Aurubis Smelter Partner for Copper Mines Bastian Bergholz Director Intermediate Products Business Unit Primary Copper Company profile » Founded in 1866 as Norddeutsche Affinerie AG in Hamburg » IPO in 1998 » Renamed in 2009 after the acquisition of Cumerio Aurum + Rubrum = the red gold = Aurubis » Production sites in European countries and North America with about 6,400 employees » Second largest producer of copper cathodes in the world with an annual output of about 1.1 million t of copper cathodes » No. 1 copper recycler in the world » Largest rod producer in the world » One of the world’s leading copper foil and flat rolled product manufacturers » Production capacities for approx. 1.3 million t of different copper products » Global leader in environmental protection 2 Aurubis, an integrated copper producer Mines and Processors and Copper production Copper processing recycling markets end users BU Primary Copper BU Copper Products Iron silicate Flat rolled SULFURIC products CONCENTRATES ACID SHAPES BU Recycling / Precious Metals CATHODES WIRE ROD Other metals Other semi-finished RECYCLING PRECIOUS MATERIALS products METALS 3 Aurubis is the largest buyer on the free concentrate market International custom smelter output (2013; in 1,000 t of Cu content; primary*) AurubisAurubis 570 JX Holdings (JP) 460 Mitsubishi Materials (JP) 430 Glencore Xstrata (CH) 420 Sumitomo Metal Mining (JP) 420 Jinchuan (CN) 370 Tongling (CN) 360 Jiangxi Copper Co. (CN) 340 Birla Copper (IN) 240 Sterlite Industries (IN) 230 * Copper production from concentrates from non-controlled mines Source: Wood Mackenzie 12/2013, Aurubis 4 Copper is part of daily life Global copper demand Copper content in various applications by industries 13% 9% 13% 30% 35% ~25 kg up to ~115 kg ~200 kg Industrial machines and plants Electrical and electronic applications Construction industry Traffic and transport Consumer goods ~4,000 kg ~7,300 kg up to ~30 t Source: Wood Macquenzie, Sep 2013 3/3/2014 5 New technologies result in more copper applications Cable Alternative energy Hybrid and electric cars » Expansion of » Expansion of » Increased popularity of electricity grid decentralised energy hybrid cars worldwide continues supply proceeds » Electric drive is the » Underground cable » High copper demand technology of the use to become priority for grid connections future, China intends in Germany » High copper demand to become market for wind turbines leader within 3 years 3/3/2014 6 Copper concentrates – object of global demand » Top producers of copper concentrates: » South America: 5.5 mill. t » Asia: 3.3 mill. t » North America: 1.7 mill. t Copper concentrates: » Copper ore with 0.5-5 % Cu, » Mining operations in Africa face concentrated by grinding and flotation uncertainties regarding the political » Typical composition: environment and infrastructure » 30 % copper, 30 % iron and 30 % sulfur » Declining copper grades and » 10 % other elements (e.g. increasing complexity of raw materials precious metals, other complex materials) 777 Main production of copper concentrates in Latin America – Main consumption in Asia Mine production (MP) and smelter consumption (SC) 2013e (in mill. t) 2.8 1.5 7.6 1.7 1.0 MP SC 3.3 MP SC MP SC 1.1 0.7 5.5 MP SC 1.9 1.0 0.4 MP SC MP SC Source: CRU 02/2014 8 A number of new projects will start up production before 2020 Size of deposits Copper price (in mill. t of copper content) (in US$/t – 3-month quotation) 140 10000 9000 120 Andina Expansion - Phase II 8000 100 7000 80 6000 Escondida (CL) 60 5000 Oyu Tolgoi Chuquicamata Collahuasi (CL) (MN) underground (CL) 4000 40 Los Pelambres Expansion (CL) Los Bronces Expansion (CL) 3000 Los Pelambres (CL) Toromocho (PE) Antamina Expansion (PE) 20 El Teniente (CL) Antamina (PE) Caserones/Regalito (CL) Mina Ministro Halees (MMH) 2000 Las Bambas Salobo I (BR) Quellaveco (PE) Batu Hijau (ID) Salobo II (BR) Esperanza (CL) 0 1000 1990 1995 2000 2005 2010 2015 2020 Source: CRU 01/2014, internet 9 The market for copper concentrates has some special features » Supply dominated by large mining companies: BHPB, Rio Tinto, Glencore Xstrata, Freeport » Custom smelters in the Far East are heavily subsidized in some cases: duty protections, general subsidies, state-owned investment funds » Increasing EHS (Environment, Health and Safety) discussions against mining operations » Volatile mine production due to technical problems, strikes, etc. » Declining copper grades and increasing production of complex qualities 10 Aurubis – an excellent and reliable partner for mining companies Countries of origin of Aurubis’ concentrate supplies 2012/13 » Highly qualified partner with more than 140 Others years of experience in copper Chile 20 % 19 % » Assistance in mine financing (Untied Loan Facility etc.) Canada » Reliable offtake partner for concentrates 5 % Peru production Argentina 18 % » World class environmental reputation 10 % » High ability to treat complex materials Brazil Bulgaria 12 % » High reputation in correct sampling and 16 % analysing Selection of Aurubis’ long-term suppliers: » Teck » Vale » Anglo American » Antofagasta » Glencore Xstrata 11 Environmental compliance is one of Aurubis’ key strengths and a competitive advantage Primary copper Recycling SO 2 emissions of copper smelters (in kg SO 2 per t of copper) 3500 3000 Hamburg site 4 2500 Pirdop site 7 Copper smelters: 2000 -European avg. 42 1500 - International avg. 228 1000 500 Pirdop Hamburg 0 Source: Brook Hunt 2013, certified data, Aurubis As the largest copper recycler in the world Aurubis has achieved outstanding success with the best available technology, Aurubis in environmental and climate protection and achieves high metal recovery rates while is one of the most environmentally friendly observing stringent environmental standards copper producers in the world today with its multi-metal recycling process 12 Aurubis Smelter Partner for Copper Mines Bastian Bergholz Director Intermediate Products Business Unit Primary Copper.