FY2023
Progress of Business Strategy
May 16, 2024
President and Representative Director

Akira Nozaki© SUMITOMO METAL MINING CO., LTD.

Table of Contents

I

Safety Initiatives

II

Environment Surrounding SMM

III

Progress in Implementing Key
Strategies under 2021 3-Year Plan

IV

Supplementary Materials

2

I. Safety Initiatives

Ⅰ Safety Initiatives
Ⅱ Environment Surrounding SMM
Progress in Implementing Key
Ⅲ Strategies under 2021 3-Year Plan

Ⅳ Supplementary Materials

31. Safety Initiatives《Domestic employee occupational accidents》
2021 3-year Plan Target: 7 cases or less2023 actual:
15 cases
2024 (Jan.–Apr.): 7 cases

・2023 actual: Improved year on year (24 cases). Nevertheless, in addition to accidents caused by unsafe actions, thenumber of accidents caused by falls and other conditions resulting from old adults increased and we wereunable to achieve the target.
There was 1 serious accident resulting in absence from work for more than 3 months (2 including contractors)
・We will eradicate accidents caused by neglect of risks and human error by further improving the essential safetyof facilities and developing a foundation through stratified education as well as promoting safety measurestargeting old adults✓ Serious accidents of employees and contractors in Japan and overseas sites: Zero (0)2021 3-year Plan ✓ Domestic employee accidents: 7 cases/year or less (7)✓ Employee accidents at overseas sites: 1 case/year or less (0)targets:
Note: ( ) are figures for Jan.–Apr. 2024(cases)

80
60
40
20
0

64
(2000)

Changes in number of occupational accidents in Japan2023
15 cases

As of April-end
2024
7 cases

2021 3-year Plan target
7 cases
1999

2004

2009

2014

2019

2024 2021 3-year Plan
4

II. Environment Surrounding SMM

Ⅰ Safety Initiatives
Ⅱ Environment Surrounding SMM
Progress in Implementing Key
Ⅲ Strategies under 2021 3-Year Plan

Ⅳ Supplementary Materials

51. Global Economy◆ Rising geopolitical risks (Ukraine, Middle East)◆ U.S. Inflation remaining high and continued financial
Medium- to long-term growth
tightening
prospect remains at a low◆ Slowdown in growth of Chinese economy, low growthlevel
in Europe
Outlook continues to be◆ Formation of economic blocs (fragmentation)
unclearcontinues unabated
IMF’s forecast on global economic growth (January and April forecasts;
arrows denote comparison with the January forecast)
2023

2024

2025

(Jan. forecast) (Apr. forecast) (Jan. forecast) (Apr. forecast) (Jan. forecast) (Apr. forecast)Global

3.1%

3.2％

3.1%

3.2%

3.2%

3.2%

U.S.

2.5%

2.5%

2.1%

2.7%

1.7%

1.9%

Europe

0.5%

0.4%

0.9%

0.8%

1.7%

1.5%

Japan

1.9%

1.9%

0.9%

0.9%

0.8%

1.0%

China

5.2%

5.2%

4.6%

4.6%

4.1%

4.1%
6

2. Profit before Tax Analysis FY2023 Results vs. FY2022 Results
Profit/Loss Excluding Temporary Factor *:¥110.0bn–¥100.0bn(in ¥100 million)

2,500*Profit/loss excluding temporary factor: Calculated by excluding the impact of temporary
gains/losses from fluctuations in metal prices or foreign exchange, as well as the impactof special factors for the concerned period from the result value.

Cu price

+54

2,000

1,500

2,299
1,000

Ni・Co
pricesAu price
etc.

-437

+33

Inventory
Foreignevaluationexchange-87
difference+127

Market Factors -310

Incl. expenses related totransfer of a subsidiary

-64
Other
Quantity
gain/loss on difference
Unit costforeign-8differentials
exchange

-297

-151

Materials
Business

Temporaryfactor

-245
Other

500

0
FY2022
FY2022
ResultResult[Profit before tax declined 134.1 billion yen]・Declines in prices of nickel and cobalt; a falloff of gain on foreignexchange booked in the previous fiscal year
・Worsening of unit cost differentials due to the inflation impact andproduction and sales reduction
・Stagnation of the market environment for the materials business andexpenses related to transfer of a subsidiary, and others

-330

958

FY2023
FY2023ResultResultTemporaryTemporary
Factor
FactorProfit/Loss
FY2023
ExcludingProfit/Loss
ExcludeTemporary
FactorTemporary
Factor7

3. Profit before Tax Analysis: FY2024 Forecast (May) vs. FY2023 Results(in ¥100 million)

Profit/Loss Excluding Temporary Factor *:¥120.0bn–¥110.0bn

Impact of large-scale projects (QB + Côté)+225*Profit/loss excluding temporary factor: Calculated by excluding the impact of
temporary gains/losses from fluctuations in metal prices or foreign exchange,
as well as the impact of special factors for the concerned period from theforecast value.

1,400
1,200

Inventory
evaluation

-355

1,000
Cu price

+69

800

Ni・Co
prices

-102

+126
600

958
400

Market Factors -264

Materials
Business

Quantitydifference

Au price Foreignexchangeetc.
difference
-2

+32

-21
Other
gain/loss
on foreignexchange

TemporaryfactorOthers-171
Unit costdifferentials

+41

+110

910

[Profit before tax to decline 4.8 billion yen]・Expecting profit contribution from large-scale projects (Quebrada, Côté)

200
0
FY2023
FY2023ResultResult・Declines in nickel and cobalt prices, impact of production decline at some copper
mines, a falloff of inventory evaluation gain recorded in the previous fiscal year

FY2024FY2024May
May Forecast
Forecast

TemporaryTemporary
Factor
FactorProfit/Loss
ExcludingTemporary
Factor8

4. Metal Supply and Demand Outlook《Copper》 Growing tightness in the short term
◆ While opening and expansion of mines are expected,
there is growing tightness given suspension of somemines and downward revisions of production plans.
◆ Fundamentals are helping copper demand.
(global spread of decarbonization, clean energy, EV shift, etc.)◆ Supply to tighten in the latter half of 2020s as the numberof new projects decreases.

《Nickel》 Assuming growth to continue◆ Demand for nickel-based lithium-ion batteries for EVs andthat for stainless steel application will continue to grow.
◆ Excessive supply due to NPI production increase inIndonesia and production increase of Class I fromintermediate products of Indonesian origin◆ There are growth risks for both demand and supply, but
the nickel market is expected to grow after accounting forthese risks.

Cu
(kt)

ICSG forecast (Apr. 2024)
2023

2024

2025

ResultForecast

Forecast

Production

26,54727,32527,976

Usage

26,54927,11827,793

-3

+207

+183

Balance

Ni(kt)

INSG forecast (Apr. 2024)
2022

2023

2024

ResultForecast

Forecast

Production

3,060

3,356

3,554

Usage

2,963

3,193

3,445

Balance

+98

+163

+109

9

5. Metal Price Estimation for FY2024《Copper》 $9,000/t (FY2023 ave.: $8,362/t Apr. 2024 ave.: $9,482/t)◆ Growing supply uncertainty due to suspension of some mines and downward revision of
production plans, while copper supply is expected to be in excess in 2024 (ICSG April forecast).
◆ There are risks for downward pressure on the price such as downturn of the Chinese economy
and opening of new smelting plants in the second half of 2024.

《Nickel》 $8.00/lb (FY2023 ave.: $8.68/lb

Apr. 2024 ave.: $8.24/lb)◆ Supply-demand balance of nickel in 2024 is expected to be in over-supply (INSG April
forecast).
◆ While the downturn of the Chinese economy, slowdown in demand for automotive batteries,
and increase in supply Indonesian-origin nickel will have a strong impact, the market will beconscious of production adjustment in the price decline phase.

《Gold》 $2,000/toz (FY2023 ave.: $1,989/toz

Apr. 2024 ave.: $2,336/toz)◆ A sense of overheating of price given heightening geopolitical tensions as well as demand forphysical gold by central banks of emerging countries.
106. Initiatives to Realize Management Conscious of Capital Cost and Share Price
Promotion of growth strategy, pursuit of efficient management◆ Steady launch of large-scale projects (QB2, Côté, production increase of cathode materials)◆ Steady implementation of 2021 3-year Plan (battery recycling, SiC, etc.)◆ Pursuit of ROCE management (strengthening of investment return criteria, improvement of
capital efficiency)◆ Business portfolio with prospects for realizing long-term growth story→ Improvement of lead time in the battery material business, inventory reduction→ Decided to transfer a subsidiary engaged in the construction material business to apartner who is expected to generate more synergies with the subsidiary(issued a press release on March 27, 2024)

Enhancing non-financial information disclosure, engagement with stakeholders◆ Establishing the new personnel system, implementation of human resources management thatbolsters the business◆ Continued efforts to address sustainability topics◆ Strengthening of information dissemination capability (explanation including businesscharacteristics such as profit/loss excluding temporary factors and long-term growth story)◆ Leveraging feedback from engagement to improve corporate value
11

7. Dividends / Cash Flows & Financial Position
Cash flows and financial position◆ We will continue to make high levels of capital investment as well as investments and financing in 2024
to execute the growth strategy. We will focus on harvesting the fruits early on as large-scale projects
QB2 and Côté move on to the production stage.
◆ We will continue to promote measures to improve capital efficiency such as strengthening costmanagement and inventory management.
◆ We will maintain financial standings that would enable us to make swift moves when a large-scale
investment becomes necessary by maintaining competitiveness through cost reduction and improvementin productivity

Shareholder return policy and dividends
Shareholder return policy:
We aim for a consolidated payout ratio of 35% or higher in principle and the minimum Indicator is DOE of 1.5%.
◆ FY2023 forecast (DOE1.5%)→Annual dividend (forecast): 98 yen/share (interim dividend paid: 35 yen, year-end dividend forecast: 63 yen)
◆ FY2024 forecast (DOE1.5%)→Annual dividend (forecast): 99 yen/share (interim dividend forecast: 49 yen, year-end dividend forecast: 50 yen)
◆ Our basic shareholder return policy is to link it with financial results but we will continue to discuss it by taking
into consideration cash flows, financial standing, and the balance with the growth strategy.
12

8. Shareholder Returns (Dividend Forecast)<Period under 2021 3-year Plan>
Annual dividend payout ratio: 35% or higher (in principle)
Minimum Indicator is DOE of 1.5%*1
Dividend amount(Yen/share)

Interim dividend

Year-end dividend

Payout ratio

Payout ratio
50%

400

350

301

300
250

※2

200

188

121

150

100
50
0

73
22
51

39
39

FY2018FY2019

205
115

78
99

40%

113

90

22
FY2020

FY2021

FY2022

DOE
1.5%

DOE
1.5%

30%

98

99

20%

（Forecast）（Forecast）

63

50

35

49

FY2023
Forecast

FY2024
Forecast

10%0%※1 DOE of 1.5% as minimum indicator take effect from the year-end dividend for the fiscal year ended March 31, 2024.
※2 The dividend payout ratio for FY2021 is calculated, excluding adjustments related to the transfer of Sierra Gorda.

13

９．Comparison of Financial Results and Forecast(億円)（in ¥100 million）

FY2023Result (A)FY2022
Result (B)Change(A)-(B)FY2024
Forecast (C)Change(C)-(A)

21 3-Year Plan
FY2024（D）

Change(C)－(D)Net sales

14,454

14,230+224

14,920+446

11,160+3,760Gross profit

1,661

2,501

-840

1,360

-301

-

-

958

2,299

-1,341

910

-48

1,570

-660

331

365

-34

285

-46

620

-335

Mineral Resources

528

764

-236

840

+312

990

-150

Smelting & Refining

622

1,179

-557

180

-442

480

-300

Materials

-72

173

-245

-40

+32

150

-190

Other

-15

-30

+15

-30

-15

-30

0

Diff. adjustment

-105

213

-318

-40

+65

-20

-20

Net income attributable toowners of parent

586

1,606

-1,020

560

-26

1,180

-620

Copper (USD/t)

8,362

8,551

-189

9,000

+638

8,000

＋1,000

Nickel (USD/lb)

8.68

11.63

-2.95

8.00

-0.68

7.50

+0.50

Gold (USD/toz)

1,989

1,805

+184

2,000

+11

1,600

+400

Cobalt (USD/lb)

14.16

25.57

-11.41

13.00

-1.16

-

-

Exchange (JPY/$)

144.63135.48+9.15

150.00+5.37

115.00+35.00

Profit / loss before tax

Segment profit

Equity method profit/loss

14

Ⅲ. Progress in Implementing Key Strategies under 2021 3-Year Plan

Ⅰ Safety Initiatives
Ⅱ Environment Surrounding SMM
Progress in Implementing Key
Ⅲ Strategies under 2021 3-Year Plan

Ⅳ Supplementary Materials

15

1. Four Challenges under 2021 3-year Plan

Four challenges
Challenge 1. Increasing corporate value- Promotion of large-scale projects

Challenge 2. Improving core businesssustainability⚫ Expanding production capacity for battery
cathode materials⚫ 3-biz collaboration to strengthen the value chain for
Ni-batteries⚫ Quebrada Blanca 2 project⚫ Shifting Hishikari Mine to sustainability-oriented operation⚫ Côté gold mine development project⚫ Enhancing competitiveness of copper-smelting business⚫ Strategy for advanced materials business expansion
挑戦

Challenge 3. Adapting to changes
in the social environment⚫ Reducing greenhouse gas (GHG) emissions⚫ Promoting the development of products,
technologies and processes that can help achievecarbon neutrality⚫ Adaptation to digital transformation (DX)
⚫ Initiatives for securing, fostering and utilizing humancapitalChallenge 4. Strengthening thefoundation of business
management⚫ Strengthening safety initiatives⚫ Reorganizing and enhancing sustainability promotion
framework⚫ Corporate governance16

2. Quebrada Blanca 2 (QB2) Project (1)Construction is almost complete.
Transitioning steadily for full-scale operation within 2024
[Progress in construction]◆ Started production and supply of bulk copper concentrate (June 2023)◆ Completed construction of the copper-molybdenum separation plant.
Started production of Mo concentrate (March 2024)◆ Completed construction of the port offshore facilities. Started loading
copper concentrate bound for our Toyo Smelter & Refinery (Ehime
prefecture; March 2024). It is expected to reach Toyo Smelter &Refinery in May 2024.
◆ Started demobilization of construction workers and expect to completearound the end of June
[Ramping up status]◆ The maximum copper ore processing volume per day at the processing
site reached 100% of the designed capacity◆ We are focusing on stabilization of processing volume[FY2024 outlook]◆ Expecting production of 207,000 tons or more (full JV basis)◆ Plan to raise it to around 280,000 tons from 2025.

Overall picture of mining
pit and processing site

Completed construction coppermolybdenum separation plant172. Quebrada Blanca 2 (QB2) Project (2)Promising competitiveness and future potential[QB2’s competitive advantages]◆ Low strip ratio and superior cost competitiveness◆ Production of high grade, low impurity concentrate◆ The equipment can be monitored and operated
remotely from the integrated operation center in
Santiago, the capital. It enables good labor environmentthat does not require long distance commuting or
camping, thus enabling us to secure good operators.
◆ Highly sustainable operation→It uses desalinated water supplied by thedesalination facility owned by the project for all waterother than rain water→Plan to use renewable energy for all electricity
needs in 2025
◆ Teck, the JV operator, has experience in operation in
Chile[Potential]◆ Given the vast volume of resources, there is room for
expansion. We are currently considering future
expansion.

(kt)

2022 Top 20 producers by mines+ QB2’s production projection(Research by SMM)

Ranked 12th in theworld in 5
years of operation18

2. Quebrada Blanca 2 (QB2) Project (3)Mining pit in operation

Tailing dam

Loading for the first shipment
to Toyo Smelter & Refinery(April 2024)

Autonomous truck

Desalination facility

As uncertainties over copper concentrates acquisition increase rapidly
around the world, start of operations of QB2 adds significant stability to
our ability to secure copper concentrates
19

3. Côté Gold Project (1)Construction works are substantially complete.
Started production of gold doré and we are promoting ramping up[Construction status]◆ Construction works are substantially over

[Ramping up status]◆ Produced the first doré (gold/silver alloy) on March 31, 2024
◆ Focusing on improvement in rate of operation of equipment andtime-based processing volume with the aim of achieving full
capacity production early on

Mining pit◆ Promote ramping up in cooperation with the JV partner with theaim of achieving 90% of the designed capacity at the end of 2024
[FY2024 outlook]◆ Expecting gold production of 6.9 tons in 2024 (full JV basis)◆ Plan to raise production to the maximum of 15 tons per year from2025 onOre processing area
where gold doré is produced203. Côté Gold Project (2)Ramping up for early stabilization of production

Autonomous haul truck in operation(August 2023)

Ore processing plant(March 2024)

Ball mill inside the ore processing plant(January 2024)

Diligently promoting ramping up of operations in cooperation with our partner
IAMGOLD for early stabilization of production so as to maximize the benefits
from the rising gold prices21

3. Côté Gold Project (3)Expectations on rising project value with an increase in the volumeof resources in adjacent areas[Resource volume (100% JV)]
◆ An increase in resources at the Gosselin deposit,
adjacent to Côté, was announced in February 2024
✓ Indicated mineral resources: Ore 161.3Mt＠
0.85g/t Au, Gold 137t (up 32% from previous
announcement)✓ Inferred mineral resources: Ore 123.9Mt@0.75g/t
Au, Gold 93t (up 74% from previous
announcement)[Potential]◆ The results of the exploration so far has suggested
that the Gosselin deposit could likely expand to asize comparable to the Côté mine (resources ofabout 370t), which is raising expectations ofincreased value of the project◆ Continue with exploration and promote assessment
towards development→Processing tests being conducted also by SMM

Côté

Gosselin

Information on Côté gold mine development project andGosselin area exploration (*The IAMGOLD announcement of
February 15, 2024, with some additions)22

4. Initiatives to Secure New Nickel Ore Sources
Decided to carry out feasibility study and to participate in
Kalgoorlie Nickel Project – Goongarrie Hub in Australia◆Project overview✓ Process: Extract ore from mine and produce
mixed sulfide (MS) using High Pressure Acid Leach(HPAL) process✓ Ore reserves: 194Mt (about 40 years)*◆Feasibility study✓ Budget: 98.5 million AUD✓ Period: First half of 2024 to second half of 2025
◆SMM and Mitsubishi Corporation to acquire a maximumof 50% share◆Certified as the Critical Minerals Supply Security Plan of
Ministry of Economy, Trade and Industry(2023 Critical Mineral No. 2-1)

Geographic location of the project*Based on Pre-Feasibility Study announced by Ardea Resources Limited in July 2023

23

5. Battery Material Business: Progress in Expanding Production Capacity

Expand battery (cathode) materials production capacity

New Niihama Plant photographedin early April 2024

[Raise production capacity by +24,000t/year (nickel-based)]
New Niihama Plant is under construction for the earlier-thanscheduled start of operation.
Discussing with customers when to start supplying products (aiming
to start by 4Q FY2024).
◆Deliberation toward next-phase production increase
Continuing R&D on a new mass production process of lithium ferrous phosphate (LFP) cathode materials anddiscussions on mass production facilities.
Inquiries on LFP cathode materials are increasing due to the needs to diversify geopolitical risks and supply
chains.
Also continuing R&D on cathode materials for all solid batteries that are expected to become next-generation batteries.
200
150
100

Capacity increase (up to FY2030)
Capacity increase (up to FY2027)+24kt/year
Existing capacities

60

Production of Cathode Materials (kt/year)

180

120
84

50
0
（kt/year）

FY2022

FY2025

FY2027

FY203024

5. Battery Material Business: Initiative to Strengthen Asset Efficiency
Progress in kaizen activities in battery material business
Promoting productivity improvement utilizing Toyota production system (TPS)[Improvement of lead time and inventories]◆ Intermediate products: Reducing inventory ofintermediate products waiting for analysis(to raise test efficiency and process capacity)◆ Cutting logistics expense and raising
efficiency: Reducing logistics expense
between plants and warehouses and external
warehousing fees by decreasing inventory ofintermediate products◆ Impact: Improvement of about 25% in termsof manufacturing lead time and goods volume(right graph)

Improvement in lead time and inventory reduction(Calculated with the levels as of Mar. 31, 2023 as 1.0)
Mar. 2023

Inventory
converted tolead timeInventory
volumeconverted to Ni

Mar. 2024

Inventory value

Further promote production process improvement andinventory reduction in all production bases25

6. 3-Business Collaboration (Nickel-Battery) to Strengthen Value Chain

Began building a lithium ion secondary battery recycling plant◆ The new plant with processing capacity of
approx. 10,000 tons in terms of LIB cells isscheduled to be completed in June 2026
◆ Using unique technology combining
pyrometallurgical smelting andhydrometallurgical refining, the plant
efficiently separates and processes used LIB
that contain many impure substances to collectcopper, nickel, and cobalt for recycling◆ Collecting and recycling lithium by combining
the process of Kanto Denka Kogyo Co., Ltd.
◆ Concluding partnership agreements withmajor trading companies and intermediate scrap
treatment companies in Japan to build
collaboration relationships for future collection ofmaterials and so on◆ Selected as a Green Innovation Fund Project of
the New Energy and Industrial Technology
Development Organization (NEDO) (April 2022)
26

7. Expansion of Advanced Materials Business (1)Full-scale recovery is not expected until second half of FY2024,
although demand is in a recovery trend
Demand for components used in smartphones, PCs and so on, which had been
declining due to the shrinking demand for these products since FY2022, has hit
bottom and is in a gradual recovery trend. However, sales of key products remain
weak.
→The speed of recovery is slow; it will take time before full-scale recovery.
We will continue cutting costs, raising productivity, and developing products toproactively capture the recovery in demand to improve our income.
・Develop and increase sales of advanced materials that help reduce
GHG emissions to strengthen our earnings power and contribute tocarbon neutrality in our supply chains
・Promote production improvement activities to raisecompetitiveness27

7. Expansion of Advanced Materials Business (2)Development of products contributing to lower carbon emissions[SiC (silicon carbide)]◆ Sicoxs Corporation manufactures bonded SiC substrate, SiCkrest. Sicoxs canmanufacture more than 50 direct bonded substrates from a single monocrystalline
substrate, we can flexibly respond to the rapidly growing demand for SiC substrates
and contribute to reducing environmental impact.
◆ Some of the 6-inch substrates are on sale.
◆ In response to a strong request to certify and evaluate 8-inch substrates from aprospective customer, we have built a development line and begun producing
prototypes from 1Q FY2024.
◆ To respond to the demand to increase supply, we began licensing of bonding
technology to some customers.

[CWO® (near-infrared light absorbing material)]◆ To improve recognition of CWO® and increase competitiveness, strongly
promoting differentiation strategy through branding and launched a materials
technology brand, SOLAMENTTM.
◆ Announced a new brand at Japan Mobility Show 2023 (Tokyo), the largest mobility
industry exhibition in Japan and exhibited featherless down jackets as the brand’s
key concept.
◆ Exhibited at South by Southwest 2024 (Austin, Texas, USA), one of the world’s
largest advance technology exhibitions, gaining response from many industries.
◆ In addition to the automotive/building materials markets where CWO® is already used
to shield sunlight, promoting entries into apparel, agriculture and beauty industries(collaborating with Mizuno Corp., AOKI Holdings, etc.)

Exhibit at South bySouthwest 2024

28

8. Promoting Development of Products, New Technologies andProcesses Contributing to Carbon Neutrality◼ Target for FY2030: Expansion of GHG reduction contribution of low-carbon
contribution products more than 600kt-CO2•

Battery cathode materials for use in automobiles•

Near-infrared absorbing materials (for automotive glass)【Increased production capacity ofbattery cathode materials】••

Examples of low-carbon contribution products
Small←

Contribution of SMM materials
within the final productConstruction of New Niihama Refinery (Nickel-based)
Development of new process technology for LFP(lithium iron phosphate) cathode materials【Development and sales expansion ofhigh-functional materials】•

Actual results for FY2022
540kt-CO2/year

Launch and sales expansion of 「SOLAMENTTM」, amaterial technology brand for CWO®(Near-infraredabsorbing materials)•

Expansion of SiC(silicon carbide) substrate production•

Development and deployment of materials related tohydrogen production

Batterycathodematerials

Ni powderin process formass-produced

magnetLow-carbon
contribution
product（current）

Copper poly

preparing formass production

Research anddevelopment
stage→ Large

Low-carbon
contribution
product（candidate）
Related Hydrogenproduction
・ Nickel Oxide
・ Scandium
・ Photocatalyst

29

Introduction of the next president
Nobuhiro Matsumoto
April 1987
April 2008
June 2014
June 2016

June 2018
June 2019

June 2020

June 2022

June 2023
June 2024

Joined Sumitomo Metal Mining Co., Ltd.
General Manager of Niihama Nickel Refinery, Non- Ferrous Metals Division
General Manager of Administration Department, Non-Ferrous Metals Division
Executive Officer
Deputy General Manager of Non-Ferrous Metals Division
General Manager of Administration Department, Non-Ferrous Metals Divis
Executive Officer
General Manager of Non-Ferrous Metals Division
Director
Executive Officer
General Manager of Non-Ferrous Metals Division
Director
Managing Executive Officer
General Manager of Non-Ferrous Metals Division
Director
Senior Managing Executive Officer
General Manager of Non-Ferrous Metals Division
Director
Senior Managing Executive Officer
Representative Director
President30

IV. Supplementary Materials

Ⅰ Safety Initiatives
Ⅱ Environment Surrounding SMM
Progress in Implementing Key Strategies and
Ⅲ Measures Under 2021 3-Year Plan

Ⅳ Supplementary Materials

31

1. Supply Demand Trends (Copper and Nickel)

Data/Reference

CopperICSG Projection (Apr 2024)
（ｋt）

2023

2024

2025

ResultForecast

Forecast

Production

26,54727,32527,976

Usage

26,54927,11827,793

-3

+207

+183

Balance

NickelINSG Projection (Apr 2024)(ｋt)

SMM Projection(Mar 2024)

2022

2023

2024

2022

2023

2024

ResultForecast

Forecast

ResultForecast

Forecast

Production

3,060

3,356

3,554

2,896

3,264

3,501

Usage

2,963

3,193

3,445

2,940

3,144

3,350

Balance

+98

+163

+109

-44

+120

+151
32

2. Non-ferrous Metal Prices and Exchange Rates
CopperPrice($/t)

LME

COMEX

Inventory(kt)SHFE

LME Cash

25

1,500

LME Inventory

20

500

Ni LME Price

400
300

1,000

10

4,000
500

0

100

0

0

Gold

200

5

2,000

2,500

600

15

6,000

($/Toz)Inventory(kt)SHFE Inventory

10,0008,000

NickelPrice($/lb)
2,000

Data/Reference0

Exchange Rates(¥/$)($/EUR)

160

1.70
¥/$

2,000

140

1,500

120

1,000

100

500

80

0

60

$/EUR

1.60
1.50
1.40
1.30
1.20
1.10
1.00
24/1

23/1

22/1

21/1

20/1

19/1

18/1

17/1

16/1

15/1

14/1

13/1

12/1

11/1

10/1

09/1

08/1

07/1

06/1

05/1

04/1

03/1

02/1

01/1

00/1

0.90

33

3. State of Business - Mineral Resources (1) Copper - 1
Morenci (US)Interest

600

Cerro Verde (Peru)
FCX
SMM

72％
25％
Sumitomo Corp.
3%

Interest

Cu Production (100%)

kt

446

Data/Reference

FCX
SMM

53.56%
16.80%
Sumitomo Corp.
4.20%
Others25.44%

Cu Production (100%)

kt
600

397

400

400

362

328

200

372

402

442

447

2022

2023

413

400

200

0
2020

2021

2022

2023

2024
(May Plan)

0
2020

2021

2024
(May Plan)

34

3. State of Business - Mineral Resources (1) Copper - 2
Quebrada Blanca (Chile)

Interest

Candelaria Complex (Chile)

Teck
SMM

60％
25％
Sumitomo Corp. 5%
Others10％Interest

Cu Production (100%)kt

Data/Reference

Cu Production (100%)

kt

300

80%
16%
Sumitomo Corp. 4%
Lundin
SMM

Combined with Ojos Del Salado

300

207
200

200

61

100

13

12

10

2020

2021

2022

123

147

146

147

2021

2022

2023

163

100

0

0
2023

2024
(May Plan)

2020

2024
(May Plan)

35

3. State of Business - Mineral Resources (2) Gold (Hishikari and Côté)
Côté Gold Mine (Canada)

Hishikari Mine (Kagoshima Pref.)Interest

SMM

100%

JV Ineterstt

Au Production

Approx. 60.3%
Approx. 39.7%

Au Production

10.0

10.0
7.5

IAMGOLD
SMM

・Construction began in 2020
・Production begun in Mar 2024

・Mineable gold reserve as of the end of 2023:
155 tons (JIS Standard)
t

6.1

6.1

4.1

5.0

3.9

4.0

5.0
2.5

0.0

0.0
FY2021

FY2022

FY2023

FY2024(May Plan)

6.9

7.5

2.5

FY2020

Data/Reference

2020

2021

2022

2023

2024
(May Plan)

36

4. State of Business - Smelting & Refining (1) Copper (Toyo Smelter & Refinery)

Data/Reference

Toyo Smelter & Refinery (Ehime Pref.）kt
600

Electrolytic Copper Production

443

419

447

375

454

400

200

0
FY2020

FY2021

FY2022

FY2023

FY2024(May Plan)

TC/RC（Benchmark）

$/t
125

TC($/t)￠/lb
12.5

RC(￠/lb)

100

10

75

7.5

50

5

25

2.5

0

0

2020

2021

2022

2023

A large shutdown was implemented in FY2023, first time in 12 years.
During the shutdown, some facilities underwent an energy switch andso on.

2024

37

4. State of Business - Smelting & Refining (2) Nickel (CBNC, THPAL and Niihama Refinery) Data/Reference
CBNC、THPAL（Philippines）、Niihama Nickel Refinery (Ehime Pref.)
Ni-kt
60.0

MS Production

48.5

50.0
40.0
30.0

42.9

46.8

45.7

51.0
31.0

29.4

24.8

28.9

29.5

19.1

18.1

17.9

16.2

20.0

FY2020

FY2021

FY2022

FY2023

FY2024(May Plan)

20.0
10.0
0.0

CBNC
Ni-kt
70
60

THPAL

Electrolytic Nickel Production

55.9

52.5

52.8

59.3

63.1

50
40
30

THPAL

20
10
0

FY2020

FY2021

FY2022

FY2023

FY2024(May Plan)

38

4. State of Business - Smelting & Refining (3) Nickel Sulfate (Niihama and Harima)

Data/Reference

Niihama Nickel Refinery (Ehime Pref.), Harima Refinery (Hyogo Pref.)Nickel Sulfate
Ni-kt

80.0

Nickel sulfate production（Niihama Nickel+Harima）

79.1

78.1

76.9

79.0
75.8

70.0

60.0
Harima Refinery
50.0
FY2020

FY2021

FY2022

FY2023

FY2024(May Plan)

39

4. State of Business - Smelting & Refining (4) Ferronickel (Hyuga)

Data/Reference

Hyuga Smelting Co.,Ltd (Miyazaki Pref.)Fe-Ni Production
Ni-Kt
15.0

13.0

12.3
10.1

10.0

4.8

5.0

4.3

◆Making production adjustments, incl. temporary shutdown,
based on the current business environment.
◆Plan to take actions such as cost reduction, facility renewal,
and GHG reduction during the shutdown.

0.0
FY2020

FY2021

FY2022

FY2023

FY2024(May Plan)◆Organize a structure to take action promptly when thesituation improves.

40

5. Status of Business - Materials

Data/Reference

Battery materials
There is a cautious view that the growing demand for batteries usedin electric vehicles (EVs) has levelled off.
The xEV market is expected to grow solidly in the medium- tolong-term.
Continue production in accordance with customer demand in FY2024.

Powder materials
Inventory adjustment has ended for smartphones, PCs and displays
and demand is recovering in the Chinese and Taiwanese markets
recovery, however, is slow overall and full-scale recovery will taketime. Demand is projected to grow in the medium- to long-term due tothe electrification of cars and the spread of 5G networks for
smartphones.

Crystal materials
Despite the spread of 5G networks, demand for SAW devices
remains weak mainly due to poor smartphone sales. AI server-related
demand is currently growing for communication devices, but its
outlook is unclear.

Package materials
The display/monitor market entered a major adjustment phase in
FY2022, and demand slowed. A moderate recovery is expected in 1H
FY2024 mainly due to the special Olympics-related demand.

Changes in Sales of Materials(In ¥100 million)
3,500

3,174
2,780

3,000
2,500

2,115

694

500

589
196

194
365

500
190
370

215

614

1,000

3,120

491

399

2,000

1,500

3,358

512
173
372

1,990

2,308

2,060

1,359
956

0
FY2020

FY2021

FY2022

FY2023

FY2024(May FCST)

Battery materials

Powder materials

Package materials

Crystal, construction, etc.

41

6. Status of Business - Research & Development (1)(In ¥100 million)

Promoting the development of products,
new technologies and processes that contribute to carbon neutrality

R&D Expense

120

110
110
100

◆ Advanced materials (materials using hydrogen, future battery materials):
Exploring new material themes at GX Materials Science Co-creation
Research Center established in Tohoku University◆ Direct reduction of GHG emissions from existing processes✓ Reducing neutralizers, fixing CO2, using biomass reductants, etc.

92

90

◆ Direct reduction of GHG emissions from innovative smelting process✓ Pursuit of a next-generation nickel smelting and refining process,use of hydrogen reduction technologies, etc.

8070

Data/Reference

69
62

66

60
50
40
FY2019FY2020

FY2021

FY2022

FY2023◆ New businesses to reduce carbon footprints✓ Battery recycling (Ni, Co, Cu, Li): Promote a NEDO-subsidized project✓ Direct recovery of lithium from salt lake brine✓ Development of cathode materials for all-solid batteries: Promote a
NEDO-subsidized project✓ Research on photocatalyst materials for artificial photosynthesis:
Opened an industry-academia joint course on carbon dioxide with
Kyoto University42

6. Status of Business - Research & Development (2) Areas/Fields

Data/Reference

Focus on growth strategy fields, search for the seeds of next-generation business43

7. ROCE

Data/Reference

FY2022 Result
Mineral Resources
FY2022
ResultMaterials(Battery material andAdvanced material)

Smelting & Refining

8.6%

12.0%

4.8%
※ Figures for "Materials" above
do not include other than battery
material and advanced material.

【Reference：Trial Calculation in FY2024 under 21 3-Year Plan
（ROCE standard during 21 3-Year Plan period: 5.5%）】
Mineral Resources
21 3-Year Plan
2024

21 3-Year Plan
Assumed price for trial calculation

Smelting & Refining

10.1%

Materials

4.5%

4.1%

Cu

Ni

Gold

$8,000/t$7.5/lb$1,600/toz

Exchange rate
(¥/$)
115
44

８．Changes in Financial Results (FY2019 - FY2024 Forecast)（in ¥100 million）

FY2019FY2020

FY2021

FY2022

FY2023

FY2024(Forecast)

Data/Reference

FY2024(21yr-Mid Plan)

Net sales

8,519

9,261

12,591

14,23014,454

14,92011,160Gross profit

1,095

1,509

2,578

2,501

1,661

1,360

-

790

1,234

3,574

2,299

958

910

1,570

62

87

575

365

331

285

620

Mineral Resources

379

631

2,085

764

528

840

990

Smelting & Refining

482

530

1,148

1,179

622

180

480

Materials

53

105

276

173

-72

-40

150

Other

-9

-28

-9

-30

-15

-30

-30

Diff. adjustment

-115

-4

74

213

-105

-40

-20

Net income attributable toowners of parent

606

946

2,810

1,606

586

560

1,180

Copper (USD/t)

5,860

6,879

9,691

8,551

8,362

9,000

8,000

Nickel (USD/lb)

6.35

6.80

9.35

11.63

8.68

8.00

7.50

Gold (USD/toz)

1,462

1,824

1,818

1,805

1,989

2,000

1,600

Cobalt (USD/lb)

15.76

16.62

27.46

25.57

14.16

13.00

-

Exchange (JPY/$)108.74106.07112.39135.48144.63150.00115.00

Profit / loss before tax

Segment profit

Equity method profit/loss

45

9. Changes in Financial Position
Total assets (left axis)

Interest-bearing liabilities (left axis)(In ¥100
million)Data/Reference

Equity attributable toEquity attributable toowners of parent (left axis)

owners of parent ratio (right axis)

32,500ROA (right axis)（％)（FY2023 Result）

30,000100

27,50025,000Equity attributable toowners of parent ratio
59.0％

22,50020,00017,50075

50

15,00012,500D/E Ratio
0.30

10,000
7,500

5,000

25

ROA
2.0%

2,500
0

0
FY2018FY2019FY2020

FY2021

FY2022

FY202346

10. Cash Flows (FY2023 Results)(In ¥100 million)

Data/Reference

Cash flow fromoperating activities＋2,107

4,500
4,000

3,500
3,000

Free cash flow

2,500

-882

2,000

Change

1,500

-811

1,000

2,150

500

Cash flow frominvesting activities-2,9890

Beginning balance(End of FY2022)

Cash flow fromfinancing activities

FX differences,
etc.

+171

1,510

+71
Incl. dividend payments -412

Ending balance(End of FY2023)

Cash flow used in investing activities remained at a high level due to
expenditures for growth strategy, which resulted in a negative free cash flow.
Maintain an appropriate level of liquidity in hand for further future growthinvestments and continue promoting the growth strategy set out in the 3Year Plan.
47

11. Capital Investment, Investments and Financing（in ¥100 million)

Mineral Resources

Smelting & Refining

Materials

R&D/Other

2,000

1,500

1,000

1,499

1,408
182
248

66

293

21 3-Yr Total Forecast（FY2022・FY2023+FY2024Forecast）

1,741

912

200

91
43

653

1,128

421
482

500

Data/Reference

742

515

4,648

2,169

（in ¥100 million)

1,151

0

FY2022
ResultFY2022
ResultFY2024
May Plan

21 3-Yr Plan
310 740Investments and financing
excl. capital investment

960

FY2022 Result

1,017

FY2023 Result

1,480

FY2024 May Plan

776

21 3-Year Plan Total

3,273【Key Projects in FY2024 May Plan】
1.Expansion of production capacity for cathodematerials for secondary batteries for electricvehicles:
35.5 billion yen (total outlay: 47.0 billion yen）
2. Cote Gold Project:18.3 billion yen (total outlay: USD 1,134 million)

4,940（in ¥100 million)

2,930+Investments and financing

1,090
48

12. Sensitivity Estimation

Data/Reference（in ¥100 million)

Element

Fluctuation

FY2024
Profit before tax

Cu±100$/t34

Ni±10￠/lb

15

Au±10$/toz

3

Exchange rate
(Yen/USD)

±1¥/$

11

Note: The monetary value of the impact of exchange rate fluctuations provided aboveis the sum of the revenue from metal processing operations in Japan and FOREX
differences in foreign operations. It does not include the impact of inventory valuation.
49

13. Long-term Vision Targets and Their Achievements(kt)Long-term vision

300

(kt)

Long-term vision

150.0

210kt

200

300
kt

230kt

100.0

100

50.0

0

0.0

FY2021

FY2022

FY2023

FY2024(May Plan)（in ¥100 million)

FY2021

FY2022

150
kt

81kt

86kt

FY2023

FY2024(May Plan)

Net income（Attributable to owners of the parent)

Materials Business (Segment profit)
300
250
200
150
100
50
0
-50
-100

*Long-term vision focuses on“production capacity”

Ni (Annual production volume)

Cu (Production from company mines)

Data/ReferenceLong-term vision¥25.0bn¥-7.2bn（in ¥100 million)

Long-term vision

3,000
2,500
2,000

¥150.0bn

1,500-¥4.0bn
FY2021

FY2022

FY2023

FY2024(May FCST)

1,000
500
0

FY2021

FY2022¥58.6bn¥56.0bn

FY2023

FY2024(May FCST)

50

14. Material Issues for Realizing Vision for 2030

Data/Reference

SMM Group’s material issues
We assessed issues from both social and business perspectives andidentified issues with significant impact.
1

Effective Use of
Non-Ferrous Metal Resources

7

Development and Participation of
Human Resources2

Climate Change

8Engagement with Stakeholders

3

Significant Environmental
Accidents

9

Co-Existence and Mutual Prosperity
with Local Communities

4

Biodiversity

10

Rights of Indigenous Peoples

5

Employees’ Occupational
Health and Safety

11

Human Rights in the Supply Chain

6

Diverse Human Resources51

15. Carbon Neutrality Initiatives

Data/Reference

Announcement of interim target and roadmap toward carbon neutrality (December 26, 2023)

GHG Emissions Scope1+2 (10,000 tons of CO2 / year)◼ Reduction target for FY2030 ： 38% or more reduction compared to FY2015(More than 50% in Japan, 24% out of Japan)
Base YearGHG emissions inJapan

GHG emission out
of Japan

3.23 million tons of CO2（Scope1＋２）

410,000 tons of CO2 reduction
2.82 million
tons of CO2

820,000 tons of
CO2 reduction

New Targets：38％
or more reduction

2 million tonsof CO2

CarbonNeutrality

24% or more reduction
out of Japan(compared to FY2015)
50% or more reductionin Japan(compared to FY2015)

FY2015

FY2022Net-Zero
FY2030FY205052

16. Initiatives for the Environment, Communities and Human Rights

Data/Reference- Initiatives for the environment and communities➢ CBNC received the following three awards: 2023 Presidential Mineral Industry
Environmental Award (PMIEA) and first place in the Safest Mineral Processing –Extraction Plant Category and in the Best Mining Forest Contest, Mineral
Processing Plant Category.
➢ THPAL was the runner-up for PMIEA and in the Best Mining Forest Contest,
Mineral Processing Plant Category, following CBNC.
→PMIEA is the most prestigious award in the Philippines’ mining industry.
CBNC and THPAL were recognized as responsible operators in terms of safety,
contribution to society, biodiversity preservation, and so on.

- Human rights-related initiatives in supply chains
Responsible mineral sourcing→Gold/silver: Renewed LBMA RGG/RGC certification
Cobalt: RMI certification since 2021
Nickel: RMI certification since 2023
Copper: RMI certification since 2023
53

17. Engagement with Stakeholders

Data/Reference- Published Sustainability Report in addition to Integrated Report (from 2023)- Significantly increased the information we disclosed in response to demands from stakeholders
and in compliance with the revised GRI standards, new ICMM benchmarks, and the European
Sustainability Reporting Standards (ESRS)- Engagement with investors (FY2023 results)- Enhanced our information dissemination capability mainly through IR activities while
utilizing the valuable feedback obtained through our engagement with investors in ourbusiness management to raise our corporate value- President and Representative Director, Chairman and Director, Outside Directors, Executive
Officers
Financial results briefings, small meetings with President, meetings with outside directors,
engagement with institutional investors in Japan and overseas (incl. those in charge of theexercise of voting rights and ESG)
- Executive Officer in charge of IR + concerned and relevant divisions
Financial results briefings, one-on-one engagement with institutional investors, analysts,
etc. : approx. 220 times
Additionally, we also held briefings for individual investors, IR Day, business briefings,
and briefings at business bases, etc.
54

Disclaimer

The materials provided herein are not intended as disclosure materials under the Financial Instruments andExchange Act of Japan. We provide no guarantee as to their completeness or accuracy.
Any projections included in these materials are based solely on information available at the time of this briefing,
and are subject to change based on market conditions, competition conditions, and a number of other factors.
We therefore ask you not to make any investment decisions based on these materials alone. We will not be held

responsible in any way for any losses that may arise as a result of the use of these materials.
Figures are rounded or fractionalized, so totals and breakdown totals do not necessarily equal.
All copyrights, trademarks, and intellectual property rights attached to these materials are the sole property of
Sumitomo Metal Mining Co., Ltd.
Sumitomo Metal Mining Co., Ltd.

55

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