Our people

Trainees at a secretarial college near Rustenburg, sponsored by Xstrata Alloys

Xstrata employs approximately 24,000 people globally, including contractors. A breakdown of employees by commodity business and by geographic region is shown in the charts below.

Human resources functions within each Commodity Business are headed by a General Manager Human Resources who reports to the Commodity Business CEO. We offer diverse employment opportunities for a cross-section of skill sets and educational requirements - from operators to supervisors and managers.

All our employees are free to join a union of their choice, but participation across the Group varies.

Recruitment and training

Xstrata's Employment Policy respects the labour standards laid down by the International Labour Organization's Fundamental Conventions, and these commitments are found in our Business Principles.

We apply equal opportunity recruitment and selection practices. Behaviour-based, non-discriminatory interview and selection techniques aim to attract the best person for the job.

Most of our operations have developed skills and workforce plans which compare current employees and skills with expected future requirements. For example, Xstrata Copper's operations collect monthly employment statistics including forward projections (by skills group) for future requirements. They also analyse specific critical areas (such as skilled trades) within their business plans and address them through increased apprentice numbers, school-based traineeship programmes, scholarships and partnerships with educational facilities such as the Mount Isa Mining School of Excellence. In 2004, we created 643 new jobs across the Group, with more than half of these within Xstrata Copper as part of the transformation programme at Mount Isa.

Under the South African Skills Development Act, all Xstrata operations are required to have a workplace skills plan in place. Because more than half our employees are based in South Africa, we have a strong focus on building the skills of these employees, particularly HDSAs.

Training and development needs vary from business to business. In 2004, the average number of training days per employee across the Group was 14.7.

Workforce diversity

Across the Group, we seek to increase the number of women in our workforce through recruitment initiatives and we are working to improve the provision of flexible work arrangements, such as flexitime and childcare facilities. In 2004, women accounted for 5.5% of Xstrata's workforce including 46 female managers. A member of our Executive Committee is responsible for monitoring our equal opportunity performance.

Communication and grievance procedures

All employees receive our Statement of Business Principles in their first language and these principles form an integral part of our induction process for new employees and contractors. Compliance with the Business Principles is a fundamental part of any assessment of our employees' performance and non-compliance with any of our Business Principles automatically results in disciplinary proceedings.

While we do not conduct formal employee satisfaction surveys, we have a number of systems and forums in place that encourage employee feedback. Daily, weekly, monthly and quarterly management briefings occur at all levels of the business and are the main mechanisms by which employee feedback is elicited. We also use notice boards, newsletters, video messages and email notices to keep our employees and contractors up to date with important initiatives across the Group.

We encourage feedback from our employees through a range of processes, including the performance appraisal system, monthly meetings between operational managers and employee representatives, and Xstrata Copper's Fair Treatment System, which enables employees to air individual grievances.

In addition, as described in the chapter entitled How We Work, we have established an 'ethics line', which provides employees and contractors with a toll-free, confidential telephone line to report any suspected breach of our Business Principles, including

incidences of fraud, bribery or corruption, criminal activities, incorrect health and safety or environmental practices or any unethical behaviour in the workplace. The call line is independently run by KPMG and any concerns are relayed in confidence and on an anonymous basis to the Head of Internal Audit, who reports directly to the Board Audit Committee, for appropriate action. This telephone service supplements the existing ethics email address - ethics@xstrata.com - emails to this address are read only by the Head of Internal Audit and are confidential. In 2004, nine incidents reported through the whistleblowing line and ethics email led to investigations by Xstrata's internal audit department and KPMG.

Suppliers

We have a purchasing and supply manual that describes our investment criteria, procurement requirements (suppliers, contractors, tendering) and levels of financial authority. All service and product suppliers are evaluated in terms of set criteria. Contracts are entered into with the successful supplier and performance is monitored in terms of the service level agreement or contractual obligations. In South Africa, we give preference to BEE suppliers and we are committed to procuring from BEE suppliers. A manager has been appointed to ensure we comply with our BEE procurement strategy. Our purchasing and supply activities are independently audited by KPMG.