Aurubis 16-11-2017 The Mental Shift 1 Aurubis Belgium 100 Years of Experience in Copper Production and Processing 2 History of Aurubis Belgium Semi-continuous casting Gradual expansion of Start of the industrial of cakes (100 ktpa), first Start-up of Contimelt Upcast capacity (30 ktpa). activities in Olen ( by John Contirod-Plant (100 ktpa) Anodecasting (450 ktpa) Demerger from Umicore Leemans) and Continuous casting of and creation of Cumerio. billets (200 ktpa) 1912 1927 1970-72 1975-76 1986 1996-98 2001-05 2008-09 2012-16 Consolidation of B&P production in Olen Expansion Upcast capacity (40kTpa) Cathodes production Second Contirod Plant New tankhouse (350 ktpa) Merger with NA and reaches 32 ktpa and start (250 ktpa). Refinery and start-up of the first creation of Aurubis. First of Wirebars and ingots reaches 330 ktpa Upcast (6 ktpa) extrusion and drawing line casting in Olen. The Aurubis Group celebrated its 150th birthday last year! 3 Aurubis Belgium: Company Profile » Demerged from Umicore in 2005 and creation of Cumerio. » Renamed in Aurubis Belgium in 2009 after the acquisition of Cumerio by NA. » Aurubis Belgium consist out of two sites: » Brussels: Commercial Services and Group Competence Centres » Olen: Operations, HR and Finance » Today Aurubis Belgium employs about 570 employees; and our workforce has grown with 4% per year in the last 5 years. » Aurubis Belgium is one of the top 30 Belgian companies ranked according to turnover and represents about 1% of Belgium’s GDP. We invest more than 10 million € per year in our Belgian facilities. » Aurubis Belgium has subsidiaries in Switzerland, Hong Kong, Finland, Russia, Sweden, Netherlands, Italy and USA. » We are operating in a wide “Open Innovation” Network, including many Top Universities. Our RDI-research work is being recognized by funding of the EC and the Flemish authorities. 4 Copper – the material of modern life High High electrical thermal High conductivity conductivity durability »Electric motors »Air conditioners »Sanitary installations »Cable and wires »Heat exchangers »Pipelines »Microchips Kitchen » »Roofs and »Transformers appliances facades End products End Brake pads » »Coins 5 Aurubis is a world leader in the copper value chain FY 2015/16 Position Custom concentrate processing 2,156,000 t No. 1 worldwide Copper scrap processing 253,000 t No. 1 worldwide Cathode production 1,084,000 t No. 4 worldwide Rod production 758,000 t No. 1 worldwide Shape production 172,000 t No. 1 in Europe Strip production 218,000 t No. 1 worldwide Sulfuric acid production 2,068,000 t Gold production 42 t Silver production 961 t 6 Aurubis Group production sites Production sites Copper Production: » Hamburg DE » Pirdop BG » Olen BE » Lünen DE Copper Processing: » Avellino IT » Mortara IT » Buffalo US » Olen BE » Dolný Kubín SK » Pori FI » Emmerich DE » Röthenbach DE » Fehrbellin DE » Smethwick GB » Hamburg DE » Stolberg DE » Zutphen NL » Aurubis has a service and sales network in more than 20 countries (Europe, Asia and North America) 7 Aurubis Belgium: an integrated copper producer Integrated copper processor Mines and Processors and Copper production Copper processing recycling markets end users Primary Copper Copper Products Iron silicate Flat rolled Sulphuric Acid Concentrates products Shapes Olen Recycling / Precious Metals Cathodes Olen Wire Rod Other metals Other semi-finished Recycling Precious Metals Materials products 8 Business model largely independent of copper price Aurubis business model Mines and Copper Copper secondary markets Production Processing Aurubis sales Sur- Costs Premium charge + Sur- Premium Profit charge Profit Aurubis Profit TC/RC Costs Copper Copper price price 9 Aurubis Belgium Flowsheet Typical data in kton 90 350 90 70 200 100 % Cu 50 200 2 10 50 400KT 400KT 230 100 % Cu In Out 18+12 100 % Cu 10 Aurubis Belgium Flowsheet Typical data in kton 90 350 90 70 200 100 % Cu 50 200 2 10 50 400KT AUR BE 400KT Logistics 230 100 % Cu In Out 18+12 100 % Cu 11 Major trends that are important for Aurubis’ business Implications Rising Copper Demand Global expansion of copper Global refined copper demand will increase, production capacity underway compensating for substitution effects Sustainability Multipolar Business World Demand for global delivery and Emerging countries (especially China) will international production platforms outpace Western countries Globalization More Complex Materials Requires extensive production Rising no. of elements and decreasing metal know-how, innovative technologies content in primary and secondary raw and... customized solutions for materials suppliers Recycling capacity and capability Increasing Recycling Efforts with high technical standards Volume and complexity of recycling materials neededLogistic to meet customer and will rise supplier requirements Growing Sustainability Ambitions solutions Sustainable activities balancing Shifting customer values towards economy, environment and people sustainability 12 Aurubis Belgium: Manpower 600 500 400 300 200 100 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Blue Collars 353 361 304 321 326 338 347 356 358 367 White Collars 121 126 107 113 116 119 133 132 144 151 Managers 24 24 35 33 32 31 39 42 45 52 13 20/11/2017 Aurubis Belgium: Our Journey Zero accidents Journey to Our Belgium: Aurubis 10,00 15,00 20,00 25,00 0,00 5,00 jan '05 LTIFR apr '05 jul '05 oct '05 jan '06 apr '06 jul '06 oct '06 jan '07 apr '07 jul '07 oct '07 jan '08 apr '08 jul '08 okt '08 jan '09 apr '09 jul '09 okt '09 jan '10 apr '10 jul '10 okt '10 jan '11 apr '11 jul '11 okt '11 jan '12 apr '12 jul '12 okt '12 jan '13 apr'13 juli'13 okt/13 jan/14 apr/14 jul/14 okt/14 jan/15 apr/15 jul/15 okt/15 jan/16 apr/16 jul/16 okt/16 jan/17 apr/17 14 Aurubis Belgium Logistics 15 Aurubis Belgium Logistics is a benchmark by location, infrastructure and organisation » Olen’s great location » Olen’s tri-modal infrastructure » 50 km from Antwerp Port » Access via road » 120 km from Rotterdam Port » Internal railway connection » 60 km from Genk Railway (Connection to line Antwerp – Terminal Aachen) » 5 km from main highways » Kanaal Bocholt-Herentals (Connection to Antwerp via Albertkanaal) » Olen’s organization » One department » Highly integrated Head of Logistics » Exchange of knowledge Planning Import Desk Product planning Internal Logistics & Export administration and selection 16 Each year we transport around 800.000mt of material 17 Our usage of Olens Tri-modality RAIL ROAD WATER 20% 75% 5% Anodes from Pirdop by rail Rod by truck all over Europe Anodes via barge from overseas Rod by train to Eastern Europe Blister from overseas via container 18 The past showed a modal shift by transportcompanies » Outsourcing the fleet » Modal shift » Lower personnel costs » Truck to train » Truck to shortsea » Intelligent systems » Squeezing the lemon » Information flows » Reports » Fast communication » Low empty kilometres 19 The current reality » Road congestions » Lack of (skilled) drivers » Less km/day covered » High personnel costs » Same volume to be covered » Restrictive laws by governments » Bigger distances to cover » Taxes » General move to eastern-Europe » Less operational time 20 The future needs a mental shift of the industry » “Driverless” transport » Material carrier as starting point » Raising tons or volume per driver » Investment in infrastructure » Giving up the link between driver and information » Payment terms and transfer of ownership » Following the path of the regulations » Logistics as enabler » Intelligent placed hubs, warehouses, big volumes, steady lanes,… » Collaboration instead of providing services 21 All Supply Chain Solutions brought forward must meet five key criteria RELIABLE FLEXIBLE SUSTAINABLE • Guaranteed for long time • Quick response to peak • Long term cooperations • Well-known and established volumes • Set-up of a direct link partners • Multi-functional • Using standards • All kinds of risk to be • Focus on big flows avoided ENVIRONMENTAL USER FRIENDLY FRIENDLY • Lean • Reduced impact on • Minimal impact on workload environment for all parties involved • Reduced impact on neighborhood “We do not simply transport from A to B but we take the whole supply chain in consideration for each decision. Therefore we strive for the multi-purpose use of each investment in order to guarantee the most cost-effective solution for the total material flow.“ Container Project An New Way of Handling Container Transport 23 Process concerned » The transport of all inbound and outbound containers between Aurubis Belgium and the Port of Antwerp + the handling of containers after arrvial with Aurubis Belgium Inland Truck Antwerp Barge (individual and Olen (grouped) within opening terminal hours) 24 Numbers of the current flows 50%-50% container with Rod +100% split inbound- in 4 years outbound 10.000 containers/year fluctuating volumes maximum average 108 39 containers/day containers/day 25 Problem statements 1. High impact on workload and number of FTE’s A. Individual processing B. Limited to openingshours 2. High impact on environment and neighbourhood A. CO² emission B. Impact on local roads 3. High total cost of transport A. Low volume and high labour costs per transport unit 4. Lack of capacity A. Congestion B. Transport legislation 26 Solutions for a shift away from road transport: Rail and Water 1. RAIL . Centralisation of containers in the port of Antwerp . 1 dedicated train to Olen with 54 containers per train . 1 roundtrip per day . Beneficial on workload and FTE’s . Very limited impact on