Market Analysis

Jan Johansson, President and CEO

Mining Smelting Copper and Refining

Boliden Capital Markets Day5 April 2005 Strong global financial recovery Growth 2004 Industrial Production

• Global 20 - Cu consumption 7 % - Cu production 6 % 15 - Zn consumption 7 % - Zn production 2 % 10 • USA - Cu consumption 8 % - Zn consumption 8 % 5 • Europe 0 - Cu consumption 2 % - Zn consumption 3 % -5 • China 03-Q1 Q2 Q3 Q4 04-Q1 Q2 Q3 Q4 - Cu consumption 14 % USA W Europa Japan China - Zn consumption 14 % • Outlook for 2005 – good

Boliden Capital Markets Day 5 April 2005 Zinc: Price and LME stocks

USc/lb tonnes

70 850000

65 810000

60 770000

55 730000

50 690000

45 650000

40 610000

35 570000

30 530000

3 3 4 4 -03 -0 -0 -03 04 -0 -0 -04 05 n pr n- pr n- ja a jul okt ja a jul okt ja

Boliden Capital Markets Day 5 April 2005 Copper: Price and LME stocks

USc/lb tonnes

160 1000000

150 900000

140 800000

130 700000

120 600000

110 500000

100 400000

90 300000

80 200000

70 100000

60 0

3 3 4 4 4 03 -03 -0 -0 -0 -0 -04 05 n- r r ul-0 n- ja ap jul okt jan ap j okt ja

Boliden Capital Markets Day 5 April 2005 Business cycle of metals

Availability of raw materials +

low metal high metal prices prices high TC/RC high TC/RC Availability + - of metal low metal high metal prices prices low TC/RC low TC/RC -

Boliden Capital Markets Day 5 April 2005

c in China and the rest of Asia together represent 47% of global zinc Z metal production and 48% of consumption and this region will dominate the zinc market in the coming years.

W. EUROPE CHINA

NAFTA E. EUROPE/ ' CIS 2264 2345 2380 1706 674 363 584 2186 930 2519 1909 ASIA

1790

1440 AFRICA ' 2574 1054 403 185 245 AUSTRALASIA (‘000 tonnes preliminary 2004) L. AMERICA

Mine Production 9649 1559 Metal Production 10181 1325 270 385 Metal Consumption 10387 465 505 Source: Brook Hunt

Boliden Capital Markets Day 5 April 2005 r e p China and the rest of Asia together represent 32% of global copper metal p o C production but 48% of consumption. It is forecast that this region will increase its imports of copper metal during the planning period, thus creating an imbalance in the market

W. EUROPE CHINA

NAFTA E. EUROPE/ 1815

' ' CIS 3796 3207 1076 3066 209 1999 612 2111 ' 1995 2035 ASIA

AFRICA 3153 2281 4370

206 ' 638 L. AMERICA 509 1131

(‘000 tonnes preliminary 2004) AUSTRALASIA

' Mine Production 14513 Metal Production 15785 1071 255 Metal Consumption 16486 495 6707 531 Source: Brook Hunt 3748

Boliden Capital Markets Day 5 April 2005 IP year over year indicates slowdown 2005 –2006, strongly influenced by US cyclic slow down.

IP % change over previous year Global IP

20 USA China Japan W. Europé 15 India Global 23% US A 33% 10 W Europé Japan 5 4% Ch ina 0 Other s 13% 1998 19999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 -5 Brook Hunt 27% -10

Flags of warning • Inflation and oil price development • US budget & foreign trade deficits • Geopolitical constraints • Christian-Islamic conflict • China soft landing scenario • Increasing threats & corruption in Russia

Boliden Capital Markets Day 5 April 2005 Boliden’s major copper customers are found in the wire rod & r c e n p i p sector, where a premium is paid for quality. Z o C The major zinc customers are in the galvanizing sector.

Copper consumption by first use Copper consumption by end use (2004) Western World (2004) Consumer products Misc. 10% 8% Copper Transport alloys Construction/ 10% 17% Infrastructure 40% Wire rod Industrial 54% equipment Tube 15% 10% Sheet/ Strip 8% Electronic/ Rods, bars Electric sections 25% 2%

Zinc consumption by first use Zinc consumption by end use (2004) Western World (2004) Capital goods Oxides and Misc. 10% other 4% chemicals 8% Transport Die-casting 23% alloys Construction 48% 13% Galvanising 51%

Brass Industrial 17% equipment Infrastructure 10% 9% Rolled and extruded products Source: Brook Hunt 7%

Boliden Capital Markets Day 5 April 2005 & r 14000 14000 c e n p Metal consumption is i p Z o 12000 12000 C expected to grow by about 3% per annum in 10000 10000 8000 8000 the coming ten years. es n n Some 40% of this o 6000 6000 k t increased consumption Zinc production 4000 4000 is expected to take Zinc cons um ption place in China 2000 2000 0 0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Global Zinc consumption trends: 25000 25000 Growth p.a. 1960 - 1973 5.1% 20000 20000 Growth p.a. 1974 - 1990 1% Growth p.a. 1991 - 2003 3.2% Growth p.a. 2004 - 2015 2.8% 15000 15000 s

nne Global Copper consumption trends: o t k 10000 10000 SX/EW production Growth p.a. 1960 - 1969 4.6% Refinery production Growth p.a. 1970 - 1979 3% 5000 Copper consumption 5000 Growth p.a. 1980 - 1989 1.6% Growth p.a. 1990 - 1999 2.8% Growth p.a. 2000 - 2015 3.2% 0 0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Source: Brook Hunt

Boliden Capital Markets Day 5 April 2005

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n o i pt um ons c % 0 0 2 8 6 4 2 0 8 0 0 h t 2 ow 2009 r 07 G 08 20 al 20 ob l 06 G 007 20 2 nc s i 05 ty, mainly in the form of t u i l 2006 c 20 n p i f r o i t 05 De Su p ned Z 20 i 004 f 2 um e ns 004 3 R o 2 00 C 3 create a relatively balanced zinc metal 2 200 2 obal l 00 G 2 002 on i 2 t 1 200 oduc 2001 r P 00 00 20 20 0 0 0 0 0 0 0

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h t ow r g ion pt m u ons c % 9 10 8 6 4 2 0 -2 -4 200 009 08 2 h t 20 ow 008 2 Gr 007 . a forecasted copper surplus 2 ons 007 6 2 C 00 2 006 5 2 n o i t 200 p 005 2 um 04 s t u i 4 l 20 0 c ons p i 0 r f C 2 Su De 003 2 003 2 2 on i 0 t 0 2 002 duc 2 o r 01 P 1 20 200 00 0 20 200 0 0 0 0 0 0 0 0 0 0 0 00 0 0 50 0 5 -50

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p Sou o C Boliden Capital 5 April 2005 Markets Day Western Europe copper and zinc balance

W. Europe copper balance (kt Cu) W. Europe zinc balance (kt Zn)

Consumption Consumption

Refinery production Smelter production (incl. secondary) (incl. secondary)

Mine production Mine production

0 1000 2000 3000 4000 0 500 1000 1500 2000 2500

Copper balance and market in Western Zinc balance and market in Western Europe Europe ƒ Depending of import of zinc concentrate. ƒ Depending of import of copper concentrate and copper cathodes. ƒ Consumption and production of zinc, balanced by import from E. Europe. ƒ Consumption of copper is far beyond production capability. ƒ Announced closures 2005

Source: Brook Hunt

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n i Z Boliden Capital 5 April 2005 Markets Day Codelco is unique – built on assets nationalized in the 1960’s and organic growth r e p since then. Freeport was built on a single mine. The others have achieved rapid p o C growth through mergers and acquisitions, although Phelps Dodge has had some exploration success.

COPPER - MERGERS AND ACQUISITIONS SEVEN LARGEST COPPER MINING COMPANIES 1982 1990 1995 2000 2004 Prod. Share KT % Codelco Codelco Codelco Codelco Codelco 1817 12,4

Phelps Dodge Phelps Dodge Phelps Dodge Phelps Dodge Phelps Dodge 1077 10,4

Cyprus Minerals Cyprus Minerals Cyprus Amax Amax Amax

BHP BHP BHP BHP

Escondida 57.5% Magma Copper BHP/Billiton 1054 7,2

Billiton Billiton Billiton Billiton

Rio Algom Rio Algom Rio Algom Rio Algom

Antamina 50%

Anglo American Anglo American Anglo American Anglo American Anglo American 724 5

Mantos Blancos HBMS (Flin Flon) Collahuasi 44% Disputada

Rio Tinto Rio Tinto Rio Tinto Rio Tinto 682 4,7

BP Minerals Somincor 49% North 18% Escondida 30% Freeport

Mexicana de Cobre Grupo Mexico Grupo Mexico Grupo Mexico Grupo Mexico 678 4,6

Asarco Asarco Asarco Asarco

Freeport Freeport Freeport Freeport Freeport 468 3,2

Boliden Capital Markets Day 5 April 2005

c in Z Large-scale consolidation of zinc primary producers in Western Europe...

1980 ’000 tZn 1990 ’000 tZn 2000 ’000 tZn 2004 ’000 tZn

Kokkola 160 Kokkola 140 Kokkola 225 Boliden 440 Norzink 95 Norzink 130 Norzink 140

Overpelt 100 Overpelt 100 Balen 180 Balen 180 Balen 240 Umicore 500 Auby 100 Auby 180 Auby 230 Viviez 100

San Juan de Nieva 160 San Juan de Nieva 210 San Juan de Nieva 325 Nordenham 100 Nordenham 130 Nordenham 140 Xtrata 630 Harlingerode 30 Noyelles Godault 85 Noyelles Godault 85 Noyelles Godault 85 Glencore Group Crotone 100 Crotone 100 Porto Vesme (ISP) 70 Porto Vesme (el;ISP) 150 Porto Vesme (el;ISP) 190 Glencore 180

Datteln 145 Datteln 120 Datteln 110 Metallgesellschaft 130

Duisburg 70 Duisburg 90 Duisburg 90 Sudamin 80

Avonmouth 90 Avonmouth 100 Avonmouth 100

Budel 160 Budel 210 Budel 210 Zinifex (a.k.a. 220

Cartagena 50 Cartagena 50 Cartagena 50 Española del Zinc 50 Total 2,230 Gailitz-Arnoldstein 30 Gailitz-Arnoldstein 30 Total 1,825 Total 2,005 Total 2,135

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