Sumitomo Metal Mining : The SMM Group’s Creation of Value

The SMM Group's Creation of Value

Message from the President

Akira Nozaki

President and

Representative Director

Responding to Social Changes and Business Opportunities - Creating New Value and Achieving Sustained Growth

FY2020 Overview: Supply Stability Maintained amid the Pandemic

In retrospect, fiscal 2020 was a year heavily impacted by the coronavirus pandemic. In the SMM Group, impact took such forms as temporary work stoppages and delayed construction at some of our overseas copper mines. On our production floors, however, while taking maximum precautions to prevent virus contagion, we were able to maintain operations, so I believe we fulfilled our role as a producer and stable supplier of materials. This continuity owed greatly to sustained operations, keeping the status quo, throughout our groupwide supply chain, and we are truly grateful to all our business partners. In addition to maintaining supply stability, initiatives were taken this past year at all production sites to trim costs through a variety of innovative means. As a result, and further buoyed by higher metal prices during the period, in fiscal 2020 we achieved the third-highest consolidated net income in the Company's history.

• That accomplishment aside, some delays have occurred in the implementation of our growth strategy incor- porated into our 2018 3-Year Business Plan, which got underway in April 2019. Here too, the situation was impacted by the pandemic. The Plan focuses on three major projects of vital importance for strengthening the growth foundation of our core businesses: Mineral Resources, Smelting & Refining, and Materials. In our Mineral Resources business, the Quebrada Blanca Phase 2 project was impacted by a temporary halt to construction due to COVID-19; operations subsequently resumed. In our Smelting & Refining business, we encountered delays in receiving necessary permits and consulting with our partners on the Pomalaa project, which is our third HPAL project, here too owing to COVID-19; but we are making every effort to be in a position to make an investment decision as early as possible. In our Materials business, where we are undertaking a project to increase produc- tion of battery materials, in fiscal 2020 we took the decision to invest toward boosting nickel-based cathode

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material production by 300 tons per month. This was followed in July 2021 with a decision to invest toward increasing production by a further 2 kilotons per month, and going forward we will continue to incrementally expand production capacity, aiming for monthly production of 10 kilotons of cathode materials by 2027.

• Today, the situation surrounding our business operations is changing at a dizzying pace. Nevertheless, strengthening the growth foundation of our businesses, centered on the foregoing three projects, is a core pillar of our 2018 3-Year Business Plan, and we remain committed to carrying this program forward.

Business Challenges and Risk Awareness

Diverse social issues impact the SMM Group significantly, and we place importance on responding to such issues, which we view as our business challenges. Three issues in particular are vitally important: carbon neutrali- ty, digital transformation (DX), and human resources strategy. If we are unable to respond to the demand for carbon neutrality, we risk being weeded out by customers and investors. If we are slow to digitalize, we will fall behind in terms of digital technology and data utilization, potentially losing our competitive strength. If we err in terms of a human resources strategy, not only would we lose our vitality as an organization; this could conceivably even develop into a matter of our corporate survival. All three of these issues are topics I believe we need to focus closely on in our next 3-Year Business Plan.

• Other issues exist that are unique to the SMM Group. The first is the social situation in the various countries where we operate. In South America, moves are underway to increase taxes levied on industries that deal in nat- ural resources: a situation reflecting a form of resource nationalism. In Indonesia, a movement is underway to promote local industry by prohibiting exports of unprocessed ore and raising ore's added value to a high level within the country. The second issue is the emergence of competitive technologies: for example, in pyrometal- lurgical smelting for making Class 1 nickel from nickel pig iron. At present, challenges exist with respect to ore grade and energy costs, for example. But a precedent is found in the case of Class 2 nickel, where similar con- cerns existed; here, a shift has occurred from nickel pig iron to ferronickel, which now prevails. In the SMM Group, we will continue improving our HPAL technology, which is superior in terms of cost competitiveness and low environmental impact, and simultaneously also keep exploring for innovative new smelting processes. The third issue is responsibility for supplies of resources and materials, and their rising costs. In the years ahead, con- sumption of non-ferrous metals, including copper and nickel, will increase; but with the arrival of a highly envi- ronmentally conscious society, conditions for resource development are expected to become more severe. Also, the energy consumed in tomorrow's production activities will need to be clean energies, regardless of their higher costs. We will also face higher costs for research into the development of new technologies to curb greenhouse gas (GHG) emissions, and to introduce the optimal technologies that respond to environmental demands. Recycling, too, will require correspondingly heavier infusions of investment money, time and labor.
• In addition, challenges exist with respect to the environment and coexistence with local communities. In developing mines, obtaining social permission to operate in the project area is absolutely essential. What this means is that, in addition to complying with legal regulations, projects must be accepted by their local commu- nities. Last year, a resource mining company set off a storm of anger in Australia when it destroyed an ancient site of great importance to the Aboriginal population. International standards have now been announced for the safe management of tailings dams, and the SMM Group, as a member of the International Council on Mining and Metals (ICMM), is preparing its response to enable our compliance with the new regulations (see p. 76).

Message from the President

• As these various movements indicate, in the years ahead the stance taken by companies involved in mine development and metal smelting toward the environment and toward their local communities will become even more stringently scrutinized. Clearly, as ESG considerations become increasingly important, the position taken by the SMM Group toward ESG will be ever more critical for our continuous business development. [Refer to "Business and Human Rights" on p. 80 and "Rights of Indigenous Peoples" on p. 91.]

Strategies for Achieving our "Vision for 2030"

- How SMM is Addressing its Business Challenges -

Our "Vision for 2030," announced in March 2020, identified 11 material issues to serve as milestones for realizing our Long-Term Vision to "Become a World Leader in the Non-ferrous Metals Industry." It also indicated what we must do to achieve that vision. [For details, see "Vision for 2030" on p. 66-67.]

• Among the 11 issues, to "ensure employees' occupational health and safety" is of extreme importance as our business foundation. Because the work sites where the SMM Group operates have many facilities of large scale, heavy-duty machinery and so on, the risk of occupational accidents is by no means negligible. To reduce such risk and achieve safer and more pleasant work environments, through the years we have implemented a variety of measures, both tangible and intangible: for example, innovations to make equipment safer and safety educa- tion. In our 2018 3-Year Business Plan we set targets of less than 5 domestic occupational accidents and less than 3 accidents of all types combined at our overseas business sites. Unfortunately, so far these targets have gone unachieved by wide margins, and their achievement remains a major challenge. We will therefore implement safety measures even more vigorously going forward, to prevent serious accidents from occurring and keep our workers free from injury.
• Another important material issue in our Vision for 2030 is "effective use of non-ferrous metal resources." In our Long-Term Vision, in our quest for a global presence in terms of mineral resources interests and metal produc- tion volumes, we are targeting expansion in attributable copper production and nickel production and acquisi- tion of superior projects involving gold. Here, besides new development and production increases, we have set targets pertaining to use of unused resources and recycling. For example, we are focusing efforts toward com- mercializing technology for recycling automobile secondary batteries.
• Looking to the future, we cannot achieve business continuity unless we take steps toward decarbonization. In the wake of the Japanese government's declaration to go carbon neutral by 2050, demands to reduce GHGs are growing among our customers and within our supply chain, and unless our businesses are able to respond, we will inevitably be compelled to withdraw from related areas. The SMM Group's businesses are in industries that consume large volumes of power and energy, and going forward we will keep striving for improvements: for

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example, pursuing low-carbon impact and higher energy efficiency in our production processes. We also will be focusing on developing and supplying products that contribute to reducing GHG emissions - automobile secondary batteries, for example - and through our business operations we aim to help prevent global warming. Starting this year we have introduced an internal carbon pricing system. In addition, in line with the Task Force on Climate-related Financial Disclosures (TCFD), we are now identifying risks and opportunities through scenario analysis, and considering measures to deal with those issues. (For more information, refer to p. 72-73.)

• DX is another important topic in terms of the issues of "[making] effective use of non-ferrous metal resourc- es" and "[ensuring] employees' occupational health and safety." In April 2021 the SMM Group inaugurated a DX Promotion Committee. Already, use of big data, communication infrastructure development, robotic process automation (RPA) and other DX-related initiatives are underway in all our business divisions. The DX Promo- tion Committee is tasked with getting an overall grasp of such initiatives, investigating measures that can be deployed in other divisions, discussing how they can contribute to promoting greater management efficien- cy and safety in all aspects of our Group business, and responding to issues relating to information security and cyberattacks.
• To carry out business strategies, what is absolutely necessary are human resources capable of achieving them. A human resources strategy is one theme of our Vision for 2030, with the relevant material issues iden- tified as "diverse human resources" and "development and participation of human resources." Here, our focus is to respond in three aspects: securing, developing, and making effective use of human resources. In terms of securing human resources, we will actively implement career recruitment, and also confirm and supplement human resource allocation for future business development. With respect to human resources development, we will closely examine the contents of the various methods already in place, and also aim to elevate levels of experience through practical experience, for example through the "Shikinen Kaikaku Project" introduced Com- pany-wide in 2020 (see p.86). Finally, regarding effective utilization of human resources, we are now taking under review, from multiple perspectives, measures for undertaking systematic changes: not only reforming workstyles, but also hiring diverse human resources, and making active use of employees of senior age through the extended retirement program. We are also currently starting fundamental revisions to our per- sonnel and compensation systems.
• Today, amid growing interest in respect for human rights in the performance of business activities and measures to address this issue being taken around the globe, the subject of "human rights and business" is becoming ever more important. For the SMM Group also, according full attention to human rights and envi- ronmental matters is indispensable for the smooth execution of our projects and businesses. In our Côté Gold Project in Canada, for example, in addition to giving full consideration to the environment and local ecosys- tems, we are steadily carrying out this project while forging good relations with the local and regional com- munities, including the indigenous population. Furthermore, to ensure human rights within our supply chain, in April 2020 we set down and announced a policy on responsible sourcing, and presently a due diligence framework is being developed.

Message from the President

Enhancement of Corporate Governance

Strengthening corporate governance is an issue of extremely great importance, and we believe it forms the core	The
of our business operations. As such, we continuously monitor the current situation and take steps to improve	SMM
and enhance our corporate governance on an ongoing basis, always taking into consideration the changes	Group's
occurring in society and the opinions of all our stakeholders.
Starting in fiscal 2020, we have been revising our basic policy on corporate governance. We disclosed our rea-	ofCreation
and functions of our outside directors; and our policies for deciding matters such as each director's compensa-
sons for appointing the current members of the Board of Directors (Vision for the Board of Directors); the roles
tion. At our Ordinary General Meeting of Shareholders held in June 2021, approval was voted to our resolution	Value
to amend our Articles of Incorporation in two respects: 1) to abolish the Adviser system; and 2) to revise the
mechanism that called for the President and Director, as the officer bearing ultimate responsibility for business
execution, to automatically preside at Board of Directors meetings in the event that no Chairman of the Board
has been appointed, etc.
Fiscal 2021 marks the year in which the next 3-Year Business Plan will be prepared. This year the Board of
Directors will engage in deeper discussions regarding issues to be included in the new 3-Year Business Plan,
including the management issues noted above, based on an assessment of the progress recorded in fiscal 2020.
Discussions and examinations will also be conducted concerning the Corporate Governance Code revised in
June 2021, to respond appropriately and put the revisions into practice. In these ways, continuous efforts will be
made to further enhance our corporate governance in the years ahead.

The SMM Group's Fundamental Roles

A major tenet of the SMM Group's corporate philosophy is our commitment to promoting "sustainable co-existence with the global environment." To carry out our social mission and responsibility as a company engaged in "monozukuri" - manufacturing in the spirit of dedicated craftsmanship - for more than 430 years we have contributed to the development of a sustainable society by securing resources for resource-poor Japan and providing non-ferrous metals, highly advanced materials, etc. Making effective use of limited resources is an issue of global proportions, and one example of how we are addressing this challenge is our world-leading commercialization of HPAL (High Pressure Acid Leach). HPAL is a technology that enables extraction of high-purity nickel from low-grade nickel ore, which had long been considered difficult to convert to a useful resource. Today, the SMM Group possesses one of the most sophisticated technologies in this area. Contributing, through our busi- nesses, to the solution of social issues is fundamental to our activities, and this commitment aligns with today's global embracement of ESG values and the pursuit of sustainability.

• The materials we provide are used in a broad array of areas that support contemporary society, including basic infrastructure, industrial machinery, construction materials, automobiles and electronic equipment. Today they are indispensable to our everyday lives, and in the years ahead the situations in which our materials are used are projected to increase amid progress in digitalization and the pursuit of an environmentally harmonious

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Message from the President

society. As a company that seeks to "Become a World Leader in the Non-Ferrous Metals Industry," we are firmly determined to be a company that, more than just pursuing growth in business scale and profitability, can contribute through its businesses to solving the many diverse issues arising from changes in our social environment. To attain that goal, we aim to be a company befitting an industry leader, undertaking initiatives focused on the SDGs and on our CSR, based on the "Sumitomo Business Spirit" deeply rooted in our operations.

Message to Our Stakeholders

In the SMM Group, we take pride in being able to contribute to solving social issues through the materials we provide. But to continue playing that role going forward, we cannot merely strive for business scale expansion and higher profitability. All around the world, companies have been investing in environmental protection - pollution prevention, etc. - to enable their business continuity, and going forward, as society becomes increasingly decarbonized, I believe investments into this area will grow as never before. Not all investments relating to environmental protection produce results that are directly reflected in earnings, however; so it is imperative that companies strengthen their financial structures in order to prepare for the diverse investments and expenditures that will be necessary to respond to social demands. In the SMM Group, through the years we have maintained a solid financial structure that has enabled us to advance and execute our growth strategies, including large- scale resource development projects. In the years ahead, to enable us to introduce and utilize optimal technologies that respond to social demands, and simultaneously to support solid shareholder returns, we will strive to maintain a corporate structure that also enables the generation of stable profits.

• To achieve society's continuous development, the roles demanded of the corporate sector today are diversify- ing, and responding appropriately to changes is an issue of great urgency. Even amid these changing times, however, two aspects of the SMM Group are immutable. The first is our commitment to contribute to solving social issues through our core businesses. The second is our management stance based on a long-range per- spective. Given the nature of our businesses, many of the SMM Group's business operations are undertaken in parameters of five or 10 years. Because we commence with measures farthest upstream, the results of decisions I take may not materialize within my tenure as president. However, I perform my management duties with the firm determination to pass down maximum assets to my successors. To win the understanding of this corporate philosophy and of our strategies and measures, communication with all our stakeholders is of great importance, so going forward we will further strengthen our communication.
• Next year will mark the start of our "2021 3-Year Business Plan," which will set us on our way to achieving our "Vision for 2030," as a prelude to realizing our Long-Term Vision to "Become a World Leader in the Non-Ferrous Metals Industry." I pledge to make every effort to address our various management issues, achieve continuous business growth, and enhance our corporate value in the years ahead.

Efforts to Help Prevent the Spread of COVID-19

The response incumbent upon companies from a social responsibility standpoint

Since the fourth quarter of FY2019, COVID-19 has been spreading globally and although progress is being made on vaccination efforts, the pandemic is still ongoing.

• To address these circumstances, the SMM Group is giving the highest priority to the safety of our stakeholders, including custom- ers, business partners, employees, and local communities, while working to prevent the spread of COVID-19 infections. Despite the limitations we face, we will continue with efforts to stably supply indispensable materials to society.
• The pages for each business division contain information on the impacts for that division, as well as corresponding countermea- sures (see details on p. 44-59).
• Furthermore, with regard to necessary responses from the standpoint of social responsibility, we are carrying out the following initiatives.

Efforts to prevent the spread of COVID-19

Employees at the Head Office, Osaka Branch, and Nagoya Branch are continuing to work from home, depending on the situation regarding infections.

• Measures are being taken against the risk of infection for employees of mines, smelters, and refineries in Japan.
  E.g.: Response measures have been established to handle new infections; on-site employees are working in two cohorts and interaction between the two is prohibited.
• Measures are being taken against the risk of infection at overseas mines.
  E.g.: We have formulated COVID-19 protocols (monitoring, prevention, and management plans) and spread out the times during which cafeterias are in use.
• Countermeasures shared across locations
• • Employees are not to come to work if there is the possibility of having been infected and if an employee is infected, we check on their physical condition and provide care.
  • Meetings, events, etc. are held or attended online or with precautions in place for avoiding the 3Cs (Closed spaces, Crowded spaces, Close-contact settings).
  • There are restrictions on overseas business trips and for business trips within Japan, the number of people and duration are carefully considered.
  • We ensure that actions take requests from local authorities into account.
  • Education and training activities are being carried out online.

Efforts addressing employee programs, wages, and hiring

• We adopted a special, paid leave program for at-homechild-raising, applicable to employees who needed to stay home because their child/children's elementary school, kindergarten, or nursery school closed temporarily.
• We are paying 90% of the temporary leave benefit.
• We are committed to maintaining employment and avoiding layoffs.
• We are paying appreciation bonuses to SMM Group employees.

Efforts for local communities

• In areas where we have business sites, whether inside or outside Japan, we are donating to fundraising campaigns and supply- ing infection prevention goods and the like.
  E.g.: We supplied infection prevention goods (such as high-performance masks) to Sumitomo Hospital in Osaka. We made a donation to the Hyogo COVID-19 Countermeasure Support Fund.1
  We provided children in Niihama, Ehime Prefecture, with novelty items such as jigsaw puzzles to cheer them up while they are restricted from attending school (distributed to all first and second grade students in the city).
  We supplied stock items that can be utilized for medical purposes at the request of the Japan Business Federation (Keidanren).

Cooperation with industry group initiatives and international initiatives

• We support the Open COVID-19 Declaration addressing intellectual property.2
• We support the Declaration of Partnership Building.3

Going forward, the SMM Group will continue to urge greater awareness and thorough implementation of countermeasures as we swiftly carry out any necessary responses to prevent the spread of COVID-19 infections.

1. A fund established for improving working conditions for healthcare workers in Hyogo Prefecture.
2. A declaration started voluntarily by companies, universities, and other groups, stating that signatories will "not assert any patent, utility model, design, or copy- right," nor seek any payment or compensation for intellectual property, during the stated period, "with respect to the activities whose sole purpose is stopping the spread of COVID-19."
3. A declaration intended to support the development of a "system to promote the introduction of appropriate trade practices among companies, along with other actions, in order to prevent SMEs and small businesses from bearing the burdens of worsened business environments resulting from impacts of the novel corona- virus disease and other factors." This was prepared by the Cabinet Office and the Small and Medium Enterprise Agency and the new partnerships were asked to involve efforts for increasing value added across supply chains.

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P.55, 88

The SMM Group's Creation of Value

Value Creation Process

As the world leader in the non-ferrous metals industry we are aiming to

• Have a global presence in terms of mineral resource interests and metal production volumes (= be in the global top five)
• Have leading technology and a unique business model that can- not be easily emulated by other major mineral resource companies
• Grow sustainably and stably produce a certain amount of profit
• Actively tackle social issues such as the SDGs
• Have employees work with spirit

Nickel (Ni)	Annual production capacity of 150 kt
	Annual production interest of 300 kt
Copper (Cu)
	Participation in new mine operations
Gold (Au)
	through the acquisition of superior
	interest
	Achievement of annual profit before
Materials
	tax of ¥25.0 billion through portfolio
	management
Profit	Annual profit ¥150.0 billion

Long-Term Vision

Become

the World Leader in

the Non-Ferrous

Metals Industry

Opportunities

INPUTS (FY2020)

Capital & Seven Competitive Strengths  P.28

Financial capital end of March 31, 2021

• Total equity ¥1,223.0 billion
• Interest-bearingliabilities ¥330.7 billion

Manufactured capital

Mineral Resources • Operational mines 8

Smelting & Refining • Plants Japan 5Overseas 2

Materials	• Plants	Japan 18Overseas 3
• Research centers	Japan 4

Intellectual capital

• Research and development expenses

¥6.2 billion

• Patents 2,785

• Ability to effectively use low-grade ores, cost

competitiveness, technological strength relat-

ed to production methods and operating

BUSINESS ACTIVITIES

Competitive capabilities generated by our 3-business collaboration model

• Greatly reduced procurement risk due to the sharing of controlled resource development and supply and demand trends
• Efficient collaboration such as new product development with materials business customers through the sharing of techno- logical information concerning non-ferrous metals
• A stable supply of highly advanced materials including cathode materials for automobile batteries made possible by collab- oration between the Smelting & Refining and Materials businesses
• Optimized characteristics in the materials we supply realized through collaboration between the Smelting & Refining and Materials businesses
• Advance knowledge and expansion of mining business opportunities through collaboration between the Mineral Resourc- es and Smelting & Refining businesses
• Cutting-edgeinnovation through the collective wisdom possessed by human resources with diverse backgrounds
• Building of cyclical systems and expansion of opportunities realized through collaboration between the Mineral Resources, Smelting & Refining, and Materials businesses
• Assurance of traceability in terms of quality and the like through a fully integrated internal supply chain

Mineral
Resources
Business	P.56-59

			OUTCOMES		(FY2020)
	Value we provide
	Financial	• +Sound financial standing (equity ratio of	• Equity ratio 59.1% (result)
	capital	50% or higher)	• Dividend payout ratio 35.1%
		• +Consolidated dividend payout ratio of	Dividend ¥121 (+¥43 YoY)
		35% or higher	• JCR credit rating AA-
		•  + Growth investment
	Manufac-	• +Increase, expansion, and upgrading of	• Development underway on the Côté Gold Project and
	tured capital	business sites and equipment	Quebrada Blanca 2 Project	P.46, 47
		• +Increase of production capacity in	• Debottlenecking at Sierra Gorda Copper Mine completed
		P.47
		response to growth in demand	• Decision made to increase production of nickel-based cathode materials
			4,550 t/month  4,850 t/month
	Intellectual	• +Development expertise	• Patents and design rights held in Japan (as of March 31, 2021) 3,126 (+177 YoY)
	capital	• +Production and equipment develop-	• Engaging in the X-MINING project aimed at realizing open innovation

ment technology	• Engaging in the verification and commercialization of technology for recovering
	and recycling cobalt and lithium from lithium-ion secondary batteries used in
	vehicles	P.55, 62

Value of Creation Group's SMM The

Risks and

P.26

techniques that are superior in terms of pro-

ductivity and other aspects (HPAL, MCLE, etc.)

• Technology and tacit knowledge that has been

continually accumulated and honed over 430

years and is focused on the next generation

• A large pool of collective knowledge support-

ed by 3-business collaboration

Human capital

• Consolidated employees 7,072
• Officers and employees who have inherited and internalized the Sumitomo Business Spirit and the Group's corporate culture
• Skill development through OJT
• Human resources systems focused on expertise

Materials

Business

P.44-49

Smelting &
Refining	P.50-55
Business
Sumitomo Metal Mining
Group
Markets

Human capital

• +Raising of awareness and encourage- ment of understanding among employ- ees
  High levels of safety consciousness Understanding regarding indigenous peoples
  Responsible mineral sourcing Social contribution

•  + Skill development through OJT Mining School

• +Skill development through off-the-job training
  Smelting & Refining University
  External training fully paid for (graduate school, correspondence education)
• +Improved job satisfaction for employees

• Serious accidents 0

All accidents 15 (level with previous FY)
• Occupational diseases 0
• Carried out internal education activities regarding indigenous peoples	P.91

• Annual hours of education per employee 20.8 (18.7 hours in the previous FY)

• Mining School	P.49, 86
• Smelting & Refining University students 5
P.55

Social and relationship capital

• Regarding society

• An organizational sense of ethics
• Risk management structures
• Social license to operate

• Regarding business partners

• Relationships of trust that have been culti- vated over many years
• Appropriate supply chain management

• Regarding governments

• Relationships of trust with governments in each country and region

• Regarding customers and employees

The SMM brand

3-Year Business Plan	P.38-41
Strategy for co-creating value with society (Vision for 2030)
	P.66-93
Governance strategy as a foundation for value creation
	P.94-113

	OUTPUTS	(FY2020)
Products and services
Non-ferrous metal materials	Highly advanced materials

Social and relationship capital

• +Building and maintaining of good rela- tionships with business partners, con- tractors, and supply chain partners
• +Building and maintaining of good rela- tionships with local communities and indigenous peoples
• +Contribution to resource-scarce Japan
• +Proper fulfillment of tax obligations
• +Expansion of product applications through co-creation with customers

• Significant environmental accidents 0
• Infrastructure investment and spending on support services ¥1,460 million

Supplementary ESG Data Book 2021 p. 23

• Two business sites awarded the Philippine's 2020 Presidential Mineral Industry Environmental Award 

• Practiced responsible mineral sourcing and CSR procurement (responsible sourcing)  P.92

• Reduced environmental impact during plant construction  P.77

• Carried out internal education activities regarding indigenous peoples
• Income tax paid ¥28.5 billion For details, see Income Tax by Country or Region on p. 35

• Formulated the Sumitomo Metal Mining Group's Basic Policy on Taxes  P.103

• Participated in JOGMEC sea-floor resource development research projects  P.70

Natural capital

• Operational mines  Japan 1Overseas 7

• Raw mineral resources

• Copper concentrates usage 1,441 kt
• Nickel oxide ore usage 8,581 kt
• Gold and silver ore usage 191 kt
• Recycled materials 229 kt

• Water resources (fresh water and seawater)

200,305,000 m3

• Energy from coal and coke

Ni Smelting & Refining			Cathode materials for batteries
• Annual production volume 87 kt
	Mineral Resources		Smelting & Refining		Materials
Cu					• Monthly production capacity 4,550 t
Mineral Resources		Smelting & Refining
• Annual production interest 250 kt	Effective use of resources
• Annual production
volume of electrolytic copper 440 kt	Smelting & Refining
∙ Recover scandium and chromite from
Au
Mineral Resources		Smelting & Refining
		nickel oxide ore
• Annual production volume* 17 t
Materials		Smelting & Refining
*Annual production volume after smelting
∙ Develop a recycling process for lithi-
					um-ion secondary batteries (copper, nick-

Natural capital

•   - Environmental destruction from development

•   - Hazardous substances emitted into the atmosphere and water

•   - Energy consumption

• +Production of recycled copper and pre- cious metals
• +Response to climate change

• Amount of land developed or rehabilitated	P.77
• Capital expenditure related to environmental preservation ¥6,054 million
P.37

• Reduction in water use through optimization 1,914,000 m3
• Increase in emissions of hazardous substances into the atmosphere and water 502 t
• Reduction in consumption of energy from coal and coke 368 TJ
• Percentage of recycled materials used 2.13%
• Engaging in an initiative to reduce GHG emissions to zero in the second half of the century
• Reduction in GHG emissions intensity (compared to FY2013) 4%

13,817 TJ (43.5% of overall energy consumption)

el, cobalt, lithium)

The + and - signs express the nature of the impact of each type of capital

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