The three companies JX Nippon Mining & Metals (Head Office: Otemachi 1-chome, Chiyoda-ku, Tokyo; President: Seiichi Murayama; 'JX Metals'), Mitsui Mining and Smelting Co., Ltd. (Head Office: Osaki 1-chome, Shinagawa-ku, Tokyo; President: Keiji Nishida; 'Mitsui Kinzoku'), and Pan Pacific Copper Co., Ltd. (Head Office: Otemachi 1-chome, Chiyoda-ku, Tokyo; President: Akira Miura; 'PPC') announce that they have reached a basic agreement, pending approvals by the relevant authorities, to revise their joint structure for copper operations as of April, 2020. Under the agreement, JX Metals and Mitsui Kinzoku are to form their own subsidiaries, the copper smelting and refining functions of Saganoseki Smelter & Refinery and Hitachi Refinery, operated by PPC, are to be transferred to JX Metals, while Hibi Smelter and Tamano Smelter of Hibi Kyodo Smelting Co., Ltd. (in which PPC has an equity share of 63.51%) are to be transferred to Mitsui Kinzoku.

1. Background and purpose of the changes
JX Metals and Mitsui Kinzoku established PPC in October 2000 as a joint sales company for their copper products. Then on April 1, 2006, the two companies transferred their respective copper refining and smelting functions to PPC and integrated their productions, with the aim to be more competitive through consolidated operation. In doing so, they established in PPC the capability of providing a full range of copper-related services, from resources development and raw materials procurement to smelting and refining and product sales, an arrangement that has continued to this day.
Since this integration of production operations, JX Metals has been reviewing the role of the smelting and refining business as it seeks to strengthen downstream business segments, while Mitsui Kinzoku has been pursuing synergies in its existing lead, zinc, and precious metals smelting and refining network, as both companies have developed their own separate business strategies in seeking to expand earnings. The decision to change over to the new operational structure is based on the judgment that by making independent use of the respective smelting and refining facilities for their own particular business portfolios, JX Metals and Mitsui Kinzoku, being thoroughly familiar with the distinctive features and nature of each of the facilities, will be better able to make the existing copper smelting and refining functions more competitive.
Along with the transfer of copper smelting and refining functions to JX Metals and Mitsui Kinzoku, respectively, the three companies have also reached basic agreement on the transfer of the resources development business conducted by PPC, including mineral rights held by PPC in the Caserones Copper Mine and mineral exploration projects, to a joint subsidiary formed through direct investment by JX Metals and Mitsui Kinzoku. PPC will then become dedicated to the copper smelting and refining business.

2. Functions of PPC following the change in operational structure
JX Metals and Mitsui Kinzoku, as individual consignees, will be supplied with raw material by PPC, and will return to PPC their respective refined copper, gold, silver, sulfuric acid and other products.
PPC, while benefiting from the merits of scale as copper smelting and refining consignor, will continue to procure raw materials and to sell the returned products.

Attachment: Graphic Showing Operational Structure

[Inquiries]

JX Nippon Mining & Metals Corporation
Public Relations Office,
Planning & Coordination Department
Tel: +81-3-6257-7405

Mitsui Mining & Smelting Co., Ltd.
Investor Relations and Corporate Communications Department,
Corporate Planning & Control Sector
Email: PR@mitsui-kinzoku.com

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JXTG Holdings Inc. published this content on 19 December 2019 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 19 December 2019 08:00:02 UTC