Date of Teleconference: August 7, 2024
(English translation released on September 6, 2024)
Questions and Answers Script of Teleconference
for Consolidated Financial Results for the First Quarter of the Year Ending March 2025 (FY2024)[The Status of Large Scale Projects]
Q) What is the status of large scale projects (Quebrada Blanca Copper Mine (Chile) and Cote Gold Mine(Canada)) that are currently being ramped up?
A) The Quebrada Blanca Copper Mine recently had a progress delay announced by the operator TECK in theirfinancial results announcement due to one-off factors, which is why they announced the downward
revisions to the FY2024 production plan and increases to estimated costs. However, there is no change
to the goal of reaching full operation in December 2024.
The Cote Goldmine, reached the “commercial production*” milestone our company and IAMGOLD had
set at the beginning of the project as was stated in the August 5, 2024 (JST) that we release. There isno change to the goal of reaching 90% design capacity in December 2024.
* Achievement of reaching a minimum of 30 consecutive days of operations during which the mill operated
at an average of 60% of nameplate.
[The Effect of Large Scale Projects on Profit Contribution]Q) What is the estimated contribution to profit and loss via large projects?
A) In the FY2024 full-year operating results forecast we announced in May 2024, we estimated that there would
be a year-on-year improvement of ¥22.5 bn. In this (August) full-year operating results forecast, we performed
trial calculations for profit and loss based on the recent situations of projects, but with the rise in metal prices(gold, copper) there was no change from the May forecast. We estimate contributions will be made to profit
and loss in the latter half of the year as ramping-up progresses. Further, in the equity in earnings of affiliatedcompanies, Quebrada Blanca Copper Mine is seeing a deterioration of the equity in earnings of affiliatedcompanies, but we estimate that there will be little change to the level of contribution to profit and loss in theconsolidated because base interest paid to our group is included in these factors.
[Unit Cost Differential Deterioration]Q) What is the reason for the substantial deterioration of the unit cost differential in the August full-yearforecast compared to the May full-year forecast?
A) Overseas copper mines are a significant factor, specifically the Morenci copper mine and the Cerro Verde coppermine. The Morenci copper mine is being affected by reductions in mining volume due to insufficient staff andby a deterioration in ore grade. We also estimate that there will be an increase in costs for maintenance aimed
at stable operation. Based on the results in the first half of the year, we estimate that operating costs for theCerro Verde copper mine will increase as a result of including what we assume to be possible risks.
[Smelting and Refining Segment Profit and Loss]
Q) It seems like a deceleration is forecast from Q2 when compared to Q1; why is that?
A) Q1 saw the price of metals- copper and nickel-related entities- rise, and the depreciation of the yen holdin the foreign exchange, so the impact on inventory evaluation brought profit and loss up. On the other
hand, from Q2 and on, we estimate that metal prices are going to drop and that the yen will start toappreciate in the foreign exchange when compared to Q1, so we see the worsening impact on inventory
evaluation for both copper and nickel-related entities pulling profit and loss down.
[Materials Segment Profit and Loss]
Q) What is the situation with production and sales in the battery materials business?
A) While there are variations in the EV market based on car OEM and type of car, we see them as healthy.

1There is no change to our production plan, and it is safe to say that we are close to full production.
Shipments for our products are also healthy. We have had some production adjustments reported, andwhile we do not think they will have an immediate effect, we are keeping an eye on the situation. Forplants that are under construction, as we explained in May, we are aiming to have part of the equipment
start production in FY2024 Q4 based on customer demand.
Q) What is the reason for the FY2024 Q1 segmented profit and loss seeing a substantial recovery whencompared to FY2023 Q4, and what are the factors behind the ¥5.0 bn increase in profit in the materials
segment profit and loss (August full-year forecast) when compared to the May forecast?
A) Segmented profit and loss for FY2023 Q4 included a one-off loss (¥6.4 bn) due to the transfer of asubsidiary, and the fall off of that one-off loss plays a significant factor in FY2024 Q1. Further, healthy
demand has continued in the battery materials business. Another significant factor was the advanced
materials business seeing the long period of inventory adjustments aimed at electrical parts makeprogress and demand moving from moderate to showing signs of recovery.
Q) You said that recovery was spotty and that some products would undergo inventory adjustments againcould you explain in more detail?
A) While we estimate that product subsegments aimed at generative AI will be healthy throughout the year,
other products, like materials for smartphones, are sluggish in recovery of their demand. We estimatethat these will go into inventory adjustments in Q2 and Q3, then moderately recover from Q4.
Q) In profit and loss for the Materials Segment, why are you estimating that you are going to be in the redagain from Q2 and on?
A) We estimate that a portion of the advanced materials business products will once again undergo inventory
adjustments, leading to a deceleration in Q2 and Q3 and a moderate recovery in Q4. Additionally, weestimate that development costs for SiC and upfront costs in the battery materials business that comewith the start of production at the new Niihama plant will increase.
[Business Environment Status]
Q) Metal prices and the foreign exchange have been very volatile recently. It seems like copper prices andthe exchange rate are weakening more than the assumptions in the August operating results forecast
including large scale projects, what kind of effect is this going to have on results?
A) Please refer to the Supplementary Explanation Material of Financial Summary. The effect on the operating
results forecast due to fluctuations in the metal prices and foreign exchange used as assumptions in theAugust operating results forecast is listed in sensitivities on page 18. Also, please take note that thesensitivities do not include impact on inventory evaluation. For large scale projects, we estimate that theincrease in costs from ramping up is going to be covered by the increase in metal prices. If metal prices
fall below that which we used as an assumption, there will be a negative effect on our results.
Q) Chinese copper smelters are increasing production, which is causing a drop in the copper concentrates
spot TC/RC. What is the effect of this change to conditions going to be moving forward?
A) To start, supply and demand for copper concentrates is seeing a limited increase in supply due to a portionof suspension of operation of copper mines and delays in the operation of new copper mines. On theother hand, there is healthy demand due to the starting up of new smelters. With such a supply anddemand environment, spot TC/RC (the processing revenue that smelters receive) is holding at a levelthat is far below that which we have seen historically. While it is conceivable that some smelters will not
be able to handle this and will reduce production, it seems unlikely that the supply-demand environment
would not slow down when demand is this healthy. If that was to happen, the effect on year-end TC/RC
condition negotiations would be unavoidable, so we are keeping an eye on the situation. However,smelters having a smaller portion means mines will have a larger portion. Although not all of the copper
concentrate used is from mines which our group hold mining interests, the increase in profits on themining side will mitigate the decrease in profits on the smelting side.

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