About the Copper Business

Flowchart from Mining to Smelting and Refining

The method of processing copper ore differs according to the type of ore (sulfide copper ore or oxide copper ore).

Pyrometallurgical method (sulfide copper ore)

Copper mine Copper smelter

Copper concentrate Copper

Sulfide copper ore Crushing, Smelting (flash furnace 65.0%)
Cu: 30.0% Electrolytic cathode
Cu2S, CuFeS2 Mining Grinding, Converting (converter 99.0%)
S: 30.0% refining (electrolytic
Cu: about 1.0% Flotation Refining (anode furnace 99.3%)
Fe: 30.0% copper)
Cu: 99.99%

Scrap

Hydrometallurgical method (SX-EW* method) (oxide copper ore) * Solvent Extraction-Electrowinning

Copper mine

Copper
cathode
Oxide copper ore Leaching Solvent extraction Electrolytic (electrolytic
Mining Crushing
CuO, Cu2O (sulfuric acid leaching) (extraction of copper ions) refining copper)
Cu: 99.99%

Revenue and Expense Structure of Copper Smelters

The cost of copper concentrate, which smelting and refining companies pay to mining companies, is the LME copper cathode price less TC/RC,
which are smelting and refining margins. TC/RC under long-term contracts are normally determined through annual negotiations. The actual sales
price of copper cathode produced by copper smelters is the LME price plus a sales premium, which is established by reference to various factors,
including importation costs and quality.

Earnings structure of copper smelter and refinery Movement in TC/RC

LME copper Cost of copper Copper cathode
cathode price concentrate sales price (TC/RC)
100/10
Sales premium
($ denominated) 90/9
Share of
copper
80/8
TC/RC smelter *
($ denominated)
70/7

60/6

50/5

40/4

Cost of copper Share of 30/3

concentrate mining
($ denominated) company 20/2 TC (Treatment Charge): Dollars per ton of copper concentrate
RC (Refining Charge): Cents per pound of copper contained in copper concentrate
10/1

0
(CY) 2007 2008 2009 2010 2011 2012 2013
* Smelting and refining margin at the end of 2010 comprises multiple agreements in accordance with
contract counterparties, contract periods, etc.

22 JX Holdings, Inc.
 Principal Products and Applications of Electronic Materials
Electronic materials made from copper are indispensable in advanced electronic devices, such as smartphones, tablets, and PCs. Global demand is
increasing due to technical innovation and to economic growth in emerging countries. The JX Group is one of the world’s leading vendors for such
products as sputtering targets for semiconductors and flat panel displays, treated rolled copper foil for flexible printed circuit boards, and precision
rolled products, which are primarily used as connector materials. On a base of processing technologies developed over many years, the Group is
working to develop innovative technologies.

Applications of electronic materials products in smartphones

Micro SIM /
Autofocus camera modules
SD card connectors

Flexible printed circuit boards Lithium-ion batteries

Battery terminals

Earphone jacks
Ground contacts

Board-to-board connectors

The JX Group’s electronic materials products End-use applications

Digital
JX Group’s Mobile Telecommu-
Principal electronic Primary equipment /
global share PCs phones / nications Automobiles
materials products applications Audiovisual
(as of 2012) Smartphones infrastructure
equipment
70% Flexible printed
Treated rolled copper foil
(No. 1) circuit boards

Semiconductor 60% CPUs, memory

targets (No. 1) chips, etc.
ITO targets 30% Transparent
Target materials for flat panel
(No. 1) electrodes
displays
HD media 50% HDD (hard disk
targets (No. 1) drives), etc.
Connectors,
Phosphor 20%
springs for elec-
bronze (No. 1) tronic components
Precision rolled Corson alloy 45% Lead frames,
materials (C7025) (No. 1) connectors

Titanium 70% High-class

copper alloy (No. 1) connectors, etc.
Optical communi-
50%
In-P compound semiconductors cation devices,
(No. 1) high-speed IC
IT-related

JX Holdings, Inc. 23
 About the Copper Business

About Recycling and Environmental Services

Intensifying worldwide competition for natural resources and the necessity to reduce the environmental burden have led to the increasing impor-
tance of recycling metal resources. However, in recent years a rising number of electronic component companies have shifted their operations
overseas, and there has been a trend toward the reduced use of metals. These factors have reinforced the trend toward a lower volume of recycled
materials generated in Japan. Accordingly, we are increasing the collection of recycled materials overseas and differentiating our operations,
including the detoxification processing of industrial waste.

Flowchart of recycling and environmental services

Producer
Recycled materials Collection Receipt Pretreatment Copper /
Analysis Metal recovery Precious metals
Declining amount Intensifying
of metals contained collection
in materials competition

Detoxification
Industrial waste Collection Receipt Slag
processing

Principal recycled materials

Electronic component Electronic component Punched scrap Discarded mobile Discarded printed
scraps (connectors) scraps (semiconductor (gold-plated brass) phones circuit boards
packages)

CHECK Detoxification of Waste

PCBs (polychlorinated biphenyls) are materials that provide excellent electrical insulation and are principally used in insulation oil in trans-
formers and capacitors. Due to the harmful nature of PCBs, their manufacture or import is currently prohibited. In Japan, there are only seven
bases, including the JX Group’s bases, that can detoxify not only insulation oil that directly contains PCBs but also chassis that used that type
of oil. The processing capacity is not sufficient for the volume of waste. Moving forward, the JX Group will work to expand and differentiate
its detoxification processing operations.

Flowchart of complete detoxification processing for low-concentration PCB waste

Waste, including low-concentration PCB

(insulation oil, etc.)
Electrostatic
Detoxified gas
Bag filter precipitator
Rotary kiln incinerator

Fixed bed furnace

Secondary Quench
incinerator tower Wash tower Stack

Waste, including
low-concentration PCB After disassembly, chassis are recycled into
(chassis from transformers, etc.) copper, steel, aluminum, etc., at smelters, etc.

24 JX Holdings, Inc.