Employees

Xstrata’s long-term interests rely on the Company’s ability to attract and retain the best people, at every level, with the appropriate skills. We provide industry-leading career development opportunities, well structured employment contracts and fair and competitive remuneration. The majority of our workforce is engaged on collective employment agreements negotiated with unions and other representative organisations. We believe that all of the Group’s operations have, in general, good relations with our employees and the unions that represent them.

As set out in Xstrata’s Sustainable Development Policy (‘SD policy’), we maintain a safe workplace that is based on mutual respect, fairness and integrity. We support our employees’ right to freedom of association and collective bargaining, provide fair remuneration and employ and promote on the basis of merit, upholding legislation in certain regions that aim to benefit historically disadvantaged groups. We consult, communicate and provide appropriate support to employees during significant organisational changes including closures, acquisitions, mergers and divestitures.

In 2008, Xstrata created a total of 3,409 new positions (2007: 3,045). A total of 311 permanent employees were made redundant and 1,721 employees’ contracts were compulsorily terminated (excluding contractors) in the period to 31 December 2008. The average number of employees in 2008 was 40,049 (2007: 39,008) and the average number of contractors was 28,291 (2007: 22,504).

Turnover increased in 2008 compared to the previous year, due to competition for skilled labour in the earlier part of the year and increased redundancies in the latter part of the year, reflecting economic conditions in each case. Given the low commodity price environment, competition for skilled labour is reducing and voluntary turnover is expected to decline in 2009. However, in response to the rapid deterioration of economic conditions in late 2008, a number of operations are suspending, scaling back or closing activities to conserve cash and ensure our businesses remain robust in challenging markets. These actions often require headcount to be reduced through redundancies, voluntary retirement or through not filling vacant positions.

In the six months from September, overall headcount has been reduced by approximately 5,500 positions across the Group, including contractors. Employee assistance programmes, retraining and other community or financial assistance have been provided as appropriate for affected employees.

A wide range of training, leadership and skills development programmes are in place at a Group and commodity business level for employees and management. We value and promote diversity in management and the wider workforce. Xstrata’s SD policy states that we do not tolerate any form of workplace discrimination, bullying, harassment or physical assault and we provide a fair and non-discriminatory employee grievance system. We do not set formal diversity targets, with the exception of South Africa, where our businesses are complying with requirements under the Mining Charter.

Key performance indicators comprising employee turnover, diversity, training hours and expenditure are provided on Non financial KPIs, with a description of performance against these indicators on Performance against KPIs.