We have not deviated from Xstrata’s strategy to deliver industry-leading value for our shareholders by growing and diversifying our business and continuously improving the quality of our assets since Xstrata’s IPO some nine years ago.
The initial stages of Xstrata’s growth relied predominantly on a series of acquisitions to rapidly add scale and diversity to our portfolio. A second stage saw the judicious application of capital and operational excellence to turn around underperforming assets, together with an unrelenting focus on improving the quality and value of our operations that continues today. A third phase of Xstrata’s evolution is now coming to fruition as we transform our portfolio over the next three years and beyond through the development of a number of near-term organic growth options. This transformation is no less fundamental than a major acquisition, but its execution is within our control to a far greater extent than any on-market transaction in a consolidated industry.
In the nine short years since our IPO, Xstrata finds itself with a broader and deeper range of options at its disposal to deliver growth than ever before. Our internal portfolio of growth projects is extensive and industry-leading and the next generation of projects is already being advanced to sustain the momentum we have created well beyond the next three years. We have built a recognised capability for identifying and executing disciplined acquisitions and integrating acquired assets rapidly and successfully and we remain alive to the potential to opportunistically grow our business through value-adding acquisitions at the business unit and Group levels. Against the backdrop of a world-class risk management and governance framework, our devolved management culture supports an entrepreneurial approach at every level of the organisation. Importantly, our balance sheet provides the financial capability to finance our organic growth programme while allowing us the flexibility to assess a range of other external opportunities to create value.
As announced in March 2011, Willy Strothotte will retire as Chairman of Xstrata plc at the AGM in May. I would like to thank Willy for his support, expertise and guidance during Xstrata’s extraordinary evolution into a world class mining group. Willy has been an exemplary Chairman whose stewardship of the Board upheld the interests of all shareholders and who successfully navigated the complexities of the company’s relationship with its major shareholder with integrity and discretion.
Sir John Bond will be appointed Chairman subject to election at the AGM. On behalf of the entire Group, I welcome Sir John to Xstrata. Sir John has an exceptional record of shareholder value creation and a distinguished career including successfully chairing two major international companies. He will make a significant contribution to the Board and ongoing success of the company during an exciting stage of its evolution.
Xstrata today is one of the world’s largest diversified mining companies with a robust portfolio of long-life operations in the bottom half of their industry cost curves, diversified across numerous geographies and exposed to commodities that will continue to benefit from the ongoing urbanisation of China, India, Brazil and other emerging economies. The next stage of our transformation is now well underway, to exploit the various options embedded within our portfolio to create value through organic growth. I remain very confident in your company’s prospects now and into the future.
Mick Davis
Chief Executive
