The Copper AllianceTM Value Proposition

May 2014
Presentation Contents
 Introduction to Copper AllianceTM and its Value Proposition
 Program examples
 4 in large detail
 3 in brief detail
 Health, Environment & Sustainable Development
 Copper Foundation
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A member-driven organization
 Leading organization for promoting copper
 43 global-level members
 Producers representing 60% of world copper production
 11 of the world’s largest copper and copper alloy
fabricators
 Nearly 500 local members and partners
 26 offices with activities in more than 60 countries
on 6 continents
 2014 budget $59 million and including co-funding
$73 million
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 Reduced 14% v. 2013
43 Global Member Companies
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Anglo American
Antofagasta Minerals S.A.
Aurubis
BHP Billiton Plc
Boliden AB
Buenavista de Cobre, S.A. de C.V.
Compañia Minera Doña Inez Collahuasi
Compañía Minera Zaldívar
CODELCO
Freeport McMoRan Copper & Gold
Glencore Xstrata
Kennecott Utah Copper Corp.
KGHM Polska Miedź S.A.
LS-Nikko Copper Inc.
Mexicana de Cobre, S.A. de C.V.
Minera Alumbrera Ltd.
Minera Antamina S.A.
Minera Escondida Limitada
Minera Esperanza
Minera Los Pelambres
Minera El Tesoro
Mitsubishi Materials Corporation
Palabora
Pan Pacific Copper
Rio Tinto Plc
Sociedad Contractual Minera el Abra
Sociedad Minera Cerro Verde S.A.A.
Southern Copper Corporation
Sumitomo Metal Mining Co., Ltd.
Teck
Tenke Fungurume
Yunnan Copper Industry (Group) Ltd.
FABRICATORS
Chinalco Luoyang
Daechang Co., Ltd.
Golden Dragon Precise Copper Tube
Halcor S.A.
KME Group SpA
Luvata
Mueller Industries
Nexans
Outotec Oyj
Revere Copper Products, Inc.
Wieland-Werke AG
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Value Proposition to Members
 Our Mission
Defend and grow markets for copper
based on its superior technical performance
and its contribution to a higher quality of life
worldwide.
 Three-Tiered Value Proposition
 Market Access
 Market Growth
 Market Defense
 Societal Benefits of Copper
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Value Proposition
 Market Access
 Maintain copper industry license to operate and ensure market access for
copper products
 Market Growth
 Create new copper end-use opportunities through technological innovation
and active promotion
 Market Defense
 Defend existing copper end-use markets in an environment of persistent
high relative material costs
 Deliver positive impact on annual copper demand of
200,000 tonnes per year and return-on-investment of 10:1
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The Societal Benefits of Copper
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When you think of “Mining”
what do you see?
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The copper mining story cannot be told
with only one chapter
 Chapter One: Mining
 The End
 Sustainable Development
 Energy Efficiency
 Climate Change Mitigation
 Renewable Energy
 Public Health
 Food Supply
 Energy Access
 Green Building
 Quality of Life
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Societal Benefits of Copper
 Copper is a material that addresses sustainable development
concerns
 The copper industry is a key contributor to addressing many of
society’s greatest challenges
 Messages are fact-based and scientifically-proven
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Our programs deliver value in three areas
 Upstream Value: new/defended copper demand
(200kt/year)
 Downstream Value: new/improved copper end-use
applications and markets
 Societal Benefit: connecting copper – and the copper
industry – in a positive way to society’s challenges
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Program Example:
Copper and Public Health
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Societal Concern:
Public Health
 Hospital-Acquired Infection (HAI) serious challenge
 Greater number of deaths than HIV and breast cancer combined
 Social costs in lives lost and expense are enormous
 Touch surfaces are the problem
 Traditional techniques to control HAI’s aren’t working
 Other materials and coatings do not work
 Antimicrobial copper works
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Copper Alliance Value Proposition
to Healthcare Sector
Use of Antimicrobial CopperTM touch
surfaces in healthcare delivers:
 >99% reduction of harmful
bacteria
 40-70% reduced infection rates
 $10-14 billion cost savings in fight
against HAIs
 Nearly 300 different copper alloys
registered by the U.S. EPA
 Including tarnish-resistant ones
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Copper Alliance Leading the Promotion of
Antimicrobial Copper
 Upstream benefit
 1-5,000 tonnes in new copper demand in
touch surface applications in healthcare
 Downstream benefit
 New end-use segment for copper and
copper alloys
 Image value
 Highly visible project, with global attention
 Strong link between copper and
the copper industry and public health
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As the number of applications grows so does the
market potential for Antimicrobial Copper products
Applications where antimicrobial touch surfaces have a role to play
MEDICAL & HEALTHCARE
PUBLIC BUILDINGS
PUBLIC TRANSPORT
APPLIANCES & HVACR
There are over 20 million
hospitals beds in the world. In
addition there are many doctors
and dentists offices, private
clinics, retirement homes, etc.
In addition to hospitals and
schools there are many other
buildings in every city around
the world that could do more to
protect the public from
microbes.
With the continuous increase in
the number of people using
public transport the need for
antimicrobial touch surfaces in
busses and trains will grow.
With most of the seven billion
people on the planet requiring
air conditioning the market
continues to outgrow inflation.
SCHOOLS
FOOD & HOSPITALITY
SPORTS FACILITIES
Schools and other educational
facilities such as kindergartens
and universities in every town
and city around the world could
benefit from less bacteria.
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There are millions of hotels,
restaurants and fast food
outlets that are constantly
looking for new ways to protect
their customers from microbes.
The need to stop the spread of
bacteria in gyms, sports
facilities, swimming pools and
locker rooms in general is clear
and set to grow.
These are just some of
the potential applications
for Antimicrobial Copper.
Details of the other
potential applications are
contained on our website.
Program Example:
Copper and Energy Efficiency and
CO2 Reduction
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Societal Concern:
Energy Efficiency and Climate Change
 Much debate among nations, few agreements
 Targets for the efficient use of electricity miniscule impact
 Huge opportunity for CO2 reduction with motor systems
 Minimum Energy Performance standards in appliances and industrial
equipment offer a significant opportunity
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Global Partnership for Energy Efficiency
in Appliances and Industrial Equipment
 Public-private partnership between ICA, United Nation Development
Program (UNDP), UN Environment Program (UNEP), CLASP
 Goals, by 2030:
 Reduce global electricity consumption by 10%
 Reduce CO2 emissions equivalent to removing half of the world’s cars
from of the road
 Supports UN’s Sustainable Energy for All Initiative (SE4ALL); by 2030:
 Universal access to modern energy services
 Double rate of renewables as part of global energy mix
 Double rate of energy efficiency
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Program Goals
 Market transformations focused on
Mandatory Minimum Energy
Performance Standards (MEPS)
globally in 6 product areas
Lighting
 This will result in, by 2030:
Refrigerators
 Global reduction in electricity
consumption by 10%
Air conditioners
Electric motors
Transformers
 Global reduction in CO2 emissions
of 1.25 gigatonnes (equivalent to the
emissions of a half-billion cars)
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 Annual savings to the users of these
products of $350 billion
Information technology
Σ 60% of global electricity
Program Goals
Mandatory Standards
Motors
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Refrigerators
2014
Mandatory Voluntary
No policy or no data
Air conditioners
Transformers
Program Goals
Mandatory Standards
Motors
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Refrigerators
2030
Mandatory
Air conditioners
Transformers
How did ICA get here?
 Culmination of 12+ years of building credibility in sustainable energy
 ICA is considered globally as a credible expert in energy efficiency
 Non-commercial, technical experts and a global footprint
 Minimum Energy Performance Standards on motors in nearly 40 countries
 Successful prior partnerships with the other three founding partners
 ICA is often the only organization to represent the broad “industry”
in discussions on energy efficiency and climate change
 United Nations
 European Commission
 Global energy and climate change forums
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Copper Alliance Leading the Promotion of
Energy-Efficiency in Appliances/Equipment
 Upstream benefit
 Up to 350,000 tonnes in new copper
demand by 2020
 Downstream benefit
 New and expanded markets for copper
in multiple end-use applications
 Copper AllianceTM creating new
technologies that support energy efficiency
 Image value
 Highly visible project, with global attention
 Strong link between copper and
the copper industry and energy efficiency
and climate change
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Program Example:
Copper and Food Supply (Aquaculture)
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Societal Concern:
Food Supply – Copper Solution
 Growing global population requires additional protein sources
 The world’s oceans, seas and rivers cannot be depended on for food
 Nearly 75% of the world’s fisheries are fully exploited or worse
 Aquaculture provides a healthy diet for people around the world
 No need for cleaning
 No predator penetration
 Net life measured in years
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Program Impact
 Upstream benefit
 100% market uptake would result in
50,000 tonnes of new copper demand
annually
 Downstream benefit
 Entirely new end-use segment for copper
and copper alloys
 Copper alloy fabrication added value
estimated at $250 million per year
 Image value
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 Strong link between copper and
the copper industry in making a positive
impact on an important societal issue:
food supply
Brief examples of other programs:
-
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Air Quality
Electrical Safety
Renewable Energy
The Issue: Energy Efficiency
and Air Quality in Air Conditioners
 * Today, the U.S. uses more energy for air conditioning than any
other country
 * If all countries adopt U.S. style of cooling, potential exists for 50-fold
increase in consumption of energy compared with the U.S.
 All-copper heat exchangers are more energy efficient and do not
allow mold growth
 In side-by-side testing, aluminum heat exchangers exhibited 60% mold
growth and 27% capacity loss (after equivalent of four years’ usage)
 In addition to loss of efficiency, mold spores represent a health hazard
*US News & World Report, 12 Aug 13
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The Issue: World Electrification
and Electrical Safety
 UN Decade of Sustainable Energy for All (SEFA) goal: universal
access by 2030
 Electrification rates need to triple to achieve that goal
 Copper AllianceTM works with code-setting bodies to ensure safe and
energy efficient codes and standards globally
 Copper AllianceTM coordinates and co-funds urban slum and rural
electrification programs
 Brazil
 India
 Copper Foundation will focus on
energy access
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The Issue: Renewable Energy
(Note: the production of one tonne of copper results in
CO2 emissions of 1.25 tons)
$1M Investment =
$1M Investment =
3,600 Premium
11 kW motors
• Using 9 t copper
• Saving 90 GWh
and 63 kT CO2
1 MW turbine
• Using 2 t copper
• Saving 50 GWh and
35 kT CO2
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250 kW PV cells
• Using 1 t copper
• Saving 5 GWh and
3.5 kT CO2
Copper and Health, Environment and
Sustainable Development:
License to Operate
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The Value of Copper AllianceTM Science
 Maintain industry license to operate
 Defend and grow market access for copper products
 Develop a sustainable image for copper
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Maintaining License to Operate:
REACH, Classification & Labeling
 Fourteen dossiers on copper and related products
 ONE copper dossier, with 144 members and NO free riders
 > $2.5M from non-members
 European Chemicals Agency evaluation underway
 Successful notification of Classification & Labelling for copper ores
and concentrates
 5 concentrate grades cover Copper Alliance membership
 70% require no classification
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Program Example:
Regulatory Compliance Need
 In 1Q 2012, International Maritime Organization adopted
new guidance on hazard assessments for solid bulk
cargoes
 Main business consequences under MARPOL Annex V:
 Cargo residues, classified as “Harmful to the Marine Environment,
can not be discharged into the sea from 1 January 2013
 Dry residues and/or wash water have to be discharged at
“adequate port reception facilities”
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Stakeholder Positions in 1Q 2012
 IMO authorities assumed all copper
(metal) concentrates would merit
classification as “Harmful to Marine
Environment”
 Several members expected their
concentrates to classify as HME
 Global metals industry (e.g. ICMM)
had no official stakeholder status
 Cochilco acted as “champion”
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Activities of the Copper AllianceTM
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Outcome and Results
 Met challenging year-end 2012 deadline
 Approach exploited earlier ICA investments in methodologies and
testing protocols used for Voluntary Risk Assessment and REACH
 Only 4, out of 119 concentrates assessed, merit HME classification
 Primarily driven by:

High chalcocite content (> 28%)
 Provided public reference to enhance visibility and credibility
 Value to the copper industry: up to $100M annual fees avoided
since vast majority of concentrates not classified as “harmful”
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Defending Market Access
 Copper removed from list of substances of environmental concern
for EU surface waters
 Copper AllianceTM science integrated into US Environmental
Protection Agency criteria for saltwater quality
 Peer review shows copper does not cause, or worsen, Alzheimer's
Disease
 Providing clear information on the antimicrobial mechanism-of-action
of solid copper
 Regulatory monitoring expanded in China, Korea, Japan and India
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Growing Copper’s Sustainable Image
 Six major mines contributed to update of
global life cycle data
 EU Life Cycle Assessments for key enduse products
 Global copper flow model

International Copper Study Group reports
35% of global demand met from recycling

How much is this relative to what is available?
 HESD initiative goal: develop SD
messaging for all Copper AllianceTM
programs
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Defense against copper substitution
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Defend against substitution using
Technology Development and Transfer (TDT)
Program example: Air Conditioning:
 Address threat from aluminum in > 500 kt/p.a.
global air-conditioning market
 Development of small diameter tubes
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
(< 5 mm) now applied in ≈ 15% of 57 million
room air conditioning units produced in China

Delayed substitution by aluminum tube by all
major Chinese OEMs
Defend against substitution using
Technology Development and Transfer (TDT)
Program example: Air Conditioning:
 Transfer to the market through the
MicroGroove™ Campaign
 Developed platform with nine fabricator
members
 Launched campaign on B2B promotion
of small diameter copper tubes
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Copper Foundation
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Copper Foundation
 ICA incorporated in New York as
501 c(6)
 Not-for-profit, but not a “charity”
 Copper Foundation formed as
501 c(3)
 Direct subsidiary of ICA;
“charitable” tax status
 Opens possibilities for
collaboration with foundations
and charitable organizations that
are not able to work with ICA
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Copper Foundation
 Copper Foundation focused on projects in developing world
 Mission aligns well with Sustainable Energy for All
 Urban/rural/slum electrification
 1.3B people without access to energy
 Public health (Antimicrobial Copper)
 1,000 deaths/day from hospital-acquired infections
 Combine these two missions
 200,000 healthcare clinics without energy access
 Electrify the clinic, which becomes the utility for the surrounding village
 Reduce infection rates with copper touch surfaces
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Thank you
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