BLOOMSBURY MINERALS ECONOMICS LTD

A Proposal relating to

New Markets for Copper

prepared for the

European Copper Institute

by

Bloomsbury Minerals Economics

September 28th 2009

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 BLOOMSBURY MINERALS ECONOMICS LTD

Bloomsbury Minerals Economics Ltd.,

5 Warren Mews
London W1T 6AP
England

Telephone: Mobile: +44 (0)7825178614 Office:

+44(0)2075298910
Email: pd@bloomsburyminerals.com
Contact: Paul Dewison
BLOOMSBURY MINERALS ECONOMICS LTD

A Proposal relating to
New Markets for Copper
prepared for the
European Copper Institute
by
Bloomsbury Minerals Economics

BACKGROUND

The following is based on a request for a Proposal relating to emerging

product markets for copper resulting from conversations between Colin
Bennett of the ECI and Paul Dewison of Bloomsbury Minerals Economics
during September 2009. The purpose of the research is to investigate the
markets for copper that are at an early stage of development, identifying
the size and potential growth of these markets and, more importantly,
what will determine this growth and how can this be influenced by the ECI.
The project would be funded out of the European budget of the ECI.

As part of its regular programme of work, the ECI collects a great deal of
information relating to the emerging product markets for copper. This
material includes information concerning the regulatory and economic
drivers relating to these markets, and technical and other information
relating specifically to them. It is intended that this information and staff
expertise within the ECI should be utilised in full during the course of this
research exercise, drawing the existing information together with any new
information that may be required in order to provide an appraisal of each
of the emerging product markets under review in a consistent (and
therefore comparable) framework.

OBJECTIVES AND SCOPE

The objective of this research project is to investigate the markets for

copper that are at an early stage of development, identifying the size and
potential growth of these markets and, more importantly, what will
determine this growth and how can this be influenced by the ECI. The
market areas identified include:

1) Transport (electric vehicles, hybrid vehicles, trains and mass

transit systems).

2) Marine (subsea, desalination etc).

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3) Energy storage, distributive generation and renewable energy

(residential heat pumps, batteries, mass storage by utilities, other
storage, fuel cells, solar energy, wind power, other distributive
generation, other renewable energy).

4) Green buildings, residential and commercial (low energy homes,

energy management, alternative fuel sources distributive
generation and storage, metering, integrated communications,
connected / smart appliances, digital homes).

While the scope of this project is global, the main area of focus will be
Europe. Inference as to the size, growth and drivers of markets in other
parts of the world will be based on common themes and identified
differences between Europe and these markets with regard to regulations
and other key issues.

When assessing the size and growth of emerging markets, some account
will be taken of existing market loss as a result of new market
development. For example, it may be assumed that each new hybrid car
replaces an existing petrol or diesel engine car. Forecasts will be taken out
to 2020.

While this research is not intended to create a technical paper, due

account will be taken of the impact of alternative technical solutions and
the impact on copper. This, for example, is a very important issue when
considering the developing markets for batteries and energy storage.
Coverage will be given to the drivers affecting technical choice, and the
likely application range of each technical solution resulting.

The “drivers” affecting the choice of technologies creating the emerging

markets include the following: 1) regulations, 2) cost to the consumer, 3)
manufacturers’ and designers’ preference, 4) macroeconomic and other
underlying considerations affecting the size of the market area in which
the emerging product market for copper may play a role. Due account will
be given to the structure and impact of each of these drivers in each of the
markets under consideration.

The ECI is able to influence some drivers affecting technology choice, but
not others. It may be influence regulations in particular, but obviously not
the macroeconomic environment. Taking this into account, specific
reference will be made the where are how the ECI may be able to influence
emerging market development will be made. There will be a particular
focus on the regulatory environment.

METHODOLOGY

This project is based on a relatively limited budget, but does have the
advantage of a wealth of published material and expertise accessible
through the UK office of the ECI. These two facts largely determine the
BLOOMSBURY MINERALS ECONOMICS LTD

nature of the research process proposed.

It is intended that this should be primarily a desk research exercise

involving the following:

1) A review of documents in the hands of the ECI.

2) Consultation with members of the members of the ECI team

allocated to this project for each subject area.

3) Accessing documents in the public domain that are not already in

the hands of the ECI, especially as they relate to regulations
affecting technology choice.

4) Telephone discussion with manufacturers and other key contacts to

supplement the results of the paper-based investigation and to gain
new insight.

5) Results analysis and report preparation.

It is intended that the work as specified above should be carried out over a
six to seven month period, and will not require the full time involvement of
a Consultant. There will be a great deal of overlap between the research
phases indicated above. Most of the work will be carried out at the BME
office or other research locations of BME, but several on-site visits to the
UK office of the ECI offices are also envisaged.

DELIVERABLES

At the completion of the research project, the Consultant will deliver a

report in MS Word containing the findings of the research and
recommendations. The report will contain text together will relevant tables
and graphs. It is likely to be 80-120 pages in length.

Upon completion, the Consultant will also provide an MS Powerpoint

presentation summarising and illustrating the main findings. This is likely
to contain 25-50 slides.

In addition, interview notes, Excel spreadsheets and any other relevant

research material will be made available to the ECI.

STAFFING

The project will be led and largely researched by Paul Dewison. During the
project, the services of an experienced Research Consultant may also be
employed in some or all of the main research tasks. More junior staff may
also be employed, as appropriate.

STATEMENT OF EXPERTISE

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BME is a specialised consultancy engaged in base metals market and price

analysis, focussing in particular on copper. The single client consultancy
arm of the company is led by Paul Dewison. Until September 2005, Paul
was Managing Director of Metalica Ltd., a consultancy focussed mostly on
copper fabricating business. Metalica always worked in close association
with BME, both companies being part of the Metallicarum alliance of
consulting and trading firms. Through Paul Dewison, the former consulting
business of Metalica is incorporated within BME and as such brings to bear
a wealth of experience relevant to the successful completion of this
project. The staff chosen for this project will have similar relevant
experience.

TIMING

The total project research time is estimated at a minimum of 55 days. This

is based on the entire project being undertaken by the Research Manager
(Paul Dewison). If other, more junior staff, are involved, the research time
will be increased accordingly.

The research timeline is indicated in Appendix 2. The timeline is stated in

terms of weeks, as there has been no agreement as to start or finish date.
As can be seen, the estimated lead time between project commencement
and completion is 30 weeks.

COST

Based on project specifications as detailed in this Proposal, the fixed fee

for completion of this research project is US$50,000 (fifty thousand US
Dollars). The fee will cover all time costs relating to research, analysis and
client communication, travel and subsistence costs within the UK,
presentation of results in the UK, and incidental expenses.

TERMS OF PAYMENT

The terms of payment are as follows:

1. 50% of the total agreed fee becomes due within one week of
commencement of work on this project.

2. 50% of the total agreed fee becomes payable on the date of project
completion and should be paid no later than four weeks after that
date.

CONFIDENTIALITY

The report(s) provided will not be published or transmitted to third parties.

Confidentiality is similarly respected with regard to source materials
owned by the ECI. The Consultant undertakes not to divulge the name of
BLOOMSBURY MINERALS ECONOMICS LTD

the organisation that has commissioned this research if required not to do

so or facts not available in the public domain relating to the client of which
the Consultant is made aware during the course of this project, unless
given specific permission by the client to do so. The Consultant retains the
right to use the findings of its research that it could have achieved by non
client-specific investigation in future publishing and consulting projects as
long as the basic principles of confidentiality are not breached.

CONFLICT OF INTEREST

There is no conflict of interest that material affects the ability of the

Consultant to make this Proposal of work for the ECI.

PERIOD OF VALIDITY OF BID

This bid shall remain valid until the end of 2009.

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Appendix 1: Preliminary Table of

Contents
EXECUTIVE SUMMARY

The Importance of Small But Fast Growing Emerging Product

Markets
A Description of the Markets Under Review
Drivers Determining Emerging Product Market Growth
Market Forecasts: Europe and Elsewhere
Points of Sensitivity Determining Market Growth: Regulations /
Other
Potential for Proactive Involvement by the ECI

1. TRANSPORT MARKETS

Including coverage of electric vehicles, hybrid vehicles, trains and

mass transit systems

An introduction will cover themes and comparisons applicable to

all of these submarkets, then a review of each submarket under
the following section headings.
1.1. Markets Description, Segmentation and Development to Date
1.2. Drivers Creating the New Market (Regulation, Cost, Other)
1.3. Alternative Technical Solutions and the Influence of Drivers on
Technology Choice
1.4. The Impact of Technology Choice on Incremental Copper Use
1.5. Markets Forecast and Implied Incremental Copper Use
1.6. Points of Sensitivity and Potential for Proactive Involvement of the
ECI (on regulation, publicity on cost / other advantages of copper
intensive solution etc.)

2. MARINE MARKETS

Including coverage of subsea, desalination and other marine

markets

An introduction will cover themes and comparisons applicable to

all of these submarkets, then a review of each submarket under
the following section headings.
2.1. Markets Description, Segmentation and Development to Date
2.2. Drivers Creating the New Market (Regulation, Cost, Other)
 BLOOMSBURY MINERALS ECONOMICS LTD

2.3. Alternative Technical Solutions and the Influence of Drivers on

Technology Choice
2.4. The Impact of Technology Choice on Incremental Copper Use
2.5. Markets Forecast and Implied Incremental Copper Use
2.6. Points of Sensitivity and Potential for Proactive Involvement of the
ECI (on regulation, publicity on cost / other advantages of copper
intensive solution etc.)

3. ENERGY STORAGE, DISTRIBUTIVE GENERATION AND

RENEWABLE ENERGY

Including coverage of residential heat pumps, batteries, mass

storage by utilities, other storage, fuel cells, solar energy, wind
power, other distributive generation, other renewable energy

An introduction will cover themes and comparisons applicable to

all of these submarkets, then a review of each submarket under
the following section headings.

3.1. Markets Description, Segmentation and Development to Date

3.2. Drivers Creating the New Market (Regulation, Cost, Other)
3.3. Alternative Technical Solutions and the Influence of Drivers on
Technology Choice
3.4. The Impact of Technology Choice on Incremental Copper Use
3.5. Markets Forecast and Implied Incremental Copper Use
3.6. Points of Sensitivity and Potential for Proactive Involvement of the
ECI (on regulation, publicity on cost / other advantages of copper
intensive solution etc.)

4. GREEN BUILDINGS, RESIDENTIAL AND COMMERCIAL

Including coverage of low energy homes, energy management,

alternative fuel sources distributive generation and storage,
metering, integrated communications, connected / smart
appliances, digital homes

An introduction will cover themes and comparisons applicable to

all of these submarkets, then a review of each submarket under
the following section headings.

4.1. Markets Description, Segmentation and Development to Date

4.2. Drivers Creating the New Market (Regulation, Cost, Other)

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4.3. Alternative Technical Solutions and the Influence of Drivers on

Technology Choice
4.4. The Impact of Technology Choice on Incremental Copper Use
4.5. Markets Forecast and Implied Incremental Copper Use
4.6. Points of Sensitivity and Potential for Proactive Involvement of the
ECI (on regulation, publicity on cost / other advantages of copper
intensive solution etc.)
BLOOMSBURY MINERALS ECONOMICS LTD

Appendix 2: Timeline
The project timeline is stated in terms of weeks. Completion is envisaged
30 weeks after project start.

The following is based on the Research Manager (Paul Dewison)

undertaking all research. The amount of time spent will be greater if other,
more junior, staff is engaged in this project.

Project timeline
W1 W2 W3 W4 W5 W6 W7 W8 W9 W10W11 W12 W13W14W15W16W17 W18 W19W20 W21W22 W23 W24W25 W26W27 W28 W29 W30
RESEARCHMANAGER
Review of ICA Documents Days=8
All Work

Consultation With ICA Staff Days=5

All Work

AccessAdditional Published Info. Days=6

All Work

Telephone and Email Research Days=8

All Work

Analysisand Reporting Days=28

Results Analysis
Report Writing
Report Presentation

Sporadic work Non intense work Intense work

Total Time on Project 55 days ( Research Manager 55 days)

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