, as well as the financial
impacts of approvals uncertainties.
There has been a significant increase in recent years in litigation (including class actions), in
which climate change and its impacts are a key or contributing consideration, including
administrative law cases, human rights claims, tortious cases and claims brought by investors. In
particular, a number of lawsuits have been brought against companies with fossil fuel operations
in various jurisdictions seeking damages related to climate change. A number of regulators have
also increased their scrutiny of companies’ actions in respect of climate change, including
through the adoption of additional reporting requirements and investigating claims related to
inaccurate or misleading disclosure (for example in connection with greenwashing allegations).
Mitigation measures
We track and respond to regulatory and technology developments, as well as customer demand.
We anticipate increased policy-driven demand for our products that have lower embedded
carbon content. We also recognise the potential for financial impacts arising from uncertainties in
project approval processes and seek to mitigate these impacts where possible. We look to play an
active and constructive role in public policy development on carbon and energy issues, both
directly and through participation in industry organisations, for instance through advocating
for a stable and predictable approach to energy policies in Europe. Through strengthening
our methodology for calculating Scope 3 emissions, undertaken in 2023, we identify
optimisation potential, carbon reduction opportunities and energy efficiencies within our
operations. We expect that technology will in time enable us to further enhance reporting of our
emissions throughout our value chain and to work with our stakeholders to reduce emissions.
We operate successfully in multiple jurisdictions that have direct and indirect carbon pricing
or regulations. During 2023, we used actual carbon prices, and carbon prices consistent with
the IEA’s NZE 2022 scenario (as the scenario available at the time of our planning process) to
assess the likelihood and impact of rising carbon prices.2
We have identified some parts of our business, such as nickel and coal, that would likely
experience significant cost pressure in a high carbon price environment. However, our
analysis of the impact of carbon pricing on operational costs is offset by the expected impact
on these commodities (prices and costs) as a whole, such that Glencore’s operations should
retain their relative positions on the cost/margin curves. We consider local regulation and
carbon price sensitivities as part of our ongoing business planning for existing industrial
assets and new investments.
We recognise the potential for financial impacts arising from global ambitions seeking to drive
quicker decarbonisation. Further information is available in note 1 to the financial statements.
We have assessed that increasing demand for our transition metals commodities is likely to
drive higher prices for those products in turn offsetting increases to processing costs arising
from the implementation of carbon pricing instruments.
We seek to correct inaccurate or misinformation that we identify in the public domain and
reiterate our position on key issues related to our climate change strategy and in relation to
our corporate reputation. We report on our climate plans and progress against these
annually to inform our stakeholders.
1. We assess policy information on: Technology Costs: Solar PV Capital Costs, Cost of Carbon, Industry:
Emissions, Industry: Emissions % Change, Industry: Iron and Steel Emissions, Industry: Iron and Steel
Emissions % Change, Transport: Heavy-Duty Trucks Emissions, Transport: Heavy-Duty Trucks Emissions
% Change, Electricity: % Supply Solar PV and Wind, Electricity: % Supply Solar PV and Wind % Change,
Electricity: Supply Emission Intensity, Electricity: Supply Emission Intensity % Change, Industry: Energy
Consumption TFC, Industry: Energy Consumption TFC % Change, Industry: Iron and Steel Energy
Consumption TFC, Industry: Iron and Steel Energy Consumption TFC % Change, Buildings: Services
Buildings Emissions, Buildings: Services Buildings Emissions % Change, Transport: Oil in Transport TFC,
Transport: Oil in Transport TFC % Change, Transport: Electricity in Transport TFC.
2. There are two main types of carbon pricing: emissions trading systems (ETS) and carbon taxes. An ETS,
sometimes referred to as a cap-and-trade system, caps the total level of greenhouse gas emissions and
allows those industries with low emissions to sell their extra allowances to larger emitters. By creating
supply and demand for emissions allowances, an ETS establishes a market price for greenhouse gas
emissions. A carbon tax directly sets a price on carbon by defining a tax rate on greenhouse gas emissions
or, more commonly, on the carbon content of fossil fuels. It is different from an ETS in that the emission
reduction outcome of a carbon tax is not pre-defined but the carbon price is (World Bank Pricing Carbon
available at www.worldbank.org/en/programs/pricing-carbon).
2023 Glencore Annual Report
37
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Mitigation measures
As one of the largest diversified natural resource companies in the world, we can support the
delivery of climate goals by producing, recycling, marketing and supplying the metals and
minerals that are essential to the transition to a low-carbon economy.
Our approach strives to ensure that we identify, understand and monitor our emissions and
climate change issues, to meet regulatory compliance and our commitments that support
the goals of the Paris Agreement (Article 2).
We remain committed to reducing coal production in our current coal portfolio in
accordance with our emissions reduction targets and ambition.
As the global patchwork of energy and climate change regulation evolves, we closely monitor
international and national developments and their potential to impact our industrial assets.
We consider energy costs and our emissions in our annual business planning processes.
Commodity departments provide energy and emission forecasts for the forward-planning
period and provide details of projects that may reduce emissions, including identifying and
developing renewable energy generation opportunities. Our business model is well placed to
supply low-carbon and renewable fuel solutions to our industrial assets through the supplier
network of our energy marketing business.
Our assessment of potential mitigation and abatement projects forms the basis of our
internal MACC. We utilise our MACC to act on cost-ranked emission reduction opportunities
to mitigate high carbon prices and are pursuing lower emission sources in our businesses.
As a vertically integrated extractive and marketing business, we can seek to leverage our
own carbon reduction efforts and market expertise to support the increasing needs for
attestable low-carbon products. Our marketing segment’s carbon strategy is expected to
create additional value over time as markets and demand for carbon solutions in the
commodity supply chain evolve.
TCFD continued
Market
Affected commodity/process/region
• Coal, copper, cobalt, lead, nickel, vanadium, zinc
• Smelting, refining, marketing
• Africa, Australia, Canada, Europe, Kazakhstan, South America
Risks and opportunities
In response to the ongoing efforts on the decarbonisation of global energy supply and
electrification of key sectors, including mobility and its associated infrastructure, we expect
demand to grow rapidly for renewable energy technologies, and the metals and minerals
required to build them.
Time
horizon
M
L
Population and economic growth are further expected to drive increasing commodity
demand. Changes in commodity use from emerging technologies, adoption of renewable
energy generation and policy changes may affect demand for our products, both positively
and negatively.
The global coal market is dynamic and subject to the changing geopolitical and energy
landscape. Over time, coal’s share of primary energy demand will continue to decline. The
IEA has projected in the WEO 2023 that global coal demand will peak during this decade
driven by decline in demand for thermal coal at a rate which exceeds growth in demand for
metallurgical coal. In the Announced Pledges Scenario, WEO 2023 it shows that 85% of the
projected coal demand decline to 2030 occurs in USA, Europe and China while demand in
India and Southeast Asia continues to grow. Demand growth in India and Southeast Asia
and the lower rate of demand decline across the balance of Asia is expected to support net
export supply volumes from Australia and North America.
We are a significant energy consumer. Energy is a key input and cost to our business as well
as being a material source of our carbon emissions. Governments may impose taxes or levies
on procured energy sources, limit supplies or introduce required purchasing or generation
of renewable energy. The introduction of carbon taxes and/or clean fuel standards may
result in increased operating costs for our industrial assets.
Increasing demand and higher commodity prices can drive substitution and market
dislocations of products.
38
2023 Glencore Annual Report
TCFD continued
Reputation
Affected commodity/process/region
• All commodities
• Industrial and marketing activities
• Global
Risks and opportunities
Negative stakeholder perception around the role of the extractive sector may arise from its
contribution to climate change or environmental and social impacts associated with
resource exploitation. This, in turn, may impact the development or maintenance of our
industrial assets due to restrictions in operating permits, licences, or similar authorisations.
Time
horizon
M
S
A number of companies, including Glencore, have faced shareholder requisitioned
resolutions on climate-related matters. These may continue to escalate, leading to
reputational impacts.
These issues may impact our access to capital or insurance, resulting in increased costs of
finance and/or divestment of our shares and bonds, as banks and other financial institutions
discontinue working with companies involved in fossil fuels.
Technology
Affected commodity/process/region
• Transition metals, coal
• Marketing
• Global
Risks and opportunities
Development of new technologies and lower costs for nascent industries may either drive
increased demand for our commodities or result in substitution and lower demand. It may
also provide opportunities to address our Scope 1, 2 and/or 3 emissions.
Time
horizon
M
L
Delays in development of new technologies enabling decarbonisation of mobile equipment
may impact our ability to meet our 2050 net zero ambition, while the uncertainty associated
with these technologies may impact our operating costs.
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Mitigation measures
We engage with a broad range of stakeholders on diverse topics, including climate change
and related areas of concern. Our engagement with our local communities and those
directly affected by our operations aims to be transparent and honest. Where we identify
differing opinions, we look for opportunities to find constructive solutions.
We engage closely with our investors, lenders and capital providers, including targeted
engagements in relation to climate change.
By maintaining strong relationships with our investors, lenders and other capital providers,
and investment grade credit ratings, we continue to have a broad range of sources from
which to access funds. We regularly review our banks’ and other institutions’ climate
change-related policies and any evolution in applicable restrictions.
Mitigation measures
Increased adoption of renewable energy sources as a means of decarbonising energy supply
is expected to create significant new demand for the current key transition-enabling
commodities, including copper, nickel and cobalt, which we produce and market.
We are investing in emission reduction projects and initiatives, focusing on both our
industrial operations and the use of our industrial products, as well as supporting low-
emission coal technology projects and GHG-related studies to address Scope 3 emissions
and we are supportive of technology such as CCS. We are also undertaking energy efficiency
projects, such as waste heat utilisation, to reduce our industrial Scope 1 and 2 emissions.
Where relevant technologies are not available, we seek to identify appropriate opportunities
to participate in industry and research partnerships targeting emission reduction.
2023 Glencore Annual Report
39
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Mitigation measures
Our Energy & Climate Change Standard, TSF Management Standard and Environment
Standard require our industrial assets to develop baselines and undertake annual risk
assessments in these areas as described in more detail below.
Our TSF Management Standard requires all our TSFs to be designed to the requirements set
out by the Canadian Dam Association (CDA). We chose to benchmark against the CDA
because it requires TSFs to be designed to higher flood frequency than may be required by
local regulations in the jurisdictions in which we operate, and as such supports a more
climate-resilient design of our TSFs. For instance, we have upgraded the design of the
spillways at some of our Peruvian operations to store and pass more water, thereby making
them more resilient in the event of rapid extreme rainfall.
We conduct various reviews of our TSFs, including through third-party assurance and regular
satellite monitoring, and these reviews include consideration of the impact of extreme
weather events. In August 2023, in accordance with the deadline set by the ICMM, we
published detailed disclosure on the conformance of our TSFs with very high and extreme
consequences of failure with the Global Industry Standard on Tailings Management (GISTM):
https://www.glencore.com/sustainability/esg-a-z/Tailings.
Hydrogeological monitoring, real-time geotechnical monitoring and early alerts help identify
and proactively address risks associated with flooding at our facilities. In addition,
infrastructure design, such as surface and underground drain systems and emergency
spillways, help contain excess water and prevent damage.
Monitoring of animal populations and their land and aquatic habitats and river health, as
well as developing internal site-specific nature targets, supports our operations to track and
address risks posed by climate to nature.
Our current assessment of the acute and chronic physical risks related to climate change
does not require us to make additional financial provisions for our operations or adjust the
estimated useful lives of specific assets.
TCFD continued
B. Physical – acute and chronic
Affected commodity/process/region
• Coal, copper, nickel, zinc
• Industrial activities
• Africa, Australia, Canada, Kazakhstan, South America
Risks and opportunities
We have identified extreme weather events such as floods, hurricanes, and droughts, as well
as changes in rainfall patterns, temperature and storm frequency as risks that can affect our
industrial assets’ operating processes, including costs and capacity. Availability of water for
our industrial assets and nearby communities may be impacted by changes in climate,
resulting in increased risk of flood at some industrial assets, and increased aridity in others.
We report on our industrial assets’ exposure to water-related risks on our water microsite.
Time
horizon
M
S
L
We identified several sites across Peru, Canada and the US where flooding presents a risk by
2030, due to its potential negative impacts on our supply chain, and disruption to our
production processes and deliveries.
The risk of an increase in frequency and severity of weather events such as extreme heat or
cold, floods or droughts, wildfires and rainfall can pose risks to nature, including river health
and animal populations, for instance in South Africa.
Severe weather events can also impact the infrastructure at our industrial assets, including
equipment and roads, as well as our tailings storage facilities, which may overflow as a result
of extreme storms, or lose structural integrity as a result of geotechnical instability arising
from flooding. Events such as flooding can also impact production and revenues due to
site downtime.
glencore.com/sustainability/esg-a-z/
water-management
40
2023 Glencore Annual Report
TCFD continued
Recommended Disclosure:
b. Describe the impact of climate-related
risks and opportunities on the
organisation’s businesses, strategy, and
financial planning.
The world requires a global transformation
of energy, industrial and land-use systems to
mitigate the risks and deliver on the
opportunities arising from climate change.
We believe this transition is a key part of the
global response to managing energy
security and responding to the increasing
risks posed by climate change.
Our response to climate-related risks and
opportunities is to continue our investment
in transition-enabling commodities, while
managing the responsible decline of our
thermal coal portfolio. Our business model
covers the production, recycling, sourcing,
marketing, and distribution of the
commodities needed by our suppliers and
customers to decarbonise, while
simultaneously reducing our own emissions.
Our 2020 CATP set out seven core actions:
1. Footprint: managing our operational
footprint – see page 48
2. Reduction: reducing our Scope 3
emissions – see page 50
3. Capital: allocating capital to prioritise
transition metals – see page 42
4. Partnership: collaborating with our value
chains – see page 58
5. Abatement: supporting uptake and
integration of abatement – see page 48
6. Technology: utilising technology to
improve resource use efficiency – see
page 49
7. Transparency: transparent approach – see
page 52
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Seven core actions were identified in our 2020 CATP to support our ambition:
Managing our footprint
Footprint
Managing our operational footprint
Reduction
Reducing our Scope 3 emissions
Reducing our Scope 1
and 2 emissions
Our commitment to a direct reduction of
our Scope 3 emissions in particular
through responsible closure of assets in
our existing coal portfolio will contribute
to reducing global emissions
Capital
Allocating capital to prioritise
transition metals
Investing in the metals that the
world needs
Contributing to global decarbonisation
Partnership
Collaborating with
our value chain
Abatement
Supporting uptake and
integration of abatement
Working in partnership with
our customers and supply
chains to enable greater use of
low-carbon metals and
support progress towards
technological solutions to
address climate change
Abatement is an essential
contributor to achieving low or
net zero carbon objectives
Technology
Utilising technology to
improve resource use
efficiency
Contributing to the
circular economy
Transparency
Transparent approach
Reporting on our progress
and performance
In 2023, we announced the acquisition of a 77% interest in Teck’s steelmaking coal business, for $6.93 billion, which remains subject to regulatory
approvals. Steelmaking coal is an essential input into steelmaking, and the acquisition presented a unique opportunity to strengthen our
position further across the products necessary for the energy transition and everyday life. Given the pending nature of the transaction, we have
not addressed the expected acquisition in relation to our decarbonisation targets and ambition in this report and the updated CATP.
2023 Glencore Annual Report
41
In 2023, our total capital expenditure on
industrial assets was $6.1 billion (2022:
$4.8 billion), of which 48% was for our copper
and cobalt assets, 15% for zinc and 9% for
nickel, with the following key projects:
• development of Collahuasi copper joint
venture’s desalination and water
transportation project; and
• building the Onaping Depth underground
nickel mine in Sudbury, Ontario.
$1.5 billion (25%) of our 2023 industrial capital
expenditure related to energy industrial
assets (2022: $1.2 billion).
Our capital expenditure for energy products
included the following:
• Infrastructure spend: Bulga pit-top
support equipment, Hunter Valley
Operations (HVO) flotation, Oaky Creek
gas drilling;
• Exploration: primarily Surat Hydrogen and
Carbon Transport and Storage Company
(CTSCo).
A meaningful level of capital expenditure
relating to Scope 1 and 2 emissions reduction
initiatives and opportunities has been
included in our capital expenditure plans.
TCFD continued
Impacts of climate-related risks and
opportunities on our financial planning
We seek to align our material capital
expenditure and investments with the goals
of the Paris Agreement (Article 2) and our
emissions targets and ambition.
As a major producer of the commodities that
underpin the current battery chemistry and
infrastructure growth initiatives that are
expected and required to power electric
vehicles and energy storage systems, we are
investing in and intend to continue our
efforts to supply energy transition metals,
including various South American copper
projects, African copper and cobalt,
Kazakhstan polymetallic investments,
nickel projects in Canada and Brazilian
bauxite/alumina.
Going forward, we intend to continue to
allocate capital to operate and to deplete our
upstream energy industrial assets in a
manner that is consistent with our Values
and our climate strategy. More specifically,
this comprises the intended cessation of
mining for at least 12 coal mines between
2019 and the end of 2035 (to specifically align
with our medium-term risks and
opportunities time horizon and our 2035
target), along with an associated decrease in
the capital expenditure required by the
existing coal portfolio.
We recognise that disclosure of how we
allocate capital can help stakeholders assess
and evaluate our approach to mitigating
climate-related risks. We have therefore
enhanced our disclosure in providing the
following breakdown of spend categories
per commodity:
42
2023 Glencore Annual Report
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Industrial capex ◊ weighting
(%)
Energy
Products
$1.5bn
Metals and
Minerals
$4.5bn
3%
3%
2%
3%
22%
22%
2023
48%
2022
43%
10%
9%
20%
15%
2023
Copper
Zinc
Nickel
48%
Coal
15%
9%
Oil
Others
22%
3%
3%
Mobile and fixed mining
and processing equipment
(incl. major overhauls and
leases, primarily fleet)
Deferred mining
(opencut and underground)
Infrastructure and
development drilling
Water and tailings
management
Smelters
Astron
Energy
Coal
Handling
& Prep.
Plant
*
Exploration
Property Purchases
Other
* Energy Products exploration capex is primarily blue
hydrogen and CTSCo
TCFD continued
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Responding to carbon pricing
We operate successfully in multiple
jurisdictions that have direct and indirect
carbon pricing or regulation. We take a
systematic approach to local regulation and
carbon price sensitivities as part of our
ongoing business planning for existing
industrial assets, and new investments.
We use actual carbon prices where they
exist and assess the sensitivity of our
industrial assets to possible future carbon
prices in order to assess the potential
impacts on investment decisions arising
from carbon pricing regulation. We expect
the rising cost of carbon will increase
operating costs, increasing the cost of
production, which, in turn, would ordinarily
be passed on to consumers. For our
sensitivity analysis during 2023, we
considered the carbon prices shown in the
table below, which were consistent with the
IEA’s 2022 NZE scenario, which was the
scenario available at the time:
Carbon
price
– US$/t
(RT2021)
2022
2030
2035
2040
Advanced
economies
Emerging
markets
Developing
economies
As legislated
140
205
250
90
160
200
25
85
180
As part of the review of our CATP, we
conducted an analysis of the future demand
outlook (considering policy and technology
developments) for commodities that we are
materially exposed to: (1) seaborne thermal
coal, (2) copper, and (3) nickel.
For this analysis, our team input data-driven
assumptions (based on latest available
intelligence) into a third-party climate and
energy transition model, which provides a
volume and price outlook for relevant
commodities across three climate scenarios
(with emissions outcomes equivalent to the
IEA SPS, APS, NZE scenarios) over time
(2030, 2040, 2050).
• Supply inputs to the model: To 2030, we
use the latest information on future
possible projects to inform our view on
cost curves. Beyond 2030, we estimate
supply curves based on data-driven
assumptions.
• Demand is an output of the model: The
model includes CO2 targets consistent
with the IEA’s SPS, APS, and NZE scenarios.
The model calculates demand based on
the lowest-cost outome for reaching those
targets.
• Prices are an output of the model: Based
on the marginal supply intersection of cost
curves and the expected level of demand
in each scenario.
Applying these carbon prices to some of our
commodities shows marginal supply costs
(90th percentile) increasing by some 10% to
over 60%, depending on the commodity.
The overall findings from this analysis are
included in this report. Where possible, we
compare our outlook to relevant modelling
from the IEA.
Recommended Disclosure:
c. Describe the resilience of the
organisation’s strategy, taking into
consideration different climate-related
scenarios, including a 2°C or lower
scenario.
Seaborne thermal coal: In terms of industry
volumes, we expect demand for seaborne
thermal coal to fall across all climate
scenarios: the faster the transition, the more
accelerated the fall in demand. However, we
still foresee some demand for seaborne
thermal coal beyond 2040, especially if
stated government policies are not further
strengthened. In terms of industry prices, we
see potential for price resilience with support
being derived from the structure of the
global supply cost curve, declining average
coal quality and the expected trend to
increase the quality of coal being consumed.
Overall, considering the trajectory of a
responsible phase-down, we expect
continued resilience in our own coal business.
For more detailed modelling on the potential
impairment risk to our existing coal assets
under different climate scenarios, please
refer to note 1 to the financial statements.
Copper: We expect high growth in demand
for copper across all scenarios. We expect
supply constraints for copper towards 2030
to contribute to higher prices due to the lead
time to add new mining capacity. We have
assessed a range of sensitivities including
scrap rates and substitution rates. We found
that the growth of demand and increased
pricing holds true even across sensitivities.
Nickel: In the short-term, nickel markets
have surplus supply and commensurate
price weakness. As the global energy
transition accelerates, while we expect
higher growth in demand for nickel across
all scenarios, the current supply pipeline is
sufficient to meet demand without material
constraints for nickel until around 2040. We
have a range of sensitivities included in this
assessment including high-pressure acid
leach supply and battery electric vehicles
(BEV) nickel content.
2040 forecast global demand volume, % change from 2021
200%
100%
0%
-100%
-200%
Glencore SPS
Glencore APS
IEA SPS
IEA APS
Glencore NZE
IEA NZE4
At the time of modelling
Copper1
Nickel2
Seaborne thermal coal3
Note: All figures calculated as % increases between demand in a baseline year and demand in 2040; 1)
Due to data availability, Copper figures for both Glencore and IEA based on 2022 baseline year; IEA
baseline and forecast data both from IEA Critical Mineral Demand 2023; Glencore baseline is same as for
IEA, with forecast based on Glencore modelling; 2) Nickel figures for both Glencore and IEA based on
2021 baseline year; IEA baseline from IEA Critical Minerals Policy Tracker 2021 and forecast from IEA
Critical Mineral Demand 2023; Glencore baseline is same as for IEA, with forecast based on Glencore
modelling; 3) Thermal coal figures based on 2021 baseline year; IEA baseline and forecast from IEA WEO
2022; Glencore baseline and forecast from Glencore modelling; 4) Comparable IEA NZE data not
available for thermal coal. Source: Glencore Modelling; IEA Critical Mineral Demand 2023; IEA WEO2022
Extended Dataset (Trade); IEA Critical Minerals Policy Tracker 2021
2023 Glencore Annual Report
43
Glencore references the IEA WEO
scenarios as follows:
• Stated Policies Scenario (SPS): The SPS
explores how the energy systems and
global emissions will evolve based on the
current policy settings. This scenario does
not assume the aspirational or economy-
wide targets are met unless they are
supported with detail on how they will be
achieved. The SPS has been assessed as
being consistent with global
temperatures rising on average by 2.5°C
by 2100.
Strategic Report
Corporate Governance
Financial Statements
Additional Information
• Net Zero Emissions by 2050 (NZE)
Scenario: The NZE Scenario works
backwards from specific goals – the main
one being to cap global warming to 1.5°C
by 2050 – and illustrates how they may be
achieved. The NZE Scenario requires a
tripling in spending on clean energy and
infrastructure to 2030, alongside a shift
towards much higher investment in
emerging market and developing
economies. The NZE Scenario falls within
the group of scenarios categorised by the
IPCC as a ‘no or low overshoot’ scenario,
and aligns with the goal, agreed again in
Glasgow at COP26 in 2021, to ‘pursue
efforts to limit the temperature increase
to 1.5°C’ (IPCC, 2022b).
• Announced Pledges Scenario (APS): The
APS gives governments the benefit of the
doubt and assumes their targets will be
achieved on time and in full, whether they
relate to climate change, energy systems
or national pledges in other areas such as
energy access. Trends in this scenario
reveal the extent of the world’s collective
ambition, as it stands today, to tackle
climate change and meet other
sustainable development goals. This
scenario recognises the commitments of
China (net zero 2060) and India (net zero
2070) and the updated Nationally
Determined Contributions. This requires
accelerated adoption of renewables
delivering global net zero emissions in
2070 and limiting the rise of global
temperatures to 1.7°C by 2100. This gets
close to achieving the goal of the Paris
Agreement to limit the temperature rise to
‘well below 2°C’, and it marks the first time
that collective government targets and
pledges have been sufficient, if delivered in
full and on time, to hold global warming to
below 2°C.
TCFD continued
This analysis supports the assumption that
across all climate scenarios, the market
demand growth in copper and nickel is likely
to outweigh the impact of any decline in
seaborne thermal coal. Given our integrated
portfolio, we expect that our current
business should be resilient to transition risk
across climate scenarios.
Beyond using scenario analysis to assess
potential financial impacts on our business
and consider our strategic resilience, we
leverage this analysis to actively manage
climate policy risks and opportunities on an
annual basis. We closely monitor the most
critical indicators (including climate policies,
rate of clean energy technology adoption,
battery technology evolution, level of
recycling, among others) to refine our
demand and price expectations. This in turn
informs our decisions to accelerate (or
decelerate) our project pipeline and capital
allocation across commodities.
In addition, management, under the
oversight of the Audit Committee,
considered whether the carrying value of
goodwill, cash generating units, physical
trade positions and material loans and
advances may be impaired as a result of,
amongst other things, the impact of climate
change. In relation to coal, there continues
to be particular focus around price outlook
and climate change-related risks.
For more detail see note 1 to the financial
statements and paragraph 5.3 of the
independent auditor’s report.
44
2023 Glencore Annual Report
TCFD continued
Risk management
TCFD Recommendation: Disclose how the
organisation identifies, assesses and
manages climate-related risks.
Recommended Disclosure:
a. Describe the organisation’s processes
for identifying and assessing climate-
related risks.
Under our Energy and Climate Change
Standard, all our industrial assets are
required to perform annual climate change
risk assessments. These follow a detailed
process that requires our corporate,
commodity department, and industrial asset
teams to undertake risk identification,
assessment, and evaluation, as well as
financial planning for relevant mitigation
measures. This process specifically includes
reviewing existing controls, identifying and
evaluating additional risk treatment options,
calculating the potential capital required to
support with implementation of the controls,
and submitting the capital requirements
into the budgeting process. The deployment
of controls is guided by our Enterprise Risk
Matrix which provides guidance on risk
treatment action based on risk ratings. We
review controls across departments and
assets when undertaking the overall risk
assessment process.
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Stage 1:
Scoping
• Define risk assessment
boundaries, aligned to
the Energy & Climate
Change Standard and
Climate Change Risk
Assessment
Procedure.
Stage 2:
Risk identification
• Collect information
and data for
assessment.
• Identify climate-
related risks and
opportunities, which
also consider nature-
related risks, relevant
to the industrial asset
and industrial
commodity
department.
Stage 3:
Risk assessment
• Assess current and
future risk ratings for
the identified climate-
related risks and assess
emissions abatement
opportunities using
the MACC.
Stage 4:
Risk evaluation
• Identify additional risk
treatment options for
climate-related risks
that are deemed to
have inadequate
existing controls to
manage the risk.
Stage 5:
Financial planning
• Document and
confirm budget
requirements for
additional risk
treatment options.
Through this process, climate-related
transition and physical risks are assessed
and prioritised for relevance and impact on
financial and operational performance at
different organisational levels. Risks with the
highest Potential Maximum Consequence
are included in the Group Risk Register, with
consequences determined across multiple
categories, including environmental, human
rights, financial, and image and reputation.
The threshold for the most material financial
consequence is an impact of more than
$500 million on operating profit, more than
$200 million on property damage and more
than $1 billion on asset value.
Climate risk assessments apply the following
criteria (which include considering existing
and emerging regulatory requirements in
relation to climate change):
• Time horizons: existing risk, 2030 and 2050
• Physical and nature temperature
scenarios: SSP1-1.9, SSP1-2.6, SSP3-7.01
• Policy scenarios: IEA SPS, APS, NZE
Risk assessments are reviewed at Group level
for consistency, including with regard to
assessment of climate-related market drivers.
Our industrial assets are required to develop
appropriate treatment options for the
identified risks, and to monitor and report on
progress in managing them. The most
material climate-related risks, and any
associated responses, are prioritised and fed
into our annual life of asset planning,
budget, and HSEC&HR strategy processes.
In particular, we seek to ensure our
commodity departments have highlighted
the financing needed for additional
risk controls.
The Board monitors the Group’s risks,
financial exposure, and related internal
controls to mitigate these risks. Monitoring
and reporting are the responsibility of the
Group risk functions and the heads of
corporate functions who provide regular
updates to the Board and its committees
covering various risks and the performance
of the relevant controls in place.
In 2023, we engaged a third-party expert to
conduct a review of our approach to
identifying and assessing climate-related
1. SSP1-1.9 – The net zero scenario used, where warming stays below 1.5°C by 2100. This describes a world where global CO2 emissions are cut to net zero around 2050.
SSP1-2.6 – The low emissions scenario used, where warming stays below 2°C by 2100, aligned to current commitments under the Paris Agreement. Net zero emissions are achieved in the second half of the century.
SSP3-7.0 – The high emissions scenario used, where warming rises by 3.6°C by 2100, with carbon emissions levels likely between a 2.8°C – 4.6°C range.
2023 Glencore Annual Report
45
For climate-related impacts and risks,
actions may include relevant engineering
works, optimisation of operational processes
and review of asset infrastructure design and
maintenance. Where relevant, such as in the
case of water-related risks, our industrial
assets are required to assess the risks to
other stakeholders, and to incorporate
stakeholder-related considerations in the
response measures to assist with decision-
making in relation to mitigating,
transferring, accepting, or controlling
climate-related risks.
In 2023, we developed additional internal
guidance and a knowledge base to support
our industrial assets in using consistent
climatic models, and available climate data
related to the operations and the
surrounding areas.
For further information on our approach
to managing risks, including climate-
related risks, across the Group,
see page 105
TCFD continued
risks and opportunities, taking into
consideration also the emerging
expectations and recommendations in
relation to the assessment of nature-related
risks and opportunities. As a result of this
review, we have taken steps to improve the
consistency of the assessments by
enhancing the relevant climate modelling
data layers in our knowledge base amongst
our teams and establishing a process for
using consistent climatic models.
The Group’s general approach to risk
management (including the
identification and management of
climate-related risks) is set out in the Risk
management section on page 105
Recommended Disclosure:
b. Describe the organisation’s processes
for managing climate-related risks.
One of our principal controls for managing
risks at a Group level is to develop a Group
Standard, which sets expectations of
performance for a particular topic, and forms
the basis of internal and external assurance.
Our Group Standards require our industrial
assets to identify and assess impacts and risks,
including those related to climate where
relevant, to develop appropriate responses,
and to monitor and report on progress in
order to manage those risks. Climate-related
risks are prioritised, and materiality
determinations are made, in line with the
Group Enterprise Risk Management process.
Risks identified by the industrial assets and
departments are reviewed by our Head of
Industrial Assets as part of quarterly business
reviews. These include a review of the Group
Risk Register and the actions taken to
manage these risks.
46
2023 Glencore Annual Report
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Recommended Disclosure:
c. Describe how processes for
identifying, assessing and managing
climate-related risks are integrated into
the organisation’s overall risk
management.
In 2023, we updated climate data layers in
our knowledge base and the climatic models
to support consistency of assessments
across the organisation. This year’s risk
assessments found no fundamental changes
to the risks identified for the industrial assets
that we have assessed as being most at risk.
We take a consistent approach to risk
management throughout our industrial
business through a structured process that
establishes a common methodology for
identifying, assessing, managing, and
monitoring material risks, including climate-
related risks. We assess climate, operational
and financial risks holistically across our
industrial assets. As such, the identification,
assessment, and management of climate-
related risks is fully integrated into the Group’s
overall industrial risk management structure.
In particular, we require our industrial
commodity departments to annually update
their climate change risk assessments. The
commodity departments utilise a bottom-up
approach, which considers regulatory risks
(both existing and emerging), including
carbon taxes, project approval
considerations, impact on licence to operate,
and physical risks, such as flooding, droughts
and extreme weather events and nature-
related risks that could be exacerbated by
climate change.
The risks are assessed and characterised in
accordance with the Group’s Enterprise Risk
Matrix and consider the horizons of 2030 and
2050. Climate-related risks with a high
rating, and any associated risk treatment
actions, are prioritised and feed into our
annual Life of Asset planning, Budget, and
HSEC&HR strategy processes.
TCFD continued
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Metrics and targets
TCFD Recommendation: Disclose the
metrics and targets used to assess and
manage relevant climate-related risks and
opportunities where such information
is material.
Recommended Disclosure:
a. Disclose the metrics used by the
organisation to assess climate-related
risks and opportunities in line with its
strategy and risk management process.
Our portfolio profile provides the flexibility to
decarbonise our emissions footprint. We
currently focus on our emissions as our key
metric to measure and manage our climate-
related risks and opportunities.
We divide CO2e emissions reporting into
three different scopes, in line with the GHG
Protocol, and measure both the direct and
indirect emissions generated by the
activities of our industrial assets, as well as
certain emissions resulting from activities
within our industrial value chain (see the
About our emissions calculations and
reporting section starting on page 53 for
further information):
• Scope 1 emissions (measured in CO2e)
includes CO2e emissions directly
generated by our industrial assets,
including emissions from stationary and
mobile combustion (such as emissions
from combustion of reductants used in
our metallurgical smelters along with
emissions from the combustion of diesel
and other fossil fuels directly by our
industrial assets), and process and fugitive
emissions. It also includes the CO2e of
methane emissions from the coal and oil
operations under our operational control,
which accounts for around 16% of our
Scope 1 emissions.
• Scope 2 emissions (measured in CO2e) are
our indirect emissions from the generation
of electricity, heat, cooling, or steam
purchased and consumed by our
industrial assets. Calculating Scope 2
emissions requires a method for allocating
GHG emissions from energy generation to
the end consumers of a given grid. Two
methods are used: the location-based
method reflects the average emissions
intensity of grids on which energy
consumption physically occurs, while the
market-based method reflects emissions
emitted by the generators from which our
industrial assets contractually purchase
electricity bundled with emissions
abatement certificates (EACs), or
unbundled electricity with EACs on their
own, and for which a specific emissions
factor is known. The location-based
method emphasises the connection
between collective consumer demand for
electricity and the emissions resulting
from local electricity production. As
sources of electricity generation on most
grids evolve to become more sustainable,
we expect location-based emissions to
gradually decrease over time. However,
this process is unlikely to move fast
enough for us to meet our emissions
reduction targets. To deliver on our
climate commitments, it is likely necessary
to proactively purchase or finance
renewable energy in the markets in which
we operate. Scope 2 emissions reductions
resulting from these proactive choices are
only accounted for in the market-based
method. While the market-based
approach is expected to be our primary
Scope 2 method, for transparency and
comparability, we will continue to report
separate figures using both Scope
2 methodologies, as recommended by the
GHG Protocol.
• Scope 3 emissions (measured in CO2e) are
our indirect emissions across our
commodity producing or processing
industrial assets’ value chain. These
include emissions embedded in
purchased goods, downstream customer
processing and use of our sold products,
third-party logistics and transportation
and our equity share of emissions
generated by joint ventures we do not
control or operate that are commodity
producing or processing industrial entities.
In addition to measuring CO2e emissions as
the key metric for our targets and ambition,
we also consider a range of financial and
operational metrics when assessing climate-
related risks and opportunities in line with
our strategy. These are set out below, with
corresponding pages for further information:
Reducing Scope 3 emissions:
• Reserves and resources (see 2023 Reserves
and Resources)
• Production volumes (see Industrial
Activities in this Annual Report)
• Global coal consumption 2000–2025 (See
Energising today; Advancing tomorrow
section of Strategic Report in this Annual
Report)
• Sensitivity of CGU carrying values to
climate change scenarios (see note 1 to the
financial statements)
Continuing investment in transition metals:
• Capital expenditure by segment (see note
2 to the financial statements)
Physical risks:
• Water Risk Register (see glencore.com/
sustainability/esg-a-z/water-
management)
Remuneration:
• Directors’ remuneration report, pages 134
to 160
We track and report on a number of other
metrics relating to energy, land use and
waste management (see annual Glencore
ESG Data Book, which can be found at
glencore.com/publications), but we do not
currently consider these metrics material for
the purposes of assessing our climate-
related risks and opportunities.
Information on how we approach carbon
pricing is on page 43. Details on how
performance metrics on climate-related
issues are incorporated into remuneration
policies are available in the Directors’
Remuneration Report and on page 143.
Recommended Disclosure:
b. Disclose Scope 1, Scope 2, and, if
appropriate, Scope 3 greenhouse gas
(GHG) emissions, and the related risks.
During 2023, our operational footprint, or our
Scope 1 and Scope 2 market-based
emissions, were 27.0Δ million tonnes CO2e.
This represents a 7.5% decrease from the
29.2 million tonnes (restated) recorded in
2022 and is largely attributable to planned
additional downtime at three of our
ferroalloys smelters which offset increased
emissions resulting from the restart of
operations at the Astron Energy Refinery,
and increased production from our
Koniambo nickel operations. Our 2023 Scope
1 and Scope 2 market-based emissions
represent a reduction of 17.9% compared to
the restated 2019 baseline year (32.9 million
tonnes CO2e).
Our Scope 1 emissions (direct emissions)
were 16.7Δ million tonnes CO2e in 2023. This
figure includes emissions from reductants
used in our metallurgical smelters along
with emissions from the combustion of
diesel and other fossil fuels directly used by
our industrial assets. It also includes the
2023 Glencore Annual Report
47
TCFD continued
CO2e of methane emissions from the coal
and oil operations under our operational
control, which accounts for around 16% of
our Scope 1 emissions. Our 2023 Scope 1
emissions represent a 2.0% increase on the
16.4 million tonnes (restated) recorded in
2022 which primarily reflects the restart of
operations at the Astron Energy Refinery
and increased nickel production at our
Koniambo nickel operations. Our 2023 Scope
1 reported emissions represent a reduction
of 12.0% compared to the restated 2019
baseline year (19.0 million tonnes).
Our Scope 2 market-based emissions
(indirect emissions from the generation of
electricity purchased and consumed by our
industrial assets) were 10.3Δ million tonnes
CO2e in 2023, a 19.5% decrease from the
12.8 million tonnes (restated) recorded in
2022. The decrease is largely due to the
extended planned shutdowns at some of our
ferroalloys smelters in South Africa. Our 2023
Scope 2 market-based emissions represent a
reduction of 25.9% compared to the restated
2019 baseline year (13.9 million tonnes).
The total energy use by our industrial assets,
was 202PJΔ in 2023 (2022 restated: 194PJ).
Renewable energy sources, bundled or
unbundled with EACs, delivered 5.4% of our
industrial energy needs (2022 restated: 7.6%).
Beyond our contractual renewable energy
claims, our operations in eastern Canada and
the DRC continue to physically benefit from
being connected to their local grids which
supply energy from predominantly
hydropower sources.
Our transition metals businesses include
energy intensive smelting operations and, as
a result, our annual metal production
volumes will be a major driver of our annual
Scope 1 and Scope 2 emissions.
Looking ahead, we anticipate continuing to
realise abatement opportunities identified in
our MACC, recognising that some of the
more impactful abatement opportunities in
our action plans have multi-year delivery
timelines, especially where they involve
establishing renewable energy additionality.
Our Scope 3 emissions in 2023 were
406 million tonnes CO2e, compared to
368 million tonnes CO2e in 2022 (restated).
The 10.2% increase was principally due to the
restart of operations at the Astron Energy
Refinery, coupled with a 7.2% increase in sold
coal volumes that were produced in our
industrial assets.
In 2023, emissions resulting from our
customers’ use of the sold coal and refined
oil products produced by our industrial
assets totalled 324Δ million tonnes CO2e
(2022 restated: 293 million tonnes CO2e),
representing around 80%1 of our Scope 3
emissions.
For further information on our restatement,
refer to the About our emissions calculations
and reporting section beginning on page 53.
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Our Scope 3 emissions vs
coal production
mtCO2e
90
4
3
1
80
3
3
4
82
3
3
1
81
3
2
4
75
2
9
3
600
500
400
300
200
100
0
mt
180
150
120
90
60
30
2019
(restated)
2020
(restated)
2021
(restated)
2022
(restated)
2023
0
Scope 3 - Category 11 - Use of sold products (LH axis)
Scope 3 - All other categories (LH axis)
Operationally controlled coal production (RH axis)
Consolidated coal production (RH axis)
Reducing our Scope 1 and 2
emissions
Our MACC enables an assessment of viable
and economic abatement opportunities
across our industrial assets, with respect to
potential scale and economics. We undertake
a uniform approach to MACCs at a
commodity department level. This delivers a
Group-wide aggregation of key
decarbonisation opportunities and actions,
which in turn supports a holistic approach to
reviewing the pipeline of initiatives from
concept to execution stages. Industrial
asset-level data is incorporated into our
annual planning cycles, supporting the
assessment and triggering of investment
decisions, including in relation to
consideration of carbon price scenarios in
these opportunities.
Our MACC continues to evolve and identify
emissions reduction opportunities across our
portfolio. When practically and commercially
viable, implementation of abatement
opportunities is pursued. For example, this
may include anticipating when increases to
carbon prices and/or technological
advancement at scale make the use of
biofuels more attractive than diesel, or when
the building of renewable power
installations can sensibly replace purchasing
grid-generated power.
In 2023, we continued to refine our MACCs,
considering both short-term (2026) and
medium-term (2035) horizons. We have
already implemented some of the projects
identified by the MACC process (e.g.,
renewable power purchase agreements
(PPAs)) and will continue to progressively
implement projects as the engineering and
planning processes are completed.
Further, through understanding the impact
of key climate scenarios’ range of carbon
prices on our industrial assets’ cost curves
and emission profiles, we are better placed
to identify where and when to make
investments in abatement opportunities,
targeting value-accretive investments. In
this manner, we aim to incorporate climate
change considerations into our business
strategy rather than considering emissions
reduction as a standalone work stream.
Our 2026 MACC indicates that we are
well-positioned with an inventory of
operational footprint decarbonisation
1. Excludes emissions related to production from independently managed Hunter Valley Operations (HVO), Hlagisa and Wonderfontein, which are reported in category 15 (investments).
48
2023 Glencore Annual Report
TCFD continued
Strategic Report
Corporate Governance
Financial Statements
Additional Information
opportunities to support the delivery of our
short-term emissions reduction target of 15%
by the end of 2026.
Our 2035 MACC identifies the potential
abatement opportunities required to
support the achievement of our medium-
term target of a 50% emissions reduction by
the end of 2035.
The MACCs show a large potential inventory
of value accretive or near value-neutral
decarbonisation opportunities for potential
delivery by 2026. Some of these initiatives
are at a concept level, while others have
progressed to an advanced engineering
phase. All the identified initiatives are
required to go through a robust
development and evaluation process to
assess viability. This inventory demonstrates
commercially advantageous decarbonisation
opportunities, resulting from the
differentiation of our industrial asset base by
commodities and geographies.
In 2023, we progressed efforts to reduce our
industrial Scope 1 and 2 emissions through
various initiatives, including:
• In Australia:
– Our underground coal mines continued
to undertake extensive gas drainage,
flaring and offsite export for power
generation. Our open-cut mines
progressed haulage planning to reduce
fossil fuel consumption. The coal
business signed a 15 MW deal for a
seven-year PPA for its Queensland sites.
– Mount Isa Mines sourced 13% of its 2023
indirect energy needs from renewable
sources (PPA with certification).
• In South America:
– Our copper industrial assets are
implementing an energy strategy to
enable the electrification of its hauling
fleet and looked at solar to replace
industrial heat processes. It also
participated in collaborative efforts to
assess opportunities to utilise hydrogen
produced using renewable energy in
mining activities in Chile and Peru.
– In Chile, Lomas Bayas and Altonorte
sourced 100% of their 2023 indirect
energy needs from renewable sources
(PPA with certification).
– Lomas Bayas started to deploy artificial
intelligence to optimise dispatch, with
the aim of achieving fuel savings. It is
also progressing work to investigate
trolley assist technology.
• In South Africa:
– Our ferroalloys business advanced
various renewable energy initiatives,
including on offsite solar and wind PPAs
(with certification). Construction started
at the end of 2023 at its Rhovan site to
generate an expected 52GWh/annum
(year one) from solar photovoltaics (PV).
– Our coal business progressed efforts to
source a portion of its electricity from
renewable sources.
– Astron Energy is undertaking refinery
and storage terminal energy efficiency
programmes and projects to produce
cleaner fuels.
• In Europe:
– Our Asturiana zinc smelter in Spain
acquired a PPA that will start delivering
energy in 2025, which should lead to
over 20% of its energy coming from
renewable sources.
– The BRM lead refinery has extended its
contract (with certification) with a
renewable energy provider to 2027,
enabling it to utilise 100% renewable energy.
Group-level MACC for year 2026
US$/t CO2e
600
500
400
300
200
100
0
-100
-200
-300
-400
-500
-600
3.2Mt NPV positive
0
1000
2000
3000
4000
5000
'000 tonnes CO2
Operating efficiency
Diesel fuel switch
Renewables
Process technology
Group-level MACC for year 2035
US$/t CO2e
700
600
500
400
300
200
100
0
-100
-200
-300
-400
-500
-600
-700
0
1000
6.1Mt NPV positive
2000
3000
4000
5000
6000
7000
8000
9000
10000
11000
12000
13000
14000
'000 tonnes CO2
Operating efficiency
Diesel fuel switch
Renewables
Process technology
A MACC presents the costs or savings expected from different opportunities, alongside the potential
volume of emissions that could be reduced if implemented. MACCs measure and compare the financial
cost and abatement (reduction) benefit of individual actions based on $/tCO2e.
A MACC shows each opportunity as an action, presented as a box above or below a horizontal axis. The
boxes above the horizontal axis indicate there is a cost to that action – the higher the box, the higher the
cost. Boxes below the horizontal axis indicate a saving from that action – the lower the box, the greater
the saving. The MACC enables comparison between actions and annualised costs or savings. The width of
the box indicates the action’s potential volume of reduction per year, expressed as tCO2e.
The curve shape is created by ordering the actions from lowest cost to the left, to highest cost on
the right.
2023 Glencore Annual Report
49
TCFD continued
Our Scope 3 emissions
Our Scope 3 emissions are our indirect
emissions across the value chain of our
industrial assets that are extracting,
producing or processing commodities. They
include our emissions from upstream supply
chains, downstream customer use of our
products, third-party logistics and
transportation, and our equity share of
emissions associated with certain joint
ventures that are not under our operational
control. We aim to address these emissions
by making changes to the products and
services we purchase and to our portfolio,
recognising that for value-chain abatement
to be just, reduction and mitigation
strategies must consider the broader social,
economic, and environmental impacts of the
global transition to net zero.
As of the end of 2023, our Scope 3 emissions
represented around 94% of our emissions,
the majority of which relate to our current
coal portfolio.
During 2023, we finalised our Emissions and
Energy Reporting Procedure (EERP), which
supports clearer, comprehensive, and
verifiable climate disclosure in response to
the proliferation of voluntary and mandatory
emission reporting requirements. During
2023, we engaged with stakeholders on the
procedure and implemented data collection
and reporting processes aligned with our
updated Scope 3 methodology across the
business. Detailed information on our Scope
3 method and resulting restatements are set
out in the About our emissions calculations
and reporting section starting on page 53.
We are working with various industry
organisations to develop life-cycle analyses
for our products through building detailed
carbon footprints.
50
2023 Glencore Annual Report
Recommended Disclosure:
c. Describe the targets used by the
organisation to manage climate-related
risks and opportunities and performance
against targets.
Our first CATP was published in 2020 and set
out our targets and ambition, which took
into consideration the goals of the UNFCCC
and the aims of the Paris Agreement. We
chose to adopt an absolute reduction metric
as this will enable us to demonstrate a
specified reduction in our emissions.
Our refreshed CATP retains the core
elements of our previous three-year strategy
– including a re-commitment to our 2026
and 2035 decarbonisation targets and our
2050 net zero ambition, subject to a
supportive policy environment. It also
introduces a new interim target of reducing
our industrial emissions footprint by 25% by
the end of 2030. All targets are measured
against our restated 2019 baseline (as set out
in the About our emissions calculations and
reporting starting on page 53).
Short-term target: 15% reduction in our
emissions by the end of 2026
Interim-term target: 25% reduction in our
emissions by the end of 2030
Medium-term target: 50% reduction in our
emissions by the end of 2035
Long-term ambition: to achieve, subject to a
supportive policy environment, net zero
emissions by the end of 2050
Our Scope 1, 2 and 3 emissions’ reduction
approach sets out how we plan to achieve
our targets and long-term ambition (subject
to a supportive policy environment and
compared to our restated 2019 baseline). As
previously indicated, given the pending
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Our route to achieving net zero emissions1
700
600
500
400
300
200
100
2026
-15%
2030
-25%
2035
-50%
2050
Net zero3
2019
554Mt
80
3
521
552
3
471
415
1352
19
14
216
277
15
51
0
2019 Sco pe 1
2019 Sco pe 2
Offsets an d efficiencies
2050 N et Zero
E E an d fuel s witch
P ortfolio D epletion (Sc 1, 2, 3)
A d ditional abate m ent
2035 M A C C Sco pe 1+2
2035 Sco pe 1+2+3
Asset invest m ents
P ortfolio D epletion (Sc 1, 2, 3)
2026 Sco pe 1+2+3
P ortfolio D epletion (Sc 1, 2, 3)
P ortfolio D epletion (Sc 1, 2, 3)
2026 M A C C Sco pe 1+2
2019 Sco pe 3
2030 Sco pe 1+2+3
2030 M A C C Sco pe 1+2
Notes:
1. The components contributing to our emissions reductions are indicative and may change based on
actual performance.
2. The split between portfolio depletion and MACC initiatives is indicative and will evolve as MACC
initiatives are developed and implemented.
3. Our 2050 net zero ambition is subject to a supportive policy environment.
The below table summarises our emissions performance for 2019 to 2023
2020
restated
2021
restated
2022
restated
2019
restated
2023
Change
2023 vs. 2019
Scope 1 – Direct
emissions (Mt CO2e)
Scope 2 – Indirect
market-based
emissions (Mt CO2e)
Scope 3 – Indirect
emissions (Mt CO2e)
Total (Mt CO2e)
19.0
15.2
16.0
16.4
16.7Δ
-12.0%
13.9
11.6
13.0
12.8
10.3Δ
-25.9%
520.7
553.7
414.0
440.8
412.9
441.8
368.3
397.5
405.8
432.8
-22.1%
-21.8%
TCFD continued
Strategic Report
Corporate Governance
Financial Statements
Additional Information
points for the respective scenarios and do
not represent any form of commitment by
Glencore to any particular pathway towards
achieving our climate-related targets and
ambition. Our 2026, 2030 and 2035 targets
are currently ahead of both national
governments’ stated policies and
announced pledges for the same years (as
modelled in IEA SPS and APS scenarios). Our
targets are not aligned with the IEA NZE
scenario, an increasingly unrealistic scenario
due to the extent to which policy, technology
and investment is lagging this pathway.
The scenarios developed by the IPCC and
IEA are amongst several inputs into our
climate strategy. We do not seek to align to
any particular pathway or scenario but
continue to monitor and compare our
targets to a range of scenarios as they are
updated each year.
nature of the transaction, we have not
addressed the expected acquisition of EVR
in relation to our decarbonsiation targets
and ambition in this report and the
updated CATP.
Owing to the nature of the industrial assets
we operate, we do not anticipate our annual
emissions reductions to progress in a linear
fashion. While changes in our operations
may result in year-on-year variations of our
emissions, we are committed to managing
our industrial assets to deliver our emissions
reductions targets.
We have set our emissions reduction targets
for 2026, 2030 and 2035 based on what we
believe the business can achieve while
recognising market demand for our
products and have not sought to align our
targets with any particular scenario. To
illustrate where our emissions reductions
targets are positioned with respect to IEA
scenarios we provide the following graphic.
The graphic illustrates the percentage
changes in global CO2e emissions from fossil
fuel use since 2010 and through 2023 based
on data reported by the IEA. The IEA
emissions pathways are shown with linear
interpolation between their published data
Change in fossil fuel CO2 emissions versus 2019
120%
100%
80%
60%
40%
20%
0%
Net IEA 2023 SPS 2.4oC
Net IEA 2023 APS 1.7o
C
Net IEA 2023 DAC 1.5oC
Gross IEA 2022 NZE 1.5oC
Net IEA 2023 NZE 1.5o
C
CO2 capture
& removal
2010
2012
2014
2016
2018
2020
2022
2024
2026
2028
2030
2032
2034
2036
2038
2040
2042
2044
2046
2048
2050
Glencore
restated 2019 baseline
Glencore
15% reduction
Glencore
25% reduction
Glencore
50% reduction
Glencore
NZE ambition
IEA Global CO2
IEA 2023 SPS Net 2.4C
IEA 2023 DAC Net 1.5C
IEA 2023 APS Net 1.7C
IEA NZE 2023 Gross 1.5C
IPCC SR15 no/ltd overshoot gross (mid)
IEA NZE 2023 Net 1.5C
IEA APS 2023 Net Coal CO2
IEA NZE 2023 Net Coal CO2
1. The Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard (Revised Edition),
available at: https://ghgprotocol.org/corporate-standard
2023 Glencore Annual Report
51
Strategic Report
Corporate Governance
Financial Statements
Additional Information
TCFD continued
Abatement
We continued to progress two key projects:
the CTSCo Project and the Surat Hydrogen
Project. This involved direct engagement
with government officials concerning federal
and state policies on carbon, capture and
storage, and hydrogen, as well as detailed
discussions about the regulatory and
approvals process. Project approvals were
also an area of direct engagement,
specifically focusing on Environmental
Impact Statements, responses to submissions,
and considerations on how our projects will
be assessed. This included deliberations on
what initiatives might be economically and
technically viable for further emission
reductions in future projects.
Our CTSCo Project aims to demonstrate
carbon capture from a power station and the
sustainable permanent storage of the
captured CO2 in the Surat Basin in
Queensland, Australia.
Through the Surat Hydrogen Project, we are
investigating the potential to produce blue
hydrogen and ammonia through utilising a
relatively small portion of the Wandoan coal
resource (up to 4 million tonnes per annum)
as feedstock. It is unlikely that we will
develop the Wandoan coal resource as a
traditional coal mine for the purpose of
servicing traditional coal markets.
Transparency
We believe that it is appropriate that we take
an active and constructive role in public
policy development, either directly or
indirectly through our membership of
industry organisations. Evolving regulatory
developments and scrutiny of our advocacy
activities require that we hold consistent
positions on policy.
52
2023 Glencore Annual Report
We communicate these positions both
directly through our engagement with
government representatives and policy
makers, as well as through the industry
organisations in which we hold membership.
During the year, we provided a response to
the UK Transition Plan Taskforce (TPT) public
consultation on its Metals & Mining Sector
Guidance. While we are broadly supportive
of the TPT Disclosure Framework, our
specific comments on the draft sector
guidance looked to recognise the diversity of
corporate reporters and the importance of
enabling transparent, accurate and
consistent reporting, without enforcing
specific strategic approaches, and avoiding a
one-size-fits-all approach.
We provided feedback to the IEA on its draft
report, Sustainable and responsible critical
mineral supply chains: Guidance for policy
makers. Our comments encouraged the IEA
to acknowledge the opportunities, as well as
the risks, associated with mining. We
suggested that the methodology used to
identify risk areas could be strengthened
and that certain terms should be more
clearly defined.
During 2023, Glencore engaged with EU
decision-makers and provided a submission
to the public consultation on the European
Union’s Critical Raw Material Act. This
regulation aims to enhance the production,
recycling, diversification, and sustainability of
metals and minerals essential for various
value chains, including energy, digital
technology, and defence.
Stronger cooperation with EU institutions
was also established on other areas of
strategic interest such as the EU Battery
Regulation, the Carbon Border Adjustment
Mechanism and the development of
Strategic Partnerships with third countries
related to Critical Raw Materials. Our
methods of engagement include bilateral
meetings, roundtable participation, and
written contributions.
Within our operating jurisdictions, we
participate in industry organisations that
undertake advocacy activities on behalf of
their members and undertake direct
engagement with government officials.
In South Africa, our oil business, Astron
Energy both directly and through its
membership of the South African Petroleum
Industry Association (SAPIA), contributed to
discussions with government on climate
change, carbon tax, biofuels and the Clean
Fuels 2 regulations, as well as the
development of country-specific emission
factors for liquid fuels.
In Australia, during 2023, we made several
submissions and directly engaged with
government officials regarding the reform of
the Safeguard Mechanism. This engagement
covered a broad range of topics, including
the coverage of industrial facilities,
international offsets, and the calculation and
methodology for setting baselines, as well as
the treatment of critical minerals facilities.
In Canada, we participated in ongoing
engagement with the Ontario, Québec and
federal governments on critical minerals and
the role base metals (copper, nickel, and zinc)
will play in the growing low-carbon economy,
and the electrification of transportation. We
informed key governmental representatives
of the role the company plays in the recycling
industry (specifically batteries and
electronics recycling).
For further detail of our industry associations,
please see our 2023 Review of Our Direct and
Indirect Advocacy.
TCFD continued
Strategic Report
Corporate Governance
Financial Statements
Additional Information
About our emissions calculations
and reporting
Unless otherwise stated in this report or our
Basis of Reporting, we have considered the
GHG Protocol’s Corporate Accounting and
Reporting Standard, the Scope 2 Guidance,
the Corporate Value Chain (Scope 3)
Accounting & Reporting Standard and
Technical Guidance for Calculating Scope 3
Emissions, and the ICMM Scope 3 Emissions
Accounting and Reporting Guidance in
formulating our approach to calculating the
emissions that we report on.
Deloitte LLP provides independent Limited
Assurance over selected 2023 climate and
energy KPIs under the ISAE 3000 (Revised)
Standard, as noted in this report, our Basis of
Reporting, which provides information about
the definition and underlying processes
applied for the collection and verification of
these selected KPIs, and the Sustainability
Report and ESG Data Book 2023 that will be
published at glencore.com/publications.
Deloitte LLP’s unqualified limited assurance
statement is published on page 295. Their
assurance statement and this section should
be read alongside the Basis of Reporting
2023, which is available at glencore.com/
publications.
Boundaries and scope
General approach: organisational
boundary of operational control
This report generally covers CO2e emissions
and energy information and data from the
activities of our industrial assets where we
have operational control, i.e., where Glencore
directly or indirectly controls and directs the
day‐to‐day management and operation of the
entity engaging in such activity, whether by
contract or otherwise.1 Where we have
operational control of industrial assets, we
report on Scope 1, 2 and 3 emissions on a 100%
basis, irrespective of our actual equity share.
Where Glencore’s marketing or corporate
offices conduct business for or on behalf of
our industrial assets, our Scope 3 emissions
calculation methodology applies to them in
relation to categories 1, 4, 9, 10 and 11 as
outlined in the Our Scope 3 emissions section.
For industrial assets that are producing or
processing commodities but are not under
Glencore’s operational control, we report our
equity share of such industrial assets’ Scope 1
and 2 emissions, and, whenever the Scope 3
emissions are greater than Scope 1 and 2
emissions combined, Scope 3 emissions in
Scope 3, category 15, as further set out in the
Our Scope 3 emissions – Category 15:
Investments section on page 54.
Further details on the organisational
boundaries and the corresponding method
of calculation of the Scope 1, 2, and the
Scope 3, categories 3 and 11 of our emissions
we report on, are included in the Basis of
Reporting 2023.
General approach: Methodology
Our Scope 1 and 2 emissionsΔ
Details on the method of calculation for the
Scope 1 emissions we report on are included
in the Basis of Reporting 2023.
There are two methods for allocating the
CO2e emissions created by electricity
generation to the end consumers of a given
grid to calculate Scope 2 emissions: location-
based methodΔ and market-based methodΔ.
Our assessment of our Scope 2 emissions
performance versus our industrial CO2e
emissions reduction targets is based on the
market-based approach. As such, the total
inventory of our reported CO2e emissions
includes our market-based Scope 2
emissions, which is our primary Scope
2 method, but for transparency and
comparability we continue to report
separate figures using both Scope
2 methodologies, as recommended by the
GHG Protocol. Details on the method of
calculation for the Scope 2 emissions we
report on are included in the Basis of
Reporting 2023.
Our Scope 3 emissions
The Scope 3 emissions we report on reflect
the sum of the value-chain emissions of our
industrial assets that are extracting,
producing or processing minerals, metals
and energy products within the following
Scope 3 categories:
Category 1. Purchased goods and services
Category 2. Capital goods
Category 3. Fuel- and energy-related activitiesΔ
Category 4. Upstream transportation and
distribution
Category 9. Downstream transportation
and distribution
Category 10. Processing of sold products
Category 11. Use of sold productsΔ
Category 15. Investments
The method, activity and emissions data
sources adopted to calculate emissions in
the Scope 3 categories we report on are set
out below.
Category 1: Purchased goods & services
In category 1, we report the estimated cradle-to-
gate CO2e emissions embedded in purchased or
acquired third-party produced feedstock
and consumables that we process or use.
Transport emissions associated with purchased
or acquired goods are included where these are
paid for by our suppliers. We exclude emissions
embedded in non-core feedstock purchases
(defined as annual purchases of less than 50Kt),
as due to our limited activity in these
commodity markets, we have insufficient
visibility in their value chains which limits
our ability to estimate emissions. Emissions
associated with purchased services other
than transport are excluded based on our
2023 materiality assessment, which determined
these to be immaterial and irrelevant to our
Scope 3 inventory.
To estimate the emissions embedded in
purchased or acquired feedstock, we apply
the principles of the GHG Protocol’s average-
data method. Emissions data is sourced from
the latest available commodity specific GHG
and energy intensity curves from Skarn
Associates (Skarn) and Ipieca for crude oil. We
use Skarn data to calculate global average
emissions per tonne of contained metal for
each processing step, allowing us to include
individual processing steps depending on the
third-party feeds purchased, and providing a
consistent methodology across the
commodities considered.
Emissions embedded in the most carbon-
intense consumables purchased or acquired
are estimated using the principles of the
average-data method and use consumable-
specific industry average emissions factors
sourced from Ecoinvent. Emissions embedded
in all other purchased consumables are
estimated by applying the principles of the
GHG Protocol’s spend-based method with
emission factors sourced from the USA
Environmental Protection Agency (EPA).
1. For the purposes of our Scope 1 and 2 emissions, we also include data from industrial operations where extraction, production or processing of minerals and metals and energy products for sale or further
processing has ceased, from industrial operations that are on care and maintenance, from industrial projects or exploration activities where such production or processing has not commenced, from warehouses,
terminals, and ports as well as from other industrial operations that are not involved in such extracting, producing or processing that are under our operational control.
2023 Glencore Annual Report
53
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Corporate Governance
Financial Statements
Additional Information
Category 2 Capital goods
In category 2, we report our estimated
upstream (cradle-to-gate) emissions
associated with purchased capital goods,
which are final products that have an
extended life. Our emissions associated with
the use of capital goods are excluded, as these
are accounted for in our industrial assets’
Scope 1 and 2 inventories. Our emissions
associated with goods accounted for as
operational expenditure are excluded, as these
are reported in Scope 3, category 1.
We estimate our emissions in this category
using a spend-based method which involves
collecting data on the economic value of
capital goods purchased (capital expenditure)
and multiplying these by the relevant
secondary emission factors sourced from EPA.
Category 3: Fuel- and energy-related activitiesΔ
In category 3, we report our emissions
relating to the extraction, production, and
transportation of fuels and energy purchased
or acquired, not already accounted for in our
Scope 1 emissions (fuel use/combustion) or our
Scope 2 emissions (energy generation). For
details on our methodology adopted, activity
and emission data sources for category 3, refer
to our Basis of Reporting 2023.
Category 4: Upstream transportation
& distribution
In category 4, we report our emissions related
to third-party transport paid for and organised
by our industrial assets or marketing business
and used to transport goods purchased or
acquired by our industrial assets and sold
products produced by our industrial assets.
We also include transport emissions
associated with third-party traded volumes
paid for by our marketing business.
We account for our emissions from the use of
third-party ocean freight, including voyage
charters, time charters, break bulk, and
container shipping. Our emissions associated
with third-party road and rail transport are
included where data on fuel use or distance
travelled is readily available.
For full-load cargoes for which information on
fuel consumption is available, we estimate our
emissions by applying the principles of the GHG
Protocol fuel-based method by multiplying the
total amount of fuel consumed by the transport
provider whilst completing its contractual
obligations to Glencore and applying the
emissions factor for that fuel consumed, sourced
from the UK Department for Environment, Food
and Rural Affairs (DEFRA).
For all other transport modes, we estimate
our emissions by applying the principles of
the GHG Protocol distance-based method by
determining the total distance between
load- and discharge-locations, the total mass
of goods purchased or sold and applying the
relevant emission factor for the transport
mode, sourced from DEFRA.
Category 9: Downstream transportation
& distribution
In category 9, we report our emissions
associated with third-party transport not paid
for by our industrial assets or marketing
business and used to transport goods
produced by our industrial assets to the
first-use customer. We estimate our
emissions from point of sale to the first-use
customer, inclusive of transport between
subsequent downstream processing steps,
using value-chain mapping and industry-
average analysis if the first-use customer is
not known1.
We account for our emissions from our
customers’ use of third-party ocean freight,
including voyage charters, time charters,
break bulk, container shipping, as well as road
and rail transportation where data on
distance travelled is readily available.
We calculate these emissions using the
principles of the GHG Protocol distance-
based method by determining the total
distance between load- and discharge-
locations and mass of goods sold and
applying the relevant emission factor for the
transport mode, sourced from DEFRA.
Category 10: Processing of sold products
In category 10, we account for our estimated
industrial emissions from further
downstream processing by our customers of
sold volumes of copper, cobalt, nickel, zinc,
lead and chrome ores, concentrates,
intermediates, and metals we produce. We
exclude downstream processing emissions
associated with our non-core product sales
(defined as annual sales of less than 50Kt), as
due to our limited activity in these
commodity markets, we have insufficient
visibility in their value chains which limits
our ability to estimate emissions. We
consider downstream processing emissions
from sold intermediate product to first-use
product, using value-chain mapping and
industry-average analysis if the processing
route to first-use processor is not known. An
overview of intermediate products and first
use products mapped to our commodity
value-chains and considered in our
calculations is provided in the table ‘Overview
of intermediate, first use and end use
products by commodity group’ on page 55.
We source emission data from the latest
available commodity specific GHG and
energy intensity curves from Skarn. We use
this data to calculate country- or region-
average emissions per tonne of contained
metal for third-party concentrating,
smelting, and refining. For the final
conversion from metal to first-use product,
such as stainless and galvanised steel,
copper wire and sheet, we use data from
relevant commodity associations’ life-cycle
assessments.
Category 11: Use of sold productsΔ
In category 11, we report our emissions
related to the combustion by our customers
of sold coal and refined oil products that our
industrial assets produced or processed. For
details on our methodology adopted, activity
and emission data sources for category 11,
refer to our Basis of Reporting 2023.
Category 15: Investments
In category 15, we report emissions related to
Glencore’s equity share of the Scope 1, 2 and,
whenever these are greater than Scope 1 and 2
combined, the Scope 3 emissions from JVs we
do not control or operate that are commodity
producing or processing industrial entities2 or
industrial entities where production or
1. While first-use products form the basis for subsequent end-use products, in first use state a material does not anatomically change and does not require further energy-intensive metallurgical processing but may
still undergo some mechanical processing. If the distance between point of sale to first use processor cannot be determined from available trade data, we base our calculations on average transport distances based
on Glencore market research and commodity value-chain mapping.
2. In February 2022, the Russian government commenced a war against the people of Ukraine. Many countries imposed a series of sanctions against the Russian government, various companies, and certain
individuals. In response to these sanctions, Russia implemented a number of counter-sanctions including restrictions on the divestment from Russian assets by foreign investors. Consequently, Glencore is not able
to receive dividends, vote or sell or transfer its equity shares in En+ Group PLC (EN+) (10.6%) and OSJC Rosneft (Rosneft) (0.57%), which have been written down to zero. We therefore also exclude emissions related to
Glencore’s equity shares in EN+ and Rosneft.
54
2023 Glencore Annual Report
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Financial Statements
Additional Information
Overview of intermediate, first use and end-use products by commodity group
Commodity
Intermediate products
First-use products (%)1
End use
Copper
Cobalt
Chrome
Lead
Zinc
Nickel
Copper concentrate, copper anode
Copper semis (wire, rod, and tubes) (100%)
Batteries, construction, transport
Cobalt concentrate, Cobalt crude
hydroxide
For sold cobalt hydroxide: Cobalt sulphate – battery
precursor (33%), cobalt tetroxide – battery precursor
(47%), alloyed steel (20%)
Batteries, electronics, aerospace, industrial
chemicals
Chrome ore, Chrome pellets,
ferrochrome
For sold cobalt metal: alloyed steel (100%)
Stainless steel (100%)
Construction, transport, engineering,
consumer goods
Lead concentrate, refined lead
Lead acid battery (93%), sheet (7%)
Batteries, cable, sheathing, alloys
Zinc concentrate, refined zinc
Continuous galvanising (41%), batch galvanising
(30%), diecast alloy (18%), brass (11%)
Construction, automotive, engineering
machinery, consumer goods
Nickel concentrate, refined nickel
Crude oil
Crude oil condensate
Coal
For sold ferronickel: stainless steel (100%); for sold
nickel: 72% steel, 7% battery precursor, 6% alloy
steel, 8% special steel, 7% plating
Gasoline (45%), coke (5%), diesel (23%), kerosene/jet
fuel (9%), residual fuel oil (4%), light ends (10%),
heavy ends (4%)
For sold Metallurgical coal and other bituminous
coal: combustion (100%)
Batteries, construction, transport,
engineering, consumer goods
Transportation, electrical power, plastics,
heating, chemical production
Power generation, manufacturing
processing of commodities has ceased, and for
which we can source or estimate emissions
data.2 We exclude emissions associated with
debt investments with known use of proceeds
and project finance where Glencore acts as
the debt investor based on our
2023 materiality assessment, which
determined these to be immaterial and
irrelevant to our total Scope 3 inventory.
or Skarn. Where primary Scope 3 data
cannot be sourced, estimates are made
based on the saleable produced volumes of
JVs that we do not control or operate and
that produce intermediate products using
the average data method (see also Scope 3,
category 10) or the direct use-phase method
for those that produce fossil fuels (see also
Scope 3, category 11).
We estimate emissions using the principles
of the investment-specific method by
sourcing primary data where available and
feasible. If primary data is unavailable or not
feasible to obtain, we source secondary data
for Scope 1 and 2 emissions from Bloomberg
Exceptions and exclusions
Our CO2e emissions include CO2, CH4 and
N2O. Other GHGs are not included, pursuant
to our most recent materiality assessment,
which concluded that their contribution to
the overall CO2e emissions of our industrial
assets is sufficiently small so as to be
immaterial in the context of our industrial
CO2e emissions profile.3
We exclude CO2e emissions data from certain
industrial offices located off site and CO2e
emissions associated with our livestock for
pastoral assets under our operational control, as
we consider their contribution to these indicators
to be sufficiently small so as to be immaterial
in the context of our overall emissions profile.
Our corporate and marketing offices do
not report on Scope 1 and 2 emissions data
as we consider their contribution to be
immaterial in comparison with that of our
industrial assets.
We do not include Scope 3 emissions related
to third-party volumes traded by our
marketing business in our emissions
reporting and targets. However, the
emissions associated with the shipping of
third-party traded volumes paid for by our
marketing business have been included in
our Scope 3, category 4 (see the Our Scope 3
emissions section on page 54).
In consideration of the GHG Protocol criteria
for identifying relevant Scope 3 activities
within our organisational boundary of
operational control, we conducted a
materiality and relevance assessment of
previously excluded Scope 3 categories and
emission sources in 2023. We applied the
principles of the GHG Protocol’s spend- and
revenue-based calculations as well as the
sample method and we compared the
calculated results to our Scope 3 inventory.
We further assessed the relevance of each
category and whether any applicable
regulation or sector guidance requires us to
report these emissions or considered whether
an exclusion is not warranted for other
reasons. Applying a 2.5%4 significance
threshold to our Scope 3 emissions we
reported on in 2022, we identified categories
5, 6, 7, 8, 12, 13, 14 and 17 as not applicable or
immaterial and irrelevant to our Scope 3
inventory and we exclude them from the
Scope 3 emissions we report on.
1. Based on industry-average analysis as per Glencore commodity market research and value-chain mapping.
2. Where we can source the respective data, we also include Glencore’s equity share of such emissions relating to investments that are industrial projects or conducting exploration activities where production or
processing of commodities has not commenced, warehouses, terminals, and ports.
3. We last performed the relevant materiality assessment in 2015/2016. We originally intended to update this assessment in 2023, however, we have postponed this work to update the materiality assessment as part of
a wider, revised approach to assessing materiality in line with impending obligations under future reporting requirements.
4. The GHG Protocol does not set a significance threshold but recommends that reporting companies should define their own based on their business goals. The ICMM Scope 3 Emissions Accounting and Reporting
Guidance recommends a referential quantitative threshold of 5% be used. In consideration of this, we adopted a comparatively lower than recommended 2.5% significance threshold to identify material Scope 3
emissions sources to reflect the maturity of our Scope 3 reporting and the dominance of downstream Scope 3 emissions associated with sales of our coal and refined oil products to our total calculated inventory.
2023 Glencore Annual Report
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Corporate Governance
Financial Statements
Additional Information
Overview of our Scope 3 materiality and relevance assessment results 1
Scope 3 category
Method and data source
Emission factors
Year of assessment
Estimated
emissions (kt CO2e)
1: Purchased goods and services – services
other than transport
Spend-based:
Accounting systems
5: Waste generated in operations
6: Business travel
7: Employee commuting
8: Upstream leased assets
Spend-based:
Accounting systems
Reporting entity sample
Road and rail:
Reporting entity sample
Air:
Distance and spend based
Road and rail:
Reporting entity sample
Air:
Distance and spend based
Spend-based:
Accounting systems
12: End-of-life treatment of sold products
Revenue-based:
Material revenue report
13: Downstream leased assets
14: Franchises
Revenue-based:
Accounting systems
Franchise sample
15: Investments – debt investments
17: Other downstream – Methane extracted
and sold to third-party operated power
plants
Average-data:
Financial statements and loan-specific
information (loan amount, repayment
structure, purpose of loan)
Direct measurement
EPA Supply Chain 2022
4.5
No category-relevant data identified
Materiality
Relevance
0.00%
of Scope 3
Not relevant
DEFRA
EPA
DEFRA
EPA
2022
2019–2023
2022
2019–2023
Road and rail: 0.03 (extrapolated
from sample)
0.00%
of Scope 3
Not relevant
Air: 7.5 - 23.0
Road and rail: 51.2 (extrapolated
from sample)
0.00 – 0.01%
of Scope 3
Not relevant
Air: 11.5 - 18.8
Emissions associated with leased third-party assets used for transportation (e.g., chartered vessels) are accounted for in
category 4. Emissions generated by the operation of leased buildings are reported under Scope 1 and 2. A review of
central financial systems identified no other leased assets in the upstream sector. This makes category 8 not applicable.
EPA’s WARM tool
(Waste Reduction
Model)
2022
311.1
EPA Supply Chain 2019–2022
31.3 - 71.8
IEA grid-average
2021 (Astron Energy),
2023 (ALE)
2021 + 2023: 139.8
EPA Supply Chain Emissions over
133.0
investment lifetime
NGER
Determination
factors
2019–2023
2019: 279.8
2020: 301.7
2021: 250.9
2022: 195.6
2023: 173.7
0.08%
of Scope 3
0.01 – 0.02%
of Scope 3
0.04%
of Scope 3
0.04%
of Scope 3
Not relevant
Not relevant
Not relevant
Not relevant
0.04 – 0.07%
of Scope 3
Not relevant
1. This tables provides an overview of the results of the 2023 Scope 3 materiality and relevance assessments for emissions of industrial assets operated by Glencore against our restated Scope 3 emissions published in
this Report for the year of assessment as set out in the table. Where separating industrial asset from marketing emission sources is not possible due to the nature of available activity data, materiality assessments
have been conducted at Group level. In 2023, this applied to our assessment of emissions reported in categories 13 and 15.
56
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Corporate Governance
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Additional Information
TCFD continued
We intend to review our Scope 3 exclusions
periodically, at least every three years. Where
we find that an expansion or adjustment of
our reporting is justified, we will consider
methodology options and appropriate
sources for activity data and emission
factors to further enhance our Scope 3
emission disclosures.
Baseline emissions restatement
This report contains our emissions data for
the full year 2023 and a restatement of
energy use and our Scope 1, 2 and 3
emissions for the years 2019–2022.
Glencore has established a fixed baseline
year of 2019 for our industrial asset emissions
(Scope 1, 2 and 3) reduction targets. To
enable comprehensive and consistent
tracking of progress against targets over
time, the GHG Protocol requires a
restatement of baseline emissions when
significant changes in company structure or
emissions inventory methodology occur,
including:
• Structural changes such as mergers,
acquisitions, and divestments;
• Changes in calculation methodologies,
improvement in data accuracy, or
discovery of significant errors; and
• Changes in categories or activities
included in the Scope 3 inventory.
Restatement for structural changes
such as mergers, acquisitions, and
divestments
Emissions from our industrial asset MARA
acquired in 2023 and falling within the
organisational boundary of operational
control were added to the emissions profile,
including the baseline. Similarly, emissions
from our sold industrial asset CSA Cobar,
which was previously within the
organisational boundary, were removed
from the baseline and subsequent reporting
periods.1 This has resulted in a minor
decrease in our Scope 1 emissions between
2019 and 2021 and a slight increase in 2022
while our Scope 2 and Scope 3 emissions
decreased c. 0.2Mt between 2019 and 2022.
Additionally, we have extended our
reporting of our Scope 1 and 2 emissions and
energy consumption to include our
warehouses, terminals, and ports.
See the graphic ‘Overview of restated 2019
baseline for our Scope 1, 2 and 3 emissions’
for an overview and graphic representation
of our baseline restatement and the table
‘Overview of our baseline restatements
2019–2022’ on page 61.
Restatement for change of applied
global warming potentials (GWPs)
Our CO2e emissions have been amended to
apply the GWP values for a 100-year time
horizon of the IPCC’s Sixth Assessment
Report, 2021 (AR6), where the granularity of
the published emission factors allows such a
conversion, except for certain CO2e
emissions from the extraction of coal and
decommissioned coal mines, which still
apply the GWPs from the IPCC’s Fifth
Assessment Report (AR5). We intend to
complete the conversion for these CO2e
emissions to the GWPs of the AR6 in 2024.
The conversion to AR6 as completed to date
had a marginal impact on our CO2e
emissions, resulting in an increase of about
0.3% across our emissions. See the graphic
‘Overview of restated 2019 baseline for our
Scope 1, 2 and 3 emissions’ for an overview
and graphic representation of our baseline
restatement and the table ‘Overview of our
baseline restatements 2019–2022’ on page 61.
Direct and indirect energy
consumption and Scope 2 emissions
restatements
We are restating our direct and indirect
energy use and associated Scope 2 emission
figures for our Kazzinc industrial asset in
Kazakhstan to align with the GHG Protocol’s
approach to identifying direct and indirect
energy sources and renewable energy
claims in relation to Scope 2 emission
accounting purposes following a review of
our approach as part of our new Emissions
and Energy Reporting Procedure (EERP).
By way of background, Glencore operates
Kazzinc Ltd (Kazzinc), which is comprised of a
number of different industrial sites, including
the Bukhtarma hydro-power plant (Bukhtarma).
In the past, Buktharma generated power
that was considered as transferred to and
consumed by other Kazzinc industrial sites
and treated as a fully integrated direct
energy source, such that emissions were
reported only within Scope 1. Scope 2
emissions, which relate to the generation of
indirect energy sources, were not calculated
either within the location-based and
market-based approach for Buktharma
generated power consumed by Kazzinc
industrial sites. Any electricity produced by
Bukhtarma but not considered transferred
to and used by Kazzinc industrial sites was
sold onto the national grid. Kazzinc industrial
sites also purchased electricity from other
providers, which was always reported as
indirect energy for emission accounting
purposes with associated emissions reported
on as Scope 2 emissions.
A recent assessment of the Kazzinc
operations against the GHG Protocol and the
new EERP showed that while there is a
network of direct lines between Bukhtarma
and some Kazzinc industrial sites, these are
not exclusive to Kazzinc and are also
physically connected to the Kazakh national
grid, which for practical purposes means
that Kazzinc obtains all its electricity from
the national grid. Due to the absence of a
direct exclusive transfer line between
Buktharma and any of the Kazzinc industrial
assets, we have decided to consider this an
indirect energy supply to the other Kazzinc
industrial assets, and thus restate our direct
and indirect energy consumption and
associated Scope 2 emissions both within
the location-based and market-based
approach. In summary, in our restated 2019
baseline year 10.4 PJ (or 2,877 GWh) of
energy supply to Kazzinc that was previously
considered a direct energy source is now
considered an indirect energy source. In our
Scope 2 location-based approach, this
restatement adds 1.8Mt CO2e to our total
industrial assets’ Scope 2 location-based
emissions, which represents an increase
of 16%.
1. In the 2022 baseline restatement we mistakenly excluded Middelkraal, an industrial site under our operational control at which production had ceased prior to 2019, from the organisational boundary of operational
control as an independently managed joint venture. We re-added Middelkraal to the baseline. There was and is no impact on the baseline in terms of Scope 3 emissions but Scope 1 and 2 emissions reported by this
industrial site for ongoing residual activity at the site have been re-added to the baseline.
2023 Glencore Annual Report
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TCFD continued
Strategic Report
Corporate Governance
Financial Statements
Additional Information
inventory. Our Scope 3 emissions from our
newly reported categories have added a
further 5.8Mt to our restated 2019 baseline.
Further detail is provided in the table
‘Overview of restatement for changes in
calculation methodologies and changes in
categories or activities included in our Scope
3 inventory’ on page 59. See the graphic
‘Overview of restated 2019 baseline for our
Scope 1, 2 and 3 emissions’ for an overview
and graphic representation of our baseline
restatement and the table ‘Overview of our
baseline restatements 2019–2022’ on page 61.
The GHG Protocol sets out specific quality
criteria for renewable energy claims within
the market-based approach which require
that they be based on clear contractual
evidence for the rights to environmental
attributes. The arrangements for Kazzinc's
power consumption from Bukhtarma date
back to 1997 and do not expressly provide for
any environmental benefits being
transferred concurrently with the relevant
volumes of electricity (as was common at
that time). Therefore, following the guidance
of the GHG Protocol and the EERP, we have
decided to account for the energy
consumed at Kazzinc as non-renewable. In
the absence of a published residual grid mix
emission factor for Kazakhstan, we use the
local IEA Emissions Factor to calculate
emissions. In the 2019 baseline year, this
restatement adds 1.8Mt CO2e to our Scope
2 market-based emissions, which represents
a 15% increase in our total industrial assets’
market-based Scope 2 inventory.
Together with a negligible impact on our
reported Scope 3, category 3 emissions
(+0.1% in our restated 2019 baseline), this
restatement represents a 0.4% increase in
our industrial assets’ total reported
emissions inventory (Scope 1, 2 and 3).
Kazakhstan has recently been approved as
an I-REC issuing country, providing an
avenue to clearly document Kazzinc's claim
to the environmental attributes of
Bukhtarma's renewable generation. Kazzinc
is in discussions with ECOJER, the Kazakh
I-REC authority, and initiated the application
process for I-RECs in relation to Bukhtarma.
We will provide subsequent updates on the
application process. If such I-RECs are issued,
Kazzinc intends to claim and retire these and
will reflect this in Kazzinc's market-based
Scope 2 emission figures accordingly.
See the graphic ‘Overview of restated 2019
baseline for our Scope 1, 2 and 3 emissions’
for an overview and graphic representation
of our baseline restatement and the table
‘Overview of our baseline restatements
2019–2022’ on page 61.
Scope 3 emissions – Restatement for
changes in calculation methodologies
and changes in categories or activities
included in our Scope 3 inventory
We have restated our Scope 3 emissions to
reflect the implementation of our updated
Scope 3 methodology across the industrial
assets that are extracting, producing, or
processing minerals and metals and energy
products under our operational control as
per our new Emissions and Energy
Reporting Procedure (EERP). Our new
approach extends coverage of our reported
Scope 3 emissions to include all categories
and emission sources deemed material and
relevant to our calculated Scope 3 inventory.
This led to an expansion of emission
coverage of our previously reported Scope 3
categories 1, 4, 10 and 15 emissions.
Our 2023 review of the applicability,
materiality, and relevance of each Scope 3
category found that an expansion of our
reporting to include Scope 3 categories 2, 3
(activities A, B, and D) and 9 was justified. We
therefore calculated these categories and
added them to our 2019 baseline.
We now calculate upstream emissions
based on purchased or acquired goods and
services, and downstream emissions based
on sold goods and services in consideration
of the GHG Protocol. Activity data is either
sourced directly from the respective
industrial asset (e.g., direct purchases or
sales) or from our commodity trading risk
management systems (e.g., indirect
purchases or sales via our marketing
business). Previously, we had based most of
our calculations on quantities of
commodities produced by our industrial
assets, with data sourced from our
production reports (adjusted to align with
our organisational boundary of
operational control).
In 2023, we also refined our commodity
value-chain mapping and industry-average
analysis, which allows us to differentiate
between the multiple processing routes and
geographies our purchased and sold
products follow, from mined ore to first-use
product. We linked this value-chain analysis
to available country- or regional industry
average emissions factors, to further
enhance our estimates of emissions
associated with upstream and downstream
value-chain processing and transportation.
This has allowed us to further specify our
emissions reported in categories 1, 4, 9, 10
and 11 to our commodity value chains and
value-chain partners.
These changes in methodology and
expanded coverage of emission sources
resulted in a 38.3Mt increase of our baseline
emissions across the Scope 3 categories that
were previously included in our reported
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2023 Glencore Annual Report
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Financial Statements
Additional Information
Scope 3 emissions: Overview of restatement for changes in calculation methodologies and changes in categories or activities included in our Scope 3 inventory
Scope 3 category
1. Purchased goods
and services
2019
baseline
Restated 2019
baseline
in Mt CO2e
in Mt CO2e
Scope 3 delta
in Mt CO2e
Summary
0.6
17.8
+17.2 Method change:
• Historically, the activity data for this category represented estimated third-party quantities of feedstock processed in
our industrial assets as per our production reports (restated to align with our organisational boundary of operational
control). Our new approach calculates upstream emissions based on purchased or acquired goods sourced from our
procurement management or commodity trading management systems.
2. Capital goods
3. Fuel- and energy-
related activities
(not included in
Scope 1 or 2)
4. Upstream
transportation
and distribution
-
1.0
2.3
5.1
2.6
5.4
Expanded coverage:
• Expanded coverage of purchased or acquired feedstock types that we process in the smelting and refining facilities
under our operational control (most prominently, third-party crude oil processed at the Astron Energy Refinery) and
inclusion of transport emissions if paid for by our suppliers.
• Inclusion of the estimated cradle-to-gate emissions embedded in purchased consumables used in the smelting and
refining facilities under our operational control, including transport emissions if paid for by our suppliers.
Enhanced value-chain analysis and emission factor sourcing:
• Historically, our upstream calculations considered only emissions associated with a purchased feedstock’s dominant
processing route. In 2023, we refined our commodity value-chain mapping to distinguish between the multiple
processing routes that can be followed, applying the most applicable one based on the product supplier (or using
industry average analysis where such information is unavailable).
• Instead of using global averages, for each processing step we now apply the relevant country- or regional industry
average emission factor.
+2.3 New category
+4.1 Expanded coverage:
• Category coverage expanded to include activities A, B, and D (previously only C).
+2.8 Expanded coverage:
• Expanded coverage to include all third-party ocean freight, such as voyage charters, time charters, break bulk, and
container shipping, paid for by our industrial assets and our marketing business.
• Third-party road and rail transport paid for by our industrial assets where data on fuel use or distance is readily available.
Enhanced value-chain analysis and emission factor sourcing:
• For all third-party ocean freight, trade system data is used to determine the load and discharge location and the total
mass of goods purchased or sold, then the appropriate emission factor for the transport mode is applied.
• Emissions are estimated from point of sale to the first-use customer, inclusive of transport between subsequent downstream
processing steps, using value-chain mapping and industry-average analysis if the first-use customer is not known.
9. Downstream
transportation
and distribution
-
3.4
+3.4 New category
2023 Glencore Annual Report
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Strategic Report
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Additional Information
TCFD continued
Scope 3 category
10. Processing of
sold products
2019
baseline
Restated 2019
baseline
in Mt CO2e
in Mt CO2e
Scope 3 delta
in Mt CO2e
Summary
21.7
20.3
-1.4 Method change:
• Historically, the activity data for this category represented saleable metals and minerals, produced in our industrial
assets as per our production reports (restated to align with our organisational boundary of operational control). Our
new approach calculates downstream processing emissions based on sold metals and minerals sourced from our
commodity trading management systems.
Expanded coverage:
• In addition to downstream processing of saleable volumes of copper, nickel, zinc and lead concentrates and metals and
ferrochrome, we have extended coverage to include chrome ore, intermediate metals and mineral sales, as well as cobalt.
Enhanced value-chain analysis and emission factor sourcing:
• Historically, our downstream calculations considered only emissions associated with a saleable commodity’s dominant
processing route. In 2023, we refined our commodity value-chain mapping allowing us to distinguish between the
multiple processing routes that can be followed from point of sale to first use, applying the most applicable one based
on the customer the product was sold to (or using industry average analysis where such information is unavailable).
• Instead of using global averages, for each processing step we now apply the relevant country or regional industry
average emission factor. This has resulted in a reduction in reported emissions, most prominently those associated with
downstream zinc processing.
+3.9 Method change:
• Historically, with respect to coal, the activity data for this category represented saleable coal, produced in our industrial
assets as per our production reports (restated to align with our organisational boundary of operational control). Our
new approach calculates emissions from the use of sold coal based on sold volumes of coal sourced from our
commodity trading management systems or directly from our industrial assets.
+11.9 Expanded coverage:
• The investments for which Glencore historically reported its equity share of emissions were: Hunter Valley Operations
(coal), Umcebo (coal), Collahuasi (copper), Antamina (copper), Century Aluminium and Viterra. We reported our equity
share of Scope 1 and 2 emissions for all of these investments, plus our equity share of Scope 3 emissions, where
relevant, for the coal investments only.
• This has been expanded significantly to cover our equity share of the Scope 1, 2 and, whenever these are greater than
Scope 1 and 2 combined, the Scope 3 emissions from JVs not under our operational control that are commodity
producing or processing industrial entities or industrial entities where operations have ceased, and for which we can
source or estimate emissions based on the investment’s production. This is the case for the vast majority of our
respective investments. We further included our equity share of Scope 1 and 2 emissions relating to a select number
of our investments that are industrial projects or conduct exploration activities where production or processing of
commodities has not commenced, warehouses, terminals, and ports for which we were able to source the
respective data.
• Emissions associated with newly completed investments in non-operated JVs have been added to our baseline and
subsequent reporting years, most prominently Alunorte.
11. Use of sold
products
427.2
431.1
15. Investments
23.4
35.3
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TCFD continued
Scope 3 category
15. Investments
(continued)
2019
baseline
Restated 2019
baseline
in Mt CO2e
in Mt CO2e
Scope 3 delta
in Mt CO2e
Summary
23.4
35.3
+11.9 Enhanced value-chain analysis and emission factor sourcing
• Primary data to be obtained from the non-operated JV (Scope 1, 2 and 3). If unavailable, secondary data is sourced from
17. Other downstream
0.3
0.0
-0.3
Our Scope 3 emissions
476.7
520.7
+44.0
Bloomberg or Skarn.
• For non-operated JVs that extract or produce fossil fuels, Scope 3 emissions are estimated based on produced volumes
using the direct use-phase method (see category 11)
• For non-operated JVs that extract or produce intermediate products, Scope 3 emissions are estimated based on
produced volumes using the average-data method (see category 10).
• Emissions previously reported in this category were associated with non-core product sales (defined as annual sales of
less than 50Kt) and identified as immaterial and irrelevant to our Scope 3 inventory. We therefore exclude them from
the Scope 3 emissions we report on (see the Exceptions and exclusions section on page 55 for more information).
Overview of restated 2019 baseline for our Scope 1, 2 and 3 emissions
Overview of our baseline restatements 2019–2022
e
2
O
C
t
n
o
i
l
l
i
M
600
500
400
300
200
100
0
508Mt
0.03
1.8
38
6
554Mt
477
12
19
521
14
19
2019 baseline
(Scope 1, 2, 3)
Scope 1
restatements
Scope 2
restatements
Scope 3
restatements
Expanded categories
Scope 3
restatements
New categories
Restated 2019
baseline
(Scope 1, 2, 3)
Baseline and our emissions reporting
as of FY2022
Our Scope 1 emissions (Mt CO2e)
Our Scope 2 emissions (market-based) (Mt CO2e)
Our Scope 3 emissions (Mt CO2e)
Our Scope 1, 2 and 3 emissions (Mt CO2e)
2019
19.0
12.2
476.7
507.9
2020
15.2
10.0
354.2
379.5
2021
15.9
11.4
364.7
392.0
2022
16.6
11.4
342.1
370.1
Baseline and our emissions reporting
as of FY2023
2019
restated
2020
restated
2021
restated
2022
restated
Our Scope 1 emissions (Mt CO2e)
Our Scope 2 emissions (market-based) (Mt CO2e)
Our Scope 3 emissions (Mt CO2e)
Our Scope 1, 2 and 3 emissions (Mt CO2e)
Change to our Scope 1 FY2022 reporting (%)
Change to our Scope 2 FY2022 reporting (%)
Change to our Scope 3 FY2022 reporting (%)
Change to our FY2022 reporting (%)
19.0
13.9
520.7
553.7
0.0%
14.3%
9.2%
9.0%
15.2
11.6
414.0
440.8
0.1%
15.4%
16.9%
16.2%
16.0
13.0
412.9
441.8
0.5%
13.8%
13.2%
12.7%
16.4
12.8
368.3
397.5
-1.3%
12.6%
7.6%
7.4%
2023 Glencore Annual Report
61
Sustainability
Strategic Report
Corporate Governance
Financial Statements
Additional Information
We take our responsibilities
to our people, to society and to
the environment seriously, and
align our internal health, safety,
environment, and social
performance and human rights
(HSEC&HR) governance with
relevant international standards.
Our approach
The Board’s Health, Safety, Environment and
Communities (HSEC) Committee sets the
strategic direction for our sustainability
activities and oversees the development and
implementation of our HSEC&HR
programmes. It meets at least four times a
year and receives regular updates on how
our business is performing across our
internally defined, sustainability-related
material risk areas.
Further details on our sustainability approach,
performance and ambitions, are available in
our sustainability-related publications. These
include a Sustainability Report published
annually with reference to the requirements
of the Global Reporting Initiative (GRI), as
well as the following publications:
• Sustainability Summary
• Extended ESG Data Book and GRI Index
• Climate Action Transition Plan
• Payments to Governments Report
• Modern Slavery Statement
• Voluntary Principles on Security and
Human Rights
• ESG A-Z section on our website
• Water microsite, considering the
requirements of the ICMM’s Water
Reporting: Good Practice Guide
• Tailings storage facilities microsite, which
includes Global Industry Standard for
Tailings Management (GISTM)-aligned
disclosures.
• Basis of Reporting
Our sustainability communications
are available on our website:
glencore.com/publications
Responsibility for implementing and
monitoring our sustainability activities across
the Group rests with our senior management,
including the Chief Executive Officer, Head
of Industrial Assets and heads of our corporate
functions and commodity departments.
Our Group policies support the delivery of our
Values and Code of Conduct, which together
detail the behaviour and performance
expectations for all our offices and industrial
assets where we have operational control.
Our industrial assets tailor their
implementation of Group policies to reflect
local cultures and regional challenges.
Our HSEC&HR Policies, such as our
Environmental Policy, Health and Safety
Policy, Tailings Storage Facility Policy,
Social Performance Policy and Human
Rights Policy, are available in different
languages via our website at
glencore.com/who-we-are/policies
Through our HSEC&HR Standards,
Procedures and Guidelines, we aim to
establish ethical and consistent business
practices and standards for our industrial
assets. These support our commitment to be
a responsible and ethical operator.
Our Group HSEC&HR strategy outlines our
goals, priorities, and objectives for our
industrial assets and, to the extent
applicable, the marketing business over the
next five years. It aligns to our Purpose and
our Values and considers our external
stakeholder expectations. Each year, we
review our strategy for material updates to
consider whether it continues to fulfil the
needs of our business and our stakeholders.
In 2023, we updated our strategy which
applies with effect from 1 January 2024.
Further details will be provided in our 2023
Sustainability Report.
62
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Corporate Governance
Financial Statements
Additional Information
Engaging with our stakeholders
We engage with relevant stakeholder
groups with a view to building meaningful
relationships and understanding their
expectations and aspirations. Further
information on our stakeholder engagement
activities will be available in our 2023
Sustainability Report.
External commitments
We participate in a wide range of external
initiatives, supporting our commitment to
ongoing improvements to our approach and
performance across sustainability topics. Our
engagement varies from reporting on our
progress to taking a role in driving
strategic change.
We seek to align with relevant international
standards to understand, control and
mitigate our impacts. We are signatories to
the United Nations Global Compact (UNGC),
aligning our strategies and operations with
its principles, which cover human rights,
labour, environment, and anti-corruption.
We recognise the UNGC’s Sustainable
Development Goals (SDGs) and their
systematic global approach to society’s
overall development. We believe that we can
play a role in supporting our host
governments to meet the SDGs.
Our policy framework aligns with the
International Labour Organization (ILO)
Declaration on Fundamental Principles and
Rights at Work, the UN Universal Declaration
of Human Rights, and the UN Guiding
Principles on Business and Human Rights
(UNGPs). In addition, we are members of the
Voluntary Principles Initiative and operate in
accordance with the Voluntary Principles on
Security and Human Rights (Voluntary
Principles), and the International Finance
Corporation’s Standard 5 on Involuntary
Resettlement. We articulate these
commitments in our Code of Conduct and
our Human Rights Policy.
We have been a member of the
International Council on Mining and Metals
(ICMM) since 2014. We endorse its Mining
Principles and position statements, and
since 2023, report against its Performance
Expectations.
We strongly support transparency in the
redistribution and reinvestment of the
payments we make to local and national
governments. We are active participants,
both in our operating jurisdictions and at
a global level, in the Extractive Industries
Transparency Initiative (EITI). We comply with
the UK regulatory obligations under DTR 4.3A
of the Financial Conduct Authority’s
Disclosure Guidance and Transparency Rules,
and, in line with those provisions, we publish
an annual Payments to Governments Report,
detailing the material payments we make by
country and project.
As part of our commitment to responsible
product stewardship, we follow the UN’s
globally harmonised system for classification
and labelling of chemicals (GHS), the
European Union’s REACH regulations on the
registration, evaluation, authorisation and
restriction of chemicals, and the London
Bullion Market Association Responsible Gold
guidance. Where appropriate, we participate
in the REACH consortia related to the
materials we produce; these include the
consortia for zinc, cobalt, cadmium,
sulphuric acid, lead and precious metals.
Our responsible sourcing strategy considers
the production, sourcing of metals and
minerals and the procurement of goods and
services. Our Responsible Sourcing Policy
and our Supplier Code of Conduct form the
basis of our risk-based supply chain due
diligence programme that for metals and
minerals aligns with the Organisation for
Economic Cooperation and Development’s
(OECD) Due Diligence Guidance for
Responsible Supply Chains of Minerals from
Conflict-Affected and High-Risk Areas
(CAHRAs), 3rd Edition (OECD DDG).
Risk management and assurance
Our management of HSEC&HR-related risks
aligns with Glencore’s general approach to
the identification, assessment, and
mitigation of risk. Our industrial assets use
our enterprise risk management framework
to identify and assess hazards, including
those with potentially major or catastrophic
consequences, and to develop plans
to address and eliminate, or mitigate,
the related risks. For each of the identified
catastrophic hazards we have implemented
a standardised approach to identifying and
understanding their causes and controls.
This also includes critical control verifications.
Our internal audit programme, overseen by
Group Internal Audit and Assurance (GIAA),
primarily focuses on our systematic
management of the catastrophic hazards
and their controls. Internal and external
senior subject matter experts participate
in this programme.
Multi-disciplinary assessments allow us
to audit complex issues from a range
of viewpoints for a more robust appraisal.
We use these assessments to review
operations and activities with different risk
factors, such as tailings storage facilities,
underground operations, open pit mines
and metal processing plants.
The Board HSEC Committee reviews the
results of all HSEC&HR audits, together with
their key findings, observations, and
recommendations for good practice.
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Financial Statements
Additional Information
Materiality assessment
Every two years, we undertake a
sustainability-related materiality assessment
that considers input from within our
business and from external sources. We use
this assessment to inform our HSEC&HR
strategic overview and our sustainability-
related disclosures and publications.
During 2022, we undertook a third party-led
materiality assessment with internal and
external stakeholders to validate the
appropriateness of existing material topics
and to identify emerging issues.
Consolidating the internal and external
stakeholders’ prioritisation has resulted in
the identification of the topics listed in the
table below as being material.
2023 material topic
Public disclosures
Annual
Report
Sustainability
Report
Modern
Slavery
Statement
Payments to
Governments
Report
Climate
Report
Ethics and
Compliance
Report
Voluntary
Principles
Report
Water
Microsite
TSF
Microsite
Climate Change
Water
Land Management
Biodiversity
Diversity, Equity and
Inclusion
Social Performance
Catastrophic Hazards
(incl. Tailings Dam
Management)
Occupational Health
Workforce Safety
Ethics and Compliance
Transparency
Responsible Sourcing
Human Rights
Indigenous Peoples
Just Transition
(emerging topic)
Detailed information available
High-level information available
No information available
64
2023 Glencore Annual Report
Read more on these topics here:
Catastrophic hazards: glencore.com/
sustainability/esg-a-z/catastrophic-
hazard-management
Workforce safety: glencore.com/
sustainability/esg-a-z/safety
Ethics and Compliance: glencore.com/
sustainability/ethics-and-compliance
Transparency: glencore.com/who-we-
are/transparency
Climate change: glencore.com/
sustainability/esg-a-z/climate-change
Water: glencore.com/sustainability/
esg-a-z/water-management
Land management: glencore.com/
sustainability/esg-a-z/land-management
Biodiversity: glencore.com/sustainability/
esg-a-z/land-management#biodiversity
Diversity: glencore.com/sustainability/
esg-a-z/our-people#diversity
Responsible sourcing: glencore.com/
sustainability/esg-a-z/responsible-
sourcing-and-supply
Human rights: glencore.com/
sustainability/esg-a-z/human-rights
Indigenous Peoples: glencore.com/
sustainability/esg-a-z/
communities#Indigenous
Occupational health: glencore.com/
sustainability/esg-a-z/health
Sustainability continued
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Meeting our targets
A new policy architecture, developed in 2021, which included revised and new Policies and Standards has strengthened our governance for overseeing the achievement of our Group
HSEC&HR targets. In 2023, we continued to roll out these Policies and Standards through a series of workshops and training programmes. Our industrial assets undertook gap assessments
against the revised HSEC&HR Standards, reporting substantial compliance to these Standards on average across all of them as at the end of 2023. Where gaps were identified, improvement
actions have been developed and are being progressively completed. Both Group HSEC&HR and our industrial commodity departments review progress against our Group HSEC&HR
targets on a monthly or quarterly basis, depending on the target.
Group HSEC&HR targets
Risk management and governance
Implement a proactive risk-based approach to prevent
HSEC&HR incidents.
No catastrophic TSF dam failures.
Conformance with GISTM in accordance with our
ICMM commitments.
Health
Year-on-year reduction in the number of new occupational disease
cases (excluding new cases from legacy exposures).
2023 progress
We continued to implement our Enterprise Risk Management Standard that we launched in 2021. It includes our
approach to catastrophic risks and the need to identify and monitor critical controls. Our industrial commodity
departments annually present their risk registers and key controls to eliminate or minimise the risks.
We recorded no catastrophic TSF dam failures.
We met the ICMM’s 5 August 2023 deadline for GISTM disclosures on TSFs with a ‘Very High’ and ‘Extreme’
Consequence Classification and identified areas of improvement to achieve conformance. We are working towards
meeting the ICMM’s 5 August 2025 deadline for GISTM disclosures on TSFs with all other Consequence
Classifications. We will further continue to implement the requirements of the GISTM.
In 2023, we recorded 162 new occupational disease cases (2022: 101 cases1). The increase reflects the implementation
of stronger definitions for occupational disease indicators, which, in turn, supported stronger reporting on this
material topic.
Safety
No work-related (occupational) fatalities.2
Environment
15% reduction in our Scope 1, 2 and 3 industrial emissions by the end
of 2026 against a restated 2019 baseline.
50% reduction in our Scope 1, 2 and 3 industrial emissions by the
end of 2035 against a restated 2019 baseline.
Ambition of achieving net zero industrial emissions for our Scope 1, 2
and 3 by the end of 2050, subject to a supportive policy environment.
By 2023, all industrial assets located in water-stressed areas3 to
finalise the assessment of their material water-related risks, setting
local targets and implementing actions to reduce impacts and
improve performance.
No major or catastrophic4 environmental incidents.
Social performance and human rights
Do not cause or contribute to incidents resulting in severe5 human
rights impacts.
1. Prior period has been corrected.
2. Refer to the Basis of Reporting 2023 for information on how work-related fatalities are recorded.
3. We define water-stressed areas as having a high to extremely high or arid and low water-use baseline
water stress, as per the World Resources Institute definitions.
4. Refer to the Basis of Reporting 2023 for information on how major and catastrophic environmental
incidents are recorded.
It is with deep sadness that we recorded the loss of fourΔ lives at our industrial assets during 2023.
We recorded 433Mt of Scope 1 and 2 market-based emissions, and Scope 3 emissions (2019 restated: 554Mt). This
decrease is largely attributable to the managed decline of coal production in our operationally controlled industrial
assets, which results in lower customer use of our sold coal volumes. For further information see the About our
emissions calculations and reporting section on pages 53 and the Basis of Reporting 2023.
We finalised the assessment of material water-related risks and have set local water targets for our industrial assets
located in water-stressed areas; our internal Water Working Group assessed these targets and risk assessments. We
are implementing actions to reduce impacts and improve performance against these targets.
We recorded no major or catastrophic environmental incidentsΔ.
We did not cause or contribute to incidents resulting in severe human rights impacts.
5. Severe is the equivalent of catastrophic and major on Glencore’s incident classification scale. For human
rights, a catastrophic incident is one with a gross human rights violation or grave systemic human
rights impacts and a major incident involves an isolated grave or serious abuse of human rights.
2023 Glencore Annual Report
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Strategic Report
Corporate Governance
Financial Statements
Additional Information
Supporting the delivery of our
strategic priorities
Our approach to managing our HSEC&HR-
related material topics supports the delivery
of the Group’s strategic priorities.
Catastrophic hazard
management including TSF
management
We define catastrophic events as those with
severe consequences that could cause
widespread loss of life or significant
environmental harm or result in major
reputational or financial damage. We are
committed to eliminating catastrophic
incidents at our industrial assets.
We recognise the exceptional nature of such
events and have developed specific
programmes to actively identify, monitor
and mitigate catastrophic hazards within
our industrial business. We review our
management of catastrophic risks to
understand whether they are adequately
controlled. We require our industrial assets
to put in place appropriate management
and mitigation measures.
GIAA oversees our internal audit
programme, which considers our
catastrophic hazards and critical control
management, using both internal and
external expert assessors. It gives particular
attention to identifying catastrophic hazards,
their critical controls and management
plans, as well as the effectiveness of
verification and reporting processes.
The HSEC and Audit Committees receive
and review relevant assurance findings.
TSF management
In recent years, a small number of high-
profile TSF failures at the operations of large
mining companies have resulted
in catastrophic consequences.
We have a robust governance process in
respect of our TSFs and we monitor them
for integrity and structural stability. Flooding
and seismic activity are the main natural
phenomena that may affect TSFs.
Our industrial assets evaluate natural
phenomena and incorporate these
considerations into their TSF designs where
relevant. In addition, our TSFs undergo
regular external inspections.
We continue to manage closed TSFs
responsibly post-closure. We regularly
inspect our facilities and external
experts conduct independent
inspections and reviews.
Further information on our approach to
tailings management is available on our
website glencore.com/sustainability/
tailings. It provides an overview of our
approach towards managing our TSFs and
includes details on our TSFs.
Performance during 2023
We target zero major or catastrophic
incidents, which we achieved during 2023.
We completed 76 audits on catastrophic
hazard management topics in 2023.
During 2023, we reported on our
conformance to the Global Industry
Standard on Tailings Management (GISTM)
for our TSFs with ‘Very High’ or ‘Extreme’
Consequence Classifications, meeting the
5 August 2023 deadline set by the ICMM.
Based on our ongoing TSF management
systems and the independent third-party
assessments that we have in place for these
TSFs, we believe that we have identified any
gaps in conformance and are managing
these appropriately.
Workforce safety
We believe that any loss of life in the
workplace is unacceptable and that all
injuries are preventable. We recognise that
we are all responsible for providing and
maintaining a safe workplace. Our business
inherently exposes some of our workers to
safety risks. Safety, as one of Glencore’s
Values, drives how we do business, and the
safety of our workforce always comes first.
SafeWork is Glencore’s approach to
eliminating work-related fatalities. SafeWork
has a set of minimum expectations and
mandatory Fatal Hazard Protocols, Life-
Saving Behaviours, and safety tools, which
our industrial assets must implement. We
believe consistent application of SafeWork
through strong, visible leadership drives a
culture of safe operating discipline and will
get our people home safe.
We require an effective safety management
system at each industrial asset to ensure
SafeWork implementation, and the integrity
of plant and equipment, structures,
processes, and protective systems, as well as
the monitoring and review of critical controls
and the identification and management of
lessons learned from incidents.
We regard reporting of high potential risk
incidents (HPRIs) as a supportive part of our
strategy to prevent repeat incidents and,
as such, we do not target a reduction in this
metric. The internal reporting of HPRIs
allows for the identification of activities that
need prioritising to advance our learning
and improve safety performance.
Performance during 2023
We are saddened to report the loss of fourΔ
lives at our operations during 2023, having
also recorded four occupational fatalities in
2022. All loss of life is unacceptable, and we
are determined to eliminate work-related
fatalities across our business.
During the year, our total recordable injury
frequency rate1 (TRIFR) was lower than in the
previous year at 2.16Δ (2022: 2.22) while our
lost time injury frequency rate2,3 (LTIFR)
decreased to 0.76Δ (2022: 0.84).
In 2023, our HPRIs rose to 532 (2022: 464).
The majority of HPRIs related to energy
isolation and mobile equipment and 85%
resulted in no injuries.
Occupational health
We are committed to protecting the health
and wellbeing of our workforce and the
residents of our host communities. We do
this by creating healthy workplaces, where
we identify and manage potential health
risks, impacts and opportunities, and reduce
health hazards exposure at source.
By their nature, some of our activities may
expose our workers to occupational hazards.
We implement a risk-based approach that
underpins the continual improvement of our
understanding and control of health
hazards, with the goal of eliminating
occupational diseases in our workplaces.
1. The total recordable injury frequency rate (TRIFR) is the sum of fatalities, lost time injuries (LTIs), restricted work injuries (RWIs) and medical treatment injuries (MTIs) per million hours worked. The metric represents
all injuries that require medical treatment beyond first aid.
2. Lost time injuries (LTIs) are recorded when an employee or contractor is unable to work following an incident. We record lost days as beginning on the first rostered day that the worker is absent after the day of the
injury. The day of the injury is not included. LTIs do not include restricted work injuries (RWIs) and fatalities.
3. The lost time injury frequency rate (LTIFR) is the total number of LTIs recorded per million hours worked.
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Strategic Report
Corporate Governance
Financial Statements
Additional Information
We also identify opportunities to promote,
educate and support our workers to make
healthy lifestyle choices, helping them to
lead a safe and healthy life.
industrial assets, with a focus on the
thematic axes of identified relevance for the
continuous improvement of our
performance in health.
We use a variety of on-site programmes to
manage occupational diseases and exposure
to health hazards. Where appropriate, we
extend these health programmes to our host
communities, to combat regional health
issues and promote healthy lifestyles.
Performance during 2023
During 2023, we recorded an increase in the
number of new cases of occupational
disease, at 162 cases (2022: 1011). The increase
reflects the implementation of stronger
definitions for occupational disease
indicators, which, in turn, supported stronger
reporting on this material topic.
We continued with the implementation of a
risk-based approach to the identification and
management of health hazards based on
potential health consequences, including
the implementation of Glencore Exposure
Action Levels (GEALs) for prioritised health
hazards. The GEALs set internal references to
trigger actions aimed at reducing exposures
to key health hazards. A hygiene monitoring
programme that includes a process to
investigate exceedances supports the
implementation of the GEALs. During 2023,
the GEALs focused on lead, diesel particulate
matter and respirable crystalline silica.
In 2023, we held a three-day health
workshop with over 65 participants from
across the business. The participants heard
from a mix of external expert speakers and
presenters from Group HSEC&HR and our
industrial management team, as well as
presentations on case studies from our
Water
We recognise that water is an increasingly
precious resource and that it is essential for
many of our industrial activities. Some of our
industrial assets are in water-stressed areas and
share access to water with other local water
users, while other industrial assets manage
surplus water that may involve dewatering
activities and flood protection measures.
Regardless of their location, we require our
industrial assets to undertake detailed
assessments of their local environmental
conditions during their operation and
operational changes in their life cycle, to
develop water management strategies to
maximise the efficient and sustainable use of
this important natural resource.
Stakeholder concerns around the ongoing
availability of water, security of access and
the potential for water contamination have
increased over the past decade in response
to extreme climatic events. We recognise
that access to safe and clean water and
sanitation is vital. We acknowledge that
access to water is integral to wellbeing and
livelihoods and the spiritual and cultural
practices of many communities. It is also
essential to the healthy functioning of
ecosystems and the services they provide.
Our industrial assets consult their host
communities and other relevant local water
users to understand local priorities and seek
to collaborate on sustainable solutions
within our water catchments.
Performance during 2023
In 2023, we withdrew2 950Δ million m3
of water (2022 restated: 1,080 million m3).
The decrease is primarily related to less
rainfall at some of our industrial coal assets
in Australia.
Our industrial assets located in water-
stressed areas completed the process of
setting water targets and are implementing
action plans to reduce their impacts and
improve their performance against
these targets.
Closure planning
Many of our industrial activities are finite. We
recognise that we are temporary custodians
of the land on which we operate, and we are
committed to responsible land ownership
and meeting a set of objectives and criteria
relating to post-closure land use that are
agreed with key stakeholders. We believe
this is possible by integrating closure
planning throughout the life of asset with
the ultimate aim of achieving safe and stable
landforms and sustainable outcomes that
consider our Just Transition Principles.
A core component of our operations’
lifecycle is progressive rehabilitation. Where
active operations have ceased, we review
opportunities for restoration and rehabilitation
in the previously operated areas. Progressive
rehabilitation has benefits that include
reducing an operation’s footprint, improving
the visual appeal of the landscape, and
reducing dust, erosion, and sedimentation,
as well as improving conditions for local
communities and future land users.
To support progressive rehabilitation, when
land becomes available our industrial assets
may undertake various actions in earlier
lifecycle stages, such as the excavation and
preservation of topsoil and overburden from
areas designated for operations, prior
to development.
Our industrial assets develop closure plans,
including progressive rehabilitation
programmes, where possible, to
incrementally restore the land over the life of
an industrial asset. We require our industrial
assets to have a closure plan that could be
initiated at any time whether planned,
unplanned or temporary closure and to
consult with local communities on the
development of their closure plans. We develop
financial estimates for closure planning, with
financial assurance typically provided to
government agencies prior to development
or expansion. Our industrial assets are
required to regularly review their closure
plans to ensure they remain fit for purpose
and align with the industrial asset’s lifecycle.
Our Closure Planning Standard requires our
industrial assets to assess their closure
maturity using principles within the ICMM’s
Closure Maturity Framework. This considers
integration into life of asset planning,
knowledge base, closure vision, principles
and objectives, post-closure land use,
stakeholder engagement, assessment of risks
and opportunities, closure activities, success
criteria, progressive closure, social and
economic transition, closure costs, closure
execution planning, monitoring,
maintenance and management and
successful transition.
1. Prior period has been corrected.
2. We previously included water shared internally, which represented a double counting and excluded water entrained in the extracted ore. For 2023, water input includes the portion of water that is entrained in the
extracted ore and excludes water that is shared internally. This change resulted in a net decrease of 3% compared to the previously applied approach. For further details see the Basis of Reporting 2023. The historic
water input has been restated accordingly.
2023 Glencore Annual Report
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Financial Statements
Additional Information
We are planning to close a number of
industrial assets within the next five years,
and we recognise that our closure planning
and execution should align with
international good practice maturity levels.
This is important for providing confidence to
our stakeholders that we take our
stewardship of the land seriously, and that
we will work towards a just and orderly
transition for our workforce and the
communities living near our industrial assets
as our operations approach closure. This
includes planning for both land
rehabilitation and socio-economic transition
as early as possible.
Performance during 2023
In 2023, we held our first multi-disciplinary
workshop on closure with over 100
participants attending from across the
business. The workshop considered closure
maturity at our industrial assets and how we
integrate closure planning throughout the
life of the industrial asset to achieve safe and
stable landforms and sustainable outcomes
while considering our Just Transition Principles.
Nature
Our industrial activities have the potential to
impact surrounding ecosystems by direct
operations during the industrial asset’s
lifecycle. We are committed to minimising
and mitigating the impacts of our industrial
assets on nature. We recognise that there is
an opportunity for us to contribute to the
protection of nature, by implementing the
mitigation hierarchy and offsetting some of
our impacts that cannot be mitigated or
restored. We also have ongoing workstreams
to mitigate, manage, and reduce our
industrial activities’ impacts on nature and
natural capital. In accordance with our nature
strategy, we are evaluating how our industrial
assets can achieve no net loss of biodiversity.
From project design to operational closure,
we focus on reducing our physical footprint
on land, identifying, managing, and
addressing our actual and potential impacts
to biodiversity, by applying the principles of
the mitigation hierarchy (avoid, minimise,
restore, and offset).
We require our industrial assets to establish
a robust environmental and socio-economic
knowledge base and to develop risk-based
biodiversity action plans and site-level
biodiversity targets to drive progress
in this key area.
Our industrial assets’ land stewardship and
biodiversity management plans can include
measures such as, preliminary clearing
works, habitat relocation, flora and fauna
conservation, invasive species control and
fire and grazing management.
We require that, where possible, our
industrial asset plans support the
continuation or enhancement of land
practices that benefit host communities, such
as grazing and other agricultural activities,
while considering impacts to ecosystems.
As an ICMM member, we commit not to
conduct any exploration, drilling or mining
in World Heritage areas and International
Union for Conservation of Nature (IUCN)
category I-IV protected areas (‘no-go’ areas),
and not to put the integrity of such
properties at risk. Our industrial assets work
to avoid the loss of any IUCN Red List
threatened species.
Performance during 2023
Where appropriate, we require our industrial
assets to develop biodiversity management
plans or update existing plans based on the
outcomes of biodiversity risk assessments. In
2023, we partnered with the Endangered
Wildlife Trust to develop training on setting
biodiversity targets to continue building
capacity and to support the target-setting
process. We also initiated a LEAP1
assessment across our industrial assets,
focusing on land owned or leased and we
are continuing this work during 2024.
Climate change
We support the global climate change goals
outlined in the UNFCCC and the Paris
Agreement to limit the rise in global
temperature to well below 2°C by the second
half of this century.
The world requires a global transformation
of energy, industrial and land-use systems to
achieve the goals of the Paris Agreement
and the SDGs. We believe this transition is a
key part of the global response to the
increasing risks posed by climate change.
As one of the world’s largest diversified
natural resource companies, we have a key
role to play in supporting the global
transition to a low-carbon economy. We are
committed to supporting the transition by
supplying the transition-enabling
commodities needed for the energy systems
of tomorrow, while continuing to responsibly
serve the energy needs of today.
Information in response to the requirements
of the Task Force on Climate-related
Financial Disclosures is set out on pages 29
to 61.
Human rights
We recognise that we have the potential
to impact human rights directly through
our operations, or through our relationships
with business partners. We are committed
to respecting human rights and actively
support our employees, business partners
and others to understand and meet
this commitment.
We uphold the dignity, fundamental
freedoms and human rights of our people,
communities and others potentially
affected by our activities.
We require our industrial assets to conduct
regular human rights training for their
workforces, with a focus on those workers in
positions exposed to human rights concerns,
such as security. This covers general human
rights awareness during day-to-day activities
for our wider workforce, as well as focused
training on the Voluntary Principles for our
security employees and contractors.
Enabling complaints and grievance
processes
We require our industrial assets to have in
place local complaints and grievance
processes designed to be legitimate,
accessible, predictable, equitable,
transparent, rights compatible and in line
with the UNGPs’ effectiveness criteria. These
processes encourage people to raise
concerns in a manner that respects the
rights of the complainant. Where people
have complaints or grievances, we aim to
investigate and resolve them at the local
level. We require our industrial assets to
investigate and record all complaints.
1. LEAP: the Taskforce on Nature-related Financial Disclosures (TNFD) has developed an integrated assessment process for nature-related risk and opportunity management called LEAP: Locate your interface with
Nature; Evaluate your dependencies and impacts; Assess your risks and opportunities; and Prepare to respond to nature-related risks and opportunities and report.
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Additional Information
We do not allow any form of punishment,
discipline, or retaliatory action against
people for speaking up or cooperating with
an investigation.
we will maintain the elevated dialogue on
security and human rights through regional
learning forums to further embed consistency
of practice and cross-functional engagement.
This has included the identification and
protection of tangible and intangible cultural
heritage and customary use.
Security
Our business faces multifaceted security
challenges which are a function of
geopolitics, industrial asset locations and the
evolution of emerging threats. Globally,
there is an escalation in geopolitical
instability and threat, compounded by
disinformation. For our industrial assets,
maintaining security is essential to providing
a safe working environment and managing
our relationship with the community.
We are committed to working alongside our
host communities and strategic
stakeholders in a way that protects the
security of our workforce and the
communities that interact with our
industrial assets. We do this in a way that
respects human rights and aligns with
Glencore’s Values, our commitment to
operating responsibly and ethically, and the
Voluntary Principles.
Performance during 2023
We did not cause or contribute to incidents
resulting in severe human rights impacts.
During 2023, we implemented a series of
regional security workshops and learning
forums to promote our industrial assets’
alignment with our Security Standard and
the implementation Group-wide of the
Voluntary Principles. The workshops
reflected regional contexts to address local
security priorities, promote regional
cohesion across our industrial business, and
identify common risks and opportunities in
the security sector and human rights.
Cross-functional in approach, over 180
security, social and human rights leaders
attended the workshops. Moving forward,
Indigenous Peoples
Some of our industrial assets are located on or
near the traditional territories of Indigenous
Peoples. Our approach aligns with the ICMM
Position Statement on Indigenous People and
Mining, which requires mining projects
located on lands traditionally owned by or
under customary use of Indigenous Peoples to
respect Indigenous Peoples’ rights, interests,
special connections to lands and waters,
and perspectives.
We respect the rights, interests and
aspirations of Indigenous Peoples and
acknowledge their right to maintain their
culture, identity, traditions, and customs
and operate in accordance with the
ICMM Position Statement on Indigenous
Peoples and Mining.
ICMM Members must adopt and apply
engagement and consultation processes that
ensure the meaningful participation
of Indigenous communities in decision
making, through a process consistent with
their traditional decision-making processes.
We seek, through good faith negotiation,
to reach agreements with Indigenous Peoples
who maintain an interest in or connection
to the land on which we operate,
formalising engagement processes and
sustainable benefits.
Performance during 2023
In 2023, our industrial assets continued their
implementation of our Social Performance
and Cultural Heritage Standards relating
to engagement with, and support for,
Indigenous Peoples with a connection
to the lands on which we operate.
Social performance
Our activities can make a significant
contribution to the national, regional, and
local economies through the production
and marketing of commodities that help
provide the basic building blocks for
development. We provide employment and
training, business partner opportunities, tax
and royalty payments and other levies to
governments that help provide essential
services, socio-economic development and
environmental stewardship.
We aim to minimise adverse impacts
from our activities and to build
partnerships to support sustainable
development and growth.
Stakeholder engagement
Through meaningful stakeholder
engagement and integration of social
performance into our core business, we
support the advancement of the mutual
interests of our host communities, broader
society, and our industrial assets. With
activities ranging from exploration to mines
and mineral processing facilities to industrial
assets in closure, we are present in a hugely
diverse range of geographies and cultures
around the world. Some of our industrial
assets operate in challenging socio-political
contexts and we remain committed
to working with others to help find and
implement solutions to social issues and
to support the building of resilient and
peaceful communities.
We work hard to get to know our local
communities and identify the individuals,
groups, or organisations affected by or with
an interest in our business. We require our
industrial assets to implement a range of
engagement activities designed to be
relevant and appropriate for different
stakeholders, including vulnerable groups,
with access to local-level complaints and
grievance processes (see Human rights).
Social contribution
In addition to our employment, local
procurement and taxes, royalties, and other
levies, we seek to make a positive
contribution to the social and economic
development of our host communities
and society more broadly through our social
investment programmes.
Our strategic objective is to support
initiatives that build resilient communities
and regions by reducing dependency on our
operations. This is challenging when the
immediate, short-term needs in many of our
communities are high. Our aim is to focus
our efforts on developing programmes that
contribute to longer-term social objectives
through activities such as enterprise and job
creation, education, health and wellbeing
and capacity building.
We base our socio-economic development
activities on the resources, needs and plans
identified at a local or regional level, which
relevant data gathering and community
engagement informs.
Performance during 2023
During 2023, we initiated a review of our
approach and management of our social
contributions to incorporate the
requirements of ICMM’s Socio-Economic
Reporting Framework and in recognition of
the community development outcomes that
are derived from both discretionary and
non-discretionary contributions.
2023 Glencore Annual Report
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Additional Information
Sustainability continued
The outcome of this process is the Glencore
Social Contribution Framework, which will
be launched during 2024. The framework
articulates the goals, operating principles,
and governance of our industrial assets’
social contributions for enhanced business
performance and sustained development
outcomes for stakeholders. The review
included a revision of our technical
definitions of social contribution, including
moving away from ‘investment’ and towards
‘contribution’ to reflect the spirit of co-
development and partnership, and our goal
to be an enabler of socio-economic
opportunity everywhere we operate.
We will support the Social Contribution
Framework with a programme of local
capacity building to elevate skills, enhance
practice, and embed the framework at our
industrial assets. For further information on
the socio-economic benefits accrued via our
payments to governments of taxes, royalties
and other levies, see page 12 and our
forthcoming 2023 Payments to
Governments Report, which will be
published on our website.
Through the development of the framework,
we are strengthening our approach to
capture our direct social contribution
performance, which takes into account our
discretionary (that is, voluntarily undertaken
at Glencore’s discretion) and non-
discretionary (for example, linked to
operating permits) payments.
In 2023, we spent around $110 million on
social contribution programmes, including
discretionary and non-discretionary payments.
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In addition, our copper and cobalt industrial
assets in the Democratic Republic of the
Congo, Kamoto Copper Company SA, and
Mutanda Mining S.A.R.L., successfully passed
third-party responsible sourcing audits,
which supports both industrial assets to
meet customer expectations.
In 2023, we obtained limited assurance by a
third party expert on our level of
conformance in 2022 with the European
Union’s Conflict Minerals Regulation that
relates to the import of materials into
Europe. The assessment concluded that our
due diligence management system
complies, in all material aspects, both with
the EU’s Conflict Minerals Regulation and
with the OECD DDG.
In 2023, we rolled out a refreshed responsible
sourcing programme for our procurement of
goods and services at our industrial assets.
This includes risk-based supplier due
diligence prior to supplier engagement,
corrective action plans where we identified
deficiencies during the due diligence
process, supplier training of our
requirements and supplier audits. We
continue to implement this programme.
We separately developed and ran a pilot for
a due diligence approach for our shipping
activities and intend to progress this further
during 2024.
Further information is available on our
website: glencore.com/sustainability
Responsible sourcing and supply
Our responsible sourcing strategy considers
the production and sourcing of metals and
minerals and procurement of goods and
services. Our approach includes, in particular,
supply chain due diligence for our metals
and minerals supply chain. For our suppliers
of metals and minerals, we conduct due
diligence in accordance with the five-step
approach framework defined in Annex I of
the OECD DDG.
Our due diligence process identifies and
assesses risks, including those relating to
CAHRAs. We adopt a collaborative risk
management and mitigation approach to
the identified risks within our supply chain.
As part of our system of controls and
transparency for metals and minerals,
we have an internal platform that manages
due diligence-related information, supplier
assessment, collection, and retention.
Our responsible sourcing team engages
with internal stakeholders to increase
awareness of the responsible sourcing
of metals and minerals.
Performance overview 2023
In 2023, our refineries producing London
Metal Exchange (LME) and/or London
Bullion Market Association (LBMA) brands
successfully passed assessments, to meet
the LME’s and LBMA’s responsible sourcing
requirements. The following underwent LME
assessments: Murrin Murrin, Mount Isa
Mines’ Copper Refinery, Kazzinc, Nikkelverk,
CCR Refinery, Britannia Refined Metals,
Portovesme, Nordenham, PASAR, Lomas
Bayas, and CEZinc. In addition, Kazzinc, CCR
Refinery, and Britannia Refined Metals also
underwent LBMA assessments.
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Key elements of our Programme
a r d o v e r s i ght and governance
B o
Discipline and
incentives
Risk
assessments
Investigations
Speaking
openly and
raising concerns
Values
Safety
Integrity
Responsibility
Openness
Simplicity
Entrepreneurialism
Policies,
standards,
procedures
and guidelines
Training and
awareness
Monitoring
Advice
Identifying, assessing
and evaluating
compliance risks
and controls
Establishing
approaches and
requirements to
mitigate compliance
risks and reflect
ethical and legal
expectations and
requirements
Training and raising
awareness on ethics
and compliance risks
Together with other
functions, ensuring
an appropriate
system for discipline
and incentives
Coordinating objective
and consistent
internal investigations,
whilst maintaining
confidentiality and
protecting against
retaliation
Providing safe channels
to raise concerns
regarding potential
misconduct, including
via our Group Raising
Concerns Programme
Assessing the effectiveness of Programme
implementation and identifying
opportunities for improvement
Providing advice and guidance
to employees on ethics and
compliance matters
Ethics and compliance
We are committed to operating
responsibly and ethically
wherever we operate and
understand that we can only
remain a business partner
of choice by upholding
this commitment.
Our approach
We have taken significant steps to develop
and implement a comprehensive, best-in-
class Ethics and Compliance Programme
(Programme). This section contains an
overview of the key elements of our
Programme, and how we manage our main
compliance risks.
You can access more detailed information
about our Programme in our Ethics and
Compliance Report, which will be published
on our website and provide a summary of
our Programme, how we raise awareness of
it, monitor it, and seek to continuously
improve it, as part of our efforts to ensure it
is fully embedded into our business globally.
For further information, you can visit our
website: glencore.com/sustainability/
ethics-and-compliance
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71
Ethics and compliance continued
Our scope
Our employees, Directors and officers,
as well as contractors under Glencore’s
direct supervision, working for a Glencore
office or industrial asset directly or indirectly
controlled or operated by Glencore plc
worldwide, must comply with our Code of
Conduct (Code) and our Programme as well
as applicable laws and regulations,
regardless of location. Our Supplier Code of
Conduct sets out the expectations we have
for all our suppliers, including expectations
regarding ethical business practices. We also
seek to assert our influence over joint
ventures we do not control to encourage
them to act in a manner consistent with our
Values and Code.
Board and management
oversight and support
Our Board of Directors plays a critical role
in overseeing and assessing our culture
of ethics and compliance, and ensuring
policies, practices and behaviours are
consistent with our Values. Our Board has
established a separate Ethics, Compliance
and Culture (ECC) Committee, which is
responsible for overseeing our Programme
and approving key ethics, compliance and
culture-related matters within the Group.
The ECC Committee receives quarterly
updates on our Programme’s
implementation, including compliance risks
and how they are managed, and on
compliance resources. The Board separately
receives quarterly updates on whistleblowing
and investigation processes, and material
internal and external investigations.
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Corporate Governance
Financial Statements
Additional Information
Our Board oversight is supported
and augmented by oversight from
management-level committees, including
the Environmental, Social and Governance
Committee (the ESG Committee),
the Business Approval Committee (BAC)
and the Raising Concerns and Investigations
Committee (the RCIC).
The ESG Committee, comprises Glencore’s
CEO, CFO, Head of Industrial Assets, General
Counsel, Head of Compliance, Head of
Corporate Affairs, Head of Human Resources,
Head of HSEC&HR and Head of
Sustainability. It also includes senior
members of management representing
marketing and industrial assets across
different commodities. The ESG Committee
reviews and considers the various ESG
issues, programmes and projects
implemented across the Group. It also
reviews and approves Group Policies,
Standards, Procedures, systems and controls
relevant for the corporate functions.
The BAC, a sub-committee of the ESG,
comprises Glencore’s CEO, CFO, General
Counsel, Head of Corporate Affairs, Head of
Sustainability and, where applicable, heads
of departments and corporate functions. It
determines and sets guidance and criteria,
and reviews business relationships,
transactions and counterparties that may
give rise to ethical or reputational concerns.
The RCIC comprises Glencore’s CEO, CFO,
General Counsel, Head of Industrial Assets,
Head of Human Resources and Head
of Compliance. The RCIC oversees the
operation of our Raising Concerns
Programme and the conduct of
investigations and is tasked with ensuring
recommendations and sanctions are applied
consistently across the Group.
Group Compliance function
structure
Our Group Compliance team is comprised of
our full-time corporate and regional teams.
evaluate the specific compliance risks faced
by each of our businesses, identify and
assess the controls in place to mitigate those
risks, as well as identify further controls that
may be required.
The Corporate Compliance team is
responsible for designing, monitoring and
continuously improving our Programme.
The Corporate Compliance team also
provides guidance and advice to the
Regional Compliance teams and the
business on implementing and embedding
our Programme to support consistent
application across the organisation.
The Regional Compliance teams are
responsible for the implementation of the
Programme across regions and commodities.
They provide guidance to the business and
support our Local Compliance Officers and
the network of Compliance Coordinators.
Risk assessments
To ensure our Programme is appropriately
designed, tailored to our business and that
resources are adequately allocated, we
identify, record and evaluate compliance
risks faced by our marketing and industrial
segments.
We achieve this by performing an annual
Group Compliance risk assessment, which
reviews current compliance risks at Group
level in a number of risk areas, but focuses in
particular on anti-corruption and bribery,
given the nature of our business and the
geographies in which we operate.
We document these risks in the Group
Compliance Risk Register and this forms the
basis for the local risk assessments. Through
the local risk assessments, these risks are
then assessed at appropriate intervals within
each office and industrial asset across the
Group. These local risk assessments help us
Group and local risk assessments are also an
input into the drafting and updating of
Group policies, standards, procedures and
guidelines, the determination of our training
and awareness initiatives and Group
Compliance team resourcing needs, as well
as the identification of focus areas to be
included within the monitoring process.
Policies, Standards, Procedures and
Guidelines
Our Group policy framework encompasses
our Values, Code and a suite of Policies,
Standards, Procedures and Guidelines on
various compliance matters and risks, with a
strong emphasis on key risks such as
corruption, sanctions, money laundering and
market abuse.
This framework reflects our commitment to
uphold ethical business practices and to
meet, or exceed, applicable laws and
external requirements.
Employees can access these documents in
up to 11 languages, through various
channels. Our offices and industrial assets
are responsible for implementing Group
documents in their domains and developing
and implementing local procedures,
consistent with Group policies and
standards, but adapted for local risks
and requirements.
Explore these polices online at
glencore.com/who-we-are/policies
Ethics and compliance continued
Training, awareness and events
Training supports employees in building the
awareness, the knowledge, skills and
mindset needed to understand and behave
in line with our Values, policies and the law.
It is key to establishing a connection with
our employees and to motivating ethical and
compliant behaviour. We have a
comprehensive approach, which includes
the right planning, the right expertise and
the right delivery to the right audience at
the right time. While training is a critical
component of our Programme, regular
awareness-raising and communication are
equally important. We therefore supplement
our compliance training with various
awareness initiatives, communications,
activities and events throughout the year.
Advice
Our compliance officers are professionals
with compliance, legal and audit
backgrounds and with expertise in our key
areas of compliance risk, including bribery
and corruption and market abuse. Due to
the fast-paced nature of our business, they
are required to respond quickly and
effectively to inquiries coming in from the
business. They guide the business on changes
in laws and regulations, our policies, standards,
procedures and guidelines, and how to make
appropriate decisions whilst encouraging
them to think critically about issues.
The fact that employees are increasingly
reaching out to pose questions and raise
doubts demonstrates that our advisory,
training and awareness efforts are paying off,
and that ethics and compliance are
considered as key elements in how we
conduct our business. In our advisory role,
we increasingly see the business self-
identifying compliance red flags and
bringing them to our attention.
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Corporate Governance
Financial Statements
Additional Information
Monitoring
We continuously monitor and test the
implementation of our Programme, via site
reviews and desktop reviews (including data
analytics projects) to determine its
effectiveness and to assess whether it is
operationalised and embedded into our
business operations. Monitoring activities
also enable us to identify opportunities for
improvement that help develop and evolve
our Programme and respond to changes in
our business, the environments we operate
in, and applicable laws and regulations.
Speaking openly and raising
concerns
We are committed to creating a culture
where everyone feels free to raise concerns
in a secure and confidential way. We take
confidentiality seriously, and do not tolerate
retaliation against anyone who speaks
openly about conduct they believe is
unethical, illegal, or not in line with our Code
and policies, even if the concern is not
substantiated.
We have a comprehensive suite of
documents which establish a framework for
managing concerns, including our
Whistleblowing Policy. This policy encourages
employees to report concerns, and explains
the process for reporting, escalating,
investigating and remedying concerns.
Concerns can be raised locally, or reported
via our Raising Concerns Programme, our
corporate whistleblowing programme
managed in Switzerland. It allows
whistleblowers to raise concerns
anonymously in any of 15 languages.
Discipline and incentives
We expect all employees to act in
accordance with our Values, Code, and
Policies, regardless of role and location.
Anybody working for Glencore who breaches
our Code, Policies or the law, may face
disciplinary action, including dismissal.
Group Human Resources is responsible for
managing the various discipline and
incentive mechanisms and standards. It has
implemented a standardised formal
behavioural review for the most senior
managers worldwide (c. 500 managers)
which has the ability to impact their
performance bonuses. The review focuses on
two main elements:
• the extent to which the individual has
applied our Values, Code of Conduct and
Policies in his or her work, including any
disciplinary action taken against the
individual, and
• an assessment of the individual’s
leadership behaviour, including his or her
behaviour towards others.
Specific elements of the review call out the
importance of leaders creating an
environment where others are encouraged
to report issues, actively escalating issues of
concern themselves and showing
commitment to integrity and the
Programme through team hiring and
promotion decisions.
Key topics
Anti-corruption and bribery
Our Anti-Corruption and Bribery Policy is
clear: the offering, providing, authorising,
requesting or accepting of bribes is
unacceptable, and we do not engage in
corruption or bribery, including making
facilitation payments. We assess corruption
risks within our businesses and work to
address these risks through Policies,
Standards, Procedures and Guidelines on
various topics. These cover our approach to:
• Political contributions
• Political engagement
• Sponsorships, charitable contributions and
community investments
• Gifts and entertainment
• Use of petty cash
• Interactions with public officials
Sanctions and trade controls
Our Sanctions Policy sets out our
commitment to complying with all
applicable sanctions and restrictive
measures, and we generally adhere to
United States, European Union, United
Nations and Swiss sanctions throughout our
business, whether we are legally required to
do so or not. We do not participate in
transactions designed or intended to evade
or facilitate a breach of applicable sanctions
or restrictive measures, and we do not
conduct business in, or involving any,
embargoed territory or sanctions targets.
We do not conduct business that would
violate any applicable restrictive measures
like export controls, trade embargoes or anti-
boycott laws, and we do not engage in any
sanctionable activity that could result in the
designation of Glencore as a sanctions
target. We also do not conduct business
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Ethics and compliance continued
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Corporate Governance
Financial Statements
Additional Information
with sectorally sanctioned entities, which is
prohibited by sanctions. We only allow
deviations from these general requirements
in exceptional circumstances with prior
approval from Compliance and Group
management and, under all circumstances,
these must be compliant with
applicable laws.
To manage our sanctions risk exposure and
support our efforts to ensure compliance, we
implement controls and processes. These
include screening and conducting due
diligence on our counterparties and vessels
using a risk-based approach to determine
whether they are a sanctions target, subject
to sectoral sanctions or otherwise attract
sanctions risk.
As announced in March 2022, we will not
enter into any new trading business in
respect of Russian origin commodities
unless directed by the relevant government
authorities. We will continue to honour our
legal obligations under pre-existing
contracts, subject to meeting all applicable
sanctions in accordance with our Sanctions
Policy and where it is feasible and safe to
perform these contracts.
Anti-money laundering and
anti-tax evasion
Our Anti-Money Laundering Policy sets out
our approach to ensuring that we comply
with all applicable laws and regulations to
prevent money laundering and the
facilitation of tax evasion, and appropriately
manage the related risks. We do not tolerate
tax evasion of any kind and we do not
knowingly or wilfully facilitate tax evasion.
We implement a number of controls and
processes to manage these risks.
Market conduct
Our Market Conduct Policy sets out our
approach to how we comply with market
conduct rules specifically relating to market
manipulation, insider dealing and unlawful
disclosure of inside information. We are
committed to complying with all applicable
laws, regulations and rules applying to
Glencore’s activities and behaviour in the
physical and commodity derivative or
related financial markets.
To manage the risks of market abuse and
insider dealing we have implemented a
series of Procedures and Guidelines. We
provide training on a range of topics
including market abuse, benchmark
manipulation, inside and confidential
information, exchange rules and regulations
applicable to specific jurisdictions. We have
also made significant investment in trade
and communications surveillance including
building a dedicated surveillance team
along with progressively implementing
trade and electronic communications
surveillance controls.
Our business partners
We work with a range of business partners
and expect them to share our commitment
to ethical business practices and conduct.
Business partners include our suppliers,
customers, joint ventures (JVs), JV partners,
service providers and other counterparties.
We have a comprehensive framework for
managing the key risks associated with our
business partners. Through this framework,
we seek to comply with applicable laws
(including anti-corruption and bribery,
sanctions, anti-money laundering and
anti-tax evasion) and manage the reputational
risks that can arise from engaging with
certain types of business partners.
Adherence to our Programme is required for
all JVs that we control or operate. For JVs we
do not control or operate, we seek to
influence our JV partners to adopt our
commitment to responsible business
practices and implement appropriate
compliance programmes.
In respect of mergers, acquisitions and
disposals, we conduct thorough pre-
transaction due diligence. We incorporate
acquired or merged entities which we
control or operate into our Programme.
When we dispose of our interest in JVs,
business undertakings or operations, we
conduct due diligence on the purchaser.
Resolutions and ongoing
investigations
Glencore has been subject to a number of
investigations over the last few years.
Glencore has taken all of these investigations
very seriously and our response to the
investigations has been overseen by our
Investigations Committee, comprised of
Non-Executive Directors, led by our
Chairman. We have sought to cooperate
extensively with the various authorities
investigating Glencore in order to resolve
these investigations as expeditiously as
possible, while also seeking to learn from
these investigations in order to support the
continuous improvement of our Programme.
In 2022, Glencore announced a number of
resolutions of certain long-standing
investigations by authorities in the United
States, the United Kingdom and Brazil into
past practices at certain Group businesses.
Separately, in December 2022, Glencore
reached an agreement with the Democratic
Republic of Congo (DRC) relating to
past conduct.
Glencore continues to cooperate with a
previously disclosed and ongoing
investigation by the Office of the Attorney
General of Switzerland (OAG) into Glencore
International AG for failure to have the
organisational measures in place to prevent
alleged corruption, and an investigation of
similar scope by the Dutch Public
Prosecution Service. The timing and
outcome of these investigations
remain uncertain.
Monitorships
Under the terms of our resolutions with the
United States Department of Justice (DOJ),
independent compliance monitors were
appointed to assess and monitor the
Company’s compliance with the resolutions
and evaluate the effectiveness of our
Programme and internal controls. The DOJ
acknowledged the enhancements we have
made to our Programme, but required the
appointment of the monitors because the
enhancements to the Programme are new
and have not been fully implemented
or tested.
The monitors were appointed in June 2023
and have recently completed their first
review period. During this review period,
they undertook various activities including
extensive document review and multiple site
visits, which involve interviews, transaction
testing, and other analysis.
For further information, please see the
public announcements on our website:
glencore.com/investigations
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2023 Glencore Annual Report
Our people
Strategic Report
Corporate Governance
Financial Statements
Additional Information
We have over 150,000 employees
and contractors, who collectively
work to deliver our strategy and
support our Values of safety,
integrity, responsibility,
openness, simplicity and
entrepreneurialism. During 2023,
we continued our efforts to
embed the Group Human
Resources Policies and
Standards with an emphasis on
promoting diversity and
inclusion to further enhance our
high-performance business.
Our approach
Through our Group Human Resources
Policies and Standards we strive to create and
maintain a workplace characterised by
equality of opportunity, freedom of
association, high performance and integrity.
These Policies and Standards support our
commitment to being a responsible and
ethical operator and assist us in delivering our
strategic priorities. Governance of our Group
Human Resources Policies and Standards
rests with the Board’s ECC Committee.
Responsibility for delivery and
implementation rests with our senior
management, including the CEO and heads
of corporate functions and commodity
departments. Each commodity department
has appropriately resourced Human
Resources teams in assets and in some cases
regions, charged with the day-to-day delivery
of Human Resources services in line with the
Group Human Resources Policies and
Standards. We have also continued to
develop and implement our Group Standards
and assure against them in an effort to
mitigate the inherent risks in our business.
We are also continuing to invest in building
our people’s skills through training and
leadership programmes, designed to
improve personal development and
performance within our organisation.
Investing in our people
During 2023, we developed a global
e-Learning platform in order to enhance our
approach to employee development,
aligning with our goal to foster a skilled and
agile workforce. ‘Advance’ is our e-Learning
platform which is currently being
implemented globally with users across
more than 100 sites and 30 countries already
using the system. The platform’s
comprehensive range of courses, from
technical skills to soft skills enhancement,
seeks to ensure that our employees are
equipped with the latest skills and
knowledge. Learning paths, already
developed in some of our businesses and in
progress in others, cater to specific role or
individual learning requirements, enhancing
the effectiveness of the training. This
investment demonstrates our dedication to
a culture of continuous learning and
development, crucial in adapting to the
rapidly evolving business landscape. The
global reach of the platform aims to
promote inclusivity and diversity and should
enable us to develop a more skilled,
adaptable, and future-ready workforce.
Our zinc and copper industrial departments
offer further examples of our investments in
leadership and development.
• Our zinc industrial department continued
the rollout of its customised leadership
programme which aims to equip its
leaders with strong skills to run modern
mining and smelting operations. Over 50
leaders have now participated in the
programme and approximately two-thirds
emotional intelligence in a high-risk work
environment; effective communication for
leaders; and recruitment strategies for
senior leaders. In addition, the participants
examined a range of business challenges
such as decarbonisation strategies,
management of change, and effective
communication strategies with local
communities. In parallel, condensed
training sessions were completed in Africa
for over 90 supervisors, superintendents
and managers. Trainers were also trained in
order to equip them with the knowledge
and facilitation skills to run these
programmes throughout 2024.
of the zinc industrial assets are now led by
an attendee of the programme. In 2023,
senior managers from the zinc and copper
marketing departments attended the
leadership programme, enabling both the
marketing and industrial asset sides of our
business to develop a greater
understanding of the entire value chain.
• Our copper industrial department
completed a review of its approach to
leadership development in 2022 which
identified the critical development areas
that could have the greatest positive
impact on the performance of the copper
industrial assets. During late 2022 and 2023,
more than 400 business leaders
contributed to the design of a new
Leadership Development Framework. In
2023, five pilot workshops were also
completed where programme content was
tested. Modules in these workshops
included: cultural awareness and mapping;
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75
Our people continued
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Corporate Governance
Financial Statements
Additional Information
Inclusion
How we all behave
The behaviours we consistently
and intentionally demonstrate
to create a collaborative culture
that values our differences,
encourages our people to be
themselves and enables them to
participate and contribute to their
full potential.
Diversity
Who we all are
The collection of unique visible and
invisible characteristics that make
each of us different including, but
not limited to, sexual orientation,
education, age, ethnicity, cultural
background, family status,
experience and beliefs.
Equity
How we all succeed
The actions necessary to ensure fair
treatment and access to opportunities,
resources, programmes and practices
for all, especially those who are
under-represented or have been
historically disadvantaged, such that
they can participate fully, regardless of
their identity.
Advancement
How we all grow
The removal of barriers that might
prevent any person or group of
people from developing to their full
potential. Different steps may be
required to facilitate growth
opportunities for under-
represented groups.
Local
Where it all happens
There is no ‘one size fits all’.
Building a more inclusive work
environment and removing
barriers requires that we set some
global priorities and a framework
that is customised locally and
implemented according to the
local context.
Creating an inclusive, diverse
and equitable organisation
We launched our IDEAL approach to
building a more diverse and equitable
organisation during 2021. During 2023, we
developed a maturity progression
assessment tool, to assist our businesses in
conducting self-assessments based on their
current and planned activities. Maturity is
assessed based on data points which include
action plans being implemented and the
gender balance compared to the industry
average of mining industry companies in the
countries where we conduct the assessment.
Our mapping comprises three levels and
helps the businesses to identify and prioritise
actions that can have the most meaningful
impact on their business given the current
levels of diversity.
Maturity mapping classification
levels
Maturity level
Key Focus Areas
Foundational
Transitional
Raising awareness and
engagement, setting up action
plans and governance across
offices and assets.
Continuing our efforts to
optimise Human Resources
Policies and processes and
achieving at least the industry
average and benchmark levels
in terms of gender balances.
Transformational Taking IDEAL to the next level,
addressing topics beyond
gender and working with
external certification bodies to
benchmark our activities.
Our ambition is to progress those industrial
assets and offices that are categorised as
being at the Foundational level to at least
the Transitional level by H1 2025, and for all
businesses to demonstrate progress towards
reaching the Transformational level by the
end of 2027. Globally, we have conducted
bias and inclusive leadership training for
senior leaders to engage them as advocates
for IDEAL. To date, we have trained more
than 1,000 managers across the different
businesses. Globally, we have increased the
percentage of female employees to 18% for
2023, slightly above the estimated global
industry average. This was supported by a
14% increase of female hires compared to
2022, mainly in our copper, coal and
ferroalloys industrial assets and marketing
departments.
A focus on wellbeing,
anti-harassment and discipline
Our Group Anti-Harassment Standard sets
out the mandatory minimum requirements
that must be observed as part of our efforts
to protect our people from any form of
violence, discrimination and harassment,
including sexual harassment, all of which,
are clearly defined in the Standard. Many
industrial assets continue to develop
processes and programmes aimed at further
embedding this Standard.
Amongst other requirements, all industrial
assets and offices are required to have a
documented leadership statement
committing to a safe and inclusive workplace,
a locally available employee assistance
programme in place to support employees’
emotional and psychological wellbeing and
to ensure that the periodic health risk
assessments, as outlined in the Group’s
Health Standard, include factors that increase
the likelihood of violence and harassment. To
date, these factors have been included in the
health risk assessments for our ferroalloys
industrial assets, Coal Australia industrial
assets and our nickel industrial asset in
Sudbury, Ontario. All industrial assets plan to
have these factors included by year-end 2024.
To further commit to and support the
management and prevention of harmful
behaviours, we launched the Glencore Global
Triage Service, a confidential triage based
psychological support service managed at
the Group Human Resources level. This
service, currently operating in a trial mode, is
in addition to the locally based employee
assistance programmes and can be utilised
by Human Resources personnel seeking a
more direct interventionist approach to
mental health in certain circumstances.
The Group Employment Standard sets clear
expectations around the steps we expect our
businesses to take to address risk areas
including, but not limited to: pay inequality,
discrimination and conflicts of interest in
recruitment processes. Whilst the Group
Employment Standard was rolled out in
September 2021, we continue to internally
assure against the Standard, monitoring
76
2023 Glencore Annual Report
Our people continued
progress across our global operations. The year
concluded on a positive note with an
estimated 98% compliance rate against our
Standard in Q4 2023 based on internal
process audits across all industrial assets and
key marketing offices including London, NY,
Singapore, Beijing and Baar.
During 2023, we continued to embed our
revised Group Discipline Standard through
various training programmes aimed at
ensuring consistency of disciplinary outcomes
globally. The standard now requires that all
industrial assets and offices consult with Group
Human Resources on the proposed disciplinary
sanction prior to the imposition of discipline
for serious breaches of our Code of Conduct.
Workforce composition and
development
The majority of our employees work at mine
and smelter sites and are employed through
full-time employment contracts, with
contractors representing approximately 46%
of our global workforce in 2023. Around 73%
of our workforce is unionised.
Employee turnover in continuing operations
was approximately 8% in 2023, with
statistically insignificant differences between
the retention rates for men and women. The
pandemic placed significant operational
pressures on many of our businesses and
employee turnover increased during that
period. Over the course of 2023, we saw the
effect of the organisational responses to that
increase and employee turnover in many
markets returned to pre-pandemic levels.
In 2023, we had no strikes across our
operations lasting longer than a week.
Living wage
Paying a living wage to our employees is a
cornerstone of our efforts to promote fair
employee compensation. During 2023,
Strategic Report
Corporate Governance
Financial Statements
Additional Information
we completed a comprehensive review in five
countries (Australia, Democratic Republic of
the Congo, Colombia, Kazakhstan and South
Africa), covering nearly 75% of our global
employees. Local data was provided by the
Business for Social Responsibility (BSR) and
highlighted that employees in these
countries are generally paid well above the
local living wage. Building on this success, our
goal is now to extend this review to all
countries in which we operate, as part of our
efforts to provide employees worldwide with
compensation above the local living wage.
2023 diversity metrics
Diversity of employees globally
Male
Female
82%
18%
Gender balance of employees
Male: 68,248 Female: 15,178
25,000
20,000
15,000
10,000
5,000
0
3,593
18,088
5,506
17,497
2,321
10,860
1,701
12,826
940
3,937
1,117
5,040
Africa
Asia
Australia
Europe
North America
South America
Number of female employees
Number of male employees
Glencore tracks and reports on progress on
senior management diversity by following
the FTSE Women Leaders Review and
Parker Review methodology.
Review
submitted
FTSE Women
Leaders Review
Parker Review
% of
women
32%
–
% of ethnic
minority
–
13%*
* Based on self-identification survey conducted
with senior leaders. For purposes of this survey,
71 senior leaders were identified for 2023, which
we define as senior employees that operate
across departments and commodities, and
departmental leadership, whose focus is on a
particular commodity or set of commodities
Employment type
Employees: 83,426 Contractors: 72,282
50,000
26,301
40,000
30,000
20,000
10,000
0
12,612
21,681
23,003
23,884
14,527
5,546
13,181
1,577
4,877
2,362
6,157
Africa
Asia
Australia
Europe
North America
South America
Number of contractors
Number of employees
2023 Glencore Annual Report
77
Financial and operational review
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Financial results
Following 2022, a year characterised by
extreme global macroeconomic and
geopolitical events resulting in extraordinary
energy market dislocation, volatility, risk,
supply disruptions and record prices for
various coal and gas benchmarks, 2023 has,
for the most part, seen international energy
trade flows rebalance and normalise, with
coal and LNG, and to a lesser extent, oil
prices materially declining. In this context,
income for the year attributable to equity
holders decreased from $17,320 million in
2022 to $4,280 million in 2023, after
recognising various significant items
(particularly impairments in our metals
industrial assets where cost inflation, higher
discount rates and lower cobalt hydroxide
price assumptions had the largest impact) as
discussed below. EPS decreased from $1.33
per share to $0.34 per share.
Further to such a vastly different energy
environment, the presence of inflation,
tighter monetary conditions and limited
growth in many large economies,
contributed to average period-over-period
metal price reductions in copper, cobalt,
nickel and zinc of 4%, 50%, 16% and 24%
respectively. Overall, largely reflecting the
lower commodity prices and market
volatility, Adjusted EBITDA was
$17,102 million and Adjusted EBIT was
$10,392 million in 2023, compared to
$34,060 million and $26,657 million in 2022.
The 2023 Adjusted EBIT contribution from
the Marketing segment was $3,450 million, a
decrease of 46% from the record 2022
period, reflecting the return to a more stable
market environment, following the extreme
market volatility levels, dislocations and
complexities exhibited during 2022.
78
2023 Glencore Annual Report
The Adjusted EBITDA contribution from the
Industrial segment was $13,202 million, a
decrease of 52% year-over-year, largely due
to lower coal prices, where average Newc
and API4 index prices were down 52% and
55% respectively, compared to 2022. Cobalt
metal pricing and low payabilities for cobalt
hydroxides weighed heavily on our African
Copper operations, while own source
production was lower at INO and Murrin
Murrin (nickel), due, respectively, to a
lengthy prior year strike and a scheduled
maintenance shut-down. Adjusted EBITDA
mining margins were 23% in our metal
operations and 49% in our energy
operations, compared to 36% and 66%
respectively in 2022. See pages 94 and 95.
Market conditions
Selected average commodity prices
S&P GSCI Industrial Metals Index
S&P GSCI Energy Index
LME (cash) copper price ($/t)
LME (cash) zinc price ($/t)
LME (cash) lead price ($/t)
LME (cash) nickel price ($/t)
Gold price ($/oz)
Silver price ($/oz)
Fastmarkets cobalt standard grade,
Rotterdam ($/lb) (low-end)
Ferro-chrome 50% Cr import, CIF main
Chinese ports, contained Cr (¢/lb)
Iron ore (Platts 62% CFR North China)
price ($/DMT)
Coal API4 ($/t)
Coal Newcastle (6,000) ($/t)
Coal HCC ($/t)
Dutch TTF Natural Gas 1-Month
Forward ($/MWh)
Oil price – Brent ($/bbl)
Currency table
AUD : USD
USD : CAD
EUR : USD
GBP : USD
USD : CHF
USD : KZT
USD : ZAR
Spot
31 Dec
2023
423
245
8,464
2,640
2,035
16,375
2,063
24
Spot
31 Dec
2022
451
288
8,365
3,003
2,337
29,886
1,824
24
Average
2023
Average
2022
427
266
480
334
8,485
2,650
2,137
21,487
1,943
23
8,805
3,475
2,147
25,623
1,802
22
13
96
130
98
149
326
35
77
19
100
112
185
399
263
79
86
15
102
114
121
173
296
44
82
30
106
113
271
360
363
138
99
Change in
average
%
(11)
(20)
(4)
(24)
–
(16)
8
5
(50)
(4)
1
(55)
(52)
(18)
(68)
(17)
Spot
31 Dec
2023
0.68
1.32
1.10
1.27
0.84
456
18.36
Spot
31 Dec
2022
0.68
1.36
1.08
1.20
0.92
463
17.04
Average
2023
Average
2022
0.66
1.35
1.08
1.24
0.90
457
18.46
0.69
1.30
1.05
1.23
0.95
461
16.37
Change in
average
%
(4)
4
3
1
(5)
(1)
13
Financial and operational review continued
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Industrial activities
Industrial Adjusted EBITDA decreased by
52% to $13,202 million (Adjusted EBIT was
$6,942 million, compared to $20,275 million
in 2022), mainly driven by a $9.9 billion lower
contribution from our Coal operations,
owing to the substantial average year-over-
year decreases in key pricing benchmarks, as
well as markedly lower cobalt hydroxide
realisations, and nickel and zinc prices.
Adjusted EBITDA/EBIT◊
Adjusted EBITDA by business segment is as follows:
US$ million
Metals and
minerals
Energy products
Corporate and
other1
Total
2023
2022
Marketing
activities
Industrial
activities
Adjusted
EBITDA
Marketing
activities
Industrial
activities
Adjusted
EBITDA
Change
%
1,774
2,098
28
3,900
5,445
8,452
7,219
10,550
1,694
5,558
9,274
18,590
10,968
24,148
(695)
13,202
(667)
17,102
(457)
6,795
(599)
27,265
(1,056)
34,060
(34)
(56)
(37)
(50)
Adjusted EBIT by business segment is as follows:
US$ million
Metals and
minerals
Energy products
Corporate and
other1
Total
2023
2022
Marketing
activities
Industrial
activities
Adjusted
EBIT
Marketing
activities
Industrial
activities
Adjusted
EBIT
Change
%
1,714
1,708
28
3,450
1,551
6,132
3,265
7,840
1,640
5,199
5,082
15,850
6,722
21,049
(741)
6,942
(713)
10,392
(457)
6,382
(657)
20,275
(1,114)
26,657
(51)
(63)
(36)
(61)
1. Corporate and other Marketing activities includes $321 million (2022: $494 million) of Glencore’s equity
accounted share of Viterra.
Marketing activities
Marketing delivered strong results, in a
return to a more normal backdrop, following
the elevated levels of market volatility,
disruption and rapidly changing global
commodity flows which characterised much
of 2022 as noted above. Such rebalancing
and calming of markets can be seen in our
lower reported VaR levels, discussed below.
Marketing Adjusted EBITDA and EBIT
decreased, respectively, over prior year, by
43% to $3,900 million and by 46% to
$3,450 million, driven by our oil and gas
department’s exceptionally high base period.
Metals and minerals Adjusted EBIT was up
5% over 2022, reflecting broadly consistent
physical marketing conditions for many of
our most important commodities. However,
various battery industry metals, notably
cobalt, nickel and lithium, experienced a
challenging market backdrop, characterised
by extensive raw material production
growth, resulting oversupply, and significant
price declines during the period.
Viterra EBITDA was $2.1 billion (2022:
$2.0 billion). Our 50% share of earnings
(captured within Corporate and Other) was
$321 million (post-interest and tax) compared
to $494 million in the prior year. In June
2023, Glencore agreed to dispose of its
interest in Viterra in a cash-and-shares
transaction with Bunge (see note 16).
2023 Glencore Annual Report
79
Financial and operational review continued
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Significant items
Significant items are items of income and
expense, which, due to their nature and
variable financial impact or the expected
infrequency of the events giving rise to
them, are separated for internal reporting,
and analysis of Glencore’s results, to aid in
providing an understanding and comparative
basis of the underlying financial performance.
In 2023, Glencore recognised a net expense,
after tax and non-controlling interests, of
$2,418 million (2022: $1,562 million) in
significant items comprised of:
• Expenses of $90 million (2022: $9 million)
relating to Glencore’s share of significant
expenses recognised directly by our
associates.
• Viterra share in earnings of $186 million,
relating to the period following the held
for sale accounting classification as at
30 June 2023 (no statutory earnings have
since been recognised), as Glencore, for
segmental and internal reporting and
analysis purposes, continues to report its
equity accounted share of Viterra earnings.
See notes 2 and 16.
• Movement in unrealised inter-segment
profit elimination of $258 million (2022:
$1,176 million). See note 2.
• Gain on acquisitions and disposals of
non-current assets of $850 million (2022:
$1,287 million), primarily related to the
disposal of Cobar ($585 million) in June
2023 and from the acquisition of the
remaining 56.25% in MARA project
($224 million). The 2022 gain resulted from
the acquisition of the remaining 66.67%
interest in Cerrejón ($1,029 million) and the
disposal of Ernest Henry ($512 million). See
note 4.
80
2023 Glencore Annual Report
• Other expense – net of $1,091 million
(2022: $911 million) see note 5. Balance
primarily comprises:
Earnings
A summary of the differences between reported Adjusted EBIT and income attributable to
equity holders, including significant items, is set out in the following table:
– $46 million (2022: net loss of
$349 million) of net foreign exchange
gains, whereby 2022 primarily relates to
realised foreign currency losses, recycled
from other comprehensive income,
recognised in respect of an intragroup
restructuring.
– $103 million (2022: $106 million) of
mark-to-market gains on equity
investments / derivative positions
accounted for as held for trading,
including the commodity price-linked
deferred consideration related to the
sale of Mototolo in 2018, the ARM Coal
non-discretionary dividend obligation
and long-term fixed price forward
physical energy contracts related to
certain European smelters.
– $168 million (2022: $302 million) relating
to various legal matters and related
costs (legal, expert, compliance),
including in respect of the government
investigations and monitorships (see
notes 23 and 31).
– $503 million (2022: $370 million) of
closed site rehabilitation provisioning,
being the movements in restoration,
rehabilitation and decommissioning
estimates relating to sites that are no
longer operational.
US$ million
Adjusted EBIT ◊
Net finance and income tax expense in relevant material associates
and joint ventures1
Proportionate adjustment Volcan1
Net finance costs
Income tax expense2
Non-controlling interests
Income attributable to equity holders of
the Parent pre-significant items ◊
Earnings per share (Basic) pre-significant items (US$)3 ◊
Significant items ◊
Share of Associates’ significant items4
Viterra share in earnings post held for sale classification
Movement in unrealised inter-segment profit elimination5
Gain on acquisitions and disposals of non-current assets6
Other expense – net7
Impairments8
Income tax expense2
Non-controlling interests’ share of significant items9
Total significant items
Income attributable to equity holders of the Parent
Earnings per share (Basic) (US$)3
2023
10,392
2022
26,657
(554)
222
(1,900)
(2,170)
708
(710)
62
(1,336)
(6,169)
378
6,698
0.53
18,882
1.45
(90)
(186)
258
850
(1,091)
(2,484)
(37)
362
(2,418)
4,280
0.34
(9)
–
1,176
1,287
(911)
(3,337)
(199)
431
(1,562)
17,320
1.33
1. Refer to note 2 of the financial statements and to APMs section for reconciliations.
2. Refer to other reconciliations section for the allocation of the total income tax expense between
pre-significant and significant items.
3. Based on weighted average number of shares, refer to note 18 of the financial statements.
4. Recognised within share of income from associates and joint ventures, see note 2 of the financial
statements.
5. Recognised within cost of goods sold, see note 2 of the financial statements.
6. Refer to note 4 of the financial statements and to APMs section for reconciliations.
7. Recognised within other income/(expense) – net, see note 5 of the financial statements and to APMs
section for reconciliations.
8. Refer to notes 7 and 11 of the financial statements and to APMs section for reconciliations.
9. Recognised within non-controlling interests, refer to APMs section.
Financial and operational review continued
Strategic Report
Corporate Governance
Financial Statements
Additional Information
• Impairments of $2,484 million (2022:
$3,337 million), see note 7. The
corresponding net impact, after income
taxes and non-controlling interests was
$1,672 million (2022: $2,341 million). The
2023 charge is net of a reversal of
$138 million at our Astron oil refinery,
owing to an improved refining margin
outlook, with the post-tax impairment
charges relating primarily to:
– our Mutanda operation ($762 million),
due to lower cobalt hydroxide price
assumptions and mine planning
changes;
– our zinc/lead operations at McArthur
River ($118 million) and Kazahkstan
($196 million), due mainly to significant
changes to key macro-estimates,
including higher discount rates
associated with the higher long-term
interest rate environment;
– the Nordenham zinc/lead smelting plant
($191 million), due to updated
assumptions projecting an extended
challenging margin environment; and
– the Mopani advance ($156 million),
reflecting the latest restructuring
discussions.
– The 2022 charge on a post-tax basis
primarily related to Mt. Isa Copper
($460 million), Mt. Isa Zinc ($318 million),
Zhairem ($148 million) and Koniambo
($227 million), due to significant changes
to key macro estimates, heavily
influenced by the Russia/Ukraine war,
and operational challenges in certain
areas, the Mopani advance ($422 million)
and outstanding VAT claims in the DRC
of $632 million.
• Income tax expense of $37 million (2022:
$199 million) – see income taxes below.
Net finance costs
Net finance costs were $1,900 million during
2023, a 42% increase compared to
$1,336 million in the comparable reporting
period. Interest expense for 2023 was
$2,515 million, up 42% over 2022, due to
higher average floating base rates (mainly
SOFR). Interest income was $615 million
compared to $435 million in the prior year,
also due to the higher average floating base
rates. See note 6.
Income taxes
An income tax expense of $2,207 million was
recognised during 2023, compared to an
expense of $6,368 million in 2022. Adjusting
for $37 million of income tax expenses (2022:
$199 million) relating to significant items
(primarily on account of impairments,
foreign exchange fluctuations and tax losses
not recognised), the 2023 pre-significant
items tax expense was $2,170 million (2022:
$6,169 million). The calculated effective tax
rate, pre-significant items, was 33.6%,
compared to 28.1% in 2022.
Statement of financial
position
Current and non-current assets
Total assets were $123,869 million as at
31 December 2023, compared to
$132,583 million as at 31 December 2022.
Current assets decreased from
$69,223 million to $64,042 million, due
primarily to a decrease in receivables,
including margin calls paid in respect of the
Group’s hedging activities, and inventories
on account of lower commodity prices at
year end relative to the prior year. Non-
current assets decreased from
$63,360 million to $59,827 million, primarily
due to $1,710 million of impairments to
property, plant and equipment and
$2,990 million of asset values reclassified to
held for sale (see below and notes 10 and 16).
Current and non-current
liabilities
Total liabilities were $85,632 million as at
31 December 2023, compared to
$87,364 million as at 31 December 2022.
Current liabilities decreased from
$53,420 million to $49,478 million, primarily
due to a decrease in income tax payable of
$2,824 million, following the settlement of
2022 income tax accruals, notably in
Australia and Colombia. Current borrowings
increased by $1,040 million (see note 21).
Non-current liabilities increased from
$33,944 million to $36,154 million, primarily
due to an increase of non-current
borrowings (see note 21).
Movements relating to current and non-
current borrowings are set out below in the
net funding and net debt movement
reconciliation and in note 21.
Equity
Total equity was $38,237 million as at
31 December 2023, compared to
$45,219 million as at 31 December 2022, the
movements being primarily the income for
the year of $3,210 million, including non-
controlling interests and a decrease in other
comprehensive income noted below, offset
by shareholder distributions and buybacks
($10,122 million) concluded during the year.
Other comprehensive income/
(loss)
A loss of $262 million was recognised during
2023, compared to a loss of $788 million in
2022, primarily relating to net mark-to-
market losses of $94 million (2022:
$1,124 million) with respect to various
minority investments (see note 11), net
defined benefit plan remeasurements of
$33 million (2022: gain of $231 million) and
exchange losses on translation of foreign
operations of $190 million (2022:
$307 million), being primarily our South
African ZAR-denominated subsidiaries, offset
by foreign exchange losses recycled to the
statement of income of $3 million (2022:
$481 million).
2023 Glencore Annual Report
81
Financial and operational review continued
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Cash flow and net funding/debt
The reconciliation in the table above is the
method by which management reviews
movements in net funding and net debt and
comprises key movements in cash and any
significant non-cash items.
Net funding as at 31 December 2023
increased by $3.6 billion to $31.1 billion and
net debt (net funding less readily marketable
inventories) increased by $4.8 billion to
$4.9 billion. Funds from operations were
$9.5 billion, significantly impacted in the
current year, having absorbed the lag effect
of settlement in H1 2023 of $2.7 billion of
2022 final income tax payments, in Australia
and Colombia, due to high coal-
concentrated industrial earnings in 2022.
Readily marketable inventories (RMI)
reduced by $1.3 billion, while $2.8 billion of
net non-RMI working capital inflows were
realised during the period, mainly on
account of a reduction in net margin calls
and lower net physical forward commodity
contract valuations, primarily due to lower
energy prices (oil, gas, coal). Noting these
various inflows, after funding $5.6 billion of
net capital expenditure and $10.1 billion of
shareholder distributions and buybacks, the
net funding increase over the year was
contained to $3.6 billion, with net debt
increasing to $4.9 billion.
82
2023 Glencore Annual Report
Business and investment
acquisitions and disposals
Net outflows from business and investment
disposals/acquisitions were $614 million over
the year, compared to an inflow of
$737 million in 2022. The net outflow mainly
comprises purchases of the remaining
interests, not previously owned, in the MARA
project ($290 million) and Noranda Income
Fund (Canadian electrolytic zinc refinery)
($199 million) and a 30% stake in the
Alunorte alumina operation in Brazil
($678 million), offset by the proceeds from
the sale of Cobar ($791 million). The net
inflow in 2022 mainly comprises the
proceeds from the sale of Ernest Henry for
$584 million (see note 26).
Cash flow and net funding/debt
Net funding
US$ million
Total borrowings as per financial statements
Proportionate adjustment – net funding1
Cash and cash equivalents
Net funding ◊
1. Refer to APMs section for definition and reconciliations.
Cash and non-cash movements in net funding
US$ million
Cash generated by operating activities before working capital
changes, interest and tax
Proportionate adjustment – Adjusted EBITDA1
Non-cash adjustments included within EBITDA
Net interest paid1
Tax paid1
Dividends received from associates1
Funds from operations ◊
Net working capital changes2
Increase in long-term advances and loans2
Acquisition and disposal of subsidiaries – net2
Purchase and sale of investments – net2
Purchase and sale of property, plant and equipment – net2
Margin receipts/(payments) in respect of financing-related hedging
activities
Proceeds paid on acquisition of non-controlling interests in subsidiaries
Distributions paid and transactions of own shares – net
Cash movement in net funding
Net funding acquired in business combinations
Change in lease obligations
Foreign currency revaluation of borrowings and other non-cash items
Total movement in net funding
Net funding ◊, beginning of the year
Net funding ◊, end of year
Less: Readily marketable inventories2
Net debt◊, end of year
1. Refer to APMs section for definition and reconciliations.
2. Refer to Other reconciliations section.
31.12.2023 31.12.2022
32,241
746
(1,925)
31,062
28,777
646
(1,923)
27,500
2023
2022
15,117
2,068
46
(1,278)
(7,069)
568
9,452
32,915
2,402
35
(1,069)
(5,904)
559
28,938
4,105
–
344
(890)
(5,561)
(13,483)
(200)
609
128
(4,543)
897
(68)
(10,130)
(1,851)
(16)
(841)
(854)
(3,562)
(1,824)
–
(7,539)
2,086
(20)
(379)
1,650
3,337
(30,837)
(27,500)
(31,062) (27,500)
27,425
26,145
(75)
(4,917)
Financial and operational review continued
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Board changes
In May 2023, Patrice Merrin retired from the
Board. Following her retirement, the
following changes in the composition of the
Board Committees were made:
• ECC Committee: Cynthia Carroll replaced
Patrice Merrin as Chair of the Committee;
• Remuneration Committee: Martin Gilbert
replaced Cynthia Carroll as Chair of the
Committee. Cynthia Carroll remains a
member of the Committee;
• Investigations Committee: Liz Hewitt
replaced Patrice Merrin as a member of
the Committee.
Liquidity and funding activities
In April 2023 (effective May 2023), Glencore
refinanced its core short- and medium-term
revolving credit facilities. As at 31 December
2023, the overall facilities comprise:
• $9,060 million one-year revolving credit
facility with a one-year borrower’s term-
out option (to May 2025); and
• $3,900 million medium-term revolving
credit facility (to May 2028).
As in previous years, these committed
unsecured facilities contain no financial
covenants, no rating triggers, no material
adverse change clauses and no external
factor clauses.
As at 31 December 2023, Glencore had
available committed liquidity amounting to
$12.9 billion (31 December 2022: $13.0 billion).
Credit ratings
In light of the Group’s extensive funding
activities, maintaining investment grade
credit rating status is a financial priority. The
Group’s credit ratings are currently Baa1
from Moody’s and BBB+ from Standard &
Poor’s. Glencore’s publicly stated objective,
as part of its overall financial policy package,
is to seek and maintain a minimum of strong
Baa/BBB credit ratings from Moody’s and
Standard & Poor’s respectively. In support
thereof, Glencore targets a maximum 2x Net
debt/Adjusted EBITDA ratio through the
cycle, previously augmented by a Net debt
cap of c.$10 billion, which we have reduced
to c.$5 billion, following the announcement
of the acquisition of a 77% interest in EVR,
alongside our continued commitment to
minimum strong Baa/BBB ratings.
Distributions
In accordance with the Company’s
shareholder return policy, the Directors have
recommended a 2023 financial year base
cash distribution of $0.13 per share
amounting to $1.6 billion, accounting for
own shares held as at 1 February 2023,
whereby payment will be effected as a $0.065
per share distribution in June 2024 and a
$0.065 per share distribution in September
2024 (in accordance with the Company’s
announcement of the 2024 Distribution
timetable made on 21 February 2024).
The cash distribution is to be effected as a
reduction of the capital contribution
reserves of the Company. As such, this
distribution would be exempt from Swiss
withholding tax. As at 31 December 2023,
Glencore plc had CHF 9 billion of such
capital contribution reserves in its statutory
accounts. The distribution is subject to
shareholders’ approval at Glencore’s AGM on
29 May 2024.
The distribution is ordinarily paid in US
dollars. Shareholders on the Jersey register
may elect to receive the distribution in
sterling, euros or Swiss francs, the exchange
rates of which will be determined by
reference to the rates applicable to the US
dollar at the time. Shareholders on the
Johannesburg register will receive their
distribution in South African rand. Further
details on distribution payments, together
with currency election and distribution
mandate forms, are available from the
Group’s website (www.glencore.com) or
from the Company’s Registrars.
2023 Glencore Annual Report
83
Financial and operational review continued
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Basis of presentation
The financial information in the Financial and Operational Review is presented on a
segmental measurement basis, including any references to revenue (see note 2) and has
been prepared on the basis as outlined in note 1 of the financial statements, with the
exception of the accounting treatment applied to relevant material associates and joint
ventures for which Glencore’s attributable share of revenues and expenses are presented. In
addition, the Peruvian-listed Volcan, while a subsidiary of the Group, is accounted for using
the equity method for internal reporting and analysis due to the relatively low economic
interest (23%) held by the Group. As at 31 December 2023, the carrying amounts of Volcan
assets and liabilities are classified as held for sale (see note 16).
The Group’s results are presented on an ‘adjusted’ basis, using alternative performance
measures (APMs) which are not defined or specified under the requirements of IFRS, but are
derived from the financial statements, prepared in accordance with IFRS, reflecting how
Glencore’s management assesses the performance of the Group. The APMs are provided in
addition to IFRS measures to aid in the comparability of information between reporting
periods and segments and to aid in the understanding of the activities taking place across
the Group by adjusting for Significant items and by aggregating or disaggregating (notably
in the case of relevant material associates and joint ventures accounted for on an equity
basis) certain IFRS measures. APMs are also used to approximate the underlying operating
cash flow generation of the operations (Adjusted EBITDA). Significant items (see
reconciliation below) are items of income and expense, which, due to their nature and
variable financial impact or the expected infrequency of the events giving rise to them, are
separated for internal reporting and analysis of Glencore’s results, to aid in providing an
understanding and comparative basis of the underlying financial performance.
APMs used by Glencore may not be comparable with similarly titled measures and
disclosures by other companies. APMs have limitations as an analytical tool, and a user of the
financial statements should not consider these measures in isolation from, or as a substitute
for, analysis of the Group’s results of operations; and they may not be indicative of the
Group’s historical operating results, nor are they meant to be a projection or forecast of its
future results.
Alternative performance measures are denoted by the symbol ◊ and are further defined and
reconciled to the underlying IFRS measures in the APMs section on page 283.
Non-Financial and Sustainability Information Statement
Reference in 2023 Annual Report
• TCFD, page 23
• Sustainability, page 62
• Risk management, page 105
• Our people, page 75
• Ethics and compliance,
page 71
• Risk management, page 105
• HSEC Committee report,
page 132
• Low-carbon economy transition-
related risks, page 113
• Sustainability, page 62
• Risk management, page 105
• Sustainability, page 62
• Our people, page 75
• Risk management, page 105
• Ethics and compliance,
page 71
• Risk management, page 105
Reporting
requirements
1. Environmental
Matters
2. Employees
3. Human Rights
4. Social Matters
5. Anti-corruption
and anti-bribery
Policies
• Environmental Policy
• Code of Conduct
• Tailings Storage Facility Policy
• Supplier Code of Conduct
• Responsible Sourcing Policy
• Code of Conduct
• SafeWork programme
• Environmental Policy
• Health and Safety Policy
• Equality of Opportunity Policy
• Diversity and Inclusion Policy
• Whistleblowing Policy
• Human Rights Policy
• Annual Modern Slavery
Statement
• Code of Conduct
• Code of Conduct
• Social Performance Policy
• Supplier Code of Conduct
• Responsible Sourcing Policy
• Code of Conduct
• Anti-money Laundering Policy
• Competition Law Policy
• Anti-corruption Policy
• Conflict of Interest Policy
• Fraud Policy
• Information Governance Policy
• Market Conduct Policy
• Sanctions Policy
• Whistleblowing Policy
• Inside Information and
Securities Dealing Policy
6. Business model
7. Principal Risks and
• Enterprise Risk Management
Uncertainties
Policy
8. Non-financial key
performance
indicators
• Our business model, page 12
• Risk management, page 105
• Key performance indicators,
page 21
84
2023 Glencore Annual Report
Marketing
activities
We responsibly source the
commodities that advance
everyday life – this means
moving them from where
they are plentiful to where
they are needed.
Creating opportunities
The significant scale of both our own
production and the volumes secured from
third parties allows us to create margin
opportunities from our ability to supply
the exact commodities the market needs
through processing and/or blending and
optimisation of qualities.
Market insight and customer
understanding
Our global scale and presence in more than
60 commodities and over 30 countries gives
us extensive market knowledge and insight
to help us fully understand the needs of
our customers.
Generating returns
We generate returns as a fee-like income
from distribution of physical commodities
and arbitrage opportunities. Our use of
hedging instruments results in profitability
being largely determined by these activities
rather than by absolute price movements.
Anticipating supply and demand
Our strategy seeks to maximise value
through our integrated Marketing and
Industrial businesses working side-by-side
to give us presence across the entire supply
chain, delivering in-depth knowledge
of physical market supply and demand
dynamics and an ability to rapidly adjust
to market conditions.
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Arbitrage opportunities
Many of the physical commodity markets
in which we operate are fragmented or
periodically volatile. This can result in
arbitrage: price discrepancies between the
prices for the same commodities in different
geographic locations or time periods. Other
factors with arbitrage opportunities include
freight and product quality.
Product arbitrage
Disparity
Pricing differences between blends,
grades or types of commodity, taking
into account processing and
substitution costs.
Execution
Ensure optionality with commodity supply
contracts, and look to lock in profitable
price differentials through blending,
processing or end-product substitution.
Geographic arbitrage
Disparity
Different prices for the same product
in different geographic regions, taking
into account transportation and
transaction costs.
Execution
Leverage global relationships
and production, processing and logistical
capabilities to source product in one location
and deliver in another.
Time arbitrage
Disparity
Different prices for a commodity depending
on whether delivery is immediate or at a
future date, taking into account storage
and financing costs.
Execution
Book ‘carry trades’ that benefit from
competitive sources of storage, insurance
and financing.
2023 Glencore Annual Report
85
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Adjusted EBIT from the Energy products
business was $1,708 million, 67% below the
record-setting prior year, owing to a
rebalancing and normalisation of
international energy trade flows, where 2022
was characterised by extreme market
volatility and dislocation. Natural gas and
coal prices, in particular, trended materially
lower during 2023.
Viterra EBITDA was $2.1 billion (2022:
$2.0 billion). Our 50% share of earnings
(reported within corporate and other)
contributed $321 million (post-interest and
tax), which was 35% lower than in 2022. In
June 2023, Glencore agreed to sell its interest
in Viterra to Bunge in a cash-and-shares deal
expected to complete in mid-2024 (see
note 16).
Financial overview
US$ million
Revenue
Adjusted EBITDA ◊
Adjusted EBIT ◊
Adjusted EBITDA margin
Metals and
minerals
Energy
products
Corporate
and other1
69,293
1,774
1,714
2.6%
117,415
2,098
1,708
1.8%
–
28
28
n.m.
2023
186,708
3,900
3,450
2.1%
Metals and
minerals
Energy
products
Corporate
and other1
77,382
1,694
1,640
2.2%
137,720
5,558
5,199
4.0%
–
(457)
(457)
n.m.
2022
215,102
6,795
6,382
3.2%
1. Corporate and other Marketing activities includes $321 million (2022: $494 million) of Glencore’s equity accounted share of Viterra.
Selected marketing volumes sold
Copper metal and concentrates1
Zinc metal and concentrates1
Lead metal and concentrates1
Gold
Silver
Nickel
Ferroalloys (incl. agency)
Alumina/aluminium
Iron ore
Thermal coal2
Metallurgical coal2
Crude oil
Oil products
1. Estimated metal unit contained.
2. Includes agency volumes.
Units
mt
mt
mt
moz
moz
kt
mt
mt
mt
mt
mt
mbbl
mbbl
2023
3.3
2.5
0.7
2.1
50.9
234
9.6
10.2
78.4
73.0
1.9
645
558
2022
3.6
2.4
0.8
1.9
69.0
263
8.4
10.0
71.0
78.4
2.5
535
544
Change
%
(8)
4
(13)
11
(26)
(11)
14
2
10
(7)
(24)
21
3
Marketing activities continued
Highlights
Marketing Adjusted EBIT of $3,450 million
was a strong result by historical standards
(top-three over the past 10 years) and above
our long-term, through the cycle, range of
$2.2–$3.2 billion p.a. However, primarily
reflecting a rebalancing of energy markets
following the severe disruptions and
elevated market volatilities experienced in
2022, Marketing Adjusted EBIT for 2023 was
46% lower than in 2022. The associated risk
backdrop also normalised somewhat, as
shown in the Value at Risk analysis discussed
in note 27.
Metals and minerals Adjusted EBIT of
$1,714 million was 5% higher than in 2022,
reflecting broadly consistent physical
marketing conditions for many of our most
important commodities, not withstanding
the rising input cost and interest rate
environment. However, various battery
industry metals, notably cobalt, nickel and
lithium, experienced a challenging market
backdrop, characterised by extensive raw
material production growth, resulting
oversupply, and significant price declines
during the period.
86
2023 Glencore Annual Report
Marketing activities continued
Copper
LME copper
($/t)
12,000
10,000
8,000
6,000
4,000
2,000
0
Dec
2021
Price, $
Dec
2022
Dec
2023
LME Inventory, th tonnes (’000)
400
350
300
250
200
150
100
50
0
After starting the year at $8,365/t (LME cash
price), strong demand from China, together
with weak mine supply growth, saw
exchange and Shanghai-bonded inventories
draw rapidly after the Lunar New Year,
driving the price above $9,000/t. Despite the
emergence of speculative short positioning
during the year, prices overall remained
supported by a tightly balanced market, low
visible inventories, and strong energy
transition demand. LME cash copper price
ended 2023 at $8,464/t.
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Spot smelter treatment and refining charges
(TC/RCs) moved higher towards the end of
the first half, amid Chinese smelter
maintenance, easing disruptions to
concentrate supply, and expectations of
strong mine supply growth. China’s Smelters
Purchase Team (CSPT) set its Q3 2023 and
Q4 2023 concentrate import buying
guidance at $95/t and 9.5c/lb, the highest
level in five years. However, due to
unforeseen and significant impacts to mine
supply in late 2023, and amid scheduled
expansions in smelting capacity, TC/RCs fell
sharply towards year end, with China’s
smelters securing concentrate around
$62.5/t and 6.25c/lb as competition
increased. TC/RCs have continued to decline;
in early February 2024, spot rates had fallen
to $26.1/t and 2.61c/lb.
Over the year ahead, we expect mine supply
growth to continue to be constrained by
ageing assets, a diminished project pipeline,
and geopolitical conditions, with new
projects likely to experience delays. On the
demand side, energy transition-related
demand increased and is expected to be a
key driver again in 2024. In the longer term,
demand will be influenced by population
growth and expected rising living standards
in emerging economies, supported by global
climate policy and decarbonisation
measures. The latter is expected to result in
increased copper use, given copper’s crucial
role in accelerating the energy transition,
with applications in renewable power
generation and distribution, energy storage
and electric vehicles.
Cobalt
Fastmarkets cobalt standard grade
(low-end) ($/lb)
45
40
35
30
25
20
15
10
5
0
Dec
2021
Price, $
Dec
2022
Dec
2023
Cobalt metal prices began 2023 on a
downward trend, dropping from $18.75/lb at
the start of the year to $15/lb by late
February. After the Lunar New Year,
consumer goods demand improved and
hydroxide availability tightened, with prices
increasing into the mid-$16s/lb by April.
Elsewhere, demand in key metal segments,
such as aerospace, continued to post
double-digit growth. However, from mid-Q2
2023, the cobalt market was heavily
impacted by oversupply, in the form of
increased mine production and the
resumption of sales from a key mine in the
DRC, ending the year at c.$13/lb.
Cobalt hydroxide payability commenced the
year around 58%–61%, reflecting the large
hydroxide inventory overhang that stemmed
from weak consumer goods demand in
2022. By May, the range weakened to
51%–53% and mostly held in the low 50s for
the rest of 2023, noting the hydroxide supply
additions above.
In 2023, the cobalt market was heavily
influenced by negative supply and demand
factors, resulting in continued inventory
build. Consumer electronics demand, which
still rivals Electric Vehicles (EVs) among the
largest demand segments, stabilised after
the demand shock of 2022, but has been
slow to return to growth. EV supply chain
demand for mined material was impacted
by destocking activity in 2023.
We believe cobalt’s longer-term demand
fundamentals remain positive, as sales of
electric vehicles are projected to increase in
Western markets. Factors that recently
limited Western EV demand are expected to
ease as markets move beyond peak interest
rates, supply chain investments gain policy
support, and costs benefit from increasing
economies of scale. A raft of new EV models
are expected to be released over the next
12–24 months, which is likely to stimulate
fresh demand. We therefore expect excess
cobalt hydroxide stocks to erode as demand
sectors move into periods of synchronised
growth, potentially accelerated by strategic
stockpiling of critical minerals.
2023 Glencore Annual Report
87
LME and SHFE inventories rebounded from
the historical lows seen in 2022, with refined
metal premia falling from the historically
high levels seen at the end of 2022/early
2023. Nonetheless, at c.5–6 days of global
consumption, refined metal stocks on LME
and SHFE are still very low by historical
standards, while average metal premia in
Europe and the US in 2023 were more than
double the average annual level of 2019–2021.
On the demand side, after a sluggish start to
2023, our estimates suggest strong demand
growth in China, supported by infrastructure
build and automotive output, offsetting the
weak property sector. China also resumed
zinc metal imports in 2023, with net imports
rising from almost zero in 2022 to 371kt. In
Europe, demand remained weak, as the
impact of the earlier energy crisis and higher
interest rates continued to affect
industrial output.
In the lead market, various supply
disruptions also impacted concentrates
availability during 2023, driving spot TCs 21%
lower from an average $103/dmt in 2022 to
$81/dmt in 2023. The average LME cash lead
price remained virtually unchanged vs. 2022,
declining by 1% to average $2,137/t.
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Nickel
LME nickel
($/t)
50,000
40,000
30,000
20,000
10,000
0
Dec
2021
Dec
2022
Dec
2023
Price, $
LME Inventory, th tonnes (’000)
In addition to the challenges around supply,
demand remained uncertain, with ongoing
macroeconomic headwinds. Battery
demand, which has been growing
exponentially in recent years, is expected to
grow at a slower rate in the short term, as
some EV manufacturers scale back sales
forecasts. Demand from the stainless steel
and alloy sectors has continued to increase,
but total demand is unable to absorb the
large supply additions to the market, which
consequently remains oversupplied.
600
500
400
300
200
100
0
Nickel prices came under significant
pressure in 2023, as new capacity for the
conversion of low-grade nickel into nickel
cathode was commissioned, extending the
persistent oversupply of low-grade nickel
products into nickel metal. From this new
capacity, three cathode brands were
registered as LME-deliverable in 2023 and
more are expected to be registered in 2024.
Reflecting this, the nickel price decreased by
c.50% over the course of the year, and basis
the current multi-year low LME Nickel cash
price range (c.$15–17k/t), it is estimated that a
large portion of global nickel production is
operating at negative margins.
Marketing activities continued
Zinc
LME zinc
($/t)
5,000
4,000
3,000
2,000
1,000
0
Dec
2021
Price, $
Dec
2022
Dec
2023
LME Inventory, th tonnes (’000)
500
400
300
200
100
0
Global macroeconomic concerns weighed
on the zinc market in 2023, with the average
LME cash zinc price falling by 24% from
$3,485/t in 2022 to $2,649/t in 2023. The drop
in prices led to various mine supply cuts
which, combined with China’s increased zinc
concentrates demand/refined metals
production, pressured treatment charges
(spot TCs fell from c.$275/dmt at the start of
2023 to $80/dmt by the end of the year),
resulting in a concentrates market deficit
and metals inventory build. According to
industry estimates, global mine supply fell by
c.0.3Mt in 2023.
88
2023 Glencore Annual Report
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Despite a reasonable increase in Indian
production, the alumina market was also
range bound, trading between $325-370/t, at
an average 15% ratio to the aluminium price.
Marketing activities continued
Ferroalloys
Aluminium
Ferro-chrome 50% Cr import
($/lb)
LME aluminium
($/t)
1.60
1.40
1.20
1.00
0.80
0.60
0.40
0.20
0.00
Dec
2021
Price, $
Dec
2022
Dec
2023
Ferrochrome production in China increased
by 14% in 2023, which more than offset a
decrease in the Rest of World output. Robust
chrome ore demand and logistical
constraints out of South Africa led to
elevated chrome ore prices throughout 2023.
Non-Chinese ferrochrome producers scaled
back some production as conversion spreads
reached historic lows.
Global vanadium demand fell due to a
slowdown in the construction sectors in
China and Europe. Combined with new
supply from low-cost producers in China,
this resulted in a market surplus, leading to a
decline in vanadium prices.
5,000
4,000
3,000
2,000
1,000
0
2,000
1,600
1,200
800
400
0
Dec
2021
Price, $
Dec
2022
Dec
2023
LME Inventory, th tonnes (‘000)
The LME 3-month aluminium price
performance was more muted in 2023
compared to the previous two years, with
volatility dropping back to pre-Covid-19
pandemic levels. After a brief January rally to
$2,680/t, prices remained rangebound
around $2,150-$2,400/t. The lower end of this
range was supported by consumers buying
at the 18-month low, while rallies were capped
by a mix of producer and systematic selling.
Rising interest rates incentivised destocking,
putting downward pressure on Western
premiums: the US Mid-West premium fell
from a 2023 peak of over 29c/lb to 18.4c/lb by
year end, while the In-Warehouse Rotterdam
Duty Paid premium rallied to $355/t in May,
before ending the year at $220/t. Asian
premiums fared better as the SHFE-LME
price arbitrage was open for most of the
year, due to better-than-expected demand
from China’s solar PV industry.
2023 Glencore Annual Report
89
China did not meaningfully restrict domestic
steel production in 2023, with export
markets having to absorb production in
excess of domestic demand. The resulting
strong global steel supply led to negative
steel margins through many parts of the
industry. Due to this low-margin
environment, iron ore product quality
differentials compressed to multi-year lows,
with low-grade outperforming high-
grade ores.
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Global production of blast furnace pig iron,
the main driver of steelmaking coal demand,
increased by c.1% during the year, with
growth in Asia more than offsetting
weakness elsewhere. New coke-making
capacity in Indonesia and increased Chinese
import demand supported a c.7% increase in
seaborne metallurgical coal demand.
Although Australian metallurgical coal
production declined due to weather
impacts, this was more than offset by c.30%
export growth from Russia and the United
States. Premium HCC prices averaged $296/t
in 2023, 19% below the $364/t average
in 2022.
Coal
FOB coal price
($/t)
700
600
500
400
300
200
100
0
Dec
2021
Dec
2022
Newc thermal
Aust HCC
Dec
2023
Global seaborne thermal coal demand grew
by c.7% in 2023, driven by a c.16% increase in
imports in the Asia-Pacific region, which
more than offset reduced demand in
Europe. This increased demand was met
with c.11% supply growth from Indonesia and
Australia, as producers recovered from
export constraints and weather impacts.
While South African exports through RBCT
were impacted by rail performance, overall
exports from South Africa increased c.5% in
2023, with the additional volumes being
transported by truck to export ports.
However, in line with normalising global gas
and power prices, average coal reference
prices materially decreased in 2023: GCNewc
($173/t; down 52% vs. 2022), API4 ($120/t;
down 56%), and API2 ($129/t; down 56%).
Marketing activities continued
Iron ore
Platts iron ore
($/t)
200
160
120
80
40
0
Dec
2021
Price, $
Dec
2022
Dec
2023
After hitting a low of $99/t in H1 2023, driven
by China’s weak property sector, iron ore
prices recovered through the second half,
ending 2023 at $142/t, as the market
responded to stronger than expected
end-demand in China, the absence of
widely-anticipated steel production
restrictions through Q4, and speculative
capital inflows that appeared to favour iron
ore over many other commodities and
securities. The latter, in particular,
contributed to prices reaching levels that
exceeded our view of what ought to have
constituted more fundamental physical
supply and demand clearing prices. On the
supply side, iron ore miners enjoyed a strong
operational performance, and elevated
prices enabled the return of higher-cost
production, resulting in strong seaborne
supply growth.
90
2023 Glencore Annual Report
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Marketing activities continued
Oil
Brent crude oil
($/bbl)
140
120
100
80
60
40
20
0
Dec
2021
Price, $
Dec
2022
Dec
2023
Dutch TTF Natural Gas
1-Month Forward ($/MWh)
350
300
250
200
150
100
50
0
Dec
2021
Price, $
Dec
2022
Dec
2023
Oil refining margins drifted lower during H1
2023, mainly due to weaker European oil
product demand. During Q3, refining
margins strengthened considerably as
stronger US demand pulled products from
Europe. In Q4 margins declined again as
demand weakened, leading to higher
inventory levels. In shipping, overall tanker
freight markets weakened in H1 2023 from
2022 highs. Freight rates recovered in H2
2023, with earnings in key tanker sectors
remaining strong on a multi-year cycle.
Crude oil prices initially rallied in January
2023 from an opening of $86/bbl Brent, but
receded in February, settling in a narrow
range of $70–$80/bbl for most of H1 2023.
Initial optimism around China’s economic
recovery eroded as global monetary
tightening, dollar strength and recessionary
fears weighed on markets. In September,
prices rose above $95/bbl on improved
sentiment, resulting from easing inflation
and production cuts from Saudi Arabia and
Russia. However, during Q4, the economic
outlook deteriorated again and supply fears
subsided with increasing US exports and
rising inventory levels, leading oil prices
lower. Brent closed the year at $77/bbl.
In gas markets, prices declined sharply in H1
2023 with the European TTF natural gas
benchmark reaching a low of $25/MWh (vs.
$25/MWh at the end of 2022), a continuation
of the downward trend seen towards the
end of 2022. Mild weather in the Northern
hemisphere (lower gas demand) and
improving supply fundamentals weighed on
spot gas prices across key markets. During
H2 2023, prices were more volatile, as
uncertainty and risks remained high for the
Northern hemisphere winter, but with
storage at near full capacity, prices were
contained to levels around $51/MWh.
2023 Glencore Annual Report
91
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Production and financial highlights
(own sourced)
Industrial
activities
We are a major producer of
commodities that support the
energy and mobility transition,
including copper, cobalt, nickel
and zinc, while our high-quality
coal provides competitively priced
and reliable energy.
Metals and minerals
mining margin ◊
23%
2022: 36%
Inflationary impacts across the
portfolio, and sharp realised price
decreases in cobalt, nickel and zinc
Energy products margin ◊
49%
2022: 66%
Progressive normalisation of
energy prices from levels seen
in 2022
Industrial◊ activities Adjusted
EBITDA◊ (US$ billion)
Adjusted EBITDA◊ weighting
Industrial activities capex◊
(US$ billion)
Industrial capex◊ weighting
30
25
20
15
10
5
0
2
7
3
.
1
7
.
1
1
3
2
.
2021
2022
2023
23%
20%
17%
2023
23%
1%
6%
2022
4%
6%
53%
12%
47%
2023
Copper
Zinc
Coal
23%
6%
47%
Other industrial
activities
1%
Marketing
23%
7
6
5
4
3
2
1
0
6
.
1
4
8
.
4
4
.
2021
2022
2023
1
,
0
5
8
.
1
1
,
0
1
0
.
1
Copper
(kt)
1,200
1,000
1
,
1
9
5
7
.
800
600
400
200
Zinc
(kt)
1,200
1,000
1
,
1
1
7
8
.
800
600
400
200
9
3
8
5
.
9
1
8
5
.
0
2021
2022
2023
0
2021
2022
2023
Nickel
(kt)
120
100
80
60
40
20
0
1
0
7
5
.
1
0
2
3
.
9
7
6
.
2021
2022
2023
3%
3%
2%
3%
22%
22%
2023
48%
2022
43%
10%
9%
20%
15%
48%
Coal
15%
9%
Oil
Others
22%
3%
3%
2023
Copper
Zinc
Nickel
Coal
(mt)
120
100
80
60
40
20
0
1
1
0
0
.
1
1
3
6
.
1
0
3
3
.
2021
2022
2023
92
2023 Glencore Annual Report
Industrial activities continued
Highlights
Industrial Adjusted EBITDA of $13,202 million
was 52% down on the prior year, primarily
reflecting lower average energy prices
(largely coal) from the unprecedented levels
seen across many energy products in 2022.
Adjusted EBITDA contribution from Metals
and minerals assets was $5,445 million,
down 41% compared to the prior year. The
largest cumulative impact on the year-over-
year decline was the significantly lower
realised prices in respect of our cobalt and
nickel production. This also informed various
portfolio decisions, including to operate
Mutanda, with its high proportion of cobalt,
at lower rates than initially planned and,
regrettably, the recent announcement that,
we and SMSP, the shareholders of
Koniambo, have decided to transition
activities into care and maintenance and
that we will initiate a process to identify a
potential new industrial partner for Koniambo.
Adjusted EBITDA contribution from Energy
products assets was $8,452 million, down
55% compared to 2022, overwhelmingly due
to significantly lower average realised coal
prices, and to a lesser extent, oil and LNG, as
noted above.
Reflecting the above, Adjusted EBITDA
mining margins were 23% (2022: 36%) in our
metals operations and 49% (2022: 66%) in our
energy operations.
Capex of $6,074 million (2022: $4,807 million)
was $1,267 million (26%) higher year-over-
year, mainly emanating from our copper
business unit, with Collahuasi comprising
the largest increase on account of its
large-scale desalination project.
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Financial overview
US$ million
Revenue◊
Adjusted EBITDA◊
Adjusted EBIT◊
Adjusted EBITDA mining margin
Metals and
minerals
Energy
products
Corporate
and other
35,556
5,445
1,551
23%
24,858
8,452
6,132
49%
7
(695)
(741)
2023
60,421
13,202
6,942
33%
Production from own sources – Total1
Copper
Cobalt
Zinc
Lead
Nickel
Gold
Silver
Ferrochrome
Coal
Metals and
minerals
Energy
products
Corporate
and other
38,993
9,274
5,082
36%
kt
kt
kt
kt
kt
koz
koz
kt
mt
39,333
18,590
15,850
66%
2023
1,010.1
41.3
918.5
182.7
97.6
747
20,011
1,162
113.6
6
(599)
(657)
2022
78,332
27,265
20,275
51%
2022
Change %
1,058.1
43.8
938.5
191.6
107.5
661
23,750
1,488
110.0
(5)
(6)
(2)
(5)
(9)
13
(16)
(22)
3
1. Controlled industrial assets and joint ventures only. Production is on a 100% basis, except for joint ventures, where the Group’s attributable share of production
is included.
2023 Glencore Annual Report
93
Industrial activities continued
Financial information 2023
C
o
p
p
e
r
i
Z
n
c
i
N
c
k
e
l
C
o
a
l
US$ million
Africa
Collahuasi1
Antamina1
South America
Australia
Polymet
Custom metallurgical
Intergroup revenue elimination
Copper
Kazzinc
Australia
European custom metallurgical
North America
Volcan
Zinc
Integrated Nickel Operations
Australia
Koniambo
Nickel
Ferroalloys
Aluminium/Alumina
Iron ore
Metals and minerals
Steelmaking Australia
Thermal Australia
Thermal South Africa
Cerrejón
Prodeco
Coal (own production)
Coal other revenue (buy-in coal)
Oil E&P assets
Oil refining assets
Energy products
Corporate and other
Total Industrial activities◊
1. Represents the Group’s share of these JVs.
94
2023 Glencore Annual Report
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Revenue◊
2,442
2,045
1,432
2,209
106
–
10,008
(148)
18,094
3,685
3,400
4,522
992
–
12,599
1,265
831
415
2,511
2,352
–
–
35,556
1,917
10,775
1,505
2,308
–
16,505
1,034
340
6,979
24,858
7
60,421
Adjusted
EBITDA◊
195
1,307
1,031
980
19
(39)
455
–
3,948
693
(53)
201
106
48
995
228
184
(455)
(43)
593
(47)
(1)
5,445
944
6,051
384
674
(80)
7,973
209
270
8,452
(695)
13,202
Adjusted EBITDA
mining margin2,3 ◊
8%
64%
72%
44%
18%
42%
19%
(2%)
9%
18%
22%
(110%)
(2%)
25%
23%
49%
56%
26%
29%
48%
61%
49%
33%
Depreciation
Adjusted
Capital
and amortisation
(575)
(326)
(403)
(795)
–
–
(188)
–
(2,287)
(684)
(276)
(100)
(55)
–
(1,115)
(324)
(29)
(33)
(386)
(106)
–
–
(3,894)
(262)
(1,282)
(309)
(268)
(6)
EBIT◊
(380)
981
628
185
19
(39)
267
–
1,661
9
(329)
101
51
48
(120)
(96)
155
(488)
(429)
487
(47)
(1)
1,551
682
4,769
75
406
(86)
(2,127)
5,846
(103)
(90)
(2,320)
(46)
(6,260)
106
180
6,132
(741)
6,942
expenditure◊
622
864
427
663
–
12
310
–
2,898
387
322
125
89
–
923
496
34
–
530
135
6
–
4,492
176
678
219
246
5
1,324
14
183
1,521
61
6,074
Industrial activities continued
Financial information 2022
C
o
p
p
e
r
i
Z
n
c
i
N
c
k
e
l
C
o
a
l
US$ million
Africa
Collahuasi1
Antamina1
South America
Australia
Polymet
Custom metallurgical
Intergroup revenue elimination
Copper
Kazzinc
Australia
European custom metallurgical
North America
Volcan
Other Zinc
Zinc
Integrated Nickel Operations
Australia
Koniambo
Nickel
Ferroalloys
Aluminium/Alumina
Iron ore
Metals and minerals
Steelmaking Australia
Thermal Australia
Thermal South Africa
Cerrejón
Prodeco
Coal (own production)
Coal other revenue (buy-in coal)
Oil E&P assets
Oil refining assets
Energy products
Corporate and other
Total Industrial activities◊
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Revenue◊ Adjusted EBITDA◊
Adjusted EBITDA
mining margin2,3 ◊
Depreciation and
amortisation
Adjusted EBIT◊
Capital
expenditure◊
3,526
2,120
1,575
2,120
351
–
9,769
(355)
19,106
3,564
3,767
4,260
1,770
–
203
13,564
2,028
1,186
713
3,927
2,396
–
–
38,993
2,468
16,890
2,767
5,393
–
27,518
1,961
1,004
8,850
39,333
6
78,332
1,551
1,501
1,186
969
70
(16)
467
–
5,728
807
415
119
127
(2)
11
1,477
886
483
(72)
1,297
719
55
(2)
9,274
1,359
11,410
1,655
3,609
(113)
17,920
781
(111)
18,590
(599)
27,265
44%
71%
75%
46%
20%
54%
23%
11%
5%
16%
44%
41%
(10%)
33%
30%
36%
55%
68%
60%
67%
65%
78%
66%
51%
(826)
(290)
(351)
(548)
(63)
–
(179)
–
(2,257)
(596)
(611)
(115)
(87)
–
(15)
(1,424)
(327)
(27)
(40)
(394)
(116)
(1)
–
(4,192)
(208)
(1,430)
(461)
(438)
–
(2,537)
(128)
(75)
(2,740)
(58)
(6,990)
725
1,211
835
421
7
(16)
288
–
3,471
211
(196)
4
40
(2)
(4)
53
559
456
(112)
903
603
54
(2)
5,082
1,151
9,980
1,194
3,171
(113)
15,383
653
(186)
15,850
(657)
20,275
440
332
362
622
85
8
202
–
2,051
346
418
147
24
–
22
957
420
26
19
465
119
5
–
3,597
186
547
146
169
–
1,048
11
113
1,172
38
4,807
2. Adjusted EBITDA mining margin for Metals and Minerals is Adjusted EBITDA excluding non-mining assets as described below ($4,682 million (2022: $8,508 million )) divided by Revenue excluding non-mining assets
and intergroup revenue elimination ($20,182 million (2022: $23,549 million) i.e. the weighted average EBITDA margin of the mining assets. Non-mining assets are the Copper custom metallurgical assets, Zinc
European custom metallurgical assets, Zinc North America (principally smelting/processing), the Aluminium/Alumina group and Volcan (equity accounted with no relevant revenue) as noted in the table above.
3. Energy products EBITDA margin is Adjusted EBITDA for coal and Oil E&P (but excluding Oil refining) ($8,182 million (2022: $18,701 million)), divided by the sum of coal revenue from own production and Oil E&P
revenue ($16,845 million (2022: $28,522 million)).
2023 Glencore Annual Report
95
Strategic Report
Corporate Governance
Financial Statements
Additional Information
South America
Copper production of 238,800 tonnes was
15,200 tonnes (7%) higher than 2022,
reflecting higher copper grades and
recoveries at Antapaccay (22,000 tonnes),
partially offset (6,800 tonnes) principally by
anticipated delayed metal deliveries to the
leach pads at Lomas Bayas, with recovery
expected in 2024.
Cobar
Cobar (Australian copper) mine was sold on
16 June 2023.
Copper custom metallurgical assets
Overall copper anode production of 443,300
tonnes was 31,600 tonnes (7%) lower than
2022, due to Altonorte maintenance in
October and operational challenges during
the post-shutdown ramp-up.
Copper cathode production of 507,300
tonnes was 50,400 tonnes (11%) higher than
2022, reflecting increased anode deliveries
from Horne and Pasar.
Production data
Production from own sources – Copper assets1
2023
2022 Change %
African Copper (KCC, Mutanda)
Copper metal
Cobalt2
Collahuasi3
Copper in concentrates
Silver in concentrates
Gold in concentrates
Antamina4
Copper in concentrates
Zinc in concentrates
Silver in concentrates
South America (Antapaccay, Lomas Bayas)
Copper metal
Copper in concentrates
Gold in concentrates and in doré
Silver in concentrates and in doré
Cobar
Copper in concentrates
Silver in concentrates
Total Copper department
Copper
Cobalt
Zinc
Gold
Silver
kt
kt
kt
koz
koz
kt
kt
koz
kt
kt
koz
koz
kt
koz
kt
kt
kt
koz
koz
241.5
38.8
252.2
4,032
41
142.4
156.6
3,912
65.8
173.0
97
1,267
15.0
180
889.9
38.8
156.6
138
9,391
253.4
40.2
251.1
3,350
38
152.5
144.3
4,964
72.6
151.0
61
1,222
37.3
446
917.9
40.2
144.3
99
9,982
(5)
(3)
–
20
8
(7)
9
(21)
(9)
15
59
4
(60)
(60)
(3)
(3)
9
39
(6)
Industrial activities continued
Copper assets
Own sourced copper production of 1,010,100
tonnes was 48,000 tonnes (5%) lower than
2022, primarily reflecting the sale of Cobar in
June 2023 and lower copper by-product
production outside the Copper department.
Own sourced copper sales during the period
were some 13,000 tonnes lower than net
relevant production, due to the timing
of shipments.
Own sourced cobalt production of 41,300
tonnes was 2,500 tonnes (6%) lower than
2022, mainly due to feed plan adjustments at
Mutanda, in the context of an oversupplied
market.
African Copper
Own sourced copper production of 241,500
tonnes was 11,900 tonnes (5%) lower than
2022, mainly reflecting lower production at
KCC (13,700 tonnes), which nonetheless
delivered in line with its plan for the year.
Own sourced cobalt production of 38,800
tonnes was 1,400 tonnes (3%) lower than
2022, reflecting lower grades, due to feed
plan adjustments, at Mutanda, partially
offset by improved cobalt recoveries at both
KCC and Mutanda.
Collahuasi
Attributable copper production of 252,200
tonnes was in line with 2022.
Antamina
Aligned with planned mining sequencing,
attributable copper production of 142,400
tonnes was 10,100 tonnes (7%) lower than
2022, while zinc production of 156,600 tonnes
was 12,300 tonnes (9%) higher.
96
2023 Glencore Annual Report
Strategic Report
Corporate Governance
Financial Statements
Additional Information
North America
Zinc production of 38,600 tonnes was 17,900
tonnes (32%) lower than 2022, mainly
reflecting the closure of Matagami mine in
mid-2022. Kidd production was broadly in
line with 2022.
South America
Following disposal of the Bolivian mines at
the end of H1 2022 and Los Quenuales in
December 2022, no operating assets remain
in this grouping.
Zinc custom metallurgical assets
Zinc metal production of 752,600 tonnes was
69,600 tonnes (10%) higher than 2022,
reflecting additional production from CEZ,
consolidated from April 2023, following
Glencore’s increased ownership from 25% to
100% and improved performance of
Asturiana, offset by the suspension of
Nordenham in H2 2022, on account of high
European power prices.
Lead metal production of 244,600 tonnes
was 28,800 tonnes (11%) lower than 2022,
primarily reflecting lower bullion received at
Northfleet from Mount Isa and Portovesme’s
partial care and maintenance.
Production from own sources – Zinc assets1
2023
2022 Change %
Kazzinc
Zinc metal
Zinc in concentrates
Lead metal
Lead in concentrates
Copper metal5
Gold
Silver
Silver in concentrates
Australia (Mount Isa, Townsville,
McArthur River)
Zinc in concentrates
Copper metal
Lead in concentrates
Silver
Silver in concentrates
North America (Matagami, Kidd)6
Zinc in concentrates
Copper in concentrates
Silver in concentrates
Other Zinc: South America (Bolivia, Peru)6
Zinc in concentrates
Lead in concentrates
Copper in concentrates
Silver in concentrates
Total Zinc department
Zinc
Lead
Copper
Gold
Silver
kt
kt
kt
kt
kt
koz
koz
koz
kt
kt
kt
koz
koz
kt
kt
koz
kt
kt
kt
koz
kt
kt
kt
koz
koz
113.8
60.1
18.7
16.9
14.8
598
2,727
548
549.4
69.1
147.1
615
5,129
38.6
22.6
1,378
–
–
–
–
761.9
182.7
106.5
598
10,397
125.7
20.7
16.9
0.4
20.5
546
2,721
12
564.0
70.5
165.9
557
5,592
56.5
28.3
1,346
27.3
8.4
1.4
3,345
794.2
191.6
120.7
546
13,573
(9)
190
11
n.m.
(28)
10
–
–
(3)
(2)
(11)
10
(8)
(32)
(20)
2
(100)
(100)
(100)
(100)
(4)
(5)
(12)
10
(23)
Industrial activities continued
Zinc assets
Own sourced zinc production of 918,500
tonnes was 20,000 tonnes (2%) lower than
2022, mainly reflecting the 2022 disposals of
South American zinc operations (27,300
tonnes) and the closure of Matagami (17,300
tonnes), offset by stronger production from
Kazzinc (Zhairem) and Antamina.
Kazzinc
Own sourced zinc production of 173,900
tonnes was 27,500 tonnes (19%) higher than
2022, reflecting Zhairem’s ramp-up, partly
offset by delayed processing of own-sourced
material at Kazzinc’s smelters, in favour of
third-party material.
Own sourced lead production of 35,600
tonnes was 18,300 tonnes (106%) higher than
2022, due to Zhairem’s ramp-up.
Own sourced copper production of 14,800
tonnes was 5,700 tonnes (28%) lower than
2022, due to lower copper grades at the
Maleevsky mine, together with furnace
downtime at the copper smelter.
Own sourced gold production of 598,000
ounces was 52,000 ounces (10%) higher than
2022, as units displaced from the 2022
schedule in favour of third-party material
were processed in 2023.
Australia
Zinc production of 549,400 tonnes was
14,600 (3%) lower than 2022, due to severe
weather conditions earlier in the year and
lower ore milled at McArthur River due to
short-term operational challenges.
Lead production of 147,100 tonnes was
18,800 tonnes (11%) lower than 2022, mainly
due to lower lead grades at Lady Loretta
mine (Mount Isa) as it nears end of life.
Copper production of 69,100 tonnes was
broadly in line with 2022.
2023 Glencore Annual Report
97
operation would transition to care and
maintenance and that Glencore would
shortly initiate a process to identify a
potential new industrial partner for KNS.
Ferroalloys assets
Attributable ferrochrome production of
1,162,000 tonnes was 326,000 tonnes (22%)
lower than 2022, mainly due to planned
additional smelter downtime during the
three-month high electricity demand winter
season, a period of elevated power prices. Q4
2023 production was 133,000 tonnes (85%)
higher than Q3 2023, as the smelter portfolio
progressively restarted, albeit with the
Rustenburg smelter remaining idle, pending
an improved price/cost environment.
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Production from own sources – Nickel assets1
2023
2022 Change %
Integrated Nickel Operations (INO)
(Sudbury, Raglan, Nikkelverk)
Nickel metal
Nickel in concentrates
Copper metal
Copper in concentrates
Cobalt metal
Gold
Silver
Platinum
Palladium
Rhodium
Murrin Murrin
Nickel metal
Cobalt metal
Koniambo
Nickel in ferronickel
Total Nickel department
Nickel
Copper
Cobalt
Gold
Silver
Platinum
Palladium
Rhodium
kt
kt
kt
kt
kt
koz
koz
koz
koz
koz
kt
kt
kt
kt
kt
kt
koz
koz
koz
koz
koz
Production from own sources – Ferroalloys assets1
Ferrochrome7
Vanadium Pentoxide
kt
mlb
39.1
0.2
8.9
4.8
0.4
11
223
24
65
3
31.1
2.1
46.2
0.2
11.9
7.6
0.6
16
195
32
83
4
35.7
3.0
27.2
25.4
97.6
13.7
2.5
11
223
24
65
3
2023
1,162
19.5
107.5
19.5
3.6
16
195
32
83
4
2022
1,488
19.8
(15)
–
(25)
(37)
(33)
(31)
14
(25)
(22)
(25)
(13)
(30)
7
(9)
(30)
(31)
(31)
14
(25)
(22)
(25)
Change
%
(22)
(2)
Industrial activities continued
Nickel assets
Own sourced nickel production of 97,600
tonnes was 9,900 tonnes (9%) lower than
2022, primarily reflecting higher INO third
party production (versus own sourced) and a
planned shutdown of Murrin Murrin for
routine maintenance, somewhat offset by a
more consistent production performance
from Koniambo.
Integrated Nickel Operations (INO)
Own sourced nickel production of 39,300
tonnes was 7,100 tonnes (15%) lower than
2022, whereby the lengthy strike at Raglan in
2022 impacted 2023 nickel production, given
the long lead time from ore mining in
Northern Quebec to finished nickel
production in Norway, and maintenance
outages impacted the Sudbury smelter.
Total refinery production of 95,000 tonnes
was 13,100 tonnes (16%) higher than 2022.
Murrin Murrin
Own sourced nickel production of 31,100
tonnes was 4,600 tonnes (13%) lower than
2022, primarily due to scheduled major
maintenance and phasing of the
subsequent ramp-up.
Koniambo (KNS)
Nickel production of 27,200 tonnes was 1,800
tonnes (7%) higher than 2022, reflecting
furnace modifications made during Q1’s
planned maintenance and an overall more
consistent operating performance. We
announced in September 2023 that Glencore
will not continue to fund ongoing operations
from March 2024. Given that KNS remained
loss-making at recent production rates and
realised nickel prices, and following
extensive engagement with relevant
stakeholders, the shareholders of KNS
announced on 12 February 2024 that the
98
2023 Glencore Annual Report
Industrial activities continued
Coal assets
Coal production of 113.6 million tonnes was
3.6 million tonnes (3%) higher than 2022,
reflecting higher productivity in South Africa
and a year-over-year easing in certain
external factors that constrain capacity, such
as wet weather and blockades.
Australian steelmaking
Production of 7.5 million tonnes was
1.2 million tonnes (14%) lower than 2022, with
the Newlands mine ceasing production in
February 2023.
Australian thermal and semi-soft
Production of 66.3 million tonnes was
broadly in line with 2022.
South African thermal
Production of 17.8 million tonnes was
1.4 million tonnes (9%) higher than 2022,
reflecting improved productivity. Both
periods were constrained by capacity
restrictions in the South African rail network.
Cerrejón
Production of 22.0 million tonnes was
2.3 million tonnes (12%) higher than 2022,
reflecting heavy rains and extended
blockades in the base period.
Oil assets
Exploration and production (non-operated)
Entitlement interest oil and gas production
of 4.7 million barrels of oil equivalent (boe)
was 1.4 million boe (23%) lower than 2022,
due to natural field decline at Bolongo in
Cameroon and the reduction of Glencore’s
entitlement percentage interest in an
Equatorial Guinea block, following the
recovery of historical costs under a
production sharing contract.
Refining
Following an extensive multi-year rebuild,
the Astron Energy Refinery in Cape Town
restarted operations in early 2023.
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Total production – Custom metallurgical assets1
Copper (Altonorte, Pasar, Horne, CCR)
Copper metal
Copper anode
Zinc (Portovesme, Asturiana, Nordenham,
Northfleet, CEZ)
Zinc metal
Lead metal
Coal assets1
Australian steelmaking coal
Australian semi-soft coal
Australian thermal coal (export)
Australian thermal coal (domestic)
South African thermal coal (export)
South African thermal coal (domestic)
Cerrejón
Total Coal department
Oil assets (non-operated)
Glencore entitlement interest basis
Equatorial Guinea
Cameroon
Total Oil department
kt
kt
kt
kt
mt
mt
mt
mt
mt
mt
mt
mt
2023
2022 Change %
507.3
443.3
456.9
474.9
752.6
244.6
683.0
273.4
11
(7)
10
(11)
2023
7.5
4.1
55.2
7.0
13.7
4.1
22.0
113.6
2022
8.7
4.0
53.4
7.8
12.7
3.7
19.7
110.0
Change
%
(14)
2
3
(10)
8
11
12
3
2023
2022
Change
%
kboe
kbbl
kboe
4,135
608
4,743
5,107
1,024
6,131
(19)
(41)
(23)
1. Controlled industrial assets and joint ventures only (excludes Volcan). Production is on a 100% basis
except for joint ventures, where the Group’s attributable share of production is included.
2. Cobalt contained in concentrates and hydroxides.
3. The Group’s pro-rata share of Collahuasi production (44%).
4. The Group’s pro-rata share of Antamina production (33.75%).
5. Copper metal includes copper contained in copper concentrates and blister.
6. North and South American assets sold or closed since the beginning of 2022: Matagami (Canada)
completed mining in June 2022, Bolivian Zinc sold in March 2022 and Peruvian Zinc sold in
December 2022.
7. The Group’s attributable 79.5% share of the Glencore-Merafe Chrome Venture.
Mineral Resources and Ore
Reserves
The resource and reserve data in the
following tables comprise summary extracts
of the Glencore Resources and Reserves
report as at 31 December 2023, as published
on the Glencore website on 1 February 2024.
The Glencore Resources and Reserves report
was publicly reported, as appropriate for
individual components, in accordance with
the 2012 edition of the Australasian Code for
Reporting of Exploration Results, Mineral
Resources and Ore Reserves (JORC Code),
the 2016 edition of the South African Code
for Reporting of Mineral Resources and
Mineral Reserves (SAMREC), the Canadian
Institute of Mining, Metallurgy and
Petroleum (CIM) Standards on Mineral
Resources and Reserves (2014 edition) and
the Petroleum Resources Management
System (PRMS) for reporting of oil and
natural gas reserves and resources.
Data is reported as at 31 December 2023,
unless otherwise noted. For comparison
purposes, data for 2022 has been included.
Metric units are used throughout, and all
data is presented on a 100% asset basis with
the exception of Oil assets which are shown
on a working interest basis. All tonnage
information has been rounded to reflect the
relative uncertainty in the estimates; there
may therefore be small differences in
the totals.
2023 Glencore Annual Report
99
Industrial activities continued
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Name of operation
Commodity
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
Measured Mineral
Resources
Indicated Mineral
Resources
Measured and
Indicated Resources
Inferred Mineral
Resources
Proved
Ore Reserves
Probable
Ore Reserves
Total
Ore Reserves
Copper assets
KCC
Mutanda
Collahuasi
Antamina
Lomas Bayas
Antapaccay
(incl. Coroccohuayco)
El Pachón
MARA
West Wall
Copper Project
North America
Ore (Mt)
Copper (%)
Cobalt (%)
Ore (Mt)
Copper (%)
Cobalt (%)
(Mt)
Copper (%)
Molybdenum (%)
(Mt)
Copper (%)
Zinc (%)
Silver (g/t)
Molybdenum (%)
Ore (Mt)
Copper (%)
Ore (Mt)
Copper (%)
–
–
–
180
2.02
0.65
973
0.81
0.02
367
0.81
0.42
10
0.03
272
0.36
316
0.45
–
–
–
369
1.40
0.55
848
0.78
0.02
282
0.82
0.58
10
0.02
289
0.36
306
0.47
279
4.04
0.61
70
1.82
0.81
245
4.69
0.55
96
0.97
0.44
4,600
4,675
0.79
0.02
533
0.89
0.74
12
0.02
1,163
0.28
868
0.51
0.79
0.02
607
0.89
0.72
12
0.02
1,152
0.29
937
0.50
279
4.04
0.61
249
1.97
0.69
5,570
0.79
0.02
900
0.86
0.61
11
0.02
1,435
0.30
1,184
0.49
245
4.69
0.55
465
1.30
0.53
28
3.62
0.64
20
2.49
0.74
74
1.61
0.47
17
0.72
0.53
5,525
5,000
4,800
0.79
0.02
889
0.86
0.67
11
0.02
1,441
0.30
1,243
0.49
0.72
0.01
1,200
1.03
0.58
11
0.02
733
0.25
102
0.31
0.05
1.0
Gold (g/t)
0.072
0.080
0.077
0.076
0.075
0.075
Silver (g/t)
Ore (Mt)
Copper (%)
Silver (g/t)
Molybdenum (%)
Ore (Mt)
Copper (%)
Gold (g/t)
Silver (g/t)
Molybdenum (%)
Ore (Mt)
Copper (%)
Gold (g/t)
Molybdenum (%)
1.4
269
0.72
2.4
0.01
1.5
533
0.67
2.4
0.01
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Ore (Mt)
Copper (%)
516
0.37
360
0.29
1.9
1,790
0.47
1.9
0.01
1,020
0.51
0.20
3.36
0.03
861
0.51
0.05
0.01
2,062
0.39
1.8
1,050
0.49
2.0
0.01
–
–
–
–
–
861
0.51
0.05
0.01
606
0.30
1.9
1.8
2,060
1,580
4,000
0.51
2.0
0.01
1,020
0.51
0.20
3.36
0.03
861
0.51
0.05
0.01
2,582
0.38
0.55
2.2
0.01
–
–
–
–
–
861
0.51
0.05
0.01
967
0.29
0.39
1.6
0.01
55
0.36
0.09
2.61
0.03
1,100
0.42
0.05
0.01
1,875
0.35
0.73
0.02
1,250
1.02
0.58
11
0.02
704
0.26
120
0.31
0.05
0.9
1,800
0.40
1.8
0.01
–
–
–
–
–
1,100
0.42
0.05
0.01
520
0.28
–
–
–
–
–
–
654
0.93
0.02
139
0.91
0.48
9.1
0.03
145
0.32
227
0.40
0.07
1.1
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
9
3.56
1.35
446
1.03
0.02
156
0.90
0.61
8.6
0.03
160
0.33
225
0.43
0.08
1.2
–
–
–
–
–
–
–
–
–
–
–
–
–
157
0.29
128
3.69
0.46
97
1.88
0.69
3,462
0.77
0.02
87
0.99
0.94
13
0.02
139
0.25
232
0.37
0.07
1.3
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
113
3.61
0.48
124
1.37
0.65
3,711
0.76
0.02
127
0.98
0.91
11
0.02
134
0.26
275
0.37
0.07
1.2
–
–
–
–
–
–
–
–
–
–
–
–
–
106
0.29
128
3.69
0.46
97
1.88
0.69
4,122
0.80
0.02
226
0.94
0.66
11
0.02
284
0.29
459
0.38
0.07
1.2
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
113
3.61
0.48
133
1.52
0.69
4,161
0.79
0.02
283
0.94
0.74
10
0.03
294
0.30
499
0.39
0.07
1.2
–
–
–
–
–
–
–
–
–
–
–
–
–
264
0.29
100
2023 Glencore Annual Report
Industrial activities continued
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Name of operation
Commodity
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
Measured Mineral
Resources
Indicated Mineral
Resources
Measured and
Indicated Resources
Inferred Mineral
Resources
Proved
Ore Reserves
Probable
Ore Reserves
Total
Ore Reserves
Zinc assets
Polymetallic Kazzinc
Kazzinc Gold
(Vasilkovsky)
Mount Isa -
Zinc bearing
Mount Isa -
Copper bearing
McArthur River
Mount Margaret
Zinc North America
Pallas Green
Ore (Mt)
Zinc (%)
Lead (%)
Copper (%)
Silver (g/t)
Gold (g/t)
Ore (Mt)
Gold (g/t)
Ore (Mt)
Zinc (%)
Lead (%)
Silver (g/t)
Ore (Mt)
Copper (%)
Ore (Mt)
Zinc (%)
Lead (%)
Silver (g/t)
Ore (Mt)
Copper (%)
Gold (g/t)
(Mt)
Zinc (%)
Lead (%)
Copper (%)
Silver (g/t)
Gold (g/t)
Ore (Mt)
Zinc (%)
Lead (%)
51
2.25
0.76
0.37
19
1.1
20
2.2
81
8.98
4.00
79
48
2.00
96
9.65
4.24
42
4.6
0.70
0.20
22.6
3.98
0.45
1.36
43
0.37
66
2.12
0.73
0.38
18
1.2
31
2.2
81
9.09
4.01
77
51
2.00
102
9.67
4.23
42
4.6
0.70
0.20
21.3
4.04
0.48
1.37
45
0.39
136
1.79
0.78
0.16
16
0.75
55
2.1
308
6.29
3.40
68
108
1.56
40
10.36
4.73
50
7.9
0.81
0.25
42.9
4.46
0.45
0.86
94
0.25
128
1.78
0.64
0.16
14
0.79
70
2.1
310
6.34
3.38
67
106
1.56
44
10.36
4.92
53
7.9
0.81
0.25
43.9
4.31
0.44
0.88
93
0.25
186
1.92
0.77
0.21
16
0.85
74
2.1
389
6.85
3.52
70
156
1.70
136
9.85
4.39
45
12.5
0.77
0.24
65
4.30
0.45
1.03
77
0.29
195
1.90
0.67
0.24
15
0.92
101
2.2
391
6.90
3.51
69
157
1.70
146
9.88
4.44
46
12.5
0.77
0.24
65
4.23
0.46
1.05
77
0.29
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
122
2.15
0.98
0.30
23
0.74
21
1.9
283
5.15
2.45
49
12
1.64
4
8.42
5.34
59
–
–
–
67
3.43
0.46
0.48
109
0.21
45
7.21
1.22
153
2.11
1.04
0.31
18
0.74
12
1.7
290
5.22
2.44
48
11
1.43
–
–
–
–
–
–
–
68
3.51
0.45
0.50
108
0.20
45
7.21
1.22
25.4
3.32
0.84
0.16
16
0.59
18.3
1.9
17.5
7.26
3.61
72
1.7
2.18
65
8.90
4.16
42
–
–
–
1.7
3.12
–
1.51
39
–
–
–
–
34.0
3.00
0.81
0.19
18
0.85
24.6
2.1
21.6
7.47
3.60
69
3.9
2.08
67
9.28
4.26
43
–
–
–
1.6
3.11
–
1.75
44
–
–
–
–
30.7
3.77
1.06
0.16
15
0.50
36.4
2.1
44
6.72
3.54
64
4.7
1.96
14
6.37
3.08
32
–
–
–
1.1
3.75
–
1.28
41
–
–
–
–
30.8
4.20
1.03
0.15
14
0.46
33.2
2.0
46
6.78
3.55
63
13.3
1.84
14
7.59
3.80
40
–
–
–
1.3
3.56
–
1.30
30
–
–
–
–
56
3.56
0.96
0.16
15
0.55
55
1.8
61
6.88
3.55
65
6.5
1.95
79
8.45
3.97
40
–
–
–
2.7
3.37
–
1.42
40
–
–
–
–
65
3.56
0.92
0.17
16
0.69
58
2.1
67
7.00
3.56
64
17.2
1.89
81
8.99
4.18
42
–
–
–
2.9
3.31
–
1.55
38
–
–
–
–
2023 Glencore Annual Report
101
Industrial activities continued
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Name of operation
Commodity
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
Measured Mineral
Resources
Indicated Mineral
Resources
Measured and
Indicated Resources
Inferred Mineral
Resources
Proved
Ore Reserves
Probable
Ore Reserves
Total
Ore Reserves
Nickel assets
INO
Murrin Murrin
Koniambo
Ore (Mt)
Nickel (%)
Copper (%)
Cobalt (%)
Platinum (g/t)
Palladium (g/t)
Ore (Mt)
Nickel (%)
Cobalt (%)
Ore (Mt)
Nickel (%)
7.3
2.85
0.85
0.07
0.80
1.8
163
1.00
0.08
15.8
2.18
10.0
2.81
0.87
0.06
0.83
1.8
164
1.01
0.08
9.5
2.47
36.7
2.51
1.96
0.05
1.00
1.7
48.3
0.98
0.07
44.6
2.09
38.1
2.45
1.90
0.06
1.00
1.9
52
0.98
0.07
43.8
2.41
44.0
2.56
1.77
0.06
0.92
1.7
211
1.00
0.08
60
2.11
48.1
2.52
1.68
0.06
0.98
1.8
215
1.00
0.08
53
2.42
56
1.58
1.72
0.03
0.76
1.2
9
0.95
0.06
110
2.10
54
1.57
1.76
0.03
0.77
1.2
9
0.95
0.06
85
2.50
8.6
2.38
0.72
0.05
0.72
1.7
134
0.97
0.08
–
–
8.2
2.10
0.69
0.05
0.63
1.3
83
1.03
0.09
9.5
2.22
23.4
2.02
0.84
0.05
0.50
0.86
25.4
0.95
0.07
–
–
20.6
1.89
0.85
0.04
0.53
0.74
7.4
1.08
0.09
26.0
2.19
31.9
2.12
0.81
0.05
0.56
1.11
159
0.97
0.08
–
–
28.8
1.96
0.81
0.05
0.56
0.90
90
1.03
0.09
35.5
2.20
Name of operation
Commodity
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
Measured Mineral
Resources
Indicated Mineral
Resources
Measured and
Indicated Resources
Inferred Mineral
Resources
Proved
Ore Reserves
Probable
Ore Reserves
Total
Ore Reserves
Ferroalloys assets
Western
Chrome Mines
Tailings
Eastern
Chrome Mines
Tailings
Vanadium
Manganese
Ore (Mt)
Cr2O3 (%)
Ore (Mt)
Cr2O3 (%)
Ore (Mt)
Cr2O3 (%)
Ore (Mt)
Cr2O3 (%)
Ore (Mt)
V2O5 (%)
Ore (Mt)
62
41.98
–
–
67
59
41.98
–
–
70
62
65
41.47
41.48
–
–
58
–
–
55
40.26
40.25
38.43
38.38
–
–
40
0.47
32.9
–
–
50
0.47
27.2
37.21
–
–
37.2
0.46
12.3
–
–
38.3
0.45
19.0
124
41.72
–
–
125
39.42
–
–
77
0.46
45.1
123
41.72
–
–
125
39.42
–
–
88
0.46
46.3
91
42.03
2.0
17.42
176
38.25
5
18.81
110
0.49
3
96
42.01
3.0
16.65
179
38.25
5
18.82
110
0.49
3
Mn (%)
36.96
36.50
36.38
36.84
36.87
36.55
36.49
7.9
30.04
–
–
19.9
34.99
–
–
11.3
0.47
20.1
36.19
8.8
30.18
–
–
22.8
34.67
–
–
18.1
0.46
18.6
36.36
2.6
28.02
–
–
7.6
31.45
–
–
7.1
0.43
–
–
2.0
28.17
–
–
7.6
30.27
–
–
8.2
0.43
2.9
35.79
10.5
29.54
–
–
27.6
34.02
–
–
18.3
0.46
20.1
36.19
10.8
29.81
–
–
30.4
33.58
–
–
26.3
0.45
21.5
36.28
Name of operation
Commodity
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
Measured Mineral
Resources
Indicated Mineral
Resources
Measured and
Indicated Resources
Inferred Mineral
Resources
Proved
Ore Reserves
Probable
Ore Reserves
Total
Ore Reserves
Aluminium assets
Aurukun
MRN
102
Ore (Mt)
Al2O3 (%)
Ore (Mt)
A.Al2O3 (%)
R.SiO2 (%)
96
53.50
422
47.31
5.33
96
53.50
–
–
–
344
49.70
4
48.95
2.55
331
49.90
–
–
–
440
50.50
425
47.32
5.31
427
50.70
3
3
48.60
49.40
–
–
–
150
49.47
3.96
–
–
–
–
–
43.3
48.91
4.89
–
–
–
–
–
–
–
2.9
49.04
4.85
–
–
–
–
–
–
–
46.3
48.91
4.88
–
–
–
–
–
2023 Glencore Annual Report
Industrial activities continued
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Name of operation
Commodity
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
Measured Mineral
Resources
Indicated Mineral
Resources
Measured and
Indicated Resources
Inferred Mineral
Resources
Proved
Ore Reserves
Probable
Ore Reserves
Total
Ore Reserves
Volcan - asset held for sale
Lead/zinc/silver deposits
Copper deposits
Energy Products
Name of operation
Coal assets
New South Wales
Queensland
South Africa
Cerrejón
Canada
Net Reserves
(2P - Proved and
Probable)1
31-Dec-22
Revisions
Divestment
Production
31-Dec-23
Ore (Mt)
Zinc (%)
Lead (%)
Silver (g/t)
Ore (Mt)
Gold (g/t)
21.5
6.12
1.56
86
18.4
22.5
5.97
1.55
89
18.4
73
4.29
1.28
80
34.3
74
4.21
1.25
82
34.3
–
–
–
–
94
4.71
1.35
81
53
–
97
4.62
1.33
83
53
–
Cu (%)
0.48
0.48
0.49
0.49
0.49
0.49
178
4.74
1.14
74
148
0.19
0.38
172
4.50
1.17
75
148
0.19
0.38
6.8
5.32
0.97
76
–
–
–
6.9
5.46
1.07
77
–
–
–
22.90
3.48
0.91
69
–
–
–
18.8
3.74
0.86
74
–
–
–
29.8
3.9 0
0.9 3
71
–
–
–
25.7
4.20
0.92
75
–
–
–
Measured Coal
Resources
Indicated Coal
Resources
Inferred Coal
Resources
Coal Reserves
Marketable
Coal Reserves
Proved
Probable
Proved
Probable
Total Marketable
Coal Reserves
Commodity
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
Steelmaking/Thermal Coal (Mt)
Steelmaking/Thermal Coal (Mt)
Thermal Coal (Mt)
Thermal Coal (Mt)
Steelmaking/Thermal Coal (Mt)
3,428
3,962
2,119
3,250
45
Equatorial Guinea
Cameroon
Working Interest Basis
3,665
3,964
2,219
3,200
45
Total
Oil
mmbbl
Gas
bcf
Oil
mmbbl
Gas
bcf
Oil
mmbbl
Gas
bcf
Combined
mmboe
8.8
-0.6
-1.7
6.5
126.9
-0.6
-28.3
98.0
1.7
0.1
-0.6
1.2
10.5
-0.5
-2.3
7.7
126.9
-0.6
-28.3
98.0
32.1
-0.6
-7.1
24.4
3,793
6,044
788
1,300
113
3,563
6,005
835
1,200
113
6,590
8,100
308
600
130
7,490
7,930
338
600
130
783
250
470
140
–
618
126
234
130
–
560
223
295
140
–
454
105
152
120
–
1,001
1,094
320
446
260
–
364
440
290
–
Net Reserves
(2P - Proved and
Probable)1
31-Dec-22
Revisions
31-Dec-23
Equatorial Guinea
Cameroon
Total
Working Interest Basis
Oil
mmbbl
Gas
bcf
Oil
mmbbl
Gas
bcf
Oil
mmbbl
Gas
bcf
Combined
mmboe
27.0
310.0
27.0
310.0
80.0
27.0
310.0
27.0
310.0
80.0
1. ‘Net’ Reserves or Resources are equivalent to Glencore’s working interest in the asset/property.
2023 Glencore Annual Report
103
Industrial activities continued
Carbon intensity of Industrial
activities
We show the carbon intensity of our
industrial assets as Scope 1 and 2 emissions
compared to their production (adjusted to
align with our organisational boundary of
operational control and expressed in tonnes
Cu-equivalent). We have shown metals
mining, coal mining, metals smelting and oil
refining separately. Emissions data is
collected on a site-by-site rather than
activity-by-activity basis. Integrated sites
with mining and smelting capability have
therefore been allocated to the most
appropriate category.
The GHG Protocol requires emissions to be
presented on a like-for-like basis throughout,
taking account of portfolio acquisitions and
disposals, with production having therefore
been adjusted to align with reported
emissions data.
Our 2019-2022 Scope 1 and 2 emissions have
been restated as further set out in the About
our emissions calculations and reporting
section on page 53.
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Metals mining1
Coal mining
Reported own sourced metals production
Copper
Zinc
Cobalt
Nickel
Lead
Gold
Silver
Converted to copper equivalents3,4
Less: attributable Cu-equivalent production
from non-operated JVs
Add: Cu-equivalent production
from Volcan
Less: net Cu-equivalent portfolio changes in
2022-23
Relevant Cu-equivalent production
CO2e emissions of operated assets (Scope 1)
CO2e emissions of operated assets (Scope 2)
CO2e emissions of operated assets
(Scope 1 & 2)
kt
kt
kt
kt
kt
koz
koz
kt
kt
kt
kt
kt
mt
mt
mt
Carbon intensity of metals mining
t CO2e/t
Cu-equiv
Metals smelting2
Reported smelter production
Copper anode
Copper cathode
Lead
Zinc
Ferroalloys
2023
2022
1,010.1
1,058.1
918.5
41.3
97.6
182.7
747
938.5
43.8
107.5
191.6
661
20,011
23,750
2,178
2,271
(492)
(496)
168
(16)
156
(63)
1,839
1,868
6.0
3.0
9.0
4.9
5.7
3.6
9.3
5.0
2023
2022
443.3
507.3
244.6
752.6
474.9
456.9
273.4
683.0
1,162.2
1,487.8
1,516
1,523
42
25
54
79
1,583
1,657
4.2
6.0
10.2
6.4
5.0
8.1
13.1
7.9
Reported coal production
Add: minority interests share of
operated JVs
Less: non-operated JVs
Less: net portfolio changes in
2022–23
Relevant coal production
Converted to copper equivalents
CO2e emissions of operated assets
(Scope 1)
CO2e emissions of operated assets
(Scope 2)
CO2e emissions of operated assets
(Scope 1 & 2)
2023
113.6
17.6
(5.7)
–
125.5
1,442
5.7
1.2
6.8
2022
110.0
16.8
(4.3)
(0.1)
122.4
1,407
5.6
1.1
6.7
mt
mt
mt
mt
mt
mt
mt
mt
mt
Carbon intensity of coal mining
t CO2e/t coal
0.055
0.055
Carbon intensity of coal mining
t CO2e/t Cu-equiv
4.7
4.8
Oil refining
Astron Energy - energy content of
refined products
CO2e emissions of Astron Energy
(Scope 1)
CO2e emissions of Astron Energy
(Scope 2)
CO2e emissions of Astron Energy
(Scope 1 & 2)
Carbon intensity of Astron Energy5
2023
2022
billion Btu
136,665
mt
mt
mt
t CO2e/billion Btu
0.8
0.1
0.9
6.5
–
0.0
0.0
0.0
–
CO2e emissions of operated assets (Scope 1 & 2)
CO2e emissions of operated assets
(Scope 1 & 2)
Metals
Coal
Smelters
Astron Energy
Add: other assets
Total reported CO2e emissions
(Scope 1 & 2)
Change vs. restated 2019 baseline
2023
2022
9.0
6.8
10.2
0.9
0.1
27.0
-18%
9.3
6.7
13.1
0.0
0.1
29.2
-11%
mt
mt
mt
mt
mt
mt
kt
kt
kt
kt
kt
kt
kt
kt
kt
mt
mt
mt
t CO2e/t
Cu-equiv
1. Includes integrated mine/smelter operations:
Mount Isa, Kazzinc, INO, Murrin Murrin,
Koniambo.
2. Includes integrated mine/smelter operations:
Ferroalloys.
3. Converted to Cu-equivalents on the basis of 2019
average prices.
Converted to copper equivalents
Add: minority interests share of
managed JVs
Add: net Cu-equivalent portfolio changes in
2022–23
Relevant Cu-equivalent production
CO2e emissions of operated assets (Scope 1)
4. Also includes by-products such as platinum,
CO2e emissions of operated assets (Scope 2)
palladium and rhodium.
5. Following an extensive multi-year rebuild, the
Astron Energy Refinery restarted operations in
early 2023.
CO2e emissions of operated assets
(Scope 1 & 2)
Carbon intensity of metals smelting
104
2023 Glencore Annual Report
Risk management
Effective risk management is
crucial in helping the Group
achieve its objectives of
preserving its overall financial
strength for the benefit of all
stakeholders and safeguarding
its ability to continue as a going
concern, while generating
sustainable long-term returns.
Glencore’s approach to risk management
and control is approved and overseen by
our Board and its committees and managed
by our Group leadership team. Risk
management is one of the core
responsibilities of the leadership team and it
is central to our decision-making processes.
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Board
The Board assesses and
approves our overall risk
appetite and monitors our risk
exposure and overall evaluation
of internal controls. This process
is supported by the Audit, HSEC
and ECC Committees.
There are four key areas the
Board needs to address to meet
its obligations under the UK
Corporate Governance Code
(Code).
• Conducting a robust
assessment of emerging and
principal risks;
• Monitoring the risk
management and internal
control system, and at least
once a year, reviewing its
effectiveness;
Management team
Our CEO, CFO, Head of
Industrial Assets and General
Counsel lead our management
team and are supported by the
rest of our Group leadership,
comprising our Head of
Corporate Affairs, Head of
Human Resources and Head of
Sustainability, and
departmental leadership
comprising the heads of each
marketing department and our
industrial leads.
• Considering the long-term
viability and success of
Glencore which is dependent
on the management of risk;
and
• Promoting a risk-aware
culture that encourages
proactive risk-based
management and decision
making.
In addition to this ongoing work
of the Board and its
committees, the Board
undertakes a complete review
of the Group’s principal and
emerging risks in its
Q4 meeting, which is then
updated and considered in
subsequent meetings for the
purposes of this report and the
half-year report.
Management is responsible for
the design, implementation,
and maintenance of the risk
management programme. By
operation of its oversight
function, management reviews
on an ongoing basis the impact
of our risks and appropriate
mitigants.
Management continues to
develop and update the
relevant internal risk
management procedures and
standards that support the risk
management programme.
Board Committees
We have established five key
committees and one temporary
committee:
• Audit Committee
• Remuneration Committee
• Nomination Committee
• HSEC Committee
• ECC Committee
• Investigations Committee
(temporary)
These committees provide
oversight of the risks in their
respective areas. They are tasked
with, among other things,
evaluating and monitoring these
risks. They receive regular
reports from the Group
corporate functions, including:
• Compliance
• Legal
• Finance
• HSEC&HR
• Sustainability
• IT
Departments and corporate functions
Monitoring and reporting are
the responsibility of the relevant
corporate and risk functions,
which provide regular updates
to the Board and its committees
covering various risks and the
performance of the relevant
controls in place. Reporting
covers various topics, including
Group VaR, credit exposure,
GIAA reports, litigation,
compliance monitoring and
HSEC&HR matters. The Board
also receives updates on the
Raising Concerns programme
and material external and
internal investigations.
Business risk owners in
departments are responsible
for their respective operations,
including implementing a risk
management process that
identifies, assesses and
manages risk.
Each corporate function
coordinates and leads the
design, implementation and
maintenance of its relevant risk
monitoring programme with
support from the business risk
owners and management in
their respective area of
responsibility.
2023 Glencore Annual Report
105
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Risk management process
Building on the structure of oversight, responsibility and process, these Principal Risks
and Uncertainties (PRUs) are managed across our two segments (Marketing and
Industrial activities) by cross-segment functional teams.
Monitoring
Internal controls
Identify
Measure
Mitigate &
control
Report
Board
HSEC
Audit
ECC & Investigation
Board
Strategic risks
HSEC risks
Finance risks
Legal and
Compliance risks
Cyber risks
PRUs
• Supply, demand
and prices of
commodities
• Geopolitical,
permits and
licences to operate
• Operational
delivery
• Low-carbon
economy
transition
PRUs
• Health, safety and
environment
• Social
performance and
human rights
• Catastrophic and
natural disaster
events
PRUs
• Currency
PRU
• Laws and
PRU
• Cyber
exchange rates
enforcement
• Counterparty
credit and
performance
• Liquidity
I
n
t
e
r
n
a
l
a
s
s
u
r
a
n
c
e
E
x
t
e
r
n
a
l
a
s
s
u
r
a
n
c
e
The Audit Committee and HSEC Committee
consider and approve the proposed risk-
based audit plan. The committees are
regularly updated on the status of delivery
against the audit plan, relevant findings and
the progress on the implementation of
agreed management action plans.
The GIAA audit plan is developed through
top-down discussions with senior
management and bottom-up independent
risk assessments of the audit and assurance
universe. GIAA also performs reviews at the
direction of senior management and the
Audit and HSEC Committees.
The audit and assurance reviews focus on
the design and operating effectiveness of
controls in place to mitigate the risks identified.
The Audit Committee and HSEC Committee
have concluded that the GIAA function
remains effective.
Risk management continued
Risk management process
Our risk management approach is modelled
after industry standards for internal control
frameworks. We seek to apply our approach
across the organisation, supported by our
controls and risk culture as follows:
Risk is identified, assessed and monitored
across each of the respective functions by
applying a framework that identifies
material matters and supports an ongoing
assessment of what matters most to our
business and stakeholders. The Company’s
senior management works with the
commodity departments and corporate
functions on an ongoing basis to assess the
Group’s major risks.
Glencore’s principal risks and uncertainties
are organised into five key pillars: Strategic,
HSEC, Finance, Legal and Compliance,
and Cyber.
Managing risk for joint ventures
(JVs)
We take measures to ensure that our
material risk management practices are
implemented at the JVs that we control or
operate. In other JVs, we seek to influence
our JV partners to adopt our commitment to
responsible business practices and
implement appropriate programmes in
respect of their main business risks.
Group Internal Audit and
Assurance (GIAA)
GIAA provides independent and objective
assurance and advisory services to help
strengthen governance, risk management
and control processes. In doing so, GIAA
supports the Board and senior management
in protecting the stakeholders, assets and
reputation of Glencore.
106
2023 Glencore Annual Report
Risk management continued
Principal and emerging risks
Our approach is framed by the ongoing
understanding of the risks that we are
exposed to, emerging trends that could
seriously impact our business model, our risk
appetite in respect of these risks, how these
risks change over time and our efforts to
ensure risk monitoring takes place across
multiple organisational levels.
In accordance with UK Financial Reporting
Council guidance, we define a principal risk
as a risk or combination of risks that could
seriously affect the performance, future
prospects or reputation of Glencore. These
include those risks which would threaten the
business model, future performance,
solvency, or liquidity of the Group.
The Group understands an emerging risk as
a risk that has not yet fully crystallised but is
at an early stage of becoming known and/or
coming into being and expected to grow in
significance in the longer term. Emerging
risks typically have their origin outside
Glencore and there is often insufficient
information for these risks to be fully
understood and mitigation by the Group
may not be possible.
The Board mandates its ECC, HSEC and
Audit Committees to identify, assess and
monitor the principal and emerging risks
relevant to their respective remits. These
committees meet at least four times a year
and are always followed by a meeting of the
Board, giving the opportunity for all
Directors to review and discuss their work.
Risk assessment
The assessment of our principal risks,
according to exposure and impact, is detailed
on the following pages. The commentary on
the risks in this section should be read in
Strategic Report
Corporate Governance
Financial Statements
Additional Information
conjunction with the explanatory text under
the section Understanding our risk
information which is set out on page 108 and
the Important notice on page 299.
In total, there are 12 PRUs (2022: 12), of which
the following five are the most significant
and may potentially give rise to the most
material and adverse effects on the Group:
• supply, demand and prices of
commodities;
• liquidity;
• geopolitical, permits and licences to
operate;
• laws and enforcement; and
• catastrophic and natural disaster events.
Marketing risk (MR)
management
Glencore’s marketing activities are
exposed to a variety of risks, such as
commodity price, basis, volatility, foreign
exchange, interest rate, credit and
performance, and liquidity. Glencore
devotes significant resources to
developing and implementing policies and
procedures to identify, monitor and
manage these risks.
Glencore’s MR is managed at an individual,
business and corporate level. Initial
responsibility for risk management is
provided by the businesses in accordance
with and complementary to their
commercial decision making. A support,
challenge and verification role is provided
by the corporate MR function headed by
the Chief Risk Officer (CRO) via its daily risk
reporting and analysis which is split by
market and credit risk.
The MR function monitors and analyses
the large transactional flows across many
locations using timely and comprehensive
recording and reporting of resultant
exposures, which provides the
encompassing positional analysis, and
continued assessment of universal
counterparty credit exposure.
The MR team provides a wide array of daily
and weekly reporting. The MR function
strives to continuously enhance its stress
and scenario testing as well as improve
measures to capture additional risk exposure
within the specific areas of the business.
Value at Risk
One of the tools used by Glencore to monitor
and limit its primary market risk exposure,
principally commodity price risk related to
its physical marketing activities, is a value at
risk (VaR) computation. VaR is a risk
measurement technique, which estimates a
threshold for potential loss that could occur
on risk positions as a result of movements in
risk factors over a specified time horizon,
given a specific level of confidence and
based on a specific price history. The VaR
methodology is a statistically defined,
probability-based approach that takes into
account market volatilities, as well as risk
Value at Risk
$m
200
150
100
50
0
Jan
Feb
Mar
Apr
May
Jun
Jul
Ago
Sep
Oct
Nov
Dec
Energy products (incl. LNG)
Metals and minerals
diversification by recognising offsetting
positions and correlations between
commodities and markets. In this way,
risks can be measured consistently across
markets and commodities and risk
measures can be aggregated to derive a
single risk value. Glencore uses a VaR
approach based on Monte Carlo
simulations computed at a 95%
confidence level and utilising a weighted
data history for a one-day time horizon.
Glencore’s Board, as part of its annual
review process in H2 2022, approved a
Group VaR limit (excluding LNG) of
$150 million, while maintaining a separate
multipronged LNG risk reporting and
control structure, including the continued
calculation and highlighting of VaR
outcomes. As market volatility somewhat
normalised in H2 2023, following a
comprehensive review, the Board in
consultation with the CRO and senior
management, determined that it was
appropriate to revert to a VaR limit that
includes LNG of $200 million.
The year-end VaR (one day 95%) was
$42 million, comfortably within the
Group’s $200 million limit. Average Group
VaR during 2023, including LNG was
$92 million, with an observable high of
$156 million and a low of $42 million, while
average equivalent VaR during 2022 was
$158 million. There were no limit breaches
during 2023.
2023 Glencore Annual Report
107
Risk management continued
Understanding our risk
information
There are many risks and uncertainties which
have the potential to significantly impact our
business. The order in which these risks and
uncertainties appear does not necessarily
reflect the likelihood of their occurrence or the
relative magnitude of their potential material
adverse effect on our business.
We have sought to provide examples of
specific risks, however, the below list does
not purport to be exhaustive. These principal
risks and uncertainties should be considered
in connection with any forward-looking
statements in this document as explained
on page 299.
Identifying, quantifying and managing risk is
complex and challenging. Although we seek to
identify and, where appropriate and
practical, actively manage risk through the
implementation of Policies, Standards and
Procedures, there can be no assurance that
these measures will be effectively implemented
and adequately protect the Group against
identified risks, including the principal risks and
uncertainties listed in the following pages.
This section describes our attempts to
manage, balance or mitigate risk. Risk is,
however, by its very nature uncertain and
inevitably events may lead to our policies
and procedures not having the intended
mitigating effect on the negative impacts of
the occurrence of a particular event. Our
scenario planning and stress testing may
accordingly prove to be inadequate,
particularly in situations where material
negative events occur in close succession.
Since many risks are connected and the
effects of one risk may exacerbate other risks
we face, our analysis should be read against
all risks to which it may be relevant.
108
2023 Glencore Annual Report
Strategic Report
Corporate Governance
Financial Statements
Additional Information
In this section, we have sought to update our
explanations, reflecting our current outlook.
Certain investors may also be familiar with
the risk factors that are published in the
Group debt or equity prospectuses or listing
documents. These provide in part some
differing descriptions of our principal risks.
Our latest documentation for debt investors
and their related risk disclosures is available
at: glencore.com/investors/debt-investors.
To provide additional context for these
descriptions:
• where we hold minority interests in certain
businesses, although these entities are not
generally subsidiaries and would not usually
be subject to the Group’s operational
control, these interests should be assumed
to be subject to these risks. ‘Business’ refers
to these and any business of the Group;
• where we refer to natural hazards, events
of nature or similar phraseology we are
referring to matters such as earthquakes,
floods, severe weather and other natural
phenomena;
• where we refer to ‘mitigation’ we do not
intend to suggest that we eliminate the
risk, but rather it refers to the Group’s
attempt to reduce or manage the risk. Our
mitigation of risks will usually include the
taking out of insurance where it is
customary and economic to do so;
• this section should be read as a whole –
often commentary in one section is relevant
to other risks and the occurrence of one risk
may exacerbate the other risks we face;
• ‘commodity/ies’ will usually refer to those
commodities which the Group produces
or sells;
• ‘law’ includes regulation of any type;
• ‘risk’ includes an uncertainty or hazard and
together with ‘material adverse effect on the
business’ should be understood as a negative
change which can seriously affect the
performance, future prospects or reputation
of the Group. These include those risks which
would materially threaten the business
model, future performance, reputation,
solvency or liquidity of the Group; and
• a reference to a note is a note to the 2023
financial statements.
Risk appetite
Following from our strategy and our key risk
principles, our risk appetite can be defined
as ‘the nature and extent of risk the Group is
willing to accept in relation to the pursuit of
its objectives’. We look at risk appetite from
the context of severity of the consequences
expected should the risk materialise following
an evaluation of any internal or external
factors influencing the risk and the status of
management actions to mitigate or control
the risk.
If a risk exceeds our appetite, it can threaten
the achievement of our objectives and may
require a change to our strategy. If a risk is
approaching the limit of the Group’s appetite,
management action will be required to ensure
the risk remains within appetite levels.
For certain risk implications, such as those
relating to safety or compliance, we are averse
to any exceptions or deficiencies. Our internal
assurance programmes seek to evaluate these
controls along with technical and specialised
experts and the results of that assurance work
will determine the risk appetite evaluation,
along with the management response to any
issues identified.
We classify our PRUs and set the corresponding
risk appetite categorisations as follows:
Averse
Mitigation of risk and uncertainty to a low
probability of occurrence is a paramount
objective as the consequences of
occurrence could be catastrophic or of such
a severity to our reputation that it could
result in an existential event for the Group.
Minimal
Mitigation to a minimal level of residual
risk for risks that present less severe
consequences ultimately resulting in an
agreed operational tolerance level, such
as VaR and liquidity minimum limits, or
the thresholds set within the authority
delegated to management.
Cautious
The risk is of a strategic and inherent
nature of the business environment in
which we operate. Exposure and
tolerance to such risks (e.g. supply and
demand of commodities) are a function of
the strategy chosen, matters of which are
reserved for the Board and/or shareholders.
We further assess the potential impact and
likelihood of PRUs, which informs our analysis
of these risks in comparison to the prior year.
Impact
Impact represents the impact of the risks
once all key controls and other mitigating
factors have been applied. It is the residual
impact the risk might have on the Group’s
operations and viability. Impact is
measured as low, medium and high.
Likelihood
Likelihood, similar to impact, is the
residual likelihood of a risk crystallising
after all key controls and other mitigating
factors have been applied.
It is in direct correlation with the level of
control that management has over a
particular given risk. The more a risk is
subject a to higher degree of external
factors, the higher the likelihood will be.
Likelihood is measured as unlikely, possible
and likely.
Risk management continued
Summary map of PRUs
Unlikely
Possible
Likely
1
6
9
10
11
12
8
Impact
Low
Medium
High
Risk probability change
in 2023 vs. 2022
Increase
Stable
Decrease
Risk
appetite
Impact
Likelihood
2023 vs.
2022
2
3 4
5
7
Principal Risks
Strategic
1
Supply, demand and prices of commodities
Cautious
2 Geopolitical, permits and licences to operate Cautious
3 Operational delivery
4
Low-carbon economy transition
Minimal
Cautious
HSEC
5 Health Safety and Environment
Averse
6
Social performance and human rights
Minimal
7 Catastrophic and natural disaster events
Averse
Finance
8 Currency exchange rates
9 Counterparty credit and performance
10 Liquidity
Legal and Compliance
11
Laws and enforcement
Cyber
12 Cyber
Emerging risks
1. Demand for commodities we produce
2. Material substitution
Likely
Possible
Possible
Possible
Possible
Likely
Possible
Likely
Possible
Possible
Minimal
Minimal
Minimal
Averse
Possible
Minimal
Possible
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Additional Information
2023 developments and
overview of principal risks and
uncertainties
Supply, demand and prices of
commodities
The overall cycle of inflation, tighter monetary
conditions and limited global economic
growth has contributed to average period-
over-period price reductions in copper, cobalt,
nickel and zinc of 4%, 50%, 16% and 24%,
respectively. The outlook remains uncertain.
While lower energy prices have tempered
some of the inflationary pressures in key
Western markets, the restart of previously
shuttered energy-intensive industries,
including some steel, zinc and aluminium
production, has been limited by weak
end-user markets, particularly in Europe.
Chinese growth is also difficult to gauge
given the positives of accelerated demand
from domestic consumer sectors and
continued investment in infrastructure and
the energy transition, balanced with the
persistent weakness in the property market.
Mergers and acquisitions
The proposed acquisition of Teck’s
steelmaking coal assets, EVR, is a
meaningful development for the Group. In
the near term, the Board and management
are focused on transaction execution,
including swift and effective integration of
EVR into Glencore’s operating environment.
The initial outflow of consideration for this
acquisition may also materially increase
Glencore’s exposure to commodity price risk.
This risk is somewhat mitigated by the
strongly cash-generative nature of the assets
to be acquired, and Glencore’s existing
policies around liquidity risk (see risks 1. and
10., below). In the longer term, the potential
demerger would be a transformative
development for Glencore and would need
to be carefully planned and implemented.
Operational delivery
Coal, copper and ferrochrome were within
acceptable performance ranges in 2023.
Nickel was impacted in three areas: follow-
on effects of a prolonged strike at Raglan in
2022 impacted Integrated Nickel Operations
(INO), while Murrin Murrin experienced some
outages due to scheduled major
maintenance and Koniambo experienced
some underperformance. An emerging issue
is the need to closely review the schedule
and budget for the Onaping Depth project
where main ore production will be delayed
relative to earlier expectations and the costs
for this project may increase accordingly.
The Zinc department underperformed at its
Zhairem project, with remediation works
taking longer than expected.
Low-carbon economy transition
At our 2023 AGM, there was a high
percentage of votes (c.30%) against approval
of our 2022 Climate Report and almost the
same sized vote in favour of a climate-
related shareholder resolution that the
Board recommended against. We have
consulted with shareholders to understand
the drivers behind the votes; it is clear that
there is a very wide range of views, but
shareholders generally remain supportive of
our strategy. Together with this report we
have published our updated Climate Action
Transition Plan, which will be put to
shareholders at our 2024 AGM for an
advisory vote.
Understanding impacts on nature
The launch of the Taskforce on Nature-related
Financial Disclosures (TNFD) is expected to
result in greater scrutiny by stakeholders and
regulators of Glencore’s assessment and
management of nature-related risks and
opportunities, and its commitments to
manage its impacts on nature. We are in the
2023 Glencore Annual Report
109
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Financial Statements
Additional Information
consolidated net debt by around
$6.93 billion, adjusted for working capital
and other closing adjustments, as per the
agreed transaction documentation. The
assets being acquired are expected to be
highly cash-generative based on current
and forecast steelmaking coal prices, and
the Directors have a reasonable expectation
that the Group’s consolidated net debt will
reach or make significant progress towards
the targeted $5 billion level or less over the
period of 24 months from close.
Based on the results of the related analysis,
the Directors have a reasonable expectation
that the Group will be able to continue in
operation and meet its liabilities as they
fall due over the four-year period of
this assessment.
Longer-term viability
In accordance with the requirements of the
UK Corporate Governance Code, the Board
has assessed the Company’s long-term
viability over a four-year assessment period.
It has also considered the Company’s
prospects in the longer term, incorporating
but not limited to the 2050 date associated
with the Company’s net zero ambition.
The assessment was informed by the
potential medium- and long-term impact
of climate change on the outlook for our
commodity businesses, under a range of
possible scenarios, as set out on page 44.
Such impacts are uncertain, being
particularly dependent on long-term
changes in the energy mix related to power
generation and transportation, as well as
consumption efficiencies, behavioural
change and co-ordinated implementation
of government policy and regulation
frameworks. This analysis, however,
indicates stable or improving opportunities
in all scenarios for the energy transition
metals we are most materially exposed to,
being copper, cobalt and nickel. Over time,
we expect demand for seaborne thermal
coal to fall across all scenarios. Our own
portfolio risk to such demand reduction is
mitigated by our trajectory of a responsible
phase-down.
The Board has assessed the Company’s
ability to meet its liabilities as they fall due
over the four-year period from 1 January
2024. This period is consistent with the
Company’s established annual business
planning and forecasting processes and cycle
which is subject to review and approval each
year by the Board. The Directors believe this
is an appropriate review period having
regard to the Group’s business model,
strategy, principal risks and uncertainties,
sources of funding and liquidity.
The four-year plan considers Glencore’s
Adjusted EBITDA, capital expenditure,
funds from operations (FFO) and Net debt,
and the key financial ratio of Net debt to
Adjusted EBITDA. It incorporates stress
tests to simulate the potential impacts of
exposure to the relevant principal risks and
uncertainties. While all the PRUs have the
capability to impact business and financial
performance, the most scenario-relevant to
the assessment of viability are Risk 1
(Supply, demand and prices of
commodities), Risk 8 (Currency exchange
rates) and Risk 3 (Operational delivery).
For the 2024–27 plan the stress test
scenarios were:
• Scenario 1: Reversion – Commodity prices
and inflation reverting to historical norms
over the outlook period (Highly likely);
• Scenario 2: Recession – Commodity prices
set at the low end of analysts’ consensus
ranges as of December 2023 for the
entirety of the outlook period
(Improbable); and
• Scenario 3: Higher interest environment
– Interest rates at 6.5% p.a. throughout
the outlook period (Possible but unlikely)
Subject to receipt of mandatory regulatory
approvals, the Company expects to finalise
its acquisition of a 77% interest in EVR no
later than Q3 2024. This will initially increase
Risk management continued
process of rolling out internal training on
nature-related objectives and strengthening
nature-related risk assessments.
Legal and compliance
Investigations remain ongoing by Swiss
authorities for failure to have organisational
measures in place to prevent alleged
corruption and an investigation of similar
scope by the Dutch Public Prosecution
Service. The timing and outcome of these
investigations remain uncertain. In addition,
as a result of the resolutions of the US, UK
and Brazilian investigations, a number of
group actions and other civil claims have
been made or threatened and other
authorities have or have threatened to
open investigations.
Monitors
The independent compliance monitors
mandated under our resolutions with the
DOJ have been appointed and commenced
their work. The Group intends to engage
constructively with the monitors during the
review periods and thereafter will need to be
prepared to implement the
recommendations coming out of the reviews.
Russia/Ukraine war
Western governments continue to tighten
sanctions, particularly concerning individuals
and companies associated with the Russian
government. This requires ongoing vigilance,
but the impact on commodity markets has
generally stabilised.
110
2023 Glencore Annual Report
Risk management continued
1. Supply, demand and prices
of commodities
2023 vs. 2022 Risk appetite
Link to
strategy
Cautious
We are subject to the inherent risk of
sustained low prices for our main
commodities, particularly affecting our
industrial business. The revenue and
earnings of substantial parts of our industrial
asset activities and, to a lesser extent, our
marketing activities, are dependent upon
prevailing commodity prices. The prices of
the commodities we produce are dependent
on the expected volumes of supply or
demand for commodities which can vary for
many reasons out of our control.
New or improved energy production
possibilities and/or technologies are likely to
reduce the demand for some commodities.
Net zero emissions commitments require
demand for unabated coal and other
hydrocarbon fuel sources to significantly
reduce over time.
The dependence of the Group (especially our
industrial business) on commodity prices,
supply and demand of commodities, makes
this the Group’s foremost risk.
Strategic priorities
Responsible and ethical production
and supply
Responsible portfolio management
Responsible product use
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Financial Statements
Additional Information
Potential impact on the Group
• Significant falls in the prices of certain
commodities (e.g., copper, coal, zinc, nickel
and cobalt) can have a severe drag on our
financial performance, impede
shareholder returns and could lead to
concerns by external stakeholders as to
the strength of the Group’s balance sheet.
• A global surplus or shortage in one or more
of the commodities we produce could have
a major impact on their traded price, and
therefore on our financial performance.
Mitigating factors or controls
Certain aspects of our business model
provide inherent mitigating factors:
• diversity in our portfolio of commodities,
geographies, assets and contracts;
• preparations for anticipated shifts in
commodity demand, for example by
putting a special focus on the parts of the
business that will potentially grow with
increases in usage of electric vehicles and
battery production, and close monitoring
of fossil fuel (particularly thermal coal)
demands; and
• ability to reduce the production of any
commodity within our portfolio in
response to changing market conditions.
We can also utilise established and
implemented mitigating controls, such as:
• financial leverage of under 1x in the
ordinary course of business, which should
support our ability to obtain financing in
a downside scenario (see Liquidity
risk below);
• maintaining focus on cost discipline and
achieving greater operational efficiency to
increase our resilience to lower prices; and
• actively managing commodity price risk in
our Marketing segment, including via daily
analysis of Group VaR.
2. Geopolitical, permits and
licences to operate
2023 vs. 2022 Risk appetite
Link to
strategy
Cautious
We control and operate assets in many
countries across the globe, some of which
are categorised as developing, complex or
having unstable political or social
environments. As a result, we are exposed to
a wide range of political, economic,
regulatory, social and tax environments.
Regulatory regimes applicable to resource
companies can often be subject to adverse
and unexpected changes. Our operations
may also be affected by political and
economic instability, including terrorism,
civil disorder, violent crime, war and
social unrest.
The terms attaching to any permit or licence
to operate may be onerous and obtaining
these and other approvals can be particularly
difficult. Furthermore, in certain countries,
title to land and rights and permits in
respect of resources may be challenged.
Increased scrutiny by governments and tax
authorities in pursuit of perceived aggressive
tax structuring by multinational companies
has elevated potential tax exposures for
the Group. Additionally, governments have
sought additional sources of revenue
by increasing rates of taxation, royalties
or resource rent taxes and aggressively
enforcing their tax codes. The tax codes
of some countries can be uncertain in their
application and the access to impartial
administrative and judicial redress may
be limited.
Potential impact on the Group
• Adverse actions by governments and
others can result in operational/project
delays or loss of permits or licences
to operate, which could have a material
adverse effect on the Group and affect the
Group’s long-term viability and success.
• Failure to obtain or renew a necessary
permit or the occurrence of other disputes
could mean that we would be unable
to proceed with the development or
continued operation of an industrial asset
and/or impede our ability to develop
new assets.
• Laws and regulations in the countries in
which we do business may change or be
implemented in a manner that may have
a materially adverse effect on the Group.
Mitigating factors or controls
• The Group’s industrial assets are diversified
across various countries which reduces the
Group’s exposure to any particular country.
• The Group has an active engagement
strategy with the governments, regulators
and other stakeholders within the
countries in which it operates or intends
to operate. Through strong relationships
with stakeholders, we endeavour to secure
and maintain our licences to operate.
• We endeavour to operate our businesses
according to high legal, ethical, social and
human rights standards, and to ensure
that our presence in host countries leaves
a positive lasting legacy.
• We operate under a Group Tax Policy,
annually reviewed by the Board, which
sets out the Group’s commitment
to comply with all applicable tax laws,
rules and regulations, without exception,
and to be characterised as a ‘good
corporate fiscal citizen’.
2023 Glencore Annual Report
111
Risk management continued
3. Operational delivery
2023 vs. 2022 Risk appetite
Link to
strategy
Minimal
Our industrial activities are subject to
significant risks throughout each operation’s
lifecycle, from project planning, through
initiation, development, operation and/or
expansion and ultimate closure.
The delivery of projects can be impacted by
a range of factors, including an inadequate
level of resource knowledge, inappropriate
design and engineering, lack of independent
review, permitting delays, poor project
execution resulting in schedule delays and
cost increases, commissioning delays and
extended ramp-up to design, or not
achieving design outputs.
Delivery of operational performance at existing
industrial assets can be impacted by a range
of factors, including a level of geological risk
relating to factors such as structure and grade
as well as geotechnical and hydrological risks,
natural hazards, processing problems,
technical malfunctions, supply chain risk of
unavailability of materials and equipment,
unreliability and/or constraints of
infrastructure, disasters, force majeure factors,
cost overruns, or delays in permitting or other
regulatory matters.
Strategic priorities
Responsible and ethical production
and supply
Responsible portfolio management
Responsible product use
112
2023 Glencore Annual Report
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Financial Statements
Additional Information
Some of the Group’s interests in industrial
assets do not constitute controlling stakes.
Although the Group has various arrangements
in place which seek to protect its position
where it does not exercise control, these assets
or other shareholders in these entities may act
contrary to the Group’s interests or be unable
or unwilling to fulfil their obligations.
or be liable for the past acts, omissions or
liabilities of companies or businesses it has
acquired, which may be unforeseen or
greater than anticipated at the time of the
relevant acquisition.
• Sales of assets may also result in
unintended consequences that impact
our operations.
plans for each asset are reviewed, including
to understand the range of potential risks to
operational delivery.
• Major acquisitions and disposals are
subject to a comprehensive review process
by senior management and the Board,
with support from relevant internal
experts and external advisers.
Major acquisitions, disposals or business
combinations also entail a number of risks,
including in connection with ongoing
regulatory requirements and obligations, as
well as the ability of the Group to effectively
integrate any businesses acquired with its
existing operations and the realisation of any
anticipated synergies.
Potential impact on the Group
• The development and operation of assets
may lead to future upward revisions in
estimated costs (capital and operating
expenditure), including in relation to delays
or other operational difficulties or damage
to properties or facilities, which may cause
production to be reduced or to cease, and
may require greater infrastructure spending.
• Severe operating difficulties may result
in impairments.
• Failure to successfully integrate an acquired
business and/or realise expected synergies
could have a material adverse effect on
the Group’s business, financial condition,
results of operations or prospects.
Acquisitions can result in significant
one-time write-offs or restructuring charges,
unanticipated costs, challenges
addressing possible differences in
business culture, processes, controls,
procedures and systems and failing to
integrate and motivate key employees
and/or retain certain individuals during the
integration period. The Group may also
face challenges with redeploying
resources in different areas of operations
Mitigating factors or controls
• We seek to ensure that project
development and operating risks and
hazards are managed through our
continuous project status evaluation and
reporting processes and the ongoing
assessment, and reporting and
communication of the risks that affect
our operations along with updates to the
risk register.
• We have developed a Group Project
Management standard which defines the
corporate requirements for major project
development, including governance
requirements for concept, pre-feasibility and
feasibility studies and execution. Major
projects are also required to be subject to an
independent peer review process as part of
the approval to progress from the pre-
feasibility project phase to the subsequent
feasibility and execution phases.
• We publish our assessment of reserves
and resources based on available drilling
and other data sources annually.
Conversion of resources to reserves and,
eventually, reserves to production is an
ongoing process that takes into account
technical and operational factors, and the
economics of the particular commodities
concerned. We also report our production
results quarterly and provide guidance on
future production periods which considers
exposure to operational delivery risk.
• We manage a disciplined annual process for
life of asset planning whereby the resource
development and subsequent production
Risk management continued
4. Low-carbon economy
transition
2023 vs. 2022 Risk appetite
Link to
strategy
Cautious
The global transition to a low-carbon
economy may affect our business through
regulations to reduce emissions, carbon
pricing mechanisms, reduced access to
capital, permitting risks and fluctuating
energy costs, as well as changing demand
for the commodities we produce and
market. A number of governments have
already introduced or are contemplating the
introduction of regulatory responses to
support the achievement of the goals of the
Paris Agreement and the transition to a
low-carbon economy. This includes countries
where we have assets such as Australia,
Canada, Chile and South Africa, as well as
significant customer markets such as China,
South Korea, Japan, the United States
and Europe.
A transition to a low-carbon economy and its
associated public policy and regulatory
developments is likely to reduce demand for
fossil fuels over time and could lead to
certain of our thermal coal assets no longer
being economically viable.
Potential impact on the Group
• A transition to a low-carbon economy and
its associated public policy and regulatory
developments may lead to:
– the imposition of new regulations, and
climate change-related policies on fossil
fuels by actual or potential investors,
customers and banks, that may impact
Glencore’s reputation, access to capital
and financial performance;
Strategic Report
Corporate Governance
Financial Statements
Additional Information
– import duties/carbon taxes in our
customers’ markets which may affect
our access to those markets as well as
our commodities’ delivery costs;
– increased costs for energy and for other
resources, which may impact associated
costs and the economic competitiveness
of our industrial assets;
– the imposition of levies or taxes, whether
or not related to greenhouse gas
emissions; and
– impacts on the development or
maintenance of our industrial assets due
to restrictions in operating permits,
licences or similar authorisations.
• Variations in commodity use from emerging
technologies, moves towards renewable
energy generation and policy changes
may affect demand for our products, both
positively and negatively.
• Implementing low-carbon processes and
technologies at our industrial assets may
increase our operating costs, while also
potentially growing/changing our
customer base.
• ESG concerns may increase pressure to
divest our coal assets, limit/stop our access
to financing, restrict production from,
development of, or close assets and impact
our ability to optimise our portfolio. Some
may choose not to invest in or transact
with us, due to our fossil fuel operations.
• Socio-economic concerns associated with
the transition to a low-carbon economy
may increase expectations of our closure
plans and increase closure liabilities.
• We may be the subject of climate-related
litigation or regulatory scrutiny. There has
been a significant increase in litigation
(including class actions), in which climate
change and its impacts are a contributing or
key consideration, including administrative
law cases, tortious cases and claims brought
by investors. In particular, a number of
lawsuits have been brought against
companies with fossil fuel operations in
various jurisdictions seeking damages
related to climate change. A number of
regulators have also increased their scrutiny
of companies’ actions in respect of climate
change, including through investigating
claims related to inaccurate or misleading
disclosure and/or greenwashing.
Mitigating factors or controls
• We seek to integrate climate
considerations, such as energy and
climate policies in countries where we
operate and sell our products,
expectations of our value chains, and
potential impacts from commitments to
achieve the goals of the Paris Agreement,
into our strategic decisions and day-to-day
operational management.
• Our internal Climate Change Taskforce, led
by our CEO and overseen by the Board of
Directors, is responsible for delivering our
climate strategy and addressing progress
against our climate commitments.
• We monitor and report our Scope 1, 2 and
3 industrial emissions, and use this data in
managing our operational emissions, as
well as for purposes of tracking progress
against our targets.
• Subject to a supportive policy
environment, we intend to deliver our
ambition of net zero industrial emissions
by the end of 2050 as further outlined in
our 2023 Climate Action Transition Plan.
5. Health, safety and
environment
2023 vs. 2022 Risk appetite
Link to
strategy
Averse
Industrial operations are inherently
hazardous. The success of our business is
dependent on a safe and healthy workforce
and work environment. Identifying and
managing risks to the safety and health
of our people is essential for maintaining
our commitment to responsible production.
Our operations around the world can
have direct and indirect impacts on the
environment and host communities. Our
ability to manage and mitigate these may
impact maintenance of our operating
licences as well as affect future projects,
acquisitions and our reputation.
We operate in some countries characterised
by complex and challenging political and/or
social climates, which increases our risk of
non-compliance with external laws and
regulations as well as our HSEC&HR Policies
and Standards.
Potential impact on the Group
• Compliance with environmental, safety
and health regulations, and our relevant
HSEC&HR Policies or Standards, may result
in increased costs.
• To understand better and plan for the
• Non-compliance or incidents causing
effects of climate change on our business,
we have a framework for identifying,
understanding, quantifying, where possible,
and, ultimately, managing climate-related
risks and opportunities facing our portfolio
which covers government policy, lobbying
activities, carbon pricing, energy costs,
physical impacts, access to capital, risks
relating to permits, product demand and
litigation risks.
serious injury or fatality or other damage
at, or to, our facilities or surrounding areas,
may result in significant losses. Related
consequences could include (1)
interruptions in production, (2) litigation
and imposition of penalties and sanctions,
(3) having licences and permits withdrawn
or suspended while being forced to
2023 Glencore Annual Report
113
industrial assets to meet, as well as those
for our workforce and business partners.
• We have re-launched SafeWork, Glencore’s
approach to creating a workplace without
fatalities and serious injuries. SafeWork
provides a set of minimum expectations for
the management of fatal and catastrophic
hazards, the consistent application of which
can drive a safe operating discipline and a
positive safety culture.
• We work with local authorities, local
community representatives and other
partners, such as NGOs, to help overcome
major public health issues in the regions
where we work, such as HIV /AIDS, malaria
and tuberculosis.
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Financial Statements
Additional Information
6. Social performance and
human rights
2023 vs. 2022 Risk appetite
Link to
strategy
Minimal
Respecting human rights and building
strong relationships with the communities
in which we operate are fundamental to the
current and future viability of our business.
We have a geographically diverse business,
operating in both developed and developing
countries in an array of different contexts.
A perception that we are not respecting
human rights or generating local sustainable
benefits could have a negative impact
on our ability to operate effectively, our
reputation with stakeholders, our ability
to secure access to new resources, our
capacity to attract and retain the best talent
and ultimately, our financial performance.
Areas that may be affected negatively
include the health and safety of our
workforce and surrounding communities,
environmental damage and interactions
with individuals and groups who live and
work in or near our local communities.
Poor performance can contribute to social
instability and the perceived and real
value of our assets.
Some of our mining operations are
in remote areas where they are a major
employer in the region. This presents
particular social challenges when the mine’s
resources are depleted to an extent that
it is no longer economic to operate and
must be closed.
Potential impact on the Group
The consequences of adverse community
reactions or allegations of human rights or
social incidents could also have a material
adverse impact on the cost, profitability,
ability to finance or even the viability of
an operation and the safety and security
of our workforce and assets. In addition,
global connectivity means that local issues
can quickly escalate to a regional, national
and global level, potentially resulting in
reputational damage and social instability.
Mitigating factors and controls
• We respect communities’ perspectives by
seeking to actively consult with them on
our decision making, and engaging openly
and honestly to build lasting relationships.
• We endeavour to focus our social
investments on initiatives and
programmes to deliver long-term benefits
fostering socio-economic resilience.
• We support the advancement of the
interests of both our host communities
and our industrial assets.
• We seek to apply the UN Voluntary
Principles on Security and Human Rights
in regions where there is a high risk
to human rights from the deployment
of public and private security forces.
• We tailor our community approach
to be relevant and appropriate to the
local context, including regarding tangible
and intangible cultural heritage.
• We strive to uphold and respect the
human rights of our workforce, local
communities and others who may be
affected by our activities, in line with the
United Nations Guiding Principles on
Business and Human Rights.
Risk management continued
undertake extensive remedial clean-up
action or to pay for government-ordered
remedial clean-up actions, and (4)
undertaking remedial actions or
reparations, including payment of
compensation, to negatively impacted
communities.
• Failure to operate responsibly may have
long-term negative impacts for host
communities and the environment, and
erode trust in the integrity of our
organisation and harm our reputation.
• Liability may also arise from the actions
of any previous or subsequent owners or
operators of the property, by any past or
present owners of adjacent properties,
or by third parties.
Mitigating factors or controls
• Our HSEC&HR Policies, Standards and fatal
hazard protocols (FHPs) have been
developed to assist in the management of
the fatal and catastrophic hazards that
present a material risk to our industrial
assets.
• We establish HSEC&HR Policies, Standards
and Procedures designed to (1) protect our
people, communities and the
environment, and (2) ensure we comply
with laws and external regulations. These
also set out our goals, objectives,
expectations and requirements that
should be applied consistently across the
Group and provide clear guidance on the
minimum requirements we expect all our
Strategic priorities
Responsible and ethical production
and supply
Responsible portfolio management
Responsible product use
114
2023 Glencore Annual Report
Risk management continued
• We require our industrial assets to
implement locally appropriate complaints
and grievance processes to receive
feedback and comments on our
performance, and take actions when
necessary to address the issues raised.
• We believe that legal artisanal and
small-scale mining (ASM) can play an
important and sustainable role in many
economies when carried out responsibly
and transparently, including the DRC.
We work with the Fair Cobalt Coalition,
an NGO that works towards eliminating
child and forced labour, improving work
practices in ASM operations, and
supporting alternative livelihoods to help
increase incomes and reduce poverty.
• We implement policies, standards and
procedures designed to identify, prevent
and mitigate human rights risks and
impacts across our business, and
are committed to understanding and
documenting the social risks and
opportunities in the communities
in which we operate.
Strategic Report
Corporate Governance
Financial Statements
Additional Information
7. Catastrophic and natural
disaster events
2023 vs. 2022 Risk appetite
Link to
strategy
Averse
Catastrophic or natural disaster events at the
Group’s industrial assets can have disastrous
impacts on workers, communities and the
environment, while also impacting
production and resulting in substantial
financial costs and harm to our reputation.
These events may arise due to natural
causes (flood, earthquake, drought) or due
to infrastructure (including underground
mines or open-pits or tailings storage facility
failure) or equipment failure (such as shafts
and winders).
Climate change may increase physical risks
to our assets and related infrastructure,
largely driven from extreme weather events
and water-related risks such as flooding
or water scarcity.
Potential impact on the Group
• Loss of life, significant environmental
damage, or social impact on livelihoods
arising from such an event may have
material adverse impacts on our business
and reputation.
• The suspension of production arising from
one of these events for an extended period
could have a significant impact on
our business.
• Inclusion of new design standards
for improved management of potentially
catastrophic events during the
development of new projects and
as required for the remediation of risks
at industrial assets may lead to future
upward revisions in estimated costs,
delays or other impacts. This may cause
production to be reduced or to cease and/
or require greater infrastructure spending.
Also, the realisation of these risks could
require significant additional capital and
operating expenditures.
Mitigating factors or controls
• Our HSEC&HR Policies, Standards and
FHPs have been developed to assist in the
management of the fatal and catastrophic
hazards that present a material risk to
our operations.
• We set regional or international standards
designed to assist in the prevention of
incidents and protect our people, the
environment, communities, assets,
and other stakeholders. They are taken
into account in the planning, design,
construction, operation, maintenance and
monitoring of our surface and
underground mines, water and tailings
storage facilities, smelters, refineries and
other infrastructure and equipment.
• Our GIAA function implements a
comprehensive process to assure whether
catastrophic hazards are effectively
identified, assessed, managed and
controlled across our industrial assets.
• We have implemented a comprehensive
tailings management framework, with
clear governance, accountabilities,
systems, training, auditing and reporting
on performance.
8. Currency exchange
(FX) rates
2023 vs. 2022 Risk appetite
Link to
strategy
Minimal
FX changes affect us as a global company
usually selling in US dollars but having costs
in a large variety of other currencies.
The main currency exchange rate exposure
is through our industrial assets, as a large
proportion of the costs incurred by these
operations, which are spread across many
different countries, is denominated in the
currency of the country in which each
industrial asset is located, the currencies
of which fluctuate against the US dollar.
The vast majority of our sales transactions
are denominated in US dollars.
Producer country currencies tend to
strengthen in correlation with relevant
higher commodity prices. Similarly,
decreases in commodity prices are generally
associated with increases in the US dollar
relative to local producer currencies.
Potential impact on the Group
• A depreciation in the value of the US dollar
against one or more of these currencies will
result in an increase in the cost base of the
relevant operations in US dollar terms.
Mitigating factors or controls
• The inverse FX correlation (against USD
commodity prices) usually provides a
partial natural FX hedge for the industrial
business.
2023 Glencore Annual Report
115
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Mitigating factors or controls
• We seek to diversify our counterparties
and try to ensure adherence to open
account limits.
• We make extensive use of credit
enhancement tools, seeking letters
of credit, insurance cover, discounting
and other means of reducing credit risk
with counterparts. Where possible, credit
exposures are covered through credit
mitigation products.
• We monitor the credit quality of our
physical and hedge counterparties and
seek to reduce the risk of customer default
or non-performance by requiring credit
support from creditworthy financial
institutions.
• Open account risk is governed by Group-
wide standards with established
thresholds for referral of credit decisions
by department heads to the CEO, CFO
and CRO (and the Board, for highest-level
approvals), relating to potential credit
risk exposures at varying levels, depending
on counterparty credit quality.
9. Counterparty credit
and performance
2023 vs. 2022 Risk appetite
Link to
strategy
Minimal
We are subject to the risk of non-
performance by our suppliers, customers
and hedging counterparties, in particular in
respect of our marketing activities.
Financial assets consisting principally of
receivables and advances, derivative
instruments and long-term advances and
loans can expose us to concentrations of
credit risk.
Potential impact on the Group
• Non-performance by suppliers, customers
and hedging counterparties may occur
and cause losses in a range of situations,
such as:
– a significant increase in commodity
prices resulting in suppliers being
unwilling to honour their contractual
commitments to sell commodities
at pre-agreed prices;
– a significant reduction in commodity
prices resulting in customers being
unwilling or unable to honour their
contractual commitments to purchase
commodities at pre-agreed prices; and
– suppliers to whom we have made
prepayments finding themselves unable
to honour their contractual obligations
due to financial distress or other reasons.
10. Liquidity
2023 vs. 2022 Risk appetite
Link to
strategy
Minimal
Liquidity risk is the risk that we are unable
to meet our payment obligations when due,
or are unable, on an ongoing basis, to borrow
funds in the market at an acceptable cost
to fund our commitments.
While we adjust our minimum internal
liquidity threshold from time to time in
response to changes in market conditions
(as was the case in 2022, due to extreme
levels of market volatility, particularly in
energy markets, impacting daily margining
requirements in respect of our hedging
derivatives portfolio), this minimum internal
liquidity target may be breached due to
circumstances we are unable to control,
such as general market disruptions, sharp
movements in commodity prices or an
operational problem that affects our
suppliers, customers or our own business.
Potential impact on the Group
• Our failure to access funds (liquidity)
would severely limit our ability to engage
in our business activities and may mean
that we would not have sufficient funds
available for our marketing and industrial
activities, both of which employ
substantial amounts of capital. If we
do not have funds available for these
activities, then they would decrease.
• Debt costs may rise owing to ratings
agency downgrades and the possibility
of more restricted access to funding.
Risk management continued
• In respect of commodity purchase and
sale transactions denominated in
currencies other than US dollars, the
Group’s policy is usually to hedge the
specific future commitment through
a forward exchange contract. From time
to time, the Group may hedge a portion
of its operating currency exposures and
requirements in an attempt to limit any
adverse effect of exchange rate fluctuations.
• We continuously monitor and report on
financial impacts resulting from foreign
currency movements.
Strategic priorities
Responsible and ethical production
and supply
Responsible portfolio management
Responsible product use
116
2023 Glencore Annual Report
Risk management continued
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Mitigating factors and controls
• Diversification of our funding sources
(bank borrowings, bonds and trade
finance, further diversified by currency,
interest rate and maturity).
• Considering the Group’s extensive funding
activities, maintaining strong investment
grade (from Moody’s and Standard &
Poor’s) credit rating status is a financial
priority. Over the past few years, Glencore’s
capital structure and credit profile has
been managed around a $10 billion Net
debt cap, with sustainable deleveraging
below the cap periodically returned to
shareholders. In the light of the
forthcoming significant EVR transaction,
and potential for a future demerger of our
combined coal and carbon steel materials
business, we are now managing the
balance sheet around a revised $5 billion
Net debt cap, alongside our continued
commitment to minimum strong Baa/
BBB ratings.
• The lower Net debt cap framework
requires us to allocate surplus cash flows
(after base distribution) towards
accelerating repayment of EVR acquisition
funding.
• Our financial policies seek to ensure
access to funds, when desired, even
in periods of market volatility.
• Our bond maturity profile is managed such
that maturity repayments do not exceed
approximately $3 billion in any given year.
• It should be noted that the credit ratings
agencies make certain adjustments,
including a discount to the value of our
Readily Marketable Inventories, so that
their calculated net debt is higher than
ours. The Group’s credit ratings are
currently Baa1 from Moody’s and BBB+
from Standard & Poor’s.
11. Laws and enforcement
2023 vs. 2022 Risk appetite
Link to
strategy
Averse
We are exposed to extensive laws and
regulations, including those relating to bribery
and corruption, sanctions, taxation, anti-trust,
financial and commodity markets regulation
and rules, environmental protection, use of
hazardous substances, product safety and
dangerous goods regulations, post-closure
reclamation, employment of labour and
occupational health and safety standards. In
addition, there are a number of high
expectations regarding the need to act
ethically in our business and we are exposed
to the risk that unethical business practices
may, by themselves, harm our ability to
engage with certain business partners, and/
or give rise to questions as to whether we are
committed to complying with applicable laws.
As a diversified sourcing, marketing and
distribution company conducting complex
transactions globally, we are particularly
exposed to the risks of fraud, corruption,
sanctions violations and other unlawful
activities both internally and externally.
Certain of our existing industrial and
marketing activities are in countries that are
categorised as developing or as having
challenging political or social climates or
where the legal system is uncertain, and/or
where corruption is generally understood to
exist, which creates risks in relation to our
compliance with laws and external
requirements. The legal system and dispute
resolution mechanisms in some countries in
which we operate may be uncertain,
meaning that we may be unable to enforce
our understanding of our rights and
obligations under these laws.
Potential impact on the Group
• Any changes to these laws or regulations
or their more stringent enforcement
or restrictive interpretation could cause
additional significant expenditure to
be incurred and/or cause suspensions of
operations and delays in the development
of industrial assets.
• The costs associated with compliance with
these laws and regulations, including the
costs of regulatory permits, are substantial
and increasing.
• The impact of any monetary fines,
penalties, redress or other restitution
requirements, and the associated
reputational damage arising from
proceedings that are resolved adversely to
the Group, could be material.
• Any successful claims brought against the
Group could result in material damages
being awarded against the Group, the
cessation of operations, compensation
and remedial and/or preventative orders.
• In addition, the cost of cooperating with
investigations and/or defending
proceedings can be substantial.
Mitigating factors or controls
• We seek to ensure compliance through
our commitment to complying with
or exceeding the laws and regulations
applicable to our operations and products
and through monitoring of legislative
requirements, and engagement with
governments and regulators.
• We have implemented a number
of programmes designed to ensure
compliance with applicable laws and
regulations, including our Group Ethics
and Compliance programme that includes
a range of Policies, Standards, Procedures
and Guidelines, as well as training and
awareness, monitoring and investigations
processes.
• We have invested significant resources
towards developing this programme,
including through increasing the number
of dedicated compliance professionals,
enhancing our compliance policies and
procedures and controls, increasing
our training and awareness activities,
and strengthening the Group’s Raising
Concerns programme and
investigations processes.
• We engage reputable external legal firms
and consultants as necessary to support
these efforts.
• Pursuant to our resolutions with the DOJ,
we have appointed two independent
compliance monitors who will:
– assess the effectiveness of Glencore’s
Ethics and Compliance programme
(including an assessment of Glencore’s
culture and internal accounting
controls) as it relates to the prevention
of future misconduct similar to
Glencore’s bribery and market conduct
violations in the DOJ resolutions;
– provide recommendations to improve or
enhance the programme, which
Glencore is required to implement; and
– certify that Glencore’s Ethics and
Compliance programme is reasonably
designed and implemented to prevent
and detect violations of the relevant
laws in the underlying resolutions.
2023 Glencore Annual Report
117
Strategic Report
Corporate Governance
Financial Statements
Additional Information
• Our IT Security Council sets the global
cyber security strategy, conducts regular
risk assessments, and designs solutions
to protect against emerging threats, and
our Cyber Defence Centre is responsible
for day-to-day monitoring and
remediation of cyber vulnerabilities across
the Group.
• We have an incident response team in
place to coordinate a swift and effective
response in the event of a major
cyber incident.
• We prioritise employee education
to raise awareness of cyber security threats
and encourage best practices in
information security.
Risk management continued
12. Cyber
2023 vs. 2022 Risk appetite
Link to
strategy
Minimal
The ever-increasing reliance on digital
technologies has brought with it a
corresponding rise in cyber-related risks,
ranging from the proliferation of
ransomware to nation-state activity and the
monetisation of cyber crime. Our industrial
production, operations, environmental
management, health and safety
management, communications, transaction
processing, and risk management all rely on
information technologies, while our long
supply chains involve numerous third parties
that are exposed to the same cyber risks.
Furthermore, the emergence of machine
learning and artificial intelligence has led
to an exponential increase in the volume
and sophistication of fraud attempts. The
use of ‘Deepfake’ technology, powered by
machine learning, makes it easier to
manipulate audio and video content,
increasing the potential for phishing or fraud
attacks that impersonate senior executives.
Given the accelerating pace at which AI
is being used to create malware and
deepfakes, there is a significant and growing
Strategic priorities
Responsible and ethical production
and supply
Responsible portfolio management
Responsible product use
118
2023 Glencore Annual Report
threat to the security and authenticity of
digital content, necessitating robust and
vigilant cyber security measures.
Potential impact on the Group
• The potential consequences of a cyber
security breach, incident, or failure
of Glencore’s IT systems are significant
and wide-ranging. Such an event could
lead to disruption of our businesses,
jeopardise the safety of our employees,
result in the exposure of confidential
information, damage our reputation,
and create substantial financial and legal
risks for the Group.
• The ramifications could extend beyond
just our own operations and impact our
customers, suppliers, and partners as well.
Mitigating factors or controls
• We take a proactive and multi-faceted
approach to mitigating cyber exposure
risks and maintaining the security of our
IT systems.
• Our IT security standards include layered
cyber security, privileged access
management, and multiple layers of email
security and malware protection, as well
as the use of two-factor authentication
and VPN technology for securing
corporate applications and
communications.
• We keep our system software up to date
and use global platforms to proactively
manage patch compliance, while routine
third-party penetration tests and
dedicated programmes for enhancing the
monitoring and security of our Operational
Technology (OT) platforms seek to ensure
the effectiveness of our security measures.
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Chairman’s governance statement
Good governance remains
crucial for our continued
success
cohesive Board which is able to have a
strategic and long-term outlook, while also
dynamically considering opportunities,
challenges and near-term considerations as
they arise.
Group engagement
Your Directors cannot fulfil their roles by just
meeting in a boardroom. Last year, Board
members visited various sites and offices
which visits we describe in this section.
Further important visits are planned for this
year. These are an essential part of the
exercise of governance, allowing the Directors
to better understand the business and its
geographic context, engage with local
management and, crucially, hear directly
from employees.
Shareholder engagement
In 2023, we actively engaged with our
shareholders and interested stakeholders
on our climate strategy. Following the 2023
AGM at which the shareholders voted on
the progress against our three-yearly
Climate Action Transition Plan, we
undertook an active engagement
programme to understand better our
shareholders’ views on our climate strategy
and seek investors’ views on updates to our
Climate Action Transition Plan that will be
put to shareholders at the 2024 AGM for an
advisory vote.
There was broad support for our climate
approach, recognising the importance of
maintaining a strategy that remains resilient
Kalidas Madhavpeddi
Chairman
I am pleased to report on another active
year for your Board in its governance of
the Company.
Performance review
Following the intensive external
independent board performance review
carried out by Spencer Stuart last year, we
were pleased to implement the various
recommendations which they made. This
year we carried out an internal review which
reflected overall satisfaction with the
operation of the Board and its committees
and identified certain opportunities for
housekeeping improvements. We wish to
ensure that we maintain a strong and
to the risks and opportunities of the evolving
energy transition, and encouragement to
continue making progress towards our short-
and medium-term targets and long-term
ambition of achieving net zero industrial
emissions by 2050, subject to a supportive
policy environment.
Together with our Annual Report, we have
published our updated Climate Action
Transition Plan, which is available on our
website at: glencore.com/publications.
Information regarding our progress against
our industrial emissions reduction targets and
ambition is also available beginning on page
50 of this Annual Report.
We also carried out extensive shareholder
engagement concerning the Board’s
proposals as to our revised Remuneration
Policy, which will be put to a vote at the 2024
AGM. We are proposing the adoption of a
considerably simplified remuneration
structure for our CEO which incentivises
long-term value creation aligned with the
shareholder experience. Further information
on the proposed updates is available on pages
138 to 140 of this Annual Report.
Investigations and monitorships
The two independent compliance monitors
mandated by our resolutions with the US
Department of Justice commenced their work
in mid-2023. We have overseen the Company’s
constructive engagement with the monitors
and their teams and will support continued
cooperation throughout the coming year. We
will provide further information on our overall
Ethics and Compliance programme in our
separate Ethics and Compliance Report for 2023.
The work of the Investigations Committee also
continues with respect to the ongoing
investigations by the Swiss and Dutch
authorities. The timing and outcome of these
investigations remain uncertain.
Looking forward
The governance of one of the most
dynamic and diverse major companies in the
resources sector remains rewarding and
challenging. Your Board sees good
governance as crucial for the continued
success of our Company and adherence to its
Values. We continue to enhance our efforts to
ensure our risks are appropriately managed,
while at the same time maintaining the
entrepreneurialism that is a driving force in
our organisation.
Kalidas Madhavpeddi
Chairman
2023 Glencore Annual Report
119
Directors and officers
Notes
All the Directors are non-executive apart
from the CEO. The Chairman is considered
not to be independent from the date
of appointment. Mr Madhavpeddi was
independent up to his appointment as
Chairman. The remaining Non-Executive
Directors (NEDs) are designated as
independent apart from Mr Coates.
Committee membership is as follows:
A Audit
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Directors
Kalidas Madhavpeddi
Chairman (68)
Gary Nagle
Chief Executive Officer (49)
Gill Marcus
Senior Independent Director (74)
Ethics, Compliance and Culture (ECC)
H I N R
E
H
I
Health, Safety, Environment and
Communities (HSEC)
Investigations
N Nomination
R Remuneration
denotes Committee Chair
Board tenure
120
2023 Glencore Annual Report
Appointed in February 2020.
Experience
Kalidas Madhavpeddi has over 40 years
of experience in the international mining
industry, including being CEO of CMOC
International, the operating subsidiary
of China Molybdenum Co Ltd (China Moly),
from 2008 to 2018. His career started at
Phelps Dodge, where he worked from 1980
to 2006, ultimately becoming senior VP
responsible for the company’s global
business development, acquisitions and
divestments, as well as its global exploration
programmes and president of its
international operations.
Mr Madhavpeddi is currently a director of
Novagold Resources (TSX:NG) and Dundee
Precious Metals Inc (TSX:DPM).
He was formerly director and chair of the
governance committee of Capstone Mining
(TSX:CS).
He has degrees from the Indian Institute of
Technology, Madras, India and the University
of Iowa and has completed the Advanced
Management Program at Harvard
Business School.
Joined Glencore in 2000; Chief Executive
Officer since July 2021.
Experience
Gary Nagle joined Glencore in 2000 in
Switzerland as part of the coal business
development team. He was heavily involved
in seeding a portfolio of assets to Xstrata
in 2002, in conjunction with its initial listing
on the London Stock Exchange.
Mr Nagle worked for five years (2008–2013)
in Colombia as CEO of Prodeco. He then
moved to South Africa to be Head of
Glencore’s ferroalloys assets (2013–2018).
Following that he was the head of Glencore’s
coal assets based in Australia. He was a
non-executive director of Lonmin plc from
2013 to 2015 and has represented Glencore
on the Minerals Councils of Australia
and Colombia.
Mr Nagle has commerce and accounting
degrees from the University of the
Witwatersrand and qualified as a Chartered
Accountant in South Africa in 1999.
A E N
Senior Independent Director since
December 2022; appointed in January 2018.
Experience
Gill Marcus worked in exile for the African
National Congress from 1970 before
returning to South Africa in 1990. In 1994, she
was elected to the South African Parliament.
In 1996, she was appointed as the Deputy
Minister of Finance and from 1999 to 2004
was Deputy Governor of the Reserve Bank.
Gill Marcus was Governor of the South
African Reserve Bank from 2009 to 2014.
Ms Marcus was the non-executive chair
of the Absa Group from 2007 to 2009 and
has been a non-executive director of Gold
Fields Ltd and Bidvest. She has acted as
chair of a number of South African
regulatory bodies. From 2018 to 2019, she
was appointed to the Judicial Commission of
Inquiry into allegations of impropriety at the
Public Investment Corporation.
Ms Marcus is a graduate of the University
of South Africa.
0-2 yrs 13% 3-6 yrs 50% 7-9 yrs 25% 9+ yrs 13% Directors and officers continued
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Martin Gilbert
Independent Non-Executive Director (68)
A I N R
Appointed in May 2017. Senior Independent
Director from May 2018 to December 2022.
Experience
Martin Gilbert co-founded Aberdeen Asset
Management in 1983, leading the company
for 34 years and overseeing its 2017 merger
with Standard Life, when he was made
co-CEO.
Mr Gilbert is currently chairman of AssetCo
plc (LON:ASTO), Revolut Limited and
Toscafund. He was formerly deputy chair of
the board of Sky PLC until 2018.
Mr Gilbert is a member of the International
Advisory Board of British American Business.
Mr Gilbert was educated in Aberdeen.
He has an LLB, an MA in Accountancy and
is a Chartered Accountant.
Peter Coates AO
Non-Executive Director (78)
E H N
Non-Executive Director since January 2014;
previously Executive Director from June to
December 2013 and Non-Executive Director
from April 2011 to May 2013.
Experience
Peter Coates worked in senior positions in
a range of resource companies before joining
Glencore’s coal unit as a senior executive in
1994. When Glencore sold its Australian and
South African coal assets to Xstrata in 2002,
he became CEO of Xstrata’s coal business,
stepping down in December 2007.
Mr Coates is currently a non-executive
director of Event Hospitality and
Entertainment Ltd (ASX:EVT). He was
non-executive chairman of Xstrata Australia
(2008–2009), Minara Resources Ltd (2008–
2011) and Santos Ltd (2009–13 and 2015–2018).
Mr Coates holds a Bachelor of Science
degree in Mining Engineering from the
University of New South Wales. He was
appointed as an Officer of the Order of
Australia in June 2009 and awarded the
Australasian Institute of Mining and
Metallurgy Medal for 2010.
Cynthia Carroll
Independent Non-Executive Director (67)
David Wormsley
Independent Non-Executive Director (63)
E H N R
Appointed in February 2021.
A N R
Appointed in October 2021.
Experience
Cynthia Carroll has over 30 years’ experience
in the resources sector. She began her career
as an exploration geologist at Amoco before
joining Alcan. She held various executive
roles there culminating in being CEO of the
Primary Metal Group, Alcan’s core business.
From 2007 to 2013 she served as CEO of
Anglo American plc.
Ms Carroll is currently a non-executive
director of Hitachi, Ltd (TYO:6501), Baker
Hughes Company (NYSE:BKR) and Pembina
Pipeline Corporation (TSE:PPL).
Ms Carroll holds a Bachelor’s degree
in Geology from Skidmore College (NY),
a Master’s degree in Geology from the
University of Kansas and an MBA from
Harvard University. She is a fellow of the
Royal Academy of Engineers and a Fellow
of the Institute of Materials, Minerals
and Mining.
Experience
David Wormsley worked in investment
banking for 35 years. His last position at
Citigroup was Chairman, UK banking and
broking when he retired in March 2021. Mr
Wormsley led a wide variety of corporate
transactions in the UK and internationally,
including IPOs and equity fundraising, both
public and private, mergers and acquisitions
and debt financing. During his period
of management, Citigroup successfully
acquired and integrated the majority
of ABN Amro’s broking business. Under his
leadership, the Citigroup UK M&A franchise
was ranked between number 1 and 5
in the market.
Mr Wormsley is currently a non-executive
director of Stanhope plc and a governor
of the Museum of London.
He holds an economics degree from
Downing College, Cambridge.
2023 Glencore Annual Report
121
Directors and officers continued
Officers
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Liz Hewitt
Independent Non-Executive Director (67)
Steven Kalmin
Chief Financial Officer (53)
John Burton
Company Secretary (59)
A I N
Appointed in July 2022.
Appointed as Chief Financial Officer in June
2005.
Appointed Company Secretary in September
2011.
Experience
From 2006 to 2011, John Burton was
company secretary and general counsel
of Informa plc, where he established the
group legal function and a new company
secretarial team. Before that he had been
a partner of CMS in London for eight years,
advising on a broad range of corporate
and securities law matters.
Mr Burton holds a B.A. degree in Law
from Durham University. He was admitted
as a Solicitor in England and Wales in 1990.
Experience
Liz Hewitt has over 30 years’ business
experience in executive and non-executive
positions. She began her career as a qualified
chartered accountant with Arthur Andersen
& Co. She held various executive positions in
private equity companies including 3i Group
plc, Gartmore Investment Management
Limited and Citicorp Venture Capital Ltd.
At 3i Group plc, she was a private equity
investor and then director of corporate
affairs. She also worked for Smith & Nephew
plc as group director of corporate affairs.
Liz Hewitt is currently a non-executive
director of Kerry Group plc (LON: KYGA). She
was previously non-executive director of
National Grid plc (2020–2024), Melrose
Industries plc (2013–2022), Novo Nordisk
(2012–2021), Savills plc (2014–2019) and
Synergy Health plc (2011–2014).
Ms Hewitt holds a bachelor’s degree in
economics from University College London.
Experience
Steven Kalmin joined Glencore in September
1999 as general manager of finance and
treasury functions at Glencore’s coal
industrial unit in Sydney. He moved to
Glencore’s head office in 2003 to oversee
Glencore’s accounting function, becoming
CFO in June 2005. From November 2017
to June 2020 he was a director of Katanga
Mining Limited (TSX:KAT).
Mr Kalmin holds a Bachelor of Business
(with distinction) from the University
of Technology, Sydney and is a member
of Chartered Accountants Australia and
New Zealand and the Financial Services
Institute of Australasia.
Before joining Glencore, Mr Kalmin worked
for nine years at Horwath Chartered
Accountants.
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2023 Glencore Annual Report
Corporate governance report
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Diversity
The Group Diversity and Inclusion Policy is applicable to all employees as well as Directors
and officers and is taken into consideration for purposes of appointments to the Board and
its committees. It sets out our commitment to build a working environment that enables full
and active participation and embraces and encourages diversity of thought and experience
in order to maximise business performance.
The Board is very cognisant of the ongoing desire from stakeholders for greater diversity in
senior management and boards. The UK FCA listing rules require companies to disclose, on a
comply or explain basis, whether they meet specific diversity targets, being:
at least 40% of the board are women
3 out of 8 Directors are women, corresponding to 37.5%
at least one of the senior board positions is
a woman
Gill Marcus is the Senior Independent Director
at least one member of the board is from a
minority ethnic background
Kalidas Madhavpeddi is from a minority ethnic
background (in UK terms)
We believe the small size of our Board assists in its collegiality and sense of purpose. Therefore, while
we will miss the gender diversity target by 2.5% we will continue with a Board of eight members. The
Board continues to seek to achieve greater diversity in the senior management of the Group and
throughout the organisation, including through the development of an internal pipeline of candidates
and continuing assessment of the Group’s diversity and inclusion approach in relevant areas.
Number
of Board
members
Percentage
of the
Board
Number
of senior
positions on
the Board2
Number
in executive
management
Percentage
of executive
management3
Gender identity
Men
Women
Ethnic Background
White British or other White
(including minority white groups)
Mixed/Multiple Ethnic Groups
Asian/Asian British
Black/African/Caribbean/
Black British
Other ethnic group, including
Arab
Not specified/prefer not to say
5
3
7
–
1
–
–
–
62.5%
37.5%
87.5%
–
12.5%
–
–
–
2
1
2
–
1
–
–
–
5
2
6
1
–
–
–
–
71.4%
28.6%
85.7%
14.3%
–
–
–
–
2. In accordance with UK Listing Rule 9.8.6 R(9)(a) includes the Chairman, Chief Executive Officer and the
Senior Independent Director.
3. In accordance with UK Listing Rule 9.8.6 R(10), executive management for these purposes are our
Corporate Secretary and members of our key management personnel (our CFO, General Counsel, Head
of Industrial Assets, Head of Corporate Affairs, Head of Human Resources and Head of Sustainability).
Board diversity, skills and experience
Kalidas
Madhavpeddi
American
Gary Nagle
S. African
Martin Gilbert
British
Cynthia Carroll
American
Peter Coates
Australian
Gill Marcus
S. African
David Wormsley
British
Liz Hewitt
British
Experience
Resources
Non-executive directorship
C-suite
International M&A
Technical skills1
Leadership and strategy
Financial expertise
Environment
Social
Governance
Health and safety
Investor relations
Communications and reputation
Risk management
1. The majority of these skills have been acquired through exposure and experience at leadership level, rather than as part of a formal education.
2023 Glencore Annual Report
123
Corporate governance report continued
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Roles and responsibilities
Chairman
• Leading the Board
• Shaping the culture in the boardroom
• Promoting sound and effective Board
governance
• Ensuring effective communication with
shareholders
• Leading the annual performance
evaluation of the Board
Senior Independent Director
• Acting as confidante of the Chairman and,
when appropriate, as an intermediary
for other independent Directors
• Acting as Chair of the Board if the
Chairman is unable to attend
• Leading the Chairman’s performance
appraisal along with other independent
Directors
• Answering shareholders’ queries when
usual channels of communication are
unavailable
Chief Executive Officer
• Leading the management team
• Executing the Group’s strategy developed
in conjunction with the Board
• Implementing the decisions of the Board
and its committees
• Delivering on the Group’s commercial
objectives
• Developing Group policies and ensuring
effective implementation
Non-Executive Directors
• Constructively challenging the Chief
Executive Officer and senior management
• Bringing an independent mindset and
a variety of backgrounds and experience
around the Board table
• Providing leadership and challenge
as chairs or members of the Board and
its Committees
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2023 Glencore Annual Report
• Assessing the Chairman’s performance
and leadership
Company Secretary
• Ensuring that Board procedures are
complied with and that papers are
provided in sufficient detail and on time
• Informing and advising the Board
on all governance matters
• Informing the Board on all matters
reserved to it
• Assisting the Chairman and the Board
regarding the annual performance
evaluation process
Division of responsibilities
As a Jersey incorporated company, Glencore
has a unitary Board, meaning all Directors
share equal responsibility for decisions
taken. Glencore has established a clear
division between the respective
responsibilities of the Non-Executive
Chairman and the Chief Executive Officer,
which are set out in a schedule of
responsibilities approved by the Board and
reviewed annually. While the Non-Executive
Chairman is responsible for leading the
Board’s discussions and decision making,
the CEO is responsible for implementing
and executing strategy and for leading
Glencore’s operating performance and
day-to-day management. The Company
Secretary is responsible for ensuring that
there is clear and effective information flow
to the Non-Executive Directors.
The CEO, CFO and General Counsel have line
of sight across the Group. Together with
the Head of Industrial Assets, they lead
our management supported by the rest of
our Group Leadership, comprising our Head
of Corporate Affairs, Head of Human
Resources and Head of Sustainability, and
departmental leadership comprising the
heads of each marketing department and
our industrial leads.
Senior Independent Director
Gill Marcus is the Senior Independent
Non-Executive Director. She is available
to meet with shareholders and acts as an
intermediary between the Chairman and
other independent Directors when required.
This division of responsibilities, coupled
with the schedule of reserved matters for
the Board, ensures that no individual has
unfettered powers of decision.
Non-Executive Directors
The Company’s Non-Executive Directors
provide a broad range of skills and
experience to the Board (see table above),
which assists in their roles in formulating
the Company’s strategy and in providing
constructive challenge to senior
management.
Independence of Non-Executive
Directors
Glencore regularly assesses its
Non-Executive Directors’ independence.
Except for Peter Coates, who was first
appointed to the Board in May 2011, and the
Chairman, all are regarded by the Board
as Independent Non-Executive Directors
within the meaning of ‘independent’ as
defined in the Code and free from any
business or other relationship which could
materially interfere with the exercise of their
independent judgement. Mr Madhavpeddi
was independent at the time of his
appointment as Chairman.
Board attendance throughout the year
Attendance during the year for all in-person scheduled full agenda Board and all permanent
Board Committee meetings is set out in the table below:
Cynthia Carroll1
Peter Coates
Martin Gilbert
Liz Hewitt
Kalidas Madhavpeddi
Gill Marcus
Gary Nagle
David Wormsley
Patrice Merrin2
Board
of 4
Audit
of 4
ECC
of 4
HSEC
of 4
Nom
of 3
Rem
of 4
4
4
4
4
4
4
4
4
2
4
4
4
4
2
4
4
2
4
4
4
2
3
3
3
3
3
3
3
2
4
4
4
3
1. Ms Carroll attended all relevant meetings from the date of her appointment as Chair of the ECC
Committee on 28 May 2023.
2. Ms Merrin attended all relevant meetings until her retirement on 28 May 2023.
There were other limited agenda or unscheduled meetings during the year: nine Board, two
Remuneration Committee and two Audit Committee meetings.
There were also various meetings of the Investigations Committee and additional calls
to review the matters described in note 32. Most Directors also attended, by invitation,
the meetings of the Committees of which they are not members.
Corporate governance report continued
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Board governance and structure
This Governance report, along with the
Strategic Report and the Directors’ report,
sets out how Glencore has complied with
the principles and provisions of the
UK Corporate Governance Code (the Code)
in a manner which enables shareholders to
evaluate how these principles have been
applied. The Board believes that the Company
has throughout the year complied with all
relevant provisions contained in the Code,
except for provision 4 in that a summary of
the engagement with shareholders
regarding resolutions 13 and 19 that were put
to the vote of shareholders at the 2023 AGM
was published 13 days after the six-month
deadline. The slight delay in publication was
due to the shareholder consultation schedule
and timing of the subsequent Board meeting
to review the results of the consultation.
During the year, the Board comprised one
Executive Director with the remaining
members being Non-Executive Directors
(including the Chairman). A list of the current
Directors, with their brief biographical details
and other significant commitments, is
provided in the previous pages.
The CFO attends all meetings of the Board
and Audit Committee and usually the
meetings of the HSEC and ECC Committees.
The Company Secretary attends all meetings
of the Board and its committees.
Appointment of Non-Executive
Directors
All the Non-Executive Directors have letters
of appointment and the details of their
terms are set out in the Directors’
Remuneration Report. No other contract
with the Company or any subsidiary
undertaking of the Company in which any
Director was materially interested existed
during or at the end of the financial year.
Director induction and information
New Directors receive a full, formal and
tailored induction on joining the Board,
including meetings with management and a
comprehensive introduction to the
Company’s Purpose, Values and Code of
Conduct, the main aspects of the Group, its
business and functions, and the roles and
responsibilities of a UK premium listed
company director.
The Directors receive training on legal and
compliance topics, climate matters and
regular updates on relevant business and
governance matters. Ms Hewitt completed
her induction during the year.
Board meetings
The Board has approved a schedule that sets
out the matters reserved for its approval,
including Group strategy, financial
statements and annual budget, and material
acquisitions and disposals. Meetings are
usually held at the Company’s headquarters
in Baar, Switzerland. The Board and its
committees have standing agenda items to
cover proposed business at their scheduled
meetings. The Chairman seeks to ensure
that the very significant work of the
committees feeds into, and benefits through
feedback from, the full Board. The Board and
committee meetings seek to cover all
aspects of the Group and, for this purpose,
receive input and support from senior
management through reports and
presentations, which among others cover
operational, financial, audit, risk, legal,
sustainability, climate, safety, compliance,
governance and investor relations. These
reports and presentations allow Directors
to further their understanding of the
business and provide the insights necessary
for defining the Company’s strategy and
objectives, in turn contributing to a more
effective Board.
Board Committees
The following permanent committees are
in place to assist the Board in exercising its
functions: Audit, Nomination, Remuneration,
HSEC and ECC. The Board is provided with
technical and commercial updates as
appropriate during the year, as well as
updates on our Raising Concerns programme
and material internal or external
investigations. The Board may also establish
temporary committees for specific purposes,
such as the Investigations Committee (see
below). As each committee reports to the
Board, committee meetings are held prior to
Board meetings, during which the chair
of each committee leads a discussion
concerning the committee’s activities since
the previous Board meeting unless all
Directors attended the meeting.
A report from each chair of the permanent
committees is set out later in this report.
All permanent committees’ terms of
reference are available at: glencore.
com/who-we-are/governance
Each committee reports to, and has its terms
of reference approved by, the Board and the
minutes of the committee meetings are
circulated to the Board. Each committee
regularly reviews its terms of reference to
ensure they reflect the Board’s expectations
as to the committee’s role as well as the
latest corporate governance requirements
and recommended practices.
Corporate governance
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2023 Glencore Annual Report
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Strategic Report
Corporate Governance
Financial Statements
Additional Information
Board and committees’ main
activities
Below are details of the main topics which
were reviewed, discussed, and when
required, approved during 2023:
Regular updates
• Reports from Committee Chairs
• Reports from CEO, CFO, Company
Secretary, General Counsel and other
senior management, including on climate
strategy
Group strategy
• The overall strategy of the Group including
future prospects, capital allocation and
climate matters
• Specific M&A proposals including:
– The Teck proposals:
– entire combination through an all
share merger proposal and
subsequent creation of two
standalone companies
– Elk Valley Resources (steelmaking
coal) acquisition and subsequent
potential demerger of the combined
coal and carbon steel material
businesses
– Sale of interest in Viterra
– Acquisition of major interests in key
assets:
– MARA Project
– Alunorte
Financial and risk
• Evaluation of the internal control
environment
• Finance reports, forecasts and capital
position updates
• 2024 budget and 2025–2027 business plan,
life of asset planning and costs analysis
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2023 Glencore Annual Report
• Capital management, debt and returns
analysis
• Financial statements
• Group principal and emerging risks
• Group risk management framework
• Tax policies and provisions
Governmental investigations
• Regular scheduled and ad hoc meetings
of the Investigations Committee to review
progress and receive updates on
interactions with relevant authorities
• Decisions concerning ongoing
investigations
Monitorships
• Review of DOJ-mandated independent
compliance monitorships
Governance and stakeholders
• Review and approval of Annual, Climate
and Sustainability Reports
• AGM, voting results and outcomes
• Investor relations reports
• Analysts’ updates
• Corporate governance framework
• Stakeholder engagement
• Board and Directors’ evaluation
• Chairman’s performance
• Group policies
Legal and compliance
• Litigation updates
• Regulatory developments
• Analysis of legal risks concerning climate
change
• Board training
• Material permitting and licences
• Group Ethics and Compliance programme
• Raising Concerns reports and material
internal and external investigations
Health, Safety, Environment &
Communities
• Fatalities, major incidents and other safety
issues
• Tailings storage facilities reviews
• Environmental incidents reports
• HSEC&HR policy framework
• Social and human rights performance
• Responsible sourcing
• Cultural heritage
Succession and remuneration
• Succession planning for Board and senior
management
• Senior management remuneration
Climate-related matters
• Oversight of the Group’s climate strategy
and response to climate-related risks and
opportunities that affect our business
• Monitoring progress against Glencore’s
climate strategy, including our Scope 1, 2
and 3 emissions performance, and the
ongoing development of our Group
marginal abatement cost curve (MACC)
• Consideration of ability to develop a
climate transition strategy for EVR
• Providing our shareholders at our 2023
AGM with their third advisory vote on the
progress against our three-year Climate
Action Transition Plan
• Receipt of feedback from the shareholder
consultation following the results of the
vote, and discussion and approval of the
steps to respond to the feedback
• Review of climate-related disclosures in
Annual Reporting and other external
engagement
• Participation in annual internal training on
climate change, including on duties as
Directors, legal risks, external expectations
and evolving climate issues. The training
also emphasised the importance of
effective integration of climate change
into the Group’s risk management
processes and related Board oversight
• Received of details on emerging industry
trends relating to climate-related litigation
and ‘greenwashing’ allegations
Other activities
Information, management meetings,
site visits and professional
development
It is considered essential that the Non-
Executive Directors attain a good knowledge
of the Company and its business and
allocate sufficient time to Glencore to
discharge their responsibilities effectively.
The Board calendar is planned to ensure
that Directors are briefed on a wide range
of topics.
During 2023, site visits were made to various
Group assets (CEZ, Horne smelter, Asturiana
and Kazzinc) and the New York office. All
Directors have access to the advice and
services of the Company Secretary, who is
responsible for ensuring that Board
procedures are complied with, and have
access to independent and professional
advice at the Company’s expense, where
they judge this to be necessary to discharge
their responsibilities as Directors.
Corporate governance report continued
Strategic Report
Corporate Governance
Financial Statements
Additional Information
In response to the constructive
recommendations we received, we will,
among other actions:
• maintain our commitment to reducing
our total industrial emissions footprint and
report on progress against our targets and
ambition; and
• update our assessment of the resilience of
our portfolio and expand our analysis of
our targets and ambition against a range
of climate policy scenarios.
The Company’s updated Climate Action
Transition Plan will be put to shareholders at
this year’s AGM for advisory approval in
accordance with the established three-year
cycle. However, following a consultation with
shareholders last year, progress reports will
no longer be put to shareholders for an
advisory vote at subsequent AGMs.
Board performance and
effectiveness
In 2023, a performance evaluation was
conducted internally. As part of this process,
each Director completed questionnaires that
covered various key indicators of Board and
committee performance and effectiveness
and had discussions with the Chairman and
the Senior Independent Director. Final
results were presented to the Board
collectively for discussion and some
operating and efficiency recommendations
were subsequently made.
Investigations
The work of the Investigations Committee
has continued in respect of the ongoing
investigations by the Swiss and Dutch
authorities. See note 32 to the financial
statements.
Management of conflicts of
interest
All Directors endeavour to avoid any
situation of conflict of interest with the
Company. Potential conflicts can arise and
therefore processes and procedures are in
place requiring Directors to identify and
declare any actual or potential conflict of
interest. Any notifications are required to be
made by the Directors prior to, or at, a Board
meeting and all Directors have a duty to
update the whole Board of any changes in
circumstances. Glencore’s Articles of
Association and Jersey law allow for the
Board to authorise potential conflicts and
the potentially conflicted Director must
abstain from any vote accordingly.
Related party transactions
In the course of its business, the Group
enters into transactions with organisations
which may constitute related parties.
All material related party transactions are
required to be reviewed and approved by
the Board. If a conflict exists for a Director,
they will not be allowed to vote on the
resolution approving the transaction. The
Company also seeks advice whenever an
assessment is to be made as to whether any
material transaction may be a related party
transaction under the terms of FCA Listing
Rule 11.
Transactions between the Group and its
significant joint ventures and associates
are summarised in note 33 to the
financial statements.
Acquisition and disposal of
assets
The Board reviews and approves all
material proposed transactions, including
acquisitions and disposals of assets.
Additionally, there is an assessment as to
whether material transactions comply
with FCA Listing Rule 10 requirements.
If required, the Board may engage an
independent third-party adviser to review
the proposed transaction and provide an
independent opinion for the Board to assist
in its decision making in addition to the
requirements to have advice from a sponsor
under the FCA Listing Rules.
Oversight of management
of climate-related risks
and opportunities
Climate change is a Board-level standing
agenda item. During 2023, our internal
climate change governance framework
continued to drive implementation of our
climate strategy and its supporting
work programmes.
The Board is responsible for overseeing
the Group’s climate strategy and progress
against Glencore’s emission targets and
ambition, which is led by the management
team. Management, led by our CEO in his
capacity as chair of our Climate Change
Taskforce (CCT), reports to the Board on
implementation of the strategy. See further
on page 34.
Climate strategy continues to be an
important area of focus for our shareholders.
There continues to be broad support for our
climate strategy, which seeks to maintain
resilience to the risks and opportunities of
the evolving energy transition, while
maintaining focus on progressing towards
our ambition of achieving a net zero
industrial emissions footprint by 2050,
assuming a supportive policy environment.
The principal areas of interest for our
shareholders include:
• comparison of our targets and ambition to
all relevant IEA scenarios;
• understanding progress on industrial
emissions reduction between our short-
term target of 2026 and medium-term
target of 2035; and
• integration of the recently announced
acquisition of 77% of Teck's Elk Valley
Resources (EVR) steelmaking coal assets
into the climate strategy.
2023 Glencore Annual Report
127
Corporate governance report continued
Strategic Report
Corporate Governance
Financial Statements
Additional Information
The Company’s next AGM is due to be
held on 29 May 2024. Full details of the
meeting will be set out in the AGM
notice of meeting. All documents
relating to the AGM will be available
on the Company’s website at:
glencore.com/agm
Secretary and the Head of Sustainability.
The matters covered by meetings with the
Chairman and Company Secretary include
the work of the Board’s Committees.
For individual shareholders, the AGM is the
primary opportunity for direct interaction
with the Board and management. The
Chairman, along with the Chair of each
committee, are available for questions at
the AGM.
At our 2023 AGM, votes against the Board
recommendation for two resolutions relating
to our climate-related disclosures were in
excess of 20%. In accordance with paragraph
4 of the Code and as part of our planned
update to our Climate Action Transition Plan,
the Company consulted with shareholders
and announced the outcome of that
consultation on 13 December 2023 – see
page 32.
Accountability and audit
Financial reporting
The Group has in place a comprehensive
financial review cycle, which includes a
detailed annual planning/budgeting process
where our commodity departments prepare
budgets for overall consolidation and
approval by the Board. The Group uses many
performance indicators to measure both
operational and financial activity in the
business. Depending on the measure, these
are reported and reviewed on a daily, weekly
or monthly basis. In addition, management
in the business receives weekly and monthly
reports of indicators which are the basis
of regular operational meetings, where
corrective action is taken if necessary. At a
Group level, a well-developed management
accounts pack, including income statement,
balance sheet, cash flow statement as well
as key ratios, is prepared and reviewed
monthly by management. As part of the
monthly reporting process, a reforecast of
the current year projections is performed.
To ensure consistency of reporting, the
Group has a global consolidation system
as well as a common accounting policies
and procedures manual. Management
monitors the publication of new reporting
standards and works closely with our
external auditor in evaluating any impact.
Risk management and internal control
The Board has complied with provisions 28
to 31 of the Code by establishing an ongoing
process for identifying, evaluating and
managing the risks that are considered
significant by the Group in accordance
with the Guidance on Risk Management,
Internal Controls and Related Financial
and Business Reporting published by the
Financial Reporting Council, as detailed
on pages 105 to 118. The Directors confirm
that they have carried out a robust
assessment of the principal and emerging
risks facing the Group and have reviewed
the effectiveness of the risk management
and internal control systems.
Interactions with shareholders
The Board aims to present a balanced and
clear view of the Group in communications
with shareholders and believes that being
transparent in describing how we see the
market and the prospects for the business
is extremely important.
We communicate with shareholders in
a number of different ways. The reporting of
our full- and half-year results and quarterly
production reports is achieved through the
publication of reports and other
communications including releases,
presentations and group calls. The full- and
half-year reporting is followed by investor
meetings across a variety of locations where
we meet institutional shareholders. We also
regularly meet with existing and prospective
shareholders. We regularly facilitate visits to
parts of the business to give analysts and
major shareholders a better understanding
of how we manage our operations. These
visits and meetings are principally
undertaken by a combination of the CEO,
CFO, Head of Industrial Assets and Head
of Investor Relations.
In addition, many major shareholders have
meetings with the Chairman and appropriate
other senior participants, including other
Non-Executive Directors, the Company
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2023 Glencore Annual Report
Audit Committee report
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Liz Hewitt
Chair
Other members
Martin Gilbert
Gill Marcus
David Wormsley
The Audit Committee met six times during
the year. Each committee member attended
all of the meetings during their period of
appointment. All current Audit Committee
members are considered by the Board to
be Independent Non-Executive Directors
and to be financially literate by virtue of their
relevant financial experience. As a whole,
the Audit Committee has the skills and
experience relevant to the sector. John
Burton is the Secretary to the Committee.
The Audit Committee usually invites the
CEO, CFO, General Counsel, Group Financial
Controller, Chief Risk Officer, Head of Group
Internal Audit and Assurance and the lead
partner from the external auditor to attend
each meeting. Other members of
management and the external audit team
may attend as and when required. Other
Directors also usually attend its meetings.
Additionally, the Audit Committee holds
closed sessions with the external auditors
and the Head of Group Assurance without
members of management being present at
every scheduled meeting. The Audit
Committee has adopted an approach which
allows only certain limited non-audit services
to be contracted with the external auditor.
Responsibilities
The primary function of the Audit
Committee is to assist the Board in fulfilling
its responsibilities with regard to financial
risk management and internal controls,
financial reporting, and oversight of external
and internal audit.
During the year, the Audit Committee’s
principal work included the following:
• reviewing the Group’s internal financial
controls and financial risk
management systems;
• reviewing the Group’s financial and
accounting policies and practices
including discussing material issues with
management and the external auditor,
especially matters that influence or could
affect the presentation of accounts
and key figures;
• considering the output from the Group-
wide processes used to identify, evaluate
and mitigate financial risks, including
credit and performance risks, across the
Industrial and Marketing activities;
• reviewing the global audit plan, scope
and fees of the audit work to be
undertaken by the external auditor;
• reviewing the annual Group
Assurance plan;
• monitoring the progress made in
remediating the internal control
deficiencies noted by the external auditor
(IT access controls and certain review
controls over journal entries and complex
valuation models). The Audit Committee
regularly discusses these matters,
the actions to remediate them and the
progress being made with management
and the external auditor; refer to point 3
below, Internal Controls Review – UK
corporate reform readiness programme;
• reviewing and agreeing the
preparation and scope of the year-end
reporting process;
• considering applicable regulatory
changes to reporting obligations;
• considering the scope and methodologies
to determine the Company’s going
concern and longer-term viability
statements;
• reviewing the full-year and half-year
financial statements with management
and the external auditor;
• evaluating the Group’s procedures for
ensuring that the Annual Report, taken as
a whole, is fair, balanced and
understandable;
• monitoring the independence of the
external auditor and the operation
of the Company’s policy for the provision
of non-audit services by the external
auditor; and
• recommending to the Board a resolution
to be put to the shareholders for their
approval on the appointment of the
external auditor and to authorise the
Board to fix the remuneration and terms
of engagement of the external auditor.
Risk management and internal
controls review process
The Audit Committee receives reports and
presentations at each scheduled meeting on
management of marketing and related risks
(excluding operational and sustainability
risks which are reviewed by the HSEC
Committee and compliance risks which
are reviewed by the ECC Committee) and
the Board separately carried out an in-depth
review of the identified principal and
emerging risks and uncertainties and the
Group’s risk management framework as a
whole which is revisited prior to finalisation
of the Annual and Half-Year Reports.
The Board’s internal controls review
processes are outlined under the Risk
management section from page 105.
Significant issues
The Audit Committee assesses whether
suitable accounting policies, including the
implementation of new accounting standards,
have been adopted and whether
management has made appropriate
estimates and judgements. It also reviews the
external auditor’s reports outlining audit work
performed and conclusions reached in respect
of key judgements, as well as identifying any
issues in respect of these reports.
2023 Glencore Annual Report
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Audit Committee report continued
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Additional Information
During the year, the Audit Committee has
focused in particular on these key matters
reviewing carefully in relation to items 4 to
7 management’s position and the challenge
from the external auditor. In each case the
Audit Committee was satisfied with the
agreed position:
1. Audit plan review
The Audit Committee reviewed key
developments and audit risks central to
planning for the half-year review and annual
audit. These included asset valuations, DRC
matters, internal controls approach and
observations, and ongoing government
investigations.
The Audit Committee considered and
agreed the materiality applied by the
external auditor and the reporting threshold
to the Audit Committee for unadjusted
misstatements.
2. Significant accounting matters
The Audit Committee considered a number
of current or prospective significant
accounting matters including acquisitions
and disposals of various assets during the
period, various asset impairments as well as
a number of key judgements and estimates.
3. Internal Controls Review – UK
corporate reform readiness
programme
In response to the corporate reform
proposals in the UK, regarding an
anticipated internal controls attestation
regime, the Audit Committee is overseeing
an intensive management review, supported
by Ernst & Young, of the Group’s internal
controls and related financial assurance
structures to ensure readiness in the event
of such new regulations in the future.
4. Impairments
The Audit Committee considered whether
the carrying value of goodwill, industrial
assets, physical trade positions and material
loans and advances may be impaired as a
result of commodity price volatility and
some asset-specific factors including the
impact of climate change. The Audit
Committee reviewed management’s reports,
outlining the basis for the key assumptions
used in calculating the recoverable value for
the Group’s assets. Future performance
assumptions used are derived from the
Board-approved business plan. As part of the
process for approval of this plan, the Audit
Committee considered the feasibility of
strategic plans underpinning future
performance expectations, and whether
they remain achievable. Considerable focus
was applied to management’s commodity
price and exchange rate assumptions and
their sensitivities within the models. In
relation to coal, there continues to be
particular focus around price outlook and
climate change-related risks.
5. Taxation
Due to its global reach, including operating
in many higher-risk jurisdictions, the Group
is subject to complexity and uncertainty in
accounting for income taxes, particularly the
evaluation of tax exposures and
recoverability of deferred tax assets. The
Audit Committee has engaged with
management to understand the potential
tax exposures globally and the key estimates
taken in determining the positions recorded,
including the status of communications with
local tax authorities and the carrying values
of deferred tax assets. The African copper
assets continue to be a particular area
of focus.
6. Counterparty exposures
The Group’s global operations expose it to
credit and performance risk, which result in
the requirement to make estimates around
recoverability of receivables, loans, trade
advances and contractual non-performance.
As part of an ongoing review, the Audit
Committee considered material continuing
exposures, the robustness of processes
followed to evaluate recoverability and
whether the amounts recorded in the
financial statements are reasonable.
7. Site visits
As part of the Board’s programme of site
visits, discussions are held with designated
individuals, representing local accounting
leadership, internal audit, external audit,
compliance or human resources.
8. Other material issues
A full discussion of the VaR limits applied
in the year is set out in the Risk
management section on page 107.
The Audit Committee considered, and was
satisfied with, the going concern and
longer-term viability conclusions reached
as set out on page 110.
Internal and external audit
The Audit Committee monitored the internal
audit component of the GIAA function as
described under ‘Group Internal Audit and
Assurance’ on page 106.
The Audit Committee focused on the critical
role of GIAA and the progress made on the
implementation of its new strategy following
a revamping of the function, which has
required a significant number of changes in
approach and increased resources.
The Audit Committee assesses the quality
and effectiveness of the external audit
process on an annual basis in conjunction
with the senior management team. Key
areas of focus include consideration of the
quality and robustness of the audit,
identification of and response to areas of risk
and the experience and expertise of the
audit team, including the lead audit partner.
The Group complies with the provisions of
the Statutory Audit Services for Large
Companies Market Investigation (Mandatory
Use of Competitive Tender Processes and
Audit Committee Responsibilities) Order
2014, which includes the requirement to
re-tender the external audit periodically.
For 2023, fees paid to the external auditor
were approximately $41 million. These
included audit-related assurance services
of $5 million and non-audit fees of $3 million
as permitted by the FRC’s Revised Ethical
Standard; further details are contained
in note 30 to the financial statements.
Audit Committees and the
External Audit: Minimum
Standard
While not mandatory the Group is broadly
compliant with Audit Committees and the
External Audit: Minimum Standard
published by the Financial Reporting
Council in May 2023.
Finally, the work of the MIMF and FCPA
Monitors has started and the Audit
Committee will be considering any relevant
changes they may recommend to the work
of the Audit Committee.
Liz Hewitt
Chair of the Audit Committee
130
2023 Glencore Annual Report
Ethics, Compliance and Culture (ECC) Committee report
Strategic Report
Corporate Governance
Financial Statements
Additional Information
controls for the prevention of unethical
business practices and misconduct;
• reviewing reports and the activities of
relevant management committees: ESG
and Business Approval Committees;
• assessing and monitoring culture to
ensure alignment with the Company’s
Purpose and Values and ensuring
appropriate levels of workforce
engagement by the designated
Directors; and
• monitoring the Group’s stakeholder
engagement.
Main activities
During the year, the ECC Committee’s
activities included the following:
Ethics and Compliance
• Provided oversight of the key elements
of the Ethics and Compliance programme,
including risk assessments, policy
implementation, training and awareness,
internal monitoring, and reviews
conducted by third-party specialists.
• Reviewed the implementation and
effectiveness of the Ethics and Compliance
programme.
• Reviewed the compliance structure and
resourcing to assess whether it is sufficient
for the Group.
• Considered developments in relation
to the independent compliance monitors
appointed pursuant to the resolutions
with the Department of Justice and the
Group’s preparation in this regard.
Stakeholder engagement
• Reviewed our ESG engagement, including
with investors, NGOs and multi-stakeholder
organisations that invest or engage on ESG
issues, and track the development of
reporting on ESG-related topics.
• Considered the significant matters
on which the Group has made political
representations and our use of lobbyists
and the conduct and positions of our
member organisations during 2023 on
material issues in accordance with our
Political Engagement Policy.
• Considered regulatory developments
in relation to responsible sourcing and the
progress of the Group’s programme in
meeting the evolving requirements and
identifying and addressing relevant risks in
our supply chain.
Workplace culture and practices
• Considered management of health-
related concerns, policies and
communications for employees with
a focus on mental health and wellbeing
and providing accurate health advice
and support.
• Considered Group HR policies, standards and
legislative compliance around the globe.
• Considered various public reports into
workplace culture and sexual harassment,
particularly within the mining industry, and
with a particular focus on the
recommendations contained within those
reports. Continued to assess whether the
Company has or is developing the
appropriate measures to address concerns.
• Considered regulatory developments in
relation to diversity and inclusion and the
Group’s proposed governance and action
planning to meet regulatory guidance and
good practice.
• Assessed employee attitudes toward the
Group’s culture of compliance through a
series of focus groups across the world, the
results of which were reported to the
Committee alongside recommendations
for enhancements and improvements to
the Ethics and Compliance Programme.
• Reviewed the outcome of Behavioural
Reviews for the Top 500 employees
including adjustments to compensation.
Workforce engagement
• As part of the ECC Committee’s role in
assessing and monitoring Group culture,
individual Non-Executive Directors held
a series of forums, mostly in-person, with
a cross-section of employees in different
parts of the business, representing different
commodities and different levels of
responsibility. Discussions were focused on
topics such as diversity and inclusion,
health and safety, climate change, ethics
and compliance and Glencore’s strategy,
Purpose and Values. The feedback
from employees was shared with the
ECC Committee and notes provided to
the Board.
• The Board considers having designated
workforce engagement Directors as the
most constructive method of workforce
engagement and has chosen for all
members of this committee to be such
workforce engagement Directors. Each
Director uses the forum of this committee
to provide feedback to the Board on the
concerns of the workforce and ensure
that employees’ voices are heard in
the boardroom.
Cynthia Carroll
Chair of the ECC Committee
2023 Glencore Annual Report
131
Cynthia Carroll
Chair
Other members
Peter Coates
Gill Marcus
The ECC Committee met four times during
the year. Each committee member attended
all of the meetings during their period of
appointment. All other Directors are invited
to attend the meetings.
Nicola Leigh (Deputy Company Secretary) is
the Secretary of this committee.
Responsibilities
The main responsibilities of the ECC
Committee are:
• overseeing the implementation of the
Group Ethics and Compliance programme
including Group policies, standards,
procedures, guidelines, systems and
Health, Safety, Environment & Communities (HSEC) Committee report
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Security Standard and alignment to the
tailings management framework.
• Tailings storage facilities: overseeing the
work on our tailings management
framework and updated Tailings Storage
Facility and Dam Management Standard
which is aligned with the ICMM’s Tailings
Governance Framework position
statement, the Global Industry Standard
on Tailings Management (GISTM), the
CDA’s Dam Safety Guidelines and the
ICOLD and the internal work on the Group’s
facilities, particularly with a ‘Very High’ or
‘Extreme’ Consequence Classification.
• External affairs: monitoring the Group’s
external HSEC reporting, continuing
engagement on material issues and
stakeholder and investor engagement. In
April 2023, Glencore disclosed the results
of our self-assessments to the ICMM
Performance Expectations and in August
we reported on our conformance to the
GISTM for our TSFs with ‘Very High’ or
‘Extreme’ Consequence Classifications.
Peter Coates
Chair of the HSEC Committee
Responsibilities
The main responsibilities of the HSEC
Committee are:
• ensuring that appropriate Group policies
and standards are developed in line with
our Values and Code of Conduct for the
identification and management of current
and emerging health, safety,
environmental, social performance and
human rights risks;
• ensuring that the policies and standards
are effectively communicated
throughout the Group and that
appropriate processes and procedures
are developed at an operational level
to implement these policies and standards
and assess their effectiveness through:
– assessment of operational performance;
– review of updated internal and external
reports; and
– independent audits and reviews of
performance with regard to HSEC&HR
matters, and action plans developed
by management in response to
issues raised;
• evaluating and overseeing the quality
and integrity of any reporting to
external stakeholders concerning
HSEC&HR matters; and
• reviewing the outcome of investigations
following fatalities and the recommended
actions to improve safety and prevent
recurrence.
Main activities
• During the year, the HSEC Committee
engaged in the following activities:
• HSEC&HR Strategy: approved the strategy
which is a comprehensive update with a
five-year time horizon. This involved the
review of both internal and external targets.
• Policy and standards: approval of the
updated Crisis and Incident Management
Standard and updated Security Standard.
Monitoring the implementation of the
Group HSEC&HR standards.
• Health and Safety: overseeing the Group’s
fatality prevention programme including
SafeWork, which is Glencore’s approach
to eliminating work-related fatalities. In
2021, a revised SafeWork was launched
through a change project called ‘SafeWork
2.0’. The Committee was updated on the
progress of implementation and reviewed
each fatality occurring with emphasis on
reviewing the investigation outcomes and
recommendations. There was also a focus
on lessons to be learned across the Group;
oversight of a revamping of leadership of
fatality investigations including a training
programme; and reviews of critical
incidents and trends in TRIFR, LTIFR,
HPRIs and other relevant statistics.
• Environment: reviewing the Group’s
progress and performance concerning
emissions, energy, water and stewardship
and other impacts.
• Social performance and human rights:
reviewing material issues including
security management, cultural heritage
issues, investigations and complaints,
monitoring the Group’s strategy and
reviewing serious incidents.
• Assurance: reviewing the work of
HSEC&HR Audit component of the Group
Internal Audit and Assurance function,
including overview of key HSEC
catastrophic audits such as tailings
storage facilities, multi-disciplinary open
cut and underground audits, metallurgical
plants and concentrators. There was also a
focus in 2023 on actions taken to
implement the Voluntary Principles on
Security and Human Rights, the Glencore
Peter Coates
Chair
Other members
Cynthia Carroll
Kalidas Madhavpeddi
The HSEC Committee met four times during
the year. Each committee member attended
all meetings during their period of
appointment. Every scheduled meeting had
a substantial agenda, reflecting the HSEC
Committee’s objective of monitoring the
achievement by management of ongoing
improvements in HSEC&HR performance.
John Burton is the Secretary of this
committee.
132
2023 Glencore Annual Report
Nomination Committee report
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Corporate Governance
Financial Statements
Additional Information
Role and responsibilities
The main responsibilities of the Nomination
Committee are to assist the Board with
succession planning and with the selection
process for the appointment of new
Directors, both Executive and Non-Executive,
including the Chair, and overseeing
succession plans for senior management.
This involves:
• evaluating the balance of skills, knowledge
and experience of the Board and
identifying the capabilities required for
a particular appointment;
• overseeing the search process;
• evaluating the need for Board
rejuvenation and succession planning
generally;
• overseeing planning for CEO and CFO
succession;
• monitoring the CEO’s planning for senior
management succession to seek to
ensure that the Company has a suitable
pipeline of candidates; and
• considering diversity in appointments.
Main activities
The Nomination Committee focused on the
following main tasks during this year:
• Firstly, it considered the current
composition of various Group senior
leaders and the succession plans for
them.
• Secondly, it considered business
leadership development and talent
management in the industrial business.
• Thirdly, it reviewed Committee
compositions.
Also, prior to the notice of the 2023 AGM
being compiled, the Nomination Committee
considered the performance of each
Director. It concluded that each Director
was effective in their role and continued
to demonstrate the commitment required
to remain on the Board. Accordingly,
it recommended to the Board that re-
election resolutions be put for each
continuing Director at the AGM.
Succession planning and the review of
succession-related development actions is
considered regularly by leadership and the
Human Resources leaders. Specific focus is
placed on measuring and increasing the
diversity of the senior management group
and the candidate pipeline. Our over-riding
targets for diversity in senior leadership
remains those targets suggested by the
FTSE Women Leaders Review.
The Nomination Committee acknowledged
the recommendations of the FTSE Women
Leaders Review (formerly Hampton-
Alexander Review) on gender and the Parker
Review on ethnic diversity. Three Board
members, out of a total of eight, are women.
The Board’s composition therefore misses
the 40% recommendation of the FTSE 100
Women Leaders Review by 2.5 percentage
points. It is part of the Nomination
Committee’s policy when making new
Board appointments to consider the
importance of diversity on the Board,
including gender and ethnicity, which is
considered in conjunction with experience
and qualifications.
The Nomination Committee continues to
encourage improvements in diversity within
the Group’s management.
Kalidas Madhavpeddi
Chair of the Nomination Committee
Kalidas Madhavpeddi
Chair
Other members
All other Non-Executive Directors
The Nomination Committee met three times
during the year and each committee
member attended all of the meetings during
their period of appointment.
John Burton is the Secretary of this
committee.
2023 Glencore Annual Report
133
Directors’ remuneration report
For the year ended 31 December 2023
Strategic Report
Corporate Governance
Financial Statements
Additional Information
1. Introduction from
the Remuneration Committee
Chair
On behalf of the Board, I am pleased to
present the Remuneration Committee
report for the financial year ended
31 December 2023.
I stepped into the role of Remuneration
Committee Chair in May 2023 and have
spent much of my first year in the role
leading a comprehensive review of the
current remuneration arrangements in
advance of the next scheduled binding
Remuneration Policy vote at the 2024 AGM.
The aim of the review was to identify
necessary modifications to ensure the
Remuneration Policy is strategically aligned
and fit for purpose. I have received input
from my fellow members of the
Remuneration Committee and the wider
Board, management, external advisers,
shareholder advisory bodies and, of course,
our fellow shareholders.
As covered in more detail below, we
conducted an extensive shareholder
consultation programme and the changes
we are proposing for the Remuneration
Policy take into account the feedback we
received. We are grateful to shareholders for
their time and feedback, which we have
carefully considered in proposing an
updated Remuneration Policy which we
believe best supports the needs of the
Company today and will drive value creation
over the long term.
Shareholder engagement 2023/24 – a
summary
Period of
engagement
No. of shareholders
No. of shareholder
advisory bodies
1. As at 31 December 2023
September 2023
– February 2024
34 shareholders
representing
approximately 68%
of shares
outstanding1
2
The remainder of this letter provides a
detailed overview of the Remuneration Policy
review and other key areas of Remuneration
Committee focus during the year.
Remuneration Policy changes for
2024–2026
Remuneration for the Executive
Director (CEO)
During 2023, the Remuneration Committee
spent a considerable amount of time
evaluating different approaches to Executive
Remuneration for the CEO ahead of putting
the new Remuneration Policy to a binding
resolution at the 2024 AGM. There are some
important changes to which I would like to
draw your attention.
Since 2021, Glencore has operated an annual
bonus (with performance assessed based on
a scorecard of financial and non-financial
measures) and a Restricted Share Plan,
which broadly reflect UK market practice. In
addition, Glencore has incorporated best
practices, including post-exit shareholding
requirements and CEO pension alignment
with the local Swiss workforce.
As a global producer and marketer of
commodities, the Company’s unique value
proposition lies in its diversified model,
spanning various geographies, products, and
activities. This diversification is not just a
hallmark of our identity but also a significant
driver of complexity and volatility even
beyond that of other large diversified miners.
This demands exceptional leadership and a
more dynamic and holistic approach to the
assessment of performance that recognises
the market realities and the macroeconomic
conditions annually and over the long term.
Our rationale is set out below:
• Firstly, Glencore’s strategy is focused on
long-term value creation. Success
depends on capital discipline and risk
management; effective execution of
projects and production; investment in
transition-enabling commodities that
support the decarbonisation of energy
usage and help meet the commodity
demands for everyday life; and agile
commercial responses to external
circumstances in both the industrial and
trading businesses. Executive
remuneration arrangements should
therefore reward sustainable long-term
value creation aligned with the
shareholder experience, rather than
short-term, volatile financial outcomes.
• Secondly, rigid scorecards with fixed
performance metrics and weightings
reinforce a disproportionate and limited
focus only on the selected measures. This
does not effectively reward making the
difficult operational and commercial
decisions that are necessary in pursuit of
long-term value maximisation.
• Lastly, the volatility in our commodity and
energy markets is a ‘new normal’ rather
than a temporary trend. Traditional
measures of financial performance are
Martin Gilbert
Chair
Other members
Kalidas Madhavpeddi
Cynthia Carroll
David Wormsley
Dear Shareholder,
This report is split into three sections:
1. This introduction;
2. The Directors’ remuneration report
(subject to an advisory vote at the
2024 AGM); and
3. The new Directors’ Remuneration
Policy (Remuneration Policy) (subject
to a binding vote at the 2024 AGM)
134
2023 Glencore Annual Report
Directors’ remuneration report continued
Strategic Report
Corporate Governance
Financial Statements
Additional Information
exposed to this volatility, and this can
impact the ongoing relevance of these
measures, especially if considered in
isolation for performance assessment
purposes. Traditional total shareholder
return-based measures commonly used in
long-term incentives risk rewarding share
price volatility, which is not an all-
encompassing measure of executive
performance, especially for a cyclical
commodity business. The use of rigid
measures can therefore create unintended
compensation results.
The Remuneration Committee proposes the
adoption of a considerably simplified
remuneration structure, comprising only
salary and long-term incentives, that is fully
aligned with our business model and the
returns received by our long-term
shareholders. Subject to shareholder
approval, long-term incentives will be
delivered in the form of shares that are (1)
performance modified against in-year and
multi-year expectations and subject to
robust vesting underpins, and (2) require full
share deferral throughout (and beyond) the
CEO’s career (Career Shares).
We recognise that the use of Career Shares
is not common practice for UK companies.
However, the Remuneration Committee
believes that the introduction of a Career
Shares Plan incorporating a holistic
performance framework, together with a
unique requirement to hold 100% of Career
Shares awarded until two years post-
employment, is the most appropriate
approach to reward the CEO. Providing
share ownership and requiring long-term
ownership of these shares is not only
important to align executive interests and
personal accountability for performance over
the long term, but also helps to retain the
best talent in the industry. Furthermore, we
were encouraged by the positive feedback
received from our largest shareholders,
many of whom welcomed the simplicity and
long-term orientation of the plan design, as
well as the meaningful alignment of CEO
pay with the shareholder experience
reinforced through the holding period, and
this feedback has helped us to finalise our
proposals, as follows.
Salary will be the only form of cash
remuneration earned by the CEO each year
under this proposed, simpler remuneration
structure. In light of the proposed removal of
the annual bonus and to partly offset the
reduction in cash compensation, from 2024,
salary will be increased from $1.854m to $2m
and, if approved, the target Career Shares
opportunity will be 350% of salary, which
remains unchanged compared to the
current Remuneration Policy’s combined
incentive target (an annual bonus target of
125% and restricted shares at 225%). The
maximum incentive opportunity for the CEO
will be 525% of salary. Taken together, this
results in a maximum cap on remuneration
of c.$12.5 million. Career Share awards are
not guaranteed, and awards may be
adjusted (including to zero) in certain
circumstances, including significant and
reputationally damaging situations, to
ensure there are no rewards for failure. The
CEO’s in-post shareholding guideline will be
increased from 500% to 525% of salary, in line
with the maximum incentive opportunity.
Glencore’s proposed Remuneration Policy,
which will only apply to the CEO, can be
found on pages 153 to 156.
The proposed Remuneration Policy will be
put to shareholders for a binding vote at the
AGM on 29 May 2024 and, if approved, shall
remain valid for the three financial years
following (2024, 2025, 2026).
Remuneration for the Chairman
and Non-Executive Directors
Fees for the Chairman and Non-Executive
Directors are reviewed annually and are
benchmarked against peer companies.
Based on our latest review, no changes to
the Chairman or Non-Executive Directors’
base fees will be made for 2024.
Performance incentive outcomes
in 2023
I am pleased that the annual bonus
outcomes for 2023 reflect the performance
of the business and the significant
contribution made by the CEO during his
second full year in post, to position Glencore
for growth and a sustainable future.
In line with the annual bonus scorecard
which provides consideration for financial,
safety, climate, and individual performance
initiatives, the Remuneration Committee
reviewed Glencore’s financial and non-
financial performance versus targets that
were established for each measure (see
page 145) to determine the appropriate level
of bonus payout for 2023. A summary of the
Remuneration Committee’s performance
assessment is below.
• Aided by healthy operational cash
generation, after funding $5.6 billion of net
capex and $10.1 billion of shareholder
returns, the 2023 year-end Net debt
outturn was contained to $4.9 billion vs.
$0.1 billion in 2022.
• $10.1 billion of cash returns to shareholders
(comprised of a $6.5 billion base and
special distribution returned to
shareholders and $3.6 billion of share
buybacks), up from c.$7.5 billion in 2022.
• Continued to embed our safety systems
and processes across all of our industrial
assets to support our ambition to achieve
zero work-related fatalities.
• The Total Recordable Injury Frequency
Rate (TRIFR) and the Lost Time Injury
Frequency Rate (LTIFR) have decreased by
3% and 10% respectively compared to 2022
and 11% and 13%, respectively versus the
3-year average.
• As of the end of 2023, reduced Scope 1 and
2 industrial emissions by 7.5% compared to
2022 (restated), in part reflecting Scope 1
and 2 abatement initiatives undertaken as
part of our efforts to achieve our short-
and medium-term targets.
• Reported against the Global Industry
Standard on Tailings Management (GISTM)
for our Tailings Storage Facilities (TSFs)
with ‘Very High’ or ‘Extreme’ Consequence
Classifications, meeting the deadline set
by the ICMM.
• Glencore’s financial flexibility, enabled by
its low net debt position, allowed for
promising acquisition opportunities
(Alunorte, Mineracão Rio do Norte S.A.),
while planning for potential material
brownfield development in transition
metals (MARA brownfield copper project,
Polymet).
• Entered into an agreement to acquire a
majority interest in Teck’s steelmaking
coal business, Elk Valley Resources (EVR)
with its high-quality steelmaking coal that
will complement our existing portfolio of
world-class coal assets in Australia, South
Africa and Colombia.
• Continued significant investment in our
Ethics and Compliance programme and
ongoing constructive engagement with
the independent compliance monitors
and their teams.
2023 Glencore Annual Report
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Strategic Report
Corporate Governance
Financial Statements
Additional Information
business, shareholders, and other
stakeholders. It is intended that any future
Remuneration Policy review be focused on
similar objectives.
I would like to take this opportunity to thank
my fellow Remuneration Committee
members for their contributions during the
year and the shareholders and proxy
agencies for their input and engagement
during this Remuneration Policy review, to
help shape the new Remuneration Policy
presented in this report. During this
consultation, we were pleased to be able to
engage with so many of the Company’s
major shareholders. I welcome all
shareholders’ feedback on this report ahead
of our AGM and we look forward to receiving
your support for our new Remuneration
Policy and Annual Report on Remuneration
at our AGM on 29 May 2024.
Sincerely,
Martin Gilbert
Chair of Remuneration Committee
March 2024
Based on the Remuneration Committee’s
assessment of 2023 performance delivered
against the annual bonus framework, the
formulaic outcome was 87% of the
maximum opportunity.
As ever, the safety and wellbeing of both our
workforce and communities where we
operate is paramount and we remain
focused on preventing and eliminating
fatalities and injuries through the promotion
of a proactive and visible safety culture.
Significant parts of our industrial assets were
able to continue to operate free from
work-related fatalities in 2023 (copper, nickel,
and oil departments), which demonstrates
that the effective application of the
SafeWork principles we established can lead
to the elimination of work-related fatalities
and injuries. Our safety ambition is zero
fatalities and we hold ourselves to very high
standards in pursuit of that ambition.
Despite our focus on eliminating fatalities,
we are saddened to report that we recorded
the loss of four∆ lives at our industrial assets
in 2023. Any loss of life is unacceptable and
an important reminder that there is more
work to be done to continuously improve
our fatality prevention standards globally
across our industrial assets. Reflecting on
Glencore’s safety commitment, the
Remuneration Committee again applied a
5% reduction to the bonus outcome, in line
with the approach taken in 2022 and 2021,
resulting in a bonus outcome of 83% of
maximum. Further details of how the
Remuneration Committee assessed the
2023 annual bonus scorecard for the CEO
are provided in the Annual Report
on Remuneration.
The Remuneration Committee also
conducted a holistic assessment of the
performance underpins for the Restricted
Share awards, which includes consideration
of shareholder distributions, overall
Company performance and ESG
performance. The first of the three
outstanding cycles of awards is due to vest
on 30 June 2024 and further details will be
provided in next year’s Annual Report.
Wider workforce considerations
The Remuneration Committee is advised of
pay and conditions around the Group and
considers such information when
considering executive pay. The Head of
Human Resources and the Head of Reward
also attend meetings by invitation and are
able to share information about the wider
workforce. In 2023, there was a continued
focus on promoting employee engagement
and facilitating direct communication
between employees and Board members on
a wide range of topics, including diversity
and inclusion, safety, business and strategy,
executive and wider workforce pay including
living wage considerations, compliance, and
our Purpose and Values.
Conclusion
Ensuring that our remuneration approach,
practices, and outcomes fully support our
strategy remains an overarching priority. The
Remuneration Committee’s focus in 2024
will be to review the implementation of the
new Remuneration Policy (if approved) and
to continue ensuring that our approach to
executive remuneration remains fair,
responsible, and provides a dynamic
framework that can accommodate the
evolving demands of a changing business
environment and the priorities of our
136
2023 Glencore Annual Report
Directors’ remuneration report continued
2. Annual Report on Remuneration
The Annual Report on Remuneration will be put to an advisory shareholder vote at the AGM
on 29 May 2024. The Remuneration Policy will be put to a binding shareholder vote at the
AGM on 29 May 2024. Sections of the report are subject to audit and these have been
flagged where applicable.
Remuneration Committee
Membership and experience of the Remuneration Committee
The members of the Remuneration Committee provide a useful balance of skills, experience
and perspectives to provide the critical analysis required in carrying out the committee’s
function. Each Remuneration Committee member has had a long career in the
management of large organisations and therefore provides considerable experience of
remuneration analysis, design and implementation.
Role of the Remuneration Committee
The terms of reference of the Committee set out its role. They are available on the Company’s website at:
glencore.com/who-we-are/governance.
Its principal responsibilities are to:
• regularly review the appropriateness and relevance of the Remuneration Policy;
• determine and agree with the Board the framework for the remuneration of the
Company’s Chairman and the CEO;
• establish the remuneration package for the CEO including the scope of pension and
benefits;
• determine the remuneration package for the Chairman, in consultation with the CEO;
• determine the policy for senior management remuneration;
• oversee schemes of performance-related remuneration (including share incentive plans),
and determine awards for the CEO (as appropriate); and
• ensure that the contractual terms on termination for the CEO are fair and not excessive.
The philosophy of the Remuneration Committee is to set the Company’s remuneration
policies and practices to promote the long-term success of the Company and support the
implementation of the Group’s strategy, while aligning the interests of the Executive
Director and executives with those of shareholders generally. This policy has consistently
underpinned our approach to executive remuneration.
The Remuneration Committee considers corporate performance on ESG and governance
issues when setting remuneration for the Executive Director. Additionally, the Remuneration
Committee seeks to ensure that the incentive structure for the Group’s senior management
does not raise ESG or governance risks by inadvertently promoting and/or rewarding
behaviours that are not aligned with the Group’s Values, culture and policies.
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Remuneration Committee meetings in 2023
The Remuneration Committee formally met four times during the year and considered,
amongst other matters, the remuneration packages applicable to the CEO and senior
management, the content and approval of the Remuneration Report and the incentive
targets and outcomes.
All Remuneration Committee members were considered independent on their appointment
to the Board. Further details concerning independence of the Non-Executive Directors are
contained on page 124.
The CEO and CFO are usually invited to attend some or all of the proceedings of
Remuneration Committee meetings; however, they do not participate in any decisions
concerning their own remuneration. Similarly, the Chairman is not involved in discussions
regarding his own fees.
Advisers to the Remuneration Committee
The Remuneration Committee received remuneration advice from Mercer UK Limited
(Mercer), its independent external adviser. Mercer is a member of the Remuneration
Consultants Group (the UK professional body for Remuneration Consultants) and adheres to
its code of conduct. Mercer was selected by the Remuneration Committee after a formal
tender process. The Remuneration Committee is satisfied that the advice provided is
objective and independent.
The fees paid for advice in respect of 2023 were $213,932. The Mercer team does not have any
connection with the Company or individual Directors.
The Head of Human Resources and Head of Reward also attend meetings at the invitation of
the Remuneration Committee.
AGM shareholder voting
The votes cast to approve the Directors’ Remuneration Report, for the year ended
31 December 2022 at the AGM, held on 26 May 2023, were as follows.
Directors’
Remuneration Report
Votes ‘For’
95.72%
Votes ‘Against’
Votes ‘Withheld’1
4.28%
(9,008,100,449)
(403,148,542)
(119,027,673)
1. A vote withheld is not counted in the calculation of the proportion of votes for and against the resolution.
2023 Glencore Annual Report
137
Directors’ remuneration report continued
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Remuneration at a glance
The main features of the Remuneration Policy that were approved by shareholders at the 2021 AGM and as applied in 2023 are summarised in the table below. The table also includes details
of how the revised Remuneration Policy is intended to apply in 2024, if approved by shareholders at the 2024 AGM. Further details of the proposed Remuneration Policy can be found on
pages 153 to 156.
Element of
remuneration
Purpose and link to strategy
Policy and operation
2023 Implementation
2024 Proposed Policy Changes
Application of the Remuneration Policy
Paid over the financial year
Base salary
To recruit, retain, and motivate
individuals of a high calibre, and reflect
the skills, experience, responsibilities,
development, and contribution of the
Executive Director
Pension
Benefits
Provides retirement benefits (defined
contribution scheme), in line with the
Swiss legal limit and contribution levels
in all-employee Swiss scheme
Provides appropriate supporting
non-monetary benefits aligned to local
policy applicable to Swiss employees,
including salary loss (long-term sickness)
and accident/travel insurance, in line
with benefits available to staff for the
office in which an Executive Director
works
Reviewed annually with adjustments
effective 1 January
Adjustments, if any, take into account
those applied across the wider
workforce; the Remuneration
Committee retains discretion to award
higher increases where appropriate to
take into account market conditions,
performance and/or development of the
individual, a change in the responsibility
and/or complexity of the role, new
challenges or a new strategic direction
for the Company
Any Executive Director’s benefit will be
aligned with the average percentage
contribution or entitlement available to
staff in the relevant market
An annual cap on the cost of provision of
retirement benefits of $150k per
Executive Director has been set
A monetary limit of $100,000 p.a. for
these benefits applies
CEO: $1.854m
CEO: $2.0m (7.9% increase)
An annual cap on the cost of provision of
retirement benefits of $150k per
Executive Director has been set
No changes proposed
A monetary limit of $100,000 p.a. for
these benefits applies
No changes proposed
138
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Directors’ remuneration report continued
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Element of
remuneration
Purpose and link to strategy
Policy and operation
FY 2023
FY 2024
Application of the Remuneration Policy
Paid/awarded in the year after the relevant financial year
Annual bonus
(up to 2023)
Supports delivery of short-term
operational, financial, and strategic goals
Maximum opportunity: 250% of salary
Performance measures, targets and
weightings are set at the start of the year
50% of annual bonus deferred in shares
for three years
Unchanged from 2021 Remuneration
Policy
Performance measures:
• Funds from Operations (30%)
• Net Debt (15%)
• Industrial capex (10%)
• Safety (15%)
• Progress towards CO2 targets (15%)
• Personal objectives (15%)
Proposed removal to simplify
remuneration approach and reinforce
long-term alignment with shareholders
Vesting at the end of three years subject to comprehensive underpins, with a post-vest holding period (no performance modifiers)
Restricted
Share Plan
Incentivises the creation of shareholder
value over the long term
Maximum opportunity: 225% of salary
Vesting after three years subject to
satisfactory performance assessed with a
comprehensive underpin which is based
on a holistic review of overall business
and ESG performance over the vesting
period
Unchanged from 2021 Remuneration
Policy
Proposed removal
Vesting at the end of three years subject to performance modified awards, comprehensive underpins, with a post-vest holding period
Incentivises the creation of shareholder
value throughout and beyond the career
of the Executive Director
Career Shares
Plan (first
proposed award
in 2025, subject
to shareholder
approval at the
2024 AGM)
Maximum incentive opportunity: 525% of
salary; target opportunity 350% of salary
N/A
Annual awards determined with
reference to performance dimensions,
where financial, operational, and ESG
performance, as well as strategy delivery,
will be assessed at the time of the award
Vesting after three years subject to
satisfactory shareholder distributions
and ESG performance
Separate to the minimum shareholding
requirements described below, shares
will only be released (other than to meet
tax obligations) on the later of five years
from grant or two years post-
employment
Proposed new single incentive plan to
simplify remuneration approach and
reinforce long-term alignment with
shareholders
The first award will be made in 2025,
subject to shareholder approval of the
new Executive Director’s policy in 2024
2023 Glencore Annual Report
139
Directors’ remuneration report continued
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Element of
remuneration
Purpose and link to strategy
Policy and operation
FY 2023
FY 2024
Application of the Remuneration Policy
Unchanged from 2021 Remuneration
Policy
Increase of in-post and post-exit
shareholding guideline from 500% to
525% of salary, in line with the proposed
combined maximum incentive
opportunity
Unchanged from 2021 Remuneration
Policy
No changes proposed.
Unchanged from 2021 Remuneration
Policy
No changes proposed.
Governance best practices
Minimum
shareholding
requirement
Provides long-term alignment with
shareholders
Malus and
clawback
Reinforces long-term alignment with
shareholders
Service
contracts
Ensure compliance with contractual
obligations
In-post (% of pre-tax salary): 500%, usually
to be achieved within five years of Board
appointment
Post-exit (% salary): the lower of the
shareholding at departure or 500% of
salary for a period of two years
Provisions allow the Remuneration
Committee to reduce or clawback
awards in certain circumstances, such as
material failures in the financial,
operational, compliance, or ESG and HR
performance of the Company and a
failure to identify and/or report such
failure(s); and any other circumstances
that are deemed to have a significant
impact on the reputation or financial
prospects of the Company.
The Remuneration Committee may, in
its discretion, decide to delay vesting and
therefore extend the period during
which malus and clawback may be
applied if facts come to light within the
period warranting an investigation.
It is the Company’s policy to provide for
12 months’ notice for termination of
employment for Executive Directors, to
be given by either party.
Under normal circumstances, the
Company may terminate the
employment of an Executive Director by
making a payment in lieu of notice
equivalent to basic salary only for the
notice period at the rate current at the
date of termination. In appropriate cases,
the Executive Director can be dismissed
without compensation.
140
2023 Glencore Annual Report
Directors’ remuneration report continued
Implementation report
Executive Director remuneration (audited)
The emoluments of the Executive Director for 2023 were as follows.
Single figure table (US$’000)
Salary
Benefits1
Pension
Other
Total fixed remuneration
Annual bonus
Long-term incentives
Total variable remuneration
Total
Gary Nagle
2023
1,854
15
121
–
1,990
3,843
–
3,843
5,833
2022
1,800
18
42
–
1,860
4,211
–
4,211
6,071
1. Lunch card and unemployment insurance covered by employer, in line with all other Swiss-based
employees.
The aggregate fees for all Non-Executive Directors for 2023 were $2,904,000 (2022:
$2,897,000). The total emoluments of all Directors for 2023 (including pension contributions)
were $8,737,000 (2022: $8,967,000).
Incentive outcomes for 2023
Annual bonus
For 2023, as in 2022, the annual bonus scorecard comprised 55% financial measures, 30% ESG
(safety and climate), and 15% personal strategic objectives. As this was the final year for the
application of the bonus scorecard (subject to shareholder approval of the proposed
Remuneration Policy), the Remuneration Committee was keen to maintain the same
framework with minimal year-on-year changes.
Strategic Report
Corporate Governance
Financial Statements
Additional Information
The financial targets were set based on a comprehensive annual business planning process
to reflect challenging levels of performance across several operating scenarios and price
assumptions, including historical performance delivered and inflationary pressures. The
financial targets were also set with reference to Glencore’s annual guidance ranges. The
non-financial targets were developed by the Board in consultation with Mr Nagle.
Consistent with the 2022 bonus scorecard, the 2023 financial measures selected include
Funds from operations (FFO), Net debt, and Capital expenditure (Capex). These financial
measures are in line with the key metrics tracked by Glencore’s four-year plan (2021 to 2024)
developed as part of its longer-term viability assessment. FFO was selected to measure
Glencore’s ability to deliver margins and generate cash that may be returned to shareholders
or further invested in the business for growth. Net debt was selected to evaluate the actions
taken to strengthen continuously Glencore’s balance sheet and capital structure. Capex was
selected to evaluate Glencore’s capital allocation and progress towards pursuing business
reinvestment opportunities that support the net zero industrial emissions ambition.
Collectively, these financial measures reinforce the importance of advancing multiple
strategies and objectives in parallel to support the Company’s long-term viability.
The non-financial measures selected include ESG (safety and climate measures), and
individual objectives which, for 2023, consider individual contributions towards continued
portfolio simplification; embedding a culture of ethics and compliance throughout Glencore;
and developing and nurturing Glencore’s next generation of leadership, including through
the development of a diverse and inclusive culture.
These financial and non-financial measures were deliberately selected in consideration of
their alignment with Glencore’s strategic priorities, as discussed at the front of the Annual
Report on pages 17 to 20 and as illustrated below.
.
Variable pay element
Measure
Weighting
Strategic
priorities
Annual bonus
Funds from
operations
Financial
ESG
Personal objectives
Net debt
Capex
Safety
Progress
towards
CO2 targets
Portfolio
simplification
Compliance People
30%
15%
10%
15%
15%
15%
Responsible and ethical production and supply
Responsible portfolio management
Responsible product use
2023 Glencore Annual Report
141
Directors’ remuneration report continued
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Bonus scorecard – Financial measures
The table below sets out the 2023 performance delivered against the financial targets under
the annual bonus scorecard which comprise a total weighting of 55%.
In 2023, actual FFO of $9.5 billion was delivered against the backdrop of challenging market
conditions. However, 2023 FFO performance was materially impacted having absorbed the
lag effect of 2022 final income tax settlements in Australia and Colombia of $2.7 billion.
Taking account of the lag effect of these 2022 tax payments, adjusted FFO was $12.2 billion in
2023, which the Remuneration Committee believes is a fairer reflection of actual
performance in 2023.
Glencore continued to prioritise delivering returns to shareholders and optimising the
capital structure of the Company. As a result of these efforts, Glencore paid c.$10.1 billion
of cash returns to shareholders, up from c.$7.5 billion in 2022. These returns comprised
$6.5 billion base and special cash distributions to shareholders and $3.7 billion of
share buybacks.
Glencore’s financial flexibility, supported by its low Net debt position, allowed for the
announced acquisition of a 77% interest in Elk Valley Resources (EVR) for a total cash
consideration of $6.93 billion, as well as investments in additional growth opportunities and
Scope 1 and Scope 2 abatement opportunities that can help us achieve our emissions
reduction targets and ambition.
In 2023, we directed most of our capital expenditure, in large part funded through the
earnings of our energy business, towards development of our transition-enabling
commodities portfolio.
Further details are set out below.
Financial
measures
Funds from
operations
Net debt
Industrial
capex
Total
Financial
Weighting Threshold
Target Maximum
30%
$10.7bn
$11.9bn
$13.1bn
15%
$16bn
$13bn
$10bn
10%
$7.8bn
$7.1bn
$6.4bn
1. FFO adjusted for 2022 final income tax settlements in H1 2023
2023 Actual
performance
$12.2bn1
(2022:
$28.9bn)
$4.9bn
(2022: $0.1bn)
$6.1bn
(2022: $4.8bn)
Percentage of
maximum
opportunity
63%
100%
100%
80%
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Directors’ remuneration report continued
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Bonus scorecard – non-financial measures
Non-financial performance categories include ESG (safety and climate) and individual initiatives that reflect short-term operational and strategic priorities of the business that are critical to
our continued success and are assessed based on performance in line with our business plan and the contributions of the CEO. These measures comprise a total weighting of 45%. The table
below sets out the performance delivered against these non-financial performance categories.
Measure
ESG measure
Safety
Weighting
15%
2023 outturn
90%
ESG measure
Climate: Progress towards 2026 and 2035
CO2 reduction targets
Weighting
15%
2023 outturn
100%
2023 achievements
• In 2023, the HSEC & Human Rights Strategy underwent a significant overhaul, which flows through to each of the individual industrial
department’s strategic plans. The revised strategy reflects the maturity of the industrial assets’ safety performance, focusing on longer-
term initiatives and commitments to deliver against three key priorities and objectives: Safety leadership; Fatality prevention (SafeWork
2.0); and Safety by design.
• We drove continuous improvement in Glencore’s fatality prevention and elimination programme through the implementation of the
revised SafeWork project (SafeWork 2.0). We require an effective safety management system at each industrial asset to ensure the integrity
of plant and equipment, structures, processes and protective systems, as well as the monitoring and review of critical controls.
• The Total Recordable Injury Frequency Rate (TRIFR) and the Lost Time Injury Frequency Rate (LTIFR) have decreased by 3% and 10%
respectively compared to 2022 and 11% and 13% respectively versus the three-year average.
• Our primary goal is the elimination of any work-related fatalities and serious injuries in our industrial assets. We take a proactive,
preventative approach towards health and safety, and we are committed to providing a safe workplace. However, despite our ongoing
efforts, we recorded the loss of four∆ lives at Glencore’s industrial assets in 2023 (two separate incidents in the ferroalloys department, one
in the coal department and one in the zinc department). We believe that a consistent application of our SafeWork approach will drive a
culture of safe operating discipline and get our people home safe.
Based on the assessment above, the Remuneration Committee determined that an outcome of 90% of the safety component is appropriate. This
is in line with the 2022 outcome and reflects the positive progress made since last year in improving our safety record while also acknowledging
that this is a complex process for a company of this size and global scale that requires time and that there is always room for improvement.
Against a restated 2019 baseline, we have set ourselves the target of reducing our Scope 1, 2 and 3 industrial emissions in the short term by
15% by the end of 2026, and in the medium term by 50% by the end of 2035. Post-2035, our ambition is to achieve, subject to a supportive
policy environment, net zero industrial emissions by the end of 2050.
• 2023 Scope 3 industrial emissions of 406 million tonnes CO2e represent a 115 million tonnes (22%) reduction on the restated 2019 baseline.
This primarily reflected the closures of the La Jagua, Calenturitas, Hlagisa1, Newlands and Liddell coal mines, with associated Scope 3
emissions reductions. The emissions reduction pathway is not linear, and year-over-year emissions may increase or decrease in the context
of longer-term abatement.
• Implementation of Scope 1 and 2 emissions reduction initiatives including the purchase of International Renewable Energy Certificates
(I-RECs) and power purchase agreements with I-RECs in Chile, sourcing of solar energy in Australia under Australia's Renewable Energy
Target (RET) Scheme and energy efficiency improvements implemented at Aston Energy Refinery in South Africa.
• As of the end of 2023, reduced Scope 1 and 2 industrial emissions by 7.5% compared to 2022 (restated), supported by Scope 1 and 2
abatement initiatives undertaken as part of our efforts to achieve our short- and medium-term targets. Potential future abatement
initiatives range from certified renewable power purchases and on-site renewable power generation, through to energy storage systems,
operational efficiency initiatives, and electrification.
• Our Climate Change Risk Assessment Guideline was updated and changed to a Procedure in 2023 to drive internal consistency and to
align with the latest global approaches to scenario analysis and our Enterprise Risk Management approach. The implementaiton of the
new Procedure informed Glencore’s disclosure of climate change risks and opportunities aligned with TCFD requirements.
Based on the assessment above, the Remuneration Committee determined that an outcome of 100% of the climate component is appropriate.
1. An independently managed joint venture in which we have a 23.12% equity interest
2023 Glencore Annual Report
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Directors’ remuneration report continued
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Measure
Individual targets
Individual objectives, comprising:
• Portfolio simplification
• Compliance
• People
Weighting
15%
2023 outturn
100%
2023 achievements
• Entered into a binding agreement with Teck for the acquisition of a 77% interest in Teck’s Steelmaking Coal business, EVR, which unlocks
the potential for a value accretive demerger of our combined coal and carbon steel materials business, subject to shareholder approval.
This acquisition is expected to close no later than Q3 2024.
• Further invested in our transition metals portfolio through acquisition of equity stakes in Alunorte and Mineracao Rio do Norte S.A., as well
as the equity we did not already own in the MARA brownfield copper project and Polymet, simplifying these structures and positioning the
company for growth.
• Formed a 50:50 JV with Teck, establishing the New Range Copper Nickel venture in Minnesota.
• Concluded, along with the other Viterra shareholders, an agreement to merge Viterra with Bunge to create a premier diversified global
agribusiness solutions company. The transaction will realise $1.0 billion in cash for Glencore and a further c.$3.1 billion in Bunge equity
(based on Bunge stock price at the date of announcement), and is expected to close in mid-2024.
• Disposed of non-core assets and sought to align around large, long-life, low-cost resources in key copper producing regions.
• In 2023, we have reported 32% women in our senior leadership as part of FTSE Women Leaders Review. Globally, we have increased the
overall proportion of female employees by one percentage point to 18%, slightly above the global industry average.
• Oversaw the dedication of substantial effort and resources to enable constructive engagement throughout 2023 with two independent
compliance monitors mandated by our resolutions with the Department of Justice.
• Oversaw the global Compliance Summit in 2023 to reinforce the importance of compliance and acting with integrity; enhance
understanding of Glencore’s Compliance Programme; and encourage sharing of insights and experience from the regions to drive
compliance.
Total non-financial
Based on the assessment above, the Remuneration Committee determined that an outcome of 100% of the individual component is
appropriate.
97%
144
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Directors’ remuneration report continued
Strategic Report
Corporate Governance
Financial Statements
Additional Information
2023 annual bonus outcomes for the CEO (audited)
The Remuneration Committee conducted a comprehensive assessment of the progress
achieved against the financial and non-financial measures. Overall, 2023 was a year of
continued momentum. An 80% payout was determined to be appropriate for the financial
objectives and an overall payout of 97% was determined to be appropriate for the non-
financial objectives based on the considerations noted above. The combined formulaic result
from the scorecard assessment was 87%.
Although significant parts of our industrial assets (including the industrial copper, nickel, and
oil commodity departments) were able to continue to operate free from work-related
fatalities in 2023, regrettably there were four∆ occupational fatalities recorded. Safety is of
paramount importance and any loss of life is unacceptable and an important reminder that
there is still work to do to improve Glencore’s safety across the business. The implementation
of prevention strategies to promote a SafeWork culture remains a key priority. Reflecting on
Glencore’s safety commitment, the Remuneration Committee again applied discretion to
adjust the formulaic bonus outcome by 5%, resulting in a final bonus outcome of 83% of
maximum.
The following table sets out the outcome of the 2023 annual bonus for Mr Nagle.
Gary Nagle
Max
opportunity
(% of salary)
250%
Performance
measures
Financial
Non-
Financial
Total formulaic bonus outturn
Discretion applied
2023 adjusted annual bonus outturn (% of maximum
opportunity)
Weighting
55%
45%
100%
Formulaic
outturn
(% of max)
80%
97%
87%
5%
83%
2023 Outturn
$3.84 million
Bonus deferral
The Remuneration Policy states that 50% of any annual bonus plan outcome is deferred into
shares for a period of up to three years unless otherwise determined by the Remuneration
Committee. The following table sets out the number of shares that were awarded as a result
of the 50% deferral.
Gary Nagle
Date of grant
19 March
2024
Face value of award1
(US$)
No. shares
Vesting date
$1.9m
334,101
18 March 2027
1. Based on a share price of $5.75 which is the Volume Weighted Average Price (VWAP) of December 2023.
Restricted Share Plan awards vesting in 2023
There were no Restricted Share Plan awards due to vest during the year.
To provide insight into the performance orientation embedded in our Restricted Share Plan
and to ensure that the performance underpins remain appropriate in the context of market
developments and the Company’s strategy, the Remuneration Committee conducted a
review of the performance delivered to date versus the Restricted Share Plan underpins for
outstanding awards.
The performance underpins are designed to mitigate the risk of payments for failure by
enabling a reduction in vesting when: (1) shareholders do not receive the minimum
distribution required under the Company’s stated distribution policy; (2) absolute and
relative shareholder performance over the vesting period is deemed unsatisfactory; or (3)
progress against ESG initiatives, including the implementation of the Company’s Ethics and
Compliance programme and the Climate Action Transition Plan, is considered to be
unsatisfactory. These performance underpins enable a more holistic consideration of
performance to reward sustainable value creation and commercial effectiveness, rather than
short-term share price volatility primarily driven by commodity price cycles that is
characteristic of traditional total shareholder return-based measures commonly used in
long-term incentive plans.
These performance underpins were also deliberately selected in consideration of their
alignment with Glencore’s strategic priorities, as illustrated below.
Variable pay element
Long-term incentive
Measure
Weighting
Strategic
priorities
Distributions to
shareholders
Company
performance
ESG
performance
Responsible and ethical
production and supply
Responsible portfolio
management
Responsible product use
N/A
Overall, the Remuneration Committee is pleased with the performance of the Company
against the underpins set at the grant of the awards which remain appropriate. A summary
of the main considerations is provided below. These considerations apply for the three
awards of restricted shares currently outstanding for the CEO, the first of which is due to vest
on 1 July 2024 and further details will be provided in next year’s Annual Report.
2023 Glencore Annual Report
145
Directors’ remuneration report continued
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Underpin
Distributions to
shareholders
Company performance
over the year
Performance considerations
• During 2023, we announced c.$6.5 billion of base and special cash distributions and $3.7 billion of share repurchases.
• For 2024, based on 2023 cash flows, we are recommending to shareholders a $0.13 per share ($1.6 billion) base distribution.
• Following the November 2023 announcement of our agreement to acquire a 77% interest in EVR, our capital structure and credit profile is now being
managed towards a revised $5 billion Net debt cap. In this context, our capital returns allocation framework prioritises repayment of the acquisition debt to a
level which would support the potential demerger construct.
• Strong returns to shareholders in 2023 despite the inflationary environment, geopolitical conflicts, and the negotiation and announcement of the EVR
transaction, expected to complete in 2024. The Group achieved Adjusted EBITDA of $17.1 billion positioned as one of the top three years in the last decade,
eclipsed only by 2021 and 2022. Net income before significant items was $6.7 billion, while Net income attributable to equity holders was $4.3 billion.
• For Marketing, 2023 Adjusted EBIT was $3.5 billion.
• For Industrial, 2023 Adjusted EBITDA was $13.2 billion.
• We continued to strengthen our balance sheet underpinned by a capital structure with optimal Net debt revised to $5 billion from $10 billion previously.
Outturn Net debt was closely in line with the optimal level. By maintaining strong investment grade ratings (BBB+/Baa1), our financial flexibility enabled the
announced acquisition of a 77% interest in EVR for a total cash consideration of $6.93 billion. This also enabled a continued focus on investing in major capital
projects, including into transition metals, in line with and supporting the Company’s overall strategy.
ESG performance
• Environment and tailings: Our strong environmental performance has continued with no major or catastrophic events. A comprehensive tailings
management framework has been implemented with clear governance, accountabilities, systems, training, auditing, and annual reporting. Glencore
published its first public disclosure against the Global Industry Standard for Tailings Management (GISTM) in August 2023, which details the actions taken in
the year and our management of tailings facilities across the portfolio that are classified as Very High and Extreme Consequence.
• Climate change: We believe that the global energy transition will be non-linear through time and geography and we have set clear principles to inform our
approach to a just and orderly transition. For the short to medium term, we set targets to reduce our Scope 1, 2, and 3 industrial emissions by 15% by 2026 and
50% by 2035 from a restated 2019 baseline. Over the past few years, we have implemented a wide range of emissions abatement initiatives and have
identified more to support the achievement of our longer-term goals. We have strengthened our emissions disclosures to enable our stakeholders to better
understand our performance. We have also continued our active engagement with our shareholders and interested stakeholders on climate change and
our strategy.
• Safety: Our TRIFR and LTIFR performance has seen improvements versus the three-year rolling averages and the implementation of prevention strategies to
promote a SafeWork culture remains a key priority. Although there were regrettably four∆ occupational fatalities recorded in 2023, significant parts of our
industrial assets (including copper, nickel, and oil departments) were able to continue to operate free from occupational fatalities in 2023. Considering the
scale of Glencore’s global operations, sustained long-term improvement in safety performance is a clear demonstration that the effective application of the
SafeWork principles supports the elimination of work-related fatalities.
• Governance: From a governance perspective, we are committed to ensuring a strong culture of ethics and compliance across the Group. We have dedicated
substantial resources over the last few years and during 2023 to build and implement a best-in-class Ethics and Compliance Programme, which
encompasses different aspects such as risk assessments, policies, standards, procedures and guidelines, training and awareness, monitoring, providing safe
channels to speak openly and raise concerns and investigations.
146
2023 Glencore Annual Report
Directors’ remuneration report continued
Strategic Report
Corporate Governance
Financial Statements
Additional Information
2023 Restricted Share Plan awards (audited)
During the year ended 31 December 2023, Mr Nagle received an award of restricted shares
which may vest after a three-year period ending on 22 March 2026, subject to the
achievement of three performance underpins as discussed above. The award is set out in the
table below.
Grant
(% of annual
salary)
Face value
of award1
(US$’000) No. shares2
Vesting date3
Holding period4
Gary Nagle
225%
4,050
608,622 22 March 2026
Five years after grant or two
years post-employment
1. Face value of award based on the 225% award opportunity multiplied by the annual salary of
$1.8 million.
2. Based on a share price of $6.65 which was the VWAP during December 2022.
3. Vesting subject to underpins described in the Restricted Share Plan awards vesting in 2023 section.
4. Whichever occurs latest.
Statement of Directors’ interests in shares (audited)
As at 31 December 2023, the Executive Director’s interests in shares via incentives were as
follows. Details of his beneficial shareholdings are shown in the Share ownership guidelines
section below.
Outstanding scheme interests at
31 December 2023
Vested scheme interests
Unvested
scheme
interests
subject to
performance1
Unvested
scheme
interests not
subject to
performance2
Total
outstanding
scheme
interests
As at
As at
31 Dec 2022
31 Dec 2023
Total of all
scheme
interests as at
31 Dec 2023
Gary Nagle
1,903,286
533,066
2,436,352
–
–
2,436,352
1. Includes awards under the Restricted Share Plan.
2. Excludes awards under the deferred bonus plan issued in 2024.
Between 1 January 2024 and the date of this 2023 Annual Report, the Executive and Non-
Executive Directors' beneficial interests in the table above remained unchanged, except for
the portion of the Executive Director's 2023 bonus deferred into shares, which was granted
in 2023 as disclosed above.
Plan
Date of
award
1/7/21
14/03/22
23/03/23
Gary Nagle
21 LTIP
22 LTIP
23 LTIP
21 bonus
deferred shares 14/03/22
22 bonus
deferred shares 23/03/23
Total
Interests
at
1 January
2023
Interests
awarded
during the
year
Interests
vested
during the
year
Interests
lapsed
during the
year
Interests
outstanding
at
31 December
2023
Date at
which
award
vests
461,108
833,556
–
–
–
608,622
216,667
–
–
316,399
1,511,331
925,021
–
–
–
–
–
–
461,108 30/06/24
833,556
13/03/25
608,622 22/03/26
216,667
13/03/25
316,399 22/03/26
2,436,352
–
–
–
–
–
Share ownership guidelines
Glencore is founded on an ownership ethos and the Remuneration Committee therefore
promotes the critical importance of aligning the interests of the CEO with those of
shareholders. The aim is to encourage the build-up of a meaningful shareholding in the
Company over time from purchases in the market and/or by retaining shares received
through the Restricted Share Plan, pursuant to which vested shares cannot be sold until the
later of five years from the date of award or two years post-departure.
In line with the current Remuneration Policy, the in-post shareholding requirement for the
CEO is 500% of salary, pursuant to which the CEO is required to retain the lower of: (1) actual
shareholding on stepping down from the Board and (2) such shares as then represent the
policy level of 500% of salary for two years after stepping down (although the Board may
relax this requirement in appropriate cases) with such policy enforceable through a
requirement to lodge such shares at the Company’s request.
Subject to shareholder approval of the proposed Remuneration Policy at the 2024 AGM, the
in-post shareholding requirement for the CEO will be increased to 525% of salary. Please see
‘Part 3 – Directors Remuneration Policy’ for further details.
Director
Gary Nagle
Beneficially
owned shares
as at 31 Dec 2023
Shareholding
requirement
(as % of salary)
Current
shareholding
(as % of salary)1
Shareholding
requirement met?
2,000,000
500%
647%
Yes
1. The share price of £4.72 and the exchange rate of £1=US$1.27 as at 31 December 2023 have been used
for the purpose of calculating the current shareholding as a percentage of salary. Unvested awards do
not count towards the satisfaction of the shareholding guidelines.
2023 Glencore Annual Report
147
Directors’ remuneration report continued
Strategic Report
Corporate Governance
Financial Statements
Additional Information
CEO pay ratio
The table below shows the ratio of CEO single figure remuneration for 2023 to the
comparable, indicative, full-time equivalent total remuneration for employees globally,
whose pay is ranked at the 25th percentile, median and 75th percentile, as at 31 December
2023. As we are a global group, which is not headquartered in the UK and whose UK
employees represent less than 1% of all our employees worldwide, we have decided to
amend this comparison to all employees, using method A, which provides the most
statistically accurate method of calculation for the purpose of this disclosure. Our
methodology is fully compliant with the UK Remuneration Regulations except that we have
substituted all of our employees for just the UK employees as specified in the Regulations on
the basis that this is a more meaningful comparison.
Year
2023
2022
2021
2020
2019
Method (A)
25th percentile
pay ratio
A
A
A
A
A
$15,613
374:1
$12,893
471:1
$10,404
381:1
$8,525
177:1
$8,558
176:1
Median
pay ratio
$31,720
184:1
$25,059
242:1
$23,530
169:1
$21,212
71:1
$21,238
71:1
75th percentile
pay ratio
$79,101
74:1
$68,250
89:1
$67,734
59:1
$65,025
23:1
$64,077
23:1
Relative importance of remuneration spend
The table below illustrates the change in total remuneration, distributions paid and net profit
from 2022 to 2023.
Distributions and buybacks attributable to
equity holders
Net income attributable to equity holders
Total remuneration
2023
US$m
10,122
4,280
5,969
2022
US$m
7,335
17,320
6,319
The figures presented have been calculated on the following bases:
• Distributions and buybacks – distributions paid and shares bought back during the year
• Net income/(loss) attributable to equity holders – our reported net income/loss in respect
of the financial year
• Total remuneration – represents total personnel costs as disclosed in note 24 to the
financial statements which includes salaries, wages, social security, other personnel
costs and share-based payments receivable by all employees of the Group
Loss of office payments (audited)
No additional payments for loss of office were made.
Payments to past Directors (audited)
No payments were made to past Directors.
Fees retained for external non-executive directorships (audited)
Not applicable.
Additional UK remuneration disclosures
Under UK laws and remuneration regulations, UK companies are also required to disclose
various data comparing the percentage change in Directors’ year-on-year remuneration
compared with employees of the listed company itself, i.e. not on a Group-wide basis. As
Glencore plc has no direct employees, there would be no non-director data to disclose. The
changes relative to the Executive Director solely relate to the change of CEO and all the
relevant information is included in this report. Minor adjustments relating to Non-Executive
Directors’ Committee fees are listed below. On this basis, it was considered unnecessary to
include such data.
Alignment between pay and performance
Total shareholder return (TSR) performance
This graph shows the value to 31 December 2023, on a total shareholder return (TSR) basis, of
£100 invested in Glencore plc on 31 December 2013 compared with the value of £100 invested
in the FTSE 100 Index.
The Remuneration Committee believes that the FTSE 100 Index is an appropriate comparator
as it is a broad equity index reflecting the performance of the largest UK-listed companies.
148
2023 Glencore Annual Report
Directors’ remuneration report continued
Strategic Report
Corporate Governance
Financial Statements
Additional Information
The UK reporting regulations also require that a TSR performance graph is supported by
a table summarising aspects of CEO remuneration, as shown below for the same period as
the TSR performance graph:
Non-Executive Director fees (audited)
The emoluments of the Non-Executive Directors for 2023 and 2022 were as follows:
250
200
150
100
50
0
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
Glencore
FTSE 100
History of CEO remuneration
Single figure of total
remuneration1(US$’000)
Annual variable element
award rates against
maximum opportunity
Long-term incentive
vesting rates against
maximum opportunity
2023
2022
2021
2021
2020
2019
2018
2017
2016
2015
2014
Gary Nagle
Gary Nagle
Gary Nagle2
Ivan Glasenberg3
Ivan Glasenberg
Ivan Glasenberg
Ivan Glasenberg
Ivan Glasenberg
Ivan Glasenberg
Ivan Glasenberg
Ivan Glasenberg
5,833
6,071
3,208
756
1,508
1,503
1,503
1,513
1,509
1,510
1,513
82.9%
93.6%
93.6%
–
–
–
–
–
–
–
–
n/a
n/a
n/a
–
–
–
–
–
–
–
–
1. The figures in this table are reported in US dollars and have been translated to US dollars where
applicable at the exchange rates used for the preparation of the financial statements in each relevant
financial year. The value of benefits and pension provision in the single figure vary as a result of the
application of exchange rates.
2. Mr Nagle was appointed Chief Executive Officer on 1 July 2021 and his 2021 remuneration was prorated
accordingly in 2021.
3. Mr Glasenberg retired as Chief Executive Officer on 30 June 2021 and his salary was prorated
accordingly in 2021.
226
168
Name
Non-Executive
Chairman
Kalidas Madhavpeddi
Non-Executive
Directors
Cynthia Carroll1
Peter Coates
Martin Gilbert2
Patrice Merrin3
Gill Marcus4
David Wormsley
Liz Hewitt5
2023
Base fees
US$’000
2022
Base fees
US$’000
2023
Committee
fees
2022
Committee
fees
Total
2023
Total
2022
US$’000
US$’000
US$’000
US$’000
1,150
1,150
n/a
n/a
1,150
1,150
135
135
135
55
200
135
135
135
135
195
135
140
135
61
133
185
143
64
108
86
106
115
185
125
160
130
70
26
268
320
278
119
308
221
241
250
320
320
295
270
205
87
1. Ms Carroll stepped down as Chair of the Remuneration Committee and was appointed as Chair of the
ECC Committee on 26 May 2023.
2. Mr Gilbert was the Senior Independent Director until 2 December 2022 and was appointed Chair of the
Remuneration Committee on 26 May 2023.
3. Ms Merrin stepped down as a Non-Executive Director on 26 May 2023.
4. Ms Marcus was appointed as Senior Independent Director on 2 December 2022 and stepped down
as Chair of the Audit Committee on 1 April 2023.
5. Ms Hewitt was appointed as a Non-Executive Director on 18 July 2022 and was appointed as Chair of the
Audit Committee on 1 April 2023 and as a member of the Investigations Committee on 26 May 2023.
2023 Glencore Annual Report
149
Directors’ remuneration report continued
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Awards of Career Shares are subject to Group performance and strategy execution in line
with the expectations of the Board and the market, to be assessed annually based on a
performance framework that enables more nuanced and multi-faceted performance
considerations. Financial and operational performance dimensions will be considered
annually. ESG performance dimensions will be considered annually and relative to multi-year
trending performance, as applicable. Performance will be holistically assessed, and specific
performance dimensions may vary year-to-year to align with our evolving strategic priorities,
competitive landscape, macroeconomic factors, and shareholder expectations. As further
described below, the Board will assess these factors in combination and determine to what
extent business and market expectations have been met under the CEO’s leadership and
the level of award of Career Shares that is warranted.
The number of shares that will be granted under the Career Shares Award will be
determined by the applicable VWAP at the time of grant in 2025, with values based on the
effective salary. Vesting of the awards remains subject to a comprehensive shareholder
distribution and ESG underpin to reinforce our stewardship and commitment to sustainable
shareholder value creation.
The diagram on page 151 outlines the illustrative lifecycle of Career Shares awards.
Implementation of Remuneration Policy in 2024
This section provides details of how the proposed Remuneration Policy will be implemented
for 2024, subject to shareholder approval at the 2024 AGM.
Fixed remuneration
Base salary
Effective date
Increase %
Reason
Gary
Nagle
$2m
1 January
2024
7.9%
The Remuneration Committee proposes a
salary increase to maintain international
competitiveness and align with the size
and complexity of Glencore’s business. It
recognises the market’s expectation of
restraining executive raises to the average
increase of the broader workforce which
was 4.2% for 2023. However, given the
significant reduction in cash
compensation resulting from the
elimination of the cash bonus (see below),
the Remuneration Committee believes a
total increase of 7.9% is warranted.
In line with the Remuneration Policy, Glencore's annual pension provision for the CEO is fully
aligned with the Swiss requirements, local legal limits, and that of other employees based in
Switzerland, where the CEO is located. For the CEO, the maximum employer contribution is
up to 12.3% of salary (capped at c.$150k per annum) and the maximum co-contribution limit
is up to 6.2% of salary.
Performance-based remuneration
Under the new Remuneration Policy, 100% of incentive awards for the CEO will be delivered
as Career Shares. The first award will be made in 2025 based on performance assessed in
2024. Therefore, the final Restricted Share award will be made in March 2024 and the CEO
will not receive an annual bonus award in respect of 2024.
Career Shares cannot be sold for the duration of the CEO’s employment and are also subject
to a post-exit shareholding requirement of two years. This post-exit shareholding
requirement is in excess of the minimum share ownership level required by the
Remuneration Policy and is intended to ensure that all Career Shares awards are truly
aligned with the long-term shareholder experience.
In line with the proposed Remuneration Policy, the maximum incentive opportunity is set at
525% of salary and is not guaranteed. The target award level is set at 350% of salary. Awards
are based on performance and may be adjusted (including to zero) in certain circumstances,
including significant and reputationally damaging situations, to ensure there are no rewards
for failure. Please see the illustrative lifecycle of Career Shares awards on page 151 for
further details.
150
2023 Glencore Annual Report
Directors’ remuneration report continued
Lifecycle of Career Shares Awards
Strategic Report
Corporate Governance
Financial Statements
Additional Information
2022 – 2024
Start of 2025
2026
2027
2028
Hold +2 years
post-employment
Career Shares Plan
(subject to shareholder approval)
Performance
period
Award
granted
Vesting period
Holding period
Award
vested
3
unique and shareholder-
friendly design features
1
2
3
Career Shares Awards are
performance modified at grant
The Board will holistically assess
performance encompassing a broad mix of
financial, operational and ESG dimensions.
Performance will be assessed to take into
account multi-year trends, performance
relative to the comprehensive business
planning and market guidance in order to
determine award level of Career Shares.
Career Shares Award
(0 – 525%)*
• Responsible production
• Responsible portfolio management
• Responsible product use
*
In the event of catastrophic events, awards can
be reduced to zero.
Vesting is subject to
comprehensive performance
underpins
Comprehensive performance underpins
(which were selected in line with Glencore’s
strategic priorities) apply over the vesting
period, designed to mitigate the risk of
payments for failure by enabling a reduction
in vesting when:
1. Shareholders do not receive the minimum
distribution required under the Company’s
stated distribution policy
2. Progress against ESG initiatives is deemed
unsatisfactory
3. Overall business performance is deemed
unsatisfactory
CEO cannot realise any value
from Career Shares until two
years post-employment
The additional requirement to hold Career
Shares for two years post-employment
ensures that 100% of the awards are truly
aligned with the long-term shareholder
experience. The value of the awards will rise
and fall in line with the prevailing share price
when the restrictions lapse.
It also encourages ownership behaviours
and discipline critical to our success:
• Long-term risk management
• Sustainable growth
• Succession planning
2023 Glencore Annual Report
151
Directors’ remuneration report continued
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Under the Career Shares Plan and subject to shareholder approval of the new Remuneration
Policy, awards will be made in March 2025 with reference to a multi-year performance
framework.
The Remuneration Committee intends to assess the following performance dimensions for
the inaugural award of Career Shares as they align with our current strategic priorities and to
give a clear line of sight into how achieving these goals drives Glencore’s performance and
the creation of sustainable shareholder value. These performance dimensions, which can be
broadly categorised as financial, ESG, and strategic goals, will be assessed in the context of
the overall performance trajectory (year-over-year and on a multi-year basis, where relevant),
achievement of our budget or guidance (as applicable), and delivery against expectations of
the Board and our shareholders. The performance assessment will also seek to recognise
capital investments made and key actions taken to position the Company well for the future.
Awards of Career Shares will be determined with reference to the target opportunity of 350%
of salary reflecting performance delivery against Board expectations, the overall business
plan, and prevailing market conditions where applicable. Awards of Career Shares will be
capped at the maximum proposed opportunity of 525% of salary reflecting strong overall
performance assessed in the context of important strategic decisions taken to drive long-
term performance and sustainability of the business. Details of the actual performance
assessment, award value and shares granted will be disclosed in next year’s Annual Report.
Our strategic
priorities
Responsible
and ethical
production
and supply
Responsible
portfolio
management
Responsible
product use
152
2023 Glencore Annual Report
Holistic assessment of performance
dimensions including:
• Adjusted EBITDA and FFO
• Production relative to market
conditions and market
inventories
• Commodity prices
• Safety metrics including FFR,
TRIFR, LTIFR relative to previous
year and rolling 3-year average
• Major projects relative to timeline
and budget
• M&A aligned to our strategic
priorities
• CO2e industrial emissions
reduction relative to target
• Capex relative to budget
• Corporate controls and the
desired culture of compliance
• Distribution to shareholders
Our values
• Our Values are embedded in
everything we do
• We are committed to operating
ethically, responsibly, and to
contributing to socio-economic
development in countries where
we operate
• Our commitment is delivered
through for example our
operational excellence,
promotion of health and safety,
acting ethically and advancing
our environmental performance
• We intend to prioritise
investment in transition-enabling
commodities that support the
decarbonisation of energy usage
and help meet the commodity
demands of everyday life
• We will reduce our thermal coal
production over time to meet our
decarbonisation targets
• We will seek opportunities to
increase the supply of transition-
enabling commodities from our
own industrial operations and
through our extensive
marketing activities
• We will participate in global
efforts to improve abatement
technologies and availability
Directors’ remuneration report continued
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Non-Executive Director fees for 2024
No changes have been made to Non-Executive Director fees during 2023. The annual fees
are paid in accordance with a Non-Executive Director’s role and responsibilities. The
Chairman’s fee is inclusive of all his committee responsibilities. As a result, the fees payable
for 2024 are as follows:
Non-Executive Directors’ base fees
Chairman
Senior Independent Director
Non-Executive Director
Committee1 fees:
ECC
Chair
Member
Remuneration
Chair
Member
Audit
Chair
Member2
Nomination3
Member
HSEC
Chair
Member
Investigations3
Member
US$‘000
1,150
200
135
60
40
55
25
70
40
20
125
40
40
1. Fees do not apply to the Chairman when he is a chair or member of a Committee.
2. Due to a typographical error, the Audit Member fee was previously shown as $35,000 per annum. There
has been no change since October 2021.
3. No chair fee applied as the Chairman chairs these Committees.
3. Directors’ Remuneration Policy
The design of the new Remuneration Policy was the main area where the Remuneration
Committee sought shareholder input during 2023.
As part of the Remuneration Policy review, the Remuneration Committee considered
Glencore’s position as one of the largest global, diversified, and vertically integrated natural
resources companies in the world which produces and trades more than 60 commodities.
Despite its UK listing, there are very few UK-listed companies that are similar to Glencore in
scope and complexity. Therefore, in addition to Anglo American, BHP, BP, Rio Tinto and Shell
(our UK-listed peer group), the Remuneration Committee felt that remuneration should
reflect a more global context, including in comparison to those that are outside of the
resources industry and/or based in North America to ensure that remuneration levels are not
just locally but also globally competitive.
The Remuneration Committee’s view is that the Remuneration Policy that is being
submitted to shareholders for approval at the 2024 AGM reflects the balance of investor
feedback received during the consultation and, in line with one of the Remuneration
Committee’s principal aims at the outset of the review, ensures that the approach to
remuneration reinforces long-term alignment with the shareholder experience. Our
intention is that this Remuneration Policy provides us with a fit-for-purpose executive pay
framework for the next three years.
The Remuneration Policy as set out in this section of the report will take effect for all
payments made to Executive Directors from the date of the 2024 AGM, subject to
shareholder approval. UK legislation and related investor guidance encourages companies
to disclose a cap within which each element of Remuneration Policy will operate. The
Remuneration Policy for the Executive Directors only applies to Mr Nagle as he is the only
Executive Director.
2023 Glencore Annual Report
153
Directors’ remuneration report continued
Remuneration Policy table for Executive Directors
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Purpose and link to strategy
Policy and operation
Maximum opportunity
Performance measure(s)
Element of
remuneration
Base salary
To recruit, retain, and motivate
individuals of a high calibre, and
reflect the skills, experience,
responsibilities, and contribution of
the CEO
Reviewed annually with increases effective 1 January;
reflects the individual’s role and contribution
Increases take account of those applied across the
wider workforce
Pension
To provide retirement benefits
which reflect local market and
wider workforce practices
Benefits
To ensure broad competitiveness
with local market practice
The Remuneration Committee retains discretion to
award higher increases where appropriate to account
for market conditions, performance and/or
development of the individual, a change in the
responsibility and/or complexity of the role, new
challenges, or a new strategic direction for the
Company
Base salary is paid monthly in cash
Participation in the defined contribution scheme for
all Swiss head office-based employees
Any Executive Director’s benefit will be aligned with
the average percentage contribution or entitlement
available to staff in the relevant market
Current benefits include salary loss (long-term
sickness) and accident/travel insurance
The Company may periodically change the benefits
available to staff for the office at which an Executive
Director works in which case the Director would
normally be eligible to receive the amended benefits
on similar terms to all relevant staff. In the case of a
Swiss-based executive, this would be expected to
mean employees generally in the Baar office
154
2023 Glencore Annual Report
Not applicable.
There is no set maximum to salary
levels or increases. Salaries are
reviewed annually with
consideration for those applied
across the Swiss workforce. Salary
increases, if any, are effective
1 January
An annual cap on the cost of
provision of retirement benefits of
$150k per Executive Director has
been set
Not applicable.
Not applicable.
The Company shall continue to
provide benefits to Executive
Directors at similar levels in line with
local Swiss policy; where insurance
cover is provided by the Company,
that cover shall be maintained at a
similar level and the Company shall
pay the prevailing market rates for
such cover
A monetary limit of $100,000 p.a.
applies to benefits
Directors’ remuneration report continued
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Purpose and link to strategy
Policy and operation
Maximum opportunity
Performance measure(s)
Element of
remuneration
Career Shares
Plan
To incentivise the creation of
shareholder value and the need to
reward sustainable long-term
performance
The maximum Career Shares award
that can be made in any year is set
at 525% of salary. The target
opportunity in any year is set at 350%
of salary
Career Shares are performance-
modified on award, based on
performance dimensions assessed
by the Remuneration Committee
and vesting is subject to
comprehensive performance
underpins
In-post shareholding guideline equal
to 525% of salary, in line with the
proposed combined maximum
incentive opportunity
Not applicable
Annual awards are determined with reference to
performance dimensions where ESG, operational and
financial performance, as well as strategy delivery will
be assessed at the time of the award. The majority of
the assessment will be based on financial
performance. Material adjustments may be made to
the award (including to zero) in certain circumstances
to ensure there are no rewards for failure
Vesting of the awards would be subject to an
underpin applying over a three-year period. The
underpin will be based on a holistic review of overall
business performance including shareholder
distributions, absolute and relative shareholder
performance and progress against ESG initiatives in
line with the previously approved Restricted Share
Plan
Malus and clawback clauses apply as described below
Shares will only be released (other than to meet tax
obligations) on the later of five years from grant and
two years post employment
Usually to be achieved within five years of Board
appointment
An Executive Director will normally be required to
retain the lower of the actual holding on stepping
down from the Board and such shares as then
represents the policy level of 525% of salary for two
years after stepping down or until retirement,
whichever is longer, (although the Board may relax
this requirement in appropriate cases) with such
policy enforceable through a requirement to lodge
such shares at the Company’s request
2023 Glencore Annual Report
155
Personal
shareholding
Provides long-term alignment with
shareholders
Directors’ remuneration report continued
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Discretion and vesting subject to the underpin
In addition to the specific discretions set out in the Remuneration Policy table on the
preceding page, the Remuneration Committee may exercise various discretions related to
the operation of the proposed Remuneration Policy, subject to any applicable plan rules. In
particular, these include, but are not limited to, the following:
• the participants of the Career Shares Plan;
• the timing of award grants, vesting and/or payment;
• the size of an award and/or payment (subject to the limits set out in the proposed
Remuneration Policy table);
• the determination of vesting;
• dealing with a change of control or corporate restructuring;
• the determination of a good/bad leaver for incentive plan purposes and the treatment
of pro-rating and holding periods;
• adjustments required in certain circumstances (e.g. rights issues, corporate
reorganisation and/or change to capital structure); and
• the determination of the appropriate performance conditions, underpins, weightings
and targets for the Career Shares Plan.
The holistic, qualitative judgement, which is applied as an underpin test before final
vesting of Career Shares is confirmed, is an important aspect to ensure that vesting is not
simply driven by a formula or the passage of time that may result in unexpected or
unintended remuneration outcomes.
The exercise of any discretion will be fully disclosed and explained in the applicable
statement of implementation of the Remuneration Policy.
Malus and clawback
Awards subject to the applicable plan rules governing the Career Shares Plan are subject
to malus and clawback provisions that allow the Remuneration Committee to reduce or
clawback awards and may be applied in certain circumstances, such as material failures in
the financial, operational, compliance, or ESG performance of the Company and a failure to
identify and/or report such failure(s); and any other circumstances that are deemed to
have a significant impact on the reputation or financial prospects of the Company.
The Remuneration Committee may, in its discretion, decide to delay vesting and therefore
extend the period during which malus and clawback may be applied if facts come to light
within the period warranting an investigation.
Service contracts
It is the Company’s policy to provide for 12 months’ notice for termination of employment
for Executive Directors, to be given by either party.
156
2023 Glencore Annual Report
Under normal circumstances, the Company may terminate the employment of an Executive
Director by making a payment in lieu of notice equivalent to basic salary only for the notice
period at the rate current at the date of termination. In appropriate cases, the Executive
Director can be dismissed without compensation.
Potential rewards under various scenarios
The chart below is based on the following scenarios, in accordance with UK reporting
regulations and based on the 2024 implementation of the proposed Remuneration Policy
set out on page 150 in this report:
• Minimum: Mr Nagle’s 2024 salary of $2m, Pension of $121k and 2023 benefits of $15k
• Target pay: as Minimum, plus Career Shares payable at target, based on target opportunity
of 350% of salary
Minimum - Fixed REM 100% - total 2,060
• Maximum pay: as Minimum, except Career Shares at maximum opportunity of 525%
Target - Fixed 21% / Career shares 79% - total 9,760
Maximum - Fixed 16% / Career shares 84% - totoal 13,060
• Maximum plus: as Maximum pay, except the share price on the Career Shares is assumed
Maximum plus Fixed REM 11% / Career shares 59% / Share price 30% - total 18,560
to increase by 50%
of salary
Each element ignores the impact of distribution roll-up
Scenarios
US$’000
20
15
10
5
0
17,886
29%
12,636
83%
59%
9,136
77%
2,136
100%
23%
17%
12%
Minimum
Target
Maximum
Maximum
plus 50%
Fixed remuneration
Career shares
Share price
Directors’ remuneration report continued
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Policy table for Non-Executive Directors
Non-Executive Directors are not eligible to participate in any performance-based pay or pension arrangements. Details of the policy on fees paid to Non-Executive Directors are set out in
the table below:
Element of
remuneration
Fees
Purpose and link to strategy
Policy and operation
Maximum opportunity
Performance measure(s)
Fees are paid monthly in cash
Not applicable
Aggregate fees for all Non-Executive
Directors (including the Chairman)
are subject to the cap set in the
Articles of Association. This is
currently set at $5,000,000
Reflects time commitment,
experience, global nature and size of
the Company
The objective in setting the fees paid to
the Chairman and the other Non-
Executive Directors is to be competitive
with other listed companies of equivalent
size and complexity
Fee levels are periodically reviewed by the
Board (for Non-Executives) and the
Remuneration Committee (for the
Chairman). In both cases, the Company
does not adopt a quantitative approach to
pay positioning and exercises judgement
as to what it considers to be reasonable in
all the circumstances as regards quantum
Non-Executive Directors and the Senior
Independent Director receive a base fee
Additional fees are paid for chairing or
membership of a Board committee
The Board Chairman receives a single
inclusive fee
Reasonable business-related expenses are
reimbursed (including any tax thereon)
Non-Executive Directors are not eligible
for any other remuneration or benefits of
any nature
The fees are reviewed periodically
2023 Glencore Annual Report
157
Directors’ remuneration report continued
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Recruitment Remuneration Policy
Executive Director appointment
The Company’s Executive Director Recruitment Remuneration Policy aims to give the
Remuneration Committee sufficient flexibility to secure the appointment and promotion of
high-calibre executives to strengthen the management team and secure the skill sets to
deliver our strategic goals.
In determining an appropriate remuneration package, the Remuneration Committee will
take into consideration all relevant factors (including quantum, nature of remuneration, and
the jurisdiction from and to which the candidate is recruited) to ensure that arrangements
are at the same time fair to the individual and in the best interests of the Company and its
stakeholders.
The starting point for the Remuneration Committee will be to review the particular
circumstances of any appointment in line with developments in market practice and
corporate governance by that point in time. We are cognisant that the proposed
Remuneration Policy does not reflect typical market practice but we believe this is the most
appropriate design to retain and motivate the current Executive Director for whom this
Remuneration Policy applies.
For any future Executive Director appointments, the Remuneration Committee will review
the remuneration package at that time by considering, among other factors, the proposed
Remuneration Policy as well as the former Remuneration Policy (as approved at the 2021
AGM). However (consistent with the UK regulations) for a newly appointed Executive
Director the Remuneration Committee is not constrained by the caps on fixed pay within the
Remuneration Policy on a recruitment or at any subsequent annual review within the life of
this Remuneration Policy as approved by shareholders. Nonetheless, the Remuneration
Committee will not pay more than it considers to be necessary to support recruitment
having regards to appropriate market rates and evolving best practice.
In cases of appointing a new Executive Director by way of internal promotion, the
Remuneration Committee and Board will be consistent with the policy for external
appointees detailed above (except in relation to buy-outs). Where an individual has
contractual commitments made prior to their promotion to Executive Director level (and not
in connection with their promotion to this level), the Company will continue to honour these
arrangements (other than pension contribution) even if these are not provided for by the
Remuneration Policy in force at the time of appointment (or when the arrangements were
originally agreed).
For external and internal appointments, the Remuneration Committee may agree that the
Company will meet certain relocation expenses as they consider appropriate and/or to make
a contribution towards legal fees in connection with agreeing employment terms. Such
costs will be outside the formal caps and will be limited to two years.
The Remuneration Committee reserves the right to make awards of incentive pay that are
necessary to secure a candidate, to compensate for the forfeiture of incentive awards or
other remuneration from a previous employer. Details of any such awards will be
appropriately disclosed.
Where it is necessary to make a recruitment-related pay award to an external candidate the
Company will not pay more than is in the view of the Remuneration Committee necessary
and will in all cases seek in the first instance to deliver any such awards under the terms of
the existing incentive pay structure. It may however be necessary in some cases to make
such awards on terms that are more bespoke than the existing Career Shares pay structure
in the Group in order to secure a candidate.
All such awards for external appointments to compensate for awards forfeited on leaving a
previous employer will take account of the nature, time-horizons and performance
requirements on those awards. In particular, the Remuneration Committee’s starting point
will be to ensure that any awards being forfeited which remain subject to outstanding
performance requirements (other than where these are substantially complete) are bought
out with replacement requirements and any awards with service requirements are bought
out with similar terms. However, exceptionally the Remuneration Committee may relax
those obligations where it considers it to be in the interests of shareholders and those factors
are in the view of the Remuneration Committee equally reflected in some other way, for
example through a significant discount to the face value of the awards forfeited. It will only
include guaranteed sums where the Remuneration Committee considers that it is necessary
to secure the recruitment and where the forfeiture risk is considered to be low.
For the avoidance of doubt, where recruitment-related awards are intended to replace
existing awards held by a candidate at an existing employer, the maximum amounts for
incentive pay as stated in the general policies will not apply to such awards. The
Remuneration Committee has not placed a maximum limit on any such awards which it
may be necessary to make as it is not considered to be in shareholders’ interests to set any
expectations for prospective candidates regarding such awards. In exceptional
circumstances, the Remuneration Committee may use the exemption permitted within the
Listing Rules. Any recruitment-related awards which do not replace awards with a previous
employer will be subject to the limits on incentive awards as detailed in the general policy.
The elements of any package for a new recruit and the approach taken by the Remuneration
Committee in relation to setting each element of the package will be consistent with the
Executive Directors’ Remuneration Policy described in this report, as modified by the above
statement of principles where appropriate.
Non-Executive Director appointment
A new Non-Executive Director would be recruited on the terms explained on page 157 in
respect of the main Remuneration Policy for such Directors.
158
2023 Glencore Annual Report
Directors’ remuneration report continued
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Termination policy summary
In practice, the facts surrounding any termination do not always fit neatly into defined
categories for good or bad leavers. Therefore, it is appropriate for the Remuneration
Committee to consider the suitable treatment on a termination having regard to all of the
relevant facts and circumstances available at that time. This policy applies both to any
negotiations linked to notice periods on a termination and any treatment which the
Remuneration Committee may choose to apply under the discretions available to it under
the terms of the incentive arrangements. The potential treatments on termination under
these plans are summarised below.
Incentives
Definition
Good leaver
• If a leaver is deemed to be a ‘good
Bad leaver
• If a leaver is deemed to
Career
Shares Plan
leaver’; i.e. leaving through serious ill
health or death, as a result of change
in control, or otherwise at the
discretion of the Remuneration
Committee
be a ‘bad leaver’; typically,
voluntary resignation or
leaving for disciplinary reasons
• Will receive a pro-rated award vesting
• All unvested awards would
normally lapse
at the normal vesting date (if
applicable, subject to the application
of the underpin at the normal
measurement date)
• The Remuneration Committee retains
the discretion to disapply pro-rating
and to accelerate the vesting of the
awards however it does not expect to
use this other than in exceptional
circumstances
In the event of a change of control or similar event, awards may become payable or vest
early with treatment broadly in line with that for good leavers. Rules permit a roll-over of
awards in appropriate circumstances.
The UK legislation does not require the inclusion of a cap or limit in relation to payments for
loss of office. The Remuneration Committee will take all relevant factors into account in
deciding whether any discretion should be exercised in an individual’s favour in these
circumstances, and the Remuneration Committee will aim to ensure that any payments
made are, in its view, appropriate having regard to prevailing best practice guidelines. The
Remuneration Committee may also, after taking appropriate legal advice, sanction the
payment of additional sums in the settlement of potential legal claims and/or the provision
of outplacement and similar services.
Directors’ service contracts
Executive Director’s contract
The table below outlines the key features of the service contract for Mr Nagle, the only
person who served as an Executive Director during 2023.
A copy of the service contract of Mr Nagle is available for inspection at the Company’s
registered office as noted on page 298 or as otherwise indicated in the Notice of 2024 AGM.
Provision
Notice period
Contract date
Expiry date
Termination payment
Change in control
Service contract terms
12 months’ notice by either party
1 July 2021
Rolling service contract
No special arrangements or entitlements
on termination. Any compensation would
be limited to base salary only for any
unexpired notice period (plus any accrued
leave)
On a change of control of the Company, no
provision for any enhanced payments, nor
for any liquidated damages
External appointments
None currently. The appropriateness of any future appointment will be considered as part of
a wider review of Directors’ interests/potential conflicts.
Non-Executive Directors’ letter of appointment and re-election
All Non-Executive Directors have letters of appointment with the Company for an initial
period of three years from their date of appointment, subject to re-election at each AGM. The
Company may terminate each appointment by immediate notice and there are no special
arrangements or entitlements on termination except that the Chairman is entitled to three
months’ notice. Copies of the letter of appointment for Non-Executive Directors are available
for inspection at Company’s registered office address as noted on page 298.
Engagement with shareholders
As explained, on page 134 of this report, the Company engaged extensively with
shareholders as part of the development of this Remuneration Policy. The Remuneration
Committee will continue to monitor the views of shareholders as published in guidelines and
engage directly with them, as appropriate.
2023 Glencore Annual Report
159
Directors’ remuneration report continued
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Engagement with colleagues
As a global resources company with employees around the world, many of whom do not
have access to the internet, it is not feasible to directly engage with all colleagues on
executive remuneration. The Remuneration Committee is advised of pay and conditions
around the Group and considers such information when considering executive pay.
Managing potential conflicts of interest
In order to avoid any conflicts of interest, remuneration is managed through well-defined
processes ensuring that no individual is involved in the decision-making process related to
their own remuneration. In particular, the remuneration of an Executive Director is set and
approved by the Remuneration Committee; no Executive Director is involved in the
determination of his or her own remuneration arrangements or attends the meetings where
this is discussed.
The Remuneration Committee also receives support from external advisers and evaluates the
support provided by those advisers annually to ensure that advice is independent, appropriate
and cost-effective. Remuneration Committee members bring their own judgement to
consideration of all matters.
UK Corporate Governance Code considerations
The Remuneration Committee has considered the factors set out in provision 40 of the
Corporate Governance Code as part of its review of the Remuneration Policy. In our view, the
proposed Remuneration Policy addresses those factors as set out below:
Clarity: remuneration
arrangements should be
transparent and promote
effective engagement with
shareholders and the
workforce.
Simplicity: remuneration
structures should avoid
complexity and their rationale
and operation should be easy
to understand.
Our Remuneration Policy and pay arrangements are clearly
disclosed each year in the Annual Report. The
Remuneration Committee proactively seeks engagement
with shareholders on remuneration matters. The
Remuneration Committee believes that the simplified
structure contributes significantly to clarity.
Our remuneration structure comprises fixed and variable
remuneration. The new Remuneration Policy utilises a
single integrated incentive in the form of Career Shares
which provide a simple and transparent mechanism for
aligning Executive Director and shareholder interests while
steering away from the complexities of traditional separate
short- and long-term incentives.
Risk: remuneration
arrangements should ensure
reputational and other risks
from excessive rewards, and
behavioural risks that can arise
from target-based incentive
plans, are identified and
mitigated.
Predictability: the range of
possible values of rewards to
individual Directors and any
other limits or discretions
should be identified and
explained at the time of
approving the policy.
Proportionality: the link
between individual awards,
the delivery of strategy and
the long-term performance of
the Company should be clear.
Outcomes should not reward
poor performance.
Alignment to culture:
incentive schemes should
drive behaviours consistent
with company purpose, values
and strategy.
There are suitable mechanisms for the Remuneration
Committee to reduce award levels for Career Shares, and all
awards are subject to malus and clawback provisions.
Career Shares reduce the risk of unintended remuneration
outcomes associated with complex performance
conditions typical of other forms of long-term incentive.
The comprehensive Career Shares Plan underpins also
mitigate the risk of payments for failure while the
requirement to retain the awards until retirement ensures
a very long-term alignment to shareholders.
Career Shares have reward values that are less volatile than
conventional PSPs (removing the risk of potentially
unintended outcomes). Maximum award levels and
discretions are set out in the Remuneration Policy tables
including scenario charts showing the potential outcomes.
Variable pay represents a significant majority of the total
remuneration opportunity and is entirely delivered in
shares which must be retained for two years post-
employment, in line with the provisions of the Career
Shares Plan. The Remuneration Committee considers
performance holistically as part of the underpin each year
to ensure that there is a clear link to strategy. Discretion is
available to the Remuneration Committee with the ability
to reduce awards, if necessary, to ensure that formulaic
outcomes do not reward poor performance.
The Career Shares will clearly align the Executive Director’s
interests with those of shareholders by ensuring a focus on
delivering against strategy including a strong focus on
shareholder returns and ESG performance.
Approval
This report in its entirety has been approved by the Remuneration Committee and the Board
of Directors and signed on its behalf by:
160
2023 Glencore Annual Report
Martin Gilbert
Chair of the Remuneration Committee
20 March 2024
Directors’ report
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Corporate structure
Glencore plc is a public company limited
by shares, incorporated in Jersey and
domiciled in Baar, Switzerland. Its shares are
listed on the London and Johannesburg
Stock Exchanges.
Financial results and
distributions
The Group’s financial results are set out in
the financial statements section of this
Annual Report.
A total capital distribution of $0.52 per share
was paid in two instalments in 2023,
comprising $0.44 in respect of the 2022
financial year and US$0.08 in respect of cash
generation in the first half of 2023 in excess
of the Group’s target leverage position. The
Board is recommending to shareholders an
aggregate capital distribution of $0.13 per
share in respect of the 2023 financial year as
further detailed on page 83.
Review of business, future
developments and post balance
sheet events
A review of the business and the future
developments of the Group is presented in
the Strategic Report.
A description of acquisitions, disposals and
material changes to Group companies
undertaken during the year is included in
the Financial review and in note 26 to the
financial statements.
Financial instruments
Descriptions of the use of financial
instruments and financial risk management
objectives and policies, including hedging
activities and exposure to price risk, credit
risk, liquidity risk and cash flow risk, are
included in notes 27 and 28 to the financial
statements.
Corporate governance
A report on corporate governance and
compliance with the UK Corporate
Governance Code is set out in the Corporate
Governance Report and forms part of this
report by reference.
Health, safety, environment,
social performance and human
rights (HSEC&HR)
An overview of HSEC&HR performance is
provided in the Sustainability section of the
Strategic Report. The work of the HSEC
Committee is contained in the Corporate
Governance Report.
Greenhouse gas emissions
Information on the Group’s industrial
emissions is included on page 50.
Taxation policy
Our Tax Policy: glencore.com/group-tax-
policy and our most recent Payments to
Governments report: glencore.com/
payments-to-governments-report set out
the Company’s approach to tax and
transparency and disclose the payments
to governments made by the Group on a
country-by-country and project-by-
project basis.
Exploration and research and
development
The Group’s business units carry out
exploration and research and development
activities that are necessary to support and
expand their operations.
Employee policies and
involvement
Glencore has a range of Group Policies and
Standards that focus on fair treatment and
diversity and inclusion. Glencore endeavours
to protect its people from any form of unlawful
discrimination including on the basis of
gender, race, ethnicity, disability, religion, or
beliefs. We seek to provide equal opportunities
for career development and promotion as
well as appropriate training opportunities.
If disability occurs during employment, the
Group seeks to accommodate that disability
where reasonably possible, including with
appropriate training.
The Group’s Code of Conduct and other
policies are designed to support and protect
the interests of employees in a number of
ways such as requiring open, fair and
respectful communication, commitment to
respect human rights, fair and equitable
conditions of employment and, above all, a
safe working environment.
Employee communication is mainly
provided through the Group’s intranet,
corporate website and via emails. A range of
information is made available to employees,
including all policies and procedures
applicable to them as well as information on
the Group’s financial performance and the
main drivers of its business. Glencore uses a
range of methods to conduct employee
consultation, including Group-wide surveys
and focus groups. The type of consultation
undertaken is tailored such that it is
appropriate for the location of the office or
industrial asset – see the Our people section
on pages 75 to 77.
2023 Glencore Annual Report
161
John Burton
Company Secretary
Introduction
This Annual Report is presented by the
Directors on the affairs of Glencore plc (the
Company) and its subsidiaries (the Group or
Glencore), together with the financial
statements and auditor’s report, for the year
ended 31 December 2023. The Directors’
report includes details of the business, the
development of the Group and likely future
developments as set out in the Strategic
Report, which together form the
management report for the purposes of the
UK Financial Conduct Authority’s Disclosure
and Transparency Rule (DTR) 4.1.8R. The
notice concerning forward-looking
statements is set out at the end of the
Annual Report.
Directors’ report continued
Directors’ conflicts of interest
Under Jersey law and the Company’s Articles
of Association (which mirror section 175 of the
UK Companies Act 2006), a Director must
avoid a situation in which the Director has, or
can have, a direct or indirect interest that
conflicts, or possibly may conflict, with the
interests of the Company. The duty is not
infringed if the matter has been authorised
by the Directors. Under the Articles, the Board
has the power to authorise potential or actual
conflict situations. The Board maintains
effective procedures to enable the Directors
to notify the Company of any actual or
potential conflict situations and for those
situations to be reviewed and, if appropriate,
to be authorised by the Board. Directors’
conflict situations are reviewed annually. A
register of authorisations is maintained.
Directors’ liabilities and
indemnities
The Company has granted third-party
indemnities to each of its Directors against
any liability that attaches to them in
defending proceedings brought against
them, to the extent permitted by Jersey law.
In addition, Directors and officers of the
Company and its subsidiaries are covered by
directors’ and officers’ liability insurance.
Directors and officers
The names of the Company’s Directors and
officers who were in office at the end of 2023,
together with their biographical details and
other information, are shown on pages 120
to 122.
162
2023 Glencore Annual Report
Directors’ interests
Details of interests in the ordinary shares of the
Company of those Directors who held office
as at 31 December 2023 are given below:
Name
Executive Director
Gary Nagle
Number
of Glencore
shares
Percentage
of Total
Voting
Rights
2,000,000
0.01
Non-Executive Directors
Cynthia Carroll
Peter Coates
Martin Gilbert
Liz Hewitt
Kalidas
Madhavpeddi
–
1,665,150
50,000
11,000
–
Gill Marcus
David Wormsley
–
–
–
0.01
0.00
0.00
–
–
–
* A breakdown of Mr Nagle’s unvested interest in
the Company’s ordinary shares is available in the
Directors’ Remuneration Report on page 147.
Share capital and shareholder
rights
As at 29 February 2024, the issued ordinary
share capital of the Company was
$135,500,000 represented by 13,550,000,000
ordinary shares of $0.01 each, of which
1,349,288,041 shares are held in treasury and
47,301,141 shares are held by Group
employee benefit trusts.
Major interests in shares
Taking into account the information
available to Glencore as at 29 February 2024,
the table below shows the Company’s
understanding of the interests in 3% or more
of the Total Voting Rights attaching to its
issued ordinary share capital:
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Name
Number
of Glencore
shares
Percentage
of Total
Voting
Rights
Ivan Glasenberg
1,211,957,850
Qatar Holding
LLC
1,046,550,951
BlackRock, Inc.
889,638,286
643,190,076
9.93
8.57
7.29
5.19*
The Capital
Group
Companies, Inc.
GQG Partners,
LLC
504,330,746
4.13
* Reportable position of The Capital Group
Companies, Inc. as published by the London
Stock Exchange on August 8, 2023. The
approximate percentage of voting rights was
calculated in relation to the share capital at the
time of the relevant disclosure notification. It
therefore does not reflect changes to this
percentage resulting from changes in the
number of outstanding shares following the
date of the disclosure notification.
Share capital
The rights attaching to the Company’s
ordinary shares, being the only share class of
the Company, are set out in the Company’s
Articles of Association (the ‘Articles’), which
can be found at glencore.com/who-we-are/
governance. Subject to Jersey law, any share
may be issued with or have attached to it
such preferred, deferred or other special
rights and restrictions as the Company may
by special resolution decide or, if no such
resolution is in effect, or so far as the
resolution does not make specific provision,
as the Board may decide.
No such resolution is currently in effect.
Subject to the recommendation of the
Board, holders of ordinary shares may
receive a distribution. On liquidation, holders
of ordinary shares may share in the assets of
the Company.
Holders of ordinary shares are also entitled
to receive the Company’s annual report and
accounts and, subject to certain thresholds
being met, may requisition the Board to
convene a general meeting (GM) or submit
resolutions for proposal at AGMs. None of the
ordinary shares carry any special rights with
regard to control of the Company.
Holders of ordinary shares are entitled to
attend and speak at GMs of the Company
and to appoint one or more proxies or, if the
holder of shares is a corporation, a corporate
representative. On a show of hands, each
holder of ordinary shares who (being an
individual) is present in person or (being a
corporation) is present by a duly appointed
corporate representative, not being himself
a member, shall have one vote. On a poll,
every holder of ordinary shares present in
person or by proxy shall have one vote for
every share of which he or she is the holder.
Electronic and paper proxy appointments
and voting instructions must be received not
later than 48 hours before a GM. A holder of
ordinary shares can lose the entitlement to
vote at GMs where that holder has been
served with a disclosure notice and has
failed to provide the Company with
information concerning interests held in
those shares. Except as (1) set out above and
(2) permitted under applicable statutes,
there are no limitations on voting rights of
holders of a given percentage, number of
votes or deadlines for exercising voting rights.
The Directors may refuse to register a
transfer of a certificated share which is not
fully paid, provided that the refusal does not
prevent dealings in shares in the Company
from taking place on an open and proper
basis or where the Company has a lien over
that share.
Directors’ report continued
Strategic Report
Corporate Governance
Financial Statements
Additional Information
The Directors may also refuse to register a
transfer of a certificated share unless the
instrument of transfer is:
1. lodged, duly stamped (if necessary), at the
registered office of the Company or any
other place as the Board may decide
accompanied by the certificate for the
share(s) to be transferred and/or such
other evidence as the Directors may
reasonably require as proof of title; or
2. in respect of only one class of shares.
Transfers of uncertificated shares must be
carried out using CREST and the Directors can
refuse to register a transfer of an uncertificated
share in accordance with the regulations
governing the operation of CREST.
The Directors may decide to suspend the
registration of transfers, for up to 30 days a
year, by closing the register of shareholders.
The Directors cannot suspend the
registration of transfers of any uncertificated
shares without obtaining consent from CREST.
There are no other restrictions on the
transfer of ordinary shares in the Company
except: (1) certain restrictions may from time
to time be imposed by laws and regulations
(for example insider trading laws); (2)
pursuant to the Company’s Inside
Information and Securities Dealing Policy
and PDMR Securities Dealing Procedure
whereby the Directors and certain
employees of the Company require approval
to deal in the Company’s shares; and (3)
where a shareholder with at least a 0.25%
interest in the Company’s issued share
capital has been served with a disclosure
notice and has failed to provide the
Company with information concerning
interests in those shares. There are no
agreements between holders of ordinary
shares that are known to the Company,
which may result in restrictions on the
transfer of securities or on voting rights.
The rules for appointment and replacement
of the Directors are set out in the Articles.
Directors can be appointed by the Company
by ordinary resolution at a GM or by the
Board upon the recommendation of the
Nomination Committee. The Company can
remove a Director from office, including by
passing an ordinary resolution or by notice
being given by all the other Directors. The
Company may amend its Articles by special
resolution approved at a GM.
The powers of the Directors are set out in the
Articles and provide that the Board may
exercise all the powers of the Company
including to borrow money. The Company
may by ordinary resolution authorise the
Board to issue shares, and increase,
consolidate, sub-divide and cancel shares in
accordance with its Articles and Jersey law.
Purchase of own shares
In February 2023 and August 2023, the
Company announced buyback programmes
of up to $1.5 billion and up to $1.2 billion.
These programmes completed on 12 July
2023 and 12 January 2024. Pursuant to them
the Company purchased 480,589,549 of its
own ordinary shares. Relevant authorities to
purchase own shares were approved by the
shareholders on 28 April 2022 and 26 May
2023. The Directors will seek a similar authority
at the Company’s AGM on 29 May 2024.
Going concern
The financial position of the Group, its cash
flows, liquidity position and borrowing
facilities are set out in the Strategic Report.
Furthermore, notes 27 and 28 to the financial
statements include the Group’s objectives
and policies for managing its capital, its
financial risk management objectives, details
of its financial instruments and hedging
activities and its exposure to credit and
liquidity risk. Significant financing activities
that took place during the year are detailed
in the Financial review section, which starts
on page 78.
The results of the Group, principally
pertaining to its Industrial activities, are
exposed to fluctuations in both commodity
prices and currency exchange rates whereas
the performance of Marketing activities is
primarily physical volume- and arbitrage-
driven with commodity price risk
substantially hedged.
The Directors have a reasonable expectation,
having made appropriate enquiries, that the
Group has adequate resources to continue
in its operational existence for the
foreseeable future. For this reason they
continue to adopt the going concern basis in
preparing the financial statements. The
Directors have made this assessment after
consideration of the Group’s capital
commitments, budgeted cash flows and
related assumptions including appropriate
stress testing of the identified uncertainties
(being primarily commodity prices and
currency exchange rates) and access to
undrawn credit facilities, monitoring of debt
maturities, and after review of the Guidance
on Risk Management, Internal Control and
Related Financial and Business Reporting
2014 as published by the UK Financial
Reporting Council.
Longer-term viability
In accordance with provision 31 of the Code,
the Directors have assessed the prospects of
the Group’s viability over a longer period
than the 12 months required by the going
concern assessment above. A summary of
the assessment made is set out on page 110
in the Risk management section.
The Directors have considered the prospects
of the Company over the long term under a
range of possible scenarios, as set out on
pages 24 to 25. The long-term view
incorporated, but was not limited to, the
2050 date associated with the Company’s
net zero ambition. The scenarios offer a
reasonable basis to conclude that the
Company’s business model is resilient to
potential uncertainties, its prospects are
good and that it will be able to meet its
financial liabilities in full.
The Directors further considered the
Company’s four-year business plan, which
they believe is an appropriate review period
having regard to the Company’s business
model, strategy, principal risks and
uncertainties, sources of funding and
liquidity. Based on the results of the related
analysis, the Directors have a reasonable
expectation that the Company will be able to
continue in operation and meet its liabilities
as they fall due over the four-year period of
this assessment.
Auditor
Each of the persons who is a Director at the
date of approval of this Annual Report
confirms that:
3. so far as the Director is aware, there is no
relevant audit information of which the
Company’s auditor is unaware; and
4. the Director has taken all the steps that he
or she ought to have taken as a Director in
order to make himself or herself aware of
any relevant audit information and to
establish that the Company’s auditor is
aware of that information.
Deloitte LLP have expressed their willingness
to continue in office as auditor and a
resolution to reappoint them will be
proposed at the forthcoming AGM.
2023 Glencore Annual Report
163
Directors’ report continued
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Statement of Directors’
responsibilities
The Directors are responsible for preparing
the Annual Report and financial statements
in accordance with applicable law
and regulations.
Company law requires the Directors to
prepare financial statements for the
Company for each financial year.
The financial statements are prepared in
accordance with International Financial
Reporting Standards (IFRS) adopted by the
United Kingdom, and IFRS as issued by the
International Accounting Standards Board.
The financial statements are required by law
to be properly prepared in accordance with
the Companies (Jersey) Law 1991.
International Accounting Standard 1 requires
that financial statements present fairly for
each financial year the Company’s financial
position, financial performance and cash
flows. This requires the faithful representation
of the effects of transactions, other events
and conditions in accordance with the
definitions and recognition criteria for assets,
liabilities, income and expenses set out in
the International Accounting Standards
Board’s Framework for the preparation and
presentation of financial statements.
In virtually all circumstances, a fair
presentation will be achieved by compliance
with all applicable IFRSs.
The Directors confirm that the Annual
Report and Accounts, taken as a whole,
is fair, balanced and understandable, and
provides the information necessary for
shareholders to assess the performance,
strategy and business model of
the Company.
However, the Directors are also required to:
• properly select and apply accounting
policies;
• present information, including accounting
policies, in a manner that provides
relevant, reliable, comparable and
understandable information;
• provide additional disclosures when
compliance with the specific requirements
in IFRSs are insufficient to enable users to
understand the impact of particular
transactions, other events and conditions
on the entity’s financial position and
financial performance; and
• make an assessment of the Company’s
ability to continue as a going concern.
The Directors are responsible for keeping
proper accounting records that disclose with
reasonable accuracy at any time the
financial position of the Company and
enable them to ensure that the financial
statements comply with the Companies
(Jersey) Law 1991. They are also responsible
for safeguarding the assets of the Company
and hence for taking reasonable steps for
the prevention and detection of fraud and
other irregularities. The Directors are
responsible for the maintenance and
integrity of the corporate and financial
information included on the Company’s
website. The legislation governing the
preparation and dissemination of the
Company’s financial statements may differ
from legislation in other jurisdictions.
Signed on behalf of the Board
John Burton
Company Secretary
20 March 2023
164
2023 Glencore Annual Report
Information required by Listing Rule LR 9.8.4C
In compliance with UK Listing Rule 9.8.4C the Company discloses the following information:
Listing Rule
9.8.4(1)
9.8.4(2)
9.8.4(5)
9.8.4(6)
9.8.4(12)
9.8.4(13)
9.8.4(14)
Information required
Relevant disclosure
Interest capitalised by the Group
Unaudited financial information as
required (LR 9.2.18)
See note 9 to the financial
statements
See Chief Executive Officer’s review
Director waivers of emoluments See Directors’ Remuneration Report
Director waivers of future emoluments See Directors’ Remuneration Report
See note 19 to the financial
statements
See note 19 to the financial
statements
Not applicable
Waivers of future dividends
Waivers of dividends
Agreement with a controlling
shareholder (LR 9.2.2A)
There are no disclosures to be made in respect of the other numbered parts of LR 9.8.4.
Confirmation of Directors’ responsibilities
We confirm that to the best of our knowledge:
• the consolidated financial statements, prepared in accordance with International Financial
Reporting Standards (IFRS) adopted by the United Kingdom, and IFRS as issued by the
International Accounting Standards Board and the Companies (Jersey) Law 1991, give a
true and fair view of the assets, liabilities, financial position and income of the Group and
the undertakings included in the consolidation taken as a whole;
• the management report, which is incorporated in the Strategic Report, includes a fair
review of the development and performance of the business and the position of the Group
and the undertakings included in the consolidation taken as a whole, together with a
description of the principal risks and uncertainties they face; and
• the Annual Report and consolidated financial statements, taken as a whole, are fair and
balanced and understandable and provide the information necessary for shareholders to
assess the performance, position, strategy and business model of the Company.
The consolidated financial statements of the Group for the year ended 31 December 2023
were approved on the date below by the Board of Directors.
Signed on behalf of the Board
Kalidas Madhavpeddi
Chairman
Gary Nagle
Chief Executive Officer
20 March 2024
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Independent Auditor’s Report to the Members of Glencore Plc
Report on the audit of the financial statements
1. Opinion
In our opinion the financial statements of Glencore plc and its subsidiaries (together “the Group”):
• give a true and fair view of the state of the Group’s affairs as at 31 December 2023 and of the Group’s profit for the year
then ended;
• have been properly prepared in accordance with United Kingdom adopted international accounting standards and
International Financial Reporting Standards (“IFRSs”) as issued by the International Accounting Standards Board (“IASB”),
and
• have been properly prepared in accordance with Companies (Jersey) Law 1991.
We have audited the financial statements of the Group which comprise:
• the consolidated statement of income;
• the consolidated statement of comprehensive income;
• the consolidated statement of financial position;
• the consolidated statement of cash flows;
• the consolidated statement of changes of equity, and
• the related notes 1 to 36.
The financial reporting framework that has been applied in their preparation is applicable law, United Kingdom adopted
international accounting standards and IFRSs as issued by the IASB.
2. Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our
responsibilities under those standards are further described in the auditor’s responsibilities for the audit of the financial
statements section of our report.
We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial
statements in the UK, including the Financial Reporting Council’s (the “FRC’s”) Ethical Standard as applied to listed public
interest entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. The non-audit
services provided to the Group for the year are disclosed in note 30 to the financial statements. We confirm that we have
complied with the FRC’s Ethical Standard in providing non-audit services to the Group.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
3. Summary of our audit approach
Key audit matters
The key audit matters that we identified in the current year were:
• Impairments and impairment reversals of non-current assets;
• Government investigations and related claims;
• Potential impact of climate change on the valuation of fossil fuel non-current assets;
• Revenue recognition - valuation of level 3 financial instruments; and
• Valuation of deferred tax assets and uncertain tax positions.
Our assessment of the Group’s key audit matters is largely consistent with those identified in
2022 except for removing the classification of trading contracts and arrangements which
contain a financing element given reduced impact on the audit.
The materiality that we used for the Group financial statements in the current year was
$600 million (2022: $700 million), which was determined on the basis of a 3-year average
adjusted profit before tax benchmark and a net assets benchmark, consistent with the
prior year.
We focused our Group audit scope primarily on 22 components, representing the Group’s
most material marketing operations and industrial assets. These 22 components accounted
for 78% of the Group’s net assets, 93% of the Group’s revenue and 90% of the Group’s
adjusted EBITDA (refer to segment information in note 2 to the financial statements).
Apart from the change in the key audit matter as explained above, there were no significant
changes to our audit approach when compared to 2022.
Materiality
Scoping
Significant changes
in our approach
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Additional Information
Independent Auditor’s Report to the Members of Glencore Plc continued
4. Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the
preparation of the financial statements is appropriate.
In evaluating the directors’ assessment of the Group’s ability to continue to adopt the going concern basis of accounting:
• We considered the effect of key risks on the Group’s business model as part of our risk assessment and analysed how these
risks might affect the Group’s liquidity position, including access to capital, and thus its ability to continue to operate as a
going concern. The risk we considered to have the greatest impact is the supply, demand and prices of commodities over
the forecast period.
• We assessed the downside stress scenarios applied by the directors in their analysis, in particular whether the downside
scenarios represented an appropriately robust sensitivity. We evaluated the effect of these scenarios on key metrics such as
liquidity headroom, net debt and net debt to EBITDA over the going concern period and performed additional sensitivities to
further challenge the Group’s forecast position.
• We assessed the directors’ reverse stress scenario and the directors’ conclusion that such a scenario is remote.
• We assessed whether the investigations resolutions and contingent liabilities could have a material effect on the Group’s
ability to continue as a going concern.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the Group's ability to continue as a going concern for a period of at
least twelve months from when the financial statements are authorised for issue.
In relation to the reporting on how the Group has applied the UK Corporate Governance Code, we have nothing material to
add or draw attention to in relation to the directors’ statement in the financial statements about whether the directors
considered it appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections
of this report.
5. Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial
statements of the current period and include the most significant assessed risks of material misstatement (whether or not due
to fraud) that we identified. These matters included those which had the greatest effect on the overall audit strategy, the
allocation of resources in the audit, and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these matters.
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Additional Information
Independent Auditor’s Report to the Members of Glencore Plc continued
5.1 Impairments and impairment reversals of non-current assets
Description of key audit matter
The carrying value of the Group’s non-current assets within the scope of IAS 36 Impairment of assets includes property, plant
and equipment (“PPE”), intangible assets, non-current advances and loans, and investments in associates and joint ventures,
which amounted in total to $54,755 million at 31 December 2023 (2022: $58,711 million). When an impairment or impairment
reversal indicator exists in respect of the Group’s material non-current assets and investments, management completes an
impairment review.
In assessing the recoverability of non-current assets, management makes significant assumptions about factors such as:
• expected future prices of commodities (particularly coal, oil, copper, cobalt, zinc, ferroalloys and nickel), oil refining margins,
foreign exchange rates, production levels, operating costs and discount rates;
• future mining and tax legislation, and political and other macro-economic developments;
• responses to climate change impacts by regulators and consumers, which could negatively impact demand for the Group’s
products, particularly coal (refer to “Potential impact of climate change on the valuation of fossil fuel non-current assets” key
audit matter below); and
• geological and other operational factors that could affect an asset’s performance over time.
For non-current advances and loans, the Group is also exposed to credit and performance risk related to non-performance by
the counterparty, particularly in markets demonstrating significant price volatility with limited liquidity and terminal markets,
where suppliers may be incentivised to default on delivery and customers may be unwilling to take contracted deliveries or be
unable to pay. Assessing counterparty performance, solvency and liquidity risks can be highly subjective.
As disclosed in note 7, pre-tax impairments totalling $2,103 million were recorded in PPE and intangible assets (2022:
$1,984 million) and $156 million in advances and loans (2022: $389 million).
The outcome of impairment or impairment reversal assessments can vary significantly if different assumptions are applied as
further described in the sensitivity disclosures made by the Group within “Key sources of estimation uncertainty” in notes 1 and
7, as well as the Audit Committee Report on page 129.
We considered the potential risk of fraud from management bias given the significant estimation uncertainty and subjectivity
in certain judgements and assumptions in the Group’s impairment and impairment reversal assessments.
How the scope of our audit responded to the key audit matter
In response to the key audit matter noted above we performed the following:
General procedures
• We considered management’s assessment of impairment risk and its assessment of the indicators of impairment or
impairment reversal, which included understanding the inherent subjectivity and complexity of key assumptions, as well as
relevant internal controls over management’s impairment and impairment reversal assessment process.
• We performed an independent assessment of impairment and impairment reversal indicators considering the current
economic environment, including the impacts of the higher interest rate environment and volatility in commodity pricing.
• We updated our assessment of management’s determination of relevant cash-generating units (“CGUs”) by reference to the
requirements of accounting standards and our understanding of the nature of the Group’s mining operations and the extent
to which active markets are considered to exist for intermediary products.
• For non-current advances and loans (see note 12), we obtained an understanding of management’s method of assessing
these assets for impairment, which included obtaining an understanding of relevant controls in the Group’s credit and
performance risk monitoring processes.
Challenge of key model assumptions and overall reasonableness of impairment or impairment reversal assessment
• We challenged the significant assumptions used and the evidence on which these assumptions were based. We considered
the risk of management bias in macroeconomic forecast assumptions and estimates with the support of our valuations
specialists by analysing management’s inputs against third party forecast data, challenging and recalculating management’s
approach and methodology to determine discount rates, and reconciliations to latest internal budget information.
• Where indicators of impairment or impairment reversal were identified, we performed detailed testing of management’s
impairment calculations and where appropriate, based on our risk assessment, alongside our Deloitte valuation and mining
specialists we assessed the appropriateness of management’s model inputs and assumptions and the basis for technical
mining, operational and financial inputs (e.g. price, discount rate, reserve and resource estimation, production parameters,
grade and recovery rates, resource conversion rates, and operating and capital costs). Production and cost assumptions were
analysed against historical performance as well as approved budgets and life of mine (“LOM”) plans, where applicable, and
minable tonnes assumptions were assessed against reserves and resources estimates.
• We assessed the competence, capability and objectivity of the Group’s internal experts responsible for preparing the reserves
and resources statements.
• We assessed the appropriateness of key asset-specific assumptions and the judgements taken in applying these
assumptions within the impairment models, such as the incorporation of price-specific discounts or premiums, changes in
tax legislation or other legal or regulatory assumptions (e.g., rehabilitation provisions).
• We evaluated the appropriateness of the carrying values of each CGU in scope for an impairment review.
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Independent Auditor’s Report to the Members of Glencore Plc continued
• We performed a stand back assessment and evaluated management’s impairment or impairment reversal assessment for
any evidence of management bias in assumptions and judgements applied. We challenged management’s assessment of
recoverability of advances and loans by reviewing a sample of supporting agreements and obtaining evidence of current
performance, historical patterns of trading and settlement, correspondence with third parties and any other information we
are aware of that may influence a third party’s ability to perform.
• We evaluated the adequacy of impairment related disclosures in the financial statements, including the key assumptions
used and the completeness and accuracy of sensitivities disclosed.
• For climate related impairment risks, please refer to our key audit matter under 5.3 below.
Key observations
Based on the results of our assessment of management’s methodology for impairment and impairment reversal testing and
modelling, we concluded that the methodology applied complies with accounting standards, and that management’s
assessment of impairment indicators and impairment reversals was appropriate.
We concluded that key assumptions to which impairment or impairment reversal outcomes were sensitive were reasonable in
comparison to historical actuals achieved, relevant evidence and/or our specialists’ judgements.
Based on the results of our testing, we concluded that the recoverable amounts for the CGUs tested were reasonable. We
considered management’s disclosures on impairment or impairment reversal sensitivities to key assumptions and found them
to be appropriate and in compliance with the requirements of IFRS.
Although we observed improvements in a number of relevant controls over impairment and impairment reversals, similar to
the prior year, we found that the level of management review and documentation retained relating to certain judgements and
key assumptions in complex models requires improvement and we considered this in our audit response.
We concluded that the Group’s impairment charge in relation to non-current loans and advances was appropriate.
5.2 Government investigations and related claims
Description of key audit matter
The Group remains subject to investigations by the Office of the Attorney General of Switzerland and the Dutch Public
Prosecutor's Office as disclosed in notes 23 and 32 to the financial statements. Claims on behalf of current and former
shareholders have been issued against the Group in the United Kingdom (“UK Claims”) subsequent to the Government
investigations which were resolved in the United States, United Kingdom and Brazil in 2022 (refer note 32). The Group may be
the subject of further legal claims brought by other parties in connection with the Government Investigations. The Board’s
consideration of these matters is set out in the Corporate Governance Report on page 119 and the Group’s commentary on the
Laws and enforcement principal risk is set out in the Strategic Report on page 117.
The Investigations Committee of the Board is overseeing the Group’s response to these matters. The Group has engaged
external legal counsel and forensic experts (“the Advisors”) to assist the Group in responding to the various investigations and
claims, to represent it in litigation and to perform additional investigations at the request of the Investigations Committee
covering various aspects of the Group’s business.
In accordance with the accounting criteria set out under IAS 37 Provisions, Contingent Liabilities and Contingent Assets, the
judgement of the Investigations Committee (guided by the General Counsel and the Group’s external legal counsel) is required
in determining the probability of whether a present obligation exists at 31 December 2023 for the ongoing Swiss and Dutch
investigations, the UK claims and potential further claims by other authorities or other parties in connection with these
matters, including collective, group or representative actions.
With respect to the Swiss and Dutch investigations, the UK Claims and any potential additional investigations or claims, the
Investigations Committee concluded that, taking all available evidence into account, it is not probable that a present obligation
existed at the end of the reporting period. The timing and amount, if any, of financial effects (such as fines, penalties or
damages, which could be material) or other consequences, including external costs, from any of the various investigations or
claims and any change in the investigations’ scope is not possible to predict or estimate. Consequently, no liability has been
recognised in the consolidated statement of financial position at 31 December 2023, nor has any estimate of the contingent
liability been disclosed, in relation to these matters.
We identified the following key audit risks:
• the risk that the related disclosure made by the Group on the nature, timing and associated uncertainties relating to the
provision as required by IAS 37 is inadequate; and
• the risk that the judgement on the probability that a present obligation did not exist for the Swiss or Dutch investigations,
the UK Claims or potential additional investigations or claims is inappropriate, or the disclosure of these investigations as
contingent liabilities may not be adequate.
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Additional Information
Independent Auditor’s Report to the Members of Glencore Plc continued
How the scope of our audit responded to the key audit matter
In response to the key audit matter noted above, we performed the following:
General procedures
• We gained an understanding of the Investigations Committee’s and General Counsel’s process and internal controls for
reviewing the IAS 37 assessment and review of the disclosures in the Annual Report.
• We attended regular briefings from the General Counsel and the Group’s external legal counsel during the year.
• We reviewed written legal assessments from the external legal counsel and evaluated whether they appropriately support
the Group’s conclusions.
• We assessed the competence, capability and objectivity of the external legal counsel and advisors used by the Group.
• We considered whether the external legal counsel’s scope and outcomes were sufficient to inform the Investigations
Committee’s assessment and representation of whether a probable present obligation exists, and the adequacy of the
provision made at 31 December 2023.
• We reviewed the internal meeting minutes of the Investigations Committee.
• We obtained an understanding of the stage of each investigation and process being followed by each regulatory and
enforcement authority in reaching resolution with Glencore from the General Counsel and gave direct challenge to and
sought confirmation from external legal counsel on each matter.
• We extended our enquiries procedures outlined below to after the balance sheet date to evaluate whether developments in
these matters were indicative of a present obligation at 31 December 2023.
Appropriateness of contingent liability assessment and relevant disclosures in relation to the ongoing Swiss and Dutch
investigations, and potential additional follow-on investigations or claims
• We enquired of the General Counsel and obtained direct written and verbal confirmation from Swiss and Dutch external
legal counsel as to the current stage of the Swiss and Dutch investigations respectively, and their assessment of the
probability of a present obligation existing at the reporting date.
• Having regard to potential additional follow-on investigations or claims, we enquired of the General Counsel and obtained
written assessment from external legal counsel on the potential for additional follow-on investigations or claims, and their
assessment of the probability of a present obligation existing at the reporting date.
• We enquired of the Investigations Committee, the General Counsel and the Group’s external legal counsel as to their
awareness of known or likely non-compliance with laws and regulations from the Swiss and Dutch investigations to date
which could indicate the existence of a present obligation at 31 December 2023, and whether any such non-compliance
could result in a potential material outflow (penalty or fine).
• We considered whether the Investigations Committee’s conclusions were reasonable that a present obligation did not exist
at the end of the reporting period and that the timing and amount, if any, of financial effects from any of these investigations
and any change in their scope is not possible to predict or estimate.
Appropriateness of contingent liability assessment and relevant disclosures in relation to the UK Claims and potential
further legal claims
• We reviewed the claims filed in the UK High Court.
• We obtained an understanding from Glencore’s General Counsel on its response to these claims.
• We reviewed a legal assessment from Glencore’s external UK legal counsel of the claims, setting out the legal process and
legal requirements that claimants need to adhere to in order to be successful.
• We evaluated management’s overall conclusion that these claims meet the IAS 37 definition of a contingent liability.
Key observations
Based on the results of our procedures, we concluded that:
• the accounting treatment and financial statement disclosures relating to the investigations by regulatory and enforcement
authorities and the related follow-on claims in notes 23 and 32 and the key judgement disclosures in note 1 are appropriate
and in accordance with the requirements of IAS 37 and IAS 1.
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5.3 Potential impact of climate change on non-current assets
Description of key audit matter
As described on pages 17 to 20 of the Annual Report, climate change can affect Glencore’s business through currently enacted
and prospective regulations to reduce carbon emissions and ultimately limit extreme climate events. This may impact the
Group through increased costs through carbon pricing mechanisms, potentially reduced access to capital and changes in
energy prices amongst others.
In the Group’s TCFD report on pages 29 to 61, the Group details the steps taken during the year to identify and implement
emission reduction opportunities and to make progress in the seven priority areas identified in the Group’s climate strategy.
As set out in note 1, Glencore’s exposure to assets that produce fossil fuels relate mainly to its coal mining operations in
Australia, South Africa and Colombia and its Astron oil refining asset in South Africa. The Group also has goodwill related to its
coal marketing CGU. All of these assets are long term in nature and, other than goodwill which is not amortised, the average
useful life of fossil fuel assets is 7.5 years (2022: 6.5 years). There are also rehabilitation liabilities linked to the coal and oil
producing assets totalling $3,291 million ($4,419 million undiscounted) (2022: $2,708 million, $3,717 million undiscounted). At
31 December 2023, the carrying values of fossil fuel producing assets and linked rehabilitation liabilities make up 28% of total
non-current assets and 9% of total non-current liabilities respectively (2022: 28% and 8% respectively).
In note 1 to the financial statements, the Group identifies the accounting measurement and disclosure impacts of assets and
liabilities that are most impacted by climate change and Glencore’s climate commitments, including:
• estimation of the carrying value of certain assets exposed to climate change risk impacted by demand and supply for the
Group’s commodities, related commodity pricing and carbon pricing;
• estimation of the remaining useful economic life of assets for depreciation and amortisation purposes; and
• estimation of timing of rehabilitation and decommissioning closure activities.
To assess the possible impact of climate change on the Group’s coal portfolio, the Group has developed a number of downside
sensitivities based on various scenarios published by the International Energy Agency (“IEA”), including a net zero emissions by
2050 scenario (“NZE”). In addition to the above, the Group has also run downside sensitivities against a Complete Displacement
Scenario. The impact of these sensitivities has been disclosed in note 1. These sensitivities illustrate the combined effect of
assuming weaker short term and long-term thermal coal demand and commodity prices than management has assumed in
its base case.
IFRS requires the Group’s financial reporting to be based, amongst other things, on the Group’s best estimate of assumptions
that are reasonable and supportable as at the date of reporting. Those assumptions may not align with the ways in which the
global economy, society and government policies will need to change to meet the targets set out in the IEA’s NZE scenario or
the Group’s stated ambitions.
We identified a key audit matter relating to the financial impacts of climate change on the Group and the impact on key
judgements and estimates within the financial statements, and assessing the consistency of reporting in the Strategic and
Corporate Governance reports on pages 1 – 164, with the financial impacts in the financial statements. Our audit focused on the
following areas in particular:
• Glencore’s coal pricing assumptions used (which differ from the IEA’s pricing assumptions under the respective scenarios) to
assess its coal non-current assets for indicators of impairment or impairment reversals and, where such indicators existed,
the valuation of the coal non-current assets;
• Glencore’s refining margin assumptions used to assess the Astron refinery for indicators of impairment reversal and its
valuation;
• The appropriateness of Glencore’s useful life assessment of fossil fuel producing assets based on anticipated demand for coal
and oil in the medium to long term;
• The appropriateness of Glencore’s judgement that carbon costs will likely be passed on to the consumer (refer note 1 for
details);
• The valuation of goodwill relating to its coal marketing cash generating unit which is based on an earnings multiple
approach of 10x (12x in 2022) (refer note 10);
• The appropriateness of the timing of rehabilitation cash flows at operations that produce fossil fuels; and
• The consistency between Glencore’s announced climate related targets and net zero 2050 ambition and the above areas.
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How the scope of our audit responded to the key audit matter
In response to the key audit matter noted above we performed the following:
Coal pricing
• As the availability of long-term coal price forecasts and demand and supply market data (particularly for the Group‘s coal
produced outside of Australia) is extremely limited, we engaged valuation experts to analyse historical price correlations
between the three primary coal benchmark prices: Newcastle (the Australian coal benchmark) which has the largest number
of external broker forecasts, API 4 (the South African coal benchmark) and API 2 (the North West Europe coal benchmark
which is relevant to the sale of the Group’s Colombian coal). This assessment was used to extrapolate a forward curve against
which we challenged the Group’s forecasted price assumptions.
• We compared Glencore’s long-term coal price assumptions to forecasts provided by external brokers and the IEA’s Stated
Policies Scenario (“STEPS”) and Announced Pledges Scenario (“APS”) noting that some adjustments were required to the
IEA’s data to ensure comparability, for example, appropriate freight adjustments.
• We considered management’s updated illustrative impairment sensitivities in note 1 and challenged whether these
presented contradictory evidence to management’s conclusion that there were no impairment indicators relating to the
Coal Australia and Cerrejon cash generating units.
Asset useful lives
• We evaluated Glencore’s coal production profile against the IEA scenarios and evaluated the consistency of management’s
internal modelling with its external climate reporting.
• With the support of South African refinery specialists, we challenged the useful life and refining margins of the Astron oil
refinery by evaluating a third party expert report commissioned by management (that covered the period up to 2050), as
well as data on oil demand expectations provided by the IEA up to 2050. We also considered factors such as the refinery’s
geographical location and competitive landscape in our assessment.
• We challenged management’s assessment of useful lives and the basis used to depreciate/amortise physical and intangible
assets.
• We assessed whether any assets’ useful lives exceeded management’s modelled life of mine/asset of the operation.
Carbon costs
• We confirmed with management that their judgement that future increases in carbon costs will be passed through to end
customers has not changed from the prior year.
• We challenged management's logic on carbon pricing being passed onto the customer based on the outcome of our
independent sensitivity analysis and observations.
• We benchmarked management's judgement against peer entities.
• We reviewed external reports (IEA and others) for market expectations on the impact of carbon pricing.
Marketing coal goodwill
• We evaluated the appropriateness of Glencore’s use of a price-to-earnings multiple to determine a market based fair value
estimate in light of an expectation that coal volumes traded are expected to decrease over time and therefore so too
would earnings.
• We determined an independent range of price-to-earnings multiples based on companies with coal trading, coal production
or coal logistics exposure to evaluate the appropriateness of the earnings multiple used by management.
Rehabilitation provisions
• We updated our understanding of the current and, where relevant proposed, legislative requirements in the jurisdictions of
the Group’s fossil fuel operations with respect to rehabilitation. We considered the impact on the timing of rehabilitation and
related provisions.
• We challenged the timing of planned rehabilitation activities of Glencore’s fossil fuel operations and whether modelled cash
flows aligned to the company’s announced climate change commitments and ambition.
• We re-performed the calculation of management’s sensitivity analysis which is set out in note 1 which quantifies the impact
on rehabilitation provisions of a 3- and 5-year acceleration in the timing of rehabilitation of fossil fuel producing assets.
Consistency between Glencore’s announced targets and accounting policies
• We used Deloitte climate and sustainability specialists to challenge the Group’s climate change narrative and related
disclosures.
• We read the other information included in the annual report and considered whether there was any material inconsistency
between the other information and the financial statements, or whether there was any material inconsistency between the
other information and our understanding of the business based on audit evidence obtained and conclusions reached in
the audit.
• We considered whether the Group’s sensitivity and estimation uncertainty disclosures were appropriate in the context of
climate change risks and uncertainties.
Key observations
With respect to Glencore’s base case assessment of coal pricing assumptions, we found Glencore’s LT Newcastle pricing
assumptions to be above broker ranges, and the API 4 and API 2 prices were at the upper end of our acceptable range. When
comparing Glencore’s assumptions to the IEA’s data points, we found their assumptions to be higher than the IEA’s STEPS
forecast. Aligning Glencore’s base case commodity pricing assumptions within our acceptable range did not result in impairment.
We concluded that Glencore’s forecast refining margin assumptions are reasonable.
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We agree with the sensitivity disclosed in note 1 that the recoverable value of the Coal South Africa CGU which was not
impaired at 31 December 2023 is sensitive to reasonably possible changes in management’s assumptions, in particular, coal
prices. As disclosed in Glencore’s illustrative climate related sensitivities in note 1, there remains a risk over the longer term
of material impairment should forecast fossil fuel prices reduce significantly and trend faster towards the IEA’s APS and
NZE scenarios.
With respect to the illustrative climate related sensitivities provided in note 1, we observed that the sensitivities reflected the
combined effect of adopting the IEA’s long-term price assumptions based on the various IEA climate scenarios, together with
the effect of adopting December 2023 spot prices as a starting point for short term price assumptions. The short-term price
assumptions in these sensitivities do not reflect the benefit of the short-term pricing environment at the balance sheet date
which is significantly higher than the price assumptions referenced in the IEA’s report. Accordingly we are satisfied that the
sensitivities do not contradict the directors’ assessment that an impairment is not reasonably possible within the next
financial year.
We consider management’s position on the ‘pass through’ of increases in carbon pricing to end customers to be reasonable
and concur that it is appropriate that this judgement is disclosed as a critical accounting judgement in note 1.
We concluded that the assumed timing of anticipated restoration, rehabilitation and decommissioning cash flows associated
with Glencore’s fossil fuel related assets was reasonable. We found the sensitivity disclosures in note 1 to be appropriate.
We found no material inconsistencies between management’s coal and oil impairment modelling, rehabilitation forecasts or
asset useful lives as set out in note 1 and its stated response to climate change as described in the Strategic Report.
We concluded that management’s assumptions of the impacts of climate change in estimating the valuation of the Group’s
fossil fuel non-current assets were reasonable.
5.4 Revenue recognition - valuation of level 3 financial instruments
Description of key audit matter
As explained in note 1, revenue and costs of goods sold include unrealised gains and losses on commodity transactions which
meet the definition of derivatives or are classified as financial instruments recorded at fair value through profit or loss. Of these
instruments, as set out in note 29, $1,233 million of financial assets (2022: $3,461 million) and $485 million of financial liabilities
(2022: $530 million) were classified as level 3 valuations as established by the hierarchy set out in IFRS 13 Fair Value
Measurement because the valuation is dependent on one or more unobservable inputs.
Determination of fair values can be a complex and subjective area, requiring significant estimates, particularly where valuations
are classified as level 3 as they use unobservable inputs (e.g. price differentials, medium and long-term LNG pricing
assumptions, credit risk assessments, market volatility and forecast operational estimates). Given the significant amount of
judgements, sensitivity of assumptions and the absolute value associated with certain level 3 positions, we have identified a
significant risk in respect of the valuation of level 3 financial instruments.
Given long-term LNG prices are not observable in active markets, as disclosed in note 1, the price assumptions used in the
valuation of the Group’s long dated LNG physical forward contracts is a key source of estimation uncertainty. As explained in
note 29, as at 31 December 2023, the Group’s physical forward level 3 assets and liabilities relating to LNG contracts were
$760 million (2022: $2,552 million) and $Nil (2022: $19 million) respectively.
How the scope of our audit responded to the key audit matter
• We reviewed Glencore’s accounting policies on revenue recognition and fair value measurements to assess compliance with
the requirements of IFRS.
• We obtained an understanding of relevant controls surrounding the completeness and accuracy of trade capture and
revenue and, for certain controls we tested their operating effectiveness. Our audit approach was largely substantive in
nature and included agreeing key terms on unrealised trades back to contracts and other supporting evidence on a
sample basis.
• We tested general IT controls over major technology applications and critical interfaces involving revenue recognition and
the completeness and accuracy of trade capture.
• We tested the accuracy and completeness of unrealised trades as of the reporting date by tracing and agreeing a sample of
trades entered into around the year-end from source documents to the trade book system.
• We obtained an understanding of certain relevant internal controls over management’s fair value measurement processes
and, where appropriate, we tested their operating effectiveness. Our audit approach for testing the valuation of unrealised
trades was largely substantive in nature and included performing independent valuations of the forward physical and paper
trades on a sample basis.
• We used our financial instrument specialists with experience in commodity trading to test management’s significant
unobservable inputs used in Level 3 measurements in the fair value hierarchy as set out in notes 28 and 29 to the financial
statements. This work included assessing management’s valuation assumptions against independent price quotes, recent
transactions, and/or other relevant documentation. For the long-term LNG contracts we assessed management’s modelling
techniques used to estimate unobservable inputs through the extrapolation of directly observable inputs.
Key observations
Based on the results of our testing, we are satisfied that the Level 3 fair value measurements are supported by reasonable
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assumptions in line with recent transactions and/or externally verifiable information. We found the financial statement
disclosures on fair value measurements to be appropriate. As improvements in controls were either in progress or
implemented during the year, we adopted a largely fully substantive audit approach in relation to the deal capture and
valuation risks.
5.5 Valuation of deferred tax assets and uncertain tax positions
Description of key audit matter
The global tax environment is complex, particularly with respect to cross border transactions, and the interpretation and
application of tax legislation in certain jurisdictions in which the Group operates can be unclear and unpredictable.
There is therefore complexity and uncertainty in respect of the calculation of income taxes. In particular, the recognition and
valuation of deferred tax assets and assessing liabilities and contingent liabilities in respect of uncertain tax positions can
involve significant management judgement. The Group applies accounting interpretation IFRIC 23 Uncertainty over Income
Tax Treatments and IAS 12 Income Taxes.
As disclosed in notes 1 and 8:
• Management has updated its assessment of uncertain tax positions and the recognition and recoverability of deferred tax
assets. In recognising a liability for uncertain tax positions, consideration was given to the range of possible outcomes to
determine the Group’s best estimate of the amount to provide. As at 31 December 2023, the Group has provided
$1,425 million (2022: $1,486 million) for uncertain tax positions.
• At 31 December 2023 the Group has recorded deferred tax assets of $1,390 million (2022: $1,837 million) and deferred tax
liabilities of $2,970 million (2022: $3,651 million).
The most significant estimation uncertainty relates to the Democratic Republic of Congo (“DRC”):
• In 2018 the DRC adopted a new mining code (“2018 Mining Code”) which introduced wide-ranging reforms including the
introduction of higher royalties, a new Super Profits Tax regime and further regulatory controls. Uncertainties in the
application and interpretation of the 2018 Mining Code, specifically in respect of the Super Profits Tax, remain.
• Since 2020, tax authorities in the DRC have regularly challenged the Group’s income tax and indirect tax filings and have
raised direct tax and customs related assessments against the Group. A number of these assessments are unresolved. The
Group is currently responding to the challenges and assessments raised.
Further estimation uncertainty arises from the challenges of forecasting future taxable profits in various jurisdictions given the
inherent volatility of trading results impacting the valuation of deferred tax assets.
As a result, we have identified a risk of material misstatement of the liability and related disclosures for uncertain tax positions
and the recognition and valuation of deferred tax assets due to the significant estimation uncertainty and subjectivity in
certain judgements and key assumptions applied by management. This was also a key risk area for the Audit Committee; refer
to page 130.
How the scope of our audit responded to the key audit matter
We engaged Deloitte tax specialists to assist in executing the following audit procedures:
• We reviewed and challenged management’s assessment of uncertain tax positions by reviewing correspondence with local
tax authorities and reviewing third party expert tax opinions where appropriate, to assess the adequacy of associated
liabilities and disclosures, having regard to the requirements of IFRIC 23.
• We considered the appropriateness of management’s assumptions and estimates to support the recognition of deferred tax
assets with reference to forecast taxable profits. We challenged the appropriateness of management’s tax utilisation models
by comparing these forecasts against the relevant entities’ budgets or life of asset plans.
• We assessed the adequacy of disclosures in the financial statements in relation to liabilities for uncertain tax positions and
deferred tax assets, and the respective sensitivity disclosures provided.
• In respect of tax exposures in the DRC:
– We challenged management’s position by inspecting correspondence with local tax authorities, reviewing third party
expert tax opinions where appropriate, and working with Deloitte local tax specialists to assess the probability and extent
of outflows from challenges or expected challenges from tax authorities.
– We challenged the adequacy of associated liabilities and disclosures having regard to IFRIC 23 and IAS 12 guidance,
as applicable.
– We challenged management’s position regarding the continuing recognition of a deferred tax asset in the DRC given the
ongoing uncertainties arising from the 2018 Mining Code (specifically the application of Super Profits Tax) and ongoing
challenges received from the DRC tax authorities on open tax years.
– We assessed the adequacy of disclosures in the financial statements in relation to the DRC tax matters and the respective
estimation uncertainty disclosures provided.
Key observations
Based on our audit work on the Group’s tax liabilities and deferred tax assets recorded at 31 December 2023, we concur that the
recorded liabilities for uncertain tax positions and deferred tax assets and related disclosures are appropriate.
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6. Our application of materiality
We define materiality as the magnitude of misstatement in the financial statements that makes it probable that the economic
decisions of a reasonably knowledgeable person would be changed or influenced. We use materiality both in planning the
scope of our audit work and in evaluating the results of our work.
We set performance materiality at a level lower than materiality to reduce the probability that, in aggregate, uncorrected and
undetected misstatements exceed the materiality for the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Group materiality and performance materiality
Group materiality: $600 million (2022: $700 million)
Group performance materiality: $390 million (2022: $455 million)
The decrease in materiality is driven by lower adjusted profit before tax and net assets compared to the prior year.
Group materiality and performance materiality
(US$ million)
900
800
700
600
500
400
300
200
100
0
7
0
0
6
0
0
4
5
5
3
9
0
2022
2023
Group
Materiality
2022
2023
Performance
Materiality
2
5
0
2
3
0
3
5
3
0
2022
2023
2022
2023
Maximum allowed
component performance
materiality
Audit committee
reporting threshold
Basis for determining materiality and performance materiality
We continue to determine materiality by reference to three-year average adjusted profit before tax and net assets. Based on
our professional judgement, we determined materiality to be $600 million which is:
• 4.2% of three-year average adjusted profit before tax (2022: 5.6%)
• 1.6% of net assets as at 31 December 2023 (2022: 1.5%).
Performance materiality
Group performance materiality for the 2023 audit has been set at $390 million being 65% of Group materiality (2022:
$455 million being 65% of Group materiality). Component audit procedures are scoped by reference to the component
materiality (see ranges applied below).
Component materiality
Due to the diversified nature of the Group’s operations, we have historically applied a maximum allowed component
materiality such that our component level procedures are set at a level that is commensurate with the contributions of each
component. The maximum permitted materiality for individual components which were of a significant size to the Group was
$230 million (2022: $250 million). The materiality applied to individual components ranged from $63 million to $230 million.
Rationale for the benchmark applied
Three-year average adjusted profit before tax
Using a three-year average continues to be an effective approach for audits of companies in the mining industry given a single
year’s profits are highly exposed to cyclical commodity price fluctuations. The average profit before tax benchmark is also
normalised for items which, due to their nature and variable financial impact and/or expected infrequency of the underlying
events, are not considered indicative of the continuing operations of the Group (such as impairment charges). The absence of
normalisation would result in a volatile materiality that may be unrepresentative of the scale of the Group’s operations.
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Net assets
Incorporating a net assets metric into our approach to estimating materiality ensures our approach gives due consideration to
the scale of the Group’s business and the strength of the Group’s balance sheet which is important to investors. In addition, as
an emerging risk, the impact of climate change is not necessarily captured in a mining company’s 12-month performance and
hence the use of an additional balance sheet benchmark for estimating materiality is beneficial.
Range approach to determining materiality
We consider a range approach to be appropriate to capture the upper and lower bounds of a reasonable materiality level that
takes into consideration both the benchmarks above. We selected a point within that range that, in our professional
judgement, appropriately reflects the sensitivity of the users of the financial statements to Glencore’s current year performance
and financial position.
The selected Group materiality of $600 million equates to 8.8% of current year adjusted pre-tax profit without the effect of
averaging (2022: 2.9%).
Error reporting threshold
We agreed with the Audit Committee that we would report individual audit differences in excess of $30 million (2022:
$35 million), as well as differences below that threshold that, in our view, warranted reporting on qualitative grounds. We also
report to the Audit Committee on disclosure matters that we identified when assessing the overall presentation of the
financial statements.
7. An overview of the scope of our audit
7.1 The impact of climate change on our audit
Climate change impacts Glencore’s business in a number of ways as set out in the Strategic report on pages 17 – 20 of the
Annual Report and Note 1 on pages 190 – 194 of the financial statements.
In planning our audit, the financial impacts on the Group of climate change and the transition to a low carbon economy were
considered where these factors have the potential to directly or indirectly impact key judgements and estimates and related
assumptions within the financial statements. We worked with our internal environmental specialists in considering potential
climate change risk factors. Our risk assessment was based on:
• enquiries of senior management to understand the potential impact of climate change risk including physical risks to
producing assets, the potential changes to the macro-economic environment and the potential for the transition to a low
carbon environment to occur quicker than anticipated;
• reading and considering Glencore’s climate change report and position papers;
• considering, together with each of our component teams, immediate and possible longer-term impacts of climate change in
each of the Group’s main jurisdictions; and
• reading and considering external publications by recognised authorities on climate change such as the IEA’s World Energy
Outlook amongst others.
The principal audit risk that we have identified for our audit is that coal forecast assumptions (particularly coal price
assumptions and the expected economic lives of these assets) used in impairment testing may not appropriately reflect
anticipated changes in supply and demand due to climate change and the energy transition.
Our response to this principal audit risk and other climate risks that we considered relevant to the audit is summarised in the
Key Audit Matter 5.3 “Potential impact of climate change on the valuation of fossil fuel non-current assets” above.
7.2 Identification and scoping of components
Our Group audit was scoped by obtaining an understanding of the Group and its environment and assessing the risks of
material misstatement at the Group level. Our scoping considered both quantitative and qualitative factors including a
component’s contribution to financial metrics (revenue, adjusted EBIT, adjusted EBITDA, and non-current assets), production
output and qualitative criteria, such as being a significant development project or exhibiting particular risk factors. Based on
our assessment, the scope of our audit comprised 22 components (2022: 24 components), representing the Group’s most
material marketing operations and industrial assets.
Our Group audit used the work of 14 component audit teams (2022: 16 component audit teams) in 12 countries
(2022: 14 countries).
The following audit scoping was applied:
• 10 components (2022: 10 components) were subject to a full scope audit, and
• 12 components (2022: 14 components) were in scope for an audit of specified account balances where the extent of our
testing was based on our assessment of the risk of material misstatement of certain specific financial statement balances
and of the materiality of the Group’s operations at those locations.
These 22 components account for 78% of the Group’s net assets (2022: 77%), 91% of the Group’s revenue (2022: 90%) and 90% of
the Group’s adjusted EBITDA (2022: 82%).
At the parent entity level, we tested the consolidation process and carried out analytical procedures to confirm our conclusion
that there was no significant risk of material misstatement in the aggregated financial information of the remaining
components not subject to audit or an audit of specified account balances.
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Net Assets
Revenue
Adjusted EBITDA
Full audit scope
60%
Specific account
balances
18%
22%
Review and
analytical procedures
Full audit scope
84%
Specific account
balances
9%
7%
Review and
analytical procedures
Full audit scope
90%
Specific account
balances
0%
10%
Review and
analytical procedures
7.3 Working with other auditors
Detailed audit instructions were sent to the auditors of each in-scope component. These instructions identified the significant
audit risks, other areas of audit focus, the account balances, classes of transactions and disclosures considered material and
their relevant risks of material misstatement as assessed by the Group audit team. The instructions also set out certain audit
procedures to be performed and the information to be reported back to the Group audit team, and other matters relevant to
the audit.
For all in-scope components, the Group audit team was involved in the audit work performed by component auditors through
a combination of providing referral instructions, regular interaction with component teams during the year using video
conferencing tools, physical onsite visits for certain components, review and challenge of related component inter-office
reporting, their audit files and of findings from their work, and attendance of component audit closing video conference calls.
7.4 Our consideration of the control environment
Glencore relies on the effectiveness of a number of IT systems and applications to ensure that financial transactions are
recorded completely and accurately. The main financial accounting, reporting, trading and treasury systems were identified as
key IT systems relevant to our audit. The IT systems which are primarily managed from the centralised IT function in
Switzerland were tested by IT specialists who were part of the Group engagement team. Other IT systems were tested by
component IT specialists to determine whether controls within these IT systems could be relied upon. IT control deficiencies
relating to the review of user access rights and the management of privileged access accounts were identified in a number of
entities within the Group. Where centrally managed IT systems were impacted, mitigating controls were identified and/or
additional procedures were performed in order to adopt a control reliance approach. However, certain component teams were
unable to adopt a controls-based audit approach in the current year and accordingly, these teams extended the scope of their
audit procedures in response to the identified control deficiencies.
As discussed in the “Revenue recognition – valuation of level 3 financial instruments” key audit matter above, as improvements
in controls in the Group’s marketing businesses were either in progress or implemented during the year, we adopted a fully
substantive audit approach in relation to testing deal capture and valuation of financial instruments. Industrial activities are
generally decentralised and thus the design of controls and testing approach varied between components.
As described in the “Impairment and impairment reversals of non-current assets” key audit matter above, although we
observed improvements in a number of relevant controls over impairment, similar to the prior year, we found that the level of
review and documentation retained relating to certain judgements and key assumptions in complex models requires
improvement. This observation was also noted in other areas of the audit where complex models are prepared.
The Audit Committee has discussed these internal control deficiencies, and management’s actions to remediate them on page
129. As deficiencies in the control environment increase the risk of fraud and error within the financial statements, we
performed additional procedures to respond to the potential risks, including the risk of fraud as outlined in section 11 below.
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8. Other information
The other information comprises the information included in the annual report other than the financial statements and our
auditor’s report thereon. The directors are responsible for the other information contained within the annual report.
Our opinion on the financial statements does not cover the other information and we do not express any form of assurance
conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially
inconsistent with the financial statements, or our knowledge obtained in the course of the audit, or otherwise appears to be
materially misstated.
If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this
gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we
conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
9. Responsibilities of directors
As explained more fully in the statement of directors’ responsibilities, the directors are responsible for the preparation of the
financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors
determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether
due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the Group’s ability to continue as a going
concern, disclosing as applicable, matters related to going concern and using the going concern basis of accounting unless the
directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.
10. Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance
is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or
in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these
financial statements.
A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
11. Extent to which the audit was considered capable of detecting irregularities,
including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with
our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to
which our procedures are capable of detecting irregularities, including fraud, is detailed below.
11.1 Identifying and assessing potential risks related to irregularities
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance
with laws and regulations, we considered the following:
• the nature of the industry and sector, control environment and business performance including the design of the Group’s
remuneration policies, key drivers for remuneration, bonus levels and performance targets;
• the Group’s own assessment of the risks that irregularities may occur either as a result of fraud or error;
• results of our enquiries of senior management, internal audit, members of the legal, risk and compliance functions, and the
Audit and Investigations Committees about their own identification and assessment of the risks of irregularities, including
those that are specific to the Group’s sector;
• any matters we identified having obtained and reviewed the Group’s documentation of their policies and procedures
relating to:
– identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of non-
compliance;
– detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud;
and
– reviewing internal controls established to mitigate risks of fraud or non-compliance with laws and regulations;
• the matters discussed among the engagement team, including significant component audit teams, and relevant internal
specialists, including forensic, tax, mining, valuations and IT specialists, regarding how and where fraud might occur in the
financial statements and any potential indicators of fraud.
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Additional Information
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As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud
and identified the greatest potential for fraud in the following areas:
• the use of agents and intermediaries in certain higher risk jurisdictions, and other higher risk transaction types;
• the testing of impairment of non-current assets within the scope of IAS 36 Impairment of Non-current Assets;
• the use of supply chain finance arrangements and their classifications and disclosure within trade creditors;
• key sources of estimation uncertainty in the recognition and measurement of deferred tax assets and uncertain tax positions;
and
• valuation of level 3 unrealised forward physical contracts.
In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of
management override.
We also obtained an understanding of the legal and regulatory frameworks that the Group operates in, focusing on provisions
of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial
statements. The key laws and regulations we considered in this context included Companies (Jersey) Law 1991, Primary and
Secondary Listing Rules, Disclosure Guidance and Transparency Rules and related guidance and relevant tax laws.
In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements
but compliance with which may be fundamental to the Group’s ability to operate or to avoid a material penalty. These included
the US Foreign Corrupt Practices Act, the US Anti-Money Laundering regulations, the UK Bribery Act 2010 and the Group’s
operating licences and environmental regulations in the jurisdictions in which it operates.
11.2 Audit response to risks identified
As a result of performing the above, we identified “Impairments and impairment reversals of non-current assets”, “Government
investigations”, “Revenue recognition – valuation of level 3 financial instruments” and “Valuation of deferred tax assets and
uncertain tax positions” as key audit matters related to the potential risk of fraud or non-compliance with laws and regulations.
The key audit matters section of our report explains the matters in more detail and the specific procedures we performed in
response to those key audit matters.
In addition, our procedures to respond to risks identified included the following:
• inquiring of management, the Audit Committee, the Investigations Committee, General Counsel and the Group’s external legal
counsel concerning actual and potential litigation and claims;
• inquiring of management, the Audit Committee, the Investigations Committee, General Counsel and the Group’s external legal
counsel regarding whether the Group is in compliance with laws and regulations relating to fraud, money laundering, bribery
and corruption;
• reading minutes of meetings of those charged with governance, reviewing internal audit reports and reviewing correspondence
with relevant regulatory and taxation authorities, where applicable;
• obtaining an understanding of the Group’s business relationships with agents and intermediaries in certain high-risk jurisdictions
and the rationale for appointment;
• scrutinising higher risk expense accounts for evidence of improper payments in high risk jurisdictions;
• performing audit procedures to identify and investigate potentially suspicious payments to government officials, agents and
intermediaries; this was done by adding search parameters to our journal entry testing for key words relevant to potentially
fraudulent payments;
• working with our Deloitte forensic specialists to assist in the design of certain audit procedures in response to the risk of fraud;
• challenging management’s key judgements and assumptions for determining the recoverable amounts and credit adjustments for
trade advances and provisions for uncertain tax positions;
• using analytical tools to identify unrealised forward physical positions of increased audit interest and challenging the method and
inputs to those valuations;
• testing management’s identification of transactions that may have supply chain financing features, and challenging the nature of
such supply chain financing arrangements and whether they qualify for separate disclosure or classification as debt;
• performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material
misstatement due to fraud;
• performing focused analytical procedures on key financial metrics of non-significant components to identify any unusual or material
transactions that may indicate a risk of material misstatement and evaluating the business rationale of such transactions;
• reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of
relevant laws and regulations described as having a direct effect on the financial statements; and
• addressing the risk of fraud through management override of controls by testing the appropriateness of journal entries and other
adjustments; assessing whether the judgements made by management in making accounting estimates indicate a potential bias
and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members, including
internal specialists and all component audit teams, and remained alert to any indications of fraud or non-compliance with laws and
regulations throughout the audit.
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Additional Information
Independent Auditor’s Report to the Members of Glencore Plc continued
Report on other legal and regulatory requirements
12. Opinion on other matters prescribed by our engagement letter
In our opinion, the part of the Directors’ Remuneration Report to be audited has been properly prepared in accordance with
the provisions of the UK Companies Act 2006 as if that Act had applied to the company.
13. Corporate Governance Statement
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate
Governance Statement is materially consistent with the financial statements and our knowledge obtained during the audit:
• the directors’ statement with regards to the appropriateness of adopting the going concern basis of accounting and any
material uncertainties identified (set out on page 163);
• the directors’ explanation as to their assessment of the Group’s prospects, the period this assessment covers and why the
period is appropriate (set out on page 110);
• the directors' statement on fair, balanced and understandable (set out on page 164);
• the board’s confirmation that it has carried out a robust assessment of the emerging and principal risks (set out on page 128);
• the section of the annual report that describes the review of effectiveness of risk management and internal control systems
(set out on pages 105-118); and
• the section describing the work of the audit committee (set out on pages 129-130).
14. Matters on which we are required to report by exception
Adequacy of explanations received and accounting records
Under the Companies (Jersey) Law, 1991 we are required to report to you if, in our opinion:
• we have not received all the information and explanations we require for our audit; or
• proper accounting records have not been kept by the parent company, or proper returns adequate for our audit have not
been received from branches not visited by us; or
• the financial statements are not in agreement with the accounting records and returns.
We have nothing to report in respect of these matters.
15. Other matters which we are required to address
15.1 Auditor tenure
We were appointed by the Board of Directors on 22 August 2011 to audit the financial statements of Glencore plc for the year
ending 31 December 2011 and subsequent financial periods. Following a competitive tender process run by the Audit
Committee in 2021, we were reappointed as auditor of Glencore plc for the year ended 31 December 2022 and subsequent
years. The period of total uninterrupted engagement including previous renewals and reappointments of the firm as auditor of
Glencore plc is 13 years, covering the years ending 31 December 2011 to 31 December 2023. The lead audit partner has rotated
three times during this period, with the most recent rotation being after the 2022 audit.
15.2 Consistency of the audit report with the additional report to the Audit Committee
Our audit opinion is consistent with the additional reporting to the audit committee we are required to provide in accordance
with ISAs (UK).
16. Use of our report
This report is made solely to the company’s members, as a body, in accordance with Article 113A of the Companies (Jersey) Law,
1991. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to
state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this
report, or for the opinions we have formed.
As required by the Financial Conduct Authority (FCA) Disclosure Guidance and Transparency Rule (DTR) 4.1.15R – DTR 4.1.18R,
these financial statements form part of the Electronic Format Annual Financial Report filed on the National Storage
Mechanism of the FCA in accordance with DTR 4.1.15R – DTR 4.1.18R. This auditor’s report provides no assurance over whether
the Electronic Format Annual Financial Report has been prepared in compliance with DTR 4.1.15R – DTR 4.1.18R. We have
provided assurance on whether the Electronic Format Annual Financial Report has been prepared in compliance with DTR
4.1.15R – DTR 4.1.18R and will publicly report separately to the members on this.
Robert Topley FCA
for and on behalf of Deloitte LLP
Recognised Auditor
London, United Kingdom
20 March 2024
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Corporate Governance
Financial Statements
Additional Information
Consolidated statement of income
For the year ended 31 December 2023
US$ million
Revenue
Cost of goods sold1
Net expected credit losses1
Selling and administrative expenses
Share of income from associates and joint ventures
Gain on acquisitions and disposals of non-current assets
Other income
Other expense
Impairments of non-current assets
Impairments of financial assets
Dividend income
Interest income
Interest expense
Income before income taxes
Income tax expense
Income for the year
Attributable to:
Non-controlling interests
Equity holders of the Parent
Earnings per share:
Basic (US$)
Diluted (US$)
Notes
3
12/14
11
4
5
5
7
7
11
6
6
8
2023
217,829
(207,046)
21
(2,105)
1,337
850
176
(1,267)
(2,264)
(220)
6
615
(2,515)
5,417
(2,207)
3,210
2022
255,984
(228,467)
(256)
(2,430)
2,300
1,287
365
(1,276)
(3,285)
(52)
45
435
(1,771)
22,879
(6,368)
16,511
(1,070)
4,280
(809)
17,320
18
18
0.34
0.34
1.33
1.32
1
In the current period, net expected credit losses on financial assets at amortised cost have been disaggregated from cost of goods sold. The prior period
balances have been restated to conform with current period presentation.
All amounts presented are derived from continuing operations. The accompanying notes are an integral part of the consolidated
financial statements.
180………………………………………………………
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Additional Information
Consolidated statement of comprehensive income
For the year ended 31 December 2023
US$ million
Income for the year
Notes
2023
3,210
2022
16,511
Other comprehensive loss
Items not to be reclassified to the statement of income in subsequent periods:
Defined benefit plan remeasurements
Tax charge on defined benefit plan remeasurements
Fair value loss on equity investments accounted for at fair value through other
comprehensive income
Tax credit on equity investments accounted for at fair value through other
comprehensive income
(Loss)/gain due to changes in credit risk on financial liabilities accounted for at fair value
through profit and loss
Net items not to be reclassified to the statement of income in subsequent periods
Items that have been or may be reclassified to the statement of income in subsequent
periods:
Exchange loss on translation of foreign operations
Items recycled to the statement of income1
Gain/(loss) on cash flow hedges
Tax credit on loss on cash flow hedges
Cash flow hedges reclassified to the statement of income
Tax charge on cash flow hedges reclassified to the statement of income
Share of other comprehensive income/(loss) from associates and joint ventures
Net items that have been or may be reclassified to the statement of income
in subsequent periods
Other comprehensive loss
Total comprehensive income
Attributable to:
Non-controlling interests
Equity holders of the Parent
24
11
5/26
11
(14)
(19)
(94)
–
(12)
(139)
(190)
(3)
203
2
(151)
–
16
298
(67)
(1,124)
2
2
(889)
(307)
481
(38)
2
65
(2)
(100)
(123)
(262)
2,948
101
(788)
15,723
(1,092)
4,040
(824)
16,547
1 Comprises foreign exchange translation losses recycled upon disposal of subsidiaries ($3 million)(2022: $50 million)(see notes 17 and 26) and restructuring of
intragroup debt ($Nil)(2022: $431 million)(see note 5).
All amounts presented are derived from continuing operations. The accompanying notes are an integral part of the consolidated
financial statements.
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Financial Statements
Additional Information
Consolidated statement of financial position
As at 31 December 2023
Notes
2023
2022
9
10
11
11
12
28
13
8
13
14
28
8
15
16
17
34
21
22
8
28
23
24
21
25
22
23
28
8
16
39,233
6,002
8,823
513
2,876
367
623
1,390
59,827
31,569
18,385
5,187
1,229
317
1,925
58,612
5,430
64,042
123,869
136
43,444
43,580
(5,343)
38,237
21,275
1,294
2,970
1,710
8,105
800
36,154
10,966
29,289
1,044
1,108
3,671
1,850
47,928
1,550
49,478
123,869
39,564
6,160
11,878
456
2,654
206
605
1,837
63,360
33,460
24,565
6,109
401
325
1,923
66,783
2,440
69,223
132,583
141
49,269
49,410
(4,191)
45,219
18,851
1,547
3,651
2,055
7,163
677
33,944
9,926
29,726
1,060
1,425
4,882
4,660
51,679
1,741
53,420
132,583
US$ million
Assets
Non-current assets
Property, plant and equipment
Intangible assets
Investments in associates and joint ventures
Other investments
Advances and loans
Other financial assets
Inventories
Deferred tax assets
Current assets
Inventories
Accounts receivable
Other financial assets
Income tax receivable
Prepaid expenses
Cash and cash equivalents
Assets held for sale
Total assets
Equity and liabilities
Capital and reserves – attributable to equity holders
Share capital
Reserves and retained earnings
Non-controlling interests
Total equity
Non-current liabilities
Borrowings
Deferred income
Deferred tax liabilities
Other financial liabilities
Provisions
Post-retirement and other employee benefits
Current liabilities
Borrowings
Accounts payable
Deferred income
Provisions
Other financial liabilities
Income tax payable
Liabilities held for sale
Total equity and liabilities
The accompanying notes are an integral part of the consolidated financial statements.
182………………………………………………………
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Financial Statements
Additional Information
Consolidated statement of cash flows
For the year ended 31 December 2023
US$ million
Operating activities
Income before income taxes
Adjustments for:
Depreciation and amortisation
Share of income from associates and joint ventures
Deferred income and other non-current provisions
Gain on acquisitions and disposals of non-current assets
Unrealised mark-to-market movements on other investments
Impairments
Other non-cash items – net1
Interest expense – net
Cash generated by operating activities before working capital changes, interest and tax
Working capital changes
Decrease/(increase) in accounts receivable2
Decrease/(increase) in inventories
Decrease in accounts payable3
Total working capital changes
Income taxes paid
Interest received
Interest paid
Net cash generated by operating activities
Investing activities
Increase in long-term advances and loans
Net cash (used)/received in acquisition of subsidiaries
Net cash received from disposal of subsidiaries
Purchase of investments
Proceeds from sale of investments
Purchase of property, plant and equipment
Proceeds from sale of property, plant and equipment
Dividends received from associates and joint ventures
Net cash used by investing activities
1 See reconciliation below.
2 Includes movements in other financial assets, prepaid expenses and other long-term advances and loans.
3 Includes movements in other financial liabilities, provisions and deferred income.
Other non-cash items comprise the following:
US$ million
Net foreign exchange (gains)/losses
Closed sites rehabilitation provisioning
Share based and deferred remuneration costs
Other
Total
Notes
2023
2022
5,417
22,879
11
4
5
7
6
12
26
26
11
Notes
5
5
20
5,981
(1,337)
(77)
(850)
103
2,484
1,496
1,900
15,117
7,544
1,978
(5,770)
3,752
(6,503)
552
(1,882)
11,036
–
(494)
838
(946)
56
(4,484)
147
1,328
(3,555)
2023
(46)
503
742
297
1,496
6,987
(2,300)
65
(1,287)
106
3,337
1,792
1,336
32,915
(4,942)
(5,035)
(3,292)
(13,269)
(4,881)
234
(1,340)
13,659
(200)
321
455
(476)
604
(4,177)
63
1,691
(1,719)
2022
349
370
1,134
(61)
1,792
All amounts presented are derived from continuing operations. The accompanying notes are an integral part of the consolidated
financial statements.
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183
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Consolidated statement of cash flows continued
For the year ended 31 December 2023
US$ million
Financing activities1
Proceeds from issuance of capital market notes2
Repayment of capital market notes
Repurchase of capital market notes
Proceeds from/(repayment of) revolving credit facility
Proceeds from other non-current borrowings
Repayment of other non-current borrowings
Repayment of lease liabilities
Margin receipts/(payments) in respect of financing-related hedging activities
Proceeds from current borrowings
Proceeds from/(repayment of) US commercial papers
Net proceeds paid on acquisition of non-controlling interests in subsidiaries
Return of capital/distributions to non-controlling interests
Purchase of own shares
Disposal of own shares3
Distributions paid to equity holders of the Parent
Net cash used by financing activities
Decrease in cash and cash equivalents
Effect of foreign exchange rate changes
Cash and cash equivalents, beginning of year
Cash and cash equivalents, end of year
Cash and cash equivalents reported in the statement of financial position
Cash and cash equivalents attributable to assets held for sale
Notes
2023
2022
3,474
(3,159)
–
1,289
–
(314)
(616)
897
430
711
(68)
(8)
(3,672)
–
(6,450)
(7,486)
(5)
(6)
1,998
1,987
1,925
62
–
(2,850)
(103)
(2,563)
430
(73)
(577)
(1,824)
3,306
(1,407)
–
(442)
(2,503)
238
(4,832)
(13,200)
(1,260)
(50)
3,308
1,998
1,923
75
17
19
15
16
1 Refer to note 21 for reconciliation of movement in borrowings.
2 Amount net of issuance costs relating to capital market notes of $26 million (2022: $Nil).
3 Comprises primarily cash received from the exercise of share-based option awards assumed in previous business combinations. There are no outstanding
options as at 31 December 2023 and 2022.
All amounts presented are derived from continuing operations. The accompanying notes are an integral part of the consolidated
financial statements.
184………………………………………………………
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Financial Statements
Additional Information
Consolidated statement of changes in equity
for the year ended 31 December 2023
1 January 2022
Income for the year
Other comprehensive income/(loss)
Total comprehensive income
Own share disposal (see note 17)
Own share purchases (see note 17)
Equity-settled share-based
expenses (see note 20)
Change in ownership interest
in subsidiaries (see note 34)
Acquisition/disposal of business
(see note 26)
Reclassifications
Cancellation of shares (see note 20)
Distributions paid (see note 19)
31 December 2022
Retained
earnings
7,914
17,320
129
17,449
(81)
–
Share
premium
43,679
–
–
–
–
–
Other
reserves
(Note 17)
(5,931)
–
(902)
(902)
–
–
Own
shares
(Note 17)
(5,877)
–
–
–
430
(2,549)
Total
reserves
and
retained
earnings
39,785
17,320
(773)
16,547
349
(2,549)
Total equity
attributable
to equity
holders
39,931
17,320
(773)
16,547
349
(2,549)
Non-
controlling
interests
(Note 34)
(3,014)
(809)
(15)
(824)
–
–
Share
capital
146
–
–
–
–
–
(32)
–
–
–
–
(3)
–
–
(32)
(3)
–
(4)
–
–
25,246
–
–
(2,130)
(4,832)
36,717
–
3
–
–
(6,833)
–
–
2,135
–
(5,861)
–
(1)
5
(4,832)
49,269
–
–
–
–
(5)
–
141
(32)
(3)
–
(1)
–
(4,832)
49,410
–
115
(28)
2
–
(442)
(4,191)
(28)
1
–
(5,274)
45,219
Total
equity
36,917
16,511
(788)
15,723
349
(2,549)
(32)
112
1 January 2023
Income for the year
Other comprehensive loss
Total comprehensive income
Own share disposal (see note 17)
Own share purchases (see note 17)
Equity-settled share-based
expenses (see note 20)
Change in ownership interest
in subsidiaries (see note 34)
Acquisition/disposal of business
(see note 26)
Reclassifications
Cancellation of shares (see note 20)
Distributions paid (see note 19)
31 December 2023
Retained
earnings
25,246
4,280
(17)
4,263
(39)
–
Share
premium
36,717
–
–
–
–
–
Other
reserves
(Note 17)
(6,833)
–
(223)
(223)
–
–
Own
shares
(Note 17)
(5,861)
–
–
–
130
(3,672)
Total
reserves
and
retained
earnings
49,269
4,280
(240)
4,040
91
(3,672)
Total equity
attributable
to equity
holders
49,410
4,280
(240)
4,040
91
(3,672)
Non-
controlling
interests
(Note 34)
(4,191)
(1,070)
(22)
(1,092)
–
–
Share
capital
141
–
–
–
–
–
Total
equity
45,219
3,210
(262)
2,948
91
(3,672)
137
–
–
–
–
24
–
–
137
24
–
–
–
–
29,607
–
–
(1,898)
(6,450)
28,369
–
–
–
–
(7,032)
–
–
1,903
–
(7,500)
–
–
5
(6,450)
43,444
–
–
–
–
(5)
–
136
137
24
–
137
(60)
(36)
–
–
–
(6,450)
43,580
20
(12)
–
(8)
(5,343)
20
(12)
–
(6,458)
38,237
The accompanying notes are an integral part of the consolidated financial statements.
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Financial Statements
Additional Information
Notes to the financial statements
1. Accounting policies
Corporate information
Glencore plc (the ‘Company’, ‘Parent’, the ‘Group’ or ‘Glencore’), is a leading integrated producer and marketer of natural resources,
with worldwide activities in the production, refinement, processing, storage, transport and marketing of metals and minerals and
energy products. Glencore operates on a global scale, marketing and distributing physical commodities sourced from third party
producers and own production to industrial consumers, such as those in the battery, electronic, construction, automotive, steel,
energy and oil industries. Glencore also provides financing, logistics and other services to producers and consumers of commodities.
In this regard, Glencore seeks to capture value throughout the commodity supply chain. Glencore’s long experience as a commodity
producer and merchant has allowed it to develop and build upon its expertise in the commodities which it markets and cultivate
long-term relationships with a broad supplier and customer base across diverse industries and in multiple geographic regions.
Glencore is a publicly traded limited company incorporated in Jersey, 13 Castle Street, St Helier and domiciled in Switzerland. Its
ordinary shares are traded on the London and Johannesburg stock exchanges.
These consolidated financial statements were authorised for issue in accordance with a Directors’ resolution on 20 March 2024.
Statement of compliance
The consolidated financial statements have been prepared in accordance with the recognition and measurement criteria of:
• United Kingdom adopted international accounting standards; and
• International Financial Reporting Standards (IFRSs) as issued by the International Accounting Standards Board (IASB).
Climate change-related considerations
The Group remains committed to its industrial emissions (Scope 1, 2 and 3) reduction targets, relative to a restated 2019 baseline, of
15% by the end of 2026, 25% by the end of 2030 and 50% by the end of 2035, and has an ambition to achieve, subject to a supportive
policy environment, net zero industrial emissions by 2050. The Group is committed to reaching the 2026, 2030 and 2035 targets
without reliance on coordinated changes in government policies. We recognise that to achieve our 2050 net zero ambition there is a
need for significant global technological evolution and advancement, and coordinated and supportive government policies, including
incentives to drive accelerated uptake of lower-carbon and decarbonisation technologies, and market-based regulations governing
industrial practices that drive a competitive, least-cost emissions reduction approach, most of which are not within our direct control
or ability to materially influence but are critical to our ability to achieve our net zero emissions ambition by the end of 2050. Our long-
term ambition is therefore subject to such a supportive policy environment and, for that reason, we have expressed it as an ambition
rather than a target, which is more appropriate for activities and actions deemed within our direct control.
The accounting-related measurement and disclosure items that are most impacted by our commitments, and climate change risk
more generally, relate to those areas of the financial statements that are prepared under the historical cost convention and are
subject to estimation uncertainties in the medium to long term. Climate change impacts can also introduce more volatility in assets
and liabilities carried at fair value. Future changes to the Group’s climate change strategy or realisation of global decarbonisation
ambitions quicker than currently anticipated may impact some of the Group’s significant judgements and key estimates and result in
material changes to financial results and the carrying values of certain assets and liabilities in future reporting periods. The Group’s
current climate change strategy is reflected in the Group’s significant judgements and key estimates, and therefore the Financial
Statements, as follows:
(i) Property, plant and equipment and Intangible assets – estimation of the remaining useful economic life of assets for
depreciation and amortisation purposes
Property, plant and equipment and intangible assets are depreciated / amortised to estimated residual values over the estimated
useful lives of the specific assets concerned, or the estimated remaining life of the associated mine, field or lease, using a straight-line
or a units of production over recoverable reserves method. The estimated useful lives of our specific assets and / or operations (and
therefore the rate of depreciation / amortisation) aligns with our climate change commitments and ambition. Property, plant and
equipment and intangible assets policies are further covered below and within impairment and impairment reversal estimation
uncertainties, together with key estimates and sensitivities pertaining to a reasonably possible change in the realisation of global
decarbonisation ambitions, which could also change the useful economic lives of the related assets.
(ii) Restoration, rehabilitation and decommissioning provisions – estimation of the timing of closure and rehabilitation activities
A provision for future restoration, rehabilitation and decommissioning costs requires estimates and assumptions to be made around
the relevant regulatory framework, the magnitude of the possible disturbance and the timing, extent and costs of the required
closure and rehabilitation activities. Many of these rehabilitation and decommissioning events are expected to take place when the
underlying commercial reserves are extracted and the operations move into closure mode. Our current estimates of the timing of
these closure activities align with the trajectory of our industrial emissions reduction targets and ambition.
Sensitivities pertaining to a reasonably possible change in the realisation of global decarbonisation ambitions (i.e. the timing of the
restoration, rehabilitation and decommissioning costs) of our fossil fuel-related obligations are outlined below in the key estimation
uncertainty - restoration, rehabilitation and decommissioning costs.
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1. Accounting policies continued
(iii) Property, plant and equipment and Intangible assets (including the carrying value of goodwill in our coal marketing CGU) –
estimation of the valuation of assets and potential impairment charges or reversals
The Group acknowledges that there is a wide range of possible energy transition scenarios, including those aligned with the Paris
Agreement goals, that would indicate different outcomes for individual commodities. The decarbonisation transition could result in
increasing or decreasing demand for the Group’s various commodities, due to policy, regulatory (including carbon pricing
mechanisms), legal, technological, market or societal responses to climate change. On the negative side, these may result in some or
all of a cash-generating unit’s reserves becoming uneconomic to extract and / or our coal marketing CGU no longer being able to
generate returns and realise the benefits of its associated goodwill balance.
We use carbon price scenarios to assess the potential impacts on commodity-specific operating cost curves and related supply /
demand outcomes, arising from existing and future potential carbon pricing regulation. A key component of this analysis is to
understand the potential development of a range of underlying cost curve structures over time and to consider, identify and make
reasonable judgements, on the extent to which costs are likely to be passed onto the end consumer. Our analysis shows that under
the IEA’s NZE2050 scenario, marginal supply costs would increase by at least 10% to potentially over 60%, for the range of our most
relevant and material commodities. We expect the rising cost of carbon will increase operating costs, increasing the cost of
production, which, in turn, would ordinarily be passed on to consumers. In fact, first and second quartile (below average) emission
intensity producers, where we see the weighted average of our portfolio residing, are likely to see margin expansion.
Notwithstanding the above, for coal and other fossil fuels, should global decarbonisation ambitions materialise along an Announced
Pledges scenario or other more ambitious net zero scenario, essentially an accelerated displacement of coal and other fossil fuels as
an energy source, the potential impact on the current carrying value of these cash-generating units is outlined below in the key
estimation uncertainty – impairments and impairment reversals (Sensitivity to demand for fossil fuels). It should be noted that, under
accelerated emission reduction scenarios, we would expect to see positive valuation developments within our industrial production
portfolio exposed to the metals currently required to deliver such rapid decarbonisation scenarios, including copper, nickel and cobalt.
Critical accounting judgements and key sources of estimation uncertainty
The preparation of the consolidated financial statements requires management to make judgements, estimates and assumptions
that affect the reported amounts of assets and liabilities as well as the disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates and assumptions
are continually evaluated and are based on historical experience and other factors, including expectations of future events that are
believed to be reasonable and relevant under the circumstances, independent estimates, quoted market prices and common
industry standard modelling techniques. Actual outcomes could result in a material adjustment to the carrying amount of assets or
liabilities affected in future periods.
Glencore has identified the following areas as being critical to understanding Glencore’s financial position as they require
management to make complex and/or subjective judgements, estimates and assumptions about matters that are inherently
uncertain:
Critical accounting judgements
In the process of applying Glencore’s accounting policies, management has made the following judgements based on the relevant
facts and circumstances including macro-economic circumstances and, where applicable, interpretation of underlying agreements,
which have the most significant effect on the amounts recognised in the consolidated financial statements.
(i) Determination of control of subsidiaries and joint arrangements
Judgement is required to determine when Glencore has control of subsidiaries or joint control of joint or other unincorporated
arrangements. This requires an assessment of the relevant activities (those relating to the operating and capital decisions of the
arrangement, such as: the approval of the capital expenditure programme for each year, and appointing, remunerating
and terminating the key management personnel or service providers of the operations) and when the decisions in relation to those
activities are under the control of Glencore or require unanimous consent. See note 26 for a summary of the acquisitions of
subsidiaries completed during 2023 and 2022.
Judgement is also required in determining the classification of a joint arrangement between a joint venture or a joint operation
through an evaluation of the rights and obligations arising from the arrangement and in particular, if the joint arrangement has been
structured through a separate vehicle, further consideration is required of whether:
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1. Accounting policies continued
(1) the legal form of the separate vehicle gives the parties rights to the assets and obligations for the liabilities;
(2) the contractual terms and conditions give the parties rights to the assets and obligations for the liabilities; and
(3) other facts and circumstances give the parties rights to the assets and obligations for the liabilities.
Joint arrangements in which the primary activity is the provision of output to the shareholders, typically convey substantially all the
economic benefits of the assets to the parties and judgement is required in assessing whether the terms of the offtake agreements
and any other obligations for liabilities of the arrangement result in the parties being substantially the only source of cash flows
contributing to the continuity of the operations of the arrangement.
Certain joint arrangements that are structured through separate vehicles including Collahuasi and Viterra are accounted for as joint
ventures. The investment in Viterra has been classified as an asset held for sale as at 31 December 2023 (see note 16). The Collahuasi
arrangement is primarily designed for the provision of output to the shareholders sharing joint control, the offtake terms of which are
at prevailing market prices and the parties are not obligated to cover any potential funding shortfalls. In management’s judgement,
Glencore is not the only possible source of funding and does not have a direct or indirect obligation to the liabilities of the
arrangement, but rather shares in its net assets and, therefore, such arrangements have been accounted for as joint ventures.
Differing conclusions around these judgements may materially impact how these businesses are presented in the consolidated
financial statements – under the full consolidation method, equity method or recognition of Glencore’s share of assets, liabilities,
revenue and expenses, including any assets or liabilities held jointly. See note 11 for a summary of these joint arrangements.
(ii) Classification of transactions which contain a financing element (notes 21, 22 and 25)
Transactions for the purchase of commodities may contain a financing element such as extended payment terms. Under such an
arrangement, a financial institution may issue a letter of credit on behalf of Glencore and act as the paying party upon delivery of
product by the supplier and Glencore will subsequently settle the liability directly with the financial institution, generally from 30 up to
90 days after physical supply. Judgement is required to determine the most appropriate classification and presentation of these
transactions within the statements of cash flows and financial position. In determining the appropriate classification, management
considers the underlying economic substance of the transaction and the significance of the financing element to the transaction.
Typically, the economic substance of the transaction is determined to be operating in nature where the financing element is
insignificant and the time frame in which the original arrangement is extended by is consistent and within supply terms commonly
provided in the market up to 90 days. As a result, the entire cash flow is presented as operating in the statement of cash flows with a
corresponding trade payable in the statement of financial position. As at 31 December 2023, trade payables include $6,860 million
(2022: $7,504 million) of such liabilities arising from supplier financing arrangements, the weighted average of which extended
settlement of the original payable to 77 days (2022: 67 days) after physical supply and are due for settlement 24 days (2022: 35 days)
after year end. There was no significant exposure to any individual financial institution under these arrangements. These payables are
not included within net funding and net debt as defined in the APMs section. Should the substance of the transaction be determined
to be financing in nature, it is presented as short-term borrowings and the resulting cash movements presented as financing in the
statement of cash flows.
(iii) Classification of physical liquefied natural gas (LNG) purchase and sale contracts (notes 28 and 29)
Judgement is required to determine the appropriate classification of physical LNG purchase and sale contracts as being measured
within the scope of IFRS 9 at fair value through profit and loss or as executory contracts. This requires an assessment of whether the
contracts to buy or sell LNG (a non-financial item) can be settled net in cash or with another financial instrument, or by exchanging
financial instruments, as if the contracts were financial instruments, and whether there is a past practice of net settling similar
contracts. Those physical LNG contracts that can be net settled are considered to be derivatives, measured at fair value through profit
or loss (see notes 28 and 29). Contracts that do not meet the definition of derivatives are considered own-use contracts and are to be
accounted for as executory contracts. Differing conclusions around classification of these contracts, may materially impact their
presentation as financial assets or liabilities and any fair value adjustments recognised through profit and loss. As at 31 December
2023, the net fair value of physical LNG contracts on the statement of financial position is $760 million (2022: $2,533 million),
comprising a $760 million forward physical asset and a $Nil forward physical liability (2022: $2,552 million forward physical asset and
$19 million forward physical liability). No physical LNG forward contracts were accounted for as executory contracts.
(iv) Investigations by regulatory and enforcement authorities and claims against the Company in connection with the
investigations – Critical judgement in relation to whether a present obligation exists (note 32).
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1. Accounting policies continued
(v) Impact of carbon pricing
In determining accounting estimates such as the recoverable amount of non-current assets, the Group has assumed that future
increases in carbon costs will be reflected in commodity prices and therefore passed onto the end consumer - refer to climate
change-related considerations above. No material change to the Group’s related accounting estimates is expected within the next
financial year as a result of this judgement.
Key sources of estimation uncertainty
In the process of applying Glencore’s accounting policies, management has made key estimates and assumptions concerning the
future and other key sources of estimation uncertainty. The key assumptions and estimates at the reporting date that have a
significant risk of resulting in a material adjustment to the carrying amount of assets and liabilities within the next financial year, are
described below. Actual results may differ from these estimates under different assumptions and conditions and may materially
affect financial results or the financial position reported in future periods.
(i) Recognition of deferred tax assets and uncertain tax positions (note 8)
Deferred tax assets are recognised only to the extent it is considered probable that those assets will be recoverable. This involves an
assessment of when those deferred tax assets are likely to reverse, and a judgement as to whether there will be sufficient taxable
income available to offset the tax assets when they do reverse. These judgements and estimates are subject to risk and uncertainty
and therefore, to the extent assumptions regarding future profitability change, there can be a material increase or decrease in the
amounts recognised in the consolidated statement of financial position within the next financial year, specifically the deferred tax
asset and uncertain tax position of the Group’s DRC operations as outlined in note 8. The recoverability of the Group’s deferred tax
assets and the completeness and accuracy of its uncertain tax positions, including the estimates and assumptions contained therein
are reviewed regularly by management.
(ii) Impairments and impairment reversals (note 7)
Investments in associates and joint ventures, advances and loans, property, plant and equipment and intangible assets are reviewed
for impairment whenever events or changes in circumstances indicate that the carrying value of an individual asset or a cash-
generating unit (CGU) may not be fully recoverable, or at least annually for CGUs to which goodwill and other indefinite life intangible
assets have been allocated. Indicators of impairment may include changes in the Group’s operating and economic assumptions,
including those arising from changes in reserves or mine planning, updates to the Group’s commodity supply, demand and price
forecasts, or the possible impacts from emerging risks such as those related to climate change and the transition to a low-carbon
economy. If an asset or CGU’s recoverable amount is less than its carrying amount, an impairment loss is recognised in the
consolidated statement of income. For those assets or CGUs which were impaired in prior periods, if their recoverable amount
exceeds their carrying amount, an impairment reversal is recorded in the consolidated statement of income. Future cash flow
estimates which are used to calculate the asset’s or CGU’s recoverable amount are discounted using asset or CGU-specific discount
rates and are based on expectations about future operations (including their alignment with our emissions reduction targets and
long-term ambition), using a combination of internal sources and those inputs available to a market participant, which primarily
comprise estimates about production and sales volumes, commodity prices (considering current and future prices and price trends
including factors such as the current global trajectory of climate change), legally enacted carbon taxes, reserves and resources,
operating costs and capital expenditures. Estimates are reviewed regularly by management. Changes in such estimates and in
particular, deterioration in the commodity pricing outlook, could impact the recoverable amounts of these assets or CGUs, whereby
some or all of the carrying amount may be impaired or the impairment charge reversed (if pricing outlook improves significantly or
the service potential of the asset or CGU has otherwise increased from the time of the previous impairment) with the impact
recorded in the statement of income.
As referred to above and further described below in the ‘impairment or impairment reversals’ accounting policy, the Group carries
out, at least annually, an impairment assessment. Following this review, indicators of impairment or impairment reversal were
identified for various CGUs, including those due to changes in the underlying commodity price environment most influencing the
respective operation. The Group assessed the recoverable amounts of these CGUs and as at 31 December 2023, except for those CGUs
disclosed in note 7, the estimated recoverable amounts exceeded the carrying values. For certain CGUs where no impairment was
recognised, should there be a significant deterioration or improvement in the key assumptions, a material impairment or reversal
could result within the next financial year. A summary of the carrying values, the key / most sensitive assumptions and a sensitivity
impact of potential movements in these assumptions for each such CGU with limited headroom (relative to its estimated recoverable
amount) is shown below. In providing sensitivity analysis (and particularly on commodity price assumptions), a 10% change,
representing a typical deviation parameter common in the industry, has generally been provided. Where a higher or lower
percentage is reasonably possible on an operational assumption, this has been clearly identified.
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1. Accounting policies continued
US$ million
Cash-generating unit
Mt Isa zinc
KCC copper/cobalt
Coal South Africa
Capital
employed1
Discount
rate2
Short-to long-term
price assumptions
Decrease/(increase)
in price of 10%3
Increase/(decrease)
in discount rate of 1%
Potential impairments/(reversal of impairments) resulting
from changes in key assumptions
656
3,773
1,845
11.8%
15.8%
10.1%
Zn: 2,476 - 2,700
Cu: 8,196 - 8,500
Co4: 20,668 - 37,203
API4: $118/t flat
382
931
304
505
(345)
–
–
–
60
183
79
(67)
–
–
1 Capital employed includes property, plant and equipment, non-current inventory, less rehabilitation provisions and net deferred tax liabilities.
2 Discount rates expressed on a real terms, post-tax basis.
3 Across the curve.
4 Cobalt hydroxide price.
Climate change (additional illustrative disclosures)
The disclosures in note 7 related to sensitivities to key assumptions for CGUs that have been impaired in the period, together with the
above disclosures related to CGUs with limited headroom, consider the effects of reasonably possible changes in key assumptions for
the next financial year.
All other sensitivities below are reasonably possible changes in assumptions beyond the next financial year, and are therefore not
considered to be key sources of estimation uncertainty at the reporting date.
Energy fossil fuels industrial operations
Our base case price assessment takes into account the short-, medium- and longer-term seaborne thermal coal demand outlook.
Achieving our net zero ambition by the end of 2050 assumes significant global technological evolution and advancement, and
coordinated and supportive government policies, including incentives to drive accelerated uptake of lower-carbon and
decarbonisation technologies, and market-based regulations governing industrial practices that drive a competitive, least-cost
emissions reduction approach, most of which are not within our direct control or ability to materially influence. In particular, economic
and regulatory incentivisation of such shift, whether through carbon pricing and / or incentives to drive accelerated uptake of lower-
carbon and decarbonisation technologies, could result in different financial results on the same tonnage profile.
Our assessment applies a value in use methodology. Glencore is not progressing thermal coal greenfield investments. However, we
plan to continue to progress selective brownfield coal extensions or expansions at existing mines as included in our life of mine plans,
while continuing to be a responsible steward of these assets, as we progress the phase-down of our global coal portfolio. We assume
that through the remaining life of mines, there will continue to be a market for thermal coal at a real Newcastle FOB export price of
$128/tonne (6,000 NAR), South African FOB export price of $118/tonne and Colombian FOB price of $105/tonne, which represents our
best current estimate of long-term pricing based on our view of projected likely supply and demand fundamentals and the industry
cost structure.
Notwithstanding these assumptions, we present illustrative impairments arising under alternate price scenarios. The review and
refresh of Glencore’s Climate Action Transition Plan (CATP) in 2023 was informed by the latest IEA scenarios as published in their
annual World Energy Outlook. In particular, the 2023 price sensitivities are informed by the IEA’s latest World Energy Outlook 2023
(WEO 2023) climate scenarios, described below:
• IEA’s Stated Policies Scenario (SPS) (WEO 2023 prices) – a pathway based on full implementation of current policy frameworks;
• IEA’s Announced Pledges Scenario (APS) (WEO 2023 prices) – a pathway based on implementation on time and in full of
governments’ announced policy pledges including commitments made in updated Nationally Determined Contributions;
• IEA’s Net Zero Emissions by 2050 Scenario (NZE) (WEO 2023 prices) – a pathway for the global energy sector to achieve net zero
emissions by 2050.
In addition, for illustrative purposes, we have shown a Complete Displacement Scenario (CDS) – reflecting the impact of fossil fuels
being immediately displaced as an energy source and the resulting immediate fall in commodity prices to zero.
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Notes to the financial statements continued
1. Accounting policies continued
Our life of mine planning reflects operating cash flows which are consistent with achieving our emissions reduction targets and
progression towards our 2050 net zero emissions ambition. Overall our industrial portfolio’s production is heavily weighted towards
the earlier part of these time frames. Based on the life of mine plan and remaining production as at 31 December 2023, we have
illustrated this by showing the year in which 50% and 80% of saleable coal would be expected to be extracted under our current plans,
being 2030 and 2037, respectively. If and while there is demand for coal, and it is economic to do so, we plan to continue to operate
our mines to the end of their economic life and in accordance with our climate commitments.
The sensitivities are presented on price alone and assume no mitigating actions; therefore the impairments in each scenario are likely
higher than would transpire. In practice, in a sustained low price environment, management would alter mine plans to cut operating
and capital costs, potentially at the expense of future volumes, in order to reduce the overall NPV impact.
The SPS, APS and NZE sensitivity prices adopted are those included in the documentation to WEO 2023, except that IEA thermal
coal prices are on a delivered basis. These have been adjusted to FOB pricing on the basis of forward freight costs. Furthermore, in
determining the Colombian FOB price, we have used a weighting of the IEA Japan and IEA European prices to take into account that
Colombian coal sold from Cerrejón is likely to be delivered to a combination of different markets in the future as coal demand in
Europe declines.
The IEA assumes, in each scenario, additional decarbonisation measures leading to declining fossil fuel prices by the years 2030 and
2050, anchored in each case in a 2022 baseline. For the purpose of our climate change sensitivities below, we have assumed linear
progression of prices between these points, except that since the 2022 baseline reflects particularly high energy prices, which is no
longer the case in 2023, we substituted spot December 2023 pricing for calendar 2024, as shown, with linear progression thereafter to
the IEA’s 2030 price point. Our base case reflects higher longer-term prices than in each of the IEA’s climate scenarios reflecting our
assessment of the supply and demand outlook and the industry cost structure.
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1. Accounting policies continued
US$ million
Base case assumptions in life of mine plan:
– LOM saleable tonnes (Glencore consolidated) (million tonnes)/
(million bbls)
– projected year when 50% LOM tonnage / reserves depleted
– projected year when 80% LOM tonnage / reserves depleted
– long-term price (Newcastle FOB / API4 FOB / Col FOB) ($/t) /
(Brent oil price) ($/bbl) (real terms)
– discount rate applied (ranges represent
opencut / underground)
Benchmark prices over LOM in selected scenarios ($/t, $/bbl):
– IEA SPS
– IEA APS
– IEA NZE
– CDS
Carrying value of non-current capital employed as at
31 December 2023
Impairment arising in selected scenarios:
– IEA SPS
– IEA APS
– IEA NZE
– CDS1
Breakdown of non-current capital employed as at 31 December
2023:
Property, plant and equipment and intangible assets
Investments in associates and other investments
Deferred tax liabilities
Non-current provisions
Other non-current net assets/(liabilities)
Cash-generating unit
Thermal
Australia
South Africa
Cerrejón
Total
thermal
coal
Oil E&P
930
2031
2038
128
290
2032
2040
118
240
2028
2031
105
2030
2037
8.9-9.5%
10.1%
10.9%
2024 - '30 - '50 2024 - '30 - '50 2024 - '30 - '50
92 - 77 - 67
92 - 78 - 49
92 - 65 - 38
n.a.
149 - 94 - 70
149 - 73 - 50
149 - 57 - 36
n.a.
96 - 86 - 63
96 - 67 - 43
96 - 50 - 28
n.a.
11
2025
2026
65
11.1%
2024 - '30
102 - 92
100 - 80
91 - 45
n.a.
6,857
1,845
1,117
9,819
122
1,000
4,300
6,857
8,274
8,781
504
(1,011)
(1,234)
(183)
1,300
1,800
1,845
1,995
2,571
25
(601)
(244)
94
–
300
1,117
2,227
2,300
6,400
9,819
12,496
2,351
–
(124)
(1,110)
–
13,703
529
(1,736)
(2,588)
(89)
–
–
37
208
223
–
(15)
(86)
–
1
In this scenario, we assume the impairment of non-current assets (net of deferred tax) while non-current liabilities, including rehabilitation, would be
retained on balance sheet.
The prior year disclosure illustrated impairments only in the NZE scenario (for Australia and South Africa) and the APS (for South Africa
only). Since shorter-term prices in the various scenarios have moved downwards, we now illustrate impairments under each of the
IEA scenarios.
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1. Accounting policies continued
Other fossil fuel-related capital employed NPV sensitivities
US$ million
Steelmaking coal
Astron Energy
Cash-generating unit
Base case assumptions in life of asset plan:
– LOA saleable tonnes (millions) / Refinery steady-state capacity ('000 bbls)
– projected year when 50% LOA reserves depleted
– projected year when 80% LOA reserves depleted
– long-term price (hard coking coal) ($/t) (real terms) / Refining margin $/bbl
– discount rate applied (ranges represent opencut / underground)
– price to earnings multiple
Percentage decrease to long-term pricing/PE multiples:
– 25% price / $1/bbl refining margin / 2x PE (20%) decrease
– 30% price / $2/bbl refining margin / 4x PE (40%) decrease
Carrying value of non-current capital employed as at 31 December 2023
Impairment arising in selected scenarios:
– 25% price decrease across the curve / $1/bbl refining margin / 2x PE (20%)
decrease
– 30% price decrease across the curve / $2/bbl refining margin / 4x PE (40%)
decrease
Breakdown of non-current capital employed as at 31 December 2023:
Property, plant and equipment and intangible assets
Investments in associates and other investments
Deferred tax liabilities
Non-current provisions
Other non-current net assets
Coal
marketing
goodwill
n.a.
n.a.
n.a.
n.a.
n.a.
10x
8x
6x
n.a.
n.a.
1,056
1,674
–
–
1,674
230
460
1,100
2
(18)
(4)
(24)
81
2028
2033
241
8.9-9.5%
100k bopd
n.a.
n.a.
10.9 - 13.7
8.7%
181
169
1,574
500
780
1,907
4
(70)
(267)
–
Climate change – property, plant and equipment and intangible assets – estimation of the remaining useful economic life
of assets for depreciation and amortisation purposes
Property, plant and equipment and intangible assets are depreciated / amortised to estimated residual values over the estimated
useful lives of the specific assets concerned, or the estimated remaining life of the associated mine, field or lease, using a straight-line
or a units of production over recoverable reserves method. The estimated useful lives of our specific assets and / or operations (and
therefore the rate of depreciation / amortisation) aligns with, and reflects, our emissions reduction commitments and ambition. The
current carrying value of our property, plant and equipment and intangible assets related to our fossil fuels operations is $16,941
million, and the depreciation / amortisation related to these balances recognised in 2023 was $2,313 million, implying an average
accounting-determined useful life of 7.5 years.
(iii) Restoration, rehabilitation and decommissioning costs (note 23)
A provision for future restoration, rehabilitation and decommissioning costs requires estimates and assumptions to be made around
the relevant regulatory framework, the magnitude of the possible disturbance and the timing, extent and costs of the required
closure and rehabilitation activities. Most of these rehabilitation and decommissioning events are expected to take place many years
in the future and the currently estimated requirements and costs that will have to be met when the restoration events occur are
inherently uncertain and could materially change over time.
In calculating the appropriate provision for the expected restoration, rehabilitation or decommissioning obligations, cost estimates of
the future potential cash outflows based on current studies of the expected rehabilitation activities and timing thereof, are prepared.
These forecasts are then discounted to their present value using a risk-free rate specific to the liability and the currency in which they
are denominated.
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1. Accounting policies continued
Any changes in the expected future costs or risk-free rate are initially reflected in both the provision and the asset and subsequently
in the consolidated statement of income over the remaining economic life of the asset. As the actual future costs can differ from the
estimates due to changes in laws, regulations, technology, costs and timing, the provisions including the estimates and assumptions
contained therein are reviewed regularly by management. A material change in the provision within the next financial year could
arise from changes in risk-free rates. The aggregate effect of changes within the next financial year as a result of revisions to cost and
timing assumptions is not expected to be material.
Climate change sensitivities
As noted above, while it is not a reasonably possible change we expect over the next financial year, global ambitions seeking to drive
quicker decarbonisation, could result in the timing of restoration, rehabilitation and decommissioning costs related to our coal and
oil closure obligations being accelerated. As at 31 December 2023, the non-current rehabilitation provision related to our coal and oil
operations is $4,419 million (undiscounted) and $3,291 million (current carrying value). The weighted average maturity is 13 years. To
illustrate the effect of quicker decarbonisation, a three-year and five-year weighted average acceleration, with no changes to the total
undiscounted cash flows, would result in an increase to the provision of $173 million and $271 million, respectively.
(iv) Valuation of Level 3 derivatives related to LNG contracts (note 29)
Adoption of new and revised standards
The following clarification revisions to existing accounting pronouncements became effective as of 1 January 2023 and have been
adopted by the Group.
(i) Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Amendments to IAS 12) – effective for year ends
beginning on or after 1 January 2023
The amendments specify how companies should account for deferred tax on transactions such as leases and decommissioning
obligations, and clarify that the initial recognition exception does not apply to transactions where both an asset and a liability are
recognised in a single transaction. Accordingly, deferred tax is required to be recognised on such transactions.
(ii) Definition of Accounting Estimates (Amendments to IAS 8) – effective for year ends beginning on or after
1 January 2023
The amendments introduce the definition of accounting estimates and include other amendments to IAS 8 to help entities
distinguish changes in accounting estimates from changes in accounting policies.
(iii) Materiality of Accounting Policy Disclosure (Amendments to IAS 1) – effective for year ends beginning on or after
1 January 2023
The amendments require companies to disclose their material accounting policy information rather than their significant accounting
policies.
(iv) IFRS 17 – Insurance Contracts and amendments to IFRS 17 – effective for year ends beginning on or after 1 January 2023
IFRS 17 replaces IFRS 4 ‘Insurance Contracts’ and provides a new general model for accounting for contracts where the issuer accepts
significant insurance risk from another party and agrees to compensate that party if future uncertain events adversely affect them.
These amendments did not have a material impact on the Group.
(v) International Tax Reform – Pillar Two Model Rules – effective for year ends beginning on or after 1 January 2023
IAS 12 - Income Taxes was amended and requires entities during the period between the legislation being enacted or substantively
enacted and the legislation becoming effective to disclose known or reasonable estimable information to their exposure to Pillar Two
income taxes.
Glencore is within the scope of the Organisation for Economic Co-operation and Development (OECD) Pillar Two model rules. The
Group operates in several jurisdictions where Pillar Two legislation has been enacted, or substantively enacted. In Switzerland, the
jurisdiction in which the ultimate parent company is tax-resident, a gradual implementation of Pillar Two is taking place with the
introduction of a Qualified Domestic Top-up Tax effective from 1 January 2024. Since the Pillar Two legislation was not effective at the
reporting date, the Group has no related current tax exposure. Glencore applies the exception to recognising and disclosing
information about deferred tax assets and liabilities related to Pillar Two income taxes, as provided in the amendments to IAS 12.
Under the legislation, the Group is liable to pay a top-up tax for the difference between its Global Anti-Base Erosion (GloBE) effective
tax rate per jurisdiction and the 15% minimum rate. The Group operates in some jurisdictions with a nominal tax rate below 15%,
however, Glencore might not be exposed to paying a material amount of Pillar Two income taxes due to the application of specific
modifiers envisaged in the Pillar Two legislation. Glencore is in the process of assessing its exposure to the Pillar Two legislation. Due
to the complexities in applying the legislation and calculating GloBE effective tax rates, the quantitative impact of the enacted or
substantively enacted legislation is not yet reasonably estimatable, although it is not expected to be significant.
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Revised standards not yet effective
At the date of the authorisation of these consolidated financial statements, the following revised IFRSs, which are applicable to
Glencore, were issued but not yet effective:
(i) Classification of Liabilities as current or non-current (Amendments to IAS 1) – effective for year ends beginning on or after
1 January 2024
The amendments clarify that the classification of liabilities as current or non-current is based on rights that are in existence at the end
of the reporting period, specify that classification is unaffected by expectations about whether an entity will exercise its right to defer
settlement of a liability, explain that rights are in existence if covenants are complied with at the end of the reporting period, and
introduce a definition of ‘settlement’ to make clear that settlement refers to the transfer to the counterparty of cash, equity
instruments, other assets or services.
(ii) Supplier Finance Arrangements (Amendments to IAS 7 and IFRS 7) – effective for year ends beginning on or after 1 January
2024
The amendments require an entity to provide additional disclosures about its supplier finance arrangements which enable users of
financial statements to assess how supplier finance arrangements affect an entity’s liabilities and cash flows and to understand the
effect of supplier finance arrangements on an entity’s exposure to liquidity risk and how the entity might be affected if the
arrangements were no longer available to it.
(iii) Lack of Foreign Currency Exchangeability (Amendments to IAS 21) – effective for year ends beginning on or after
1 January 2025
The amendments require an entity to apply a consistent approach to assessing whether a currency is exchangeable into another
currency and, when it is not, to determining the exchange rate to use and the disclosures to provide.
No significant changes to presentation or disclosures within these financial statements are expected following the adoption of these
amendments.
Basis of preparation
The consolidated financial statements are prepared under the historical cost convention except for certain financial assets, liabilities,
marketing inventories and pension obligations that are measured at revalued amounts or fair values at the end of each reporting
period as explained in the accounting policies below. Historical cost is defined as the amount of cash or cash equivalents paid or the
fair value of the consideration given to acquire them at the time of their acquisition. The principal accounting policies adopted are set
out below.
The Directors have assessed that they have, at the time of approving these consolidated financial statements, a reasonable
expectation that the Group has adequate resources to continue in operational existence for the 12 months from the expected date
of approval of the 2023 Annual Report and Accounts. Therefore, they continue to adopt the going concern basis of accounting in
preparing these financial statements. The Directors have made this assessment after consideration of the Group’s capital
commitments, budgeted cash flows and related assumptions including appropriate stress testing of the identified uncertainties
(being primarily commodity prices and currency exchange rates) and access to undrawn credit facilities and monitoring of debt
maturities. Further information on Glencore’s objectives, policies and processes for managing its capital and financial risks is detailed
in note 27.
All amounts are expressed in millions of United States dollars, the presentation currency of the Group, unless otherwise stated.
Principles of consolidation
The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company
and its subsidiaries.
Control is achieved when Glencore is exposed, or has rights, to variable returns from its involvement with the investee and has the
ability to affect those returns through its power over the investee. Specifically, Glencore controls an investee if, and only if, Glencore
has all of the following:
• Power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the investee);
• Exposure, or rights, to variable returns from its involvement with the investee; and
• The ability to use its power over the investee to affect its returns.
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1. Accounting policies continued
When Glencore has less than a majority of the voting rights of an investee or similar rights of an investee, it considers all relevant facts
and circumstances in assessing whether it has power over the investee including:
• The size of Glencore’s holding of voting rights relative to the size and dispersion of holdings of the other vote holders;
• Potential voting rights held by Glencore, other vote holders or other parties;
• Rights arising from other contractual arrangements; and
• Any additional facts and circumstances that indicate that Glencore has, or does not have, the current ability to direct the relevant
activities at the time that decisions need to be made, including voting patterns at previous shareholders’ meetings.
The Company reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one
or more of the three elements of control listed above. Consolidation of a subsidiary begins when Glencore obtains control over the
subsidiary and ceases when Glencore loses control of the subsidiary. Specifically, income and expenses of a subsidiary acquired or
disposed of during the year are included in the consolidated statement of income and other comprehensive income from the date
Glencore gains control until the date when Glencore ceases to control the subsidiary.
Profit or loss and each component of other comprehensive income are attributed to the owners of the Company and to the non-
controlling interests. Total comprehensive income of subsidiaries is attributed to the owners of the Company and to the non-
controlling interests even if this results in the non-controlling interests having a deficit balance.
When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with
the Group’s accounting policies. All intragroup assets and liabilities, equity, income, expenses and cash flows relating to transactions
between members of the Group are eliminated in full on consolidation.
Changes in Glencore’s interests in subsidiaries that do not result in a loss of control are accounted for as equity transactions with any
difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid
or received being recognised directly in equity and attributed to equity holders of Glencore.
When Glencore loses control of a subsidiary, a gain or loss is recognised in the consolidated statement of income and is calculated as
the difference between (i) the aggregate of the fair value of the consideration received and the fair value of any retained interest and
(ii) the previous carrying amount of the assets (including goodwill), and liabilities of the subsidiary and any non-controlling interests.
All amounts previously recognised in other comprehensive income in relation to that subsidiary are accounted for as if Glencore had
directly disposed of the related assets or liabilities of the subsidiary (i.e. reclassified to profit or loss or transferred to another category of
equity as specified/permitted by applicable IFRSs). The fair value of any investment retained in the former subsidiary at the date when
control is lost is regarded as the fair value on initial recognition for subsequent accounting under IFRS 9, when applicable, or the cost
on the initial recognition of an investment in an associate or a joint venture.
Investments in associates and joint ventures
Associates and joint ventures (together ‘Associates’) in which Glencore exercises significant influence or joint control are accounted for
using the equity method. Significant influence is the power to participate in the financial and operating policy decisions of the
investee but is not control or joint control over those policies. Significant influence is presumed if Glencore holds between 20% and
50% of the voting rights, unless evidence exists to the contrary. A joint venture is a joint arrangement whereby the parties that have
joint control of the arrangement have rights to the net assets of the joint arrangement. Joint control is the contractually agreed
sharing of control over an arrangement, which exists only when decisions about relevant strategic and/or key operating decisions
require unanimous consent of the parties sharing control.
Equity accounting involves Glencore recording its share of the Associate’s net income and equity. Glencore’s interest in an Associate is
initially recorded at cost and is subsequently adjusted for Glencore’s share of changes in net assets of the Associate, less any
impairment in the value of individual investments. Where Glencore transacts with an Associate, unrealised profits and losses are
eliminated to the extent of Glencore’s interest in that Associate.
Changes in Glencore’s interests in Associates are accounted for as a gain or loss on disposal with any difference between the amount
by which the carrying value of the Associate is adjusted and the fair value of the consideration received being recognised directly in
the consolidated statement of income.
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Joint operations
A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement, have rights to the assets and
obligations for the liabilities relating to the arrangement.
When Glencore undertakes its activities under joint operations, Glencore recognises in relation to its interest in a joint operation:
• Its assets, including its share of any assets held jointly;
• Its liabilities, including its share of any liabilities incurred jointly;
• Its revenue from the sale of its share of the output arising from the joint operation;
• Its share of the revenue from the sale of the output by the joint operation; and
• Its expenses, including its share of any expenses incurred jointly.
The Group accounts for the assets, liabilities, revenues and expenses relating to its interest in a joint operation in accordance with the
IFRSs applicable to the particular assets, liabilities, revenues and expenses.
Where Glencore transacts with a joint operation, unrealised profits and losses are eliminated to the extent of Glencore’s interest
in that joint operation.
Other unincorporated arrangements
In some cases, Glencore participates in unincorporated arrangements where it has the rights to its share of the assets and obligations
for its share of the liabilities of the arrangement, rather than a right to the net returns of the arrangement, but does not share joint
control. In such cases, Glencore accounts for its share of the assets, liabilities, revenues and expenses in accordance with the IFRSs
applicable to the particular assets, liabilities, revenues and expenses and obligations for the liabilities relating to the arrangement,
similar to a joint operation noted above.
Business combinations and goodwill
Acquisitions of subsidiaries and businesses are accounted for using the acquisition method of accounting. The cost of the acquisition
is measured at fair value, which is calculated as the sum of the acquisition date fair values of the assets transferred, liabilities incurred
to the former owners of the acquiree and the equity interests issued in exchange for control of the acquiree. The identifiable assets,
liabilities and contingent liabilities (‘identifiable net assets’) are recognised at their fair value at the date of acquisition. Acquisition-
related costs are recognised in the consolidated statement of income as incurred.
Where a business combination is achieved in stages, Glencore’s previously held interests in the acquired entity are remeasured to fair
value at the acquisition date (i.e. the date Glencore attains control) and the resulting gain or loss, if any, is recognised in the
consolidated statement of income.
Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interests in the
acquiree, and the fair value of the acquirer’s previously held equity interest in the acquiree (if any) over the net of the acquisition-date
amounts of the identifiable assets acquired and the liabilities assumed.
After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing,
goodwill acquired in a business combination is, from the acquisition date, allocated to the CGUs that are expected to benefit from the
synergies of the combination. CGUs to which goodwill has been allocated are tested for impairment annually, or more frequently
when there is an indication that the unit may be impaired. If the recoverable amount of the CGU is less than its carrying amount, the
impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of
the unit pro-rata based on the carrying amount of each asset in the unit.
Any impairment loss is recognised directly in profit or loss. An impairment loss recognised for goodwill is not able to be reversed in
subsequent periods.
On disposal of the relevant CGU, the attributable amount of goodwill is included in the determination of the profit or loss on disposal.
If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs,
Glencore reports provisional amounts for the items for which the accounting is incomplete. Those provisional amounts are adjusted
for additional information obtained during the ‘measurement period’ (which cannot exceed one year from the acquisition date)
about facts and circumstances that existed at the acquisition date that, if known, would have affected the amounts recognised at
that date.
Non-controlling interests that are present ownership interests and entitle their holders to a proportionate share of the entity’s net
assets in the event of liquidation may be initially measured either at fair value or at the non-controlling interests’ proportionate share
of the recognised amounts of the acquiree’s identifiable net assets. The choice of measurement basis is made on a transaction-by-
transaction basis. Other types of non-controlling interests are measured at fair value or, when applicable, on the basis specified in
another IFRS.
Similar procedures are applied in accounting for the purchases of interests in Associates and joint operations. Any goodwill arising
from such purchases is included within the carrying amount of the investment in Associates, but not amortised thereafter. Any excess
of Glencore’s share of the net fair value of the Associate’s identifiable net assets over the cost of the investment is included in the
consolidated statement of income in the period of the purchase.
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1. Accounting policies continued
Non-current assets held for sale and disposal groups
Non-current assets, liabilities and those included in disposal groups are classified as held for sale if their carrying amount will
be recovered principally through a sale transaction rather than through continuing use, they are available for immediate disposal and
the sale is highly probable. Non-current assets, liabilities and those included in disposal groups held for sale are measured at the lower
of their carrying amount or fair value less costs to sell.
Revenue recognition
Revenue is derived principally from the sale of goods (sale of commodities) and in some instances the goods are sold on Cost and
Freight (CFR) or Cost, Insurance and Freight (CIF) Incoterms. When goods are sold on a CFR or CIF basis, the Group is responsible for
providing these services (shipping and insurance) to the customer, sometimes after the date at which Glencore has lost control of the
goods. Revenue is recognised when the performance obligations have been satisfied, which is once control of the goods and/or
services has transferred from Glencore to the buyer. Revenue is measured based on consideration specified in the contract with a
customer and excludes amounts collected on behalf of third parties. The same recognition and presentation principles apply to
revenues arising from physical settlement of forward sale contracts that do not meet the own-use exemption.
Revenue related to the sale of goods is recognised when the product is delivered to the destination specified by the customer, which
is typically the vessel on which it is shipped, the destination port or the customer’s premises and the buyer has gained control
through their ability to direct the use of and obtain substantially all the benefits from the asset. Where the sale of goods is connected
with an agreement to repurchase goods at a later date, revenue is recognised when the purchase terms are at prevailing market
prices, the goods repurchased are readily available in the market, and the buyer gained control of the goods originally sold to them.
Should it be determined that control has not transferred or the buyer does not have the ability to benefit substantially from
ownership of the asset, revenue is not recognised and any proceeds received are accounted for as a financing arrangement.
For certain commodities, the sales price is determined on a provisional basis at the date of sale as the final selling price is subject
to movements in market prices up to the date of final pricing, normally ranging from 30 to 90 days after initial booking (provisionally
priced sales). Revenue on provisionally priced sales is recognised based on the estimated fair value of the total consideration
receivable. The revenue adjustment mechanism embedded within provisionally priced sales arrangements has the character of a
commodity derivative.
Accordingly, the fair value of the final sales price adjustment is re-estimated continuously and changes in fair value are recognised as
an adjustment to revenue. In all cases, fair value is estimated by reference to forward market prices.
Revenue from the sale of material by-products are included within revenue. Where a by-product is not regarded as significant,
revenue may be credited against cost of goods sold.
Revenue related to the provision of shipping and insurance-related activities is recognised over time as the service is rendered.
Payments received for future metal (primarily gold and silver) deliveries (prepayments) are accounted for as executory contracts
whereby the prepayment is initially recorded as deferred revenue in the consolidated statement of financial position. The initial
deferred revenue amount is unwound and revenue is recognised in the consolidated statement of income as and when Glencore
physically delivers the metal and loses control of it. Where these prepayments are in excess of one year and contain a significant
financing component, the amount of the deferred revenue is adjusted for the effects of the time value of money. Glencore applies the
practical expedient to not adjust the promised amount of consideration for the effects of time value of money if the period between
delivery and the respective payment is one year or less.
Interest income is recognised using the effective interest method for debt instruments measured at amortised cost and at FVTOCI.
For financial assets, interest income is calculated by applying the effective interest rate to the gross carrying amount of a financial
asset. For credit-impaired financial assets, interest income is calculated on the net carrying amount of the financial asset.
Dividend income is recognised when the right to receive payment is established, typically when the shareholder's entitlement to the
dividend is confirmed.
Foreign currency translation
Glencore’s reporting currency and the functional currency of the majority of its operations is the US dollar as this is assessed to be the
principal currency of the economic environment in which it operates.
(i) Foreign currency transactions
Transactions in foreign currencies are converted into the functional currency of each entity using the exchange rate prevailing at the
transaction date. Monetary assets and liabilities outstanding at year end are converted at year-end rates. Non-monetary items
measured in terms of historical cost are translated using the exchange rate at the date of the transaction. The resulting exchange
differences are recorded in the consolidated statement of income.
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(ii) Translation of financial statements
For the purposes of consolidation, assets and liabilities of Group companies whose functional currency is in a currency other than the
US dollar are translated into US dollars using year-end exchange rates, while their statements of income are translated using average
rates of exchange for the year. Translation adjustments are included as a separate component of shareholders’ equity and have no
consolidated statement of income impact to the extent that no disposal of the foreign operation has occurred. Where an intragroup
balance is, in substance, part of the Group’s net investment in an entity, exchange gains and losses on that balance are taken to the
currency translation reserve. Cumulative translation differences are recycled from equity and recognised as income or expense on
partial disposal of the net investment in an entity, which includes repayments of capital and loans. On such partial disposals, when the
Group’s percentage of equity ownerships do not change, the ‘absolute’ approach is applied. Under this approach, the amounts held in
the foreign currency translation reserve are reclassified to income or expense based on the proportionate share of total cumulative
translation differences recognised in the net investment.
Goodwill and fair value adjustments arising from the acquisition of a foreign operation are treated as assets and liabilities of the
foreign operation and are translated at the closing rate.
Borrowing costs
Borrowing costs are expensed as incurred except where they relate to the financing of construction or development of qualifying
assets in which case they are capitalised up to the date when the qualifying asset is ready for its intended use.
Employee and retirement benefits
Wages, salaries, bonuses, social security contributions, paid annual and sick leave are accrued in the period in which the associated
services are rendered by the employees of the Group.
Glencore operates various pension schemes in accordance with local requirements and practices of the respective countries. The
annual costs for defined contribution plans that are funded by payments to separate trustee administered funds or insurance
companies equal the contributions that are required under the plans and accounted for as an expense.
For defined benefit retirement plans, the cost of providing benefits is determined using the Projected Unit Credit Method, with
actuarial valuations being carried out at the end of each annual reporting period. Remeasurements comprising actuarial gains and
losses, the effect of the asset ceiling (if applicable) and the return on plan assets (excluding interest) are recognised immediately in the
statement of financial position with a charge or credit to other comprehensive income in the period in which they occur.
Remeasurements recognised in other comprehensive income are not reclassified. Past service cost is recognised in profit or loss
when the plan amendment or curtailment occurs, or when the Group recognises related restructuring costs or termination benefits,
if earlier. Gains or losses on settlement of a defined benefit plan are recognised when the settlement occurs. Net interest is calculated
by applying a discount rate to the net defined benefit liability or asset.
Defined benefit costs are split into three categories:
• service costs, which includes current service cost, past service cost and gains and losses on curtailments and settlements;
• net interest expense or income; and
• remeasurements.
The Group recognises service costs within the consolidated statement of income.
Net interest expense or income is recognised within interest expense or income within the consolidated statement of income.
Any past service cost (or the gain or loss on settlement) is calculated by measuring the defined benefit liability (asset) using updated
assumptions and comparing benefits offered and plan assets before and after the plan amendment (or curtailment or settlement)
but ignoring the effect of the asset ceiling (that may arise when the defined benefit plan is in a surplus position). The Group uses the
updated assumptions from this remeasurement to determine current service cost and net interest for the remainder of the reporting
period after the change to the plan. In the case of the net interest for the period post-plan amendment, the net interest is calculated
by multiplying the net defined benefit liability (asset) as remeasured with the discount rate used in the remeasurement (also taking
into account the effect of contributions and benefit payments on the net defined benefit liability (asset)).
The retirement benefit obligation recognised in the consolidated statement of financial position represents the deficit or surplus in
the Group’s defined benefit plans. Any surplus resulting from this calculation is limited to the present value of any economic benefits
available in the form of refunds from the plans or reductions in future contributions to the plans.
Glencore also provides post-retirement healthcare benefits to certain employees in Canada, South Africa and the United States. These
are accounted for in a similar manner to the defined benefit pension plans, however are unfunded.
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1. Accounting policies continued
Share-based payments
(i) Equity-settled share-based payments
Equity-settled share-based payments are measured at the fair value of the awards based on the market value of the shares at the
grant date. Fair value excludes the effect of non-market-based vesting conditions. The fair value is charged to the consolidated
statement of income and credited to retained earnings on a straight-line basis over the period the estimated awards are expected
to vest.
At each balance sheet date, the Company revises its estimate of the number of equity instruments expected to vest as a result of the
effect of non-market-based vesting conditions. The impact of the revision of the original estimates, if any, is recognised in the
consolidated statement of income such that the cumulative expense reflects the revised estimate, with a corresponding adjustment
to retained earnings.
(ii) Cash-settled share-based payments
For cash-settled share-based payments, a liability is initially recognised at fair value based on the estimated number of awards that
are expected to vest, adjusting for market and non-market-based performance conditions. Subsequently, at each reporting period
until the liability is settled, it is remeasured to fair value with any changes in fair value recognised in the consolidated statement
of income.
Income taxes
Income taxes consist of current and deferred income taxes. Current taxes represent income taxes expected to be payable based on
enacted or substantively enacted tax rates at the period end on expected current taxable income, and any adjustment to tax payable
in respect of previous years. Deferred taxes are recognised for temporary differences between the carrying amounts of assets and
liabilities in the financial statements and the corresponding tax bases used in the computation of taxable income, using enacted
or substantively enacted income tax rates which are expected to be effective at the time of reversal of the underlying temporary
difference. Deferred tax assets and unused tax losses are only recognised to the extent that their recoverability is probable. Deferred
tax assets are reviewed at reporting period end and amended to the extent that it is no longer probable that the related benefit will
be realised. To the extent that a deferred tax asset not previously recognised subsequently fulfils the criteria for recognition, an asset is
then recognised.
Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same authority and Glencore has both the
right and the intention to settle its current tax assets and liabilities on a net or simultaneous basis. The tax effect of certain temporary
differences is not recognised principally with respect to the initial recognition of an asset or liability (other than those arising in
a business combination or in a manner that initially impacted accounting or taxable profit) and temporary differences relating
to investments in subsidiaries and Associates to the extent that Glencore can control the timing of the reversal of the temporary
difference and it is probable the temporary difference will not reverse in the foreseeable future. Deferred tax is provided in respect
of fair value adjustments on acquisitions. These adjustments may relate to assets such as extraction rights that, in general, are not
eligible for income tax allowances.
Current and deferred tax are recognised as an expense or income in the consolidated statement of income, except when they relate
to items that are recognised outside the consolidated statement of income (whether in other comprehensive income or directly in
equity) or where they arise from the initial accounting for a business combination.
Royalties, extraction taxes and other levies/taxes are treated as taxation arrangements when they have the characteristics of an
income tax, including being imposed and determined in accordance with regulations established by the respective government’s
taxation authority and the amount payable is based on taxable income – rather than physical quantities produced or as a percentage
of revenues – after adjustment for temporary differences. For such arrangements, current and deferred tax is provided on the same
basis as described above for other forms of taxation. Obligations arising from royalty arrangements that do not satisfy these criteria
are recognised as current provisions and included in cost of goods sold.
Glencore assesses its liabilities and contingencies for all tax years open to audit based upon the latest information available. Inherent
uncertainties exist in estimates of tax contingencies due to complexities of interpretation and changes in tax laws. For those matters
where it is probable that an adjustment will be made, the Group records its best estimate of these tax liabilities, including related
interest charges. Where the amount of tax payable or recoverable is uncertain, due to local tax authority challenges or uncertainty
regarding the appropriate treatment, judgement is required to assess the range of possible outcomes. In accordance with IFRIC 23, if
it is not probable that the treatment will be accepted, the Group accounts for uncertain tax provisions for all matters worldwide based
on the Group’s judgement of the most likely amount of the liability or recovery, or where there is a wide range of possible outcomes,
using the probability-weighted average approach. Generally, uncertain tax treatments are assessed on an individual basis, except
where they are expected to be settled collectively. A change in estimate of the likelihood of a future outflow and/or in the expected
amount to be settled is recognised in the statement of income in the period in which the change occurs. This requires application of
judgement as to the possible outcome, which can change over time depending on facts and circumstances.
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Notes to the financial statements continued
1. Accounting policies continued
Property, plant and equipment
Property, plant and equipment are stated at cost, being the fair value of the consideration given to acquire or construct the asset,
including directly attributable costs required to bring the asset to the location or to a condition necessary for operation and the direct
cost of dismantling and removing the asset, less accumulated depreciation and any accumulated impairment losses.
Property, plant and equipment are depreciated to their estimated residual value over the estimated useful life of the specific asset
concerned, or the estimated remaining life of the associated mine (LOM), field or lease.
Depreciation commences when the asset is available for use. The major categories of property, plant and equipment are
depreciated/amortised on a units of production (UOP) and/or straight-line basis as follows:
Buildings
Freehold land
Plant and equipment
Right-of-use assets
Mineral and petroleum rights
Deferred mining costs
10 – 45 years
not depreciated
3 – 30 years/UOP
2 – 20 years
UOP
UOP
(i) Mineral and petroleum rights
Mineral and petroleum reserves, resources and rights (together ‘Mineral and petroleum rights’) which can be reasonably valued,
are recognised in the assessment of fair values on acquisition. Mineral and petroleum rights for which values cannot be reasonably
determined are not recognised. Exploitable Mineral and petroleum rights are amortised using the UOP basis over the commercially
recoverable reserves and, in certain circumstances, other mineral resources. Mineral resources are included in amortisation
calculations where there is a high degree of confidence that they will be extracted in an economic manner.
(ii) Exploration and evaluation expenditure
Exploration and evaluation expenditure relates to costs incurred in the exploration and evaluation of potential mineral and petroleum
resources and includes costs such as exploration and production licences, researching and analysing historical exploration data,
exploratory drilling, trenching, sampling and the costs of pre-feasibility studies. Exploration and evaluation expenditure for each area
of interest, other than that acquired from another entity, is charged to the consolidated statement of income as incurred except
when the expenditure is expected to be recouped from future exploitation or sale of the area of interest and it is planned to continue
with active and significant operations in relation to the area, or at the reporting period end, the activity has not reached a stage which
permits a reasonable assessment of the existence of commercially recoverable reserves, in which case the expenditure is capitalised.
As the intangible component (i.e. licences) represents an insignificant and indistinguishable portion of the overall expected tangible
amount to be incurred and recouped from future exploitation, these costs along with other capitalised exploration and evaluation
expenditure are recorded as a component of property, plant and equipment. Purchased exploration and evaluation assets are
recognised at their fair value at acquisition.
As the capitalised exploration and evaluation expenditure asset is not available for use, it is not depreciated. All capitalised exploration
and evaluation expenditure is monitored for indications of impairment. Where a potential impairment is indicated, an assessment is
performed for each area of interest or at the CGU level. To the extent that capitalised expenditure is not expected to be recovered it is
charged to the consolidated statement of income.
Administration costs that are not directly attributable to a specific exploration area are charged to the consolidated statement of
income. Licence costs paid in connection with a right to explore in an existing exploration area are capitalised and amortised over the
term of the permit.
Development expenditure
When commercially recoverable reserves are determined and such proposed development receives the appropriate approvals,
capitalised exploration and evaluation expenditure is transferred to construction in progress, a component within the plant and
equipment asset sub-category. All subsequent development expenditure is similarly capitalised, provided commercial viability
conditions continue to be satisfied.
Proceeds from the sale of product extracted during the development phase are recognised in the statement of income.
Upon completion of development and commencement of production, capitalised development costs are further transferred,
as required, to the appropriate plant and equipment asset category and depreciated using the unit of production method (UOP)
or straight-line basis.
(iii) Deferred mining costs
Mainly comprises certain capitalised costs related to underground mining as well as pre-production and in-production stripping
activities as outlined below. Deferred mining costs are amortised using the UOP basis over the life of the ore body to which those
costs relate.
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Notes to the financial statements continued
1. Accounting policies continued
Deferred stripping costs
Stripping costs incurred in the development of a mine (or pit) before production commences are capitalised as part of the cost of
constructing the mine (or pit) and subsequently amortised over the life of the mine (or pit) on a UOP basis.
In-production stripping costs incurred to access an identifiable component of the ore body to realise benefits in the form of improved
access to ore to be mined in the future (stripping activity asset), are capitalised within deferred mining costs provided all the following
conditions are met:
(a) it is probable that the future economic benefit associated with the stripping activity will be realised;
(b) the component of the ore body for which access has been improved can be identified; and
(c) the costs relating to the stripping activity associated with the improved access can be reliably measured.
If all of the criteria are not met, the production stripping costs are charged to the consolidated statement of income as they are
incurred.
The stripping activity asset is subsequently depreciated on a UOP basis over the life of the identified component of the ore body that
became more accessible as a result of the stripping activity and is then stated at cost less accumulated depreciation and any
accumulated impairment losses.
Leases
As lessee, the Group assesses whether a contract contains a lease at inception of the contract. The Group recognises a right-of-use
asset and corresponding lease liability in the statement of financial position for all lease arrangements where it is the lessee, except for
short-term leases with a term of 12 months or less and leases of low-value assets. For these leases, the Group recognises the lease
payments as an operating expense on a straight-line basis over the term of the lease.
The lease liability is initially measured at the present value of the future lease payments from the commencement date of the lease.
The lease payments are discounted using the interest rate implicit in the lease or, if not readily determinable, the asset and company-
specific incremental borrowing rates. Lease liabilities are recognised within borrowings on the statement of financial position. The
lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective
interest method) and by reducing the carrying amount to reflect the lease payments made. The Group remeasures the lease liability,
with a corresponding adjustment to the related right-of-use assets, whenever:
• The lease term changes or there is a significant event or change in circumstances resulting in a change in the assessment of
exercise of a purchase option, in which case the lease liability is remeasured by discounting the revised lease payments using a
revised discount rate;
• The lease payments change due to the changes in an index or rate or a change in expected payment under a guaranteed residual
value, in which case the lease liability is remeasured by discounting the revised lease payments using an unchanged discount rate;
or
• A lease contract is modified and the lease modification is not accounted for as a separate lease, in which case the lease liability is
remeasured based on the lease term of the modified lease by discounting the revised lease payments using a revised discount rate
at the effective date of modification.
The right-of-use assets are initially recognised on the balance sheet at cost, which comprises the amount of the initial measurement
of the corresponding lease liability, adjusted for any lease payments made at or prior to the commencement date of the lease, any
lease incentive received and any initial direct costs incurred, and expected costs for obligations to dismantle and remove right-of-use
assets when they are no longer used. Right-of-use assets are recognised within property, plant and equipment on the statement of
financial position. Right-of-use assets are depreciated on a straight-line basis from the commencement date of the lease over the
shorter of the useful life of the right-of-use asset or the end of the lease term.
The Group enters into lease arrangements as a lessor with respect to some of its time charter vessels. Leases for which the Group is an
intermediate lessor are classified as finance or operating leases by reference to the right-of-use asset arising from the head lease.
Income from operating leases is recognised on a straight-line basis over the term of the relevant lease. Amounts due from lessees
under finance leases are recognised as receivables at the amount of the Group’s net investment in the leases. Finance lease income is
allocated to accounting periods so as to reflect a constant periodic rate of return on the Group’s net investment outstanding in
respect of these leases.
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Notes to the financial statements continued
1. Accounting policies continued
Restoration, rehabilitation and decommissioning
Restoration, rehabilitation and decommissioning costs arising from the installation of plant and other site preparation work,
discounted using a risk-free rate specific to the liability and the currency in which they are denominated to their net present value, are
provided for and capitalised at the time such an obligation arises. Capitalised costs are charged to the consolidated statement of
income over the life of the operation through depreciation of the asset together with the unwinding of the discount on the provision.
Costs for restoration of subsequent site disturbance, which is created on an ongoing basis during production, are provided for at their
net present values and charged to the consolidated statement of income as extraction progresses.
Changes in the estimated timing of the rehabilitation or changes to the estimated future costs are accounted for prospectively by
recognising an adjustment to the rehabilitation liability and a corresponding adjustment to the asset to which it relates, provided
a reduction, if any, in the provision is not greater than the depreciated capitalised cost of the related asset, in which case the
capitalised cost is reduced to nil and the remaining adjustment recognised in the consolidated statement of income. In the case of
closed sites, changes to estimated costs are recognised immediately in the consolidated statement of income.
Intangible assets
Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business
combination is their fair value at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any
accumulated amortisation (calculated on a straight-line basis over their useful lives) and accumulated impairment losses, if any.
Identifiable intangible assets with a finite life are amortised on a straight-line basis over their expected useful life. The amortisation
method and period are reviewed annually and impairment testing is undertaken when circumstances indicate the carrying amount
may not be recoverable. Other than goodwill which is not amortised, Glencore has no identifiable intangible assets with an indefinite
life.
The major categories of intangibles are amortised on a units of production (UOP) and/or straight-line basis as follows:
Port allocation rights
Licences, trademarks and software
Customer relationships
UOP
3 – 20 years
5 – 9 years
Goodwill impairment testing
For the purpose of impairment testing, goodwill has been allocated to the CGUs, or groups of CGUs, that are expected to benefit from
the synergies of the business combination and which represent the level at which management monitors and manages the goodwill.
In assessing whether an impairment is required, the carrying value of the CGU is compared with its recoverable amount. The
recoverable amount is the higher of its fair value less costs of disposal (FVLCD) and its value in use (VIU). If the recoverable amount of
the CGU is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any
goodwill allocated to the unit and then to the other assets of the unit on a pro-rata basis of the carrying amount of each asset in the
unit. Any impairment loss for goodwill is recognised directly in the consolidated statement of income. An impairment loss recognised
for goodwill can not be reversed in subsequent periods.
Other investments
Equity investments, other than investments in Associates, are recorded at fair value. Glencore designates investments that are not
held for trading as at fair value through other comprehensive income (FVTOCI). As a result, changes in fair value are recorded in the
consolidated statement of other comprehensive income. Dividends from these investments are recognised in the consolidated
statement of income, unless the dividend represents a recovery of part of the cost of the equity investment. Investments that are held
for trading are subsequently measured at fair value through profit or loss (FVTPL).
Impairment or impairment reversals
Glencore conducts, at least annually, an internal review of asset values which is used as a source of information to assess for any
indications of impairment or impairment reversal. Formal impairment tests are carried out, at least annually, for cash-generating units
containing goodwill and for all other non-current assets, when events or changes in circumstances indicate the carrying value may
not be recoverable.
A formal impairment or reversal test involves determining whether the carrying amounts are in excess (or below, as the case may be)
of their recoverable amounts. An asset’s recoverable amount is determined as the higher of its FVLCD and its VIU. Such reviews are
undertaken on an asset-by-asset basis, except where assets do not generate cash flows independent of other assets, in which case
the review is undertaken at the CGU level.
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Notes to the financial statements continued
1. Accounting policies continued
If the carrying amount of an asset exceeds its recoverable amount, an impairment loss is recorded in the consolidated statement of
income to reflect the asset at the lower amount.
For those assets which were impaired in prior periods, if their recoverable amount exceeds their carrying amount, and the change in
their recoverable amount is not solely due to the passage of time, an impairment reversal is recorded in the consolidated statement
of income to reflect the asset at the higher amount to the extent the increased carrying amount does not exceed the carrying value
of the asset that would have been determined had no impairment previously been recognised. Goodwill impairments cannot be
subsequently reversed.
Provisions
Provisions are recognised when Glencore has a present obligation (legal or constructive), as a result of past events, and it is probable
that an outflow of resources embodying economic benefits that can be reliably estimated will be required to settle the liability.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the
balance sheet date, taking into account the risks and uncertainties surrounding the obligation, including interpretation of specific
laws and likelihood of settlement. Where a provision is measured using the cash flow estimated to settle the present obligation, its
carrying amount is the present value of those cash flows (when the effect of the time value of money is material).
Onerous contracts
An onerous contract is considered to exist where Glencore has a contract under which the unavoidable costs of meeting the
obligations under the contract exceed the economic benefits expected to be received from the contract. Present obligations arising
under onerous contracts are recognised and measured as provisions.
Unfavourable contracts
An unfavourable contract is considered to exist when Glencore, in a business combination, acquires a contract under which the terms
of the contract require Glencore to sell or purchase products or services on terms which are economically unfavourable compared to
current market terms at the time of the business combination. Unfavourable contracts are recognised at the present value of the
economic loss and amortised into the statement of income over the term of the contract.
Inventories
The vast majority of inventories attributable to the marketing activities are valued at fair value less costs of disposal with the
remainder valued at the lower of cost or net realisable value, with costs allocated using the first-in-first-out (FIFO) method. Unrealised
gains and losses from changes in fair value are reported in cost of goods sold.
Inventories held by the industrial activities are valued at the lower of cost or net realisable value. Cost is determined using FIFO or the
weighted average method and comprises material costs, labour costs and allocated production-related overhead costs. Typically raw
materials and consumables are measured using the FIFO method and work in progress inventories using the weighted average
method. Where the production process results in more than one product being produced (joint products), cost is allocated between
the various products according to the ratio of contribution of these metals to gross sales revenue. Financing and storage costs related
to inventory are expensed as incurred.
Non-current inventories primarily relate to stockpiles which are not expected to be utilised within the normal operating cycle.
Physical advances and prepayments
The Group periodically enters into physical advances and prepayment agreements with certain suppliers and customers. Where such
advances and prepayments are separable from contracts to buy or sell commodities and are primarily settled in cash or another
financial asset, they are initially recorded at the amount of the cash paid or received and are subsequently classified and measured as
financial assets or financial liabilities at amortised cost.
Certain physically settled advances and prepayments which are not separable from contracts to buy or sell commodities and do not
meet the own-use exemption criteria are considered prepaid commodity forward contracts and are accounted for as financial
instruments measured at fair value through profit and loss.
When physically settled advances and prepayments which are not separable from contracts to buy or sell commodities meet the
own-use exemption criteria, they are classified as non-financial assets or non-financial liabilities. These are initially recorded at the
amount of the cash paid or received and are subsequently reduced by the relevant value of the contractual volumes of physical
deliveries made.
To conform with current period presentation, certain prior period amounts which are accounted for as financial instruments were
reclassified from ‘Non-financial assets’ to ‘Financial assets at amortised cost’ and ‘Financial assets at fair value through profit and loss’
(see notes 12 and 14), from ‘Prepayments’ to ‘Prepayments at fair value through profit and loss’ (see note 22), and from ‘Non-financial
liabilities’ to ‘Financial liabilities at fair value through profit and loss’ (see note 25).
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Notes to the financial statements continued
1. Accounting policies continued
Financial instruments
Financial assets and financial liabilities are recognised in the Group’s consolidated statement of financial position when the Group
becomes a party to the contractual provisions of the instrument. Contractual maturities of such financial assets and financial liabilities
may be longer than one year. However, in the normal course of trading activities, derivative financial instruments are often settled
before their maturity date, and therefore classified as current assets or current liabilities.
Financial assets are classified as either financial assets at amortised cost, at fair value through other comprehensive income (FVTOCI)
or at fair value through profit or loss (FVTPL) depending upon the business model for managing the financial assets and the nature of
the contractual cash flow characteristics of the financial asset. Financial assets are initially recognised at fair value on the trade date,
including, in the case of instruments not subsequently measured at fair value through profit or loss, directly attributable transaction
costs. Trade receivables with no provisional price features and where there is no significant financing component, are initially
recognised at their transaction price. Subsequently, other investments, provisionally priced trade receivables and derivatives are
carried at fair value and trade receivables that do not contain provisional price features, loans and other receivables are carried at
amortised cost.
Financial liabilities, other than derivatives and those containing provisional price features, are initially recognised at fair value of
consideration received net of transaction costs as appropriate and subsequently carried at amortised cost. Financial liabilities that
contain provisional pricing features (accounted for as embedded derivatives) were designated in their entirety as at FVTPL.
Derivatives are carried at FVTPL.
Where a group of financial assets and financial liabilities recognised at fair value is managed and reported to key management
personnel on the basis of its net exposure to either market risks or credit risk, fair value of that group of financial assets and financial
liabilities is measured on the basis of the net price that would be received to sell the long position and to transfer the short position for
a particular risk exposure of the specific financial asset or liability being measured. When the group of financial assets and/or financial
liabilities is not presented on a net basis in the statement of financial position, any portfolio-level adjustments are allocated to the
individual instruments that make up the group on an appropriate basis.
(i) Impairment of financial assets
A loss allowance for expected credit losses is determined for all financial assets (as well as for issued loan commitments and financial
guarantee contracts), other than those at FVTPL and investments in equity instruments measured at FVTOCI, at the end of each
reporting period. The expected credit loss recognised represents a probability-weighted estimate of credit losses over the expected
life of the financial instrument.
The Group applies the simplified approach to measure the loss allowance for trade receivables classified at amortised cost, using the
lifetime expected loss provision. The expected credit losses on these financial assets are estimated using a provision matrix by
reference to past default experience and an equivalent credit rating, adjusted as appropriate for current observable data and forward-
looking information.
For all other financial assets at amortised cost, the Group recognises lifetime expected credit losses when there has been a significant
increase in credit risk since initial recognition, which is determined by:
• A review of overdue amounts;
• Comparing the risk of default at the reporting date and at the date of initial recognition; and
• An assessment of relevant historical and forward-looking quantitative and qualitative information.
For those balances that are beyond 30 days overdue, such is presumed to be an indicator of a significant increase in credit risk.
If the credit risk on the financial instrument has not increased significantly since initial recognition, the Group measures the loss
allowance for that financial instrument at an amount equal to 12-month expected credit loss, which comprises the expected lifetime
loss from the instrument taking into account the probability of a default occurring within 12 months of the reporting date.
The Group considers an event of default has materialised and the financial asset is credit impaired when information developed
internally or obtained from external sources indicates that the debtor is unlikely to pay the Group without taking into account any
collateral held by the Group or if the financial asset is more than 90 days past due, unless the Group has reasonable and supportable
information to demonstrate that a more lagging default criterion is more appropriate. The Group writes off a financial asset when
there is information indicating that the debtor is in severe financial difficulty and there is no realistic prospect of recovery.
(ii) Derecognition of financial assets and financial liabilities
The Group derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or when it transfers the
financial asset and substantially all the risks and rewards of ownership of the asset to another party. If the Group neither transfers nor
retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Group recognises its
retained interest in the asset and an associated liability for amounts it may have to pay. If the Group retains substantially all the risks
and rewards of ownership of a transferred financial asset, the Group continues to recognise the financial asset and also recognises
a collateralised borrowing for the proceeds received.
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Notes to the financial statements continued
1. Accounting policies continued
The Group derecognises financial liabilities when the Group’s obligations are discharged, cancelled or have expired.
On derecognition of a financial asset/financial liability in its entirety, the difference between the carrying amount of the financial
asset/financial liability and the sum of the consideration received and receivable/paid and payable is recognised in profit and loss.
On derecognition of equity investments designated and measured at FVTOCI, the cumulative gain or loss recognised in other
comprehensive income is reclassified directly to retained earnings.
Own shares
The cost of purchases of own shares is deducted from equity. Where they are purchased, issued to employees or sold, no gain or loss
is recognised in the consolidated statement of income. Such gains and losses are recognised directly in equity. Any proceeds received
on disposal of the shares or transfers to employees are recognised in equity.
Derivatives and hedging activities
Derivative instruments, which include physical contracts to sell or purchase commodities that do not meet the own-use exemption,
are initially recognised at fair value when Glencore becomes a party to the contractual provisions of the instrument and are
subsequently remeasured to fair value at the end of each reporting period. Fair values are determined using quoted market prices,
dealer price quotations or using models and other valuation techniques, the key inputs for which include current market and
contractual prices for the underlying instrument, time to expiry, yield curves, volatility of the underlying instrument and
counterparty risk.
Gains and losses on derivative instruments for which hedge accounting is not applied, other than the revenue adjustment
mechanism embedded within provisionally priced sales and mark-to-market movements on physical forward sales contracts, are
recognised in cost of goods sold.
Those derivatives qualifying and designated as hedges are either (i) a Fair Value Hedge of the change in fair value of a recognised
asset or liability or an unrecognised firm commitment, or (ii) a Cash Flow Hedge of the change in cash flows to be received or paid
relating to a recognised asset or liability or a highly probable transaction.
At the inception of the hedge and on an ongoing basis, Glencore documents whether the hedging instrument is effective in
offsetting changes in fair values or cash flows of the hedged item attributable to the hedged risk, which is when the hedging
relationship meets the qualifying hedge effectiveness requirements.
Glencore discontinues hedge accounting when the qualifying criteria for the hedged relationship is no longer met.
A change in the fair value of derivatives designated as a Fair Value Hedge is reflected together with the change in the fair value of the
hedged item in the consolidated statement of income.
A change in the fair value of derivatives designated as a Cash Flow Hedge is initially recognised in the consolidated statement of
comprehensive income and accumulated in the cash flow hedge reserve in shareholders’ equity. The deferred amount is then
released to the consolidated statement of income in the same periods during which the hedged transaction affects the consolidated
statement of income. Hedge ineffectiveness is recorded in the consolidated statement of income when it occurs.
When a hedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge accounting, any cumulative
gain or loss existing in equity at that time remains in shareholders’ equity and is recognised in the consolidated statement of income
when the committed or forecast transaction is ultimately recognised in the consolidated statement of income. However, if a forecast
or committed transaction is no longer expected to occur, the cumulative gain or loss that was recognised in equity is immediately
transferred to the consolidated statement of income.
A derivative may be embedded in a non-derivative ‘host contract’ such as provisionally priced sales and purchases. Such
combinations are known as hybrid instruments. If a hybrid contract contains a host that is a financial asset within the scope of IFRS 9,
then the relevant classification and measurement requirements are applied to the entire contract at the date of initial recognition.
Should the host contract not be a financial asset within the scope of IFRS 9, the embedded derivative is separated from the host
contract, if it is not closely related to the host contract, and accounted for as a standalone derivative.
Where the embedded derivative is separated, the host contract is accounted for in accordance with its relevant accounting policy,
unless the entire instrument is designated at FVTPL in accordance with IFRS 9.
Financial guarantee contracts
Financial guarantee contracts are accounted for in accordance with IFRS 9 as financial liabilities. After initial recognition, any such
contracts are subsequently measured at the higher of the amount of the provision for expected credit losses and the amount initially
recognised less any income recognised in accordance with the principles of IFRS 15.
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Notes to the financial statements continued
2. Segment information
Glencore is organised and operates on a worldwide basis in two core business segments – Marketing activities and Industrial
activities, reflecting the reporting lines and structure used by Glencore’s management to allocate resources and assess the
performance of Glencore.
The business segments’ contributions to the Group are primarily derived from a) the net margin or premium earned from physical
Marketing activities (net sale and purchase of physical commodities) and the provision of marketing and related value-add services
and b) the net margin earned from Industrial asset activities (resulting from the sale of physical commodities over the cost of
production and/or cost of sales). The marketing-related operating segments have been aggregated under the Marketing reportable
segment as their economic characteristics (historical and expected long-term Adjusted EBITDA margins and the nature of the
marketing services provided) are similar. The industrial-related operating segments have been aggregated under the Industrial
reportable segment as the core activities (extracting raw material and / or processing it further into saleable product, as required, and
then selling it at prevailing market prices), the exposure to long-term economic risks (price movements, technology, sovereign and
production substitution) and the longer-term average Adjusted EBITDA margins are similar. The economic and operational
characteristics of our coal operating and commercial units are not expected to change in the foreseeable future and continue to be
included within the industrial assets and marketing reporting segments, respectively.
Corporate and other: consolidated statement of income amounts represent Group-related income and expenses (including share of
Viterra earnings and certain variable bonus charges). Statement of financial position amounts represent Group-related balances. In
June 2023, Glencore and its fellow shareholders in Viterra Limited concluded an agreement with Bunge Limited, to merge Bunge
and Viterra in a cash and stock transaction. As a result, the carrying amount of the 49.9% investment in Viterra as at 31 December 2023
is classified as held for sale (see note 16) and, while having this classification, Glencore no longer accounts for its share of Viterra’s
income. However, for segmental reporting purposes, and for internal reporting, Viterra continues to be accounted for as an equity
accounted associate.
The financial performance of the operating segments is principally evaluated by management with reference to Adjusted
EBIT/EBITDA. Adjusted EBIT is the net result of segmental revenue (revenue including Proportionate adjustments as defined in the
Alternative performance measure section) less cost of goods sold and selling and administrative expenses plus share of income from
associates and joint ventures, dividend income and the attributable share of Adjusted EBIT of relevant material associates and joint
ventures, which are accounted for internally by means of proportionate consolidation, excluding significant items. Adjusted EBITDA
consists of Adjusted EBIT plus depreciation and amortisation, including the related Proportionate adjustments. In addition, Volcan,
while a subsidiary of the Group, is accounted for under the equity method for internal reporting and analysis due to the relatively low
economic ownership held by the Group.
The accounting policies of the operating segments are the same as those described in note 2 with the exception of the Antamina
copper/zinc mine, the Collahuasi joint venture and Volcan. Under IAS 28 and IFRS 11, Glencore’s investment in the Antamina
copper/zinc mine (34% owned at 31 December 2023 and 31 December 2022) is considered to be an associate as it is not subject to joint
control and the Collahuasi copper mine (44% owned at 31 December 2023 and 31 December 2022) is considered to be a joint venture.
Associates and joint ventures are required to be accounted for in Glencore’s financial statements under the equity method. For
internal reporting and analysis, Glencore evaluates the performance of these investments under the proportionate consolidation
method, reflecting Glencore’s proportionate share of the revenues, expenses, assets and liabilities of the investments. For internal
reporting and analysis, management evaluates the performance of Volcan under the equity method, reflecting the Group’s relatively
low 23.3% economic ownership (at 31 December 2023 and 31 December 2022) in this fully ring-fenced listed entity, with its stand-alone,
independent and separate capital structure. The balances as presented for internal reporting purposes are reconciled to Glencore’s
statutory disclosures in the following tables and/or in the Alternative performance measures section.
In Q4 2022, Glencore commenced a process to dispose of its 23.3% economic interest in Volcan, which is ongoing. As a result, the
carrying amounts of Volcan assets and liabilities as at 31 December 2023 and 31 December 2022 are classified as held for sale
(see note 16). For segmental reporting purposes, Volcan continues to be accounted for as an equity accounted associate.
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Financial Statements
Additional Information
Notes to the financial statements continued
2. Segment information continued
Glencore accounts for intra-segment sales and transfers where applicable as if the sales or transfers were to third parties, i.e. at arm’s
length commercial terms.
2023
US$ million
Revenue
Metals and minerals
Energy products
Corporate and other
Revenue – segmental
Proportionate adjustment – revenue1
Revenue – reported measure
Metals and minerals
Adjusted EBITDA
Depreciation and amortisation
Proportionate adjustment – depreciation1
Adjusted EBIT
Energy products
Adjusted EBITDA
Depreciation and amortisation
Adjusted EBIT
Corporate and other
Adjusted EBITDA2
Depreciation and amortisation
Adjusted EBIT
Total Adjusted EBITDA
Total depreciation and amortisation
Total depreciation Proportionate adjustment
Total Adjusted EBIT
Share of associates' significant items1,3
Viterra share in earnings post-held for sale classification2
Movement in unrealised inter-segment profit elimination
adjustments4
Gain on acquisitions and disposals of non-current assets
Other expense – net
Impairments
Interest expense – net
Income tax expense
Proportionate adjustment – net finance, impairment and income
tax expense1
Income for the year
Marketing
activities
Industrial
activities
Inter-segment
eliminations
69,293
117,415
–
186,708
–
186,708
1,774
(60)
–
1,714
2,098
(390)
1,708
28
–
28
3,900
(450)
–
3,450
35,556
24,858
7
60,421
(2,559)
57,862
5,445
(3,165)
(729)
1,551
8,452
(2,320)
6,132
(695)
(46)
(741)
13,202
(5,531)
(729)
6,942
(22,808)
(3,933)
–
(26,741)
–
(26,741)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Total
82,041
138,340
7
220,388
(2,559)
217,829
7,219
(3,225)
(729)
3,265
10,550
(2,710)
7,840
(667)
(46)
(713)
17,102
(5,981)
(729)
10,392
(90)
(186)
258
850
(1,091)
(2,484)
(1,900)
(2,207)
(332)
3,210
1 Refer to segment information on previous page and APMs section for definition.
2 Marketing activities include $321 million of Glencore’s equity accounted share of Viterra, of which $186 million relates to the period following the held for sale
classification as at 30 June 2023. In June 2023, Glencore and its fellow shareholders in Viterra Limited, concluded an agreement with Bunge Limited to
merge Bunge and Viterra in a cash and stock transaction. As a result, the carrying amount of the 49.9% investment in Viterra as at 31 December 2023 is
classified as held for sale (see note 16) and, while having this classification, Glencore no longer accounts for its share of Viterra’s income. However, for
segmental reporting purposes, and for internal reporting, Viterra continues to be accounted for as an equity accounted associate.
3 Share of associates’ significant items comprise Glencore’s share of significant charges relating to impairments and other items booked directly by
various associates.
4 Represents the required adjustment to eliminate unrealised profit or losses arising on inter-segment transactions, i.e. before ultimate sale to a third party.
For Glencore, such adjustments arise on the sale of product, in the ordinary course of business, from its Industrial to Marketing operations. Management
assesses segment performance prior to any such adjustments, as if the sales were to third parties.
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Financial Statements
Additional Information
Notes to the financial statements continued
2. Segment information continued
2022
US$ million
Revenue
Metals and minerals
Energy products
Corporate and other
Revenue – segmental
Proportionate adjustment – revenue1
Revenue – reported measure
Metals and minerals
Adjusted EBITDA
Depreciation and amortisation
Proportionate adjustment – depreciation1
Adjusted EBIT
Energy products
Adjusted EBITDA
Depreciation and amortisation
Adjusted EBIT
Corporate and other
Adjusted EBITDA2
Depreciation and amortisation
Adjusted EBIT
Total Adjusted EBITDA
Total depreciation and amortisation
Total depreciation Proportionate adjustment
Total Adjusted EBIT
Share of associates' significant items1,3
Movement in unrealised inter-segment profit elimination
adjustments4
Gain on acquisitions and disposals of non-current assets
Other expense – net
Impairments
Interest expense – net
Income tax expense
Proportionate adjustment – net finance, impairment and income
tax expense1
Income for the year
Marketing
activities
Industrial
activities
Inter-segment
eliminations
77,382
137,720
–
215,102
–
215,102
1,694
(54)
–
1,640
5,558
(359)
5,199
(457)
–
(457)
6,795
(413)
–
6,382
38,993
39,333
6
78,332
(2,695)
75,637
9,274
(3,776)
(416)
5,082
18,590
(2,740)
15,850
(599)
(58)
(657)
27,265
(6,574)
(416)
20,275
(25,499)
(9,256)
–
(34,755)
–
(34,755)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Total
90,876
167,797
6
258,679
(2,695)
255,984
10,968
(3,830)
(416)
6,722
24,148
(3,099)
21,049
(1,056)
(58)
(1,114)
34,060
(6,987)
(416)
26,657
(9)
1,176
1,287
(911)
(3,337)
(1,336)
(6,368)
(648)
16,511
1 Refer to segment information above and APMs section for definition.
2 Marketing activities include $494 million of Glencore’s equity accounted share of Viterra.
3 Share of associates’ significant items comprise Glencore’s share of significant charges relating to impairments and other items booked directly by various
associates.
4 Represents the required adjustment to eliminate unrealised profit or losses arising on inter-segment transactions, i.e. before ultimate sale to a third party.
For Glencore, such adjustments arise on the sale of product, in the ordinary course of business, from its Industrial to Marketing operations. Management
assesses segment performance prior to any such adjustments, as if the sales were to third parties.
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Financial Statements
Additional Information
Notes to the financial statements continued
2. Segment information continued
2023
US$ million
Current assets
Current liabilities
Allocatable current capital employed
Property, plant and equipment
Intangible assets
Investments in associates and other investments
Non-current advances and loans
Inventories
Allocatable non-current capital employed
Other assets1
Other liabilities2
Total net assets
Capital expenditure
Metals and minerals
Energy products
Corporate and other
Capital expenditure – segmental
Proportionate adjustment – capital expenditure3
Capital expenditure – reported measure4
2022
US$ million
Current assets
Current liabilities
Allocatable current capital employed
Property, plant and equipment
Intangible assets
Investments in associates and other investments
Non-current advances and loans
Inventories
Allocatable non-current capital employed
Other assets1
Other liabilities2
Total net assets
Capital expenditure
Metals and minerals
Energy products
Corporate and other
Capital expenditure – segmental
Proportionate adjustment – capital expenditure3
Capital expenditure – reported measure4
Marketing
activities
38,010
(28,603)
9,407
987
5,144
699
1,818
–
8,648
Industrial
activities
18,677
(8,359)
10,318
38,246
858
8,637
1,058
623
49,422
18,055
59,740
95
508
–
603
–
603
Marketing
activities
47,534
(32,495)
15,039
920
5,142
4,509
1,666
–
12,237
4,492
1,521
61
6,074
(1,291)
4,783
Industrial
activities
17,326
(9,258)
8,068
38,644
1,018
7,825
988
605
49,080
27,276
57,148
60
239
–
299
–
299
3,597
1,172
38
4,807
(461)
4,346
Corporate
and other
–
–
–
–
–
–
–
–
–
9,112
(48,670)
(39,558)
–
–
–
–
–
–
Corporate
and other
–
–
–
–
–
–
–
–
–
6,406
(45,611)
(39,205)
–
–
–
–
–
–
Total
56,687
(36,962)
19,725
39,233
6,002
9,336
2,876
623
58,070
9,112
(48,670)
38,237
4,587
2,029
61
6,677
(1,291)
5,386
Total
64,860
(41,753)
23,107
39,564
6,160
12,334
2,654
605
61,317
6,406
(45,611)
45,219
3,657
1,411
38
5,106
(461)
4,645
1 Other assets include non-current financial assets, deferred tax assets, cash and cash equivalents and assets held for sale.
2 Other liabilities include borrowings, non-current deferred income, deferred tax liabilities, non-current provisions, non-current post-retirement and other
employee benefits, non-current financial liabilities and liabilities held for sale.
3 Refer to APMs section for definition.
4 Includes $821 million (2022: $425 million), comprising $485 million (2022: $219 million) in Marketing activities and $336 million (2022: $206 million) in Industrial
activities, of ‘right-of-use assets’ capitalised in accordance with IFRS 16 – Leases.
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Additional Information
Notes to the financial statements continued
2. Segment information continued
Geographical information
US$ million
Revenue from third parties1
The Americas
Europe
Asia
Africa
Oceania
Non-current assets2
The Americas
Europe
Asia
Africa
Oceania
2023
2022
42,495
64,129
95,459
11,570
4,176
217,829
19,627
7,465
3,481
10,068
14,040
54,681
44,354
87,662
104,861
13,238
5,869
255,984
17,183
11,297
3,966
11,300
14,461
58,207
1 Revenue by geographical destination is based on the country of incorporation of the sales counterparty, however this may not necessarily be the country of
the counterparty’s ultimate parent and/or final destination of product.
2 Non-current assets are non-current assets excluding other investments, advances and loans, other financial assets and deferred tax assets. Non-current
assets comprise assets in Australia of $13,733 million (2022: $14,164 million), in Peru of $5,340 million (2022: $5,519 million) and the DRC of $5,158 million (2022:
$6,074 million).
3. Revenue
US$ million
Sale of commodities
Freight, storage and other services
Total
2023
214,286
3,543
217,829
2022
252,356
3,628
255,984
Revenue is derived principally from the sale of commodities, recognised once control of the goods has transferred from Glencore to
the buyer. Revenue from sale of commodities includes $1,773 million negative (2022: $78 million positive) of mark-to-market related
adjustments on provisionally priced sales arrangements, recognised within our Marketing segment. Revenue derived from freight,
storage and other services is recognised over time as the service is rendered. Revenue is measured based on consideration specified
in the contract with the customer and is presented net of amounts prepaid as incentives and/or rebates paid to customers, and
excludes amounts collected on behalf of third parties. This is consistent with the revenue information disclosed for each reportable
segment (see note 2).
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Additional Information
Notes to the financial statements continued
4. Gain on acquisitions and disposals of non-current assets
US$ million
Gain on sale of Cobar
Gain on revaluation of MARA
Gain on revaluation of Noranda Income Fund
Gain on bargain purchase of Cerrejón
Gain on sale of Ernest Henry
Loss on sale of Bolivia Zinc
Loss on sale of E&P Chad
Gain on sale of BaseCore
Loss on sale of Los Quenuales
Loss on sale of Access World
Net gain on sale of other investments/operations
Gain/(loss) on disposal of property, plant and equipment
Total
Notes
26
26
26
26
26
26
26
11
26
26
2023
585
224
18
–
–
–
–
–
–
–
3
20
850
2022
–
–
–
1,029
512
(104)
(34)
131
(180)
(23)
71
(115)
1,287
2023
Disposal of Cobar
In June 2023, Glencore completed the disposal of its interest in the CSA mine, a copper mine in New South Wales, Australia, resulting
in a gain on sale of $585 million (see note 26).
Acquisition of MARA
In September 2023, Glencore completed the acquisition of the remaining 56.25% interest in the MARA project, a copper and gold
brownfield project located in the Caramarca province, Argentina, resulting in a gain on acquisition of $224 million, following the
revaluation of Glencore’s previously recognised interest (see note 26).
Acquisition of Noranda Income Fund
In March 2023, Glencore completed the acquisition of the remaining 75% interest in Noranda Income Fund, an electrolytic zinc
processing facility and ancillary assets located in Salaberry-de-Valleyfield, Quebec, that it did not previously own, resulting in a gain on
acquisition of $18 million, following the revaluation of Glencore’s previously recognised interest (see note 26).
2022
Acquisition of Cerrejón
In January 2022, Glencore completed the acquisition of the remaining 66.67% interest in Cerrejón, a coal mine in Colombia, resulting
in a bargain purchase gain of $1,029 million (see note 26).
Disposal of Ernest Henry
In January 2022, Glencore completed the disposal of its interest in Ernest Henry Mining Pty Ltd, a copper-gold mine in Queensland,
Australia, resulting in a gain on sale of $512 million (see note 26).
Disposal of Bolivia Zinc
In March 2022, Glencore completed the disposal of its interest in the Bolivia Zinc assets (Sinchi Wayra and Illapa), resulting in a loss on
sale of $104 million (see note 26).
Disposal of E&P Chad
In June 2022, Glencore completed the disposal of its Chad upstream oil operations, resulting in a loss on sale of $34 million (see note
26).
Disposal of BaseCore
In July 2022, BaseCore Metals (a Glencore joint venture) completed the disposal of a royalty package to Sandstrom Gold Ltd, resulting
in an overall gain on sale to Glencore of $131 million (see note 11).
Disposal of Los Quenuales
In December 2022, Glencore completed the disposal of its Los Quenuales zinc, lead, silver operations in Peru, facilitated by the earlier
settlement of an underlying silver streaming arrangement, resulting in a loss on sale of $180 million (see note 26).
Disposal of Access World
In December 2022, Glencore completed the disposal of its interest in the Access World Group, a global commodities storage and
logistics group, resulting in a loss on sale of $23 million (see note 26).
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Financial Statements
Additional Information
Notes to the financial statements continued
5. Other income/(expense)
US$ million
Net foreign exchange gains
Gain on energy contracts
Other income
Total other income
Net foreign exchange losses
Net loss in mark-to-market valuations
Loss on energy contracts
Legal and regulatory proceedings
Closed sites rehabilitation provisioning
Closure and severance costs
Other expenses
Total other expenses
Net other expenses
Notes
2023
46
–
130
176
–
(103)
(94)
(168)
(503)
(40)
(359)
(1,267)
(1,091)
2022
–
264
101
365
(349)
(106)
–
(302)
(370)
–
(149)
(1,276)
(911)
Together with foreign exchange movements and mark-to-market valuations, other net income / (expense) includes other items that,
due to their nature and variable financial impact or infrequency of the events giving rise to these items, are reported separately from
operating segment results.
Net foreign exchange gains/losses
2022 net foreign exchange losses included realised foreign currency losses of $431 million (see page 181) recognised on the
restructuring and partial repayment of ZAR-denominated intragroup debt and return of capital that were part of the Group’s net
investment in its South African operations. These repayments are considered a partial disposal of a net investment in a subsidiary, and
thus a proportionate share of the total accumulated foreign exchange losses recognised in the net investment were recycled to the
statement of income upon these repayments.
Net loss in mark-to-market valuations
Primarily relates to movements on interests in investments and loans (see notes 11 and 14), the ARM Coal non-discretionary dividend
obligation (see note 29) and deferred consideration related to Mototolo stake sale in 2018 (see notes 12 and 14), all carried at fair value.
Loss/gain on energy contracts
2023 loss of $94 million relates to mark-to-market movements on long-term physically settled electricity contracts entered into by our
European metallurgical operations, and the 2022 gain of $264 million relates to the settlement of certain physically settled electricity
contracts, following the significant appreciation in European traded power prices in the summer of 2022.
Legal and regulatory proceedings
$168 million (2022: $302 million) relating to various legal matters and related costs (legal, expert and compliance), including in respect
of the government investigations (see notes 23 and 31) and monitorships ($57 million).
Closed sites rehabilitation provisioning
Comprises movements in restoration, rehabilitation and decommissioning estimates related to sites that are no longer operational
(see note 23).
Closure and severance costs
Closure and severance-related costs were primarily incurred at operations in Australia.
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Financial Statements
Additional Information
Notes to the financial statements continued
6. Interest income/(expense)
US$ million
Bank deposits and other financial assets
Interest income and accretion on certain advances repayable with product
Loans to associates
Interest income
Interest expense for financial liabilities not classified at FVTPL
Capital market notes
Revolving credit facilities
Lease liabilities
Other bank loans
Less: capitalised interest
Other interest
Other interest expense
Post-retirement employee benefits
Deferred income
Restoration and rehabilitation
Other provisions
Other accretion interest
Interest expense
7. Impairments
US$ million
Impairments of non-current assets
Property, plant and equipment and intangible assets
Investments
Advances repayable with products
VAT receivable – non-current
Inventory and other
Impairments of financial assets
Advances and loans – current and non-current
Total impairments1
Notes
12
9
9
24
22
23
23
2023
604
–
11
615
(1,334)
(195)
(117)
(346)
51
(262)
(2,203)
(21)
(89)
(122)
(43)
(37)
(312)
(2,515)
2022
290
133
12
435
(869)
(118)
(88)
(225)
31
(178)
(1,447)
(19)
(97)
(155)
(36)
(17)
(324)
(1,771)
Notes
2023
2022
9/10
11
12/14
12/14
(2,103)
–
(156)
–
(5)
(2,264)
(220)
(220)
(2,484)
(1,984)
(167)
(389)
(632)
(113)
(3,285)
(52)
(52)
(3,337)
1
Impairments recognised during the year are allocated to Glencore’s operating segments as follows: Marketing activities $393 million (2022: $515 million) and
Industrial activities $2,091 million (2022: $2,822 million).
As part of a regular portfolio review, Glencore carries out an assessment of whether there are indicators of cash-generating unit (CGU)
or asset impairments or whether a previously recorded impairment may no longer be required.
The recoverable amounts of the property, plant and equipment and intangible assets were measured based on fair value less costs
of disposal (FVLCD). The FVLCD of all CGUs are determined by discounted cash flow techniques based on the most recent approved
financial budgets, underpinned and supported by the life of asset plans of the respective operations. The valuation models use a
combination of internal sources and those inputs available to a market participant, which comprise the most recent reserve and
resource estimates, relevant cost assumptions and where possible, market forecasts of commodity price and foreign exchange rate
assumptions, discounted using operation specific post-tax real discount rates (unless otherwise indicated) ranging from 8.7% – 15.8%
(2022: 7.4% – 14.9%). The valuations generally remain most sensitive to price and a deterioration / improvement in the pricing outlook
may result in additional impairments/reversals. The determination of FVLCD used Level 3 valuation techniques for both years. In
providing sensitivity analysis (and particularly on commodity price assumptions), a 10% change, representing a typical deviation
parameter common in the industry, has been provided. Where a higher percentage is reasonably possible on an operational
assumption, that has been clearly identified.
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Additional Information
Notes to the financial statements continued
7. Impairments continued
As a result of the regular impairment assessment, the following significant impairment charges were recognised:
2023
Property, plant and equipment and intangible assets
During 2023, many central bank interest rates continued to increase, often leading to higher equity risk and certain country risk
premiums and ultimately an environment of generally higher discount rates. These macro factors, together with a particularly
subdued cobalt hydroxide short-to medium-term pricing outlook and various operational challenges, resulted in a number of
impairments related to metals and minerals CGUs in our Industrial activities segment. The valuations are most sensitive to
commodity price and discount rate assumptions and a deterioration/improvement in these assumptions could result in additional
impairments/reversal of impairments, as set out below.
2023 impairment/
(reversal of
impairment)
Impairments/(reversal of impairments)
resulting from changes in key assumptions
pre tax
post tax
Capital
employed1
Discount
rate2
Short-to long-term
price assumption
Decrease/(increase)
in price of 10%3
Increase/(decrease)
in discount rate of 1%
US$ million
Cash-generating unit
Mutanda copper/cobalt
1,045
762
1,432
15.0%
McArthur River zinc
Kazzinc Smelting zinc
Kazzinc - Zhairem zinc
Volcan zinc5
Nordenham Zinc5
Astron oil
Various other
211
156
77
375
231
(190)
198
2,103
118
134
62
340
191
(138)
147
1,616
758
1,265
522
1,086
–
1,056
–
6,119
Cu: 8,196 - 8,500
Co4: 20,668 - 37,203
Zn: 2,476 - 2,700
Zn: 2,476 - 2,700
Zn: 2,476 - 2,700
10.6%
13.3%
13.3%
9.2%
Zn: 2,476 - 2,700
8.7% Margin $/bbl: 10.9 - 13.7
261
307
364
160
125
–
–
243
–
1,460
(254)
(292)
(332)
(134)
(126)
–
–
(48)
–
(1,186)
133
70
109
16
–
–
88
–
416
(148)
(79)
(123)
(18)
–
–
(48)
–
(416)
1 Estimated recoverable capital employed, post impairment. Capital employed includes property, plant and equipment, non-current inventory, less
rehabilitation provisions and net deferred tax liabilities.
2 Discount rates expressed on a real terms, post-tax basis.
3 Across the curve.
4 Cobalt hydroxide price
5 The estimated recoverable value of Nordenham is estimated to be de minimis. In respect of Volcan, the recoverable value reflects indicative third-party
offers. No reasonably possible change in assumptions would materially impact this value, hence no sensitivity analysis is presented.
• $1,045 million, Mutanda CGU. On account of significantly increased global production, the cobalt hydroxide market moved further
into oversupply during 2023. In response, Mutanda has made certain market-related adjustments to its short-to medium-term
production plans, which, in addition to the Group revising cobalt price assumptions lower over this period, has significantly
impacted Mutanda’s expected overall returns.
• $211 million, McArthur River CGU. Lower modelled saleable production volumes due to revised processing recovery assumptions
and a higher assessed discount rate of 10.6% (2022: 8.7%) were the primary drivers of the impairment.
• $156 million, Kazzinc Smelting CGU. In addition to the above-noted macro inputs, the Kazzinc Smelting CGU was incrementally
impacted by cost inflation on both capital and operational expenditures as it continues to manage logistical and supply chain
challenges stemming from the Russia/Ukraine war.
• $77 million, Kazzinc Zhairem CGU. As above with the Kazzinc Smelting site CGU, the Zhairem CGU was impacted by inflationary
pressures and the macro impacts increasing the assessed discount rate to 13.3% (2022: 11%).
• $375 million, Volcan CGU. Volcan is a listed zinc / silver mining entity in Peru, in which the Group holds a 63% controlling (23.2%
economic) interest in. Over the past year, the Group has been exploring various disposal options and as a result, has classified the
assets and liabilities of Volcan as held for sale (see note 16). The Group has received various proposals to acquire its equity interest
and the current carrying value reflects the value indicated by such proposals.
• $231 million, Nordenham CGU. In 2022, Nordenham’s zinc processing operations were put into care and maintenance, with value
being realised through the resale of committed electricity supply into the grid. In 2023, forecast treatment and refinery fee
assumptions over the medium term are insufficient to support the carrying value. A full impairment has been recognised.
• The balance of the impairment charges of $198 million on property, plant and equipment (none of which were individually material)
relate to specific assets (Industrial activities segment) where utilisation is no longer required or to projects no longer progressed due
to changes in production and development plans.
Reversal of impairment:
• $190 million, Astron Energy CGU. The CGU was impaired in 2020, reflecting the global macro-economic impact of Covid-19 on
refined petroleum product demand, the resulting industry overcapacity and lower refining margins. As demand continued to
recover post-Covid, refining margins and their outlook also improved and as a result, a large portion of the previously recorded
impairment has been reversed, further enabled by the restart of operations of the Astron Energy refinery in Cape Town in early
2023, following a multi-year rebuild.
2023 Glencore Annual Report
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215
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Notes to the financial statements continued
7. Impairments continued
Advances repayable with products
During 2023, the originally expected production rate at Mopani was not achieved, in part due to a lack of funding. The new
shareholder conducted operational and strategic reviews, resulting in Mopani seeking additional equity funding, alongside the
restructuring of our transaction debt (see note 12). As a result, the advance was impaired by $156 million (Marketing activities
segment).
Advances and loans
Impairment charges on advances and loans of $220 million (none of which were individually material) were recognised following
changes in the underlying financial conditions of various counterparties and / or non-performance in settling certain obligations.
2022
Property, plant and equipment and intangible assets
During 2022, significant changes to key macro estimates ensued, exacerbated by the Russia/Ukraine war, which contributed to
significant supply/demand imbalances, extreme commodity price volatility, higher energy prices and, in some cases, which are
generally linked, emboldening governments to raise royalties and taxes. 2022 saw broad-based cost increases, reflecting:
– direct and indirect inflationary pressures on goods and services (particularly energy-related flow-through impacts on electricity
costs, coal, diesel, steel, explosives, chemicals, reagents and Original Equipment Manufacturer spare parts);
– competition for skilled employees and contractors; and
– supply chain pressures, including their secondary effects on shipping and handling costs, as trade flows adjusted in response to
the war.
The weighting of the above macro factors on certain CGUs, combined with various operational challenges, resulted in a number of
impairments in our Industrial activities segment, almost exclusively related to metals and minerals’ CGUs. The valuations are most
sensitive to price and discount rate assumptions and a deterioration/improvement in these assumptions could result in additional
impairments/reversal of impairments, as set out below.
US$ million
Cash-generating
unit
Mt. Isa copper4
Mt. Isa zinc
McArthur River zinc
Zhairem zinc
Portovesme zinc4
Volcan zinc
Koniambo nickel4
Various other
2022 impairment/
(reversal of impairment)
Impairments/(reversal of impairments)
resulting from changes in key assumptions
pre tax
post tax
Capital
employed1
Discount
rate2
Short-to long-term
price assumption
Decrease/(increase)
in price of 10%3
Increase/(decrease)
in discount rate of 1%
656
455
172
185
143
164
227
(18)
1,984
460
318
96
148
105
116
227
(18)
1,452
–
630
869
565
72
1,243
–
–
3,379
9.7% Cu: 8,157 - 7,400
9.7% Zn: 3,250 - 2,450
8.7% Zn: 3,250 - 2,450
11.0% Zn: 3,250 - 2,450
9.9% Zn: 3,250 - 2,450
9.4% Zn: 3,250 - 2,450
Ni: 19,500 -
18,400
10.7%
–
504
396
161
–
303
–
(318)
(96)
(148)
–
(242)
–
–
–
50
63
21
–
69
–
–
(58)
(71)
(22)
–
(96)
–
1,364
(804)
203
(247)
1 Estimated recoverable non-current capital employed, post impairment. Non-current capital employed includes property, plant and equipment, non-
current inventory, less rehabilitation provisions and net deferred tax liabilities.
2 Discount rates expressed on a real terms, post-tax basis.
3 Across the curve.
4 The estimated recoverable value of non-current capital employed of these CGUs is estimated to be de minimis. No reasonably possible change in
assumptions would materially impact this value, hence no sensitivity analysis is presented.
• $656 million, Mt. Isa Copper CGU. During the year, various options for copper mining activities were considered in the context of
higher costs due to the above macro factors. These factors outweighed the significant efforts made over the past few years to make
the operation more competitive, such that the entire carrying value of this CGU was impaired.
• $455 million, Mt. Isa Zinc CGU and $172 million, McArthur River Zinc CGU. Resulting primarily from the above-noted macro impacts,
during 2022, the zinc market and its related treatment and refinery cost / revenue / profit drivers were significantly impacted,
particularly in relation to ex-China smelting, where updated Group assumptions have significantly impacted Australia Zinc’s long-
term through-the-cycle expected mining returns.
• $185 million, Zhairem zinc/lead CGU. In addition to the above-noted macro impacts, the Zhairem CGU, located in Kazakhstan, was
significantly impacted by additional logistical impositions, as traditional supply chains were re-routed and the Kazakhstan
government increased mineral extraction tax by some 50% (e.g. the rate applicable to zinc increased from 7% to 10.5%).
• $143 million, Portovesme zinc/lead CGU. As a result of the above-noted macro impacts, particularly relating to increases in European
energy costs, Portovesme curtailed its primary zinc and lead smelting operations, with its remaining focus then being the
treatment / recycling of waelz oxides. These macro factors outweighed the significant efforts made over the past few years to make
the primary operations more competitive, such that the entire carrying value of these CGUs, other than the waelz-oxide line, was
impaired.
216………………………………………………………
216
2023 Glencore Annual Report
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Strategic Report
Corporate Governance
Financial Statements
Additional Information
Notes to the financial statements continued
7. Impairments continued
• $164 million, Volcan zinc CGU. Resulting primarily from the above-noted macro impacts, during 2022, the zinc market and its
related treatment and refinery cost / revenue / profit drivers were significantly impacted, particularly in relation to ex-China
smelting, whereby updated assumptions, including in relation to Peru’s increasing political challenges, have impacted the long-
term through-the-cycle expected returns of Volcan’s southern cluster CGU.
• $227 million, Koniambo nickel CGU. As a result of persistent operational challenges, high ferro-nickel price discounts, and the
above-noted macro impacts, which have produced significantly higher energy and other costs, a strategic review of the long-term
viability of Koniambo was initiated with one of the options being the potential cessation of operations. These factors outweigh the
significant efforts made over the past few years to make the operation more competitive, such that the entire carrying value of this
CGU was impaired.
• Net $18 million reversal of impairments. The balance of the impairment charges of $70 million on property, plant and equipment
(none of which were individually material) relate to specific assets (Industrial activities segment) where utilisation is no longer
required or to projects no longer progressed due to changes in production and development plans, net of reversals of impairment
of $88 million on property, plant and equipment (none of which were individually material) as a result of improved market
conditions in the oil and gas market (Industrial activities segment).
Investments
Primarily comprised impairment charges of $55 million in respect of our 26.3% interest in Trevali Mining Corporation (Industrial
activities segment), reflecting the Company obtaining creditor protection, following a serious mining incident at its Perkoa Mine in
Burkina Faso in April 2022, and $54 million in respect of our 2.1% interest in Britishvolt (Marketing activities segment), owing to its
financial difficulties and entering into administration. As a result, the entire carrying values of these investments were impaired.
Advances repayable with products
During 2022, the originally expected production rate at Mopani was not achieved, in part due to a lack of funding. The new
shareholder had conducted operational and strategic reviews, resulting in Mopani seeking additional funding and to restructure
and extend repayment of the transaction debt (see note 12). As a result, the advance was impaired by $422 million to a value of
$596 million. The valuation assumed a long-term copper price of $7,400/t and an asset-specific discount rate of 19%, which is reflective
of an increase in emerging market risk premiums and underlying interest rates. The valuation was most sensitive to price, receipt of
physical copper and discount rate assumptions, and a deterioration in these assumptions could have resulted in additional
impairments (Marketing activities segment). As at 31 December 2022, had the price assumptions declined by 10% (across the curve), it
could have resulted in a further $43 million of impairment being recognised. If the discount rate increased by 1%, it could have
resulted in a further $36 million of impairment being recognised, while a 10% decrease in physical copper estimates could have
resulted in an additional impairment of $19 million. Conversely, a 10% increase in price assumptions (across the curve) would have
resulted in an impairment reversal of $44 million and a 10% increase in physical copper receipts would have resulted in an
impairment reversal of $18 million.
VAT receivable – non-current
As a result of the continued delay and non-performance by the DRC government in settling long-outstanding Value Added Tax (‘VAT’)
claims, impairment charges of $632 million were recognised in respect of balances outstanding at our Mutanda and KCC CGUs
(Industrial activities segment).
Inventories – non-current
As a result of geotechnical and other operational challenges, the KCC CGU undertook an extensive technical review and operational
optimisation exercise, resulting in a significant reduction in its shorter-term production forecasts over the next three to four years,
such that $113 million of inventory stockpile value was impaired, consistent with its latest life of mine model.
2023 Glencore Annual Report
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Strategic Report
Corporate Governance
Financial Statements
Additional Information
Notes to the financial statements continued
8. Income taxes
Income taxes consist of the following:
US$ million
Current income tax expense
Adjustments in respect of prior year current income tax
Deferred income tax credit
Adjustments in respect of prior year deferred income tax
Total tax expense reported in the statement of income
Deferred income tax recognised directly in other comprehensive income
Total tax expense recognised directly in other comprehensive income
2023
(2,583)
(282)
697
(39)
(2,207)
(17)
(17)
2022
(7,165)
(274)
998
73
(6,368)
(65)
(65)
The effective Group tax rate is different from the statutory Swiss income tax rate applicable to the Company for the following reasons:
US$ million
Income before income taxes
Less: Share of income from associates and joint ventures
Parent Company’s and subsidiaries’ income before income tax and attribution
Income tax expense calculated at the Swiss income tax rate of 12% (2022: 12%)
Tax effects of:
Different tax rates from the standard Swiss income tax rate
Tax-exempt income
Items not tax deductible
Foreign exchange fluctuations
Changes in tax rates
Utilisation and changes in recognition of tax losses and temporary differences
Tax losses not recognised
Adjustments in respect of prior years
Other
Income tax expense
2023
5,417
(1,337)
4,080
(490)
(891)
525
(939)
263
17
(198)
(255)
(321)
82
(2,207)
2022
22,879
(2,300)
20,579
(2,469)
(3,057)
538
(1,252)
(187)
(47)
385
(98)
(201)
20
(6,368)
The non-tax deductible items of $939 million (2022: $1,252 million) primarily relate to financing costs, impairments and various other
expenses.
The impact of tax-exempt income of $525 million (2022: $538 million) primarily relates to non-taxable dividends, income that is not
effectively connected to the taxable jurisdiction, and various other items.
The tax impact of foreign exchange fluctuations relates to the foreign currency movements on deferred tax balances where the
underlying tax balances are denominated in a currency different to the functional currency determined for accounting purposes.
For significant items, including non-recurring adjustments, refer to APM section.
218………………………………………………………
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2023 Glencore Annual Report
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Strategic Report
Corporate Governance
Financial Statements
Additional Information
Notes to the financial statements continued
8. Income taxes continued
Deferred taxes
Deferred taxes as at 31 December 2023 and 2022 are attributable to the items in the table below:
US$ million
Deferred tax assets1
Tax losses carried forward
Other
Total
Deferred tax liabilities1
Depreciation and
amortisation
Mark-to-market valuations
Other
Total
Total Deferred tax - net
US$ million
Deferred tax assets1
Tax losses carried forward
Other
Total
Deferred tax liabilities1
Depreciation and
amortisation
Mark-to-market valuations
Other
Total
Total Deferred tax - net
Recognised in
the statement
of income
Recognised in
other
comprehensive
income
Business
combination
and disposal of
subsidiaries
Foreign
currency
exchange
movements
Other
2022
(357)
(108)
(465)
1,639
(183)
(333)
1,123
658
–
(17)
(17)
–
2
(2)
–
(17)
11
22
33
(438)
–
–
(438)
(405)
1
1
2
61
–
(2)
59
61
–
–
–
(60)
–
(3)
(63)
(63)
1,515
322
1,837
(3,299)
(125)
(227)
(3,651)
(1,814)
Recognised in
the statement
of income
Recognised in
other
comprehensive
income
Business
combination
and disposal of
subsidiaries
Foreign
currency
exchange
movements
Other
2021
116
(18)
98
1,254
(1)
(280)
973
1,071
–
(2)
(2)
–
(2)
(61)
(63)
(65)
(4)
(17)
(21)
(625)
5
295
(325)
(346)
1
(2)
(1)
60
–
5
65
64
(16)
–
(16)
168
–
–
168
152
1,418
361
1,779
(4,156)
(127)
(186)
(4,469)
(2,690)
2023
1,170
220
1,390
(2,097)
(306)
(567)
(2,970)
(1,580)
2022
1,515
322
1,837
(3,299)
(125)
(227)
(3,651)
(1,814)
1 Asset and liability positions in the same category reflect the impact of tax assets and liabilities arising in local tax jurisdictions that cannot be offset against
tax assets and liabilities arising in other tax jurisdictions.
Deferred tax assets are net of $324 million (2022: $311 million) of uncertain tax liabilities related to tax estimation and judgement
uncertainties with respect to various open tax disputes discussed below.
Deferred tax assets are recognised for tax losses carried forward only to the extent that realisation of the related tax benefit is
probable. As at 31 December 2023, $1,665 million (2022: $1,915 million) of deferred tax assets related to available loss carry forwards have
been recognised, of which $1,170 million (2022: $1,515 million) are disclosed as deferred tax assets with the remaining balance being
offset against deferred tax liabilities arising in the same tax entity. This balance is primarily comprised of:
• $483 million (2022: $652 million) in entities domiciled in the DRC;
• $416 million (2022: $493 million) in entities domiciled in Switzerland; and
• $255 million (2022: $277 million) in entities domiciled in the US.
In evaluating whether it is probable that taxable profits will be earned in future accounting periods prior to any tax loss expiry as may
be the case, all available evidence was considered, including approved budgets, forecasts and business plans and, in certain cases,
analysis of historical operating results. These forecasts are consistent with those prepared and used internally for business planning
and impairment testing purposes. Following this evaluation, it was determined there would be sufficient taxable income generated
to realise the benefit of the deferred tax assets. With the exception of the deferred tax assets raised in respect of the Group’s DRC
operations (see below), no reasonably possible change in any of the key assumptions would result in a material reduction in forecast
headroom of tax profits so that the recognised deferred tax asset would not be realised.
2023 Glencore Annual Report
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Strategic Report
Corporate Governance
Financial Statements
Additional Information
Notes to the financial statements continued
8. Income taxes continued
The recognised losses carried forward in the DRC primarily relate to historical development, ramp-up and financing-related costs at
KCC. The losses carried forward have an unlimited carry-forward period, but are subject to annual utilisation limitation. As at 31
December 2023, deferred taxation assets have been recognised for available tax losses carried forward where they are expected to be
utilised fully by taxable profits. In recognising these deferred tax assets, consideration was given to the range of possible outcomes to
determine the expected value of the tax losses available for future offset, including to what extent previously incurred tax losses would
be available to offset future taxable profits. Any adverse challenge by the DRC tax authorities could materially impact the currently
recognised tax losses and could result in a reversal of part or all of the recognised deferred tax assets.
The recognised losses carried forward in Switzerland primarily relate to non-recurring events. Based on the core business activities
conducted in Switzerland and taxable income forecasts going forward, sufficient taxable profits are expected to fully utilise the
recognised tax losses prior to expiration.
The recognised losses carried forward in the US primarily relate to non-recurring events in 2011 and have a carry forward period of 20
years. The US entities comprise our core US marketing activities and based on taxable income forecasts going forward, sufficient
taxable profits are expected to fully utilise the recognised tax losses prior to expiration.
Income tax receivable / payable
US$ million
Income tax receivable
Income tax payable
Net income tax payable
2023
1,229
(1,850)
(621)
2022
401
(4,660)
(4,259)
Income tax judgements and uncertain tax liabilities
The current open tax matters are spread across numerous jurisdictions and consist primarily of legacy transfer pricing matters that
have been open for a number of years and may take several years to resolve. In recognising a provision for these taxation exposures,
consideration was given to the range of possible outcomes to determine the Group’s best estimate of the amount to provide. As at 31
December 2023, the Group has recognised $1,425 million (2022: $1,486 million) of uncertain tax liabilities related to possible adverse
outcomes of these open matters, of which $324 million (2022: $311 million) has been recognised net of deferred tax assets, with the
balance of $1,101 million (2022: $1,175 million) recognised as an income tax payable. The change in the total uncertain tax position
during the year reflects the issuance of various new assessments and the outcome of certain settlements and discussions at the
administrative phase.
UK Tax Audit
In previous periods, HMRC have issued formal transfer pricing, unallowable purposes and diverted profits tax assessments for the
2008-2019 tax years, amounting to $912 million. The Group has appealed against, and continues to vigorously contest, these
assessments, following, over the years, various legal opinions received and detailed analysis conducted, supporting its positions and
policies applied. Therefore, the Group has not fully provided for the amount assessed. The matter is now proceeding through the
Mutual Agreement Process, pursuant to article 24 of the Switzerland – United Kingdom Income Tax Treaty 1977. Management does
not anticipate a significant risk of material changes in estimates in this matter within the next financial year.
DRC Tax Audit
As a matter of course, various tax authorities in the DRC issue draft assessments adjusting revenue and denying costs and other
items, along with customs-related claims for alleged non-compliance or incorrect coding on certain filings. Upon receipt of such draft
assessments, the Group engages with the tax authorities to defend its filing positions. As at 31 December 2023, there are various
ongoing technical discussions and challenges, the ultimate outcome of which remains uncertain, and therefore there remains a risk
that the outcome could materially impact the recognised balances within the next financial year. It is impractical to provide further
sensitivity estimates of potential downside variances.
Available gross tax losses
Available gross tax losses carried forward and deductible temporary differences, for which no deferred tax assets have been
recognised in the consolidated financial statements, are detailed below and will expire as follows:
US$ million
1 year
2 years
3 years
Thereafter
Unlimited
Total
2023
18
217
16
12,193
17,212
29,656
2022
115
48
44
9,642
13,806
23,655
As at 31 December 2023, unremitted earnings of $58,500 million (2022: $62,829 million) have been retained by subsidiaries for
reinvestment. No provision is made for income taxes.
220………………………………………………………
220
2023 Glencore Annual Report
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Strategic Report
Corporate Governance
Financial Statements
Additional Information
Notes to the financial statements continued
9. Property, plant and equipment
2023
US$ million
Gross carrying amount:
1 January 2023
Business combination
Disposal of subsidiaries
Additions
Disposals
Effect of foreign currency
exchange movements
Other movements1
31 December 2023
Accumulated depreciation
and impairment:
1 January 2023
Disposal of subsidiaries
Disposals
Depreciation
Impairment
Effect of foreign currency
exchange movements
Other movements1
31 December 2023
Net book value 31 December 2023
Notes
Freehold land
and buildings
Plant and
equipment
Right-of-use
assets
Mineral and
petroleum
rights
Exploration
and
evaluation
Deferred
mining costs
26
26
26
7
6,504
8
(1)
46
(52)
(8)
122
6,619
2,807
–
(50)
301
72
(4)
17
3,143
3,476
45,850
541
(71)
3,571
(818)
(178)
(1,110)
47,785
29,142
(56)
(721)
2,179
334
(89)
(112)
30,677
17,108
3,198
6
–
821
(491)
–
(24)
3,510
1,726
–
(444)
665
–
–
(12)
1,935
1,575
27,255
969
(133)
145
(81)
(156)
905
28,904
14,347
(105)
(72)
1,440
980
(67)
(12)
16,511
12,393
413
–
–
–
–
(1)
13
425
362
–
–
1
29
–
–
392
33
15,094
2
–
772
(569)
(31)
886
16,154
10,366
–
(561)
1,271
295
(10)
145
11,506
4,648
Total
98,314
1,526
(205)
5,355
(2,011)
(374)
792
103,397
58,750
(161)
(1,848)
5,857
1,710
(170)
26
64,164
39,233
1 Primarily consists of increases in rehabilitation provision of $780 million and reclassifications within the various property, plant and equipment headings.
Plant and equipment includes expenditure for construction in progress of $4,640 million (2022: $3,731 million). Depreciation expenses
included in cost of goods sold are $5,805 million (2022: $6,782 million) and in selling and administrative expenses, $52 million
(2022: $46 million).
During 2023, $51 million (2022: $31 million) of interest was capitalised. With the exception of project-specific borrowings, the rate used
to determine the amount of borrowing costs eligible for capitalisation was 6.1% (2022: 3.5%).
As at 31 December 2023, with the exception of leases, no property, plant or equipment was pledged as security for borrowings
(2022: $Nil).
2023 Glencore Annual Report
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221
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Notes to the financial statements continued
9. Property, plant and equipment continued
2022
US$ million
Gross carrying amount:
1 January 2022
Business combination
Disposal of subsidiaries
Additions
Disposals
Effect of foreign currency
exchange movements
Reclassification to held for sale
Other movements1
31 December 2022
Accumulated depreciation and
impairment:
1 January 2022
Disposal of subsidiaries
Disposals
Depreciation
Impairment
Effect of foreign currency
exchange movements
Reclassification to held for sale
Other movements1
31 December 2022
Net book value 31 December 2022
Notes
Freehold land
and buildings
Plant and
equipment
Right-of-use
assets
Mineral and
petroleum
rights
Exploration
and
evaluation
Deferred
mining costs
26
26
16
26
7
16
6,854
542
(169)
67
(59)
(8)
(897)
174
6,504
2,940
(137)
(53)
383
91
(3)
(447)
33
2,807
3,697
44,580
1,009
(256)
3,179
(1,127)
(171)
(953)
(411)
45,850
27,361
(199)
(1,003)
2,610
910
(89)
(474)
26
29,142
16,708
3,048
20
(37)
425
(169)
(1)
(86)
(2)
3,198
1,343
(33)
(134)
573
–
(2)
(21)
–
1,726
1,472
30,019
961
(163)
84
(94)
(145)
(3,824)
417
27,255
15,777
(113)
(50)
1,993
323
(54)
(3,490)
(39)
14,347
12,908
665
–
(255)
–
(4)
2
–
5
413
577
(210)
(2)
–
(2)
(1)
–
–
362
51
15,552
271
(382)
876
(186)
(30)
(1,199)
192
15,094
9,561
(323)
(185)
1,269
660
(7)
(609)
–
10,366
4,728
Total
100,718
2,803
(1,262)
4,631
(1,639)
(353)
(6,959)
375
98,314
57,559
(1,015)
(1,427)
6,828
1,982
(156)
(5,041)
20
58,750
39,564
1 Primarily consists of increases in rehabilitation provision of $399 million and reclassifications within the various property, plant and equipment headings.
Leases
The Group leases various assets including land and buildings and plant and equipment. As at 31 December 2023, the net book value of
recognised right-of use assets relating to land and buildings was $468 million (2022: $418 million) and plant and equipment
$1,107 million (2022: $1,054 million). The depreciation charge for the period relating to those assets was $72 million (2022: $58 million)
and $593 million (2022: $515 million), respectively.
Disclosure of amounts recognised as lease liabilities in the statement of financial position and cash outflows for leases in the year are
included within note 21 and their maturity analysis within note 27.
Amounts recognised in the statement of income are detailed below:
US$ million
Depreciation on right-of-use assets
Interest expense on lease liabilities
Expense relating to short-term leases
Expense relating to low-value leases
Expense relating to variable lease payments not included in the
measurement of the lease liability
Income from subleasing right-of-use assets
Total
2023
(665)
(117)
(992)
(17)
(34)
187
(1,638)
2022
(573)
(88)
(781)
(16)
(7)
153
(1,312)
At 31 December 2023, the Group is committed to $407 million of short-term lease payments (2022: $229 million) and $87 million (2022:
$Nil) related to capitalised leases not yet commenced.
222………………………………………………………
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Additional Information
Notes to the financial statements continued
10. Intangible assets
2023
US$ million
Cost:
1 January 2023
Business combination
Disposal of subsidiaries
Additions
Disposals
Effect of foreign currency exchange movements
Other movements
31 December 2023
Accumulated amortisation and impairment:
1 January 2023
Disposals
Amortisation expense1
Impairment
Effect of foreign currency exchange movements
Other movements
31 December 2023
Net book value 31 December 2023
1 Recognised in cost of goods sold.
2022
US$ million
Cost:
1 January 2022
Disposal of subsidiaries
Additions
Disposals
Effect of foreign currency exchange movements
Reclassification to held for sale
Other movements1
31 December 2022
Accumulated amortisation and impairment:
1 January 2022
Disposal of subsidiaries
Disposals
Amortisation expense2
Impairment
Effect of foreign currency exchange movements
Reclassification to held for sale
Other movements
31 December 2022
Net book value 31 December 2022
Notes
Goodwill
Port allocation
rights
Licences,
trademarks
and software
Customer
relationships
and other
26
26
7
13,134
–
–
–
–
–
–
13,134
8,134
–
–
–
–
–
8,134
5,000
1,128
–
–
–
–
(79)
–
1,049
381
–
52
–
(26)
–
407
642
554
–
(12)
5
(5)
6
11
559
348
(5)
40
–
1
(2)
382
177
753
7
–
26
(23)
10
2
775
546
(12)
32
18
6
2
592
183
Notes
Goodwill
Port allocation
rights
Licences,
trademarks
and software
Customer
relationships
and other
26
16
26
7
16
13,293
(159)
–
–
–
–
–
13,134
8,293
(159)
–
–
–
–
–
–
8,134
5,000
1,203
–
1
(1)
(73)
–
(2)
1,128
308
–
–
97
–
(24)
–
–
381
747
561
(4)
6
(25)
3
(1)
14
554
341
(4)
(24)
34
2
–
–
(1)
348
206
669
(24)
7
(2)
2
(10)
111
753
549
(24)
(3)
28
–
2
(6)
–
546
207
Includes $109 million for Mutanda mining licence renewal, which is being amortised over 15 years.
1
2 Recognised in cost of goods sold.
Total
15,569
7
(12)
31
(28)
(63)
13
15,517
9,409
(17)
124
18
(19)
–
9,515
6,002
Total
15,726
(187)
14
(28)
(68)
(11)
123
15,569
9,491
(187)
(27)
159
2
(22)
(6)
(1)
9,409
6,160
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Financial Statements
Additional Information
Notes to the financial statements continued
10. Intangible assets continued
Goodwill
The carrying amount of goodwill has been allocated to cash-generating units (CGUs), or groups of CGUs as follows:
US$ million
Metals and minerals marketing business
Coal marketing business
Total
2023
3,326
1,674
5,000
2022
3,326
1,674
5,000
Metals and minerals and coal marketing businesses
Goodwill of $3,326 million and $1,674 million was recognised in connection with previous business combinations and was allocated to
the metals and minerals marketing and coal marketing CGUs, respectively, based on the annual synergies expected to accrue to the
respective marketing departments as a result of increased volumes, blending opportunities and freight and logistics arbitrage
opportunities.
Goodwill impairment testing
Given the nature of each CGU’s activities, information on its fair value is usually difficult to obtain unless negotiations with potential
purchasers or similar transactions are taking place. Consequently:
• The recoverable amount for each of the marketing CGUs is determined by reference to the FVLCD which utilises a price-to-
earnings multiple approach, based on the 2024 approved financial budget which includes factors such as marketing volumes
handled and operating, interest and income tax charges, generally based on past experience. The price-to-earnings multiple of 10
times (2022: 12 times) is derived from observable market data for broadly comparable businesses; and
• Glencore believes that no reasonably possible changes in any of the above key assumptions would cause the recoverable amount
to fall below the carrying value of the CGU over the next 12 months. The determination of FVLCD for each of the marketing CGUs
used Level 3 valuation techniques in both years.
Port allocation rights
Port allocation rights represent contractual entitlements to export certain amounts of coal on an annual basis from Richards Bay Coal
Terminal in South Africa recognised as part of previous business combinations. The rights are amortised on a units of production
basis.
Licences, trademarks and software
Intangibles related to internally developed technology and patents were recognised in previous business combinations and are
amortised over the estimated economic life of the technology which ranges between 3 and 20 years.
Customer relationships
Customer relationships mainly represent intangible assets related to long-standing customer relationships recognised in previous
business combinations. These intangible assets are being amortised on a straight-line basis over their estimated economic life which
ranges between 5 and 9 years.
224………………………………………………………
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Financial Statements
Additional Information
Notes to the financial statements continued
11. Investments in associates, joint ventures and other investments
Investments in associates and joint ventures
US$ million
1 January
Additions
Disposals
Share of income from associates and joint ventures
Share of other comprehensive income/(loss) from associates and joint ventures
Transfer of previously held equity accounted investment to subsidiary
Impairments
Dividends received
Reclassification to held for sale
Other movements
31 December
Of which:
Investments in associates
Investments in joint ventures
Notes
26
7
16
2023
11,878
829
(22)
1,337
16
(175)
–
(1,328)
(3,711)
(1)
8,823
5,281
3,542
2022
12,294
157
(232)
2,300
(100)
(598)
(113)
(1,691)
(148)
9
11,878
4,806
7,072
As at 31 December 2023, the carrying value of our listed associates is $591 million (2022: $430 million), mainly comprising Century
Aluminum, PT CITA and Metals Acquisition Corp., which have carrying values of $170 million (2022: $232 million), $199 million (2022:
$181 million) and $100 million (2022: $Nil), respectively. The fair value of our listed associates, using published price quotations (a Level 1
fair value measurement) is $862 million (2022: $652 million). As at 31 December 2023, Glencore’s investment in Century Aluminum was
pledged under a loan facility, with proceeds received and recognised in current borrowings of $125 million (2022: $Nil) (see note 21).
Additions
On 1 December 2023, Glencore completed the acquisition of a non-controlling 30% equity stake in Alunorte S.A. and a non-controlling
45% equity stake in Mineracão Rio do Norte S.A. for a combined payment on completion, including earn-in and other adjustments, of
$677 million. The acquisition of the equity stakes provides Glencore with exposure to lower-quartile carbon alumina and bauxite,
enhancing our capability to supply to our customers such critical materials for the ongoing energy transition.
Disposals
On 12 July 2022, Glencore effected the sale of a royalty package by BaseCore Metals LP (‘BaseCore’) to Sandstorm Gold Ltd.
(‘Sandstorm’). Glencore received, in aggregate, $300 million in cash and Sandstorm shares for its 50% interest in BaseCore. The
disposal resulted in a gain on disposal of non-current assets of $131 million (see note 4).
Transfer of previously held equity accounted investments to subsidiary
In March 2023, Glencore completed the acquisition of the remaining 75% interest in Noranda Income Fund, an electrolytic zinc
processing facility and ancillary assets located in Salaberry-de-Valleyfield, Quebec, that it did not previously own. Prior to the
acquisition, Glencore owned a 25% interest in Noranda Income Fund which was accounted for as an associate (see note 26).
In September 2023, Glencore completed the acquisition of the remaining 56.25% interest in the MARA Project, a copper and gold
brownfield project located in Argentina, that it did not previously own. Prior to the acquisition, Glencore owned a 43.75% interest in
the MARA Project which was accounted for as an associate (see note 26).
In January 2022, Glencore completed the acquisition of the remaining 66.67% interest in Cerrejón, a coal mine in Colombia, that it did
not own. Prior to the acquisition, Glencore owned a 33.33% interest in Cerrejón which was accounted for as an associate (see note 26).
2023 Glencore Annual Report
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Financial Statements
Additional Information
Notes to the financial statements continued
11. Investments in associates, joint ventures and other investments continued
2023 Details of material associates and joint ventures
Summarised financial information in respect of Glencore’s associates and joint ventures, reflecting 100% of the underlying associates’
and joint ventures’ relevant figures, is set out below.
US$ million
Non-current assets
Current assets
Non-current liabilities
Current liabilities
The above assets and liabilities include the following:
Cash and cash equivalents
Current financial liabilities1
Non-current financial liabilities1
Net assets 31 December 2023
Glencore's ownership interest
Acquisition fair value and other
adjustments
Carrying value
1 Financial liabilities exclude trade, other payables and provisions.
2 Classified as held for sale, see note 16.
Total
material
associates
6,275
1,596
(2,488)
(857)
Antamina
6,275
1,596
(2,488)
(857)
Collahuasi
6,914
2,173
(2,662)
(718)
71
(106)
(1,138)
4,526
33.8%
1,618
3,148
71
(106)
(1,138)
4,526
1,618
3,148
327
(31)
(1,091)
5,707
44.0%
1,031
3,542
Total
material
associates
and
joint
ventures
13,189
3,769
(5,150)
(1,575)
Total
material
joint
ventures
6,914
2,173
(2,662)
(718)
327
(31)
(1,091)
5,707
398
(137)
(2,229)
10,233
Viterra2
–
–
–
–
–
–
–
–
49.9%
–
–
1,031
3,542
2,649
6,690
Summarised profit and loss in respect of Glencore’s associates and joint ventures, reflecting 100% of the underlying associates’ and
joint ventures’ relevant figures for the year ended 31 December 2023 including Group adjustments relating to alignment of
accounting policies or fair value adjustments, is set out below.
US$ million
Revenue
Income for the year
Other comprehensive loss
Total comprehensive income
Glencore's share of dividends paid
The above income for the year includes the following:
Depreciation and amortisation
Interest income1
Interest expense2
Income tax expense
1
Includes foreign exchange gains and other income of $29 million.
2 Includes foreign exchange losses and other expenses of $22 million.
3 Classified as held for sale, see note 16.
Total
material
associates
4,243
1,206
–
1,206
452
Antamina
4,243
1,206
–
1,206
452
Collahuasi
4,648
1,471
(18)
1,453
308
Viterra3
–
–
–
–
–
Total
material
associates
and
joint
ventures
8,891
2,677
(18)
2,659
760
Total
material
joint
ventures
4,648
1,471
(18)
1,453
308
(1,193)
34
(21)
(664)
(1,193)
34
(21)
(664)
(741)
20
(18)
(761)
–
–
–
–
(741)
20
(18)
(761)
(1,934)
54
(39)
(1,425)
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2023 Glencore Annual Report
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Corporate Governance
Financial Statements
Additional Information
Notes to the financial statements continued
11. Investments in associates, joint ventures and other investments continued
2022 Details of material associates and joint ventures
Summarised financial information in respect of Glencore’s associates and joint ventures, reflecting 100% of the underlying associates’
and joint ventures’ relevant figures, is set out below.
US$ million
Non-current assets
Current assets
Non-current liabilities
Current liabilities
The above assets and liabilities include the following:
Cash and cash equivalents
Current financial liabilities1
Non-current financial liabilities1
Net assets 31 December 2022
Glencore's ownership interest
Acquisition fair value and other
adjustments
Carrying value
1 Financial liabilities exclude trade, other payables and provisions.
Total
material
associates
5,137
2,105
(2,129)
(681)
Antamina
5,137
2,105
(2,129)
(681)
Collahuasi
5,540
2,405
(2,602)
(436)
87
(50)
(1,089)
4,432
33.8%
1,694
3,192
87
(50)
(1,089)
4,432
1,694
3,192
446
(21)
(1,084)
4,907
44.0%
1,046
3,205
Total
material
associates
and
joint
ventures
17,884
20,990
(12,227)
(12,075)
1,170
(4,078)
(8,932)
14,572
Total
material
joint
ventures
12,747
18,885
(10,098)
(11,394)
1,083
(4,028)
(7,843)
10,140
Viterra
7,207
16,480
(7,496)
(10,958)
637
(4,007)
(6,759)
5,233
49.9%
1,256
3,867
2,302
7,072
3,996
10,264
Summarised profit and loss in respect of Glencore’s associates and joint ventures, reflecting 100% of the underlying associates’ and
joint ventures’ relevant figures for the year ended 31 December 2022, including Group adjustments relating to alignment of
accounting policies or fair value adjustments, is set out below.
US$ million
Revenue
Income for the year
Other comprehensive loss
Total comprehensive income
Glencore's share of dividends paid
The above (loss)/income for the year includes the following:
Depreciation and amortisation
Interest income1
Interest expense2
Income tax expense
1
Includes foreign exchange gains and other income of $186 million.
2 Includes foreign exchange losses and other expenses of $62 million.
Total
material
associates
4,668
1,601
–
1,601
472
Antamina
4,668
1,601
–
1,601
472
Collahuasi
4,817
1,807
(13)
1,794
660
Viterra
53,854
995
(155)
840
200
Total
material
associates
and
joint
ventures
63,339
4,403
(168)
4,235
1,332
Total
material
joint
ventures
58,671
2,802
(168)
2,634
860
(1,039)
86
(5)
(952)
(1,039)
86
(5)
(952)
(658)
9
(120)
(832)
(936)
131
(397)
(463)
(1,594)
140
(517)
(1,295)
(2,633)
226
(522)
(2,247)
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Corporate Governance
Financial Statements
Additional Information
Notes to the financial statements continued
11. Investments in associates, joint ventures and other investments continued
Aggregate information of associates and joint ventures that are not individually material:
US$ million
The Group's share of income
The Group's share of other comprehensive gain/(loss)
The Group's share of total comprehensive income
Aggregate carrying value of the Group's interests
2023
282
24
306
2,133
2022
467
(17)
450
1,614
The amount of corporate guarantees in favour of associates and joint ventures as at 31 December 2023 was $131 million (2022:
$463 million). No amounts have been claimed or provided as at 31 December 2023. Glencore’s share of joint ventures’ capital
commitments amounts to $431 million (2022: $464 million).
Refer to note 35 for further details of the Group’s principal associates and joint ventures.
Other investments
Other investments comprise equity investments, other than investments in associates, recorded at fair value.
2023
US$ million
1 January
Additions
Disposals
Changes in mark-to-market valuations
Total
2022
US$ million
1 January
Additions
Disposals
Changes in mark-to-market valuations
Impairments
Reclassification to held for sale
Other movements
Total
FVTOCI1
419
62
–
(94)
387
FVTOCI1
1,620
338
(312)
(1,124)
(54)
(38)
(11)
419
FVTPL2
37
108
(39)
20
126
FVTPL2
–
50
(10)
(17)
–
–
14
37
Total
456
170
(39)
(74)
513
Total
1,620
388
(322)
(1,141)
(54)
(38)
3
456
1 FVTOCI - Fair value through other comprehensive income.
2 FVTPL - Fair value through profit and loss.
During the year, dividend income from equity investments designated at fair value through other comprehensive income amounted
to $6 million (2022: $45 million).
Refer to note 35 for further details of the Group’s principal other investments.
228………………………………………………………
228
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Corporate Governance
Financial Statements
Additional Information
Notes to the financial statements continued
12. Advances and loans
US$ million
Financial assets at amortised cost
Loans to associates
Advances and loans1,2
Deferred consideration
Rehabilitation trust fund3
Financial assets at fair value through profit and loss
Prepaid commodity forward contracts2,4
Other non-current receivables and loans
Convertible loan
Contingent consideration
Non-financial assets
Pension surpluses
Advances repayable with product2
Land rights prepayment
Other tax and related non-current receivables
Total
Notes
2023
2022
26
28
28
28
28
24
137
1,363
60
148
1,708
124
22
136
–
282
189
447
150
100
886
2,876
130
580
142
148
1,000
44
22
168
103
337
148
939
150
80
1,317
2,654
1 Net of $261 million (2022: $538 million) provided by various banks, the repayment terms of which are contingent upon and connected to the future delivery
of contractual production.
2 Certain amounts related to advances that are accounted for as financial instruments were reclassified from their prior period presentation within ‘Non-
financial assets’ to ‘Financial assets at amortised cost’ ($271 million) and ‘Financial assets at fair value through profit and loss’ ($44 million).
3 The balance has been assessed for impairment and is deemed recoverable.
4 Net of $572 million (2022: $Nil) provided by various banks, the repayment terms of which are contingent upon and connected to the future delivery of
contractual production.
Financial assets at amortised cost
Loans to associates
Loans to associates generally bear interest at applicable floating market rates plus a premium.
Advances and loans
Various financing facilities, generally marketing related and secured against certain assets and/or payable from the future sale of
production of the counterparty. Secured financing arrangements are separable from contracts to buy or sell commodities and are
primarily settled in cash or another financial asset. They are interest bearing and on average are to be repaid over a three-year period.
Rehabilitation trust fund
Glencore makes contributions to controlled funds established to meet the costs of its restoration and rehabilitation liabilities, primarily
in South Africa. These funds are not available for the general purposes of the Group, and there is no present obligation to make any
further contributions.
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Corporate Governance
Financial Statements
Additional Information
Notes to the financial statements continued
12. Advances and loans continued
Loss allowances of financial assets at amortised cost
The Group determines the expected credit loss of loans to associates, advances and loans (at amortised cost) and deferred
consideration based on different scenarios of probability of default and expected loss applicable to each of the material underlying
balances. Expected credit losses for these assets are measured as either 12-month expected credit losses, taking into account prior
experience regarding probability of default adjusted for forward-looking information, or as lifetime expected credit losses (when there
is significant increase in credit risk or the asset is credit impaired). The movement in loss allowance for financial assets classified at
amortised cost is detailed below:
2023
US$ million
Gross carrying value
1 January 20233
Increase during the period
Decrease during the period
Assumed in business combination
Effect of foreign currency exchange
movements
Reclassifications
31 December 2023
Allowance for credit loss
1 January 20233
Released during the period4
Charged during the period4
Utilised during the period
Effect of foreign currency exchange
movements
Reclassifications
31 December 2023
Net carrying value 31 December 2023
2022
US$ million
Gross carrying value
1 January 20223
Increase during the period
Decrease during the period
Disposal of subsidiaries
Reclassification to held for sale
Reclassifications
31 December 2022
Loss allowances
1 January 20223
Released during the period4
Charged during the period4
Reclassifications
31 December 2022
Net carrying value 31 December 2022
12-Month
ECL
Loans to associates
Lifetime
ECL1
Total
Advances and loans and deferred
consideration
12-Month
ECL
Lifetime
ECL2
Total
Total
15
–
–
–
–
1
16
–
–
–
–
–
–
–
16
191
17
(2)
–
(5)
(1)
200
76
(3)
2
–
1
3
79
121
206
17
(2)
–
(5)
–
216
76
(3)
2
–
1
3
79
137
364
362
(70)
8
1
(143)
522
9
(3)
27
–
(5)
–
28
717
31
(262)
–
–
748
1,234
350
(9)
127
(203)
1
39
305
1,081
393
(332)
8
1
605
1,756
359
(12)
154
(203)
(4)
39
333
1,287
410
(334)
8
(4)
605
1,972
435
(15)
156
(203)
(3)
42
412
494
929
1,423
1,560
Loans to associates
Advances and loans and deferred
consideration
12-Month
ECL
Lifetime
ECL1
Total
12-Month
ECL
Lifetime
ECL2
Total
Total
31
10
(1)
(6)
6
(25)
15
–
–
–
–
–
15
159
14
(5)
–
–
23
191
62
–
14
–
76
115
190
24
(6)
(6)
6
(2)
206
62
–
14
–
76
529
143
(75)
(49)
10
(194)
364
14
–
–
(5)
9
676
143
(150)
–
–
48
717
278
(9)
91
(10)
350
1,205
286
(225)
(49)
10
(146)
1,081
292
(9)
91
(15)
359
130
355
367
722
1,395
310
(231)
(55)
16
(148)
1,287
354
(9)
105
(15)
435
852
1 Gross carrying amount comprises stage 2 receivables of $126 million (2022: $Nil) and stage 3 receivables of $74 million (2022: $191 million). Loss allowance
comprises stage 2 credit losses of $31 million (2022: $Nil) and stage 3 credit losses of $48 million (2022: $76 million).
2 Gross carrying amount comprises stage 2 receivables of $738 million (2022: $138 million) and stage 3 receivables of $496 million (2022: $579 million).
Loss allowance comprises stage 2 credit losses of $101 million (2022: $51 million) and stage 3 credit losses $204 million (2022: $299 million).
3 Certain amounts related to prepaid commodity contracts which do not meet the own-use exemption and are thus accounted for as financial instruments,
were reclassified from their prior period presentation within ‘Non-financial assets’ to ‘Financial assets at amortised cost’. Advances and loans opening
balances have been adjusted accordingly.
4 $135 million (2022: $37 million) recognised as impairment (see note 7) and the balancing charge of $6 million (2022: $59 million) recognised in net expected
credit losses.
230………………………………………………………
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2023 Glencore Annual Report
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Strategic Report
Corporate Governance
Financial Statements
Additional Information
Notes to the financial statements continued
12. Advances and loans continued
Financial assets at fair value through profit and loss
Prepaid commodity forward contracts
Certain physically settled advances and prepayments which are not separable from contracts to buy or sell commodities where the
commodities do not meet the own-use exemption criteria are accounted for as financial instruments at fair value through profit
and loss.
Other non-current receivables and loans
During 2023, fair value movements of positive $7 million were recognised (2022: $Nil)(see note 7).
Convertible loan
In May 2022, Glencore subscribed for $200 million of convertible debt in Li-Cycle Holdings Corp. (‘Li-Cycle’), a lithium-ion battery
recycler in North America, listed on the New York Stock Exchange. The convertible loan is repayable by 2027 at an effective interest
rate of SOFR plus 5% per annum. If Glencore elects to convert during the conversion option period, Glencore would hold an
approximate 10% equity stake in Li-Cycle. The loan is classified as financial asset at fair value through profit and loss in accordance
with IFRS (see notes 28 and 29). During 2023, fair value movements of negative $74 million (2022: $40 million) were recognised in net
changes in mark-to-market valuations (see note 5).
Contingent consideration
In 2023, fair value movements of negative $32 million (2022: $117 million positive) were recognised in net changes in mark-to-market
valuations (see note 5).
Non-financial assets
Advances repayable with product
Where physically settled advances and prepayments which are not separable from contracts to buy or sell commodities meet the
own-use exemption criteria, they are classified as non-financial assets and assessed for impairment.
Mopani
On 31 March 2021, Glencore completed the disposal of its 90% interest in Mopani to ZCCM Investments Holdings plc, the holder of the
remaining 10% interest in Mopani, in exchange for $1 and the rights to offtake copper and other metals from Mopani until
$1.5 billion of existing intercompany debt (the ‘transaction debt’) has been repaid to Glencore. The transaction debt attracts interest
at a floating benchmark rate plus 3%. The repayment of the transaction debt is in substance based on Glencore receiving physical
product deliveries from Mopani through its offtake rights and retaining defined percentages of Mopani’s annual gross revenues
until the transaction debt is fully repaid. On the date of completion, the fair value of the transaction debt was determined to be
$838 million (see note 26). During 2022 and 2023, the originally expected production rate at Mopani was not achieved, in part due to a
lack of funding. The new shareholder has conducted operational and strategic reviews, resulting in Mopani seeking additional equity
funding and to restructure the transaction debt. As a result, a further impairment of $156 million (2022: $422 million) was recognised
(see note 7).
Land rights prepayment
In August 2020, Kamoto Copper Company (‘KCC’) advanced $150 million to La Générale des Carrières et des Mines (‘Gécamines’), to
acquire a comprehensive land package covering areas adjacent to KCC’s existing mining concessions for $250 million. If the closing
conditions as prescribed in the agreement are not fulfilled, Glencore has the right to accrue interest on the prepaid amount,
terminate the agreement and, if funds are not returned, offset against future amounts owing to Gécamines. The balance of the
consideration is due five days after the respective closing conditions of each area to be transferred are satisfied. During 2023, activities
and discussions to facilitate access to the land packages continued.
2023 Glencore Annual Report
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Strategic Report
Corporate Governance
Financial Statements
Additional Information
Notes to the financial statements continued
13. Inventories
US$ million
Inventory at fair value less costs of disposal1
Raw materials and consumables
Semi finished products
Finished goods1
Inventory at the lower of cost or net realisable value
Total current inventory
Raw materials and consumables
Inventory at the lower of cost or net realisable value
Total non-current inventory
2023
14,441
5,827
4,955
6,346
17,128
31,569
623
623
623
2022
15,608
5,970
5,527
6,355
17,852
33,460
605
605
605
1 Certain amounts were reclassified from their prior period presentation to conform with current year presentation.
Current inventory
The amount of inventories and related ancillary costs recognised as an expense during the period was $188,291 million
(2022: $211,666 million).
Fair value of inventories are predominantly a Level 2 fair value measurement using observable market prices obtained from
exchanges, traded reference indices or market survey services adjusted for relevant location and quality differentials. There are no
significant unobservable inputs in the fair value measurement of such inventories.
Inventories of $216 million (2022: $862 million) are a Level 3 fair value measurement using observable market prices obtained from
exchanges, traded reference indices or market survey services, adjusted for significant unobservable inputs such as relevant location
and quality differentials. Movements during the year comprise unrealised losses recognised in cost of goods sold of $121 million
(2022: $231 million) million, purchases of $574 million (2022: $1,870 million) and sales of $1,099 million (2022: $1,115 million). A 10% change
in pricing assumptions would result in a $4 million (2022: $18 million) adjustment to the current carrying value.
Glencore has a number of dedicated financing facilities, which finance a portion of its inventories. In each case, the inventory has not
been derecognised as the Group has not transferred control. The proceeds received are recognised as current borrowings (see note
21). As at 31 December 2023, the total amount of inventory pledged under such facilities was $1,808 million (2022: $3,455 million).
The proceeds received and recognised as current borrowings were $1,843 million (2022: $3,092 million) and $Nil (2022: $80 million)
as non-current borrowings.
Non-current inventory
Non-current inventories valued at lower of cost or net realisable value are not expected to be utilised or sold within the normal
operating cycle and are therefore classified as non-current inventory.
232………………………………………………………
232
2023 Glencore Annual Report
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Strategic Report
Corporate Governance
Financial Statements
Additional Information
Notes to the financial statements continued
14. Accounts receivable
US$ million
Financial assets at amortised cost
Trade receivables1
Margin calls paid and other broker balances
Receivables from associates
Deferred consideration
Other receivables2,3,4
Financial assets at fair value through profit and loss
Trade receivables containing provisional pricing features1
Prepaid commodity forward contracts2,5
Contingent consideration
Other receivables
Non-financial assets
Advances repayable with product2
Other tax and related receivables6
Total
Notes
2023
2022
26
28
28
28
28
4,281
3,036
352
73
1,050
8,792
6,229
543
137
8
6,917
624
2,052
2,676
18,385
5,610
8,111
441
333
605
15,100
7,018
520
128
73
7,739
223
1,503
1,726
24,565
1 Certain amounts were reclassified from their prior period presentation within ‘Trade receivables’ to ‘Trade receivables containing provisional pricing features’
($1,592 million) to conform with current year presentation.
2 Certain amounts related to advances that are accounted for as financial instruments were reclassified from their prior period presentation within ‘Non-
financial assets’ to ‘Financial assets at amortised cost’ ($596 million to ‘Margin calls paid and other broker balances’ and $77 million to ‘Other receivables’) and
‘Financial assets at fair value through profit and loss’ ($520 million).
3 Includes loans and advances of $724 million (2022: $396 million).
4 Net of $181 million (2022: $240 million) provided by banks, the repayment terms of which are contingent upon and connected to the future delivery of
contractual production over the next 12 months.
5 Net of $217 million (2022: $247 million) provided by banks, the repayment terms of which are contingent upon and connected to the future delivery of
contractual production over the next 12 months.
6 Comprises sales and other tax receivables of $1,892 million (2022: $1,351 million) and other receivables of $160 million (2022: $152 million).
Financial assets at amortised cost
Trade receivables
Trade receivables are separable from contracts to buy or sell commodities and are primarily settled in cash or another financial asset.
The average credit period on sales of goods is 20 days (2022: 17 days). The carrying value of trade receivables approximates fair value.
The Group applies a simplified approach to measure the loss allowance for trade receivables classified at amortised cost, using the
lifetime expected loss provision. The expected credit loss on trade receivables is estimated using a provision matrix by reference to
past default experience and credit rating, adjusted as appropriate for current observable data. Expected credit loss provisions are
recognised in net expected credit losses and during the period, a gain of $6 million (2022: charge of $148 million) was recognised. The
current year provision is lower in the current period primarily due to the lower overall gross receivable balances on-hand at the period
end as a result of lower commodity prices. The following table details the risk profile of trade receivables based on the Group’s
provision matrix.
US$ million
As at 31 December 2023
Gross carrying amount
Weighted average expected credit loss rate
Lifetime expected credit loss
Total
US$ million
As at 31 December 2022
Gross carrying amount
Weighted average expected credit loss rate
Lifetime expected credit loss
Total
Not past due
2,865
0.43%
(12)
2,853
Trade receivables – days past due
<30
251
0.62%
(2)
249
31 – 60
20
1.01%
–
20
61 – 90
42
1.01%
–
42
Trade receivables – days past due
Not past due
3,422
0.45%
(23)
3,399
<30
444
0.67%
(3)
441
31 – 60
158
0.98%
(2)
156
61 – 90
85
1.17%
(1)
84
>90
1,269
11.18%
(152)
1,117
>90
1,673
7.34%
(143)
1,530
Total
4,447
(166)
4,281
Total
5,782
(172)
5,610
2023 Glencore Annual Report
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Strategic Report
Corporate Governance
Financial Statements
Additional Information
Notes to the financial statements continued
14. Accounts receivable continued
The Group determines the expected credit loss of receivables from associates, deferred consideration and other receivables (at
amortised cost) based on different scenarios of probability of default and expected loss applicable to each of the material underlying
balances. Expected credit losses for these assets are measured as either 12-month expected credit losses, taking into account prior
experience regarding probability of default adjusted for forward-looking information, or as lifetime expected credit losses (when there
is significant increase in credit risk or the asset is credit-impaired). The movement in allowance for credit loss relating to receivables
from associates and other receivables is detailed below:
2023
US$ million
Gross carrying value
1 January 20233
Increase during the period
Decrease during the period
Assumed in business combination
Effect of foreign currency exchange
movements
Reclassifications
31 December 2023
Allowance for credit loss
1 January 20233
Released during the period4
Charged during the period4
Utilised during the period
Effect of foreign currency exchange
movements
Reclassifications
31 December 2023
Receivables from associates
Other receivables and
deferred consideration
12-Month ECL Lifetime ECL1
Total
12-Month ECL Lifetime ECL2
Total
Total
432
77
(166)
–
1
(2)
342
–
–
–
–
–
–
–
136
1
(16)
–
4
2
127
127
(15)
4
–
4
(3)
117
568
78
(182)
–
5
–
469
127
(15)
4
–
4
(3)
117
896
491
(429)
13
(8)
(34)
929
39
(30)
11
–
(1)
2
21
185
3
(84)
–
3
292
399
104
–
101
(30)
4
5
184
1,081
494
(513)
13
(5)
258
1,328
143
(30)
112
(30)
3
7
205
1,649
572
(695)
13
–
258
1,797
270
(45)
116
(30)
7
4
322
Net carrying value 31 December 2023
342
10
352
908
215
1,123
1,475
1 Gross carrying value comprises stage 2 receivables of $9 million and stage 3 receivables of $118 million. Allowance for credit losses comprises of stage 2 credit
losses of $2 million and stage 3 credit losses of $115 million.
2 Gross carrying value comprises stage 2 receivables of $170 million and stage 3 receivables of $229 million. Allowance for credit loss comprises stage 2 credit
losses of $37 million and stage 3 credit losses of $147 million.
3 Certain amounts related to advances which do not meet the own-use exemption and are thus accounted for as financial instruments, were reclassified
from their prior period presentation within ‘Non-financial assets’ to ‘Financial assets at amortised cost’. Other receivables opening balance has been adjusted
accordingly.
4 $92 million recognised as impairment (see note 7) and the balancing $21 million net credit recognised in net expected credit losses.
234………………………………………………………
234
2023 Glencore Annual Report
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Strategic Report
Corporate Governance
Financial Statements
Additional Information
Notes to the financial statements continued
14. Accounts receivable continued
2022
US$ million
Gross carrying value
1 January 20223
Increase during the period
Decrease during the period
Business combination
Disposal of subsidiaries
Effect of foreign currency exchange
movements
Reclassification to held for sale
Reclassifications
31 December 2022
Allowance for credit loss
1 January 20223
Released during the period4
Charged during the period4
Utilised during the period
Effect of foreign currency exchange
movements
Reclassification to held for sale
Reclassifications
31 December 2022
Receivables from associates
Other receivables and
deferred consideration
12-Month ECL Lifetime ECL1
Total
12-Month ECL Lifetime ECL2
Total
Total
391
136
(94)
–
(2)
(2)
1
2
432
–
–
–
–
–
–
–
–
138
20
(15)
–
–
(7)
–
–
136
116
(2)
21
–
(8)
–
–
127
529
156
(109)
–
(2)
(9)
1
2
568
116
(2)
21
–
(8)
–
–
127
387
427
(81)
28
(14)
(18)
(1)
168
896
23
(5)
34
(3)
–
–
(10)
39
857
199
26
(10)
–
–
–
(8)
(22)
185
106
–
16
(4)
(4)
(6)
(4)
104
586
453
(91)
28
(14)
(18)
(9)
146
1,081
129
(5)
50
(7)
(4)
(6)
(14)
143
1,115
609
(200)
28
(16)
(27)
(8)
148
1,649
245
(7)
71
(7)
(12)
(6)
(14)
270
81
938
1,379
Net carrying value 31 December 2022
432
9
441
1 Gross carrying value comprises stage 2 receivables of $9 million and stage 3 receivables of $127 million. Allowance for credit losses comprises of stage 2 credit
losses of $2 million and stage 3 credit losses of $125 million.
2 Gross carrying value comprises stage 2 receivables of $33 million and stage 3 receivables of $152 million. Allowance for credit loss comprises stage 2 credit
losses of $29 million and stage 3 credit losses of $75 million.
3 Certain amounts related to advances which do not meet the own-use exemption and are thus accounted for as financial instruments, were reclassified
from their prior period presentation within ‘Non-financial assets’ to ‘Financial assets at amortised cost’. Other receivables opening balance has been adjusted
accordingly.
4 $15 million recognised as impairment (see note 7) and the balancing $49 million net charge recognised in net expected credit losses.
Financial assets at fair value through profit and loss
Trade receivables containing provisional pricing features
Trade receivables containing provisional pricing features meet the definition of a derivative and are recorded at fair value through
profit and loss.
Prepaid commodity forward contracts
Certain physically settled advances and prepayments which are not separable from contracts to buy or sell commodities where the
commodities do not meet the own-use exemption criteria are accounted for as financial instruments at fair value through profit and
loss.
Non-financial assets
Advances repayable with product
Advances repayable with product are not separable from contracts to buy or sell commodities and meet the own-use exemption
criteria.
Glencore has a number of dedicated financing facilities, which finance a portion of its receivables. The receivables have not been
derecognised, as the Group retains the principal risks and rewards of ownership. The proceeds received are recognised as current
borrowings (see note 21). As at 31 December 2023, the total amount of trade receivables pledged was $794 million (2022: $278 million)
and proceeds received and classified as current borrowings amounted to $712 million (2022: $200 million).
2023 Glencore Annual Report
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235
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Notes to the financial statements continued
15. Cash and cash equivalents
US$ million
Bank and cash on hand
Deposits and treasury bills
Total
2023
1,415
510
1,925
2022
1,445
478
1,923
Cash and cash equivalents comprise cash held at bank, cash in hand and short-term bank deposits with an original maturity of three
months or less. The carrying amount of these assets approximates their fair value.
As at 31 December 2023, $249 million (2022: $78 million) was restricted.
16. Assets and liabilities held for sale
Net assets held for sale are measured at their carrying amount, being the lower of carrying amount and fair value less costs to sell. As
of 31 December 2023, the carrying amounts of assets and liabilities held for sale were lower than their fair value less costs to sell, hence
no gains or losses were recognised in the statement of income for the period.
The carrying value of the assets and liabilities classified as held for sale are detailed below:
2023
US$ million
Non-current assets
Property, plant and equipment
Intangible assets
Investments in associates and joint ventures
Advances and loans
Deferred tax assets
Current assets
Inventories
Accounts receivable
Income tax receivable
Prepaid expenses
Cash and cash equivalents
Total assets held for sale
Non-current liabilities
Borrowings
Deferred tax liabilities
Provisions
Deferred income
Current liabilities
Borrowings
Accounts payable
Provisions
Income tax payable
Total liabilities held for sale
Total net assets held for sale
Non-controlling interest
Viterra
Volcan
Total
–
–
3,711
–
–
3,711
–
–
–
–
–
–
3,711
–
–
–
–
–
–
–
–
–
–
–
3,711
–
1,245
10
148
72
37
1,512
48
65
28
4
62
207
1,719
(668)
(94)
(329)
(3)
(1,094)
(123)
(300)
(18)
(15)
(456)
(1,550)
169
302
1,245
10
3,859
72
37
5,223
48
65
28
4
62
207
5,430
(668)
(94)
(329)
(3)
(1,094)
(123)
(300)
(18)
(15)
(456)
(1,550)
3,880
302
Volcan
In Q4 2022, Glencore commenced a process to explore a disposal of its 23.3% economic interest in Volcan (Industrial activities
segment). The Group has received various proposals to acquire its equity interest, which it is actively pursuing.
Viterra
In June 2023, Glencore and its fellow shareholders in Viterra Limited, concluded an agreement with Bunge Limited to merge Bunge
and Viterra in a cash and stock transaction. Under the terms of the agreement, Glencore will receive c.$3.1 billion in Bunge stock
(based on Bunge’s stock price as at 30 June 2023) and $1.0 billion in cash for its c.50% stake in Viterra (Marketing, corporate activities
segment) resulting in a c.15% holding in the combined group, based on the number of Bunge shares outstanding at the time.
The merger, subject to satisfaction of customary closing conditions including receipt of regulatory approvals, is expected to close
in mid-2024.
236………………………………………………………
236
2023 Glencore Annual Report
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Strategic Report
Corporate Governance
Financial Statements
Additional Information
Notes to the financial statements continued
16. Assets and liabilities held for sale continued
2022
US$ million
Non-current assets
Property, plant and equipment
Intangible assets
Investments in associates and joint ventures
Advances and loans
Deferred tax assets
Current assets
Inventories
Accounts receivable
Income tax receivable
Prepaid expenses
Cash and cash equivalents
Total assets held for sale
Non-current liabilities
Borrowings
Deferred tax liabilities
Provisions
Deferred income
Post-retirement and other employee benefits
Current liabilities
Borrowings
Accounts payable
Provisions
Income tax payable
Total liabilities held for sale
Total net assets held for sale
Non-controlling interest
Cobar
Volcan
451
1
–
–
–
452
25
4
–
3
1
33
485
–
(25)
(20)
–
(1)
(46)
(1)
(42)
–
–
(43)
(89)
396
–
1,467
4
148
71
32
1,722
57
68
29
5
74
233
1,955
(777)
(151)
(322)
(6)
–
(1,256)
(22)
(315)
(31)
(28)
(396)
(1,652)
303
201
Total
1,918
5
148
71
32
2,174
82
72
29
8
75
266
2,440
(777)
(176)
(342)
(6)
(1)
(1,302)
(23)
(357)
(31)
(28)
(439)
(1,741)
699
201
Cobar
In March 2022, Glencore entered into an agreement with Metals Acquisition Corp (MAC) for the disposal of its 100% interest in Cobar
(Industrial activities segment), a copper mine in New South Wales, Australia for a mix of cash and other forms of consideration. The
transaction closed in June 2023 (see note 24).
2023 Glencore Annual Report
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237
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Notes to the financial statements continued
17. Share capital and reserves
Authorised:
31 December 2023 and 2022 Ordinary shares with a par value of $0.01 each
Issued and fully paid up:
1 January 2022 – Ordinary shares
Own shares cancelled during the year
Distributions paid (see note 19)
31 December 2022 – Ordinary shares
Own shares cancelled during the year
Distributions paid (see note 19)
31 December 2023 – Ordinary shares
Number
of ordinary
shares
(thousand)
50,000,000
14,586,200
(500,000)
–
14,086,200
(536,200)
–
13,550,000
Share capital
(US$ million)
Share
premium
(US$ million)
146
(5)
–
141
(5)
–
136
43,679
(2,130)
(4,832)
36,717
(1,898)
(6,450)
28,369
Own shares:
1 January 2022
Own shares purchased during the year
Own shares transferred to satisfy
employee share awards
Own shares disposed during the year
Own shares cancelled during the year
31 December 2022
1 January 2023
Own shares purchased during the year
Own shares transferred to satisfy
employee share awards
Own shares disposed during the year
Own shares cancelled during the year
31 December 2023
Treasury Shares
Number
of shares
(thousand)
Own
shares
(US$ million)
Trust Shares
Total
Number
of shares
(thousand)
Own
shares
(US$ million)
Number
of shares
(thousand)
Own
shares
(US$ million)
1,390,388
425,309
(50,000)
–
(500,000)
1,265,697
1,265,697
625,956
(25,000)
–
(536,200)
1,330,453
(5,417)
(2,503)
225
–
2,135
(5,560)
(5,560)
(3,672)
75
–
1,903
(7,254)
99,213
–
50,000
(93,567)
–
55,646
55,646
–
25,000
(34,511)
–
46,135
(460)
–
1,489,601
425,309
(271)
430
–
(301)
(301)
–
(132)
187
–
(246)
–
(93,567)
(500,000)
1,321,343
1,321,343
625,956
–
(34,511)
(536,200)
1,376,588
(5,877)
(2,503)
(46)
430
2,135
(5,861)
(5,861)
(3,672)
(57)
187
1,903
(7,500)
Own shares
Own shares comprise shares acquired under the Company’s share buyback programmes (‘Treasury Shares’) and shares of Glencore
plc held by Group employee benefit trusts (‘the Trusts’) to satisfy the potential future settlement of the Group’s employee stock plans
(‘Trust Shares’).
The Trusts also coordinate the funding and manage the delivery of Trust Shares and free share awards under certain of Glencore’s
share plans. The Trust Shares have been acquired by either stock market purchases or share issues from the Company. The Trusts
may hold an aggregate of Trust Shares up to 5% of the issued share capital of the Company at any one time and are permitted to sell
them. The Trusts have waived the right to receive distributions from the Trust Shares that they hold. Costs relating to the
administration of the Trusts are expensed in the period in which they are incurred.
During the year, Glencore purchased the remaining $1,080 million of shares under the $3 billion share buyback programme
announced in July 2022 and purchased $1.5 billion of shares under the $1.5 billion share buyback programme announced in February
2023. In August 2023, Glencore announced a $1.2 billion share buyback programme to be completed by February 2024. As at 31
December 2023, $1,092 million of shares had been purchased. No liability has been recognised in respect of this share buyback
programme as the terms of the arrangement do not result in a contractual obligation.
In line with the policy to reduce and maintain from time to time treasury shares below 10% of total issued share capital, in February
2023 Glencore cancelled 286 million treasury shares, in June 2023 cancelled 100 million treasury shares, in September 2023 cancelled
100 million treasury shares, and in December 2023 cancelled 50 million treasury shares.
As at 31 December 2023, 1,376,588,292 shares (2022: 1,321,342,547 shares), including 1,330,453,041 Treasury Shares (2022: 1,265,696,812
shares), equivalent to 10.16% (2022: 9.38%) of the issued share capital were held at a cost of $7,500 million (2022: $5,861 million) and
market value of $8,279 million (2022: $8,809 million).
238………………………………………………………
238
2023 Glencore Annual Report
2023 Glencore Annual Report
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Notes to the financial statements continued
17. Share capital and reserves continued
Other reserves
US$ million
1 January 2023
Exchange loss on translation of foreign operations
Items recycled to the statement of income upon disposal
of subsidiaries (see note 26)
Gain on cash flow hedges, net of tax
Loss on equity investments accounted for at fair value
through other comprehensive income, net of tax
Change in ownership interest in subsidiaries (see note 34)
Loss due to changes in credit risk on financial liabilities
accounted for at fair value through profit and loss
31 December 2023
1 January 2022
Exchange loss on translation of foreign operations
Items recycled to the statement of income on
restructuring of intragroup debt (see note 5)
Items recycled to the statement of income upon disposal
of subsidiaries (see note 26)
Gain on cash flow hedges, net of tax
Loss on equity investments accounted for at fair value
through other comprehensive income, net of tax
Change in ownership interest in subsidiaries (see note 34)
Gain due to changes in credit risk on financial liabilities
accounted for at fair value through profit and loss
Reclassifications
31 December 2022
Foreign
currency
translation
reserve
(2,673)
(170)
Cash flow
hedge reserve
(97)
–
Net
unrealised
gain/(loss)
(1,417)
–
Net ownership
changes in
subsidiaries
(2,646)
–
(3)
–
–
–
–
(2,846)
(2,898)
(290)
431
84
–
–
–
–
–
(2,673)
–
55
–
–
–
(42)
(124)
–
–
–
27
–
–
–
–
(97)
–
–
(93)
–
(12)
(1,522)
(300)
–
–
–
–
(1,122)
–
2
3
(1,417)
–
–
–
24
–
(2,622)
(2,609)
–
–
(34)
–
–
(3)
–
–
(2,646)
Total
(6,833)
(170)
(3)
55
(93)
24
(12)
(7,032)
(5,931)
(290)
431
50
27
(1,122)
(3)
2
3
(6,833)
The translation adjustment reserve is used to capture the cumulative impact of foreign currency translation adjustments arising from
the Group’s non-USD denominated functional currency subsidiaries.
The cash flow hedge reserve is used to accumulate the gains and losses from the effective portion of hedging instruments contained
within hedge relationships until the hedged item impacts profit or loss. Cost of hedging is recorded within the cash flow hedge
reserve due to its immaterial amount.
The net unrealised gain/loss reserve is used to accumulate the gains and losses associated with the remeasurement of the Group’s
investments carried at FVTOCI and changes in credit risk on financial liabilities measured at FVTPL.
The net ownership changes in subsidiaries reserve is used to capture equity movements arising from changes in the Group’s
ownership in its subsidiaries.
2023 Glencore Annual Report
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Strategic Report
Corporate Governance
Financial Statements
Additional Information
Notes to the financial statements continued
18. Earnings per share
US$ million
Income attributable to equity holders of the Parent for basic earnings per share
Weighted average number of shares for the purposes of basic earnings per share (thousand)
2023
4,280
12,425,821
2022
17,320
13,042,304
Effect of dilution:
Equity-settled share-based payments (thousand)
Weighted average number of shares for the purposes of diluted earnings per share (thousand)
Basic earnings per share (US$)
Diluted earnings per share (US$)
112,115
12,537,936
98,454
13,140,758
0.34
0.34
1.33
1.32
Headline earnings
Headline earnings is a Johannesburg Stock Exchange (JSE) defined performance measure. The calculation of basic and diluted
earnings per share, based on headline earnings as determined by the requirements of the Circular 1/2023 as issued by the
South African Institute of Chartered Accountants (SAICA), is reconciled using the following data:
US$ million
Income attributable to equity holders of the Parent for basic earnings per share
Net gain on acquisitions and disposals1
Net gain on acquisitions and disposals – non-controlling interest
Net gain on acquisitions and disposals – tax
Impairments2
Impairments – non-controlling interest
Impairments – tax
Headline and diluted earnings for the year
Headline earnings per share (US$)
Diluted headline earnings per share (US$)
2023
4,280
(850)
(5)
192
2,731
(349)
(495)
5,504
0.44
0.44
2022
17,320
(1,287)
(4)
86
3,181
(404)
(585)
18,307
1.40
1.39
1 See note 4.
2 Comprises impairments of property, plant and equipment and intangible assets, investments, advances and loans, VAT receivable (see note 7) and
Glencore’s share of impairments booked directly by associates (see note 2).
19. Distributions
US$ million
Paid during the year:
First tranche distribution – $0.22 per ordinary share (2022: $0.13)
Second tranche and additional distribution – $0.30 per ordinary share (2022: $0.24)
Total
2023
2022
2,750
3,700
6,450
1,707
3,125
4,832
The proposed distribution in respect of the year ended 31 December 2023 of $0.13 per ordinary share amounting to some $1.6 billion is
subject to approval by shareholders at the Annual General Meeting and has not been included as a liability in these financial
statements. Such declared distribution is expected to be paid equally ($0.065 each) in June 2024 and September 2024.
A distribution of $0.52 per ordinary share amounting to $6,450 million was paid in 2023.
240………………………………………………………
240
2023 Glencore Annual Report
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Strategic Report
Corporate Governance
Financial Statements
Additional Information
Notes to the financial statements continued
20. Share-based payments
Deferred awards
2018 Series
2019 Series
2021 Series
2022 Series1
2023 Series
Performance share
awards
2017 Series
2018 Series
2019 Series
2020 Series
2021 Series1
2022 Series1
2023 Series
Total
Number of
awards
granted
(thousands)
Fair value at
grant date
(US$ million)
Number
of awards
outstanding
2023
(thousands)
Number
of awards
outstanding
2022
(thousands)
Expense
recognised
2023
(US$ million)
Expense
recognised
2022
(US$ million)
12,891
10,791
21,327
6,719
37,555
89,283
19,750
28,499
29,705
33,583
27,012
25,580
20,247
184,376
273,659
65
37
94
40
202
95
104
90
104
130
166
116
1,170
667
217
2,875
36,915
41,844
–
2,218
690
8,933
16,039
22,134
20,257
70,271
112,115
3,535
667
13,016
5,267
–
22,485
344
2,293
9,066
19,555
24,918
19,793
–
75,969
98,454
2
–
–
1
198
201
–
1
1
10
33
79
3
127
328
3
–
(1)
30
–
32
–
2
9
26
69
12
–
118
150
1 During the current year, 316 thousand shares have been granted as part of the deferred awards 2022 series and 4,861 thousand shares have been granted as
part of the performance share awards 2021 and 2022 series, resulting in an increase of the fair value at grant date amount by $2 million for deferred share
awards and $32 million for performance share awards.
Between 2011 and 2021, deferred awards were made under the Company’s Deferred Bonus Plan and performance share awards were
made under the Company’s Performance Share Plan. In May 2021 the Company introduced a single Incentive Plan which replaced
both of these plans and under which both deferred awards and performance share awards continue to be made.
Deferred awards
Under a deferred award the payment of a portion of a participant’s annual bonus is deferred for a period of one to seven years as an
award of either ordinary shares (a ‘‘Bonus Share Award’’) or cash. Awards vest over a specified period, subject to continued
employment and forfeiture for malus events. The Bonus Share Awards may be satisfied, at Glencore’s option, in shares by the issue of
new ordinary shares, by the transfer of ordinary shares held in treasury or by the transfer of ordinary shares purchased in the market
or in cash, with a value equal to the market value of the award at settlement, including distributions paid between award and settling.
Glencore currently intends to settle all Bonus Share Awards in shares. The associated expense is recorded in the statement of
income/loss as part of the expense for performance bonuses. The fair value at grant date is determined as the monthly volume-
weighted average share price (VWAP) of Glencore plc prior to the respective award date.
Performance share awards
Performance share awards vest in tranches over a specified period, subject to continued employment and forfeiture for malus events.
At grant date, each award is equivalent to one ordinary share of Glencore. Awards vest in one, two or three tranches on 31 January or
30 June of the years following the year of grant, as may be the case. The awards may be satisfied, at Glencore’s option, in shares by the
issue of new ordinary shares, by the transfer of ordinary shares held in treasury or by the transfer of ordinary shares purchased in the
market or in cash, with a value equal to the market value of the award at vesting, including distributions paid between award and
vesting. Glencore currently intends to settle these awards in shares. The fair value at grant date is determined as the monthly volume-
weighted average share price (VWAP) of Glencore plc prior to the respective award date.
Share-based awards assumed in previous business combinations
1 January 2022
Exercised
31 December 2022
Total options
outstanding
(thousands)
44,537
(44,537)
–
Weighted
average
exercise
price (GBP)
3.91
4.16
–
All awards were settled in the prior year and none were outstanding as at December 2023. Since the share price leading up to the
expiry date of 17 February 2022 was above the exercise price, all options were exercised. Glencore settled these awards by the transfer
of ordinary shares held as Trust Shares.
2023 Glencore Annual Report
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241
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Notes to the financial statements continued
21. Borrowings
US$ million
Non-current borrowings
Capital market notes
Amount drawn under revolving credit facilities
Lease liabilities
Other bank loans
Total non-current borrowings
Current borrowings
Secured inventory/receivables/other facilities
Amount drawn under revolving credit facilities
US commercial paper
Capital market notes
Lease liabilities
Other bank loans1
Total current borrowings
Total borrowings
Notes
2023
2022
11/13/14
18,587
1,306
961
421
21,275
2,680
150
1,044
2,823
547
3,722
10,966
32,241
17,229
–
934
688
18,851
3,292
–
333
2,977
445
2,879
9,926
28,777
1 Comprises various uncommitted bilateral bank credit facilities and other financings.
Changes in liabilities arising from financing activities
Liabilities arising from financing activities are those for which cash flows are classified in the Group's consolidated cash flow statement
as cash flows from financing activities. The table below details changes in the Group's liabilities arising from financing activities,
including both cash and non-cash changes.
2023
US$ million
1 January 2023
Cash-related movements2
Proceeds from issuance of capital market notes
Repayment of capital market notes
Proceeds from revolving credit facilities
Repayment of other non-current borrowings
Repayment of lease liabilities
Margin receipts from financing-related hedging activities
Proceeds from US commercial papers
Proceeds from current borrowings
Non-cash related movements
Borrowings acquired in business combinations3
Fair value adjustment to fair value hedged borrowings
Fair value movement of hedging derivatives
Foreign exchange movements
Change in lease liabilities
Interest on convertible bonds
Other movements
31 December 2023
Borrowings
excluding
lease
liabilities
27,398
Lease
liabilities
1,379
Total
borrowings
28,777
Cross-currency
and interest
rate swaps and
net margins1
(154)
Total liabilities
arising from
financing
activities
28,623
3,474
(2,996)
1,289
(314)
–
–
711
430
2,594
6
410
–
248
–
22
55
741
30,733
–
–
–
–
(616)
–
–
–
(616)
9
–
–
(1)
737
–
–
745
1,508
3,474
(2,996)
1,289
(314)
(616)
–
711
430
1,978
15
410
–
247
737
22
55
1,486
32,241
–
(163)
–
–
–
897
–
–
734
–
–
(525)
–
–
–
–
(525)
55
3,474
(3,159)
1,289
(314)
(616)
897
711
430
2,712
15
410
(525)
247
737
22
55
961
32,296
1 The currency and interest rate swaps are reported on the balance sheet within the headings ‘Other financial assets’ and ‘Other financial liabilities’
(see note 27) and margin calls paid/received within accounts receivable/payable (see notes 14 and 25).
2 See consolidated statement of cash flows.
3 See note 26.
4 See note 16.
242………………………………………………………
242
2023 Glencore Annual Report
2023 Glencore Annual Report
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Notes to the financial statements continued
21. Borrowings continued
2022
US$ million
1 January 2022
Cash-related movements2
Repayment of capital market notes
Repurchase of capital market notes
Repayment of revolving credit facilities
Proceeds from other non-current borrowings
Repayment of other non-current borrowings
Repayment of lease liabilities
Margin payments for financing-related hedging activities
Proceeds from US commercial papers
Repayment of current borrowings
Non-cash related movements
Borrowings acquired in business combinations3
Borrowings reclassified to held for sale4
Borrowings derecognised on disposal of subsidiaries3
Fair value adjustment to fair value hedged borrowings
Fair value movement of hedging derivatives
Foreign exchange movements
Change in lease liabilities
Interest on convertible bonds
Other movements
31 December 2022
Borrowings
excluding
lease
liabilities
33,023
Lease
liabilities
1,618
Total
borrowings
34,641
Cross-currency
and interest
rate swaps and
net margins1
23
Total liabilities
arising from
financing
activities
34,664
(2,850)
(103)
(2,563)
430
(73)
–
–
(1,407)
3,306
(3,260)
52
(762)
–
(1,250)
–
(436)
–
21
10
(2,365)
27,398
–
–
–
–
–
(577)
–
–
–
(577)
30
(38)
(2)
–
–
(41)
389
–
–
338
1,379
(2,850)
(103)
(2,563)
430
(73)
(577)
–
(1,407)
3,306
(3,837)
82
(800)
(2)
(1,250)
–
(477)
389
21
10
(2,027)
28,777
–
–
–
–
–
–
(1,824)
–
–
(1,824)
–
–
–
–
1,647
–
–
–
–
1,647
(154)
(2,850)
(103)
(2,563)
430
(73)
(577)
(1,824)
(1,407)
3,306
(5,661)
82
(800)
(2)
(1,250)
1,647
(477)
389
21
10
(380)
28,623
1 The currency and interest rate swaps are reported on the balance sheet within the headings ‘Other financial assets’ and ‘Other financial liabilities’
(see note 27) and margin calls paid/received within accounts receivable/payable (see notes 14 and 25).
2 See consolidated statement of cash flows.
3 See note 26.
4 See note 16.
2023 Glencore Annual Report
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………………………………………………………243
243
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Notes to the financial statements continued
21. Borrowings continued
Capital market notes
US$ million
Euro 600 million 0.625% coupon bonds
Euro 750 million 1.75% coupon bonds
Euro 500 million 3.75% coupon bonds
Euro 500 million 1.50% coupon bonds
Euro 950 million 1.125% coupon bonds
Euro 600 million 0.75% coupon bonds
Euro 500 million 1.25% coupon bonds
Eurobonds
GBP 500 million 3.125% coupon bonds
Sterling bonds
CHF 175 million 1.25% coupon bonds
CHF 250 million 0.35% coupon bonds
CHF 225 million 1.00% coupon bonds
CHF 150 million 0.50% coupon bonds
Swiss Franc bonds
US$ 974 million 4.125% coupon bonds
US$ 990 million 4.625% coupon bonds
US$ 625 million non-dilutive convertible bonds
US$ 500 million 4.00% coupon bonds
US$ 1,000 million 1.625% coupon bonds
US$ 600 million 1.625% coupon bonds
US$ 1,000 million 4.00% coupon bonds
US$ 50 million 4.00% coupon bonds
US$ 500 million 3.875% coupon bonds
US$ 500 million 5.40% coupon bonds
US$ 750 million 6.125% coupon bonds
US$ 750 million 4.875% coupon bonds
US$ 1,000 million 2.50% coupon bonds
US$ 750 million 6.375% coupon bonds
US$ 600 million 2.85% coupon bonds
US$ 750 million 2.625% coupon bonds
US$ 500 million 5.70% coupon bonds
US$ 1,000 million 6.50% coupon bonds
US$ 250 million 6.20% coupon bonds
US$ 500 million 6.90% coupon bonds
US$ 497 million 6.00% coupon bonds
US$ 468 million 5.30% coupon bonds
US$ 500 million 3.875% coupon bonds
US$ 500 million 3.375% coupon bonds
US$ bonds
Total non-current bonds
Euro 1,000 million 1.875% coupon bonds
Euro 400 million 3.70% coupon bonds
Euro 600 million 0.625% coupon bonds
CHF 175 million 1.25% coupon bonds
US$ 1,500 million 4.125% coupon bonds
US$ 974 million 4.125% coupon bonds
US$ 990 million 4.625% coupon bonds
Total current bonds
Maturity
Sep 2024
Mar 2025
Apr 2026
Oct 2026
Mar 2028
Mar 2029
Mar 2033
Mar 2026
Oct 2024
Sep 2025
Mar 2027
Sep 2028
Mar 2024
Apr 2024
Mar 2025
Apr 2025
Sep 2025
Apr 2026
Mar 2027
Mar 2027
Oct 2027
May 2028
Oct 2028
Mar 2029
Sep 2030
Oct 2030
Apr 2031
Sep 2031
May 2033
Oct 2033
Jun 2035
Nov 2037
Nov 2041
Oct 2042
Apr 2051
Sep 2051
Sep 2023
Oct 2023
Sep 2024
Oct 2024
May 2023
Mar 2024
Apr 2024
2023
–
799
534
512
1,050
570
421
3,886
596
596
–
297
268
167
732
–
–
596
481
997
554
945
50
470
492
773
709
994
781
514
638
485
1,059
267
575
533
473
496
491
13,373
18,587
–
–
663
205
–
974
981
2,823
2022
644
749
499
470
1,014
510
367
4,253
541
541
184
270
244
142
840
972
960
574
470
995
503
926
50
460
–
–
697
993
–
535
621
–
–
269
580
535
473
496
486
11,595
17,229
1,070
422
–
–
1,485
–
–
2,977
244………………………………………………………
244
2023 Glencore Annual Report
2023 Glencore Annual Report
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Notes to the financial statements continued
21. Borrowings continued
2023 Bond activities
• In May 2023, issued:
– 5-year $500 million, 5.40% coupon bond
– 10-year $500 million, 5.70% coupon bond
• In October 2023, issued:
– 5-year $750 million, 6.125% coupon bond
– 7-year $750 million, 6.375% coupon bond
– 10-year $1,000 million, 6.50% coupon bond
2022 Bond activities
There were no bond activities during the year.
Committed revolving credit facilities
In April 2023 (effective May 2023), Glencore refinanced its core syndicated revolving credit facilities.
As at 31 December 2023, the facilities comprise:
• a $9,060 million one-year revolving credit facility with a one-year borrower’s term-out option (to May 2025); and
• a $3,900 million medium-term revolving credit facility (to May 2028).
As in previous years, these committed unsecured facilities contain no financial covenants, no rating triggers, no material adverse
change clauses and no external factor clauses.
Secured facilities
US$ million
Syndicated committed metals
inventory/receivables facilities - US$ 2
Syndicated uncommitted metals
inventory/receivables facilities - non-US$2
Syndicated uncommitted metals and oil
inventory/receivables facilities2
Other secured facilities2,3
Total
Current
Non-current
Maturity1
Nov 2024
Sep 2024
Oct 2024
Jan 2024 & Dec 2024
Interest
2023
2022
3.2%
19.0%
SOFR + 65 bps
6.0%
84
61
712
1,823
2,680
2,680
–
81
20
610
2,661
3,372
3,292
80
1 Uncommitted facilities are re-drawn several times until actual expiry of the facility contract.
2 Comprises various facilities. The maturity and interest detail represent the weighted average of the various debt balances outstanding at year end.
3 Inventory and equity related. The interest rate represents the weighted average of the various debt balances outstanding at year end. The weighted average
maturity is January 2024 for inventory-related facilities and December 2024 for equity-related facilities. Since year end, in the ordinary course of business,
these maturities have been rolled/extended.
2023 Glencore Annual Report
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245
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Notes to the financial statements continued
22. Deferred income
US$ million
1 January 2023
Additions
Accretion in the year
Revenue recognised in the year
Acquired in business combination
Effect of foreign currency exchange difference
Mark-to-market
31 December 2023
Current
Non-current
1 January 2022
Additions
Accretion in the year
Revenue recognised in the year
Reclassification to held for sale
Effect of foreign currency exchange difference
31 December 2022
Current
Non-current
Notes
26
16
Unfavourable
contracts
265
–
–
(64)
–
(4)
–
197
73
124
Prepayments1
1,149
113
89
(145)
39
8
–
1,253
193
1,060
Prepayments at
FVTPL1,2
(see note 28)
1,193
822
–
(1,130)
–
–
3
888
778
110
336
–
–
(66)
–
(5)
265
72
193
1,157
41
97
(133)
(6)
(7)
1,149
89
1,060
2,168
521
–
(1,500)
–
4
1,193
899
294
Total
2,607
935
89
(1,339)
39
4
3
2,338
1,044
1,294
3,661
562
97
(1,699)
(6)
(8)
2,607
1,060
1,547
1 $1,193 million of prepayments that are accounted for as financial instruments were reclassified from their prior period presentation within ‘Prepayments’ to
‘Prepayments at FVTPL’.
2 FVTPL – Fair value through profit and loss.
Unfavourable contracts
In several business combinations, Glencore recognised liabilities related to various assumed contractual agreements to deliver tonnes
of coal over various periods ending until 2032 at fixed prices lower than the prevailing market prices on the respective acquisition
dates.
These amounts are released to revenue as the underlying commodities are delivered to the buyers over the life of the contracts at
rates consistent with the extrapolated forward price curves at the time of the acquisitions.
Prepayments
Prepayments comprise various short- to long-term product supply agreements whereby an upfront prepayment is received in
exchange for the future delivery of a specific product, such as gold, silver or cobalt. The arrangements are accounted for as executory
contracts whereby the advance payment is recorded as deferred revenue. Revenue is recognised in the consolidated statement of
income as specific products are delivered, at the implied forward price curve at the time of transaction execution together with an
accretion expense, representing the time value of the prepayment received.
Prepayments include various long-term streaming agreements for the future delivery of gold and/or silver produced over the life of
mine from our Antamina and Antapaccay operations. In addition to the upfront payments received, Glencore receives ongoing
amounts equal to 20% of the spot silver or gold price, as the case may be. Once certain delivery thresholds have been met at
Antapaccay, the ongoing cash payment increases to 30% of the spot gold price. As at 31 December 2023, $990 million (2022: $1,025
million) of product delivery obligations remain, of which $30 million (2022: $42 million) are due within 12 months.
Prepayments at FVTPL
Prepayments at FVPTL comprise various short- to long-term product supply agreements accounted for as financial instruments,
whereby an upfront prepayment is received in exchange for the future delivery of a specific product or financial asset which is not
separable from the contract to sell the commodities. Revenue is recognised in the consolidated statement of income as specific
products are delivered or the financial obligation is settled.
246………………………………………………………
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2023 Glencore Annual Report
2023 Glencore Annual Report
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Notes to the financial statements continued
23. Provisions
US$ million
1 January 2023
Utilised
Released
Accretion
Assumed in business combination
Disposal of subsidiaries
Additions
Effect of foreign currency exchange
movements
31 December 2023
Current
Non-current
1 January 2022
Utilised
Released
Accretion
Assumed in business combination
Disposal of subsidiaries
Additions
Reclassification to held for sale
Effect of foreign currency exchange
movements
31 December 2022
Current
Non-current
Notes
26
26
Rehabilitation
costs
6,963
(366)
(20)
122
213
(33)
1,350
Onerous
contracts
530
(157)
(100)
35
–
–
12
Legal
investigations
484
(484)
–
–
–
–
–
Other
provisions
611
(92)
(29)
8
46
–
153
(49)
8,180
680
7,500
5,731
(238)
(30)
155
998
(158)
840
(290)
(45)
6,963
531
6,432
–
320
153
167
455
(143)
(71)
26
–
–
265
–
(2)
530
185
345
–
–
–
–
1,500
(883)
(133)
–
–
–
–
–
–
484
484
–
16
713
275
438
524
(152)
(30)
10
73
(9)
285
(83)
(7)
611
225
386
26
26
16
Total
8,588
(1,099)
(149)
165
259
(33)
1,515
(33)
9,213
1,108
8,105
8,210
(1,416)
(264)
191
1,071
(167)
1,390
(373)
(54)
8,588
1,425
7,163
Rehabilitation costs
Rehabilitation provision represents the accrued costs required to provide adequate restoration and rehabilitation upon the
completion of production activities. These amounts will be settled when rehabilitation is undertaken, generally at the end of a
project’s life, which ranges from two to in excess of 50 years with an average for all sites, weighted by closure provision, of some
18 years (2022: 19 years). Discount rates were determined for each relevant jurisdiction by reference to the average annual real-terms
return on a relevant government security with a tenor of 20 years.
As at 31 December 2023, the discount rate applied in calculating the restoration and rehabilitation provision is a pre-tax risk free rate
specific to the liability and the currency in which they are denominated as follows: US dollar 1.85% (2022: 1.25%), South African rand
7.3% (2022: 3.75%), Australian dollar 1.38% (2022: 2.0%), Canadian dollar 1.34% (2022: 1.25%), and Chilean peso 2.42% (2022: 2.5%). The
impact of changes in the discount rate on the value of the provision in the period was $161 million.
The sensitivity of the rehabilitation costs provision to changes in the discount rate assumptions as at 31 December 2023, assuming
that all other assumptions are held constant, is set out below:
US$ million
Decrease/(increase) in overall rehabilitation provision
(Decrease)/increase in property, plant and equipment
Net increase/(decrease) in statement of income
Effect in the following year
Decrease/(increase) in depreciation expense
(Increase)/decrease in interest expense
Net increase/(decrease) in statement of income
Discount rate
Increase 1%
936
(769)
167
Decrease 1%
(1,224)
998
(226)
40
(26)
14
(53)
40
(13)
2023 Glencore Annual Report
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Strategic Report
Corporate Governance
Financial Statements
Additional Information
Notes to the financial statements continued
23. Provisions continued
Onerous contracts
Onerous contracts represent liabilities related to contractual take or pay commitments for securing coal logistics capacity over various
periods ending until 2048 at fixed prices and quantities higher than the acquisition date forecasted usage and prevailing market
price. The provision is released to costs of goods sold as the underlying commitments are incurred.
Investigations by regulatory and enforcement authorities
On 24 May 2022, the Group announced that it had resolved the previously disclosed investigations by authorities in the United States,
the United Kingdom and Brazil.
The Group remains subject to the following ongoing investigations:
• The Office of the Attorney General of Switzerland (‘OAG’) is investigating Glencore International AG for failure to have the
organisational measures in place to prevent alleged corruption.
• The Dutch authorities are conducting a criminal investigation into Glencore International AG related to potential corruption
pertaining to the DRC. The scope of the investigation is similar to that of the OAG investigation. The Dutch authorities are
coordinating their investigation with the OAG and the Group expects any possible resolution to avoid duplicative penalties for the
same conduct.
The timing and outcome of the OAG and Dutch investigations remains uncertain – see note 32.
Other provisions
Other comprises provisions for possible demurrage, mine concession and construction-related claims, a royalty indemnification
related to the disposal of the Ernest Henry operations (see note 26) and various other individually immaterial legal matters. This
balance comprises no individually material provisions.
248………………………………………………………
248
2023 Glencore Annual Report
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Strategic Report
Corporate Governance
Financial Statements
Additional Information
Notes to the financial statements continued
24. Personnel costs and employee benefits
US$ million
1 January 2023
Utilised
Released
Accretion
Additions
Actuarial loss
Effect of foreign currency exchange movements
31 December 2023
1 January 2022
Utilised
Released
Accretion
Additions
Actuarial gain
Reclassification to held for sale
Effect of foreign currency exchange movements
31 December 2022
Notes
Post-retirement
employee
benefits
488
(78)
(1)
21
96
14
11
551
Other
employee
entitlements
189
(6)
(4)
–
71
–
(1)
249
782
(82)
(1)
19
97
(298)
–
(29)
488
157
(37)
(1)
–
79
–
(1)
(8)
189
16
Total
677
(84)
(5)
21
167
14
10
800
939
(119)
(2)
19
176
(298)
(1)
(37)
677
The provision for post-retirement employee benefits includes pension plan liabilities of $220 million (2022: $178 million) and post-
retirement medical plan liabilities of $331 million (2022: $310 million).
The other employee entitlements provision represents the value of employee entitlements due to employees upon their termination
of employment. The associated expenditure will occur in a pattern consistent with when employees choose to exercise their
entitlements.
Total personnel costs, which include salaries, wages, social security, other personnel costs and share-based payments, incurred for the
years ended 31 December 2023 and 2022, were $5,969 million and $6,319 million, respectively. Personnel costs related to consolidated
industrial subsidiaries of $4,478 million (2022: $4,284 million) are included in cost of goods sold. Other personnel costs, including
deferred bonus and performance share plans, are included in selling and administrative expenses.
The Company and certain subsidiaries sponsor various pension schemes in accordance with local regulations and practices. Eligibility
for participation in the various plans is either based on completion of a specified period of continuous service, or date of hire. Among
these schemes are defined contribution plans as well as defined benefit plans.
Defined contribution plans
Glencore’s contributions under these plans amounted to $176 million in 2023 (2022: $171 million).
Post-retirement medical plans
The Company participates in a number of post-retirement medical plans in Canada, USA and South Africa, which provide coverage
for prescription drugs, medical, dental, hospital and life insurance to eligible retirees. Almost all of the post-retirement medical plans
in the Group are unfunded.
2023 Glencore Annual Report
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Strategic Report
Corporate Governance
Financial Statements
Additional Information
Notes to the financial statements continued
24. Personnel costs and employee benefits continued
Defined benefit pension plans
The Company operates defined benefit plans in various countries, the main locations being Canada, Switzerland, UK and the US.
Approximately 61% of the present value of the pension obligations accrued relates to the defined benefit plans in Canada, which are
pension plans that provide benefits to members in the form of a guaranteed level of pension payable for life. Contributions to the
Canadian plans are made to meet or exceed minimum funding requirements based on provincial statutory requirements and
associated federal taxation rules.
The majority of benefit payments are from trustee-administered funds; however, there are also a number of unfunded plans where
Glencore meets the benefit payments as they fall due. Plan assets held in trusts are governed by local regulations and practices in
each country. Responsibility for governance of the plans – overseeing all aspects of the plans including investment decisions and
contribution schedules – lies with Glencore. Glencore has set up committees to assist in the management of the plans and has also
appointed experienced, independent professional experts such as investment managers, actuaries, custodians, and trustees.
The movement in the defined benefit pension and post-retirement medical plans over the year is as follows:
US$ million
1 January 2023
Current service cost
Past service cost – plan amendments
Interest expense/(income)
Total expense recognised in consolidated statement
of income
Gain on plan assets, excluding amounts included
in interest expense – net
Gain from change in demographic assumptions
Loss from change in financial assumptions
Loss from actuarial experience
Actuarial losses/(gains) recognised in consolidated
statement of comprehensive income
Employer contributions
Employee contributions
Benefits paid directly by the Company
Benefits paid from plan assets
Net cash (outflow)/inflow
Exchange differences
31 December 2023
Of which:
Pension surpluses
Pension deficits
Notes
Post-retirement
medical plans
310
4
–
18
Defined benefit pension plans
Present value
of defined
benefit
obligation
1,912
41
9
91
Fair value
of plan
assets
(1,882)
–
–
(88)
Net liability
for defined
benefit
pension plans
30
41
9
3
141
–
(3)
99
12
108
–
4
(8)
(110)
(114)
72
2,119
(88)
(107)
–
–
–
(107)
(60)
(4)
8
110
54
(65)
(2,088)
22
–
(9)
19
3
13
–
–
(18)
–
(18)
4
331
–
331
53
(107)
(3)
99
12
1
(60)
–
–
–
(60)
7
31
(189)
220
12
The actual return on plan assets in respect of defined benefit pension plans amounted to a gain of $260 million (2022: loss of
$456 million), comprising interest income and the re-measurement of plan assets, including exchange differences.
During the next financial year, the Group expects to make a contribution of $97 million in respect of the defined benefit pension and
post-retirement medical plans across all countries, including current service costs and contributions required by pension legislation.
Contributions over the next five years for the Canadian plans only, based on the most recently filed actuarial reports, approximate $113
million. Future funding requirements and contributions are reviewed and adjusted on an annual basis.
250………………………………………………………
250
2023 Glencore Annual Report
2023 Glencore Annual Report
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Notes to the financial statements continued
24. Personnel costs and employee benefits continued
US$ million
1 January 2022
Current service cost
Past service cost – plan amendments
Settlement of pension plan disposal
Interest expense/(income)
Total expense/(income) recognised in consolidated
statement of income
Loss on plan assets, excluding amounts included
in interest expense – net
Gain from change in demographic assumptions
Gain from change in financial assumptions
(Gain)/loss from actuarial experience
Actuarial (gains)/losses recognised in consolidated
statement of comprehensive income
Employer contributions
Benefits paid directly by the Company
Benefits paid from plan assets
Net cash (outflow)/inflow
Exchange differences
31 December 2022
Of which:
Pension surpluses
Pension deficits
Notes
Post-retirement
medical plans
430
8
1
–
17
Defined benefit pension plans
Present value
of defined
benefit
obligation
2,760
52
3
(115)
67
Fair value
of plan
assets
(2,533)
–
–
121
(65)
Net liability
for defined
benefit
pension plans
227
52
3
6
2
26
–
(7)
(91)
(6)
(104)
–
(18)
–
(18)
(24)
310
–
310
12
7
–
(26)
(576)
25
(577)
–
(8)
(130)
(138)
(140)
1,912
56
383
–
–
–
383
(64)
8
130
74
138
(1,882)
63
383
(26)
(576)
25
(194)
(64)
–
–
(64)
(2)
30
(148)
178
The defined benefit obligation accrued in Canada represents the majority for the Company. The breakdown below provides details of
the Canadian plans for both the statement of financial position and the weighted average duration of the defined benefit obligation
as at 31 December 2023 and 2022. The net liability of any of the Group’s defined benefit plans outside of Canada as at 31 December
2023 does not exceed $74 million (2022: $34 million).
2023 Glencore Annual Report
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Strategic Report
Corporate Governance
Financial Statements
Additional Information
Notes to the financial statements continued
24. Personnel costs and employee benefits continued
2023
US$ million
Post-retirement medical plans
Present value of defined benefit obligation
of which: amounts owing to active members
of which: amounts owing to pensioners
Defined benefit pension plans
Present value of defined benefit obligation
of which: amounts owing to active members
of which: amounts owing to non-active members
of which: amounts owing to pensioners
Fair value of plan assets
Net defined benefit (asset)/liability at 31 December 2023
Of which:
Pension surpluses
Pension deficits
Weighted average duration of defined benefit obligation – years
2022
US$ million
Post-retirement medical plans
Present value of defined benefit obligation
of which: amounts owing to active members
of which: amounts owing to pensioners
Defined benefit pension plans
Present value of defined benefit obligation
of which: amounts owing to active members
of which: amounts owing to non-active members
of which: amounts owing to pensioners
Fair value of plan assets
Net defined benefit (asset)/liability at 31 December 2022
Of which:
Pension surpluses
Pension deficits
Weighted average duration of defined benefit obligation – years
Canada
Other
Total
287
87
200
1,292
290
15
987
(1,398)
(106)
(159)
53
11
44
7
37
827
449
104
274
(690)
137
(30)
167
11
331
94
237
2,119
739
119
1,261
(2,088)
31
(189)
220
11
Canada
Other
Total
264
74
190
1,203
261
14
928
(1,277)
(74)
(126)
52
10
46
8
38
709
364
91
254
(605)
104
(22)
126
12
310
82
228
1,912
625
105
1,182
(1,882)
30
(148)
178
11
Estimated future benefit payments of the Canadian plans, which reflect expected future services but exclude plan expenses, up until
2033 are as follows:
US$ million
2024
2025
2026
2027
2028
2029-2033
Total
Post-retirement
medical plans
18
19
18
18
18
87
178
Defined benefit
pension plans
86
86
85
85
85
406
833
Total
104
105
103
103
103
493
1,011
252………………………………………………………
252
2023 Glencore Annual Report
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Strategic Report
Corporate Governance
Financial Statements
Additional Information
Notes to the financial statements continued
24. Personnel costs and employee benefits continued
The plan assets consist of the following:
Cash and short-term investments
Fixed income
Equities
Real estate
Other
Total
Level 1
10
779
533
–
402
1,724
2023
Level 2
–
–
–
–
–
–
Level 3
–
–
–
213
151
364
Level 1
37
569
567
–
329
1,502
2022
Level 2
–
182
–
–
–
182
Level 3
–
–
–
198
–
198
The fair value of plan assets includes none of Glencore’s own financial instruments and no property occupied by or other assets used
by Glencore. For many of the plans, representing a large portion of the global plan assets, asset-liability matching strategies are in
place, where the fixed income assets are invested broadly in alignment with the duration of the plan liabilities, and the proportion
allocated to fixed income assets is raised when the plan funding level increases. The asset mix for each plan reflects the nature,
expected changes in, and size of the liabilities and the assessment of long-term economic conditions, market risk, expected
investment returns as considered during a formal asset mix study, including sensitivity analysis and/or scenario analysis, conducted
periodically for the plans.
Through its defined benefit plans, Glencore is exposed to a number of risks, the most significant of which are detailed below:
Asset volatility: The plan liabilities are calculated using a discount rate set with reference to corporate bond yields; if plan assets
underperform this yield, this will create a deficit. The funded plans hold a significant proportion of equities, which are expected to
outperform bonds in the long term while contributing volatility and risk in the short term. Glencore believes that due to the long-term
nature of the plan liabilities, a level of continuing equity investment is an appropriate element of Glencore’s long-term strategy to
manage the plans efficiently.
Change in bond yields:: A decrease in bond yields will increase plan liabilities, although this will be partially offset by an increase in the
value of the plans’ bond holdings.
Inflation risk: Some of the plans’ benefit obligations are linked to inflation, and higher inflation will lead to higher liabilities, although,
in most cases, caps on the level of inflationary increases are in place to protect the plan against extreme inflation.
Life expectancy: The majority of the plans’ obligations are to provide benefits for the life of the member, so increases in life
expectancy will result in an increase in the plans’ liability.
Salary increases: Some of the plans’ benefit obligations related to active members are linked to their salaries. Higher salary increases
will therefore tend to lead to higher plan liabilities.
The principal weighted-average actuarial assumptions used were as follows:
Discount rate
Future salary increases
Future pension increases
Ultimate medical cost trend rate
Post-retirement medical plans
Defined benefit pension plans
2023
5.7%
–
–
4.6%
2022
6.2%
–
–
3.5%
2023
4.3%
2.6%
0.4%
–
2022
4.9%
2.7%
0.4%
–
Mortality assumptions are based on the latest available standard mortality tables for the individual countries concerned. As at
31 December 2023, these tables imply expected future life expectancy, for employees aged 65, 16 to 24 years for males (2022: 16 to 24)
and 20 to 25 years for females (2022: 20 to 25). The assumptions for each country are reviewed regularly and are adjusted where
necessary to reflect changes in fund experience and actuarial recommendations.
2023 Glencore Annual Report
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Strategic Report
Corporate Governance
Financial Statements
Additional Information
Notes to the financial statements continued
24. Personnel costs and employee benefits continued
The sensitivity of the defined benefit obligation to changes in principal assumptions as at 31 December 2023 is set out below,
assuming that all other assumptions are held constant and the effect of interrelationships is excluded.
US$ million
Discount rate
Increase by 100 basis points
Decrease by 100 basis points
Rate of future salary increase
Increase by 100 basis points
Decrease by 100 basis points
Rate of future pension benefit increase
Increase by 100 basis points
Decrease by 100 basis points
Medical cost trend rate
Increase by 100 basis points
Decrease by 100 basis points
Life expectancy
Increase in longevity by one year
25. Accounts payable
US$ million
Financial liabilities at amortised cost
Trade payables1
Margin calls received and other broker balances
Associated companies
Other payables and accrued liabilities
Increase/(decrease) in pension obligation
Defined benefit
pension plans
Post-retirement
medical plans
Total
(35)
44
–
–
–
–
35
(29)
10
(197)
226
29
(28)
22
(18)
–
–
44
(232)
270
29
(28)
22
(18)
35
(29)
54
Notes
2023
2022
4,669
597
992
754
7,012
20,423
24
20,447
–
1,322
508
1,830
29,289
6,865
112
903
644
8,524
18,258
484
18,742
294
1,839
327
2,460
29,726
Financial liabilities at fair value through profit and loss
Trade payables containing provisional pricing features1
Other payables2
28
28
Non-financial liabilities
Advances settled in product2
Other payables and accrued liabilities3
Other tax and related payables
Total
1 Certain amounts were reclassified from their prior period presentation within ‘Trade payables’ to ‘Trade payables containing provisional pricing features’
($4,179 million) to conform with current year presentation.
2 $382 million related to other payables accounted for as financial instruments were reclassified from their prior period presentation within ‘Non-financial
liabilities’ to ‘Financial liabilities at fair value through profit and loss’.
3 Primarily comprised of employee benefits accruals.
Trade payables are obligations to pay for goods and services. Trade payables typically have maturities up to 90 days depending on the
type of material and the geographic area in which the purchase transaction occurs and the agreed terms. The carrying value of trade
payables approximates fair value.
254………………………………………………………
254
2023 Glencore Annual Report
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Strategic Report
Corporate Governance
Financial Statements
Additional Information
Notes to the financial statements continued
26. Acquisition and disposal of subsidiaries and other entities
2023 Acquisitions
In 2023, Glencore acquired the remaining 75% interest in Noranda Income Fund and the remaining 56.25% interest in the MARA
copper project that it did not already own. The fair values are provisional pending final valuations expected to be finalised within 12
months of the acquisitions. It is expected that adjustments could be made to the allocation of value between acquired plant and
equipment, inventories, deferred taxes and provisions.
The net cash used in the acquisition of subsidiaries and the provisional fair value of assets acquired and liabilities assumed on the
acquisition date are detailed below:
US$ million
Non-current assets
Property, plant and equipment
Intangible assets
Advances and loans
Deferred tax assets
Current assets
Inventories
Accounts receivable1
Other financial assets
Cash and cash equivalents
Non-current liabilities
Non-current borrowings
Non-current deferred income
Deferred tax liabilities
Non-current provisions
Current liabilities
Borrowings
Accounts payable
Deferred income
Provisions
Total fair value of net assets acquired
Consideration paid
Contingent consideration
Amounts previously recognised as investments
Gain on revaluation of previously recognised investments
Cash and cash equivalents paid
Cash and cash equivalents acquired
Net cash used in acquisition of subsidiaries
Noranda
Income Fund
MARA
Other
64
–
–
33
97
213
14
23
5
255
–
(34)
–
(18)
(52)
(6)
(66)
(5)
(1)
(78)
222
(204)
–
–
18
(204)
5
(199)
1,461
–
8
–
1,469
2
16
–
187
205
(8)
–
(436)
(204)
(648)
(1)
(77)
–
(35)
(113)
913
(477)
(37)
(175)
224
(477)
187
(290)
1
7
–
–
8
–
–
–
1
1
–
–
(2)
–
(2)
–
–
–
(1)
(1)
6
(6)
–
–
–
(6)
1
(5)
Total
1,526
7
8
33
1,574
215
30
23
193
461
(8)
(34)
(438)
(222)
(702)
(7)
(143)
(5)
(37)
(192)
1,141
(687)
(37)
(175)
242
(687)
193
(494)
1 There is no material difference between the gross contractual amounts for accounts receivable and their fair value.
2023 Glencore Annual Report
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Strategic Report
Corporate Governance
Financial Statements
Additional Information
Notes to the financial statements continued
26. Acquisition and disposal of subsidiaries and other entities continued
Noranda Income Fund
In March 2023, Glencore completed the acquisition of the remaining 75% interest in Noranda Income Fund, which in turn owns 100%
of Canadian Electrolytic Zinc Ltd, an electrolytic zinc processing facility and ancillary assets located in Salaberry-de-Valleyfield, Quebec,
that it did not previously own for $54 million and settled outstanding debt of $150 million. As Glencore holds 100% of the voting shares,
providing it the ability to control the key strategic, operating and capital decisions of the business, it is required to account for the
acquisition using the full consolidation method in accordance with IFRS 10.
Prior to the acquisition, Glencore owned a 25% interest in Noranda Income Fund which was accounted for as an associate. In
accordance with IFRS 3 Business Combinations, the equity interest is required to be revalued, at the date of acquisition, to its fair
value with any resulting gain or loss recognised in the statement of income. On the date of acquisition, the fair value of 100% of the
net assets acquired was determined to be $222 million and as a result, a gain of $18 million was recognised on the revaluation of the
original 25% equity interest.
If the acquisition had taken place effective 1 January 2023, the operation would have contributed additional revenue of $207 million
and additional attributable profit after tax of $3 million. From the date of acquisition, the operation contributed $531 million of revenue
and $15 million of attributable losses after tax for the period ended 31 December 2023.
MARA Project
In September 2023, Glencore completed the acquisition of the remaining 56.25% interest in the MARA project, a copper and gold
brownfield project located in the Caramarca province, Argentina, that it did not previously own for $477 million of cash on closing and
a Net Smelter Return (NSR) copper royalty of 0.75%. As Glencore holds 100% of the voting shares, providing it the ability to control the
key strategic, operating and capital decisions of the business, it is required to account for the acquisition using the full consolidation
method in accordance with IFRS 10.
Prior to the acquisition, Glencore owned a 43.75% interest in the MARA project which was accounted for as an associate. In
accordance with IFRS 3 Business Combinations, the equity interest is required to be revalued, at the date of acquisition, to its fair
value with any resulting gain or loss recognised in the statement of income. On the date of acquisition, the fair value of 100% of the
net assets acquired was determined to be $913 million and as a result, a gain of $224 million was recognised on the revaluation of the
original 43.75% equity interest.
If the acquisition had taken place effective 1 January 2023, the operation would have contributed additional revenue of $Nil and
additional attributable losses after tax of $5 million. From the date of acquisition, the operation contributed $Nil of revenue and $13
million of attributable losses after tax for the period ended 31 December 2023.
256………………………………………………………
256
2023 Glencore Annual Report
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Strategic Report
Corporate Governance
Financial Statements
Additional Information
Notes to the financial statements continued
26. Acquisition and disposal of subsidiaries and other entities continued
2022 Acquisitions
In 2022, Glencore acquired the remaining 66.67% interest in Cerrejón that it did not already own, and various other businesses, none
of which are individually material. The acquisition accounting for Cerrejón has now been finalised, with no adjustments to the
previously reported provisional fair values.
The net cash acquired/(used) in the acquisition of subsidiaries and the fair value of assets acquired and liabilities assumed on the
acquisition date are detailed below:
US$ million
Non-current assets
Property, plant and equipment
Current assets
Inventories
Accounts receivable1
Cash and cash equivalents
Non-current liabilities
Non-current borrowings
Deferred tax liabilities
Provisions
Current liabilities
Borrowings
Accounts payable
Provisions
Income tax payable
Total fair value of net assets acquired
Less: cash and cash equivalents acquired
Less: amounts previously recognised as investments
Gain on bargain purchase of subsidiaries
Cash and cash equivalents paid
Cash and cash equivalents acquired
Net cash acquired/(used) in acquisition of subsidiaries
Cerrejón
Other
Total
2,470
2,470
315
312
511
1,138
(13)
(278)
(1,033)
(1,324)
(17)
(232)
(30)
(309)
(588)
1,696
(100)
(567)
1,029
(100)
511
411
333
333
51
13
5
69
–
(50)
(8)
(58)
(52)
(70)
–
–
(122)
222
(95)
(31)
96
(95)
5
(90)
2,803
2,803
366
325
516
1,207
(13)
(328)
(1,041)
(1,382)
(69)
(302)
(30)
(309)
(710)
1,918
(195)
(598)
1,125
(195)
516
321
1 There is no material difference between the gross contractual amounts for accounts receivable and their fair value.
Cerrejón
On 11 January 2022, Glencore completed the acquisition of the remaining 66.67% interest in Cerrejón, a coal mine in Colombia, that it
did not own. The purchase price consideration of $588 million was based on an economic effective date of 31 December 2020. After
taking into account the dividends generated during 2021, together with certain other adjustments, the completion cash payment
made by Glencore amounted to $100 million. As Glencore holds 100% of the voting shares, providing it the ability to control the key
strategic, operating and capital decisions of the business, it is required to account for Cerrejón using the full consolidation method in
accordance with IFRS 10.
Prior to the acquisition, Glencore owned a 33.33% interest in Cerrejón which was accounted for as an associate. In accordance with
IFRS 3 Business Combinations, the equity interest is required to be revalued, at the date of acquisition, to its fair value with any
resulting gain or loss recognised in the statement of income. On the date of acquisition, the fair value of 100% of the net assets
acquired was determined to be $1,696 million, a value broadly consistent with the carrying value of the initial 33.33% equity interest
and as a result, no gain or loss was recognised on the revaluation of the original equity interest.
The valuation was determined using a bottom-up approach to identify the fair value of the specific assets and liabilities within the
Cerrejón Group, with the mineral reserves being valued using a discounted cash flow method that assumes life of mine saleable coal
production of 223 million tonnes over the period 2022-2032, at a long-term CIF price of $67/t, adjusted as appropriate for coal quality,
applying a discount rate of 8.56%.
As the assessed fair value of $1,696 million was in excess of the completion cash payment and the fair value of the previously held
investment, a bargain purchase gain on acquisition of $1,029 million was recognised in the consolidated statement of income.
Glencore assessed that all identifiable assets and liabilities had been included in the valuation prior to recognising the gain as noted
above. The gain effectively represents the discount that the selling joint venture partners were willing to accept in order to achieve
timely execution of their respective decarbonisation strategies. The immediate near-term valuation was also supported by the net
$411 million of unencumbered cash assumed on completion, benefitting from the transaction effective date of 31 December 2020.
From the date of acquisition, the operation contributed $5,393 million of revenue and $2,909 million of attributable income (including
the bargain purchase gain) for the period ended 31 December 2022.
2023 Glencore Annual Report
2023 Glencore Annual Report
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Strategic Report
Corporate Governance
Financial Statements
Additional Information
Notes to the financial statements continued
26. Acquisition and disposal of subsidiaries and other entities continued
Other
From the date of acquisition, the other operations contributed $223 million of revenue and $241 million of attributable income
(including the bargain purchase gain) for the period ended 31 December 2022.
2023 Disposals
The carrying value of the assets and liabilities over which control was lost and consideration receivable from the 2023 disposals are
detailed below:
US$ million
Non-current assets
Property, plant and equipment
Intangible assets
Advances and loans
Current assets
Inventories
Accounts receivable
Income tax receivable
Prepaid expenses
Cash and cash equivalents
Non-controlling interest
Non-current liabilities
Deferred tax liabilities
Non-current provisions
Post-retirement and other employee benefits
Current liabilities
Borrowings
Accounts payable
Provisions
Carrying value of net assets disposed
Cash and cash equivalents received
Items recycled to the statement of income
Retained interest recognised as investment in associate (MAC)
Deferred interest bearing consideration
Contingent future considerations
NSR royalty
Net (gain)/loss on disposal
Cash and cash equivalents received
Less: cash and cash equivalents disposed
Net cash received in disposal
Cobar1
Other
Total
499
1
–
500
25
3
4
1
–
33
–
(25)
(44)
(1)
(70)
(8)
(31)
–
(39)
424
(749)
–
(100)
(75)
(64)
(21)
(585)
749
–
749
44
12
9
65
6
66
–
1
6
79
20
–
(32)
–
(32)
–
(24)
(1)
(25)
107
(95)
(3)
–
–
–
–
9
95
(6)
89
543
13
9
565
31
69
4
2
6
112
20
(25)
(76)
(1)
(102)
(8)
(55)
(1)
(64)
531
(844)
(3)
(100)
(75)
(64)
(21)
(576)
844
(6)
838
1 As at 31 December 2022, total assets and liabilities were presented as current assets and liabilities ‘held for sale’ (see note 16).
Cobar
In June 2023, Glencore disposed of its 100% interest in the CSA Copper mine, located near Cobar, New South Wales, to Metals
Acquisition Corp (MAC). As consideration, Glencore received:
• $749 million in cash, after closing adjustments;
• $100 million in shares of MAC (20.7% underlying interest as at June 2023);
• $75 million deferred interest-bearing consideration to be settled within 12 months;
• $75 million contingent future consideration when daily copper prices average >US$4.25/lb for 18 continuous months over the life of
mine;
• $75 million contingent future consideration when daily copper prices average >US$4.50/lb for 24 continuous months over the life of
mine; and
• $21 million, being the current discounted value of a 1.5% life of mine Net Smelter Return (NSR) royalty.
258………………………………………………………
258
2023 Glencore Annual Report
2023 Glencore Annual Report
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Notes to the financial statements continued
26. Acquisition and disposal of subsidiaries and other entities continued
The fair value of the deferred interest-bearing consideration was determined to be $75 million using a discounted cash flow model
of the projected amount and timing of receipts, using an asset-specific discount rate of 12.5%. The contractual terms of the deferred
consideration give rise to cash flows that are not solely payments of principal and interest as the margin between 8 and 12% is
dependent on the quarterly copper price and thus is accounted for as a financial asset at fair value through profit and loss.
The combined fair value of the two contingent future consideration amounts was determined to be $64 million. As the nature of the
deferred future consideration is analogous to a financial option, the fair value was determined using a Monte Carlo option pricing
methodology which incorporated a copper spot price of $8,110/mt, a volatility factor of 19.3%, a life of mine period of 8.6 years and
a discount rate that ranged between 5.9 and 11.5%.
The fair value of the 1.5% NSR royalty over the life of the mine was determined to be $21 million, using a discounted cash flow model of
the forecast royalty payments, discounted using an asset-specific discount rate of 8.5%.
2022 Disposals
The carrying value of the assets and liabilities over which control was lost and consideration receivable from the 2022 disposals are
detailed below:
US$ million
Non-current assets
Property, plant and equipment
Intangible assets
Investments in associates
Advances and loans
Deferred tax assets
Current assets
Inventories
Accounts receivable
Prepaid expenses
Cash and cash equivalents
Non-controlling interest
Non-current liabilities
Non-current borrowings
Deferred income
Deferred tax liabilities
Non-current provisions
Post-retirement and other employee
benefits
Current liabilities
Borrowings
Accounts payable
Provisions
Income tax payable
Carrying value of net assets disposed
Cash and cash equivalents (received)/paid
Items recycled to the statement of income
Reclassified to investment in associate
Royalty indemnification2
Streaming settlement
Future consideration
Net (gain)/loss on disposal
Cash and cash equivalents received/(paid)
Less: cash and cash equivalents disposed
Net cash received/(used) in disposal
Ernest Henry1 Bolivia Zinc1
E&P Chad1
Access
World1
Los
Quenuales
Other
Total
311
–
–
–
16
327
16
24
–
1
41
–
–
(138)
–
(74)
(1)
(213)
–
(30)
(38)
–
(68)
87
(585)
–
–
125
–
(139)
(512)
585
(1)
584
163
2
–
43
13
221
97
90
–
17
204
–
(8)
–
(4)
(26)
(16)
(54)
(2)
(139)
(44)
(13)
(198)
173
–
–
–
–
–
(69)
104
–
(17)
(17)
247
–
–
–
–
247
21
19
–
5
45
–
–
–
(3)
(86)
–
(89)
–
(7)
–
–
(7)
196
(17)
–
–
–
–
(145)
34
17
(5)
12
206
11
10
9
4
240
–
159
12
42
213
(2)
(110)
–
(1)
(3)
(1)
(115)
(19)
(154)
(3)
(4)
(180)
156
(40)
22
–
–
–
(115)
23
40
(42)
(2)
126
–
–
2
21
149
5
9
–
7
21
(2)
(1)
–
–
(97)
–
(98)
(1)
(23)
(9)
–
(33)
37
10
1
–
–
132
–
180
(142)
(7)
(149)
121
–
–
–
–
121
6
19
1
3
29
(24)
–
–
(3)
(59)
–
(62)
–
(19)
(2)
–
(21)
43
(30)
27
(17)
–
–
(3)
20
30
(3)
27
1,174
13
10
54
54
1,305
145
320
13
75
553
(28)
(119)
(138)
(11)
(345)
(18)
(631)
(22)
(372)
(96)
(17)
(507)
692
(662)
50
(17)
125
132
(471)
(151)
530
(75)
455
1 As at 31 December 2021, total assets and liabilities were presented as current assets and liabilities ‘held for sale’.
2 See note 23.
2023 Glencore Annual Report
2023 Glencore Annual Report
………………………………………………………259
259
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Notes to the financial statements continued
26. Acquisition and disposal of subsidiaries and other entities continued
Ernest Henry
In January 2022, Glencore disposed of its 70% interest in Ernest Henry Mining Pty Ltd, a copper-gold mine in Queensland, Australia.
After closing adjustments, $585 million was received with $139 million received in January 2023. The contractual terms of the deferred
consideration give rise to cash flows that are solely payments of principal and interest, therefore the receivable is accounted for as
financial asset at amortised cost. A $125 million provision was recognised for the indemnification of future royalty payments under an
existing agreement.
Bolivia Zinc
In March 2022, Glencore disposed of its 100% interest in the Bolivian zinc assets (Sinchi Wayra and Illapa), to Santacruz Silver Mining
Ltd. After closing adjustments, $90 million is receivable over a four-year period and a 1.5% NSR royalty over the life of the mines. The
fair value of the future consideration was determined to be $69 million using a discounted cash flow model of the projected amount
and timing of receipts, discounted using an asset-specific discount rate of 11%. The contractual terms of the deferred consideration
give rise to cash flows that are solely payments of principal and interest, therefore the receivable is accounted for as financial asset at
amortised cost.
E&P Chad
In June 2022, Glencore disposed of its Chad upstream oil operations to Perenco S.A. for $197 million, of which $17 million was due on
closing and $180 million is due through a price and production participation arrangement payable annually. The fair value of the
future consideration was determined to be $145 million using a discounted cash flow model of the projected amount and timing of
receipts, discounted using an asset-specific discount rate of 13%. The contractual terms of the deferred consideration give rise to cash
flows that are solely payments of principal and interest, therefore the receivable is accounted for as financial asset at amortised cost.
Access World
In December 2022, Glencore disposed of its 100% interest in the Access World Group, a global commodities storage and logistics
group, for $180 million. $40 million was received in December and, after closing adjustments, $115 million is receivable over 2023.
The contractual terms of the deferred consideration give rise to cash flows that are solely payments of principal and interest, therefore
the receivable is accounted for as financial asset at amortised cost.
Los Quenuales
In December 2022, Glencore disposed of its 100% interest in Los Quenuales, a zinc-lead-silver mine in Peru, to Alpayana S.A. for
$10 million in cash. Conditional on completion of the transaction, Glencore earlier settled its silver streaming arrangement over one
of Los Quenuales’ mining properties with Wheaton Precious Metals for a payment of $132 million.
260………………………………………………………
260
2023 Glencore Annual Report
2023 Glencore Annual Report
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Notes to the financial statements continued
27. Financial and capital risk management
Financial risks arising in the normal course of business from Glencore’s operations comprise market risk (including commodity price
risk, interest rate risk and currency risk), credit risk (including performance risk) and liquidity risk. It is Glencore’s policy and practice
to identify and, where appropriate and practical, actively manage such risks (for management of ‘margin’ risk within Glencore’s
extensive and diversified industrial portfolio, refer to net present value at risk below) to support its objectives in managing its capital
and future financial security and flexibility. Glencore’s overall risk management programme focuses on the unpredictability of
financial markets and seeks to protect its financial security and flexibility by using derivative financial instruments where possible to
substantially hedge these financial risks. Glencore’s finance and risk professionals, working in coordination with the commodity
departments, monitor, manage and report regularly to senior management and the Board of Directors on the approach and
effectiveness in managing financial risks along with the financial exposures facing the Group.
Glencore’s objectives in managing its ‘capital attributable to equity holders’ include preserving its overall financial health and strength
for the benefit of all stakeholders, maintaining an optimal capital structure in order to provide a high degree of financial flexibility at
an attractive cost of capital and safeguarding its ability to continue as a going concern, while generating sustainable long-term
profitability. Central to meeting these objectives is maintaining an investment grade credit rating status. Glencore’s current credit
ratings are Baa1 from Moody’s and BBB+ from S&P.
Distribution policy and other capital management initiatives
Glencore’s base cash distribution policy comprises two components: (1) a fixed $1 billion component and (2) a variable element
representing 25% of free cash flow generated by our industrial assets during the preceding year. Distributions are expected to be
formally declared by the Board annually (with the preliminary full-year results). Distributions, when declared, will be settled equally in
May/June and September of the year they are declared in. In addition, reflecting the Group’s through the cycle Net debt objective of
c.$10 billion (reducing to c.$5 billion – see below), and consideration of the cyclical nature of the industry and other relevant factors, the
Board could declare additional distributions to be included with the distribution confirmed with respect to the prior year, consider
top-up distributions during the year and/or initiate or continue share buyback programmes. As disclosed in note 31, following the
November 2023 announcement of our agreement to acquire a 77% interest in Teck Resources’s EVR steelmaking coal business, our
capital structure and credit profile is now being managed towards a revised $5 billion Net Debt cap, alongside our continued
commitment to minimum strong BBB/Baa ratings. Notwithstanding that the cash distribution is declared and paid in US dollars,
shareholders will be able to elect to receive their distribution payments in Pounds Sterling, Euros or Swiss Francs based on the
exchange rates in effect around the date of payment. Shareholders on the JSE will receive their distributions in South African Rand.
Commodity price risk
Glencore is exposed to price movements for the inventory it holds and the products it produces which are not held to meet forward-
priced contract obligations and forward-priced purchase or sale contracts. Glencore manages a significant portion of this exposure
through futures and options transactions on worldwide commodity exchanges or in over the counter (OTC) markets, to the extent
available. Commodity price risk management activities are considered an integral part of Glencore’s physical commodity marketing
activities and the related assets and liabilities are included in other financial assets from and other financial liabilities to derivative
counterparties, including clearing brokers and exchanges. Whilst it is Glencore’s policy to substantially hedge its commodity price
risks, there remains the possibility that the hedging instruments chosen may not always provide effective mitigation of the
underlying price risk. The hedging instruments available to the marketing businesses may differ in specific characteristics to the risk
exposure to be hedged, resulting in an ongoing and unavoidable basis risk exposure. Residual basis risk exposures represent a key
focus point for Glencore’s commodity department teams who actively engage in the management of such.
Value at risk
One of the tools used by Glencore to monitor and limit its primary market risk exposure, principally commodity price risk related to its
physical marketing activities, is a value at risk (VaR) computation. VaR is a risk measurement technique which estimates a threshold
for potential loss that could occur on risk positions as a result of movements in risk factors over a specified time horizon, given a
specific level of confidence and based on a specific price history. The VaR methodology is a statistically defined, probability-based
approach that takes into account market volatilities, as well as risk diversification by recognising offsetting positions and correlations
between commodities and markets. In this way, risks can be measured consistently across markets and commodities and risk
measures can be aggregated to derive a single risk value.
Glencore uses a VaR approach based on Monte Carlo simulations computed at a 95% confidence level and utilising a weighted data
history for a one-day time horizon. Glencore’s Board, as part of its annual review process in H2 2023, approved an increase in the
Group’s consolidated VaR limit (one day 95% confidence level) from $150 million (ex-LNG) to $200 million (inc. LNG), which represents
approximately 0.5% of total equity.
The previous limit of $150 million was established in H2 2022, from which LNG was temporarily excluded due to significantly increased
market volatilities in the European gas market. As market volatility somewhat normalised in H2 2023, following a comprehensive
review, the Board, in consultation with the Chief Risk Officer and senior management, determined that it was appropriate to revert to
a VaR limit that includes LNG of $200 million. There were no limit breaches in 2023.
2023 Glencore Annual Report
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261
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Notes to the financial statements continued
27. Financial and capital risk management continued
Position sheets are regularly distributed and monitored and daily Monte Carlo simulations are applied to the various business groups’
net marketing positions to determine potential losses.
Market risk VaR (one-day 95% confidence level) ranges and year-end positions were as follows:
US$ million (all including LNG)
Year-end position
Average during the year
High during the year
Low during the year
2023
42
92
156
42
2022
88
158
451
66
VaR does not purport to represent actual gains or losses in fair value in earnings to be incurred by Glencore, nor does Glencore claim
that these VaR results are indicative of future market movements or representative of any actual impact on its future results. VaR
should always be viewed in the context of its limitations; notably, the use of historical data as a proxy for estimating future events,
market illiquidity risks and tail risks. Glencore recognises these limitations, and thus complements and continuously refines its VaR
analysis by analysing forward-looking stress scenarios, benchmarking against an alternative VaR computation based on historical
simulations and back testing calculated VaR against the hypothetical portfolio returns arising in the next business day.
Glencore’s VaR computation currently covers its business in the key base metals, bulks, freight, and energy products (including, but
not limited to, aluminium, nickel, copper, zinc, cobalt, coal, iron ore, oil, gas and related products) and assesses the open priced
positions which are subject to price risk, including inventories of these commodities. Due to the lack of a liquid terminal market,
Glencore does not include a VaR calculation for products such as alumina, molybdenum and some risk associated with metals
concentrates as it does not consider the nature of these markets to be suited to this type of analysis. Alternative measures are used to
monitor exposures related to these products.
Net present value at risk
Glencore’s future cash flows related to its forecast Industrial production activities are also exposed to commodity price movements.
Glencore manages this exposure through a combination of portfolio diversification, occasional shorter-term hedging via futures and
options transactions, insurance products and continuous internal monitoring, reporting and quantification of the underlying
operations’ estimated cash flows and valuations.
Interest rate risk
Glencore is exposed to various risks associated with the effects of fluctuations in the prevailing levels of market interest rates on its
assets and liabilities and cash flows. Matching of assets and liabilities is utilised as the dominant method to hedge interest rate risks;
other methods include the use of interest rate swaps and similar derivative instruments with the same critical terms as the
underlying interest rate exposures. See details on swap instruments used below.
Floating rate debt which is predominantly used to fund fast-turning working capital (interest is internally charged on the funding of
this working capital) is now primarily based on Secured Overnight Funding Rate (SOFR) plus an appropriate premium. Accordingly,
prevailing market interest rates are continuously factored into transactional pricing and terms.
Assuming the amount of floating rate liabilities at the reporting period end were outstanding for the whole year, interest rates were
100 basis points higher/lower and all other variables held constant, Glencore’s income for the year ended 31 December 2023 would
decrease/increase by $226 million (2022: $188 million).
Interest rate benchmark reform
As of 31 December 2023, the Group had completed its transition to the new interest rate benchmarks. For interest rate hedging
arrangements, all USD LIBOR derivative contracts transitioned to the SOFR upon cessation date and in accordance with the terms of
the ISDA Fallback Protocol. For other financial and non-financial assets and liabilities, the Group adopted a combination of Term
SOFR, daily SOFR compounded in arrears, and the cost of funds quoted by the bank (if any) involved in such financing.
262………………………………………………………
262
2023 Glencore Annual Report
2023 Glencore Annual Report
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Notes to the financial statements continued
27. Financial and capital risk management continued
Currency risk
The US dollar is the predominant functional currency of the Group. Currency risk is the risk of loss from movements in exchange rates
related to transactions and balances in currencies other than the US dollar. Such transactions include operating expenditure, capital
expenditure and to a lesser extent purchases and sales in currencies other than the functional currency. Purchases or sales of
commodities concluded in currencies other than the functional currency, apart from certain limited domestic sales at industrial
operations which act as a hedge against local operating costs, are ordinarily economically hedged through forward exchange
contracts. Consequently, foreign exchange movements against the US dollar on recognised transactions would have an immaterial
financial impact. Glencore enters into currency hedging transactions with leading financial institutions.
Glencore’s debt-related payments (both principal and interest) are primarily denominated in or swapped using hedging instruments
into US dollars. Glencore’s operating expenses, being a small portion of its revenue base, are incurred in a mix of currencies of which
the US dollar, Swiss Franc, Pound Sterling, Canadian dollar, Australian dollar, Euro, Kazakhstan Tenge, Colombian Peso and South
African Rand are the predominant currencies.
Glencore has issued Euro, Swiss Franc and Sterling denominated bonds (see note 21). Cross-currency swaps were concluded to hedge
the currency risk on the principal and related interest payments of these bonds. These contracts were designated as fair value or cash
flow hedges of the associated foreign currency risks. The critical terms of these swap contracts and their corresponding hedged items
are matched and the Group expects a highly effective hedging relationship with the swap contracts and the value of the
corresponding hedged items to change systematically in opposite direction in response to movements in the underlying exchange
rates. Sources of ineffectiveness on cash flow and fair value hedges stem from fluctuations in credit risk spreads that may not align
with the designated hedging instruments. The corresponding fair value and notional amounts of these derivatives is as follows:
US$ million
Cross-currency swap agreements
Cash flow hedges – currency risk
Eurobonds
Swiss franc bonds
Fair value hedges – currency and interest
rate risk
Eurobonds
Sterling bonds
Swiss franc bonds
Interest rate swap agreements
Fair value hedges – interest rate risk
US$ bonds
1 Refer to note 21 for details.
Notional amounts
Average FX
rates
2023
2022
2023
2022
Carrying amount
Assets
(Note 29)
2023
2022
Carrying amount
Liabilities
(Note 29)
2023
2022
Average
maturity1
1,790
504
2,907
504
1.16
1.06
1.14
1.06
3,405
663
347
6,709
3,947
663
347
8,368
1.20
1.33
1.07
1.22
1.33
1.07
9,200
15,909
7,200
15,568
–
–
–
73
–
–
21
94
128
222
–
20
3
1
–
24
2
26
66
–
203
–
2026
2026
588
64
–
718
903
106
24
1,236
2027
2026
2026
533
1,251
507
1,743
2029
The carrying amounts of the fair value hedged items are as follows:
US$ million
Foreign exchange and interest rate risk
Eurobonds
Swiss franc bonds
Sterling bonds
US$ bonds
Carrying amount of the
hedged item
(Note 21)
Of which,
accumulated fair value
hedge adjustments and FX
2023
2022
2023
2022
2,837
372
596
8,884
12,689
3,017
326
541
6,657
10,541
(587)
20
(62)
(404)
(1,033)
(866)
(20)
(122)
(505)
(1,513)
2023 Glencore Annual Report
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263
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Notes to the financial statements continued
27. Financial and capital risk management continued
Credit risk
Credit risk arises from the possibility that counterparties may not be able to settle obligations due to Glencore within their agreed
payment terms. Financial assets which potentially expose Glencore to credit risk consist principally of cash and cash equivalents,
receivables and advances, derivative instruments and non-current advances and loans. Glencore’s credit management process
includes the assessment, monitoring and reporting of counterparty exposure on a regular basis. Glencore’s cash and cash equivalents
are placed overnight with a diverse group of highly credit-rated financial institutions. Margin calls paid are similarly held with credit-
rated financial institutions. Glencore determines these instruments to have low credit risk at the reporting date. Credit risk with
respect to receivables and advances is mitigated by the large number of customers comprising Glencore’s customer base, their
diversity across various industries and geographical areas, as well as Glencore’s policy to mitigate these risks through letters of credit,
netting, collateral and insurance arrangements where appropriate. Additionally, it is Glencore’s policy that transactions and activities
in trade-related financial instruments be concluded under master netting agreements or long form confirmations to enable
offsetting of balances due to/from a common counterparty in the event of default by the counterparty. Glencore actively and
continuously monitors the credit quality of its counterparties through internal reviews and a credit scoring process, which includes,
where available, public credit ratings. Balances with counterparties not having a public investment grade or equivalent internal rating
are typically enhanced to investment grade through the extensive use of credit enhancement products, such as letters of credit or
insurance products. Glencore has a diverse customer base, with no customer representing more than 8.5% (2022: 7.1%) of its trade
receivables (taking into account credit enhancements) or accounting for more than 3.3% of its revenues over the year ended
31 December 2023 (2022: 3.2%) (see notes 3 and 14).
The maximum exposure to credit risk (including performance risk – see below), without considering netting agreements or without
taking account of any collateral held or other credit enhancements, is equal to the carrying amount of Glencore’s financial assets
(see note 28) and physically settled advances (see notes 12 and 14).
Management information used to monitor credit risk indicates that the prima facie risk profile % categories of financial assets which
are subject to review for impairment under IFRS 9, is as set out below. The total balance for those assets as at 31 December 2023 is
$8,144 million (2022 restated: $12,413 million) (see notes 12, 14 and 15).
in %
AAA to AA-
A+ to A-
BBB+ to BBB-
BB+ to BB-
B+ to B-
CCC+ and below
2023
10
39
15
8
13
15
2022
7
51
16
5
9
12
The 2022 prima facie risk profile % were restated to conform with prior period presentation reclassifications (see notes 12, 14 and 15).
Movements in credit losses for accounts receivable and advances and loans are shown in notes 12 and 14.
Performance risk
Performance risk (part of the broader credit risk subject matter, discussed above) is inherent in contracts, with agreements in the
future, to physically purchase or sell commodities with fixed price attributes, and arises from the possibility that counterparties may
not be willing or able to meet their future contractual physical sale or purchase obligations to/from Glencore. Glencore undertakes
the assessment, monitoring and reporting of performance risk within its overall credit management process. Glencore’s market
breadth, diversified supplier and customer base as well as the standard pricing mechanism in the vast majority of Glencore’s
commodity portfolio which does not fix the primary commodity price beyond three months, ensure that performance risk is
adequately mitigated. The commodity industry has trended towards shorter-term fixed price contract periods, in part to mitigate
against such potential performance risk, but also due to the continuous development of transparent and liquid spot commodity
markets, with their associated derivative products and indexes.
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Corporate Governance
Financial Statements
Additional Information
Notes to the financial statements continued
27. Financial and capital risk management continued
Liquidity risk
Liquidity risk is the risk that Glencore is unable to meet its payment obligations when due, or that it is unable, on an ongoing basis, to
borrow funds in the market on an unsecured or secured basis at an acceptable price to fund actual or proposed commitments.
Prudent liquidity risk management implies maintaining sufficient cash and cash equivalents and availability of adequate committed
funding facilities. Glencore has set itself an internal minimum liquidity target to maintain at all times, including via available
committed undrawn credit facilities, of $3 billion (2022: $3 billion), which has purposely been substantially exceeded in recent years,
accounting for the more volatile market backdrop. Glencore’s credit profile, diversified funding sources and committed credit
facilities, ensure that sufficient liquid funds are maintained to meet its liquidity requirements. As part of its liquidity management,
Glencore closely monitors and plans for its future capital expenditure, working capital needs and proposed investments, as well as
credit facility refinancing/extension requirements, well ahead of time (see notes 1, 12, 21, 22 and 25).
As at 31 December 2023, Glencore had available committed undrawn credit facilities and cash amounting to $12,853 million (2022:
$13,000 million), refer to Other reconciliations section. The maturity profile of Glencore’s financial liabilities based on the contractual
terms is presented in the table below.
The liquidity risk related to physical forward purchase obligations represents the gross contractual cash outflows expected to be paid
upon transfer of control of the underlying physical commodity. Gross cash inflows expected from physical forward sales are not
presented in the below table, but would approximate the expected gross cash outflows related to forward purchase obligations plus
an appropriate margin.
The gross liquidity risk relating to cross-currency swaps entered into for the purposes of hedging foreign currency and interest rate
risks arising from the Group’s non-US dollar denominated bonds is presented below. The amounts reflect the expected gross
settlement of the US dollar pay leg of these swaps. The inflows from the related foreign currency receive leg of these swaps are not
presented in the below table, but would approximate the foreign currency equivalent of the US dollar pay leg. Counterparty
settlement date risk related to these swaps is limited, as the Group has entered into margining arrangements for both the outflow
and inflow legs of the swap.
2023
US$ million
Non-derivative financial liabilities
Borrowings excluding lease liabilities, fair
value hedge adjustments and other non-
cash items
Expected future interest payments
Lease liabilities – undiscounted
Securities lending arrangements1
Accounts payable
Derivative financial liabilities
Physical forward purchases
Cross-currency swaps
Other financial liabilities
Total
2022
US$ million
Non-derivative financial liabilities
Borrowings excluding lease liabilities, fair
value hedge adjustments and other non-
cash items
Expected future interest payments
Lease liabilities – undiscounted
Accounts payable2
Derivative financial liabilities
Physical forward purchases
Cross-currency swaps
Other financial liabilities2
Total
After 5 years Due 3 - 5 years Due 2 - 3 years Due 1 - 2 years
Due 0 - 1 year
Total
9,578
4,304
2,539
4,892
10,404
31,717
3,225
707
–
–
6,380
1,476
471
21,837
771
267
–
–
25,018
1,717
111
32,188
675
222
–
–
25,224
2,059
195
30,914
1,017
396
–
–
38,192
1,284
493
46,274
783
707
400
27,459
80,645
1,124
2,582
123,704
6,471
2,299
400
27,459
175,459
7,660
3,852
255,317
After 5 years Due 3 - 5 years Due 2 - 3 years Due 1 - 2 years
Due 0 - 1 year
Total
8,203
2,876
637
–
13,078
2,840
493
28,127
4,330
3,262
3,350
9,821
28,966
722
196
–
25,750
2,408
228
33,634
456
167
–
26,884
1,289
309
32,367
553
328
–
32,321
1,138
68
37,758
720
526
27,266
58,919
2,072
2,090
101,414
5,327
1,854
27,266
156,952
9,747
3,188
233,300
1 Glencore enters into financial instruments which require posting of cash collateral with brokers. As part of its working capital management, Glencore has
satisfied certain of its cash collateral obligations with US treasury bills acquired through securities lending arrangements. As at 31 December 2023,
$400 million (2022: $Nil) of US treasury bills were held in respect of such arrangements.
2 Accounts payable were reclassified from their prior period presentation, see note 25. Other financial liabilities were restated to conform with current period
gross liquidity risk presentation.
2023 Glencore Annual Report
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Corporate Governance
Financial Statements
Additional Information
Notes to the financial statements continued
28. Financial instruments
Fair value of financial instruments
The following tables present the carrying values and fair values of Glencore’s financial instruments. Fair value is the price that would
be received to sell an asset or paid to transfer a liability in an orderly transaction in the principal (most advantageous) market at the
measurement date under current market conditions. Where available, market values have been used to determine fair values. When
market values are not available, fair values have been calculated by discounting expected cash flows at prevailing market interest and
exchange rates. The estimated fair values have been determined using market information and appropriate valuation
methodologies, but are not necessarily indicative of the amounts that Glencore could realise in the normal course of business.
The financial assets and liabilities are presented by class in the tables below at their carrying values, which generally approximate the
fair values with the exception of $30,733 million (2022: $27,398 million) of borrowings, the fair value of which at 31 December 2023 was
$30,555 million (2022: $26,675 million). $6,080 million (2022: $6,918 million) represents the listed portion of the borrowing portfolio,
based on quoted prices on active markets (a Level 1 fair value measurement), and $24,475 million (2022: $19,757 million) is based on
observable market prices (a Level 2 fair value measurement).
2023
US$ million
Assets
Other investments
Non-current other financial assets
Advances and loans
Accounts receivable
Other financial assets
Cash and cash equivalents
Total financial assets
Liabilities
Borrowings
Non-current other financial liabilities
Accounts payable
Deferred income
Other financial liabilities
Total financial liabilities
2022
US$ million
Assets
Other investments
Non-current other financial assets
Advances and loans3
Accounts receivable3
Other financial assets
Cash and cash equivalents
Total financial assets
Liabilities
Borrowings
Non-current other financial liabilities
Accounts payable3
Deferred income3
Other financial liabilities
Total financial liabilities
Amortised
cost
FVTPL1
FVTOCI2
Total
–
–
1,708
8,792
–
1,925
12,425
32,241
–
7,012
–
–
39,253
126
367
282
6,917
5,187
–
12,879
–
1,710
20,447
888
3,671
26,716
387
–
–
–
–
–
387
–
–
–
–
–
–
513
367
1,990
15,709
5,187
1,925
25,691
32,241
1,710
27,459
888
3,671
65,969
Amortised
cost
FVTPL1
FVTOCI2
Total
–
–
1,000
15,100
–
1,923
18,023
28,777
14
8,524
–
–
37,315
37
206
337
7,739
6,109
–
14,428
–
2,041
18,742
1,193
4,882
26,858
419
–
–
–
–
–
419
–
–
–
–
–
–
456
206
1,337
22,839
6,109
1,923
32,870
28,777
2,055
27,266
1,193
4,882
64,173
1 FVTPL – Fair value through profit and loss.
2 FVTOCI – Fair value through other comprehensive income.
3 Certain amounts were reclassified from their prior period presentation. See notes 12, 14, 22 and 25.
266………………………………………………………
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2023 Glencore Annual Report
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Strategic Report
Corporate Governance
Financial Statements
Additional Information
Notes to the financial statements continued
28. Financial instruments continued
Offsetting of financial assets and liabilities
In accordance with IAS 32 the Group reports financial assets and liabilities on a net basis in the consolidated statement of financial
position only if there is a legally enforceable right to set off the recognised amounts and there is intention to settle on a net basis, or
to realise the asset and settle the liability simultaneously. The financial assets and liabilities subject to offsetting, enforceable master
netting and similar agreements as at 31 December 2023 and 2022 were as follows:
2023
US$ million
Derivative assets1
Derivative liabilities1
2022
US$ million
Derivative assets1
Derivative liabilities1
Amounts eligible for set off
under netting agreements
Related amounts not set off
under netting agreements
Gross
amount
15,909
(16,127)
Amounts
offset
(12,338)
12,338
Net
amount
3,571
(3,789)
Financial
instruments
(1,936)
1,936
Financial
collateral
(511)
1,471
Amounts
not subject
to netting
agreements
1,983
(1,592)
Net
amount
1,124
(382)
Amounts eligible for set off
under netting agreements
Related amounts not set off
under netting agreements
Gross
amount
3,422
(5,929)
Amounts
offset
(2,141)
2,141
Net
amount
1,281
(3,788)
Financial
instruments
(608)
608
Financial
collateral
(26)
2,638
Amounts
not subject
to netting
agreements
5,034
(3,149)
Net
amount
647
(542)
Total as
presented
in the
consolidated
statement
of financial
position
5,554
(5,381)
Total as
presented
in the
consolidated
statement
of financial
position
6,315
(6,937)
1 Presented within current and non-current other financial assets and other financial liabilities.
For the financial assets and liabilities subject to enforceable master netting or similar arrangements above, each agreement between
the Group and the counterparty allows for net settlement of the relevant financial assets and liabilities in the ordinary course of
business. Where practical reasons may prevent net settlement, financial assets and liabilities may be settled on a gross basis, however,
each party to the master netting or similar agreement will have the option to settle all such amounts on a net basis in the event of
default of the other party. Per the terms of each agreement, an event of default includes failure by a party to make payment when
due, failure by a party to perform any obligation required by the agreement (other than payment) if such failure is not remedied
within periods of 30 to 60 days after notice of such failure is given to the party or bankruptcy.
29. Fair value measurements
Fair values are primarily determined using quoted market prices or standard pricing models using observable market inputs where
available and are presented to reflect the expected gross future cash in/outflows. Glencore classifies the fair values of its financial
instruments into a three-level hierarchy based on the degree of the source and observability of the inputs that are used to derive the
fair value of the financial asset or liability as follows:
Level 1
Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that Glencore can assess at the
measurement date; or
Level 2
Inputs other than quoted inputs included in Level 1 that are observable for the assets or liabilities, either directly or indirectly;
or
Level 3 Unobservable inputs for the assets or liabilities, requiring Glencore to make market-based assumptions.
Level 1 classifications primarily include futures with a tenor of less than one year and options that are exchange traded, whereas Level
2 classifications primarily include futures with a tenor greater than one year, over the counter options, swaps and physical forward
transactions which derive their fair value primarily from exchange quotes and readily observable broker quotes. Level 3 classifications
primarily include physical forward transactions which derive their fair value predominantly from models that use broker quotes and
applicable market-based estimates surrounding location, quality and credit differentials and financial liabilities linked to the fair value
of certain mining operations. In circumstances where Glencore cannot verify fair value with observable market inputs (Level 3 fair
values), it is possible that a different valuation model could produce a materially different estimate of fair value.
It is Glencore’s policy that transactions and activities in trade-related financial instruments be concluded under master netting
agreements or long form confirmations to enable balances due to/from a common counterparty to be offset in the event of default,
insolvency or bankruptcy by the counterparty.
2023 Glencore Annual Report
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Strategic Report
Corporate Governance
Financial Statements
Additional Information
Notes to the financial statements continued
29. Fair value measurements continued
The following tables show the fair values of the derivative financial instruments including trade-related financial and physical forward
purchase and sale commitments by type of contract and non-current other financial assets and liabilities as at 31 December 2023 and
2022. Other assets and liabilities which are measured at fair value on a recurring basis are marketing inventories, other investments,
cash and cash equivalents. There are no non-recurring fair value measurements.
Financial assets
2023
US$ million
Financial assets
Trade receivables
Prepaid commodity forward contracts
Contingent consideration
Other receivables
Non-current prepaid commodity forward contracts
Other non-current receivables and loans
Convertible loan
Other investments
Financial assets
Other financial assets
Commodity-related contracts
Futures
Options
Swaps
Physical forwards
Financial contracts
Cross-currency swaps
Foreign currency and interest rate contracts
Current other financial assets
Non-current other financial assets
Cross-currency swaps
Foreign currency and interest rate contracts
Other financial derivative assets
Purchased call options over Glencore shares1
Non-current other financial assets
Total
Level 1
Level 2
Level 3
Total
–
–
–
–
–
–
–
390
390
1,978
33
416
–
–
–
2,427
–
–
–
–
–
2,817
6,229
543
75
–
124
–
–
123
7,094
205
61
661
851
20
21
1,819
73
127
–
103
303
9,216
–
–
62
8
–
22
136
–
228
–
–
5
936
–
–
941
–
–
64
–
64
1,233
6,229
543
137
8
124
22
136
513
7,712
2,183
94
1,082
1,787
20
21
5,187
73
127
64
103
367
13,266
1 Call options over the Company’s shares in relation to conversion rights of the $625 million non-dilutive convertible bond, due in 2025.
268………………………………………………………
268
2023 Glencore Annual Report
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Strategic Report
Corporate Governance
Financial Statements
Additional Information
Notes to the financial statements continued
29. Fair value measurements continued
Financial assets
2022
US$ million
Financial assets
Trade receivables2
Prepaid commodity forward contracts2
Contingent consideration
Other receivables
Non-current prepaid commodity forward contracts2
Other non-current receivables and loans
Convertible loan
Non-current contingent consideration
Other investments
Financial assets
Other financial assets
Commodity-related contracts
Futures2
Options
Swaps2
Physical forwards
Financial contracts
Foreign currency and interest rate contracts
Current other financial assets
Non-current other financial assets
Cross-currency swaps
Foreign currency and interest rate contracts
Purchased call options over Glencore shares1
Non-current other financial assets
Total
Level 1
Level 2
Level 3
Total
–
–
–
–
–
–
–
–
280
280
809
120
40
–
–
969
–
–
–
–
1,249
7,018
520
–
–
44
–
–
–
176
7,758
156
4
165
1,786
62
2,173
24
1
181
206
10,137
–
–
128
73
–
22
168
103
–
494
–
–
18
2,949
–
2,967
–
–
–
–
3,461
7,018
520
128
73
44
22
168
103
456
8,532
965
124
223
4,735
62
6,109
24
1
181
206
14,847
1 Call options over the Company’s shares in relation to conversion rights of the $625 million non-dilutive convertible bond, due in 2025.
2 Certain amounts were reclassified from their prior period presentation to conform with current year presentation. See notes 12 and 14.
2023 Glencore Annual Report
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Strategic Report
Corporate Governance
Financial Statements
Additional Information
Notes to the financial statements continued
29. Fair value measurements continued
Financial liabilities
2023
US$ million
Financial liabilities
Accounts payable
Non-discretionary dividend obligation1
Financial liabilities
Other financial liabilities
Commodity-related contracts
Futures
Options
Swaps
Physical forwards
Financial contracts
Cross-currency swaps
Foreign currency and interest rate contracts
Current other financial liabilities
Non-current other financial liabilities
Cross-currency swaps
Foreign currency and interest rate contracts
Non-discretionary dividend obligation1
Contingent consideration
Embedded call options over Glencore shares2
Non-current other financial liabilities
Deferred income
Current deferred income
Non-current deferred income
Deferred income
Total
Level 1
Level 2
Level 3
Total
–
–
–
20,423
–
20,423
1,592
104
130
–
–
–
1,826
–
–
–
–
–
–
285
29
331
1,019
4
110
1,778
714
499
–
–
103
1,316
–
–
–
1,826
778
110
888
24,405
–
24
24
–
–
1
66
–
–
67
–
–
285
109
–
394
–
–
–
485
20,423
24
20,447
1,877
133
462
1,085
4
110
3,671
714
499
285
109
103
1,710
778
110
888
26,716
1 A ZAR-denominated derivative liability payable to ARM Coal, a partner in one of the Group’s principal coal joint operations based in South Africa. The liability
arises from ARM Coal’s rights as an investor to a share of agreed free cash flows from certain coal operations in South Africa and is valued based on those
cash flows using a risk-adjusted discount rate. The derivative liability is settled over the life of those operations with a modelled mine life of 13 years as at
31 December 2023.
2 Embedded call option bifurcated from the 2025 convertible bond.
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2023 Glencore Annual Report
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Strategic Report
Corporate Governance
Financial Statements
Additional Information
Notes to the financial statements continued
29. Fair value measurements continued
Financial liabilities
2022
US$ million
Financial liabilities
Accounts payable1
Other payables1
Non-discretionary dividend obligation2
Financial liabilities
Other financial liabilities
Commodity-related contracts
Futures3
Options
Swaps3
Physical forwards
Financial contracts
Cross-currency swaps
Foreign currency and interest rate contracts
Current other financial liabilities
Non-current other financial liabilities
Cross-currency swaps
Foreign currency and interest rate contracts
Non-discretionary dividend obligation2
Option over non-controlling interest in Ale
Contingent consideration
Embedded call options over Glencore shares3
Non-current other financial liabilities
Deferred income
Current deferred income1
Non-current deferred income1
Deferred income
Total
Level 1
Level 2
Level 3
Total
–
–
–
–
714
32
–
–
–
1
747
–
–
–
–
–
–
–
–
–
–
747
18,258
382
–
18,640
459
119
660
2,498
181
105
4,022
1,055
490
–
–
–
181
1,726
899
294
1,193
25,581
–
–
102
102
–
–
–
113
–
–
113
–
–
219
22
74
–
315
–
–
–
530
18,258
382
102
18,742
1,173
151
660
2,611
181
106
4,882
1,055
490
219
22
74
181
2,041
899
294
1,193
26,858
1 Certain amounts were reclassified from their prior period presentation to conform with current year presentation. See notes 22 and 25.
2 A ZAR-denominated derivative liability payable to ARM Coal, a partner in one of the Group’s principal coal joint operations based in South Africa. The liability
arises from ARM Coal’s rights as an investor to a share of agreed free cash flows from certain coal operations in South Africa and is valued based on those
cash flows using a risk-adjusted discount rate. The derivative liability is settled over the life of those operations with a modelled mine life of 13 years as at
31 December 2022.
3 Embedded call option bifurcated from the 2025 convertible bond.
2023 Glencore Annual Report
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Financial Statements
Additional Information
Notes to the financial statements continued
29. Fair value measurements continued
The following table shows the net changes in fair value of Level 3 other financial assets and other financial liabilities:
US$ million
1 January 2023
Total (loss)/gain recognised in revenue
Total loss recognised in cost of goods sold
Acquisition
Fair value recognised in other
income/(expense)
Realised
31 December 2023
1 January 2022
Total gain recognised in revenue
Total gain/(loss) recognised in cost of
goods sold
Acquisition
Fair value recognised in other
income/(expense)
Realised
31 December 2022
Contingent
consideration Convertible loan
168
–
–
25
157
–
–
(39)
(37)
(128)
(47)
261
–
–
(20)
105
(189)
157
(57)
–
136
–
–
–
200
(32)
–
168
Physical
forwards
2,836
(219)
(1,167)
–
–
(580)
870
411
231
2,403
–
–
(209)
2,836
Swaps
18
65
(66)
–
–
(13)
4
40
67
(70)
–
–
(19)
18
Other
(248)
–
–
64
20
(51)
(215)
(63)
–
–
–
(173)
(12)
(248)
Total
Level 3
2,931
(154)
(1,233)
50
(74)
(772)
748
649
298
2,333
180
(100)
(429)
2,931
During the year, no amounts were transferred between Level 1 and Level 2 of the fair value hierarchy and no amounts were
transferred into or out of Level 3 of the fair value hierarchy for either other financial assets or other financial liabilities.
Fair value of financial assets / financial liabilities
Some of the Group’s financial assets and financial liabilities are measured at fair value at the end of each reporting period.
Futures, options and swaps classified as Level 1 financial assets and liabilities are measured using quoted prices in an active market.
Accounts receivable and payables, and certain futures, options, swaps, physical forwards, cross-currency swaps, foreign currency and
interest rate contracts classified as Level 2 financial assets and liabilities are measured using discounted cash flow models. Key inputs
include observable quoted prices sourced from exchanges or traded reference indices in active markets for identical assets or
liabilities. Prices are adjusted by a discount rate which captures the time value of money and counterparty credit considerations, as
required.
Call options over Glencore shares classified as Level 2 financial assets and liabilities are measured using an option pricing model. Key
inputs include the current price of Glencore shares, strike price, maturity date of the underlying convertible debt security, risk-free
rate and volatility.
Given the extent to which the Group recognises financial instrument assets and liabilities at fair value, the preparation of the Group’s
consolidated financial statements requires management to consider on an ongoing basis, the key valuation metrics and judgements
involved in the determination of the fair value of financial instruments. To the extent that valuation is based on models or inputs that
are less observable or unobservable in the market, the determination of fair value requires more judgement. Management reviewed
the key valuation metrics, assumptions and methodologies involved in the determination of the Level 3 fair value of financial
instruments and determined that the valuations were materially reasonable.
The following table provides information on the valuation techniques and inputs used to determine the fair value of Level 3 financial
assets of $1,233 million (2022: $3,461 million) and financial liabilities of $485 million (2022: $530 million).
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29. Fair value measurements continued
US$ million
Contingent consideration (Mototolo)
Assets
Liabilities
2023
62
–
2022
231
–
Valuation techniques and key inputs:
Significant and other unobservable inputs: – Long-term forecast platinum group metals prices; and
Discounted cash flow model
– Discount rates using weighted average cost of capital methodology.
The significant unobservable inputs represent the long-term forecast commodity prices
to which the valuation remains sensitive to. A 10% increase/decrease in commodity price
assumptions would result in a $4 million (2022: $19 million) adjustment to the current
carrying value.
Other receivables and non-current receivables and loans
Assets
Liabilities
30
–
95
–
Valuation techniques and key inputs:
Significant and other unobservable inputs: – Discount rates specific to the operation; and
Discounted cash flow model
Convertible loan (Li-Cycle)
– Underlying business plans and forecasts.
The valuation remains sensitive to repayment cash flows dependent upon the
underlying business plans and forecasts. A one-year delay in the underlying cash flows
would result in a $1 million (2022: $19 million) reduction to the current carrying value of
the asset while bringing forward repayments by one year would result in a $7 million
(2022: $11 million) increase.
Assets
Liabilities
112
–
168
–
Valuation techniques and key inputs:
Significant and other unobservable inputs: – Share price; and
Discounted cash flow and option pricing model
– Risk-free rate, credit spread; and volatility.
The valuation remains sensitive to the credit spread and resulting discount rate (2022:
share price) and a 10% increase in the discount rate (2022: increase/decrease in share
price) would result in a $29 million (2022: $6 million) reduction (2022: adjustment) to the
current carrying value.
Contingent consideration and convertible loan
Valuation techniques and key inputs:
Discounted cash flow models
Significant and other unobservable inputs: – Estimated production plans;
Assets
Liabilities
24
(109)
–
(74)
– Forecast coal and copper prices; and
– Discount rates using weighted average cost of capital methodology.
The convertible loan valuation remains sensitive to the share price and a 10%
increase/decrease in share price assumptions would result in a $1 million adjustment to
the current carrying value. The contingent consideration liabilities were mainly
determined using forecast production estimates and coal prices. Should production
volumes increase/decrease by 10% the value of the liability would increase/decrease by
$6 million (2022: $7 million), and for any given quarter, should coal prices be lower than
the royalty trigger, no amounts would be due under the price contingent royalty
arrangement. A 10% increase/decrease in copper price assumptions would result in a $4
million adjustment to the contingent consideration.
Assets
Liabilities
64
–
–
–
Other financial derivative assets (Cobar)
Valuation techniques and key inputs:
Significant and other unobservable inputs: – Estimated production plans; and
Discounted Monte Carlo option pricing simulation
Swaps
– Forecast copper prices.
The contingent future consideration valuation remains sensitive to production volumes
and an 8-year increase in the life of mine assumptions would result in a $5 million
increase to the current carrying value.
Assets
Liabilities
5
(1)
18
–
Valuation techniques and key inputs:
Significant and other unobservable inputs: – Long-term aluminium and alumina prices.
Discounted cash flow model
The significant unobservable inputs represent the long-term aluminium and alumina
prices to which the valuation remains sensitive. A 10% increase/decrease in price
assumptions would result in a $1 million (2022: $2 million) adjustment to the current
carrying value.
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Notes to the financial statements continued
29. Fair value measurements continued
US$ million
Physical Forwards
Assets
Liabilities
2023
936
(66)
2022
2,949
(113)
Valuation techniques and key inputs:
Significant and other unobservable inputs: Valuation of the Group’s commodity physical forward contracts categorised within this
Discounted cash flow model
level is based on observable market prices that are adjusted by unobservable
differentials, as required, including:
– quality;
– geographic location;
– local supply and demand;
– customer requirements; and
– counterparty credit considerations.
These unobservable inputs generally represent 1%–30% of the overall value of the
instruments. The valuation prices are applied consistently to value physical forward sale
and purchase contracts, and changing a particular input to reasonably possible
alternative assumptions does not result in a material change in the underlying value of
the portfolio.
As at 31 December 2023, physical forward Level 3 assets relating to LNG contracts
amount to $760 million (2022: $2,552 million) and liabilities of $Nil (2022: $19 million).
Valuation of these contracts is based on observable Oil and Global Gas prices that are
adjusted by unobservable differentials which collectively represent, but are not limited
to, transportation, storage, liquefication and regasification premiums.
The value of our Level 3 long-term LNG physical supply contracts reflects the price
dislocation between Europe and other international markets and uncertainty of pricing
inputs beyond the observable range. There is limited observable LNG pricing data
beyond 2027 and an estimation uncertainty exists over global gas supply and demand
and the extent to which the current dislocation impacts long-term LNG pricing. For the
longer-dated portion of the curve, complex modelling techniques are also required
where there is limited observable market data. Extrapolation of observable pricing is
applied and correlated to third-party long-term forecast macro pricing assumptions for
various Oil and Global Gas indices, on which the long-term LNG prices are based. Given
the resulting inherent estimation uncertainty, reasonable valuation ranges are
developed to reflect the expected transfer value of these arrangements to another
market participant in accordance with IFRS 13. The Group considers the risks associated
with realising market value from unobservable long-term prices in selecting pricing from
within those ranges.
The potential impact of a 10% favourable and unfavourable change in the unobservable
valuation inputs could result in a gain and loss of $0.1 billion (2022: a gain and loss of $0.1
billion), respectively, both of which would be reflected in the consolidated statement of
income.
Non-discretionary dividend obligation (ARM Coal)
Assets
Liabilities
–
(309)
–
(321)
Valuation techniques:
Significant and other unobservable inputs: – Long-term forecast coal prices;
Discounted cash flow model
– Discount rates using weighted average cost of capital methodology;
– Production models;
– Operating costs; and
– Capital expenditures.
The resultant liability is essentially a discounted cash flow valuation of the underlying
mining operation. Increases/decreases in forecast coal prices will result in an
increase/decrease to the value of the liability though this will be partially offset by
associated increases/decreases in the assumed production levels, operating costs and
capital expenditures, which are inherently linked to forecast coal prices. The significant
unobservable inputs represent the long-term forecast commodity prices to which the
valuation remains sensitive. A 10% increase/decrease in coal price assumptions would
result in a $92 million (2022: $108 million) adjustment to the current carrying value.
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29. Fair value measurements continued
US$ million
Option over non-controlling interest (AleSat)
Assets
Liabilities
2023
–
–
2022
–
(22)
Valuation techniques and key inputs:
Significant unobservable inputs:
Discounted cash flow model
The 31 December 2022 balance is the value of the remaining minority stake in the
subsidiary, measured as the higher value of the acquisition date valuation of the shares,
and a discounted future earnings-based valuation. The valuation was additionally
sensitive to movement in the spot exchange rates between the Brazilian real and US
dollar. The non-controlling interest was acquired during the current year.
30. Auditor’s remuneration
US$ million
Remuneration in respect of the audit of Glencore's consolidated financial statements
Other audit fees, primarily in respect of audits of accounts of subsidiaries
Audit-related assurance services1
Total audit and related assurance fees
Other assurance services2
Total non-audit fees
Total professional fees
2023
28
5
5
38
3
3
41
2022
21
5
2
28
1
1
29
1 Audit-related assurance services primarily related to interim reviews of the Group’s half-year accounts as well as bond issuances and comfort letters.
2 Other assurance services primarily comprises assurance in respect of certain aspects of the Group’s sustainability reporting.
31. Future commitments
Capital expenditure for the acquisition of property, plant and equipment is generally funded through the cash flow generated by the
respective industrial entities. As at 31 December 2023, $1,433 million (2022: $1,295 million), of which 94% (2022: 94%) relates to
expenditure to be incurred over the next year, was contractually committed for the acquisition of property, plant and equipment.
Certain of Glencore’s exploration tenements and licences require it to spend a minimum amount per year on development activities,
a significant portion of which would have been incurred in the ordinary course of operations. As at 31 December 2023, $187 million
(2022: $118 million) of such development expenditures are to be incurred, of which 42% (2022: 20%) are for commitments to be settled
over the next year.
As part of Glencore’s ordinary sourcing and procurement of physical commodities and other ordinary marketing obligations, the
selling party may request that a financial institution act as either a) the paying party upon the delivery of product and qualifying
documents through the issuance of a letter of credit or b) the guarantor by way of issuing a bank guarantee accepting responsibility
for Glencore’s contractual obligations. Similarly, Glencore is required to post rehabilitation and pension guarantees in respect of some
of these future, primarily industrial, long-term obligations. As at 31 December 2023, $7,207 million (2022: $7,965 million) of
procurement and $4,667 million (2022: $4,256 million) of rehabilitation and pension commitments have been issued on behalf of
Glencore, which will generally be settled simultaneously with the payment for such commodity and rehabilitation and pension
obligations.
Astron-related commitments
As part of the regulatory approval process relating to the acquisition of a 75% shareholding in Astron Energy, Glencore and Astron
Energy entered into certain commitments (subject to variation for good cause) with the South Africa Competition Tribunal and the
South African Economic Development Department. These commitments include investment expenditure of up to ZAR 6.5 billion
($358 million) over the period to 2024 so as to de-bottleneck and improve the performance of the Cape Town oil refinery, contribute to
the rebranding of certain retail sites and establish a development fund to support small and Black-owned businesses in Astron
Energy’s value chain.
EVR
In November 2023, Glencore entered into an agreement with Teck, for the acquisition of a 77% effective interest in the entirety of
Teck’s steelmaking coal business, EVR, for $6.93 billion in cash, on a cash-free debt free basis, subject to a normalised level of working
capital. At closing, Glencore will also acquire from Teck and the other partners in EVR their attributable share of a shareholder loan
from Teck to EVR which is repayable out of EVR’s cash flows. The amount payable for this portion of the loan is expected to be some
$250-$300 million on closing.
The transaction is subject to mandatory regulatory approvals, being Investment Canada Act and competition approvals. While closing
could occur earlier, it is expected no later than Q3 2024.
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32. Contingent liabilities
There were no corporate guarantees in favour of third parties as at 31 December 2023 (2022: None), except those disclosed in note 11.
The Group is subject to various legal and regulatory proceedings as detailed below. These contingent liabilities are reviewed on a
regular basis and where appropriate an estimate is made of the potential financial impact on the Group. As at 31 December 2023 and
2022, it was not feasible to make such an assessment.
Legal and regulatory proceedings
Under IAS 37 Provisions, Contingent Liabilities and Contingent Assets, a provision is recognised when Glencore has a present
obligation (legal or constructive), as a result of a past event, and it is probable that an outflow of resources embodying economic
benefits, that can be reliably estimated, will be required to settle the liability. A contingent liability is a possible obligation that arises
from a past event and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future
events not wholly within the control of Glencore. If it is not clear whether there is a present obligation, a past event is deemed to give
rise to a present obligation if, taking account of all available evidence, it is more likely than not that a present obligation exists at the
end of the reporting period. When a present obligation arises but it is not probable that an outflow of resources embodying economic
benefits will be required to settle the obligation or the amount of the obligation cannot be measured with sufficient reliability, a
contingent liability is disclosed.
Investigations by regulatory and enforcement authorities
As described in note 23, the Group remains subject to investigations by the OAG and Dutch authorities. At 31 December 2023, taking
account of all available evidence, the Investigations Committee concluded that, with respect to these investigations, it is not probable
that a present obligation existed at the end of the reporting period. The timing and amount, if any, of the possible financial effects
(such as fines, penalties or damages, which could be material) or other consequences, including external costs, from the OAG and
Dutch investigations and any change in their scope are not currently possible to predict or estimate.
The Group notes that other authorities may commence investigations against the Group in connection with the resolved
investigations or the matters under investigation. In respect of these investigations, taking into account all available evidence, the
Investigations Committee does not consider it probable that a present obligation existed in relation to these potential investigations
as at the balance sheet date, and the amount of any financial effects, which could be material, is not currently possible to predict or
estimate.
Claims against the Company in connection with investigations by regulatory and enforcement
authorities
Claims are being pursued against the Group in the United Kingdom in connection with the various Government investigations,
constituting claims on behalf of approximately 350 current and former shareholders. The claims are, inter alia, made under s90 of the
Financial Services and Markets Act 2000 (‘FSMA’) relating to prospectus liability, while certain claimants currently include s90A FSMA
claims relating to misstatements in other information by the Company and/or dishonest delay in publishing information. The bases
for the claims are that the prospectuses issued in 2011 and 2013 and other published information by the Company were untrue,
misleading or contained omissions.
The Group may be the subject of further legal claims brought by other parties in connection with the Government investigations,
including collective, group or representative actions.
In respect of these claims, taking into account all available evidence, the Investigations Committee does not consider it probable that
a present obligation existed in relation to these claims or potential claims as at the balance sheet date, and the amount of any
financial effects, which could be material, is not currently possible to predict or estimate.
Claims in respect of Horne smelter
In October 2023, two individuals (Plaintiffs) filed Motion for Authorization of a Class Action and to Obtain the Status of Representatives
against Glencore and the Attorney General of Québec, as representative of the Government of the Province of Québec (the ‘Québec
Government’) (together, the ‘Defendants’) regarding Glencore’s Horne Smelter situated in the city of Rouyn-Noranda, in the Province
of Québec, Canada. The Plaintiffs allege that Glencore caused prejudice to the proposed class by releasing contaminants into the
environment, while fully aware of the risks and dangers to public health. The Plaintiffs also allege that the Québec Government
committed a fault and caused prejudice to the proposed class in that it tolerated and authorised these emissions. The claims are at an
early stage. Taking into account all available evidence, the Company does not consider it probable that a present obligation existed at
the balance sheet date in relation to this claim, and the amount of any financial effects, which could be material, is not currently
possible to predict or estimate.
Other legal proceedings
Other claims and unresolved disputes are pending against Glencore. However, based on the Group’s current assessment of these
matters any future individually material financial obligations are considered to be remote.
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Notes to the financial statements continued
32. Contingent liabilities continued
Environmental contingencies
Glencore’s operations are subject to various environmental laws and regulations. Glencore is not aware of any material non-
compliance with those laws and regulations. Glencore accrues for environmental contingencies when such contingencies are
probable and reasonably estimable. Such accruals are adjusted as new information develops or circumstances change. Recoveries of
environmental remediation costs from insurance companies and other parties are recorded as assets when the recoveries are
virtually certain. At this time, Glencore is unaware of any material environmental incidents at its locations. Any potential liability arising
from environmental incidents in the ordinary course of the Group’s business would not usually be expected to have a material
adverse effect on its consolidated income, financial position or cash flows.
33. Related party transactions
In the normal course of business, Glencore enters into various arm’s length transactions with related parties, including fixed price
commitments to sell and to purchase commodities, forward sale and purchase contracts, agency agreements and management
service agreements. Outstanding balances at period end are unsecured and settlement occurs in cash (see notes 12, 14 and 25). There
have been no guarantees provided or received for any related party receivables or payables.
All transactions between Glencore and its subsidiaries are eliminated on consolidation along with any unrealised profits and losses
between its subsidiaries, associates and joint ventures. In 2023, sales and purchases with associates and joint ventures amounted to
$3,289 million (2022: $3,941 million) and $5,850 million (2022: $8,091 million), respectively.
Remuneration of key management personnel
Glencore’s key management personnel are the members of the Board of Directors, CEO, and the following members of our Group
Leadership: our CFO, General Counsel, Head of Industrial Assets, Head of Corporate Affairs, Head of Human Resources and Head of
Sustainability. The remuneration of Directors and other members of key management personnel recognised in the consolidated
statement of income including salaries and other current employee benefits amounted to $36 million (2022: $29 million). Amounts
expensed relating to long-term benefits or share-based payments to key management personnel amounted to $9 million (2022: $7
million). Further details on remuneration of Directors are set out in the Directors’ Remuneration Report on page 134.
34. Principal subsidiaries with material non-controlling interests
Non-controlling interest is comprised of the following:
US$ million
Kazzinc
Koniambo
Kamoto Copper Company (KCC)
Volcan
Other
Total
2023
1,087
(6,419)
(185)
(302)
476
(5,343)
2022
1,156
(5,745)
88
(201)
511
(4,191)
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Notes to the financial statements continued
34. Principal subsidiaries with material non-controlling interests continued
Summarised financial information in respect of Glencore’s subsidiaries that have material non-controlling interest as at
31 December 2023 and 2022, reflecting 100% of the underlying subsidiary’s relevant figures, is set out below.
Kazzinc
Koniambo
KCC
Volcan
2,750
1,920
4,670
200
876
1,076
3,594
2,507
1,087
30.3%
3,685
(3,891)
(206)
(173)
(33)
(206)
1
224
(337)
43
(70)
307
420
727
16,072
114
16,186
(15,459)
(9,040)
(6,419)
51.0%
415
(1,736)
(1,321)
(647)
(674)
(1,321)
–
(388)
–
384
(4)
4,414
1,308
5,722
9,867
2,250
12,117
(6,395)
(6,210)
(185)
25.0%
1,816
(2,864)
(1,048)
(575)
(473)
(1,048)
–
(239)
(465)
749
45
1,512
207
1,719
1,094
456
1,550
169
471
(302)
76.7%
919
(1,051)
(132)
(31)
(101)
(132)
–
163
(156)
(19)
(12)
Kazzinc
Koniambo
KCC
Volcan
3,377
1,613
4,990
494
673
1,167
3,823
2,667
1,156
30.3%
3,564
(3,615)
(51)
(35)
(16)
(51)
(196)
549
(335)
(309)
(95)
507
519
1,026
15,019
147
15,166
(14,140)
(8,395)
(5,745)
51.0%
713
(1,823)
(1,110)
(544)
(566)
(1,110)
–
(78)
(19)
112
15
4,429
1,351
5,780
9,602
1,456
11,058
(5,278)
(5,366)
88
25.0%
2,545
(3,127)
(582)
(407)
(175)
(582)
(211)
898
(393)
(632)
(127)
1,723
241
1,964
1,256
405
1,661
303
504
(201)
76.7%
1,000
(1,124)
(124)
(29)
(95)
(124)
–
234
(245)
(146)
(157)
US$ million
31 December 2023
Non-current assets
Current assets
Total assets
Non-current liabilities
Current liabilities
Total liabilities
Net assets/(liabilities)
Equity attributable to owners of the Company
Non-controlling interest
Non-controlling interest %
2023
Revenue
Expenses
Net loss for the year
Loss attributable to owners of the Company
Loss attributable to non-controlling interests
Total comprehensive loss for the year
Dividends paid to non-controlling interests
Net cash inflow/(outflow) from operating activities
Net cash outflow from investing activities
Net cash inflow/(outflow) from financing activities
Total net cash (outflow)/inflow
US$ million
31 December 2022
Non-current assets
Current assets
Total assets
Non-current liabilities
Current liabilities
Total liabilities
Net assets
Equity attributable to owners of the Company
Non-controlling interest
Non-controlling interest %
2022
Revenue
Expenses
Net loss for the year
Loss attributable to owners of the Company
Loss attributable to non-controlling interests
Total comprehensive loss for the year
Dividends paid to non-controlling interests
Net cash inflow/(outflow) from operating activities
Net cash outflow from investing activities
Net cash (outflow)/inflow from financing activities
Total net cash (outflow)/inflow
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35. Principal operating, finance and industrial subsidiaries and investments
Principal subsidiaries
Industrial activities
El Pachon
MARA Project1
Cobar Management Pty Limited
Compania Minera Lomas Bayas
Complejo Metalurgico Altonorte SA
Compania Minera Antapaccay S.A.
Pasar Group
Glencore Recycling LLC
Polymet Mining Corp.
Kamoto Copper Company SA2
Mutanda Group
Mount Isa Mines Limited
Kazzinc Ltd
Zhayremsky Gorno-Obogatitelny Kombinat JSC
Altyntau Kokshetau JSC
Britannia Refined Metals Limited
Murrin Murrin Operations Pty Ltd
Koniambo Nickel S.A.S.3
Glencore Nikkelverk AS
Mcarthur River Mining Pty. Ltd.
Canadian Electrolytic Zinc Limited1
Nordenhamer Zinkhütte GmbH
Asturiana de Zinc S.A.U.
Volcan Companja Minera S.A.A.4
Portovesme S.r.L.
Country of
incorporation
% interest
2023
% interest
2022
Main activity
Argentina
Argentina
Australia
Chile
Chile
Peru
Philippines
USA
Canada
DRC
DRC
Australia
Kazakhstan
Kazakhstan
Kazakhstan
UK
Australia
New
Caledonia
Norway
Australia
Canada
Germany
Spain
Peru
Italy
100.0
100.0
–
100.0
100.0
100.0
78.2
100.0
100.0
75.0
95.0
100.0
69.7
69.7
69.7
100.0
100.0
49.0
100.0
100.0
100.0
100.0
100.0
23.3
100.0
Copper production
100.0
Copper production
43.7
Copper production
100.0
Copper production
100.0
Copper production
100.0
Copper production
100.0
Copper production
78.2
Copper production
100.0
Copper production
71.0
Copper/Cobalt production
75.0
Copper/Cobalt production
95.0
100.0 Copper/Zinc/Lead production
69.7 Copper/Zinc/Lead production
69.7 Copper/Zinc/Lead production
Gold production
69.7
Lead production
100.0
Nickel production
100.0
49.0
100.0
100.0
25.0
100.0
100.0
23.3
100.0
Nickel production
Nickel production
Zinc production
Zinc production
Zinc production
Zinc production
Zinc production
Zinc/Lead production
In 2023, Glencore completed the acquisitions of the remaining 75% in Noranda Income Fund and the remaining 56.3% in the MARA project (see note 26).
1
2 Refer to note 34.
3 The Group has control of Koniambo Nickel S.A.S. as a result of the ability to direct the key activities of the operation and to appoint key management
personnel provided by the terms of the financing arrangements underlying the Koniambo project.
4 The Group has control of Volcan Compania Minera S.A.A. as a result of the ability to control the entity through the voting of its 63.0% of the voting shares
(Class A); the economic interest is diluted by the outstanding non-voting shares (Class B).
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Notes to the financial statements continued
35. Principal operating, finance and industrial subsidiaries and investments continued
Country of
incorporation
% interest
2023
% interest
2022
Main activity
Industrial activities
Oakbridge Pty Limited
Rolleston Coal Holdings Pty Limited
Mangoola Coal Operations Pty Limited
Mt Owen Pty Limited
NC Coal Company Pty Limited
Ravensworth Operations Pty Limited
Ulan Coal Mines Pty Limited
Prodeco group
Umcebo Mining (Pty) Ltd5
ARM Coal (Proprietary) Limited6
Carbones del Cerrejón Limited
Glencore Exploration Cameroon Ltd.
Glencore Exploration (EG) Limited
Astron Energy (Pty) Ltd
Marketing activities and other operating and finance
Xstrata Limited
Glencore Australia Investment Holdings Pty Ltd
Glencore Operations Australia Pty Limited
Glencore Queensland Pty Limited
Glencore Investment Pty Limited
Glencore Australia Holdings Pty Limited
Glencore Finance (Bermuda) Ltd.
Alesat Combustiveis S.A.
Topley Corporation
Glencore Finance (Canada) Limited
Glencore Finance (Europe) Limited
Glencore Capital Finance Designated Activity Company
Finges Investment B.V.
Glencore (Schweiz) AG
Glencore Group Funding Limited
Glencore Funding LLC
Glencore Australia Oil Pty Limited
Glencore Canada Corporation
Glencore Chile SpA
Glencore China Ltd.
Glencore Singapore Pte. Ltd.
ST Shipping and Transport Pte. Ltd.
Glencore AG (Ltd/SA)
Glencore International AG (Ltd/SA)
Glencore Commodities Ltd
Glencore Energy UK Ltd.
Glencore UK Ltd.
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Colombia
South Africa
South Africa
Anguilla
Bermuda
Bermuda
South Africa
UK
Australia
Australia
Australia
Australia
Australia
Bermuda
Brazil
B.V.I.
Canada
Jersey
Ireland
Netherlands
Switzerland
UAE
USA
Australia
Canada
Chile
China
Singapore
Singapore
Switzerland
Switzerland
UK
UK
UK
98.2
100.0
100.0
100.0
100.0
100.0
100.0
100.0
48.7
49.0
100.0
100.0
100.0
72.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
98.2
100.0
100.0
100.0
100.0
100.0
100.0
100.0
48.7
49.0
100.0
100.0
100.0
72.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
88.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
Coal production
Coal production
Coal production
Coal production
Coal production
Coal production
Coal production
Coal production
Coal production
Coal production
Coal production
Oil production
Oil production
Oil refining / distribution
Holding
Holding
Holding
Holding
Holding
Finance
Finance
Oil distribution
Ship owner
Finance
Finance
Finance
Finance
Finance
Finance
Finance
Operating
Operating
Operating
Operating
Operating
Operating
Operating
Operating
Operating
Operating
Operating
5 Although Glencore holds less than 50% of the voting rights, it has the ability to exercise control over Umcebo as a result of shareholder agreements which
provide Glencore the ability to control the board of directors.
6 Although Glencore holds 47.5% (2022: 47.5%) of the voting rights, it has the ability to exercise control over ARM as a result of shareholder agreements which
provide Glencore the ability to control the board of directors.
280………………………………………………………
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Corporate Governance
Financial Statements
Additional Information
Notes to the financial statements continued
35. Principal operating, finance and industrial subsidiaries and investments continued
Country of
incorporation
% interest
2023
% interest
2022
Principal joint ventures7
Viterra Group
Compania Minera Dona Ines de Collahuasi SCM
Principal joint operation and other unincorporated
arrangement8
Bulga Joint Venture
Hail Creek Joint Venture
Hunter Valley Operations Joint Venture
Liddell and Foybrook Joint Ventures
Oaky Creek Coal Joint Venture
United Wambo Joint Venture
Goedgevonden Joint Venture9
Glencore Merafe Chrome Pooling and Share Joint Venture
Glencore Bakwena-Ba-Mogopa Rhovan Pooling and
Sharing Joint Venture9
NewRange Copper Nickel LLC
Jersey
Chile
Australia
Australia
Australia
Australia
Australia
Australia
South Africa
South Africa
South Africa
USA
49.9
44.0
87.5
84.7
49.0
67.5
55.0
47.5
74.0
79.5
74.0
50.0
49.9
44.0
87.5
84.7
49.0
67.5
55.0
47.5
74.0
79.5
74.0
–
Main activity
Agriculture business
Copper production
Coal production
Coal production
Coal production
Coal production
Coal production
Coal production
Coal production
Ferroalloys production
Vanadium production
Copper production
7 The principal joint arrangements are accounted for as joint ventures as the shareholder agreements do not provide the Group the ability to solely control
the entities.
8 Classified as joint operations under IFRS 11, as these joint arrangements convey a direct right to a share of the underlying operations’ assets, liabilities,
revenues and expenses. The Hail Creek interest is an ‘other unincorporated arrangement’ accounted for similar to a joint operation.
9 Glencore has the ability to exercise control over Goedgevonden Joint Venture and Rhovan Joint Venture as a result of shareholder agreements which
results in the joint ventures being fully consolidated.
Principal associates
Newcastle Coal Shippers Pty Limited10
GS Coal Holdings Pty Ltd
Richards Bay Coal Terminal Company Limited11
Century Aluminum Company12
Alumina do Norte do Brasil S.A
Mineração Rio do Norte S.A.
PT CITA Mineral Investindo Tbk
Aquarius Energy Limited
Compania Minera Antamina S.A.
Metals Acquisition Limited
Country of
incorporation
% interest
2023
% interest
2022
Main activity
Australia
Australia
South Africa
USA
Brazil
Brazil
Indonesia
Jersey
Peru
Jersey
52.6
50.0
19.8
46.0
30.0
45.0
31.7
49.0
33.8
19.9
52.6
50.0
19.8
46.1
–
–
31.7
49.0
33.8
–
Coal terminal
Coal production
Coal terminal
Aluminium production
Alumina production
Bauxite production
Alumina production
Oil storage
Zinc/Copper production
Copper production
10 Glencore holds 50.2% (2022: 50.2%) of the voting rights.
11 Glencore holds 19.3% (2022: 19.3%) of the voting rights.
12 Represents the Group’s economic interest in Century, comprising 42.9% (2022: 42.9%) voting interest and 3.0% non-voting interest (2022: 3.2%). Century is
publicly traded on NASDAQ under the symbol CENX.
Other investments
Shenzhen Energy Gas Investment Holding Co., Ltd
Press Metal Aluminium Holdings Berhad
PT Amman Mineral Internasional Tbk.
36. Subsequent events
Country of
incorporation
% interest
2023
% interest
2022
Main activity
China
Malaysia
Indonesia
7.8
1.5
1.2
7.8
–
–
Energy distribution
Aluminium production
Copper production
On 12 February 2024, the Group and its fellow shareholder made the decision to transition Koniambo Nickel SAS (KNS) into care and
maintenance, following several months of extensive discussions and negotiations with relevant government and other key
stakeholders. Glencore will fund the operation according to an agreed budget as it begins an orderly transition to a state of care and
maintenance and will shortly initiate a process to identify a potential new industrial partner for KNS.
2023 Glencore Annual Report
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Corporate Governance
Financial Statements
Additional Information
Alternative performance measures
Alternative performance measures are denoted by the symbol ◊.
When assessing and discussing the Group’s reported financial performance, financial position and cash flows, Glencore makes
reference to Alternative performance measures (APMs), which are not defined or specified under the requirements of IFRS, but are
derived from the financial statements prepared in accordance with IFRS. The APMs are consistent with how business performance is
measured and reported within the internal management reporting to the Board and management, and assist in providing
meaningful analysis of the Group’s results both internally and externally in discussions with the financial analyst and investment
community.
The Group uses APMs to aid the comparability of information between reporting periods and segments and to aid the understanding
of the activity taking place across the Group by adjusting for items that are of an infrequent nature and by aggregating or
disaggregating (notably in the case of relevant material associates and joint ventures accounted for on an equity basis) certain IFRS
measures. APMs are also used to approximate the underlying operating cash flow generation of the operations (Adjusted EBITDA).
Investments in the extractive industry are typically significant and the initial spend generally occurs over several years, ‘upfront’, prior
to the operations generating cash. As a result, the investments are sometimes made with partners and an assessment to
approximate the operating cash flow generation/pay-back of the investment (Adjusted EBITDA) is required. Against this backdrop,
the key APMs used by Glencore are Adjusted EBITDA, Net funding/Net debt and the disaggregation of the equivalent key APMs of
our relevant material associates and joint ventures (‘Proportionate adjustment’) to enable a consistent evaluation of the financial
performance and returns attributable to the Group.
Adjusted EBITDA is a useful approximation of the operating cash flow generation by eliminating depreciation and amortisation
adjustments. Adjusted EBITDA is not a direct measure of our liquidity, which is shown by our cash flow statement and needs to be
considered in the context of our financial commitments.
Proportionate adjustments are useful to enable a consistent evaluation of the financial performance and returns available to the
Group, irrespective of the differing accounting treatments required to account for our minority/joint ownership interests of our
relevant material investments.
Net funding is an aggregation of IFRS measures (Borrowings less cash and cash equivalents) and Net debt is Net funding less Readily
marketable inventories and provides a measure of our financial leverage and, through Net debt to Adjusted EBITDA relationships,
provides an indication of relative financial strength and flexibility.
APMs used by Glencore may not be comparable with similarly titled measures and disclosures by other companies. APMs have
limitations as an analytical tool, and a user of the financial statements should not consider these measures in isolation from, or as a
substitute for, analysis of the Group’s results of operations; and they may not be indicative of the Group’s historical operating results,
nor are they meant to be a projection or forecast of its future results.
Listed below are the definitions and reconciliations to the underlying IFRS measures of the various APMs used by the Group.
Proportionate adjustment
For internal reporting and analysis, management evaluates the performance of Antamina copper/zinc mine (34% owned) and
Collahuasi copper mine (44% owned) under the proportionate consolidation method reflecting Glencore’s proportionate share of the
revenues, expenses, assets and liabilities of these investments.
Although Glencore has a voting interest in Volcan of 63%, its total economic interest is only 23.3%. For internal reporting and analysis,
management evaluates the performance of Volcan under the equity method, reflecting the Group’s relatively low 23.3% economic
ownership in this fully ring-fenced listed entity, with its stand-alone, independent and separate capital structure. The impact is that
we reflect 23.3% of Volcan’s net income in the Group’s Adjusted EBIT/EBITDA and its consolidated results are excluded from all other
APMs, including production data. In Q4 2022, Glencore commenced a process to dispose of its 23.3% economic interest in Volcan,
which is ongoing. As a result, the carrying amounts of Volcan assets and liabilities as at 31 December 2023 and 31 December 2022 are
classified as held for sale (see note 16).
The Viterra joint venture is a stand-alone group with a fully independent capital structure, governance and credit profile, supporting a
global business, across many geographies, products and activities. Glencore’s management evaluates this investment’s financial
performance on a net return basis, as opposed to an Adjusted EBITDA basis and thus, the financial results of Viterra are presented on
a basis consistent with its pre ‘held for sale’ underlying IFRS treatment (equity accounting). In June 2023, Glencore and its fellow
shareholders in Viterra Limited, concluded an agreement with Bunge Limited to merge Bunge and Viterra in a cash and stock
transaction. As a result, the carrying amount of the 49.9% investment in Viterra as at 31 December 2023 is classified as held for sale (see
note 16) and, while having this classification, Glencore no longer accounts for its share of Viterra’s income. However, for segmental
reporting purposes, and for internal reporting, Viterra continues to be accounted for as an equity accounted associate.
See reconciliation of revenue and relevant material associates’ and joint ventures’ Adjusted EBIT to ‘Share of net income from
associates and joint ventures’ below.
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Financial Statements
Additional Information
Alternative performance measures continued
APMs derived from the statement of income
Revenue
Revenue represents revenue by segment (see note 2 of the financial statements), as reported on the face of the statement
of income plus the relevant Proportionate adjustments. See reconciliation table below.
US$ million
Revenue – Marketing activities
Revenue – Industrial activities
Inter-segment eliminations
Revenue – segmental
Proportionate adjustment material associates and joint ventures – revenue
Proportionate adjustment Volcan – revenue
Revenue – reported measure
Share of income from relevant material associates and joint ventures
US$ million
Associates’ and joint ventures’ Adjusted EBITDA
Depreciation and amortisation
Associates’ and joint ventures’ Adjusted EBIT
Net finance costs
Income tax expense
Share of income from relevant material associates and joint ventures
Share of income from other associates and joint ventures
Share of income from associates and joint ventures1
2023
186,708
60,421
(26,741)
220,388
(3,477)
918
217,829
2023
2,338
(729)
1,609
5
(559)
(554)
1,055
282
1,337
2022
215,102
78,332
(34,755)
258,679
(3,695)
1,000
255,984
2022
2,687
(641)
2,046
(22)
(688)
(710)
1,336
964
2,300
1 Comprises share in earnings of $51 million (2022: $528 million) from Marketing activities and share in earnings of $1,286 million (2022: $1,772 million) from
Industrial activities.
Adjusted EBIT/EBITDA
Adjusted EBIT/EBITDA provide insight into our overall business performance (a combination of cost management, seizing market
opportunities and growth), and are the corresponding flow drivers towards our objective of achieving industry-leading returns.
Adjusted EBIT is the net result of revenue less cost of goods sold, net expected credit losses on financial assets and selling and
administrative expenses, plus share of income from associates and joint ventures, dividend income and the attributable share of
Adjusted EBIT of relevant material associates and joint ventures, which are accounted for internally by means of proportionate
consolidation, excluding Significant items, see below.
Adjusted EBITDA consists of Adjusted EBIT plus depreciation and amortisation, including the related Proportionate adjustments. See
reconciliation table below.
US$ million
Reported measures
Revenue
Cost of goods sold
Net expected credit losses
Selling and administrative expenses
Share of income from associates and joint ventures
Dividend income
Adjustments to reported measures
Share of associates’ significant items
Viterra share in earnings post held for sale classification
Movement in unrealised inter-segment profit elimination
Proportionate adjustment material associates and joint ventures – net
finance and income tax expense
Proportionate adjustment Volcan – net finance, income tax expense
and non-controlling interests
Adjusted EBIT
Depreciation and amortisation
Proportionate adjustment material associates and joint ventures – depreciation
Proportionate adjustment Volcan – depreciation
Adjusted EBITDA
2023
2022
217,829
(207,046)
21
(2,105)
1,337
6
10,042
90
186
(258)
554
(222)
10,392
5,981
729
–
17,102
255,984
(228,467)
(256)
(2,430)
2,300
45
27,176
9
–
(1,176)
710
(62)
26,657
6,987
641
(225)
34,060
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Strategic Report
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Financial Statements
Additional Information
Alternative performance measures continued
Significant items
Significant items of income and expense which, due to their variable financial impact or the expected infrequency of the events
giving rise to them, are separated for internal reporting and analysis of Glencore’s results to aid in an understanding and comparative
basis of the underlying financial performance. Refer to reconciliation below.
Reconciliation of net significant items 2023
US$ million
Share of associates' significant items1
Viterra share in earnings post-held for sale classification
Movement in unrealised inter-segment profit elimination1
Gain on acquisitions and disposals of non-current assets2
Other expense – net3
Tax-significant items in their own right4
Impairments attributable to equity holders
Impairments5
Impairment Volcan5
Total significant items
Gross
significant
charges
(90)
(186)
258
850
(1,091)
–
(259)
Non-controlling
interests’ share
–
–
–
–
45
–
45
Significant
items tax
–
–
(35)
(197)
13
(313)
(532)
Equity
holders’ share
(90)
(186)
223
653
(1,033)
(313)
(746)
(2,109)
(375)
(2,484)
(2,743)
56
261
317
362
460
35
495
(37)
(1,593)
(79)
(1,672)
(2,418)
1 See note 2 of the financial statements.
2 See note 4 of the financial statements.
3 See note 5 of the financial statements.
4 Relates to tax losses not recognised ($255 million) and adjustments in respect of prior years ($321 million) less foreign exchange fluctuations ($263 million),
see note 8 of the financial statements.
5 See note 7 of the financial statements.
Reconciliation of net significant items 2022
US$ million
Share of associates' significant items1
Movement in unrealised inter-segment profit elimination1
Gain on acquisitions and disposals of non-current assets2
Other expense – net3
Tax-significant items in their own right4
Impairments attributable to equity holders
Impairments5
Impairment Volcan5
Total significant items
Gross
significant
charges
(9)
1,176
1,287
(911)
–
1,543
Non-controlling
interests’ share
–
–
4
–
–
4
Significant
items tax
–
(141)
(115)
(26)
(486)
(768)
Equity
holders’ share
(9)
1,035
1,176
(937)
(486)
779
(3,173)
(164)
(3,337)
(1,794)
338
89
427
431
521
48
569
(199)
(2,314)
(27)
(2,341)
(1,562)
1 See note 2 of the financial statements.
2 See note 4 of the financial statements.
3 See note 5 of the financial statements.
4 Relates to foreign exchange fluctuations ($187 million), tax losses not recognised ($98 million) and adjustments in respect of prior years ($201 million),
see note 8 of the financial statements.
5 See note 7 of the financial statements.
Net income attributable to equity holders pre-significant items
Net income attributable to equity holders pre-significant items is a measure of our ability to generate shareholder returns.
The calculation of tax items to be excluded from Net income, includes the tax effect of significant items and significant tax items
themselves. Refer to reconciliation below.
US$ million
Income for the year attributable to equity holders of the Parent
Significant items
Income attributable to equity holders of the Parent pre-significant items
2023
4,280
2,418
6,698
2022
17,320
1,562
18,882
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Financial Statements
Additional Information
Alternative performance measures continued
APMs derived from the statement of financial position
Net funding/Net debt and Net debt to Adjusted EBITDA
Net funding/debt demonstrates how our debt is being managed and is an important factor in ensuring we maintain investment-
grade credit rating status and a competitive cost of capital. Net funding is defined as total current and non-current borrowings less
cash and cash equivalents and related Proportionate adjustments. Net debt is defined as Net funding less readily marketable
inventories and related Proportionate adjustments. Consistent with the general approach in relation to our internal reporting and
evaluation of Volcan, its consolidated net debt has also been adjusted to reflect the Group’s relatively low 23.3% economic ownership
(compared to its 63% voting interest) in this still fully ring-fenced listed entity, with its standalone, independent and separate capital
structure. Furthermore, the relationship of Net debt to Adjusted EBITDA provides an indication of financial flexibility. See
reconciliation table below.
Readily marketable inventories (RMI)
RMI, comprising the core inventories which underpin and facilitate Glencore’s marketing activities, represent inventories that, in
Glencore’s assessment, are readily convertible into cash in the short term due to their liquid nature, widely available markets and the
fact that price risk is primarily covered either by a forward physical sale or hedge transaction. Glencore regularly assesses the
composition of these inventories and their applicability, relevance and availability to the marketing activities. As at 31 December 2023,
$26,145 million (2022: $27,425 million) of inventories were considered readily marketable. This comprises $14,441 million (2022:
$15,608 million) of inventories carried at fair value less costs of disposal and $11,704 million (2022: $11,817 million) carried at the lower of
cost or net realisable value. Total readily marketable inventories includes $113 million (2022: $230 million) related to the relevant
material associates and joint ventures (see note 2) presented under the proportionate consolidation method, comprising inventory
carried at lower of cost or net realisable value. Given the highly liquid nature of these inventories, which represent a significant share
of current assets, the Group believes it is appropriate to consider them together with cash equivalents in analysing Group net debt
levels and computing certain debt coverage ratios and credit trends.
Net funding/net debt at 31 December 2023
US$ million
Non-current borrowings
Current borrowings
Total borrowings
Less: cash and cash equivalents
Net funding1
Less: Readily marketable inventories
Net debt1
Adjusted EBITDA
Net debt to Adjusted EBITDA
Net funding/net debt at 31 December 2022
US$ million
Non-current borrowings
Current borrowings
Total borrowings
Less: cash and cash equivalents
Net funding1
Less: Readily marketable inventories
Net debt / (cash)1
Adjusted EBITDA
Net debt to Adjusted EBITDA
1
Includes $705 million (2022: $595 million) of Marketing-related lease liabilities.
Proportionate
adjustment
material
associates and
joint ventures
864
50
914
(168)
746
(113)
633
Proportionate
adjustment
Volcan
–
–
–
–
–
–
–
Reported
measure
21,275
10,966
32,241
(1,925)
30,316
(26,032)
4,284
Proportionate
adjustment
material
associates and
joint ventures
845
26
871
(225)
646
(230)
416
Proportionate
adjustment
Volcan
–
–
–
–
–
–
–
Reported
measure
18,851
9,926
28,777
(1,923)
26,854
(27,195)
(341)
Adjusted
measure
22,139
11,016
33,155
(2,093)
31,062
(26,145)
4,917
17,102
0.29
Adjusted
measure
19,696
9,952
29,648
(2,148)
27,500
(27,425)
75
34,060
0.00
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Financial Statements
Additional Information
Alternative performance measures continued
Capital expenditure (‘Capex’)
Capital expenditure is expenditure capitalised as property, plant and equipment. For internal reporting and analysis, Capex includes
related Proportionate adjustments. See reconciliation table below.
US$ million
Capital expenditure – Marketing activities
Capital expenditure – Industrial activities
Capital expenditure – segmental
Proportionate adjustment material associates and joint ventures – capital expenditure
Proportionate adjustment Volcan – capital expenditure
Capital expenditure – reported measure
APMs derived from the statement of cash flows
2023
603
6,074
6,677
(1,291)
–
5,386
2022
299
4,807
5,106
(694)
233
4,645
Net purchase and sale of property, plant and equipment
Net purchase and sale of property, plant and equipment is cash purchase of property, plant and equipment, net of proceeds from sale
of property, plant and equipment. For internal reporting and analysis, Net purchase and sale of property, plant and equipment
includes Proportionate adjustments. See reconciliation table below.
2023 US$ million
Purchase of property, plant and equipment
Proceeds from sale of property, plant and equipment
Net purchase and sale of property, plant and equipment
2022 US$ million
Purchase of property, plant and equipment
Proceeds from sale of property, plant and equipment
Net purchase and sale of property, plant and equipment
Proportionate
adjustment
material
associates and
joint ventures
(1,229)
5
(1,224)
Proportionate
adjustment
material
associates and
joint ventures
(674)
–
(674)
Proportionate
adjustment
Volcan
–
–
–
Proportionate
adjustment
Volcan
245
–
245
Reported
measure
(4,484)
147
(4,337)
Reported
measure
(4,177)
63
(4,114)
Adjusted
measure
(5,713)
152
(5,561)
Adjusted
measure
(4,606)
63
(4,543)
Funds from operations (FFO) and FFO to Net debt
FFO is a measure that reflects our ability to generate cash for investment, debt servicing and returns to shareholders. It comprises
cash provided by operating activities before working capital changes, less tax and net interest payments plus dividends received and
related Proportionate adjustments. Furthermore, the relationship of FFO to net debt is an indication of our financial flexibility and
strength. See reconciliation table below.
2023 US$ million
Cash generated by operating activities before working capital changes,
interest and tax
Addback EBITDA of relevant material associates and joint ventures
Non-cash adjustments included within EBITDA
Adjusted cash generated by operating activities before working capital
changes, interest and tax
Income taxes paid
Interest received
Interest paid
Dividends received from associates and joint ventures
Funds from operations (FFO)
Net debt
FFO to net debt
Proportionate
adjustment
material
associates and
joint ventures
Reported
measure
Proportionate
adjustment
Volcan
Adjusted
measure
15,117
–
–
15,117
(6,503)
552
(1,882)
1,328
8,612
–
2,338
46
2,384
(589)
10
(15)
(760)
1,030
–
(270)
–
(270)
23
(6)
63
–
(190)
15,117
2,068
46
17,231
(7,069)
556
(1,834)
568
9,452
4,917
192.2%
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Strategic Report
Corporate Governance
Financial Statements
Additional Information
Alternative performance measures continued
2022 US$ million
Cash generated by operating activities before working capital changes,
interest and tax
Addback EBITDA of relevant material associates and joint ventures
Non-cash adjustments included within EBITDA
Adjusted cash generated by operating activities before working capital
changes, interest and tax
Income taxes paid
Interest received
Interest paid
Dividends received from associates and joint ventures
Funds from operations (FFO)
Net debt
FFO to net debt
Proportionate
adjustment
material
associates and
joint ventures
Reported
measure
Proportionate
adjustment
Volcan
32,915
–
–
32,915
(4,881)
234
(1,340)
1,691
28,619
–
2,687
46
2,733
(1,066)
3
(18)
(1,132)
520
Adjusted
measure
32,915
2,402
35
–
(285)
(11)
(296)
35,352
43
(5)
57
–
(201)
(5,904)
232
(1,301)
559
28,938
75
n.m.
2023 Glencore Annual Report
2023 Glencore Annual Report
………………………………………………………287
287
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Other reconciliations
Available committed liquidity1
US$ million
Cash and cash equivalents – reported
Proportionate adjustment – cash and cash equivalents
Headline committed core revolving credit facilities
Other committed facilities
Amount drawn under revolving credit facilities
Amounts drawn under US commercial paper programme
Total
1 Presented on an adjusted measure basis.
Cash flow-related adjustments 2023
US$ million
Funds from operations (FFO)
Working capital changes
Net cash used in acquisitions of subsidiaries
Net cash received from disposal of subsidiaries
Purchase of investments
Proceeds from sale of investments
Purchase of property, plant and equipment
Proceeds from sale of property, plant and equipment
Margin receipts in respect of financing-related hedging activities
Net proceeds paid on acquisition of non-controlling interests in
subsidiaries
Return of capital/distributions to non-controlling interests
Purchase of own shares
Distributions paid to equity holders of the Parent
Cash movement in net funding
Cash flow-related adjustments 2022
US$ million
Funds from operations (FFO)
Working capital changes
Increase in long-term advances and loans
Net cash received in acquisitions of subsidiaries
Net cash received from disposal of subsidiaries
Purchase of investments
Proceeds from sale of investments
Purchase of property, plant and equipment
Proceeds from sale of property, plant and equipment
Margin payments in respect of financing-related hedging activities
Return of capital/distributions to non-controlling interests
Purchase of own shares
Disposal of own shares
Distributions paid to equity holders of the Parent
Cash movement in net funding
288………………………………………………………
288
2023 Glencore Annual Report
2023 Glencore Annual Report
2023
1,925
168
12,960
300
(1,456)
(1,044)
12,853
2022
1,923
225
11,185
–
–
(333)
13,000
Proportionate
adjustment
material
associates and
joint ventures
1,030
159
–
–
–
–
(1,229)
5
–
Proportionate
adjustment
Volcan
(190)
194
–
–
–
–
–
–
–
–
–
–
–
(35)
–
–
–
–
4
Proportionate
adjustment
material
associates and
joint ventures
520
(172)
–
(167)
–
–
–
(674)
–
–
–
–
–
–
(493)
Proportionate
adjustment
Volcan
(201)
(42)
–
–
–
–
–
245
–
–
–
–
–
–
2
Reported
measure
8,612
3,752
(494)
838
(946)
56
(4,484)
147
897
(68)
(8)
(3,672)
(6,450)
(1,820)
Reported
measure
28,619
(13,269)
(200)
321
455
(476)
604
(4,177)
63
(1,824)
(442)
(2,503)
238
(4,832)
2,577
Adjusted
measure
9,452
4,105
(494)
838
(946)
56
(5,713)
152
897
(68)
(8)
(3,672)
(6,450)
(1,851)
Adjusted
measure
28,938
(13,483)
(200)
154
455
(476)
604
(4,606)
63
(1,824)
(442)
(2,503)
238
(4,832)
2,086
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Other reconciliations continued
Applicable tax rate
The applicable tax rate represents the effective tax rate which is computed based on the income tax expense, pre-significant items
and related Proportionate adjustments, divided by the earnings before tax, pre-significant items and related Proportionate
adjustments. See reconciliation table below.
Reconciliation of tax expense 2023
US$ million
Adjusted EBIT, pre-significant items
Net finance costs
Adjustments for:
Net finance costs from material associates and joint ventures
Proportionate adjustment and net finance costs – Volcan
Share of income from other associates pre-significant items
Profit on a proportionate consolidation basis before tax and pre-significant items
Income tax expense, pre-significant items
Adjustments for:
Tax expense from material associates and joint ventures
Tax credit from Volcan
Tax expense on a proportionate consolidation basis
Applicable tax rate
Total
10,392
(1,900)
5
16
(372)
8,141
(2,170)
(559)
(3)
(2,732)
33.6%
US$ million
Tax expense on a proportionate consolidation basis
Adjustment in respect of material associates and joint ventures – tax
Adjustment in respect of Volcan – tax
Tax expense on the basis of the income statement
Pre-significant
tax expense
2,732
(559)
(3)
2,170
Significant
items tax1
72
–
(35)
37
Total
tax expense
2,804
(559)
(38)
2,207
Reconciliation of tax expense 2022
US$ million
Adjusted EBIT, pre-significant items
Net finance costs
Adjustments for:
Net finance costs from material associates and joint ventures
Proportionate adjustment and net finance costs – Volcan
Share of income from other associates pre-significant items
Profit on a proportionate consolidation basis before tax and pre-significant items
Income tax expense, pre-significant items
Adjustments for:
Tax expense from material associates and joint ventures
Tax credit from Volcan
Tax expense on a proportionate consolidation basis
Applicable tax rate
US$ million
Tax expense on a proportionate consolidation basis
Adjustment in respect of material associates and joint ventures – tax
Adjustment in respect of Volcan – tax
Tax expense on the basis of the income statement
1 See table above.
Total
26,657
(1,336)
(22)
60
(973)
24,386
(6,169)
(688)
10
(6,847)
28.1%
Pre-significant
tax expense
6,847
(688)
10
6,169
Significant
items tax1
247
–
(48)
199
Total
tax expense
7,094
(688)
(38)
6,368
2023 Glencore Annual Report
2023 Glencore Annual Report
………………………………………………………289
289
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Production by quarter – Q4 2022 to Q4 2023
Metals and minerals
Production from own sources – Total1
Copper
Cobalt
Zinc
Lead
Nickel
Gold
Silver
Ferrochrome
Coal
Oil (entitlement interest basis)
Q4
2022
kt 287.6
10.7
kt
kt 238.9
54.7
kt
25.9
kt
157
koz
koz 5,872
378
28.1
1,309
kt
mt
kboe
Q1
2023
244.1
10.5
205.3
39.3
20.9
187
4,525
400
26.9
1,208
Production from own sources – Copper assets1
Q2
2023
Q3
2023
Q4
2023
2023
2022
243.9
11.2
229.4
48.1
25.5
182
4,921
317
27.3
1,142
247.8
10.8
237.4
46.2
22.0
175
5,064
156
29.7
1,164
274.3
8.8
246.4
49.1
29.2
203
5,501
289
29.7
1,229
1,010.1
41.3
918.5
182.7
97.6
747
1,058.1
43.8
938.5
191.6
107.5
661
20,011 23,750
1,488
110.0
6,131
1,162
113.6
4,743
African Copper (KCC, Mutanda)
KCC
Copper metal
Cobalt2
Copper metal
Cobalt2
Mutanda
Total Copper metal
Total Cobalt2
Collahuasi3
Copper in concentrates
Silver in concentrates
Gold in concentrates
Antamina4
Copper in concentrates
Zinc in concentrates
Silver in concentrates
South America (Antapaccay, Lomas Bayas)
Antapaccay Copper in concentrates
Gold in concentrates
Silver in concentrates
Lomas Bayas Copper metal
Q4
2022
Q1
2023
Q2
2023
Q3
2023
Q4
2023
2023
2022
kt
kt
kt
kt
kt
kt
kt
koz
koz
kt
kt
koz
kt
koz
koz
kt
67.3
6.6
11.2
3.2
78.5
9.8
62.9
809
10
36.4
32.5
1,018
42.5
19
316
19.4
53.6
7.0
8.2
2.8
61.8
9.8
57.1
724
9
32.0
31.8
923
36.8
21
251
17.9
48.7
7.6
9.7
3.0
58.4
10.6
57.3
888
11
36.3
45.3
1,027
45.9
35
358
11.9
59.9
7.4
9.0
3.0
68.9
10.4
66.1
1,242
9
34.5
42.1
918
33.8
16
235
15.5
44.2
5.6
8.2
2.4
52.4
8.0
71.7
1,178
12
206.4
27.6
35.1
11.2
220.1
25.5
33.3
14.7
241.5
38.8
253.4
40.2
252.2
4,032
41
251.1
3,350
38
39.6
37.4
1,044
152.5
142.4
156.6
144.3
3,912 4,964
56.5
25
423
20.5
173.0
97
1,267
65.8
151.0
61
1,222
72.6
Total Copper metal
Total Copper in
concentrates
Total Gold in concentrates
and in doré
Total Silver in concentrates
and in doré
kt
19.4
17.9
11.9
15.5
20.5
65.8
72.6
kt
42.5
36.8
45.9
33.8
56.5
173.0
151.0
koz
19
21
35
16
25
97
61
koz
316
251
358
235
423
1,267
1,222
Change
2023 vs
2022
%
(5)
(6)
(2)
(5)
(9)
13
(16)
(22)
3
(23)
Change
Q4 23 vs
Q4 22
%
(5)
(18)
3
(10)
13
29
(6)
(24)
6
(6)
Change
2023 vs
2022
%
Change
Q4 23 vs
Q4 22
%
(6)
8
5
(24)
(5)
(3)
–
20
8
(7)
9
(21)
15
59
4
(9)
(9)
15
59
4
(34)
(15)
(27)
(25)
(33)
(18)
14
46
20
9
15
3
33
32
34
6
6
33
32
34
Australia (Cobar)
Cobar
Copper in concentrates
Silver in concentrates
Total Copper department
kt
koz
11.2
139
8.7
100
6.3
80
–
–
–
–
15.0
180
37.3
446
(60)
(60)
(100)
(100)
Copper
Cobalt
Zinc
Gold
Silver
kt
kt
kt
koz
koz
250.9
9.8
32.5
29
2,282
214.3
9.8
31.8
30
1,998
216.1
10.6
45.3
46
2,353
218.8
10.4
42.1
25
2,395
240.7
8.0
37.4
37
2,645
889.9
38.8
156.6
138
9,391
917.9
40.2
144.3
99
9,982
(3)
(3)
9
39
(6)
(4)
(18)
15
28
16
290………………………………………………………
290
2023 Glencore Annual Report
2023 Glencore Annual Report
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Production by quarter – Q4 2022 to Q4 2023 continued
Metals and minerals
Production from own sources – Zinc assets1
Q4
2022
Q1
2023
Q2
2023
Q3
2023
Q4
2023
2023
2022
Change
2023 vs
2022
%
Change
Q4 23 vs
Q4 22
%
Kazzinc
Zinc metal
Zinc in concentrates
Lead metal
Lead in concentrates
Copper metal5
Gold
Silver
Silver in concentrates
kt
kt
kt
kt
kt
koz
koz
koz
Kazzinc – total production including third-party feed
kt
kt
kt
koz
koz
Zinc metal
Lead metal
Copper metal
Gold
Silver
Australia (Mount Isa, McArthur River)
Mount Isa
Zinc in concentrates
Copper metal
Lead in concentrates
Silver
Silver in concentrates
kt
kt
kt
koz
koz
28.0
8.6
3.8
0.4
4.3
125
698
12
55.5
25.8
13.9
262
4,959
87.2
23.1
36.0
207
1,383
24.9
9.4
4.8
3.5
3.4
154
693
140
63.5
23.9
11.5
261
4,861
61.6
16.5
18.8
180
708
Mount Isa, Townsville – total production including third-party feed
Copper metal
Gold
Silver
McArthur
River
Zinc in concentrates
Lead in concentrates
Silver in concentrates
Total Zinc in concentrates
Total Copper
Total Lead in concentrates
Total Silver
Total Silver in concentrates
North America (Matagami, Kidd)6
Matagami
Zinc in concentrates
Copper in concentrates
Zinc in concentrates
Copper in concentrates
Silver in concentrates
Kidd
kt
koz
koz
kt
kt
koz
kt
kt
kt
koz
koz
kt
kt
kt
kt
koz
56.2
43
578
70.5
13.1
371
157.7
23.1
49.1
207
1,754
–
–
8.4
4.9
292
44.3
37
408
66.9
12.2
366
128.5
16.5
31.0
180
1,074
–
–
10.7
6.8
392
24.6
13.1
4.0
4.0
1.6
134
414
123
61.5
21.8
5.8
270
4,716
68.5
18.6
27.8
158
1,086
50.5
35
386
66.4
12.3
261
134.9
18.6
40.1
158
1,347
–
–
11.5
4.6
477
31.6
15.8
5.2
3.3
4.4
147
760
143
66.2
27.7
11.8
275
4,355
76.0
16.1
25.4
134
1,056
53.0
46
482
63.1
12.3
262
139.1
16.1
37.7
134
1,318
–
–
8.8
5.1
254
32.7
21.8
4.7
6.1
5.4
163
860
142
113.8
60.1
18.7
16.9
14.8
598
2,727
548
125.7
20.7
16.9
0.4
20.5
546
2,721
12
71.1
24.6
13.0
318
3,634
262.3
98.0
42.1
1,124
256.9
107.6
55.8
912
17,566 22,005
81.1
17.9
24.7
143
987
49.4
50
475
65.8
13.6
403
146.9
17.9
38.3
143
1,390
287.2
69.1
96.7
615
3,837
290.2
70.5
114.5
557
4,125
197.2
168
1,751
191.5
148
1,885
262.2
50.4
1,292
273.8
51.4
1,467
549.4
69.1
147.1
615
5,129
564.0
70.5
165.9
557
5,592
(9)
190
11
n.m.
(28)
10
–
n.m.
2
(9)
(25)
23
(20)
(1)
(2)
(16)
10
(7)
3
14
(7)
(4)
(2)
(12)
(3)
(2)
(11)
10
(8)
17
153
24
n.m.
26
30
23
n.m.
28
(5)
(6)
21
(27)
(7)
(23)
(31)
(31)
(29)
(12)
16
(18)
(7)
4
9
(7)
(23)
(22)
(31)
(21)
–
–
7.6
6.1
255
–
–
38.6
22.6
1,378
17.3
3.2
39.2
25.1
1,346
(100)
(100)
(2)
(10)
2
n.m.
n.m.
(10)
24
(13)
Total Zinc in concentrates
Total Copper in
concentrates
Total Silver in concentrates
kt
8.4
10.7
11.5
8.8
7.6
38.6
56.5
(32)
(10)
kt
koz
4.9
292
6.8
392
4.6
477
5.1
254
6.1
255
22.6
1,378
28.3
1,346
(20)
2
24
(13)
2023 Glencore Annual Report
2023 Glencore Annual Report
………………………………………………………291
291
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Production by quarter – Q4 2022 to Q4 2023 continued
Metals and minerals
Production from own sources – Zinc assets1 continued
Other Zinc: South America (Bolivia, Peru)6
Zinc in concentrates
Lead in concentrates
Copper in concentrates
Silver in concentrates
Total Zinc department
Zinc
Lead
Copper
Gold
Silver
kt
kt
kt
koz
kt
kt
kt
koz
koz
Q4
2022
Q1
2023
Q2
2023
Q3
2023
Q4
2023
2023
2022
Change
2023 vs
2022
%
Change
Q4 23 vs
Q4 22
%
3.7
1.4
0.3
567
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
27.3
8.4
1.4
3,345
(100)
(100)
(100)
(100)
(100)
(100)
(100)
(100)
206.4
54.7
32.6
125
3,530
173.5
39.3
26.7
154
2,479
184.1
48.1
24.8
134
2,519
195.3
46.2
25.6
147
2,609
209.0
49.1
29.4
163
761.9
182.7
106.5
598
2,790 10,397
794.2
191.6
120.7
546
13,573
(4)
(5)
(12)
10
(23)
–
(10)
(10)
30
(21)
292………………………………………………………
292
2023 Glencore Annual Report
2023 Glencore Annual Report
Strategic Report
Corporate Governance
Financial Statements
Additional Information
Production by quarter – Q4 2022 to Q4 2023 continued
Metals and minerals
Production from own sources – Nickel assets1
Integrated Nickel Operations (Sudbury, Raglan, Nikkelverk)
Q4
2022
Q1
2023
Q2
2023
Q3
2023
Q4
2023
2023
2022
Change
2023 vs
2022
%
Change
Q4 23 vs
Q4 22
%
Nickel metal
Nickel in concentrates
Copper metal
Copper in concentrates
Cobalt metal
Gold
Silver
Platinum
Palladium
Rhodium
Nickel metal
Nickel in concentrates
Copper metal
Copper in concentrates
Cobalt metal
Gold
Silver
Platinum
Palladium
Rhodium
kt
kt
kt
kt
kt
koz
koz
koz
koz
koz
kt
kt
kt
kt
kt
koz
koz
koz
koz
koz
9.7
0.1
2.5
1.6
0.1
3
60
8
16
1
23.6
–
4.7
2.7
0.9
6
130
16
49
2
Murrin Murrin
Total Nickel metal
Total Cobalt metal
kt
kt
9.1
0.8
Murrin Murrin – total production including third-party feed
Total Nickel metal
Total Cobalt metal
kt
kt
10.3
0.9
8.1
–
2.0
1.1
0.1
3
48
6
16
1
23.9
–
5.2
1.6
0.9
6
86
12
46
1
7.8
0.6
8.9
0.7
Koniambo
Nickel in ferronickel
kt
7.0
5.0
Total Nickel department
Nickel
Copper
Cobalt
Gold
Silver
Platinum
Palladium
Rhodium
kt
kt
kt
koz
koz
koz
koz
koz
25.9
4.1
0.9
3
60
8
16
1
20.9
3.1
0.7
3
48
6
16
1
10.0
–
1.9
1.1
0.1
2
49
6
17
–
23.2
0.1
5.0
1.6
0.8
8
89
13
54
1
7.8
0.5
9.0
0.6
7.7
25.5
3.0
0.6
2
49
6
17
–
7.3
0.1
2.2
1.2
–
3
60
5
14
1
23.9
–
4.8
1.1
0.8
5
110
11
43
1
7.5
0.4
8.6
0.4
13.7
0.1
2.8
1.4
0.2
3
66
7
18
1
24.0
0.1
5.1
1.9
1.0
8
122
15
58
–
8.0
0.6
9.9
0.7
39.1
0.2
8.9
4.8
0.4
11
223
24
65
3
95.0
0.2
20.1
6.2
3.5
27
407
51
201
3
46.2
0.2
11.9
7.6
0.6
16
195
32
83
4
81.9
0.2
18.5
10.6
3.1
29
494
69
221
5
(15)
–
(25)
(37)
(33)
(31)
14
(25)
(22)
(25)
16
–
9
(42)
13
(7)
(18)
(26)
(9)
(40)
41
–
12
(13)
100
–
10
(13)
13
–
2
n.m.
9
(30)
11
33
(6)
(6)
18
(100)
31.1
2.1
35.7
3.0
(13)
(30)
(12)
(25)
36.4
2.4
40.4
3.3
(10)
(27)
(4)
(22)
7.1
7.4
27.2
25.4
7
6
22.0
3.4
0.4
3
60
5
14
1
29.2
4.2
0.8
3
66
7
18
1
97.6
13.7
2.5
11
223
24
65
3
107.5
19.5
3.6
16
195
32
83
4
(9)
(30)
(31)
(31)
14
(25)
(22)
(25)
13
2
(11)
–
10
(13)
13
–
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Additional Information
Production by quarter – Q4 2022 to Q4 2023 continued
Metals and minerals
Production from own sources – Ferroalloys assets1
Ferrochrome7
Vanadium pentoxide
kt
mlb
Q4
2022
378
5.5
Q1
2023
400
5.4
Q2
2023
317
3.9
Q3
2023
156
5.6
Q4
2023
289
4.6
2023
2022
1,162
19.5
1,488
19.8
Total production – Custom metallurgical assets1
Q4
2022
Q1
2023
Q2
2023
Q3
2023
Q4
2023
2023
2022
Copper (Altonorte, Pasar, Horne, CCR)
Copper metal
Copper anode
kt
kt
130.7
131.9
128.2
119.9
123.2
105.4
125.7
122.8
130.2
95.2
507.3
443.3
456.9
474.9
Zinc (Portovesme, Asturiana, Nordenham, Northfleet, CEZ)
Zinc metal
Lead metal
kt
kt
155.2
57.3
140.6
65.0
204.7
58.7
200.5
60.9
206.8
60.0
752.6
244.6
683.0
273.4
Change
2023 vs
2022
%
(22)
(2)
Change
Q4 23 vs
Q4 22
%
(24)
(16)
Change
2023 vs
2022
%
Change
Q4 23 vs
Q4 22
%
11
(7)
10
(11)
–
(28)
33
5
1 Controlled industrial assets and joint ventures only (excludes Volcan). Production is on a 100% basis except for joint ventures, where the Group’s attributable
share of production is included.
2 Cobalt contained in concentrates and hydroxides.
3 The Group’s pro-rata share of Collahuasi production (44%).
4 The Group’s pro-rata share of Antamina production (33.75%).
5 Copper metal includes copper contained in copper concentrates and blister.
6 North and South American assets sold or closed since the beginning of 2022: Matagami (Canada) completed mining in June 2022, Bolivian Zinc sold in
March 2022 and Peruvian Zinc sold in December 2022.
7 The Group’s attributable 79.5% share of the Glencore-Merafe Chrome Venture.
Energy products
Production from own sources – Coal assets1
Australian steelmaking coal
Australian semi-soft coal
Australian thermal coal (export)
Australian thermal coal (domestic)
South African thermal coal (export)
South African thermal coal (domestic)
Cerrejón
Total Coal department
mt
mt
mt
mt
mt
mt
mt
mt
Oil assets (non-operated)
Q4
2022
2.5
1.2
13.7
2.4
2.9
0.8
4.6
28.1
Q1
2023
2.0
1.1
12.9
1.5
3.2
0.8
5.4
26.9
Q2
2023
1.7
0.8
13.8
1.7
3.4
1.1
4.8
27.3
Q3
2023
1.5
0.9
14.3
2.0
3.8
1.0
6.2
29.7
Q4
2023
2.3
1.3
14.2
1.8
3.3
1.2
5.6
29.7
2023
2022
7.5
4.1
55.2
7.0
13.7
4.1
22.0
113.6
8.7
4.0
53.4
7.8
12.7
3.7
19.7
110.0
Change
2023 vs
2022
%
(14)
2
3
(10)
8
11
12
3
Change
Q4 23 vs
Q4 22
%
(8)
8
4
(25)
14
50
22
6
Glencore entitlement interest basis
Equatorial Guinea
Cameroon
Total Oil department
Gross basis
Equatorial Guinea
Cameroon
Total Oil department
Q4
2022
Q1
2023
Q2
2023
Q3
2023
Q4
2023
2023
2022
kboe
kbbl
kboe
1,104
205
1,309
1,017
191
1,208
979
163
1,142
1,030
134
1,164
1,109
120
1,229
4,135
608
4,743
5,107
1,024
6,131
kboe
kbbl
kboe
6,858
508
7,366
6,027
483
6,510
5,241
410
5,651
5,680
367
6,047
6,399
302
23,347 26,309
2,435
1,562
6,701 24,909 28,744
Change
2023 vs
2022
%
Change
Q4 23 vs
Q4 22
%
(19)
(41)
(23)
(11)
(36)
(13)
–
(41)
(6)
(7)
(41)
(9)
1 Controlled industrial assets and joint ventures only. Production is on a 100% basis, except for joint ventures, where the Group’s attributable share of
production is included.
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Additional Information
Independent Limited Assurance Report to the Directors of Glencore plc
Independent Limited Assurance Report by Deloitte LLP to the Directors of Glencore plc (“Glencore”) on selected
Environmental, Social and Governance (“ESG”) metrics (the “Selected Information”) within the Annual Report for the reporting
year ended 31 December 2023 (“2023 Annual Report”).
Our assurance conclusion
Based on our procedures described in this report, and evidence we have obtained, nothing has come to our attention that
causes us to believe that the Selected Information for the reporting year ending 31 December 2023, reported within the 2023
Annual Report has not been prepared, in all material respects, in accordance with Glencore’s Basis of Reporting 2023 defined
by the Directors as set out here: https://www.glencore.com/publications.
Scope of our work
Glencore has engaged us to provide independent limited assurance in accordance with the International Standard on
Assurance Engagements 3000 (Revised) Assurance Engagements Other than Audits or Reviews of Historical Financial
Information (“ISAE 3000”), issued by the International Auditing and Assurance Standards Board (“IAASB”) and our agreed terms
of engagement.
The Selected Information in scope of our engagement for the reporting year ended 31 December 2023, as indicated by Δ in the
2023 Annual Report, is as follows:
Environment
figure Health and safety
2023
Assured
2023
Assured
figure
Total direct energy consumption (PJ)
Total indirect energy consumption (PJ)
125.0 Total working hours (employee and contractor)
77.3 Total number of lost time injuries (employee and
302,555,085
229
Total direct (Scope 1) greenhouse gas (GHG)
emissions (million tonnes of CO2e)
Total Scope 2 GHG emissions (location-based)
(million tonnes of CO2e)
Total Scope 2 GHG emissions (market-based)
(million tonnes of CO2e)
Category 3 Scope 3 GHG emissions – Emissions
from fuel and energy-related activities, not
included in Scope 1 and 2 (million tonnes of CO2e)
Category 11 Scope 3 GHG emissions - Emissions
from the use of sold products (million tonnes
of CO2e)
Total water input (million m3)
Total water output (million m3)
Total number of catastrophic (category 5) and
major (category 4) environmental incidents
and spills
contractor)
16.72 Total number of medical treatment injuries
(employee and contractor)
9.66 Total number of restricted work injuries
(employee and contractor)
10.33 Total number of fatalities (employee and
contractor)
4.53 Total Recordable Injury Frequency Rate
(employee and contractor) (number of total
recordable injuries per million hours worked)
301
121
4
2.16
324.40 Lost Time Injury Frequency Rate (employee and
0.76
contractor) (number of lost time injuries per
million hours worked)
949.7 Economic
558.2
0 Total amounts of payments to governments
12,718
(millions $ USD)
The Basis of Reporting 2023 defined by Glencore, the nature of the Selected Information, and absence of consistent external
standards allow for different, but acceptable, measurement methodologies to be adopted which may result in variances
between entities. The adopted measurement methodologies may also impact comparability of the Selected Information
reported by different organisations and from year to year within an organisation as methodologies develop.
The Selected Information, as listed in the above table, needs to be read and understood together with the Basis of Reporting
2023, which can be found at https://www.glencore.com/publications.
Inherent limitations of the Selected Information
We obtained limited assurance over the preparation of the Selected Information in accordance with the Basis of Reporting.
Inherent limitations exist in all assurance engagements.
Any internal control structure, no matter how effective, cannot eliminate the possibility that fraud, errors or irregularities may
occur and remain undetected and because we use selective testing in our engagement, we cannot guarantee that errors or
irregularities, if present, will be detected.
Selected Information related to health and safety incidents is derived from events that are self-reported by the individuals
involved in the health and safety incidents. While Glencore requires the reporting of this Selected Information in accordance
with its procedures, there is an inherent limitation in that our testing may not identify all misstatements relating to
completeness, for example instances where an incident may have occurred but not been reported.
Directors’ responsibilities
The Directors are responsible for preparing the Selected Information for the 2023 Annual Report and for being satisfied that the
Selected Information as presented in the 2023 Annual Report, taken as a whole, is fair, balanced and understandable.
The Directors are also responsible for:
• Selecting and establishing the Basis of Reporting 2023.
2023 Glencore Annual Report
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Independent Limited Assurance Report to the Directors of Glencore plc continued
• Preparing, measuring, presenting and reporting the Selected Information in accordance with the Basis of Reporting 2023.
• Publishing the Basis of Reporting 2023 publicly in advance of, or at the same time as, the publication of the Selected
Information.
• Designing, implementing, and maintaining internal processes and controls over information relevant to the preparation of
the Selected Information to ensure that they are free from material misstatement, including whether due to fraud or error.
• Providing sufficient access and making available all necessary records, correspondence, information and explanations to
carry out our procedures for the purposes of our work on the Selected Information.
Our responsibilities
We are responsible for:
• Planning and performing procedures to obtain sufficient appropriate evidence in order to express an independent limited
assurance conclusion on the Selected Information.
• Communicating matters that may be relevant to the Selected Information to the appropriate party including identified or
suspected non-compliance with laws and regulations, fraud or suspected fraud, and bias in the preparation of the
Selected Information.
• Reporting our conclusion in the form of an independent limited Assurance Report to the Directors.
Our independence and competence
In conducting our engagement, we complied with the independence requirements of the FRC’s Ethical Standard and the
ICAEW Code of Ethics. The ICAEW Code is founded on fundamental principles of integrity, objectivity, professional competence
and due care, confidentiality and professional behaviour.
We applied the International Standard on Quality Management 1 (“ISQM 1”) issued by the International Auditing and Assurance
Standards Board. Accordingly, we maintained a comprehensive system of quality management including documented
policies and procedures regarding compliance with ethical requirements, professional standards and applicable legal and
regulatory requirements.
Key procedures performed
We are required to plan and perform our work to address the areas where we have identified that a material misstatement in
respect of the Selected Information is likely to arise. The procedures we performed were based on our professional judgment.
In carrying out our limited assurance engagement in respect of the Selected Information, we performed the following
procedures:
• Performed an assessment of the criteria (the benchmarks used to measure or evaluate the underlying information) to determine
whether they are suitable for the engagement circumstances, and discussed with the Directors the Basis of Reporting 2023.
• Performed analytical review procedures to understand the underlying subject matter and identify areas where a material
misstatement of the Selected Information is likely to arise.
• Through inquiries of management obtained an understanding of Glencore, its environment, processes and information
systems relevant to the preparation of the Selected Information sufficient to identify and further assess risks of material
misstatement in the Selected Information, and provide a basis for designing and performing procedures to respond to
assessed risks and to obtain limited assurance to support a conclusion.
• Through inquiries of management, obtained an understanding of internal controls relevant to the Selected Information, the
quantification process and data used in preparing the Selected Information, the methodology for gathering qualitative
information, and the process for preparing and reporting the Selected Information. We did not evaluate the design of
particular internal control activities, obtain evidence about their implementation or test their operating effectiveness.
• Inspected documents relating to the Selected Information, including Health, Safety, Environment and Communities (HSEC)
Committee meeting minutes and where applicable internal audit outputs to understand the level of management
awareness and oversight of the Selected Information.
• Performed procedures over the Selected Information, including recalculation of relevant formulae used in manual
calculations and assessment whether the data has been appropriately consolidated. Performed procedures over underlying
data on a statistical sample basis to assess whether the data has been collected and reported in accordance with the Basis of
Reporting 2023, including verifying to source documentation.
• Conducted site visits at a sample of industrial sites (9 in-person and 1 remote data review), selected on a judgmental basis as
mutually agreed with Glencore to determine consistency in understanding and application of the Basis of Reporting 2023,
checked understanding of processes, and performed completeness testing.
• Read the narrative accompanying the Selected Information with regard to the Basis of Reporting 2023, and for consistency
with our findings.
• For the restatements made to historic data, although not part of the scope of our limited assurance engagement for 2023 on
the Selected Information, we inquired about the rationale and inspected the supporting calculations provided by Glencore,
and where appropriate, reviewed against relevant standards (i.e., GHG Protocol).
The procedures performed in a limited assurance engagement vary in nature and timing from, and are less in extent than for,
a reasonable assurance engagement. Consequently, the level of assurance obtained in a limited assurance engagement is
substantially lower than the assurance that would have been obtained had a reasonable assurance engagement been performed.
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Independent Limited Assurance Report to the Directors of Glencore plc continued
Use of our report
This report is made solely to the Directors of Glencore as a body in accordance with ISAE 3000 and our agreed terms of
engagement. Our work has been undertaken so that we might state to Glencore those matters we have agreed to state to
them in this report and for no other purpose.
Without assuming or accepting any responsibility or liability in respect of this report to any party other than Glencore, we
acknowledge that Glencore may choose to make this report publicly available for others wishing to have access to it, which
does not and will not affect or extend for any purpose or on any basis our responsibilities. To the fullest extent permitted by law,
we do not accept or assume responsibility to anyone other than Glencore, for our work, for this report, or for the conclusions we
have formed.
Deloitte LLP
London, United Kingdom
20 March 2024
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Additional Information
Shareholder Information
Glencore plc is registered in Jersey,
is headquartered in Switzerland
and its Group has operations around
the world.
Headquarters
Baarermattstrasse 3
6340 Baar
Switzerland
Registered office
13 Castle Street
St Helier, Jersey
JE1 1ES
Channel Islands
The Company has a primary listing
on the London Stock Exchange (LSE)
and a secondary listing on the
Johannesburg Stock Exchange (JSE).
Our website contains further
information on our business and for
shareholders including as to share
transfer and distributions: glencore.
com/investors/shareholder-centre
Share registrars
Jersey (for London listing)
Computershare Investor Services
(Jersey) Limited
13 Castle Street
St Helier, Jersey
JE1 1ES
Channel Islands
Tel: +44 (0) 370 707 4040
Enquiries
Corporate Services
Glencore plc
Baarermattstrasse 3
6340 Baar
Switzerland
Tel: +41 41 709 2000
Fax: +41 41 709 3000
Email: info@glencore.com
Johannesburg
Computershare Investor Services (Pty)
Ltd
Rosebank Towers,
15 Biermann Avenue,
Rosebank, 2196,
South Africa
Tel: +27 (0) 11 370 5000
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2023 Glencore Annual Report
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Additional Information
Important notice
This document does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for
any securities.
Cautionary statement regarding
forward-looking information
Certain descriptions in this document are oriented towards future events
and therefore contains statements that are, or may be deemed to be,
‘forward-looking statements’ which are prospective in nature. Such
statements may include, without limitation, statements in respect of trends
in commodity prices and currency exchange rates; demand for
commodities; reserves and resources and production forecasts; expectations,
plans, strategies and objectives of management; expectations regarding
financial performance, results of operations and cash flows, climate
scenarios; sustainability performance (including, without limitation,
environmental, social and governance) related goals, ambitions, targets,
intentions, visions, milestones and aspirations; approval of certain projects
and consummation of certain transactions (including, without limitation,
acquisitions and disposals, in particular the proposed acquisition of a
majority stake of the Elk Valley Resources steelmaking coal assets (EVR)
from Teck Resources Limited and potential subsequent demerger of the
combined coal and carbon steel materials business); closures or divestments
of certain assets, operations or facilities (including, without limitation,
associated costs); capital costs and scheduling; operating costs and supply of
materials and skilled employees; financings; anticipated productive lives of
projects, mines and facilities; provisions and contingent liabilities; and tax,
legal and regulatory developments.
These forward-looking statements may be identified by the use of forward-
looking terminology, or the negative thereof including, without limitation,
‘outlook’, ‘guidance’, ‘trend’, ‘plans’, ‘expects’, ‘continues’, ‘assumes’, ‘is subject
to’, ‘budget’, ‘scheduled’, ‘estimates’, ‘aims’, ‘forecasts’, ‘risks’, ‘intends’,
‘positioned’, ‘predicts’, ‘projects’, ‘anticipates’, ‘believes’, or variations of such
words or comparable terminology and phrases or statements that certain
actions, events or results ‘may’, ‘could’, ‘should’, ‘shall’, ‘would’, ‘might’ or ‘will’
be taken, occur or be achieved. The information in this document provides an
insight into how we currently intend to direct the management of our
businesses and assets and to deploy our capital to help us implement our
strategy. The matters disclosed in this document are a ‘point in time’
disclosure only. Forward-looking statements are not based on historical facts,
but rather on current predictions, expectations, beliefs, opinions, plans,
objectives, goals, intentions and projections about future events, results of
operations, prospects, financial conditions and discussions of strategy, and
reflect judgements, assumptions, estimates and other information available
as at the date of this document or the date of the corresponding planning or
scenario analysis process.
By their nature, forward-looking statements involve known and unknown
risks, uncertainties and other factors which may cause actual results,
performance or achievements to differ materially from any future event,
results, performance, achievements or other outcomes expressed or implied
by such forward-looking statements. Important factors that could impact
these uncertainties include (without limitation) those disclosed in the risk
management section of our latest Annual Report and Half-Year Report
(which can each be found on our website). These risks and uncertainties may
materially affect the timing and feasibility of particular developments. Other
factors which impact risks and uncertainties include, without limitation: the
ability to produce and transport products profitably; demand for our
products and commodity prices; development, efficacy and adoption of new
or competing technologies; changing or divergent preferences of our
stakeholders; changes to the assumptions regarding the recoverable value
of our tangible and intangible assets; changes in environmental scenarios
and related regulations, including, without limitation, transition risks and the
evolution and development of the global transition to a low-carbon
economy; recovery rates and other operational capabilities; timing, quantum
and nature of certain acquisitions and divestments; health, safety,
environmental or social performance incidents; labour shortages or
workforce disruptions; natural catastrophes or adverse geological conditions,
including, without limitation, the physical risks associated with climate
change; effects of global pandemics and outbreaks of infectious disease; the
outcome of litigation or enforcement or regulatory proceedings; the effect of
foreign currency exchange rates on market prices and operating costs;
actions by governmental authorities, such as changes in taxation or
regulation or changes in the decarbonisation policies and plans of other
countries; changes in economic and financial market conditions generally or
in various counties or regions; political or geopolitical uncertainty; and wars,
political or civil unrest, acts of terrorism, cyber attacks or sabotage.
Readers, including, without limitation, investors and prospective investors,
should review and consider these risks and uncertainties (as well as the other
risks identified in this document) when considering the information
contained in this document. Readers should also note that the high degree of
uncertainty around the nature, timing and magnitude of climate-related
risks, and the uncertainty as to how the energy transition will evolve, makes it
difficult to determine all potential risks and opportunities and disclose these
and any potential impacts with precision. Neither Glencore nor any of its
affiliates, associates, employees, Directors, officers or advisers, provides any
representation, warranty, assurance or guarantee as to the accuracy,
completeness or correctness, likelihood of achievement or reasonableness of
any forward-looking information contained in this document or that the
events, results, performance, achievements or other outcomes expressed or
implied in any forward-looking statements in this document will actually
occur. Glencore cautions readers against reliance on any forward-looking
statements contained in this document, particularly in light of the long-term
time horizon which this document discusses in certain instances and the
inherent uncertainty in possible policy, market and technological
developments in the future.
No statement in this document is intended as any kind of forecast
(including, without limitation, a profit forecast or a profit estimate),
guarantee or prediction of future events or performance and past
performance cannot be relied on as a guide to future performance.
Except as required by applicable regulations or by law, Glencore is not under
any obligation, and Glencore and its affiliates expressly disclaim any
intention, obligation or undertaking, to update or revise any forward-looking
statements, whether as a result of new information, future events or
otherwise. This document shall not, under any circumstances, create any
implication that there has been no change in the business or affairs of
Glencore since the date of this document or that the information contained
herein is correct as at any time subsequent to its date.
Cautionary statement regarding climate strategy
Glencore operates in a dynamic and uncertain market and external
environment. Plans and strategies can and must adapt in response to
dynamic market conditions, changing preference of our stakeholders, joint
venture decisions, changing weather and climate patterns, new
opportunities that might arise or other changing circumstances. Investors
should assume that our strategy on climate change will evolve and be
updated as time passes. Additionally, a number of aspects of our strategy
involve developments or workstreams that are complex and may be
delayed, more costly than anticipated or unsuccessful for many reasons,
including, without limitation, reasons that are outside of Glencore’s control.
Our strategy will also necessarily be impacted by changes in our business,
such as the proposed acquisition of EVR and potential demerger of the
combined coal and carbon steel materials business.
There are inherent limitations to scenario analysis and it is difficult to predict
which, if any, of the scenarios might eventuate. Scenario analysis relies on
assumptions that may or may not be, or prove to be, correct and that may or
may not eventuate and scenarios may also be impacted by additional factors
to the assumptions disclosed. Given these limitations we treat these
scenarios as one of several inputs that we consider in our climate strategy.
Due to the inherent uncertainty and limitations in measuring greenhouse
gas (GHG) emissions and operational energy consumption under the
calculation methodologies used in the preparation of such data, all CO2e
emissions and operational energy consumption data or volume references
(including, without limitation, ratios and/or percentages) in this document
are estimates. GHG emissions calculation and reporting methodologies may
change or be progressively refined over time resulting in the need to restate
previously reported data. There may also be differences in the manner that
third parties calculate or report such data compared to Glencore, which
means that third-party data may not be comparable to Glencore’s data. For
information on how we calculate our emissions and operational energy
consumption data, see the About our emissions calculations and reporting
section of this Annual Report as well as our latest Basis of Reporting,
Climate Action Transition Plan and Extended ESG Databook, which are
available on our website.
Sources
Certain statistical and other information included in this document is
sourced from publicly available third-party sources. This information has not
been independently verified and presents the view of those third parties, and
may not necessarily correspond to the views held by Glencore and Glencore
expressly disclaims any responsibility for, or liability in respect of, and makes
no representation or guarantee in relation to, such information (including,
without limitation, as to its accuracy, completeness or whether it is current).
Glencore cautions readers against reliance on any of the industry, market or
other third-party data or information contained in this document.
Information preparation
In preparing this document, Glencore has made certain estimates and
assumptions that may affect the information presented. Certain information is
derived from management accounts, is unaudited and based on information
Glencore has available to it at the time. Figures throughout this document are
subject to rounding adjustments. The information presented is subject to
change at any time without notice and we do not intend to update this
information except as required.
This document contains alternative performance measures which reflect
how Glencore’s management assesses the performance of the Group,
including results that exclude certain items included in our reported results.
Further details and information needed to reconcile such information to our
reported results can be found in the section of our Annual Report entitled
‘Alternative Performance Measures’ which is available on our website.
Subject to any terms implied by law which cannot be excluded, Glencore
accepts no responsibility for any loss, damage, cost or expense (whether
direct or indirect) incurred by any person as a result of any error, omission or
misrepresentation in information in this document.
Other information
The companies in which Glencore plc directly and indirectly has an interest
are separate and distinct legal entities. In this document, ‘Glencore’,
‘Glencore group’ and ‘Group’ are used for convenience only where references
are made to Glencore plc and its subsidiaries in general. These collective
expressions are used for ease of reference only and do not imply any other
relationship between the companies. Likewise, the words ‘we’, ‘us’ and ‘our’
are also used to refer collectively to members of the Group or to those who
work for them. These expressions are also used where no useful purpose is
served by identifying the particular company or companies.
2023 Glencore Annual Report
299
Glencore plc
Baarermattstrasse 3
6340 Baar
Switzerland
info@glencore.com