The Copper AllianceTM Value Proposition

November 2012

The Copper AllianceTM Value Proposition

November 2012

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Presentation Contents

Introduction to Copper AllianceTM and its Value Proposition

Program examples

Defense against substitution

Health, Environment and Sustainable Development

Market Intelligence, Data and Measurement

What is Copper Alliance™?

• In 2011, the ICA Network adopted a branding campaign referred to as Copper Alliance. • The Copper Alliance brand is being utilized by a network of 26 regional copper

centers, led by ICA • Use of the Copper Alliance brand permits the ICA Network to maintain a stronger

web presence and better position copper centers within the ICA

• Never before have copper and the copper industry been in a position to make a positive impact on so many of society’s greatest challenges

• As global issues like energy, CO2 and health become more urgent, copper has an increasing role to play in almost every industry

• Copper Alliance is positioning copper – the material and the industry – based on its unique benefits to society

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A member-driven organization

Leading organization for promoting copper

43 global-level members

Producers representing 60% of world copper production

11 of the world’s largest copper and copper alloy fabricators

Nearly 500 local members and partners

Activities in more than 60 countries on 6 continents

2012 budget, including co-funding: $95 million

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43 Global Member Companies

Anglo American Chile Antofagasta Minerals S.A. AurubisBHP Billiton PlcBoliden ABCompañia Minera Doña Inez CollahuasiCompañía Minera ZaldívarCODELCOFreeport McMoRan Copper & GoldKennecott Utah Copper Corp.KGHM Polska Miedź S.A.LS-Nikko Copper Inc.Mexicana de Cananea, S.A. de C.V.Mexicana de Cobre, S.A. de C.V.Minera Alumbrera Ltd.Minera Antamina S.A.Minera Escondida LimitadaMinera EsperanzaMinera Los PelambresMinera El TesoroMitsubishi Materials CorporationPalaboraPan Pacific Copper

Rio Tinto PlcSociedad Contractual Minera el AbraSociedad Minera Cerro Verde S.A.A.Southern Copper CorporationSumitomo Metal Mining Co., Ltd. TeckTenke FungurumeXstrata CopperYunnan Copper Industry (Group) Ltd.

FABRICATORS Chinalco LuoyangDaechang Co., Ltd.Golden Dragon Precise Copper TubeHalcor S.A.KME Group SpALuvataMueller IndustriesNexansOutotec OyjRevere Copper Products, Inc.Wieland-Werke AG

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Contribution to date

Human health, environmental science and sustainable development Maintain copper industry license to operate

Maintain and expand the critical position of copper in broad regulatory frameworks

Ensure market access for copper products

Provide technical support to supply chain: Strengthen commitment of users to copper

Defend against material substitution In partnership with industry

Grow copper demand Promote copper-intensive solutions

Develop leading-edge copper technologies

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Mission Statement

Defend and grow markets for copperbased on its superior technical performance

and its contribution to a higher quality of life worldwide.

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Value Proposition

Position copper and the copper industry as delivering significant benefit to society in areas of critical current concern:

Sustainable development

CO2 reduction

Green building

Energy access (electrification)

Alternative (renewable) energy

Public health

Food supply

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Value Proposition

Maintain copper industry license to operate and ensure market access for copper products

Deliver an estimated positive impact on annual copper demand of 1 million tonnes by 2016:

Create new copper end-use opportunities through technological innovation and active promotion

Increase copper intensity-of-use in existing products and systems

Defend existing copper end-use markets in an environment of persistent high relative material costs

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2012-16 Strategic Plan

Core Initiatives Sustainable Energy Building Construction Antimicrobial Copper Health, Environment and Sustainable Development Technology Development and Transfer

Support Functions Communications Market Intelligence, Data and Measurement Technical and Market Support Funding (Revenue Strategy) Administration

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2012 Operating Plan: $68.8M(Budget by Initiative, $M)

$11.90

$6.70

$8.00

$7.00$6.00

$6.20

$4.40

$1.80

$3.30

$1.30

$11.40

Sustainable Energy (17.3%)

Building Construction Electrical (9.7%)

Building Construction Non-Electrical(11.6%)Antimicrobial Copper (10.2%)

Health, Environment & SustainableDevelopment (8.7%)Technology Development & Transfer(9.0%)Communications (6.4%)

Market Intelligence, Data &Measurement (2.3%)Technical and Market Support (4.8%)

Funding (1.9%)

Administration (16.6%)

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Program Example:Copper and Public Health

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Societal Concern: Public Health

25 million people worldwide acquire a Hospital-Acquired Infection (HAI) each year

Mortality rates vary from 4% to 10% in developed countries

Higher in less-developed parts of the world

Greater number of deaths than HIV and breast cancer combined

In the U.S. each year costs $30 billion, 2 million HAIs, 100,000 deaths

80% of bacteria and viruses that cause infection are spread by touch

Hand-washing and regular cleaning not enough

Traditional materials and silver-ion coatings do not work

Antimicrobial CopperTM works

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Use of Antimicrobial CopperTM touch surfaces in healthcare delivers: >99% reduction of harmful

bacteria 40-70% reduced infection rates $10-14 billion cost savings in fight

against HAIs Nearly 300 different copper alloys

registered by the U.S. EPA Including tarnish-resistant ones

Copper AllianceTM Value Proposition to Healthcare Sector

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Copper AllianceTM Leading the Promotion of Antimicrobial Copper

Tonnage 40-50,000 tonnes in new copper demand in

touch surface applications in healthcare

Fabricator Opportunities New end-use segment for copper and

copper alloys

Image Value Highly visible project, with global attention

Strong link between copper and the copper industry and public health

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Program Example:Copper and CO2 Reduction

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Societal Concern:CO2 Reduction

Much debate among nations, few agreements

Targets for the efficient use of electricity (and corresponding)CO2 reduction tend to focus on highly visible areas

Compact fluorescent lights

High-efficiency appliances

These have relatively limited potential for impact

Every energy-saving effort is important, but high-impact areasare often ignored

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CO2 reduction through Electrical Energy Efficiency - Example of motor systems

Motor systems use nearly half of all electricity globally; by 2030: 13+ trillion kilo-watt hours p.a.

8.6 giga-tons CO2 emissions p.a.

Current best practices for just industrial motor systems would result in reduction of: 320 billion kilo-watt hours of electricity

200 million tons CO2 emissions

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Copper Increases Efficiency and ReducesCO2 Emissions from Motor Systems

0

10

20

30

Standard High  Premium Super Premium

10 HP Motor

Cop

peru

se (k

g)

Motor Efficiency

86% 89.5% 91% 92.9%

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Copper Alliance Leading the Promotion of Energy-Efficient Motors

Tonnage 100,000+ tonnes in new copper demand by

2016

Fabricator Opportunities Displace competing materials with copper

Copper AllianceTM creating new motor technologies

Image Value Highly visible project, with global attention

Strong link between copper and the copper industry and energy efficiency and CO2 reduction

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Program Example:Copper and Food Supply (Aquaculture)

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Societal Concern: Food Supply

Growing global population requires additional protein sources

The world’s oceans, seas and rivers cannot be depended on for food

Nearly 75% of the world’s fisheries are fully exploited or worse

Aquaculture provides a healthy diet for people around the world

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Copper Solves Aquaculture Industry Challenges

No need for cleaning

Increased worker safety

Reduced cost

Reduced stress, disease and mortality

Reduced antibiotics and chemical treatments

No predator penetration

Net life measured in years

At end-of-life, copper net is fully recyclable

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Program Impact

Tonnage

100% market uptake would result in50,000 tonnes of new copper demand annually

Fabricator Opportunities

Entirely new end-use segment for copper and copper alloys

Copper alloy fabrication added value estimated at $250 million per year

Image Value

Strong link between copper and the copper industry in making a positive impact on an important societal issue: food supply

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Brief examples of other programs:

- World Electrification- Electrical Safety- Green Building- Earthquake Protection

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World Electrification

1.3 billion without access to electricity

Currently, 100,000 people added to electrical grid each day

Rate would need to triple to achieve universal access by 2030

$20 trillion investment needed

Copper AllianceTM works with code-setting bodies to ensure safe, energy efficient, copper-based codes and standards globally

Copper AllianceTM coordinates and co funds urban slum and rural electrification programs

Brazil

India

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Electrical Safety

Older housing stock frequently has unsafe electrical installations New housing stock in developing regions require strong electrical

code setting Copper AllianceTM partners with cable makers, contractors and

consumer groups to create joint programs and institutions e.g.: Forum for European Electrical Domestic Safety (FEEDS)

Casa Segura (Latin America)

The FEEDS and Casa Segura campaigns: Build statistical case for electrical safety at national and regional levels

Influence regulations for periodic inspection

Communicate with home users to take responsibility

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Green Building – US example

Electrical energy efficiency is critical to green building:

40% of total energy usage

70% of electricity consumption

Green building not just about CO2 reduction, but also makes economic sense; LEED-certified buildings command a premium of:

10% on rentals

30% on sales

Many of the components that lead to Green certification require copper

Efficiency in heating and cooling systems; motor-driven systems; lighting.

Copper AllianceTM works closely with Green organizations and materials decision-makers to ensure copper is the material of choice

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Earthquake Protection for Buildings

Energy Dissipation Devices (EDD)

Copper energy dissipation devices in buildings reduce earthquake damage

Potential applications include public buildings, hospitals, bridges and mining facilities

Potential market impact of 25,000 tonnesby 2015

Tremendous image impact for copper and the copper industry

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Copper and Health, Environment and Sustainable Development:License to Operate

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The Value of Copper AllianceTM Science

Maintain industry license to operate

Defend and grow market access for copper products

Develop a sustainable image for copper

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Maintaining License to Operate:REACH, Classification & Labeling

Fourteen dossiers on copper and related products

ONE copper dossier, with 144 members and NO free riders

> $2.5M from non-members

European Chemicals Agency evaluation underway

Successful notification of Classification & Labelling for copper ores and concentrates

5 concentrate grades cover Copper Alliance membership

70% require no classification

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Defending Market Access

Copper removed from list of substances of environmental concern for EU surface waters

Copper AllianceTM science integrated into US Environmental Protection Agency criteria for saltwater quality

Peer review shows copper does not cause, or worsen, Alzheimer's Disease

Providing clear information on the antimicrobial mechanism-of-action of solid copper

Regulatory monitoring expanded in China, Korea, Japan and India

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Growing Copper’s Sustainable Image

Six major mines contributed to update of global life cycle data

EU Life Cycle Assessments for key end-use products

Global copper flow model

International Copper Study Group reports 35% of global demand met from recycling

How much is this relative to what is available?

HESD initiative goal: develop SD messaging for all Copper AllianceTM

programs

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Defense against copper substitution

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Defend against substitution using Technology Development and Transfer (TDT)

Program example: Air Conditioning:

Address threat from aluminum in > 500 kt/p.a. global air-conditioning market

Development of small diameter tubes

(< 5 mm) now applied in ≈ 15% of 57 million room air conditioning units produced in China

Delayed substitution by aluminum tube by all major Chinese OEMs

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Defend against substitution using Technology Development and Transfer (TDT)

Program example: Air Conditioning:

Transfer to the market through the MicroGroove™ Campaign

Developed platform with nine fabricator members

Launched campaign on B2B promotion of small diameter copper tubes

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Copper Market Intelligence, Data and Measurement (MIDM)

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Market Intelligence, Data and Measurement Current activity

Comprehensive end-use data 24 million tonne of copper use covered (2010)

Annual material substitution survey 21 product sectors and 24 different countries

Quantification and detailed understanding of annual copper substitution

Copper Flow Model To address widespread requests for recycling indicators

Data for Life Cycle Inventory (LCI) and Life Cycle Assessment (LCA)

Current global survey of future plans for electric vehicle infrastructure

MIDM initiative audits performance of Copper Alliance market development programs Includes assessment of market impact

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16.9 18.5 19.2

4.95.7 5.9

0

5

10

15

20

25

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2009 2010 2011E

Refined copper Direct use scrap

21.824.2

25.0e

Mt

Data: CRU

TOTAL COPPER SEMIS USE 2009 - 11(e)

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2.2 2.3

10.8 11.5

2.7 2.7

4.9 4.9

3.6 3.6

0

5

10

15

20

25

2010 2011

Americas

Europe

North East Asia

Developing Asia

Rest of World

24.2Mt 25.0MtMt

Data: CRU

COPPER DEMAND BY REGION