Citigroup Global Markets Inc. | Subgroup Name

Citigroup Global Markets | Global Metals & Mining

Key Themes in Global Metals & Mining Sector

Russian & CIS Coal Summit 2013

William Husband, Head of Metals & Mining for Russia and CIS

May 2013

Current Metals and Mining Sector Themes

1 Meaningful Cost Escalation Impacting All Regions and Commodities

2 Uncertainty in Emerging Mining “Hot Zones”

3 Mixed Results from Growth via Acquisitions

4 Stocks Have Largely Underperformed

5 Shifting Priorities Have Led to Major Changes in Leadership

6 Long-Term Thesis Remains Intact: China and India Will Drive Demand

7 Capital Expenditures Will Be Robust, but Strategically Targeted

8 Outlook on Commodity Pricing Remains Constructive

1

Rising Cost Curves Impacting Performance 1

Commodity Spot Price ∆ Mining Cash Costs ∆

EBITDA Margin

Comparison

Coking Coal 388% 260% 2001

39%

2011

55%

Thermal Coal 250% 225% 2001

33%

2011

38%

Iron Ore 150% 178% 2001

65%

2011

62%

Copper 212% 250% 2001

53%

2011

47%

Gold 200% 253% 2001

51%

2011

43%

Ten Year Operating Performance (2001 – 2011)

Source: Bloomberg and FactSet market data Cost and EBITDA Margin ∆ calculated off index sales weighted average COGS and EBITDA, respectively.

Note: Coking Coal represents Pacific HCC benchmark price. Thermal Coal represents FOB Newcastle / Port Kembla. Iron Ore represents CIF Main China Port. Met Index Includes Alpha, Borneo, Mongolian Mining, New World Resources and

Walter. Thermal Index includes Adaro, Arch, China Coal, China Shenhua, Coal India and Peabody. Iron Ore Index includes Atlas Fortescue, Mount Gibson, Aquila, Gindalbie, Grange, Ferrexpo, MMX Mineracao, Kumba and Vale. Copper

Index includes Augusta Resource, Copper Mountain, Pacific BookerMinerals, Duluth Metals, Freeport Resources, FNX Mining, Inmet Mining, Ivanhoe Australia, Equinox Minerals, Kazakhmys, Antofagasta, Southern Copper, First Quantum

and Western Copper and Gold Corp. Gold Index includesAgnico-Eagle, AngloGold Ashanti, Barrick, Goldcorp, Gold Fields, Kinross, Newcrest, Newmont, Polyus, Randgold, Yamana

2

New Production Below

Highest 2012 Cost Quartile

Coking Coal(1) 160 mt

Thermal Coal(1) 375 mt

Iron Ore(2) 1,100 mt

Copper(3) 9,000 mlbs

Gold(4) 350 t

--

100c

200c

300c

400c

-- 3,750 7,500 11,250 15,000 18,750 22,500 26,250 30,000 33,750 37,500 41,250 45,000

$

$50

$100

$150

$200

-- 25 50 75 100 125 150 175 200 225 250 275 300 325 350 375 400 425

$

$25

$50

$75

$100

-- 75 150 225 300 375 450 525 600 675 750 825 900 975 1,050 1,125

$

$400

$800

$1,200

$1,600

-- 250 500 750 1,000 1,250 1,500 1,750 2,000 2,250

$

$25

$50

$75

$100

$125

-- 225 450 675 900 1,125 1,350 1,575 1,800 2,025 2,250 2,475 2,700 2,925 3,150 3,375

New Supply Focused on Lower Cash Cost Position 1

Commodity Cost Curves Over Time (2012 – 2020E)

Source: American Mineral Economics and Wood Mackenzie.

(1) Represents seaborne metallurgical “hard coking” and thermal “steam” coal C1 FOB cash cost in nominal $ / tonne; cost includes mining, preparatory, transport, port and overhead costs; production in million metric tonnes.

(2) Represents iron ore mine FOB cash cost in real 2013 $ / tonne; cost includes mining, processing, administrative & support and freight costs; production in million metric tonnes.

(3) Represents copper mine C1 FOB cash cost in nominal c / lb; cost includes c to c, freight, realization and net by-product credits; production in million lbs.

(4) Represents gold mine C1 FOB cash cost in nominal $ / oz; cost includes production, realization and net by-product credits; production in tonnes.

2020E Cost Curve 2012 Cost Curve

Cash C

ost

($/t)

Cumulative Production (MT) C

ash C

ost

($/t)

Cumulative Production (MT)

Cash C

ost

($/t)

Cumulative Iron Ore Production (MT)

Cu C

ash C

ost

(c/lb)

Cumulative Copper Production (Mlbs)

Au C

ash C

ost

($/o

z)

Cumulative Gold Production (t)

2012 Avg.

$69

2020 Avg.

$66

2012 Avg.

$34

2020 Avg.

$35

2012 Avg.

$48

2020 Avg.

$44

2012 Avg.

152c

2020 Avg.

156c

2012 Avg.

$589

2020 Avg.

$539

3

Brazil(1)

Coking Coal 1

Thermal Coal 28

Iron Ore 313 mt

Copper 329 kt

Gold 401 koz

Russia

Coking Coal 8 mt

Thermal Coal 6 mt

Iron Ore 20 mt

Copper 491kt

Gold 2,810 koz

Mongolia

Coking Coal 17 mt

Thermal Coal 13 mt

Iron Ore 3 mt

Copper 861 kt

Gold 1,102 koz

Western Africa(2)

Iron Ore 168 mt

Copper 263 kt

Gold 3,434 koz

Indonesia

Thermal Coal 27 mt

Iron Ore 2 mt

Copper 225 kt

Gold 877 koz

Expected Production Increase (2012-2020E)

Coking Coal Thermal Coal Iron Ore Copper Gold

2012-2020E Absolute Emerging Geography Production Increase

54 mt 92 mt 524 mt 2,816 kt 10,183 koz

2012-2020E Absolute Increase as % of 2020E Total Global Production

13% 9% 18% 11% 10%

Significant Resource Potential in Emerging Geographies 2

Source: American Mineral Economics.

(1) Includes Colombian met and thermal coal production.

(2) Includes Burkina Faso, Congo, Ghana, Guinea, Ivory Coast, Liberia, Mauritania, Nigeria, Senegal and Sierra Leone.

(3) Southern Africa includes Mozambique, Namibia, South Africa, Zambia and Zimbabwe.

Southern Africa(3)

Coking Coal 28 mt

Thermal Coal 17 mt

Iron Ore 19 mt

Copper 647 kt

Gold 1,529 koz

4

Development / Execution Risk Associated with Greenfield Projects

Lack of Transportation Infrastructure to Support Growth

Political and Economic Instability

Increased Resource “Nationalism”

Rising Royalty / Tax Requirements

Unstable Labor Situations

Rising Acquisition Valuation and Capital Investment Levels

Challenges in Emerging Mining Regions 2

5

2006 – 2011: “Golden Period” of M&A in Metals and Mining

M&A Deals in the Metals and Mining Sector Since 2002(1) (US$ in millions)

$11,074

$17,795$14,155

$46,321

$127,310$122,062

$95,927

$38,514

$132,119

$143,062

$128,145

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Source: SDC.

Note: Transaction value including net debt.

(1) Transactions in the mining sector above US$250 million.

3

11 22 17 33 41 83 83 52 120 114 91

Annual # of Deals

Financial

Recession

Glencore /

Xstrata Rio / Alcan

6

$5.5bn

$11.8bn

$37.6bn

$3.8bn

$17.3bn$5.2bn

$4.8bn

$3.9bn

$3.1bn

$2.8bn

$2.5bn

$3.0bn

$2.9bn

$2.5bn

$2.0bn

$3.8bn

$3.5bn

$4.7bn

$6.4bn

$17.0bn

$19.6bn

$48.0bn

$14.1bn

$28.5bn

AngloAmerican bhpbilliton RioTinto Vale Xstrata

Significant Consolidation Since Mid – 2000’s 3

De Beers

Minas

Rio

Petrohawk

Fayetteville

Alcan

Riversdale

Ivanhoe

BPI +

Fosfertil

Norsk

Hydro

BSG

Guinea

Falconbridge

Prodeco

Diversified Major Acquisitions (2006 – Current) (US$ in billions)

Source: Company filings and SDC.

Jubilee

Mines

M.-Rio/Amapá

7

$4.0bn$2.8bn $3.0bn $2.8bn $2.1bn

$2.2bn

$1.3bn

$10.5bn

$2.3bn

$1.1bn

$6.7bn

$8.6bn

$6.2bn

$4.1bn

$28.8bn

$5.1bn

$3.3bn

AngloAmerican bhpbilliton RioTinto Vale Xstrata

Sector Re-ratings Have Led to Large Asset Writedowns 3

Diversified Major Impairment Charges(1) (2006 – Current) (Cumulative charges as % of 2006 to current cumulative acquisition value, US$ in billions)

Minas

Rio

Fayette-

ville

Mozambique

Coal

Aluminium

Alcan

Onça

Puma

Nickel

Assets

Source: Company filings and SDC.

(1) Pre-tax charges shown.

36%

21%

60%

36% 12%

Alcan /

Aluminium

8

$118

$258

$180

$74

$172

$107

$61

$152

$86

$47

$69

$47

$75 $69

$35

118% (30%) 132% (38%) 149% (44%) 47% (32%) (8%) (50%)

2007 2011 2013 2007 2011 2013 2007 2011 2013 2007 2011 2013 2007 2011 2013

BHP-AU RIO-AU VALE5-BR XTA-GB AAL-GB

Mining Equity Values Have Seen Mixed Performance 4

Source: Company filings and FactSet Market Data as of April 3, 2013.

Note: 2007 and 2011 market capitalizations reflect first trading day of respective calendar years.

Diversified Miner Market Capitalization (US$ in billions, % ∆ in market capitalization from prior period)

9

Commodity Prices Have Been Primary Equity Value Driver 4

Source: Bloomberg and FactSet market data as of April 3, 2013.

Note: Diversified Miners Index represents the market value weighted average of Anglo American, BHP Billiton, Rio Tinto, Vale and Xstrata. Coking Coal Benchmark represents the

Australia – Japan Benchmark HCC contract price. Thermal Coal Spot price represents FOB Newcastle / Port Kembla. Iron Ore Spot represents Fines CFR Main China port.

2007 – 2009 Price Performance 2009 – 2011 Price Performance 2011 – Current Price Performance

163%

58%

39%

7%

(29%)

(54%)

CokingCoal

ThermalCoal

Gold

IronOre

DiversifiedMiners

Copper

236%

145%

123%

61%

50%

(15%)

Copper

DiversifiedMiners

IronOre

Gold

ThermalCoal

CokingCoal

9%

(20%)

(22%)

(24%)

(32%)

(34%)

Gold

ThermalCoal

IronOre

Copper

DiversifiedMiners

CokingCoal

10

Faltering Performance Has Led to Change in Leadership 5

Source: Company filings and press releases and FactSet market data.

Company Former CEO New CEO Stock Price ∆ Since 2011

Cynthia Carroll

(2007– 2012)

Mark Cutifani

(52%)

Marius Kloppers

(2007 – 2013)

Andrew Mackenzie

(27%)

Tom Albanese

(2006 – 2013)

Sam Walsh

(34%)

Roger Agnelli

(2001 – 2011)

Murilo Ferreira

(43%)

Mick Davis (2001 – Pending)

Ivan Glasenberg

(33%)

11

6.8% 6.7%

4.8%

3.2% 2.7% 2.7%

China India Brazil R.O.W. U.S. Russia

Positive Long-Term Macro Trends in China and India 6 Sustained GDP Growth (2012 – 2020 CAGR)

Accelerating Urbanization (China + India)

Electricity Demand Relies on Coal (coal fired % of total domestic electricity generation)

Increasing End Market Demand – World Auto Builds (2012-2028 world light vehicle assembly CAGR)

Source: American Mineral Economics, Wood Mackenzie and United Nations.

78% 74% 67%77%

22% 26% 33%23%

2012 2020 2012 2020

China India

Coal Non-Coal

1950 1960 1970 1980 1990 2000 2010 2020 2030

Rural Population Urban Population

41% 54%

2000 – 2030 CAGR

2.5%

11.8%

4.4% 4.2%3.5%

1.8%0.9%

India China Russia Brazil R.O.W. USA

12

Commodity Consumption Over Time(2012 - 2020)

Coking Coal(mm tonnes)

Thermal Coal(mm tonnes)

Iron ore(mm tonnes)

Copper(mm tonnes)

Gold(tonnes)

Global Coking Coal

Demand Growth

Global Thermal Coal

Demand Growth

Global Iron Ore

Demand Growth

Global Copper

Demand Growth

Global Gold

Demand Growth

+50% +29% +29% +36% +9%

180

213

54

112

32

75

266

400

2012 2020

508597

223

31289

150

820

1,058

2012 2020

688860

1,066

1,376

90

149

1,844

2,386

2012 2020

11

14

9

121

1

20

28

2012 2020

4,4494,841

4,449

4,841

2012 2020

Commodity Consumption Driven by Chinese & Indian Demand 6

Source: AME and Wood Mackenzie.

Note: Consumption data reflects seaborne market only.

China Rest of World India Total World (in bold)

13

$5.4 $5.6

'08-'12 Avg '13-'15 Avg

(US$ in billions) Capex Profile ∆ In Average Capex Profile ∆ Average EBITDA Profile

Company Historical Projected 2008-2012A 2013-2015E 2008-2012A 2013-2015E

$13.3

$15.9

'08-'12 Avg '13-'15 Avg

$9.7$12.1

'08-'12 Avg '13-'15 Avg

$6.5 $6.4

'08-'12 Avg '13-'15 Avg

$13.5

$15.8

'08-'12 Avg '13-'15 Avg

$28.8

$33.9

'08-'12 Avg '13-'15 Avg

$20.9

$23.8

'08-'12 Avg '13-'15 Avg

$21.9

$24.7

'08-'12 Avg '13-'15 Avg

$9.3 $10.8

'08-'12 Avg '13-'15 Avg

$10.5 $10.5

'08-'12 Avg '13-'15 Avg

Need for Capital Investment to Sustain Operating Platforms 7

$9.3 $11.1 $11.6$15.8

$19.8

'08 '09 '10 '11 '12

$18.5$14.8 $14.3

'13E '14E '15E

$10.2$8.1

$13.4$16.9 $17.7

'08 '09 '10 '11 '12

$16.4 $16.3 $15.0

'13E '14E '15E

$8.6$5.4 $4.6

$12.3

$17.4

'08 '09 '10 '11 '12

$13.3 $11.8 $11.2

'13E '14E '15E

$4.8 $3.6$5.8

$8.1$10.0

'08 '09 '10 '11 '12

$8.0$6.2 $4.9

'13E '14E '15E

$5.1 $4.6 $5.3$6.2 $6.0

'08 '09 '10 '11 '12

$6.2 $6.1$4.5

'13E '14E '15E

3%

17%

25%

20%

(1.7%)

18%

13%

14%

16%

Source: Company filings and press releases and Wall Street consensus estimates.

14

Shift in Focus to Low Risk, Higher Return Investments 7

Source: Company filings and Wall Street research.

(1) Industry composition made up of capital expenditure projections represent broader metals and mining industry.

Total Capex Including Net M&A for Mining Majors (FY2004 – FY2012, US$ in billions)

Industry Projections for Composition for Capex(1) (US$ in billions)

$85$82

$76

2013 2014 2015

Brownfield Maintenance Greenfield

19%16% 30%

56%

39%

40%

25%

45%

30%

$109 $108

$67

BHPB Rio Anglo

Sustaining Capex Growth Capex Net M&A

17% 18% 18%

31% 33% 36%

52% 49% 46%

15

Historical Commodity Price Volatility Flattening Out 8

Commodity Historical Forecast(1) Key Drivers

Coking Coal (US$ / tonne)

Hard coking coal volatility continues

Forecast well above past levels

Trends: China , US / EUR

Thermal Coal (US$ / tonne)

De-stocking / gas impacting near-term

Coal remains primary global fuel

Iron Ore (US$ / tonne)

Volatility created scare amongst producers

Significant new supply deferred

Long-term supply will impact pricing

Copper (US$ / lb)

High cost new supply deferred / cancelled

Input costs / China demand are concerns

Gold (US$ / ozt)

Focus on interest rates, FX, inflation

New supply replacing aging mines

Unique “outside” support buoys market

Commodity Price Outlook

Source: Bloomberg, FactSet, Wall Street research and Wood Mackenzie.

Note: “LT” represents consensus long-term price forecast in real 2013 US$. Coking coal represents Pacific HCC benchmark contract. Thermal Coal represents FOB Newcastle / Port Kembla.

Historical Iron Ore represents 63.5% CIF Main China Port; forecast pricing may differ.

(1) Represents median Wall Street consensus forecast in real 2013 US$.

$0$50

$100$150$200$250

2005 2006 2007 2009 2010 2011 2013

$0

$50

$100

$150

$200

2005 2006 2007 2009 2010 2011 2013

$50

$150

$250

$350

2005 2006 2007 2009 2010 2011 2013

$102 $106 $107 $109 $105

2013E 2014E 2015E 2016E LT

$198 $202 $197 $197 $200

2013E 2014E 2015E 2016E LT

$120 $122

$122 $115 $81

2013E 2014E 2015E 2016E LT

$0

$500

$1,000

$1,500

$2,000

2005 2006 2007 2009 2010 2011 2013

$2,000

$4,000

$6,000

$8,000

$10,000

2005 2006 2007 2009 2010 2011 2013

$7,840 $7,239 $6,930 $6,613 $5,842

2013E 2014E 2015E 2016E LT

$1,780 $1,630

$1,468 $1,359 $1,075

2013E 2014E 2015E 2016E LT

16

Significant Cash Flow Potential Based on Current Outlook 8

Commodity Industry Commentary

Coking Coal

“Coking coal is going to be a very strong one in the future as China and

India’s requirement for imported coking coal increases.”

- Ian Kilgour (SVP – Coal)

Thermal Coal

“The key for urbanizing countries in Asia, thermal coal remains the

lowest cost fuel source for power generation.”

- Mick Davis (CEO)

Iron Ore

“High demand growth rates in China associated with that steel intensive

phase of development at times have overwhelmed the capacity of the

low cost producers to expand.”

- Marius Kloppers (Former CEO)

Copper

“Copper remains a highly attractive business, given the on-go supplying

constraints that persist in this sector. As production has struggled to

grow due to decline in grades and production disruptions.”

- Tom Albanese (Former CEO)

Gold

“We think the gold price has a long way to run. It is the one currency

whose supply is limited and can’t be created by electronic printing

presses.”

- Russel Ball (CFO)

Source: Company transcripts.

17

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