GFMS COPPER SURVEY 2015

Prepared by GFMS, Thomson Reuters

The GFMS team at Thomson Reuters gratefully acknowledges

the generous support from the following companies for this
years GFMS Copper Survey and the Update

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COPPER PRICE SLIDE

Source: GFMS, Thomson Reuters

COPPER PRICE SLIDE

Source: GFMS, Thomson Reuters

INTRA-YEAR COPPER PRICE PERFORMANCE

Source: GFMS, Thomson Reuters

LME COPPER STOCKS: CUMULATIVE WEEKLY CHANGE

Source: LME, GFMS, Thomson Reuters

WORLD COPPER SUPPLY AND DEMAND

2011

2012

2013

2014

Change y-o-y

CAGR (3-Y)

CAGR (6-Y)

Primary (conc. & SXEW)

16,130

16,410

16,920

18,066

7%

3.9%

2.7%

Secondary

3,465

3,580

3,795

3,740

-1%

2.6%

4.8%

Total Refined
Production

19,595

19,990

20,715

21,806

5%

3.6%

3.0%

Total Refined
Consumption

19,736

19,799

20,669

21,490

4%

2.9%

3.2%

Surplus/(Deficit)

-141

191

46

316

Exchange Stock
Change

-24

45

-83

-200

Implied Off-Exchange
Stock Change

-117

146

129

517

LME 3-Month Price

($/tonne)

8,825

7,946

7,346

6,828

-7%

LME Cash Price

($/tonne)

8,811

7,950

7,322

6,862

-6%

Source: GFMS, Thomson Reuters

GLOBAL CONSUMPTION BY REGION

+3.2%

Source: GFMS, Thomson Reuters

COPPER CONSUMPTION YEAR-ON-YEAR CHANGE

Source: GFMS, Thomson Reuters

REGIONAL/COUNTRY CONSUMPTION SPLIT, 2014

Source: GFMS, Thomson Reuters

GROWTH TRENDS AND REGIONAL SPLIT BY END-USE

Source: GFMS, Thomson Reuters

EXCHANGE & BONDED WAREHOUSE STOCKS

Source: LME, COMEX, Chinas Customs, GFMS, Thomson Reuters

CHINESE REFINED COPPER IMPORTS

VS BONDED PREMIA

CHINA END-USE SPLIT

Source: GFMS, Thomson Reuters

CHINA AUTO PRODUCTION

Source: National Bureau of Statistics of China (NBS)

REAL ESTATE SLOWDOWN

Source: National Bureau of Statistics of China (NBS)

GROWTH AT END-USE SECTORS-AC DESTOCKING

Source: China Electricity Council, NBS

INVESTMENT IN POWER GRID FALLS

Source: GFMS, Thomson Reuters, China Electricity Council, NBS,

MINED AND REFINED PRODUCTION

Source: GFMS, Thomson Reuters

ANNUAL INCREASES IN MINED AND REFINED

PRODUCTION

Source: GFMS, Thomson Reuters

MINE PRODUCTION: VARIANCE ANALYSIS

Source: GFMS, Thomson Reuters

MINE PRODUCTION WINNERS AND LOSERS

BY REGION

BY COUNTRY

Source: GFMS, Thomson Reuters

GFMS MINE ECONOMICS: COPPER

GLOBAL UNIT COSTS AND MARGINS

Source: GFMS, Thomson Reuters

NET UNIT CASH COST BY REGION

Source: GFMS, Thomson Reuters

ORE PROCESSED AND IMPLIED COPPER GRADE

Source: GFMS, Thomson Reuters

CASH AND TOTAL COST CURVES; MINES

8.000
2014 copper price

7.000

US$/TONNE

6.000
5.000

Total costs

4.000
3.000

Net cash costs

2.000
1.000

0
0

20
40
60
80
CUMULATIVE PRODUCTION (%)

100

Source: GFMS, Thomson Reuters

CASH AND TOTAL COST CURVES; COMPANIES

8.000
2014 copper price

7.000

Total costs

5.000

Net cash costs

20

40

ANGLO AMERICAN
GLENCORE

BHP BILLITON

RIO TINTO

KGHM

FIRST QUANTUM

1.000

SOUTHERN
COPPER

2.000

FREEPORT

3.000

ANTOFAGASTA

4.000

CODELCO

US$/TONNE

6.000

60

80

100

CUMULATIVE PRODUCTION (%)

Source: GFMS, Thomson Reuters

CASH COSTS 2014; COUNTRY

6.000

Net cash costs

4.000

20

40

60

80

AUSTRALIA
ZAMBIA

CONGO (DRC)

PERU

CHILE

POLAND

1.000

MEXICO

2.000

UNITED STATES
BRAZIL

3.000

INDONESIA

US$/TONNE

5.000

100

CUMULATIVE PRODUCTION (%)

Source: GFMS, Thomson Reuters

90TH PERCENTILE COASH AND TOTAL COSTS

Source: GFMS, Thomson Reuters

M&A ACTIVITIY - DEAL SCREENER ON EIKON

METALS & MINING GLOBAL M&A DEAL VALUE/VOLUME

Source: GFMS, Thomson Reuters

DEAL VALUE BY COMMODITY 2014

Source: GFMS, Thomson Reuters

M&A DEAL VALUE BY SECTOR

Source: GFMS, Thomson Reuters

M&A DEAL VALUE BY SECTOR

Source: GFMS, Thomson Reuters

M&A DEAL VALUE BY SECTOR

Source: GFMS, Thomson Reuters

M&A DEAL VALUE BY SECTOR

Source: GFMS, Thomson Reuters

CHINESE M&A DEAL VALUE SPLIT BY TARGET NATION

Source: GFMS, Thomson Reuters

COPPER: GLOBAL M&A DEAL VALUE AND VOLUME

Source: GFMS, Thomson Reuters

COPPER M&A DEALS 2014/15

Acquiror Name

Target Name

Completion Date

MMG South
America
Management

Xstrata Peru SA

Aug-14

Freeport-McMoRan
Inc
First Quantum
Lumina Copper
Minerals Ltd
Corp
HudBay Minerals Augusta Resource
Inc
Corp
CCC Mining
Kazakhmys PLC
Construction BV
Alsons Prime
Indophil Resources
Investments Corp
NL
Xstrata Frieda River
PanAust Ltd
Ltd

Lundin Mining Corp

Boliden Mineral AB Altona Mining Ltd

Deal Value $m

Key asset

stage

asset location

7,005

Las Bambas

construction

Peru

Nov-14

2,000

Candelaria

operating

Chile

Aug-14

395

Taca Taca

project

Argentina

Jul-14

328

Rosemont

project

United States

Jun-14

260

Koksay

project

Kazakhstan

Jan-15

255

Tampakan

project

Philippines

Aug-14

125

Frieda River

project

Papua New Guinea

Oct-14

95

Kylylahti

operating

Finland

Investor Group

Nesko Metal Sanayi

ve Ticaret AS

May-14

65

Munella/Lakrosh

operating

Albania

RTG Mining Inc

Sierra Mining Ltd

May-14

60

Mabilo/Bunawan

project

Philippines

INCENTIVE PRICE FOR NEW SUPPLY

Source: GFMS, Thomson Reuters

MAJOR COPPER PROJECTS

Project

Company

Location

Process

Type

Capacity
(000 tpa)

Capex
(US$ M)

Start Date

Aktogay

Kaz Minerals

Kazakhstan

Conc/SX-EW

New Project

104

2,300

Q4 2015/17

Antucoya

Antofagasta

Chile

SX-EW

New Project

85

1,900

H1 2015

Bozshakol

Kazakhmys

Kazakhstan

Conc

New Project

75

2,250

Q4 2015

Buenavista

Southern Copper

Mexico

Conc

Expansion

170

1,384

2015

Sentinel

First Quantum

Zambia

Conc

New Project

300

1,900

Mid-2015

Antapaccay

Glencore

Peru

Conc

Expansion

34

2016

Freeport

Peru

Conc

Expansion

272

4,600

2016

Antofagasta

Chile

SX-EW

Expansion

50

636

2016

Jabal Sayid

Barrick/Maaden

Saudi Arabia

Conc

New Project

45

350

2016

Las Bambas

MMG/CITIC,
Guoxin Intl

Peru

Conc

New Project

400

5,885

2016

Cerro Verde
expansion
El Tesoro
(Encuentro
Oxidos)

Source: GFMS, Thomson Reuters

COMPANY REPORTED PLANNED NEW CAPACITY

Source: GFMS, Thomson Reuters

COMPANY REPORTED PLANNED NEW CAPACITY

Source: GFMS, Thomson Reuters

3 YEAR OUTLOOK FOR COPPER

Source: GFMS, Thomson Reuters

Y-O-Y GROWTH RATES FORECAST TO 2017

Source: GFMS, Thomson Reuters

GLOBAL COPPER BALANCE FORECAST TO 2017

Source: GFMS, Thomson Reuters

GLOBAL COPPER BALANCE FORECAST TO 2017

Source: GFMS, Thomson Reuters

WILDCARDS AND CAVEATS

Source: GFMS, Thomson Reuters

THANK YOU
bruce.alway@thomsonreuters.com

Any
Questions?

Source: GFMS, Thomson Reuters