ENGLISH ADVANCING TR ADE TRAFIGURA GROUP CORPORATE BROCHURE

Transcription

1 ENGLISH ADVANCING TR ADE TRAFIGURA GROUP CORPORATE BROCHURE

2 BUSINESS HIGHLIGHTS * $98.1bn 264.4mmt $41.2bn Group revenue Combined volume of commodities traded** Total assets 65% 205.4mmt $45.0bn+ Oil and Petroleum Products revenue as a percentage of Group revenue Oil and Petroleum Products total volume traded Financial lines available to Trafigura 35%14.9mmt 3,878 Metals and Minerals revenue as a percentage of Group revenue Metals total volume traded Shipping and chartering fixtures per year 44.1mmt4,107 Minerals total volume traded Average number of employees over the year * Trafigura s financial year runs from 1 October 2015 to 30 September ** Million metric tonnes.

3 ADVANCING TR ADE OVERVIEW Trafigura is one of the world s leading independent commodity trading and logistics houses. Every day, around the world, Trafigura is advancing trade. We are developing markets, investing in infrastructure, building connections and cementing alliances. We see global trade as a positive force. We go further to make trade work better. Whether you re a producer, a service provider or an end-user, our focus, commitment and global resources can get you closer to your markets. In these pages we set out what we do and how we can add value to your business. CONTENTS Overview 02 Trafigura at a glance 04 How we re advancing trade around the world 10 Business model and structure Performance capabilities 12 Oil and Petroleum Products Trading 18 Metals and Minerals Trading 22 Shipping and Chartering 24 Puma Energy 25 DT Group 26 Impala Terminals 30 Mining Group Corporate responsibility 34 Investing in responsible trade 35 Trafigura Foundation TRAFIGURA CORPORATE BROCHURE 01

4 OVERVIEW TRAFIGURA AT A GLANCE Trafigura s core business is physical trading and logistics; our assets and investments complement and enhance these activities. With 61 offices in 36 countries, Trafigura s network extends to every corner of the globe. TRADING ACTIVITIES Oil and Petroleum Products In a fragmented market where no single company has a dominant position, we are one of the world s largest traders by volume of oil and petroleum products. Trafigura is one of the few oil and petroleum products traders with global presence and comprehensive coverage of all major markets. The Oil and Petroleum Products Division is supported by offices across the world including in Beijing, Calgary, Geneva, Houston, Johannesburg, Mexico City, Montevideo, Moscow, Mumbai and Singapore. Metals and Minerals We are one of the world s largest metals and minerals traders. We negotiate offtake agreements with miners and smelters and invest in logistics through our subsidiary, Impala Terminals, to improve market access for our clients The Metals and Minerals Division is supported by offices across the world including in Geneva, Johannesburg, Lima, Mexico City, Montevideo, Mumbai, Shanghai, Singapore and Stamford mmt Oil and Petroleum Products volume traded 59.0mmt Metals and Minerals volume traded DIVISIONAL PERFORMANCE DIVISIONAL PERFORMANCE Oil and Petroleum Products volume traded (mmt) Shipping and Chartering* Our Shipping and Chartering desk is closely integrated into Trafigura s business model, providing freight services to commodity trading teams internally and trading freight externally in the professional market. Operations are based in regional offices in Athens, Geneva, Houston, Montevideo and Singapore. All post-fixture operations are managed from our Athens office Metals and Minerals volume traded (mmt) 3,878 Shipping and Chartering fixtures * Financials relevant to Shipping and Chartering are consolidated within Oil and Petroleum Products/Metals and Minerals trading activities. Metals Minerals 02 TRAFIGURA CORPORATE BROCHURE

5 OV E RV I E W INDUSTRIAL AND FINANCIAL ASSETS DT Group Impala Terminals Mining Group DT Group is a business venture between Trafigura and Cochan Ltd. It develops markets in sub-saharan Africa, with a particular focus on Angola. It works closely with international and local partners in the logistics, trading and natural resources sectors. Impala Terminals is a multimodal logistics provider focused on export-driven emerging markets. It owns and operates ports, port terminals, warehouses and transport assets. It has particular expertise in providing efficient logistic solutions in challenging environments and hard-to-reach locations. The Mining Group manages mining operations, develops projects, conducts technical audits of existing and potential partner projects and provides advisory and support services to Trafigura s trading desks, trading partners and Galena Asset Management. 50% 100% 83 1,625 ownership ownership employees* Galena Asset Management Galena Asset Management provides investors with specialised alternative investment solutions. It operates independently, but benefits from the Group s insights into the global supply and demand of commodities. Trafigura is a 49.6 percent shareholder in Puma Energy, a global oil and petroleum products distribution company. The company manages over 20 million m3 throughput volumes via its network of 100 bulk storage terminals, 62 airports and over 2,460 service stations. 100% 100% 49.6% ,800+ ownership employees Puma Energy** ownership employees years in operation ownership employees REGIONAL INFORMATION NORTH AMERICA EUROPE MIDDLE EAST ASIA & AUSTRALIA Offices Offices Offices Offices LATIN AMERICA AFRICA 23 7 Offices Offices * All employee numbers represent average annual totals. ** Puma Energy was deconsolidated at the end of the 2013 financial year at which point Trafigura ceased to control Puma Energy. Locations and employee number breakdown on the above map do not include Puma Energy. TRAFIGURA CORPORATE BROCHURE 03

6 OVERVIEW HOW WE RE ADVANCING TR ADE AROUND THE WORLD Trafigura helps make trade happen. We move physical commodities from where they are plentiful to where they are most needed reliably, efficiently and responsibly. We are one of the world s leading trading firms. We have built a global business on service and performance. 04 TRAFIGURA CORPORATE BROCHURE

7 OVERVIEW Advancing trade by OPTIMISING PHYSICAL TR ADING AND LOGISTICS US Connecting counterparties reliably, efficiently and responsibly. We have built a global business in pursuit of one basic task making trade flow better. We approach it single-mindedly, bringing all our energy and resources to bear. We source, store, blend and deliver commodities according to precise customer specifications. We manage diverse risks and complex operational issues. We deploy market knowledge, industry expertise and world-class infrastructure. Our trading teams have the agility, intellect and ambition to succeed in increasingly regulated markets. Singapore Advancing trade GLOBALLY AND AT SCALE At scale, across the world we re at the heart of the global economy. Trafigura is active in 36 countries on six continents. Our global network supports our trading activities. Each of our offices has access to the knowledge, resources and support of the Trafigura Group. We continually invest in systems and processes that equip us to operate effectively in complex markets. Customers for oil and petroleum products include electric utilities, refiners, major producers and state-owned oil companies. Metals and minerals customers range from mining companies to smelters, refined metals retailers and industrial manufacturers. TRAFIGURA CORPORATE BROCHURE 05

8 OVERVIEW Advancing trade with INTEGRATED SOLUTIONS Colombia Simple, cost-effective and tailored to your needs. Our services add value at every stage of the supply chain. We access hard-to-reach locations and offer technical advice and financial support. We build infrastructure and devise logistics to streamline and simplify transportation. We operate at scale through state-of-the-art terminals. We deliver on time, on-spec commodities wherever they are needed. Uruguay Advancing trade with FINANCIAL STRENGTH AND RESILIENCE A trading partner you can rely on, even in the toughest times. Trafigura raises funds in the US, Europe and Asia-Pacific, and has lending arrangements in place with over 120 banks. Our strong balance sheet generates economies of scale, supports infrastructure investment and gives us scope to support production with prepayment agreements. Our prudent approach to risk management unlocks access in volatile markets. 06 TRAFIGURA CORPORATE BROCHURE

9 OVERVIEW Advancing trade by INVESTING IN INFR ASTRUCTURE Brazil Strategically located infrastructure gets you closer to global markets. We invest in ports, terminals and logistics to enhance our physical trading activities. We build warehouses and storage facilities, operate truck and barge fleets, purchase and charter ships, and develop mines whatever it takes to make trade flow better. Impala Terminals moves coal along the Mississippi, transports oil from Colombia s heartland, concentrates from Mexico and Peru, and iron ore out of Brazil. Our midstream and downstream energy partner, Puma Energy, manages storage and import terminals on five continents. Zambia Advancing trade by STRENGTHENING SUPPLY CHAINS Reducing trading costs and extending services. Trafigura has built a global presence by challenging the status quo. We operate in fluid, fast-changing markets. To succeed, we need to stay agile and responsive. Sustained success depends on consistently delivering leading-edge services. We never stop investing in innovation. We develop trade routes and product categories. We improve logistics. We introduce new counterparties to global opportunities and strengthen connections between suppliers and end-users. TRAFIGURA CORPORATE BROCHURE 07

10 OVERVIEW Advancing trade with ENDURING CUSTOMER RELATIONSHIPS Bahamas Aligning our resources with your long-term priorities. Trafigura is privately owned and fully independent. We relish that status. It keeps us focused on what our customers want. We work to develop strong, self-sustaining relationships with our customers. We do that by understanding and then meeting their needs. As a Trafigura customer you have a commercial partner that prioritises your interests. We don t just focus on the deal, we configure our business to fit your changing trading requirements. Tanzania Advancing trade with STRATEGIC PARTNERSHIPS Strong relationships are built on firm foundations. Strategic alliances with carefully selected partners extend the scope of our activities. Financial partners invest alongside us. Industrial partners contribute valuable, complementary skills and resources. We are making more progress alongside our partners. We are buying and building terminals, storage, and productive and processing capacity. We are integrating assets, boosting performance and realising gains. 08 TRAFIGURA CORPORATE BROCHURE

11 OVERVIEW Advancing trade by PROMOTING TR ANSPARENCY Peru Driving performance and stakeholder engagement. We believe that transparency comes in many forms from being open about financial performance, to driving deeper stakeholder engagement, to improving monitoring and reporting within the organisation and across our supply chain. As a major facilitator of global trade, we also believe that natural resource wealth should be an important engine for economic growth that contributes to sustainable development and poverty reduction. Being open about how we manage natural resources gives the populations in countries where we operate the tools to hold governments and business to account. Mexico Advancing trade SUSTAINABLY Generating lasting value for local communities. Trust is highly valued. It has to be earned one day at a time. We consult regularly with local communities. We work hard to gain and sustain their confidence. This is the right way to do business and it makes commercial sense. Our social licence to operate is reliant on local goodwill. Maintaining high safety and environmental standards is a prerequisite. We put down roots wherever we operate. We work closely with host governments, project partners and local communities to ensure that the benefits of trade are shared. TRAFIGURA CORPORATE BROCHURE 09

12 BUSINESS MODEL AND STRUCTURE OUR BUSINESS MODEL CREATES VALUE Our vision is of an increasingly interconnected and prosperous world in which commodities pass seamlessly from their points of origin to points of need. WHAT WE DO We connect producers and end-users of commodities by performing transformations in space, time and form. We use our market knowledge, logistics and infrastructure: to move physical commodities from places where they are abundant to where they are in demand (space). to store physical commodities while supply is unusually high and release inventories at times of high demand (time). to blend physical commodities to alter their quality or grade according to customer specifications (form). Transformations in space, time and form SOURCE STORE BLEND DELIVER We negotiate offtake agreements with oil producers, refiners, mining companies and smelters. We invest in logistics that improve market access for our suppliers. We store petroleum products at owned and third-party tankage. We store metals and minerals at Impala Terminals and third-partyowned facilities. We blend physical commodities to regional, market and customer specifications in strategically located terminals and warehouses around the world. We operate efficient, safe and high-quality logistics. We move commodities by barge, truck, rail, pipeline and vessel in support of our core trading activities and for third parties. ADVANCING TRADE: HOW WE CREATE VALUE BY MAKING MARKETS WORK We use our global network and market intelligence to connect supply and demand for commodities and ensure delivery in the right place, at the right time, to the right specification. BY OPTIMISING THE SUPPLY CHAIN We have developed world-leading logistical capabilities enabling us to source, store, blend and deliver oil and petroleum products, metals and minerals reliably and efficiently anywhere in the world. BY MANAGING RISK Our business model is resilient in the most volatile market conditions. We systematically hedge price risks and have created systems and processes that enable us to manage a complex range of operational and financial risks. BY INVESTING IN INFRASTRUCTURE We invest in high-quality infrastructure that supports our trade flows, such as oil storage facilities, warehouses, ports and transport. BY SUPPORTING OUR CLIENTS Our strong financial resources give us the capacity to add value for our customers through integrated solutions incorporating trading, finance, infrastructure investment and risk management in the physical commodity sector. BY ACTING RESPONSIBLY We are committed to operating and growing our business in a responsible and sustainable way. Responsible trade drives economic and social progress. 10 TRAFIGURA CORPORATE BROCHURE

13 OUR STRUCTURE DELIVERS VALUE OVERVIEW Trafigura s core business is physical trading and logistics. Strategic investments in industrial and financial assets complement and enhance this activity. We structure these investments as standalone businesses.* TRADING ACTIVITIES Midstream Time charter Voyage charter WET Private equity FREIGHT Private infrastructure GALENA Private debt DRY FREIGHT Voyage charter Time charter Owned mines Downstream PUMA ENERGY** OIL AND METALS PETROLEUM AND PRODUCTS MINERALS TRADING TRADING GROU P M I N I NG Joint venture mines Technical advisory Trading Shipping Infrastructure GROU P D T Investments logistics Multimodal I M PA L A T E R M IN A L S Transport assets Ports and terminals * The size of each segment is not indicative of percentage of ownership or contribution to Trafigura s bottom line. ** Puma Energy is a separate company to Trafigura; 49.6 percent of its share capital is owned by Trafigura. TRAFIGURA CORPORATE BROCHURE 11

14 PERFORMANCE CAPABILITIES OIL AND PETROLEUM PRODUCTS TR ADING Trafigura is one of the world s largest independent traders of oil and petroleum products, handling well over four million barrels a day. It is one of the few independent energy traders with a global presence and comprehensive product coverage, as well as extensive logistical and storage capability around the world. Global trading teams based in Beijing, Calgary, Geneva, Houston, Montevideo, Moscow and Singapore are supported by offices in Johannesburg, Mexico City and Mumbai mmt 65% Total volume traded Contribution to global revenue Oil and Petroleum Products total volume traded (mmt) Trafigura has the inherent strengths and agility to respond effectively to fast-changing markets. We invest in world-class assets and logistics to streamline and simplify physical delivery. SERVICE AND PERFORMANCE As a global trading house we have a detailed overview of macro and micro trends. As physical traders, we experience economic fundamentals first hand. At a time when markets are in flux, we have the resources and agility to accommodate rapidly evolving customer needs. Trafigura has the inherent strengths to respond effectively in fast-changing markets. We invest in world-class assets and logistics to streamline and simplify physical delivery. Our integrated trading operation has strong expertise across the product spectrum with global trading desks delivering relevant, distinctive, innovative services and outstanding performance. CRUDE In the crude oil market, we use our global presence, market knowledge and logistics capabilities to balance supply and demand, optimise supply chains and service the needs of our customers around the world. Globally, we store and transport over 1.7 million barrels of crude daily. Trafigura s crude team has strong technical capabilities. These, combined with our deep understanding of physical flows, allow us to respond rapidly to changing market dynamics and non-standard crude oil opportunities. We source oil from a variety of counterparties including public production companies, oil majors and national oil companies (NOCs). We provide distribution solutions for producers, and assist refineries with tailored shipments and specialist financing. Our substantial North American business includes a blending hub in Louisiana and a logistics-based offering in Texas. Our extensive US domestic lease activity in the Eagle Ford Shale and the Permian regions continues to expand. We have established a leading position in the burgeoning US crude export business. Strong relationships with producers and refineries in Europe and beyond are helping us to place shipments even at times of over-supply. Our thriving business in Africa encompasses both significant exports and imports. In Asia, we are an active participant in both sweet and sour grade trading and we continue to grow our assets in the region. In China, we have developed a strong presence, growing business with NOCs and private-sector refineries. We control tankage at strategic locations in Europe and supplement this with short- and long-term leases. We have access to long-term supplies of tradable oil streams and excellent relationships with regional refiners. 12 TRAFIGURA CORPORATE BROCHURE

15 PERFORMANCE CAPABILITIES Corpus Christi storage terminal, Texas, US. GASOLINE The gasoline team manages one of the world s largest seaborne gasoline books. We have an active market presence in components, and extensive, strategically located tankage. Our key strengths in this volatile market include a large storage footprint around the world, a close trading relationship with downstream investment Puma Energy and our carefully managed global distribution system. We source, store, blend and deliver cost-effective gasoline to our customers around the world, with an emphasis on quality service and optimal performance. We have built up long-standing relationships with NOCs, major refiners, and downstream partners in every core trading region. We maintain major blending hubs on the Gulf Coast, New York Harbour, in the Mediterranean and Singapore and lease tankage globally. We have a considerable ocean-bound charter fleet and are active in the pipeline trade. These assets give us the capacity to respond to our customers needs with considerable flexibility. Growing markets East of Suez remains a priority. We have grown our presence in both China and India, and are increasingly active in the rapidly evolving Far East market. Our integrated offering in the Americas is built on strong relationships with US refiners and substantial storage capacity in the Gulf, Caribbean basin and New York Harbour. We have some significant customers in Mexico, Colombia and Brazil and we supply fuel to Puma Energy s extensive distribution network in Central America. FUEL OIL Our fuel oil trading team combines global presence, market knowledge and efficient logistics to connect producers and end-users. Trafigura trades over 600,000 barrels of fuel oil and 150,000 barrels of feedstocks per day. We serve the needs of our customers by blending in and shipping between our 13.5 million-barrel global network of leased and owned storage facilities in Rotterdam, Singapore, Malta, Fujairah, Panama and Houston. Our team has built an effective global trading culture, a significant and sustainable feedstocks business, and is developing closer ties to end-users in the bunker market. Our trading and operations teams work closely with customers to bring value to the supply chain. Together with our team of analysts we are positioning ourselves to capture opportunities in changing market conditions. MIDDLE DISTILLATES Middle distillates are traded in integrated global markets. Trafigura s network comprises offices across the globe and holds one of the largest middle distillates books. Our mid-distillates trading operation covers jet fuel, diesel and gas oil. It leases storage globally and uses tankage to blend products to local specifications and premium-priced fuels. We trade the full range of distillates, from low to high sulphur. With cleaner diesel requirements being implemented around the world coupled with the continued refinery upgrades and new capacity, volumes of low-sulphur diesel are increasing rapidly. Trafigura is well-placed to serve this market efficiently. TRAFIGURA CORPORATE BROCHURE 13

16 Naphtha storage at Impala Terminals Barrancabermeja facility, Colombia. NAPHTHA Trafigura is one of the world s leading naphtha traders and one of the few with a US export facility. We source, store and blend all the most actively demanded products and grades, supporting trade flows to the Far East, South America, Africa and Europe. Our naphtha teams operate in Singapore, Geneva and Houston with local offices managing origination and business development. We work with colleagues in Dubai, Montevideo, Puerto Rico and West Africa. We focus on long-term relationships and work with our customers to meet changing needs. Our broad product coverage allows us to take advantage of naphtha s high substitutability. The naphtha teams work closely with the gasoline, condensate, crude and LPG desks to assess relative pricing for different products and grades and maximise our ability to deliver targeted, cost-effective shipments to our customers. BIODIESEL We work to promote biodiesel as a sustainable alternative and adjunct to fossil fuel-based diesel and are active on all the major international trade routes. The biodiesel desk is fully integrated within our global distillates team. We source supplies globally, both directly from agribusinesses and through the professional markets. We have built strategic partnerships with producers in the Americas, Europe and Asia. We have the ability to blend, store and transport biodiesel and ethanol anywhere in the world. Our customers include oil majors, refineries and downstream suppliers. CONDENSATE Trafigura is a leading international condensate trader. We trade in all parts of the world, bringing a wide variety of grades to market. We use terminals in the Arab Gulf, the Baltic region and the Far East for blending, and building or breaking bulk. We have offtake agreements with numerous oil and gas producers. We are developing new uses for condensates with a diverse customer base that includes refineries, splitters and petrochemical facilities. The end of the 40-year ban on US crude oil exports has shifted the dynamics of the condensate market. We are meeting rising global demand through our access to Eagle Ford shale and our stake in the Buckeye Partners splitter at the Corpus Christi terminal hub in Texas. (See page 16 for more details.) 14 TRAFIGURA CORPORATE BROCHURE

17 PERFORMANCE CAPABILITIES The Hoegh Gallant, chartered by Trafigura, leaving shipbuilders in Ulsan, South Korea. LIQUEFIED PETROLEUM GAS (LPG) Trafigura is a leading trader in the rapidly changing LPG market. The US is consolidating its position as the world s biggest LPG exporter. As a shareholder in the Buckeye Partners 1.1 million barrel terminal hub at Corpus Christi, Texas with exclusive throughput rights at this facility, Trafigura is an active participant. As an LPG producer in control of our own storage facilities we can tailor cargo specifications to suit a wide range of customers, from petrochemical consumers and blenders to autogas and bottled gas consumers. In addition to our facility in South Texas we work closely with our industrial investment, Puma Energy, which owns and operates LPG storage and distribution networks in strategic locations across the world. Our global presence and very strong logistical system support our trading activities. Effective vessel rotations, high-traded volumes, and rapid decision making allow us to prioritise clients requirements and respond quickly to changing market conditions. Our specialised team of LPG operations and chartering professionals works alongside our traders. They manage a large and rapidly evolving fleet of LPG tankers, ranging from small pressurised to Very Large Gas Carriers (VLGCs). LIQUEFIED NATURAL GAS (LNG) Trafigura was an early entrant in LNG and is now the world s leading independent trader in this rapidly growing energy market. The LNG team, based in Geneva, Singapore and Houston, works closely with our regional offices as well as our coal desks. LNG trading activity is well diversified globally, with a focus on Latin America, Europe, Middle East, Africa and Asia. Trafigura has also further expanded its natural gas trading capabilities in Europe and the US. With LNG market liquidity expanding rapidly, independent traders such as Trafigura are increasingly able to add value, matching new buyers with different sources of supply. Our LNG infrastructure business supports our customers with strategically deployable assets that offer low cost, flexibility and modularity. We will continue to provide innovative and flexible products to our clients and continue to invest in infrastructure where we can add value. TRAFIGURA CORPORATE BROCHURE 15

18 CORPUS CHRISTI: TERMINAL AND CONDENSATE SPLITTER STRATEGY EXTENDING OPTIONALITY BY INVESTING IN INFR ASTRUCTURE 16 TRAFIGURA CORPORATE BROCHURE

19 IMPLEMENTATION OUR INVESTMENT WITH BUCKEYE POSITIONS US TO TAKE ADVANTAGE OF CHANGING MARKET CONDITIONS IN US OIL AND PETROLEUM MARKETS PERFORMANCE CAPABILITIES In 2014, we sold a controlling stake of a Corpus Christi terminal complex to Buckeye Texas Partners (BTP). Buckeye Partners now owns 80 percent and we retain a 20 percent equity interest. The sale released USD860 million for reinvestment in other business activities. Strategically, we have retained exclusive commercial rights to use the terminal. BTP s vertically integrated system of midstream assets is strategically located on the Gulf Coast, in Corpus Christi, Texas, close to Eagle Ford production, one of the most prolific and economically advantageous shale plays in the US. The terminal has six million barrels of tankage for varied energy products, including crude oil, LPG, distillate and naphtha. There is pipeline connectivity to Eagle Ford and a deep-draft marine port that accommodates ocean-going vessels. It also includes one of the largest refrigerated LPG storage facilities in the US. In 2015, BTP commissioned a state-of-the-art condensate splitter. This 50,000 barrel per day processing facility is the second standalone splitter to be completed in the US and gives us the ability to refine crude and condensate locally and export the products globally. Energy markets are volatile and highly cyclical. To operate successfully across the cycle we need to maintain significant flexibility in our trading portfolio. This thinking underpinned Trafigura s initial investment in the Corpus Christi terminal. By retaining our rights to make use of this infrastructure we have maintained optionality to transport crude oil or products to the best available home. In addition, we secured a reliable partner and operator with strong safety credentials and extensive experience. Buckeye Partners LP has been a specialist in this sector for over a century. Our collaboration with Buckeye connects us with a company that operates well over 100 terminals in the US. Being aligned with such a business enhances our ability to move into new US markets quickly when opportunities arise. 6m Barrel storage capacity 50,000bpd Capacity condensate splitter Trafigura and Buckeye Partners LP s condensate splitter at Corpus Christi Facility, Texas, US. Main image: LPG vessel at Corpus Christi terminal, Texas, US. TRAFIGURA CORPORATE BROCHURE 17

20 PERFORMANCE CAPABILITIES METALS AND MINERALS TRADING Trafigura is one of the world s largest metals and minerals traders. We are building global connectivity between miners, smelters and refined metal fabricators. Global trading teams are based in Geneva, Montevideo, Singapore and Stamford and supported by offices in Johannesburg, Lima, Mexico City, Mumbai and Shanghai. 35% 59.0mmt Contribution to global revenue Total volume traded Metals and Minerals total volume traded (mmt) Metals Minerals Trafigura is committed to growing traded volumes so that we can gain from the significant economies of scale in the sector STRATEGIC PARTNERSHIPS AND LONG-TERM COMMITMENT Slower economic growth in China and its managed transition from export-led manufacturing towards domestic consumption have dramatically reshaped demand for international metals and minerals. In some markets primary producers have already scaled back production; in others price adjustments will still be needed. While we do have some assets with price exposures, these are minimal within the scope of our trading activities. This allows us to focus on our business partners and prioritise their interests. The strong headwinds in the metals complex also yield value-based investment opportunities for committed market participants. We are investing for the long term alongside our strategic financial partners. We differentiate ourselves through innovative solutions that utilise our various strengths all supported by a truly global presence. We are committed to growing traded volumes so that we can gain from the significant economies of scale in the sector. We offer financial assistance to producers through offtake agreements and develop downstream outlets that underpin volume growth. We enter strategic alliances and invest in infrastructure which streamlines and simplifies supply chains. CONCENTRATES Trafigura is the market leader in copper, lead and zinc concentrates trading, and a leading alumina and nickel trader. We source copper, lead and zinc from resource-rich areas in Africa, Australia, Canada, China, Europe, Indonesia, South America and the US. Our alumina comes from refineries in Australia, Brazil, China, Europe, India and Jamaica. Our Geneva-based trading teams are supported by regional and local offices around the world. We work closely with our partners to develop long-term relationships and to guarantee a consistent, high-quality service. On the demand side, we are creating a more coherent supply chain for our customers using geographical and quality arbitrages. Carefully selected investments in infrastructure are furthering volume growth. Our joint venture with Mubadala of Abu Dhabi has doubled capacity at the MATSA concentrates mining complex in Spain. The mine links to our state-of-the-art logistics and warehousing operation at Huelva and enhances our ability to serve European and Asian markets. In China, our strategic partnership with Jinchuan Group, gives us a minority stake in its Fangchenggang copper smelter and 18 TRAFIGURA CORPORATE BROCHURE

21 PERFORMANCE CAPABILITIES Aluminium in storage, Dubai, UAE. access to supply and offtake agreements covering both copper concentrates and refined metals. In lead and zinc concentrates, we are building on our market leadership by sticking to our established strategy of carefully selecting counterparties and maintaining mutually beneficial long-term relationships with suppliers and producers. Trafigura s recently established nickel concentrates trading team is ranked number two globally by volume. The desk is building long-term sustainable business by diversifying its geographical scope and customer base. Our alumina trading team maintains strong relationships with refineries and smelters, focusing principally on the increasingly important Chinese market. In volatile market conditions the Group s financial strength is an important lever as we develop sustainable relationships and establish strong supply chains. Through Impala Terminals, we are investing in first-class logistics and infrastructure to facilitate the safe, prompt passage of product to market. We combine our warehousing, blending and transport capabilities to aggregate base tonnage, align blends with specific import and customer requirements, and transport products to Western Europe, China, South East Asia, the US, Russia and Japan. REFINED METALS Trafigura is the market leader for the majority of the refined metals we trade. Our refined metals department trades the following core metals copper cathodes, copper blister and copper wire rods, aluminium, lead, zinc, nickel and precious metals. Our group is also very familiar and experienced with scrap, steel, tin, cobalt and specialty alloys or further downstream products of the core metals we trade. Our participation in these markets, however, is opportunistic and based principally on where we can add value to the value chain. We maintain a global presence. We have the knowledge on the ground to source metals swiftly and cost-effectively from around the world. Our focus is on building volume and meeting the varying needs of producers and end-users. In increasingly competitive market conditions, the ability to respond swiftly to shifting patterns of demand is a key point of differentiation. The refined metals and concentrates teams collaborate closely, using a range of tools to facilitate trading, including structured finance and tolling models. We maintain strong positions in China. Slowing demand for international commodities in this critical region is rebalancing markets and shifting trading priorities. Unlike many other international metal traders, we operate through a domestic trading subsidiary in the country. This is an effective platform for developing and maintaining close trading relationships. Our minority stake in the leading metals processing group, Nyrstar, supports a growing zinc and lead business in Europe. In India, our online refined metals procurement platform, Lykos, is changing the way small- and medium-sized manufacturers buy metal. We have formed a joint venture with India s largest copper cable manufacturer to build a copper wire rod manufacturing facility in Gujarat. IRON ORE We trade the whole spectrum of iron ore products and grades, including fine, low-grade and high-grade lump and pellet feed. Our origination teams operate in all the main exporting countries. We use our extensive international network to connect specific buyers with particular grades of stock. We deal with the major producers in key exporting countries such as Australia and Brazil, where we have good access to cost-competitive supplies, as well as with smaller mining concerns in India, South Africa, Mexico and Chile. Our sales teams in China have built up strong contacts with steel mills and local trading houses. We have expanded our value proposition to global steel producers by sourcing coking coal for them through the coal desk. Impala s terminal network also provides the business with an important competitive advantage. The 50-million tonne capacity Porto Sudeste facility south of Rio de Janeiro in Brazil, jointly controlled with Mubadala, provides a vital international gateway for miners in the country s iron ore quadrangle. COAL We have steadily built up traded volumes in recent years to become one of only two truly global market operators. The coal market is becoming more challenging. Several major economies are acting to reduce their reliance on coal in the energy mix and there is increasing competition from alternative energy sources. The regulatory environment is less favourable. We remain committed to the market. Our focus is on developing advantageous origination strategies, novel trading flows, and innovative delivery methods that will allow us to continue to build volumes and grow market share. We apply these approaches across the full range of thermal coal qualities, in all the major points of origin, and across all the major global sales markets. We also serve coking coal customers across the world and are growing our presence in coke and petcoke. Our global sales network, strength and reliability as a contractual counterparty continue to generate opportunities. Our positions evolve with changing patterns of trade and relative pricing. But our approach remains fundamentally unchanged: we employ our extensive physical trading positions to deliver valuable intermediation and logistics services to our clients. TRAFIGURA CORPORATE BROCHURE 19

22 JINCHUAN GROUP: STRATEGIC PARTNER STRATEGY JOINING FORCES TO CONSOLIDATE MARKET LEADERSHIP 20 TRAFIGURA CORPORATE BROCHURE

23 IMPLEMENTATION TRAFIGURA HAS EMBARKED ON A JOINT VENTURE WITH JINCHUAN GROUP WITH A 30 PERCENT SHAREHOLDING IN ONE OF ITS MAJOR CHINESE COPPER SMELTERS Trafigura and Jinchuan Group enjoy a healthy business relationship founded on trust and mutual respect. We have built closer ties over several years by striving for consistently excellent service. In 2015, we became a shareholder in a subsidiary of Jinchuan Group, acquiring a stake in one of China s largest standalone copper smelters, in Guangxi province. Our 30 percent shareholding is linked to a multi-year commercial agreement. Trafigura will deliver 30 percent of the new facility s concentrates and offtake 30 percent of its copper cathode production. The partnership brings together two companies with solid credentials and complementary strengths in the copper market. The new entity combines strong capabilities in metals production, raw materials sourcing, product marketing, financing, risk management and logistics. Jinchuan is China s third-largest copper producer. Its heartland is in the north-west of the country, from where it serves the domestic market. However, high transportation costs to and from that location, along with supply concerns about domestically produced raw materials, have constrained its business model. In 2013, it completed construction of a 400,000 tonnes per year smelting facility on China s south coast. The smelter is ideally located for cost-effective access to concentrates available from offshore suppliers. It is also perfectly positioned to sell its products to both the domestic and export markets. Trafigura s strong network of offshore concentrates suppliers will allow the joint venture to optimise its raw materials sourcing pool. Our chartering department will give it logistical economies of scale. The joint venture will also have access to our pool of international financing contacts helping bring down its overall cost of financing and diversify its financing channels. Our risk management capabilities will help it trade effectively in today s volatile markets. China currently accounts for 65 percent of Trafigura s copper concentrates sales, a proportion set to increase as growth in the global copper market is centralised in China. In securing such a renowned and strongly established long-term partner in China, Trafigura takes its metals business to the next level. With this transaction, we are the first international trading firm to make a major co-investment in a Chinese domestic smelting business. The partnership has raised our profile in the copper market and the two companies are actively discussing broader cooperation in the future. 400,000t Smelting capacity per annum PERFORMANCE CAPABILITIES Anode casting inside Jinchuan Group s copper smelting facility in Fangchenggang, China. Main image: Drying and blending of copper concentrates at Jinchuan Group s copper smelting facility in Fangchenggang, China. TRAFIGURA CORPORATE BROCHURE 21

24 LOGISTICS CAPABILITIES SHIPPING AND CHARTERING Trafigura Maritime Logistics arranges shipping and freight services to Trafigura s various commodity trading teams as well as to third-party clients. It operates as a service provider securing competitive and reliable freight for our in-house oil, metals and minerals traders. The Wet and Dry Freight desks also operate respectively as profit centres in their own right. All commercial shipping and chartering activities are managed out of Trafigura s key regional offices. All post-fixture operations, which include issuing voyage orders, completing stowage plans, negotiating with port agents and handling demurrage claims are managed centrally from our Athens office. 3,878 Shipping and Chartering fixtures (2015: 2,744) 2016 Wet and Dry Freight Activity Wet Dry 152mmt Tonnage shipped (1) 30mmt (2) 2015: 106mmt (1) 2015: 32mmt (3) 2,974 Number of fixtures 2015: 1, Average time-charter fleet (4) 2015: (1) Includes third-party tonnage and internal tonnage fixed internally and externally. (2) Includes 14mmt external customer tonnage. (3) Includes 21mmt external customer tonnage. (4) A vessel on hire for longer than three months : : 40 With more than 20 years experience as the exclusive carrier of Trafigura Group cargo, we understand the importance of a reliable freight partner when moving essential raw materials and commodities. A RELIABLE PARTNER FOR OCEAN FREIGHT TRANSPORT Trafigura Maritime Logistics is a provider of ocean freight services carrying multiple commodities on various ship types and sizes worldwide. We use both time and voyage charters to adapt to our customers needs and deliver cargo reliably and efficiently. With more than 20 years experience as the exclusive carrier of Trafigura Group cargo, we understand the importance of a reliable freight partner when moving essential raw materials and commodities. CAREFUL RISK MANAGEMENT Our freight trading teams lease time-chartered vessels and negotiate spot fixings to manage physical freight positions for Trafigura and its customers. Our global presence gives us strong insights into freight and commodity market trends. We manage risk using bunker swaps and Forward Freight Agreements (FFAs). COLLABORATING WITH TRADING TEAMS Our commodity traders rely on real-time freight pricing to structure transactions for their customers. Freight specialists are embedded in our trading teams. Our freight professionals are in constant dialogue with the various trading desks. Knowledge of traders requirements helps shape freight trading strategy and capacity planning. Trafigura s trading and freight activities also combine to extend Trafigura s service to customers. Our clients can elect to buy commodities and freight together, on Cost, Insurance and Freight (CIF) instead of Free On Board (FOB) terms. 22 TRAFIGURA CORPORATE BROCHURE

25 PERFORMANCE CAPABILITIES Dry bulk vessels at Impala Terminals and Mubadala s Porto Sudeste iron ore export facility in Brazil. WET AND GAS FREIGHT We charter a range of tanker tonnage to meet our physical delivery requirements for the worldwide transportation of oil and petroleum products. Our wet freight desks deal in all vessel sizes, from 2,000 to 300,000 deadweight tonnes (DWT) tankers. The vessels trade in every market segment, including crude, clean, dirty, LNG and LPG. We fix vessels on spot voyage, negotiate Contracts Of Affreightments (COAs) and run a portfolio of time-charter ships with period commitments spanning 30 days to three years. We work closely with Puma Energy, especially in Africa and Latin America, to manage delivery schedules and optimise fleet utilisation. The wet freight desk trades ships around the world fixing both external and internal cargoes, aiming always to maximise the inherent value of the trading platform. DRY FREIGHT Around 35 percent of Trafigura s annual shipped tonnage is in dry bulk commodities such as coal, iron ore and mineral concentrates. These cargoes are shipped using a combination of time charter and voyage charter. We control on average 40 ships on time charter and 50 ships on voyage charter at any one time. Internally, we act as a service centre to Trafigura s Metals and Minerals trading desks. Externally, we offer freight services to thirdparty customers including miners, steel mills and other trading houses. RESPONSIBLE SHIPPING As a trading company that regularly buys and sells cargo from and to oil majors, we make sure we meet their rigorous standards for shipping and freight. And we go further, with strict rules governing certification and vessel quality. A strict vessel screening policy makes safety top priority. We use both internal and external vessel vetting services to make sure that we only charter vessels that are technically suitable for the intended trade. We also ensure that all our vessels are classified by an accredited member of the International Association of Classification Societies (IACS). We require every vessel we charter to have earned at least two approvals from oil majors using the Oil Companies International Marine Forum (OCIMF) Ship Inspection Report (SIRE) Programme over the previous six-month period. For further information please visit TRAFIGURA CORPORATE BROCHURE 23

26 STRATEGIC PARTNERSHIP PUMA ENERGY Puma Energy is a global oil and petroleum products distribution company backed by strong infrastructure resources in 47 countries across five continents. The company manages over 20 million m 3 of fuel through its network of 100 terminals, 62 airports and more than 2,460 service stations. 7.9m m m m 3 + Storage capacity Throughput volumes in ,800+ 2,460+ Employees Retail sites FUELLING GROWTH Puma Energy is Trafigura s leading downstream trading partner for oil and petroleum products. It operates independently but gains synergies from our access to global fuel markets. Trafigura owns 49.6 percent of the company. Puma s unique business model focuses on international reach and downstream delivery. It integrates fuel supply structures and invests in infrastructure to maximise opportunities in high-growth markets. The company has expanded rapidly through a combination of organic growth and acquisition. It has repeatedly proven its ability to incorporate existing businesses into its portfolio, both in existing markets and new territories and regions. MEETING DIVERSE ENERGY NEEDS Puma markets its fuels through its extensive international retail network, strong business-to-business distribution channels and contracts with oil majors and leading oil traders. Multinational construction companies rely on Puma Energy fuels in numerous territories. It supplies mining businesses and has long-term contracts with large power generation companies. The aviation fuel business operates at 62 airports across the globe. It services major international carriers, such as Delta, Air France/KLM and Qatar Airways as well as the US Air Force. In lubricants, Puma is the world s largest distributor of Castrol products. It is also a leading integrated global bitumen distributor, with facilities in seven countries. Business lines and retail customers around the world trust Puma Energy to deliver high-quality fuels safely, reliably and at a fair price. For further information please visit Puma Energy service station, Brisbane, Australia. 24 TRAFIGURA CORPORATE BROCHURE

27 INVESTMENT CAPABILITIES DT GROUP PERFORMANCE CAPABILITIES DT Group is a joint venture between Trafigura and Cochan. It develops markets in sub-saharan Africa, with a particular focus on Angola. It works closely with international and local partners in the logistics, trading and natural resources sectors. With offices in Geneva, Luanda and Singapore, DT Group s interests span trading, shipping infrastructure, asset management and logistics. 151 $1.8bn People employed globally Total assets 7 $3.9bn Owned vessels Sales revenue INVESTING IN AFRICA S FUTURE DT Group leverages the market capabilities and financial strength of Trafigura together with the local knowledge and networks of Cochan. DT Group s flexible business model allows it to seed, develop and scale up a wide array of projects. It is helping to strengthen markets and promote economic diversification in Angola through its participation in transformative projects. DEVELOPING MARKETS IN ANGOLA Angola is a country with enormous potential. It has a growing population and abundant natural resources, but it still lacks infrastructure and is overly dependent on energy exports. The Government is investing in projects to diversify the economy beyond the oil sector. DT is involved in key sectors that support Angola s economic development. The Group maintains flexibility by bringing international specialists and local partners together for each of its projects. DT Group activities span three main areas. Its trading services leverage Trafigura s international presence to connect Angola with global markets. Its logistics businesses manage infrastructure and transportation. In the natural resource arena, it is developing agricultural assets. TRADING SERVICES DT Group trading entities, DTS Refining and DTS Commercial, trade gasoil, gasoline, jet, LPG, bunker fuel and bitumen with Sonangol, Angola s state-owned energy company. LOGISTICS DT Shipping s fleet of four bunkering vessels is chartered to Sonangol Distribuidora. Its vessels transport and supply gasoil to Angola s offshore exploration and production industry. DT Shipping also has three further tankers, chartered to Sonangol, to transport refined products from Sonangol s storage facilities in Luanda to help supply their maritime depots, as well as a number of support tugs to assist with firefighting and support duties. NATURAL RESOURCES DT Agro is investing in the agribusiness sector. Its 90-hectare site in Catumbela is radically improving fruit and vegetable production yields by combining technology, modern processes and vertical integration. BUILDING BETTER FUTURES The social dimension is a key element in DT Group s business model. It pursues initiatives that promote social inclusion, social entrepreneurship and self-reliance. It has set up and endowed the DT Foundation as an independent philanthropic organisation to deliver targeted programmes in support of these objectives. For further information please visit DT Group Ana Nzinga vessel off the coast of Angola. TRAFIGURA CORPORATE BROCHURE 25

28 LOGISTICS CAPABILITIES IMPA L A TERMINALS Impala Terminals is a multimodal logistics provider focused on export-driven emerging markets. Impala owns and operates ports and warehouses which, combined with its transport assets, provide end-to-end logistics solutions for dry and liquid bulk cargoes, general cargo and containers for Trafigura and third-party clients. $375.8m 18 Sales revenue Countries of operation 1, Employees Locations worldwide Impala s multimodal capabilities connect producers, end-users and international markets with a key focus of increasing efficiency. PROFESSIONAL OPERATIONS IN CHALLENGING ENVIRONMENTS Impala has a substantial presence in emerging markets and particular expertise in providing efficient logistic solutions in challenging environments and hard-to-reach locations. Impala s multimodal capabilities connect producers, end-users and international markets with a key focus of increasing efficiency. Its logistics solutions across Africa and in Brazil, Colombia, Peru and Spain integrate barge, truck, rail, storage and direct berth access. In Colombia, Impala has developed the first, fully multimodal logistics system linking major ports with the economic heartland and resource-rich regions. Impala places significant emphasis in conducting operations in a safe and environmentally responsible manner and with particular attention paid to working closely with local communities through engagement and a focus on recruiting local people wherever possible. DEVELOPING MULTIMODAL LOGISTICS Impala s USD1 billion investment in Colombia is transforming the Magdalena River into a multimodal logistics corridor, with over 130 double-hulled, dry and wet cargo barges to transport oil and other liquid bulk products, containers, coal and other commodities to and from the main Colombian ports on the Caribbean Sea. Our purpose-built river port at Barrancabermeja, Colombia, is a consolidation hub, connecting river, road and rail cargoes. On the Paraná River, a fast-growing barging operation links Trafigura s oil storage terminal at Campana, Argentina with upstream ports in Paraguay, Brazil and Bolivia. Impala s metal concentrates operation in Callao, Peru s leading commercial port, and in Manzanillo, Mexico provide safe, high-quality services through advanced processes based on over 25 years experience and a continuous focus on innovation. In Africa, Impala is improving service quality and reliability in some of the most challenging operating environments. It has upgraded facilities at Ndola, Zambia and refurbished its port terminal at Dar es Salaam, where multimodal connectivity links traffic by road, rail and sea. 26 TRAFIGURA CORPORATE BROCHURE

29 PERFORMANCE CAPABILITIES Impala s new terminal at the port of Huelva, Spain. INVESTING IN MULTIMODAL TERMINALS Impala jointly controls a 50-million tonne capacity iron ore export terminal at Porto Sudeste in Brazil with Mubadala Investment and Development Company. Porto Sudeste connects directly with Brazil s iron ore quadrangle in Minas Gerais state via the privately owned MRS railway. The port is a major export hub for the country s iron ore mining operations, with blending operations that enhance the marketability of their products globally. Impala s USD300 million investment to refurbish and expand a state-of-the-art bulk storage terminal on the Mississippi River has transformed Burnside into a strategic hub. It links the US coal producing heartland with international export markets. Its newest terminal, at Huelva port in Spain, offers 240,000 tonnes of warehouse static capacity and a 550-metre private berth. It is set to become a hub port in western Europe for metal concentrates and a strategic gateway for Spain s mining industry. continents, moves 75,000 containers annually both for Trafigura and, increasingly, for third-party customers. BUILDING CAPACITY Impala is investing internationally to build capacity and consolidate its global presence. Strategically located infrastructure and multimodal logistics are streamlining supply chains and facilitating global trade. At scale and across the world, Impala has the capabilities and the people to forge safe, reliable and cost-effective links between commodity producers and end-users. For further information please visit DELIVERING END-TO-END SERVICE Many of the world s top companies rely on Impala to move, store, blend and deliver their bulk commodities efficiently. For customers looking to deliver domestically, Impala offers storage, onward shipping and final-mile delivery. Value-added services include containerisation, blending, weighing, sampling and laboratory testing. The company s global container freight forwarding business further enhances reliability, cost-efficiency and access to its customers. Its freight forwarding operation, based in seven locations on four TRAFIGURA CORPORATE BROCHURE 27

30 COLOMBIA: MULTIMODAL LOGISTICS INVESTMENT STRATEGY SHAPING A MORE PROSPEROUS FUTURE FOR COLOMBIA 28 TRAFIGURA CORPORATE BROCHURE

31 IMPLEMENTATION IMPALA TERMINALS IS DEVELOPING A MULTIMODAL LOGISTICS SOLUTION THAT INTEGRATES INTERNATIONAL TRADE WITH COLOMBIA S INTERIOR PERFORMANCE CAPABILITIES Impala Terminals USD1 billion-plus investment in Colombia is one of the most ambitious projects ever undertaken by the Trafigura Group. We aim to develop a unified, multimodal logistics solution that integrates international trade with the domestic economy. Impala Terminals is transforming logistics provision on the River Magdalena. Our fleet of over 130 double-hulled barges connects ports on the Caribbean Sea with a purpose-built terminal 600 kilometres inland. At Barrancabermeja we have invested USD450 million in a state-ofthe-art fluvial terminal for hydrocarbons, general cargo and container cargo. This is a key interchange platform between road and river routes, and a gateway to international markets. Barrancabermeja commenced early operations in As the terminal steps up its activities it is delivering increasing socio-economic benefits. Industrialising the river has brought jobs and skills; many new businesses have sprung up. There are environmental gains too. Every six-barge convoy on the river means 250 fewer 1,200 kilometre journeys by truck. Across Colombia, we work continuously with the communities most affected by our activities to understand and incorporate their concerns. We buy the newest equipment, invest in high-quality training and commit to demanding HSEC and service standards, both for our own employees and our contractors. We are helping Colombia s economy reach the next level by transforming its logistics. $1bn Total investment 720,000bbls Oil storage capacity for crude and naphtha Container to barge loading at riverside port at Barrancabermeja, Colombia. Main image: Impala s recently completed riverside port at Barrancabermeja, Colombia. TRAFIGURA CORPORATE BROCHURE 29

32 PRODUCTION CAPABILITIES MINING GROUP The Mining Group manages mining operations, develops projects, conducts technical audits of existing and potential partner projects and provides advisory and support services to the rest of the company. 4.4mmt 0.7mmt Ore extracted at MATSA mine, Spain in 2016 Ore extracted at Catalina Huanca mine, Peru in 2016 Trafigura Mining Group grows existing operations organically, develops new projects where opportunities arise, and provides technical services to assist Trafigura Group and its partners. OPTIMISING GROWTH Trafigura Mining Group has a three-part strategy. It grows existing operations organically, develops new projects where opportunities arise, and provides technical services to assist Trafigura Group and its partners. Trafigura Mining Group s main operations are in Latin America, Europe and the Caribbean. The Group operates the Catalina Huanca mine in Peru and is active in Brazil and Cuba. Its flagship mining operation is owned in a joint venture with Abu Dhabi-based investment and development company Mubadala. Aguas Teñidas (MATSA), produces copper, zinc and lead concentrates along with some silver on the Iberian Pyrite Belt in Spain s southwestern region of Andalusia (see page 33 for more details). EXPANDING MATSA A EUR220 million, two-year expansion programme at MATSA has created one of Spain s largest mining operations. Major new deposits and a second treatment plant have doubled production capacity in recent years from 2.3 million to 4.4 million tonnes annually. A brand new mine, Magdalena, the first in Spain for decades came on-stream in The satellite Sotiel mine, located near MATSA, was reopened to feed the expanded treatment plant while production ramps-up at Magdalena. Impala s 135,000m 2 logistics terminal at the Port of Huelva provides additional storage and carries out blending to prepare shipments that meet customer requirements. Magdalena features exceptionally rich copper concentrate deposits. We are optimising productivity and implementing effective HSEC procedures to give MATSA one of the lowest break-even production costs in the global copper mining industry. A MORE PRODUCTIVE FUTURE FOR CATALINA HUANCA, PERU The Catalina Huanca mine in Peru produces copper and zinc concentrates with some gold and silver. This has always been a relatively expensive mine to operate primarily because of its remote location and limited mine-life. The Mining Group has increased efficiency and lowered production costs at Catalina Huanca. It has also consulted closely with the local community to win support for its strategy. These initiatives have enhanced the mine s economic viability and helped to extend its productive life. 30 TRAFIGURA CORPORATE BROCHURE

33 PERFORMANCE CAPABILITIES Compacted filtered tailings disposal at Catalina Huanca copper and zinc mine, Peru. Catalina Huanca is now in good shape to weather the continuing weakness in commodity prices and to benefit from the upturn in the zinc market. CONSOLIDATION IN BRAZIL S IRON QUADRANGLE In Brazil, the Mining Group along with Mubadala, has acquired the Tico-Tico and Ipe iron ore mining and processing assets from the creditors of MMX Sudeste. The assets represent an opportunity for Trafigura to expand in the ferrous mining business and will complement the Porto Sudeste port business also jointly controlled by Impala Terminals and Mubadala. The Mining Group is interested in exploring further opportunities and to play a role in the consolidation of the fragmented mining industry in Brazil s Belo Horizonte region. CUBAN COLLABORATION The Mining Group has consistently demonstrated its ability to deploy expertise and investment in challenging economic or political environments. Emincar, a joint venture with the Government of Cuba to develop the Castellanos zinc and lead mine is the most recent example. Expected to be operational by late-2017, this has the potential to develop into a significant part of our portfolio and an important export for the Cuban economy. The Mining Group will manage operations and oversee capital expenditure for the project. Trafigura s wholly owned investment subsidiary, Galena Asset Management, takes a long-term interest in commodity-type private equity opportunities. It has raised USD400 million through the Galena Private Equity Resources Fund to invest in the equity and debt of metals and mining companies. To date, half of the Fund has been allocated to assets in the Democratic Republic of the Congo and the US. It has recently recapitalised and restructured these investments in the light of low commodity prices. Galena continues to prospect for suitable resource investments offering strong underlying asset value and the opportunity to apply management and financial capabilities from the wider Trafigura Group. For further information please visit TECHNICAL SERVICES Our global technical team includes internationally renowned mining specialists and provides a range of specialist services. Geologists, mining engineers, metallurgists, project management experts and mining industry veterans travel the world, providing assistance where it is needed. The team has provided expertise to support a range of projects, including Jinchuan s new copper smelter in China and due-diligence work with iron ore producers in Brazil. For further information please visit TRAFIGURA CORPORATE BROCHURE 31

34 MUBADALA INVESTMENT AND DEVELOPMENT COMPANY: STRATEGIC PARTNER STRATEGY GROWING TR ADED VOLUMES IN CHALLENGING MARKET CONDITIONS 32 TRAFIGURA CORPORATE BROCHURE

35 IMPLEMENTATION TRAFIGURA AND MUBADALA ARE SHARING SKILLS AND CAPABILITIES TO ACQUIRE BASE METAL ASSETS AT ATTRACTIVE PRICES PERFORMANCE CAPABILITIES Structural changes in base metal markets are raising searching questions for metal and mineral producers. As Chinese demand growth has slowed, market participants are having to adjust. Persistently low prices will make some producers uneconomic. Many mining companies will scale back production. Some may be forced into asset disposals. There are likely to be attractive investment opportunities in base metal assets for those with the patience, confidence and resources to invest at this stage of the economic cycle. Trafigura is already one of the world s leading base metals trading firms. We are now working with Abu Dhabi-based investment and development company Mubadala to identify productive base metal assets in which each firm can invest. Mubadala has already acquired a 50 percent stake in our Minas de Aguas Teñidas (MATSA) mining operation, which owns mines in southern Spain producing copper, zinc and lead concentrates. Mubadala and Trafigura have also co-invested a 25.5 percent stake respectively in Mineração Morro do Ipê mining operation in the Serra Azul mining region of Minas Gerais, Brazil. The two companies are a natural fit. Mubadala has a global outlook and extensive resources. Its sound investment philosophy is based on fundamental value and long-term growth. Trafigura has a similar stance. Our industry knowledge and global network allow us to identify, develop and market productive base metal assets. Our Mining Group has the technical expertise to improve productivity. Our trading teams deal-sourcing capabilities provide a platform for negotiating offtake agreements in exchange for equity holdings. At present, Trafigura and Mubadala each hold non-controlling interests in Porto Sudeste, a state-of-the-art iron ore port in Rio de Janeiro state. The port connects miners in Brazil s iron ore quadrangle with international markets. Scale is a key factor for success in base metals markets. Working with Mubadala to identify opportunities promises significant future value creation and strengthens our ability to compete effectively by growing traded volumes. Impala Terminal s and Mubadala s Porto Sudeste iron ore export facility in Brazil. Main image: MATSA mine, Seville, Spain. TRAFIGURA CORPORATE BROCHURE 33

36 CORPORATE RESPONSIBILITY INVESTING IN RESPONSIBLE TR ADE Responsible trade drives economic progress and strengthens society. We are leveraging our experience and expertise to embed responsibility in our business and across the sector. ADVANCING TRADE RESPONSIBLY As a leading commodities trading company, we act as partner to nations, corporations and communities. We aim to redress complex supply and demand imbalances while earning the trust of those around us through responsible practices and behaviours. Our approach is shaped by the knowledge that, in the long term, our performance will be governed by the positive contribution we make for stakeholders and society at large. We aim to enhance our societal and environmental impacts through transparent and ethical behaviour. Global trade is a positive economic force, but it can also have disruptive effects. We address these complex issues head on and work hard to obviate or mitigate any potentially negative consequences. This is what we mean by advancing trade responsibly. OUR CORPORATE RESPONSIBILITY JOURNEY Our vision is to become acknowledged sector leaders in corporate responsibility. This is an important strategic commitment, endorsed by Trafigura s Board of Directors, shareholders and employees all closely involved in the running of our business. There are compelling commercial arguments for investing in responsible trade. We know that to operate effectively we have to earn and maintain a social licence to operate in the many countries and communities where we are active. It is basic good business: safer operations are not only better places to work, they are also more efficient. And there is the opportunity to gain competitive advantage by leading on the responsibility agenda. We enhance our access to capital and liquidity by demonstrating leadership and sustainability. Rightly, actual and potential partners deserve assurance that we operate to the highest standards. A COMPREHENSIVE FRAMEWORK FOR RESPONSIBILITY Our Corporate Responsibility Policy and Business Principles, along with our Code of Business Conduct, encapsulate our approach. These are published online. We encourage everyone with whom we do business to adopt a comparable stance, and require contractors and suppliers to apply complementary standards, principles and policies. We report annually on progress and performance in a standalone Responsibility Report. PROMOTING TRANSPARENCY Transparency is indispensable to our corporate responsibility journey. As a major facilitator of global trade, we believe that natural resource wealth should be an important engine for economic growth contributing to sustainable development and poverty reduction. Being open about how we manage natural resources gives the populations in countries where we operate the tools to hold governments and business to account. Through our work with the Extractive Industries Transparency Initiative (EITI) and the disclosures we have made of payments to governments for oil, we are helping to inform debate around the contribution our company, and potentially our sector, makes to national economies. ENGAGING WITH STAKEHOLDERS Our commitment to transparency goes beyond data disclosure. Honest, open engagement with stakeholders helps us identify and prioritise material issues. We are members of the UN Global Compact and World Business Council for Sustainable Development. We contribute towards industry forums in developing best practice and in presenting our industry, its processes and practices as well as its social and environmental impacts. For further information please visit Trucking from Impala Terminals warehouse in Ndola, Zambia. 34 TRAFIGURA CORPORATE BROCHURE

37 CORPORATE PHILANTHROPHY TRAFIGURA FOUNDATION CORPORATE RESPONSIBILITY The Trafigura Foundation provides long-term funding and expertise to improve socio-economic conditions for vulnerable communities around the world. KEY FIGURES for Programmes Countries of activity OUR MISSION The Trafigura Foundation was established in 2007 as an independent philanthropic organisation with a twofold mission: providing financial and technical support to long-term development programmes and promoting staff engagement in philanthropic activities. In terms of grant-making, over the past eight years we have invested more than USD48 million in nearly 100 different programmes on five continents. We act as a catalyst bringing people, expertise and financial assistance together in support of long-term philanthropic objectives. We partner with expert organisations on the ground to support self-sustaining activities that help people realise their full potential. OUR ROLE IN TRAFIGURA We fulfil the second part of our mission through our interaction with Trafigura. The Foundation acts as an embedded stakeholder in the business, offering perspectives and experiences that help our colleagues in Trafigura gain a more rounded appreciation of their community and social responsibilities. We maintain strong operational connections through our links around the world. There has always been a drive within the company to support communities and worthwhile causes. We work with Charity Committees in Trafigura s main offices to coordinate philanthropic programmes on behalf of their employees. They raise funds and act as conduits for staff members wanting to get more directly involved by contributing time or expertise. FOCUS AREAS The Trafigura Foundation ran 54 programmes across 33 countries in We provide our NGO partners with the financial means to carry out and strengthen their programmes and we don t just give money, we also coordinate strategic and managerial support. Our three main focus areas as a grant-maker are complementary and interdependent. We sponsor programmes to support sustainable development, education and integration, and health. WOMEN AS AGENTS FOR CHANGE Investing in women s education and employment is a common theme in many of our projects. According to a recent McKinsey Global Institute report, removing the gender gap could add as much as 26 percent to global GDP by Women bear the brunt of poor healthcare. Equality of girls education is both an intrinsic right and a critical lever for breaking the cycle of poverty. DISASTER AND EMERGENCY RELIEF We stand ready to lend assistance in crisis situations. The current plight of refugees seeking safe havens in Europe demands immediate action. As part of our response, we provide funding for the search-andrescue operations of the Migrant Offshore Aid Station (MOAS) fleet in the Mediterranean. LOOKING FORWARD: THE NEW STRATEGIC VISION Going forward for 2017, the Foundation has adopted a new strategy focusing its support on development programmes that are connected to the commodity trading and logistics industry s areas of activity. It also seeks to support initiatives that are more closely aligned with Trafigura as a business s entrepreneurial spirit, allocating resources to longer-term social entrepreneurship ventures that aim to help develop local economies, create sustainable employment as well as clean and safe logistics. To discover the many other programmes supported by the Trafigura Foundation, visit TRAFIGURA CORPORATE BROCHURE 35