Boliden Capital Markets Day 2007 Jan Johansson, President and CEO - - PDF document

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Boliden Capital Markets Day 2007 Jan Johansson, President and CEO - - PDF document

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Boliden Capital Markets Day 2007 Jan Johansson, President and CEO 2007-06-05 1 Boliden AB Bolidens Production Entities Aitik (Sweden) Rnnskr (Sweden) Boliden g Copper mine g Copper smelter Harjavalta/Pori (Finland) Boliden Area

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SLIDE 1

Boliden AB 1 2007-06-05

Boliden

Capital Markets Day 2007

Jan Johansson, President and CEO

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SLIDE 2

Boliden AB 2007-06-05 2

Boliden’s Production Entities

Boliden Odda (Norway)

g Zinc smelter

Kokkola (Finland)

g Zinc smelter

Harjavalta/Pori (Finland)

g Copper smelter

Rönnskär (Sweden)

g Copper smelter

Boliden Area (Sweden)

g Zinc mines

Aitik (Sweden)

g Copper mine

Garpenberg (Sweden)

g Zinc mines

Tara (Ireland)

g Zinc mine

Bergsöe (Sweden)

g Lead smelter

Smelters Mines

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SLIDE 3

Boliden AB 2007-06-05 3

Boliden’s goals

  • To be Europe’s leading supplier of copper and zinc
  • To be the world leader in the recycling of electronic scrap
  • To be one of the world’s most cost-effective metal producers
  • To generate a return on capital employed exceeding 10 per cent
  • ver a business cycle
  • To achieve a net debt/equity ratio of approximately 40 per cent
  • To pay a dividend corresponding to approximately one third of

the net profit over a business cycle

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SLIDE 4

Boliden AB 2007-06-05 4

Integrated value chain – from mining and smelting to metal sales

Mines Smelters Sales

MARKET & SALES EXPLORATION MINING OPERATIONS RECYCLING SMELTING & REFINING

  • Supply reliability
  • One single point of contact for

customers

  • Process and logistics integration
  • Customized products

Advantages:

  • Full process control ensures a high and

consistent quality

  • High guaranteed capacity utilisation

(Boliden mines/smelters, logistics, customers’ capacity)

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SLIDE 5

Boliden AB 2007-06-05 5

The Metals Market

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SLIDE 6

Boliden AB 2007-06-05 6

Continued strong demand for zinc and copper

2 4 6 8 10 12 14 16 18 20

2004 2005 2006 Q3 2007

USA W Europe Japan China

Growth %

Industrial Production

2 4 6 8 10 12 14 16 18 20

2004 2005 2006 Q3 2007

USA W Europe Japan China

Growth %

Industrial Production

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SLIDE 7

Boliden AB 2007-06-05 7

Zinc price and stock levels (LME)

USD/tonne

Tonnes 1 000 1 500 2 000 2 500 3 000 3 500 4 000 4 500 5 000 J a n

  • 5

F e b

  • 5

M a r

  • 5

A p r

  • 5

M a y

  • 5

J u n

  • 5

J u l

  • 5

A u g

  • 5

S e p

  • 5

O c t

  • 5

N

  • v
  • 5

D e c

  • 5

J a n

  • 6

F e b

  • 6

M a r

  • 6

A p r

  • 6

M a y

  • 6

J u n

  • 6

J u l

  • 6

A u g

  • 6

S e p

  • 6

O c t

  • 6

N

  • v
  • 6

D e c

  • 6

J a n

  • 7

F e b

  • 7

M a r

  • 7

A p r

  • 7

125 000 250 000 375 000 500 000 625 000 750 000 875 000 1 000 000

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SLIDE 8

Boliden AB 2007-06-05 8

China’s net imports

Chinese Net Imports of Zinc 2004-2007

  • 60 000
  • 40 000
  • 20 000

20 000 40 000 60 000

jan-04 apr-04 jul-04

  • kt-04

jan-05 apr-05 jul-05

  • kt-05

jan-06 apr-06 jul-06

  • kt-06

jan-07 apr-07

Tonnes

Source: Metals Insider

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SLIDE 9

Boliden AB 2007-06-05 9

LME Copper Price and Stocks

Tonnes

USD/tonne

1 200 1 980 2 760 3 540 4 320 5 100 5 880 6 660 7 440 8 220 9 000 J a n

  • 5

F e b

  • 5

M a r

  • 5

A p r

  • 5

M a y

  • 5

J u n

  • 5

J u l

  • 5

A u g

  • 5

S e p

  • 5

O c t

  • 5

N

  • v
  • 5

D e c

  • 5

J a n

  • 6

F e b

  • 6

M a r

  • 6

A p r

  • 6

M a y

  • 6

J u n

  • 6

J u l

  • 6

A u g

  • 6

S e p

  • 6

O c t

  • 6

N

  • v
  • 6

D e c

  • 6

J a n

  • 7

F e b

  • 7

M a r

  • 7

A p r

  • 7

100 000 200 000 300 000 400 000 500 000 600 000 700 000 800 000 900 000 1 000 000

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SLIDE 10

Boliden AB 2007-06-05 10

Chinas’ import of copper

April 07 Source: Metals Insider

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SLIDE 11

Boliden AB 2007-06-05 11

Global zinc consumption exceeds total production

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SLIDE 12

Boliden AB 2007-06-05 12

… and larger copper consumption than production in many regions

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SLIDE 13

Boliden AB 2007-06-05 13

Global zinc production and smelter demand

2000 4000 6000 8000 10000 12000 14000 16000 18000 1988 1991 1994 1997 2000 2003 2006 2009 2012 2015

Probable B Projects Probable A Projects Base Case Production Capability Smelter demand ~3% grow th Smelter demand ~5% grow th

kt Zn

~5 %

~3 %

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SLIDE 14

Boliden AB 2007-06-05 14

Global copper production and smelter demand

5000 10000 15000 20000 25000 30000 35000 1990 1995 2000 2005 2010 2015

Possible Expansions Probable Expansions Highly Probable Expansions Mine Production Smelter Demand ~3% grow th Smelter Demand ~5% grow th

kt

~5 %

~3 %

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SLIDE 15

Boliden AB 2007-06-05 15

Potential for continued growth for metals

2006 Copper consumption vs. GDP per capita

Kg per capita GDP per capita PPP adjusted 2005 40 000 45 000 35 000 30 000 25 000 20 000 15 000 10 000 5 000 0,0 1,0 2,0 3,0 4,0 5,0 6,0 7,0 8,0 9,0 10,0 11,0 12,0

Japan W Europe USA Australia Canada Malaysia Saudi Russia Thailand

World

Latin America China Indonesia Vietnam Philippines India Africa

High increase in metal demand

Kazakhstan Brazil

200 400 600 800 1000 1200 1400

China India USA Indonesia Brazil

Million

Top 5 population 2006 48% of world population

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SLIDE 16

Boliden AB 2007-06-05 16

Potential for continued growth for metals

Kg per capita GDP per capita PPP adjusted 2005 40 000 45 000 35 000 30 000 25 000 20 000 15 000 10 000 5 000 0,0 1,0 2,0 3,0 4,0 5,0 6,0 7,0 8,0 9,0 10,0 11,0 12,0

Large populations * 9 kg per capita = 28 M tonnes copper + 60% from today’s global copper consumption 17,5 M tonnes (2006)

China Indonesia India Brazil

Potential

Russia

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SLIDE 17

Boliden AB 2007-06-05 17

Focus on value creation

  • Boliden is operational and financial reconstructed
  • Cost efficient operations
  • Strong cash flow
  • Leading edge treatment technology
  • World leading with patent technology for metal recycling
  • Intensified exploration activities, tripled ore reserves in Q1 2007
  • Organic growth projects
  • Continue to evaluate possible acquisitions of project and companies

to grow mine assets

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SLIDE 18

Boliden AB 18 2007-06-05

Financials

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SLIDE 19

Boliden AB 2007-06-05 19

Result first quarter 2007

Revenues 8 455 7 337 15 Operating profit (EBIT) 1 286 1 750

  • 27

Profit before tax 1 261 1 698

  • 26

Earnings per share, SEK 3.18 4.28

  • 26

Cash flow from operating activities 1 490 999 49 Return on capital employed (%) 28 44 Net debt (%)

  • 8

45 Change SEK m 2007 2006 % Quarter 1

  • Higher metal prices, increased revenues
  • Reduced operating profit mainly due to lower grades of copper and gold, poorer

USD exchange rate and lower TC/RC

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SLIDE 20

Boliden AB 2007-06-05 20

Result first quarter 2007, deviations compared with fourth quarter 2006

Operating profit (EBIT) 1 286 2 225 - 939 Net price deviation

  • 894
  • f which, Currencies
  • 88

Hedges 138 Definite prices (MAMA)

  • 310

Stock results 132 Treatment charges

  • 197

Price decreases

  • 569

Net volume deviations

  • 288

Net cost deviations 262 Other - net

  • 19

SEK m 2007 2006 Diff. Quarter 1 / Quarter 4

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SLIDE 21

Boliden AB 2007-06-05 21

Operating profit per segment

Mines 787 732 8 Smelters 544 1 029

  • 47

Others

  • 45
  • 11
  • 309

The Boliden Group 1 286 1 750

  • 27

Change SEK m 2007 2006 % Quarter 1

  • Mines: Prices and terms improved operating profit by SEK 444 million but

volume decreases, mainly due to planned lower grades at the Aitik mine, had negative effect of SEK -336 million. Costs increased by SEK -53 million compared to first quarter 2006

  • Smelters: Decreased operating profit by SEK -487 million mainly due to lower

TC/RC, lower USD exchange rate and increased costs by SEK -112 million.

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SLIDE 22

Boliden AB 2007-06-05 22

Cash Flow First Quarter

Operating profit before depreciation

(EBITDA), SEK m

2 079 2 779 2 421 2 551 1 637 500 1 000 1 500 2 000 2 500 3 000 Q1 2006 Q2 2006 Q3 2006 Q4 2006 Q1 2007

  • Cash flow from operating

activities SEK 1 490 million (SEK 999 m)

  • Cash flow from investment

activities SEK -373 million (SEK -441 m)

  • Free cash flow SEK 1 117

million (SEK 558 m)

  • Net loan amortisation SEK

26 million (SEK 1 220 m)

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SLIDE 23

Boliden AB 2007-06-05 23

Cost Structure of the Boliden Group Q 1 2007

Energy 18% Consumables 17% Personnel 28% Transports 5% External services 16% Depreciations and others 16%

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SLIDE 24

Boliden AB 2007-06-05 24

Production Mines

25 617 21 835 19 858 19 515 14 703

20 000 40 000 60 000 80 000 100 000 Tonnes Q1 2006 Q2 2006 Q3 2006 Q4 2006 Q1 2007

Copper (metal content)

89 225 80 090 76 288 82 040 89 031

20 000 40 000 60 000 80 000 100 000 Tonnes Q1 2006 Q2 2006 Q3 2006 Q4 2006 Q1 2007

Zinc (metal content)

  • Production of milled tonnage is higher or at the same level during first quarter 2007 than in

corresponding period 2006 in all mining areas.

  • Production of zinc concentrate during the first quarter remained largely on a par with levels

during the corresponding period in 2006.

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SLIDE 25

Boliden AB 2007-06-05 25

Aitik

Milled production, head grades, metal content Cu

5 000 10 000 15 000 20 000 25 000

tonnes

0.00% 0.10% 0.20% 0.30% 0.40% 0.50% 0.60%

Milled prod (ktonnes) 4 342 4 823 4 611 4 705 4 678 Metal content, Cu (t) 19 190 16 964 15 132 14 847 11 116 Ore grades, Cu act. 0.50% 0.39% 0.36% 0.35% 0.28% Ore reserve, Cu grade 0.31% 0.31% 0.31% 0.31% 0.28% Q1-06 Q2-06 Q3-06 Q4-06 Q1-07

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SLIDE 26

Boliden AB 2007-06-05 26

Boliden Area

Milled production, head grades, metal content Zn

10 000 20 000 30 000

tonnes

0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0%

Milled prod (ktonnes) 447 401 380 450 454 Metal content, Zn (t) 21 010 18 812 14 979 16 849 18 229 Ore grades, Zn act. 6.0% 6.0% 5.6% 4.7% 5.1% Ore reserve, Zn grade 6.7% 6.7% 6.7% 6.7% 5.0% Q1-06 Q2-06 Q3-06 Q4-06 Q1-07

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SLIDE 27

Boliden AB 2007-06-05 27

Garpenberg

Milled production, head grades, metal content Zn

5 000 10 000 15 000 20 000

tonnes

0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0%

Milled prod (ktonnes) 269 285 322 305 314 Metal content, Zn (t) 13 227 13 800 17 793 16 172 17 056 Ore grades, Zn act. 5.5% 5.3% 6.0% 5.8% 6.1% Ore reserve, Zn grade 5.7% 5.7% 5.7% 5.7% 5.8% Q1-06 Q2-06 Q3-06 Q4-06 Q1-07

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SLIDE 28

Boliden AB 2007-06-05 28

Tara

Milled production, head grades, metal content Zn

10 000 20 000 30 000 40 000 50 000 60 000

tonnes

0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0% 10.0%

Milled prod (ktonnes) 694 693 710 654 686 Metal content, Zn (t) 54 988 47 478 43 516 49 019 53 746 Ore grades, Zn act. 8.6% 7.4% 6.7% 8.2% 8.5% Ore reserve, Zn grade 8.5% 8.5% 8.5% 8.5% 8.4% Q1-06 Q2-06 Q3-06 Q4-06 Q1-07

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SLIDE 29

Boliden AB 2007-06-05 29

Production Smelters

Cathode copper Cast zinc (zinc slabs)

90 029 87 866 87 843 90 653 90 072

20 000 40 000 60 000 80 000 100 000 120 000 140 000 Tonnes Q1 2006 Q2 2006 Q3 2006 Q4 2006 Q1 2007

108 455 109 566 112 814 112 073 114 759

20 000 40 000 60 000 80 000 100 000 120 000 140 000 Tonnes Q1 2006 Q2 2006 Q3 2006 Q4 2006 Q1 2007

  • Production of copper cathodes was stable and on a level that was as high during

the first quarter of 2007 as in the previous year.

  • Production of zinc metal was higher during the first quarter than during the

corresponding period in 2006.

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SLIDE 30

Boliden AB 2007-06-05 30

Share Ownership Structure

Ownership April 30, 2007 Name Share Ownership % Foreign nominee accounts 46 012 599 15.90 AMF 16 301 500 5.63 SEB Funds (incl. Gamla Livförsäkringsbolaget) 9 680 796 3.34 Afa Försäkring 8 837 663 3.05 Swedbank Robur Funds 8 677 923 3.00 Handelsbanken Funds 8 058 234 2.78 The Fourth AP Fund 7 916 900 2.74 Nordea Funds 5 454 821 1.88 Skandia 5 444 594 1.88 Folksam-KPA-Förenade Liv 2 923 680 1.01 The First AP Fund 2 904 150 1.00 Odingroup 2 890 565 1.00 The largest shareholders in total: 120 203 425 43.21 Other shareholders 169 253 744 56.79 Total 289 457 169 100.00

Source: VPC AB

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SLIDE 31

Boliden AB 2007-06-05 31

Business Area Market

Ulf Söderström, President BA Market

slide-32
SLIDE 32

Boliden AB 2007-06-05 32

Content

  • BA Market
  • Customers
  • Market development
  • MAMA pricing
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SLIDE 33

Boliden AB 2007-06-05 33

Business model BA Market within the Group

BA Market

Boliden Mines New Mines New Smelters Boliden Smelters Metal sales Concentrate sales External Mines and Smelters

Commercial terms Tolling Tolling

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SLIDE 34

Boliden AB 2007-06-05 34

Responsibility for becoming a leading supplier

  • Generating value outside the industrial processes
  • Optimising flows in the value chain
  • Optimising cash flows
  • Optimising physical flows
  • Customer, business and product development

High quality metal products and services Smelting & Refining Exploration Mining/Milling Recycling

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SLIDE 35

Boliden AB 2007-06-05 35

The Organization of BA Market

Rönnskär

Copper Market 15 Zinc Market 1 Common 7

Pori/Harjavalta

Copper Market 4 Common 2

Kokkola

Zinc Market 7,5

Espoo

Copper Market 6 Zinc Market 4 Common 2

Bergsöe(Swe/Dk)

Zinc Market 3

Lemington Spa

Zinc Market 3

Rotterdam

Zinc Market 12

Stockholm

Zinc Market 3

Paris

Copper Market 1

Neuss

Zinc Market 3

  • No. of employees

Common 11 Zinc Market 40 Copper Market 26 Total 77 c

Odda

Zinc Market 4 Sales branches

slide-36
SLIDE 36

Boliden AB 2007-06-05 36

Content

  • BA Market
  • Customers
  • Market development
  • MAMA pricing
slide-37
SLIDE 37

Boliden AB 2007-06-05 37

Zinc customers

Continuoues Galvanisers General Galvanisers Brass Zinc Based Alloyers Others

(zinc sheet, powder, wire)

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SLIDE 38

Boliden AB 2007-06-05 38

Boliden Zinc Sales by customer segment

Others 15% Zinc Based Alloyers 5% Brass 5% General Galvanizers 20% Continuous Galvanizers 55%

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SLIDE 39

Boliden AB 2007-06-05 39

The galvanizing industry is Europe’s largest customer of zinc metal – and the one experiencing highest growth

Zinc Consumption in Europe (2006) Global Zinc Consumption by market sector (2006)

Construction 45% Transport 25% Infrastructure 10% Industrial equipment 10% Capital Goods 10% Galvanising 45% Rolled & Extruded Products 11% Brass Semis & Castings 21% Diecasting Alloys 10% Oxides & Chemicals 8% Miscellaneous 5%

The construction and transport industry are the two most important users of zinc

Source: Brook Hunt

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SLIDE 40

Boliden AB 2007-06-05 40

Copper customers

Sheet Strip Wire Rod Tube Others Copper Profile

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SLIDE 41

Boliden AB 2007-06-05 41

Boliden Copper Sales by customer segment

Tube 15% Other 5% Profils 10% Sheet Stripe 15% Wire Rod 55%

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SLIDE 42

Boliden AB 2007-06-05 42

The wire rod industry is the largest customer of copper metal – power cables are experiencing highest growth

By Market Sector

By First Use

Tube 10% Cu Alloys 17% Sheet/strip 7% Other 13% Wire Rod 53%

First use (2006)

Consumer Products 10% Transport 11% Electronic Products 32% Industry Machinery 12% Construction 35%

Market sector (2006)

The construction and Electronic products industry are the two most important users of copper

Source: Brook Hunt

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SLIDE 43

Region/ Total consumption Boliden Boliden country

  • f primary zinc (kt)

Sales (kt) market share Nordic 125 125 100% UK 190 85 45% Germany 520 125 25% France 300 35 10% Other 1439 73 5% Europe 2574 443 17%

Strong market share in northern Europe – growth potential in central and southern Europe

ZINC COPPER

Region/ Total consumption 2006 Boliden Boliden country

  • f cathode copper (kt)

Sales (kt) market share Scandinavia 286 249 87 % UK 181 60 33 % Other 3810 48 1% Europe 4277 357 8 %

Boliden AB 2007-06-05 43

Source: Brook Hunt, Boliden

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SLIDE 44

Boliden AB 2007-06-05 44

Content

  • BA Market
  • Customers
  • Market development
  • MAMA pricing
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SLIDE 45

Boliden AB 2007-06-05 45

The zinc metal deficit continues to be significant and needs to be filled by non-EU sources

Zinc Balance in Europe

  • 271
  • 223
  • 297
  • 358
  • 438
  • 398

+ 68 + 105 2000 2100 2200 2300 2400 2500 2600 2700 2004 2005 2006 2007 2008 2009 2010 2011 (500) (300) (100) 100 300 500 700 900 Balance Europe Production Total Europe Consumption Total Europe

Source: CRU

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SLIDE 46

Boliden AB 2007-06-05 46

Zinc metal premiums lower since year end but still on historical high level

USD/tonne US Midwest Delivered Europe ex-works Far East (Western)

123 143 158 172 209 231 270 265 254 265 275 265 243 233 210 177 130 140 155 180 230 275 265 265 320 320 380 350 320 320 320 105 110 130 135 145 100 100 95 100 100 95 90 97,5 95 90 90 360

50 100 150 200 250 300 350 400

Jan-06 Feb-06 Mar-06 Apr-06 May-06 Jun-06 Jul-06 Aug-06 Sept-06 Oct-06 Nov-06 Dec-06 Jan-07 Feb-07 Mar-07 Apr-07

Data: CRU Monitor Zinc

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SLIDE 47

Boliden AB 2007-06-05 47

Benchmark Zinc TC for 2007 almost settled

Year Bas TC Basis Price Escalator Other 2006 128$ 1400$ +14%/-12% 2007 A 300$ 3500$ +8%/-6% 2007 B 300$ 3000$ +8,5%/-6,5% 0% 3000-3750$

Term Contracts Spot Contracts Market

2004 2005 2006 2007 Contracts Jan Feb Mar Apr Base TC

141 126 128 195 250 240 270

Basis Price

1000 1000 1400

Realized TC

148 187 390 195 250 240 270

Actual Zn price

1048 1381 3272 3786 3309 3258 3543

data: Brook hunt

slide-48
SLIDE 48

Boliden AB 2007-06-05 48

Demand for copper import in Europe is still on high level

  • 1686
  • 1460
  • 1762
  • 1776
  • 1725
  • 1677
  • 1446
  • 1318

1500 2000 2500 3000 3500 4000 4500 5000 2004 2005 2006 2007 2008 2009 2010 2011 Production and Consumption ktonnes

  • 3000
  • 2500
  • 2000
  • 1500
  • 1000
  • 500

500 1000

Balance in ktonnes

Balance Europe Production Total Europe Consumption Total Europe

data: Brook hunt

48

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SLIDE 49

Boliden AB 2007-06-05 49

Spot TC increasing as copper market tightens

USD/ton

120 140 155 115 135 110 100 80 70 70 60 60 50 80 80 110 70 70 90 45 40 50 45 45 93 93 113 50

30 50 70 90 110 1 30 1 50 1 70

Jan-05 Feb-05 Mar-05 Apr-05 May-05 Jun-05 Jul-05 Aug-05 Sept-05 Okt-05 Nov-05 Dec-05 Jan-06 Feb-06 Mar-06 Apr-06 Maj-06 Jun-06 Jul-06 Aug-05 Sept-06 Okt-06 Nov-06 Dec-06 Jan-07 Feb-07 Mar-07 Apr-07

Spot Copper premium CIF W. Europe

Benchmark 2005 115 USD annual Benchmark 2007 125 USD annual Benchmark 2006 105 USD annual

slide-50
SLIDE 50

Boliden AB 2007-06-05 50

Two year brick system makes changes in copper TC/RC less volatile

45 51 85 65 95 90 60 75

30 40 50 60 70 80 90 100

2004 2005 2006 2007

Benchmark TC Boliden TC (2 years brick)

USD/ton

slide-51
SLIDE 51

Boliden AB 2007-06-05 51

Official TC/RC impact on total revenues

Foot-note:Above figures is from 2006 and the revenue distribution is very dependant on the market situation.

Zn Cu

TC/RC PP Free Metal Premiums

slide-52
SLIDE 52

Boliden AB 2007-06-05 52

Content

  • BA Market
  • Customers
  • Market development
  • MAMA pricing
slide-53
SLIDE 53

Ownership and valuation of inventories

Type of inventory Ownership

Mines Market Market Smelters

Valuation

Production cost Balance day price Balance day price Lowest of BDP and last months average

  • Str. hedge

Yes, partly No No No

Off-set hedge

No Yes Yes No Concentrates at mines and in harbours Raw materials at smelters Metal products Iron stock (process stock)

Boliden AB 2007-06-05 53

slide-54
SLIDE 54

Boliden AB 2007-06-05 54

MAMA-Pricing

QP MAMA

January

Production Delivery of Final

  • f concentrate

concentrate Pricing

Action January February March Valu- ation P&L

Mines production costs Balance day price (BDP) Month average price MAP = Final price BDP – Mines production MAP – BDP (positive or negative) costs

slide-55
SLIDE 55

Boliden AB 2007-06-05 55

“Boliden produces metals that make modern life work”

slide-56
SLIDE 56

Boliden AB 2007-06-05 56

Business Area Mines

Jan Moström, President BA Mines

slide-57
SLIDE 57

Boliden AB 2007-06-05 57

Zinc mining in Europe dominated by Ireland, Sweden and Poland

Source: Raw Materials Data, Stockholm 2006

slide-58
SLIDE 58

Boliden AB 2007-06-05 58

Copper mining in Europe dominated by Poland, Sweden, Bulgaria, Portugal. Russia is also a major copper producer

Source: Raw Materials Data, Stockholm 2006

slide-59
SLIDE 59

Boliden AB 2007-06-05 59

Aitik Aitik

  • Aitik, with copper, gold and

silver, is one of Europe’s largest bulk tonnage mines

  • Mining operations began in

1968 and over the years the mine has been expanded and production has increased

  • Today’s known ore reserves

should last until the year 2025 at current production level

  • No of employees 457

Production 2006

Ore 18.50 Mt Metal content Copper 66 100 t Silver 35 700 kgs Gold 2 300 kgs

slide-60
SLIDE 60

Boliden AB 2007-06-05 60

Boliden Area Boliden Area

  • The Boliden Area comprises four

mines, a concentrator and a gold leaching plant

  • In 1925, Europe's richest gold

mine was opened at Boliden

  • Since then, mining activities

have been carried out at 29 mines in the Boliden Area

  • No of employees 422

Production 2006

Ore 1.7 Mt Metal content Copper 20 100 t Lead 2 100 t

Kristineberg Mine, Boliden Area

Zinc 71 700 t Silver 67 800 kgs Gold 1 900 kgs

slide-61
SLIDE 61

Boliden AB 2007-06-05 61

Garpenberg Garpenberg

  • Garpenberg Mine and Garpenberg

Norra are Boliden’s mines in the Swedish county of Dalarna

  • Boliden acquired the Garpenberg

mine in 1957 and commenced production at Garpenberg Norra in 1972

  • An extensive mineralization,

Lappberget, has been discovered. In 2004, production on a wider scale commenced

  • No of employees 275

Production 2006

Metal content Zinc 61 000 t Lead 21 100 t Copper 593 t Silver 108 100 kgs Gold 270 kgs Ore 1.20 Mt

slide-62
SLIDE 62

Boliden AB 2007-06-05 62

Tara Tara

  • Tara mine in Ireland is the largest

zinc mine in Europe

  • Production started in 1977, and
  • ver 62 million tonnes of ore have

been mined since then

  • Investment in an improvement

programme and extensions to the mine have reduced unit costs

  • Boliden acquired Tara at the end
  • f 2003
  • No of employees 678

Production 2006

Ore 2.75 Mt Metal content Zinc 195 000 t Lead 25 600 t

slide-63
SLIDE 63

Boliden AB 2007-06-05 63

Business Plan BA Mines

With the purpose to maintain and create conditions for an increased persistent mine production are the following areas of highest priority:

  • Cost Efficiency
  • Exploration
  • Expansion
slide-64
SLIDE 64

Boliden AB 2007-06-05 64

Cash Cost Copper USc/lb

  • 40
  • 20

20 40 60 80 100 120 USc/lb

Mine Site Costs Realisation Costs (TC/RC) Subtotal Credits (by- products)

Cash Cost 1

Mine Site Costs etc. are calculated per lb Copper Payable Metal. Note, USD conversion effects

slide-65
SLIDE 65

Boliden AB 2007-06-05 65

Aitik Cash Cost Cu 2006 Brook Hunt

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SLIDE 66

Boliden AB 2007-06-05 66

Cash Cost Zn 2006 Brook Hunt

  • Boliden

Garpenberg

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Boliden AB 2007-06-05 67

Boliden’s mines are considered to be among the most productive in the world

Productivity Ton / man hour

43 55 20 40 60 Aitik 18 Mton Aitik 36 Mton 15 global average 2.6 2.3 2 1 2 3 4 5 Garpenberg Boliden Tara 1,3-1,6 Global average

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Boliden AB 2007-06-05 68

Potentials

  • At the mines are the potentials mainly costs and
  • productivity. A potential of 20 - 30 %, on the production

cost is estimated.

  • The largest potential in revenues (about 5 %) is in the

concentrators, (recoveries and conentrate quality).

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SLIDE 69

Boliden AB 2007-06-05 69

Exploration

The targets for exploration activities during the period 2007- 2011:

  • 10 years’ long time planning of ore reserves and mineral

resources

  • Contribute to the balance in mine and smelter production, with a

special focus on copper

  • Contribute to increased growth for the mines
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SLIDE 70

Boliden AB 2007-06-05 70

One of Europe’s largest players within base metal exploration

  • Boliden’s ore base tripled.
  • Intensified exploration

activities at all mine areas during first quarter.

  • Focus on the Boliden area

with new findings at Kristineberg, Renström and Maurliden.

  • Doubled investment to approx.

SEK 300 million (SEK 162) for 2007.

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Boliden AB 2007-06-05 71

Field exploration

Sweden:

  • Skelleftefield (Zn, Cu, Pb, Au),
  • Dorotea (Zn, Cu, Pb),
  • Bergslagen (Zn, Pb) och
  • Aitik (Cu, Au, Mo)

Ireland:

  • Tara,
  • Limerick (Zn, Pb),
  • Wexford and
  • Longford-areas
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SLIDE 72

Boliden AB 2007-06-05 72

Exploration

External growth through:

  • Acquisition of advanced projects, deposits, mines, companies
  • Joint Venture
  • Exploration

As a logical follow-up after acquisition of deposit/mine Joint Venture Own exploration

»Give priority to countries »Acquisition of projects »Joint Venture

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Boliden AB 2007-06-05 73

Aitik

100 000 200 000 300 000 400 000 500 000 600 000 700 000 800 000 900 000 1 000 000 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Year Ktonnes Inferred Measured&Indicated Proven&Probable Production

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Boliden AB 2007-06-05 74

Boliden Area

1000 2000 3000 4000 5000 6000 7000 8000 9000 10000 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Year Ktonnes Inferred Measured&Indicated Proven&Probable Production

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Boliden AB 2007-06-05 75

Garpenberg Area

2000 4000 6000 8000 10000 12000 14000 16000 18000 20000 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Year Ktonnes Inferred Measured&Indicated Proven&Probable Production Ktonnes

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Boliden AB 2007-06-05 76

Tara

2000 4000 6000 8000 10000 12000 14000 16000 18000 20000 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Year Ktonnas Inferred Measured&Indicated Proven&Probable Production

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Boliden AB 2007-06-05 77

Kristineberg

B-Malm Einarsson Einarsson väst J-zonen K-Zinken Y1000 Y1500 Y2000 Y2500 Y3000 Z1000 Z500 Z0

Field drilling

Planned drifts Drifts Target areas Target areas - explored Orereserv Mineralresource Potential Mined

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SLIDE 78

Boliden AB 2007-06-05 78

Expansion

  • Aitik
  • Garpenberg
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SLIDE 79

Boliden AB 2007-06-05 79

Expansion Aitik

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SLIDE 80

Boliden AB 2007-06-05 80

Expansion Garpenberg

Plannes drifts Drifts Target areas Target areas explored Orereserv Mineralresource Potential Mined

0Z 400Z 800Z 1200Z

870 Z 910 Z

Kaspersbo N Strandmalmen Kanalmalmen Finnhyttan Tyskgården och Kyrkmalmen Kvarnberget Dammsjön Lappberget Dammsjön

870 Z

Lappberget

Garpenberg Garpenberg N

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Boliden AB 2007-06-05 81

Business Area Smelters

Svante Nilsson, President BA Smelters

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Boliden AB 2007-06-05 82

Main Zinc Smelter Competitors

slow growth in output in the coming years

Xstrata

Nordenham, Germany San Juan de Nieva, Spain

Umicore/Zinifex

Budel Balen, Belgium Auby, France

Boliden

Kokkola Odda

Glencore

Portovesme, Italy

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Boliden AB 2007-06-05 83

Primary Copper Smelter Competitors

NA

Hamburg, Germany

Atlantic Copper

Huelva, Spain

Boliden

Rönnskär Harjavalta

KGHM

Lublin, Polen

Cumerio

Olen refinery, Belgium Pirdop, Bulgaria

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Boliden AB 2007-06-05 84

Rönnskär

  • The world class smelter, Rönnskär,

is situated in Skelleftehamn, northern Sweden

  • It focuses on sustainable

production and maintains very high standards towards environmental requirements and resource-efficiency while treating and refining metals from concentrates and various recycled materials Production 2006 Copper 229 200 t Lead 25 500 t Silver 374 000 kgs Gold 15 700 kgs Sulphuric acid 551 300 t Liquid SO2 36 600 t Zinc clinker 33 300 t No of employees 813

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Boliden AB 2007-06-05 85

Harjavalta

  • Boliden Harjavalta comprises two plants -

a copper smelter in Harjavalta and a copper refinery in Pori. They are both situated on the west coast of Finland

  • The flash smelting method, used and

developed at Harjavalta, is efficient both environmentally and economically

  • Boliden Harjavalta smelts also nickel

concentrates on a tolling agreement

Production 2006

Primary copper 164 300 t Cathode copper 127 200 t Liquid SO2 42 500 t Silver 40 400 kg Gold 4 000 kg Sulphuric acid 632 200 t Nickel concentrates 205 000 t

Pori Harjavalta

No of employees 449

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Boliden AB 2007-06-05 86

Kokkola

  • Boliden Kokkola is situated
  • n the west coast of Finland
  • Production at the Kokkola

zinc plant started in 1969

  • After four expansions the

Kokkola plant is one of the biggest, most automatized and most technically advanced zinc plants in the world Production 2006 Zinc 282 200 t No of employees 685

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Boliden AB 2007-06-05 87

Odda Odda

  • This sole Norwegian zinc plant is

situated in the western part of the country

  • The company was founded in

1924, close to a hydro power plant

  • A modernisation (88 meuro) was

carried out in 2004 and over the last years the environmental performance has been greatly improved

Production 2006

Zinc metal 160 700 t Sulphuric acid 157 900 t Aluminium Fluoride 28 800 t Anhydrite 39 500 t No of employees 385

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Boliden AB 2007-06-05 88

Bergsöe

  • The only secondary smelter

for recycling lead acid batteries in Scandinavia

  • One of the cleanest smelters

in Europe

  • Among the five largest

secondary smelters in Europe

  • Holds 5% of the European

market for secondary lead

  • Highly developed

environmental standards

  • Logistical advantages –

harbour, railway and road transports

Metal production 2006

Lead and lead alloys 44 700 t No of employees 101

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Boliden AB 2007-06-05 89

E-waste is the faster growing segment of all municipal waste stream in developing countries

WEEE generated by category in Europe Approx 9,5 M ton*

Large White Goods 32% Other H ousehold appliances 11% Fridges/ Freezers 9 % Sources of Light Electric Fittings 6 % Cam eras, Watches, Sport Equipm ent, Toys 1% Other 2% TV, Video, Audio 19 % IT, Office equipm ent 20 %

Target segments for Boliden 39% of generated e-waste

  • Each European

produce in average between 17 and 20 kilos of electrical and electronic waste (WEEE)

* EU 25 Source: Electronic waste Recovery Business 2006, Environmental Impact Assessment Review 2005

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Boliden AB 2007-06-05 90

BA-Smelters route to operational excellence

  • Commissioning of decided investments
  • Expansion of secondary raw-materials “two new mines”
  • Debottle-necking projects
  • Bench-marking
  • Material balance
  • Process groups
  • Finnish synergy team