Attachment

PACIFIC METALS CO., LTD.
Financial Results Briefing Session for the Six Months
Ended September 30, 2023
November 16, 2023

PACIFIC METALS Website:
https://www.pacific-metals.co.jp/en/
Inquiries:
General Administration Dept. (IR Group) TEL: +81-3-3201-6681

2

Table of Contents
1. Profile(1) Company overview(2) Trends in operating results and financial condition(3) Trend in operating results of segments

345

2. Business Details
Nickel business
1) Ferronickel business
From raw-material procurement to sales
Raw-material procurement
Production
Sales2) Ferronickel slag business

6
7
8
9
10

3. Q&A List about Pacific Metals
4. Medium-term Business Plan PAMCO-2024 (Announced on May 10, 2022)

11
12

3

1. Profile  (1) Company overview
Company Overview (As of March 31, 2023)

Brief History

Business

Production and sales of ferronickel and ferronickel slag products
Waste recycling business

1949

Founded as Nisso Steel Co., Ltd. after being spun off from the steel divisionof Nippon Soda Co., Ltd.

Established

December 1949

1952

Listed on both the Tokyo and Osaka Stock Exchanges

1954

Started production of ferronickel

1968

Started production of stainless steel

Tokyo Head Office
Location

1-6-1 Otemachi, Chiyoda-ku, Tokyo 100-0004

Hachinohe Head
Office Location

5-2, Toyama Shinden, Kawaragi, Hachinohe City, Aomori 031-8617(Hachinohe Works)

1970

Absorbed Pacific Nickel Co., Ltd. through merger and changed its name to
Pacific Metals Co., Ltd.

468 people (consolidated), 422 people (unconsolidated)

1973

Acquired an equity stake in Rio Tuba Nickel Mining Corporation (thePhilippines) and got involved in development of nickel mines

Number of Issued
Shares

19,577,071 shares

1987

Acquired an equity stake in Taganito Mining Corporation (the Philippines) and
got involved in development of nickel mines

Securities Code5541 Tokyo Stock Exchange (Prime Market)

1995

Installed a 60,000-kVA electric furnace for ferronickel smelting. Three electric
furnace systems established at the Hachinohe Works

1998

Acquired ISO 9002, then transitioned to ISO 9001: 2000 in 2003

1999

Withdrew from the stainless-steel business. Transferred headquartersfunction to Hachinohe to become a specialized manufacturer of ferronickel

2003

Started a waste recycling business2009

Acquired ISO 14001 (environmental management)2012

Acquired OHSAS 18001: 2007

Number of Employees

Name
Major Shareholders* Ownership ratios arecalculated excluding 75,035
shares of treasury stockBusiness Size
(Consolidated)(Million yen)

Number of
Shares Held
(1,000 shares)

Ownership
Ratio
(%)

The Master Trust Bank of Japan, Ltd.

3,257

16.70

NIPPON STEEL Stainless SteelCorporation

2,049

10.51

Custody Bank of Japan, Ltd.

1,373

7.04

2013

Started operation of wastewater terminal treatment facilities

Net Sales

34,852

2014

Started operation of an Integrated Management System

Operating Profit-12,5882023

Withdrew from the waste recycling business

Ordinary Profit-4,960

Profit Attributable to Owners of
Parent-5,026

Total Assets

78,825Net Assets

72,034

Share Capital

13,922

Interest-Bearing Debt－

Head Office (Hachinohe Works)

1. Profile

Trend in Operating Results

Net sales (Unit: billion yen)
800
80.0

61.2

600
60.0
400
40.0
200
20.0
0

-4.0

-6.1

-7.7

-1.5

-12.2
-15.3

-0.5
-3.0

-3.5

2014.32015.32016.3

41.2

-0.2
-3.2

-0.8

2017.32018.3Operating
営業利益
profitOrdinary
経常利益

44.1

93%

profit

34.8

32.2

3.6

0.1

-1.8

3.4

-0.4

0.9

2019.32020.3

Net profit
当期純利益

12.9

3.3

0.6

1.1

2021.3

600
60.0

11.3

4.8

2022.3

91%

92%

89%

89%

89%

400
40.0
200
20.0

-12.5

-5.0

-4.9

2023.3

0
-20.0
△ 200
-40.0
△ 400

売上高
Net sales

Trend in Financial Condition

Amount (Unit: billion yen)
150.0
1,500

49.0

-38.3

(200)
(400)

57.1

47.6
38.6

0.0

Profit (Unit: billion yen)
800
80.0

56.4

-1.8

4

 (2) Trends in operating results and financial condition

Ratio

90%

88%

89%

91%

100%

120.0
1,200

80%

90.0
900

60%

60.0
600

116.1 107.8

120.1

30.0
300
00

40%

109.8
73.8 67.7

71.7 63.7

70.3 62.6

71.9 64.4

69.9 63.5

75.4 67.0

89.8

80.1

78.8 72.0

0.2

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

2014.32015.32016.32017.32018.32019.32020.32021.32022.32023.3

Interest有利子負債

Net
純資産

Equity ratio
自己資本比率

Total
総資産
assetsbearing debt

assets20%0%

1. Profile

Net Sales of Segments(Unit: billion yen)
800
80.0
0.7
1.6

600
60.0

0.9
1.3

400
40.0
54.3

200
20.0
0
0

5

 (3) Trend in operating results of segments

2014.359.0

2015.3

1.9
0.6

0.8
0.6

0.7
0.7

37.3

39.8

2017.32018.3

45.2

2016.3

Nickel business
ニッケル事業

Segment

Power generation

48.1

2019.3

発電事業
business(2013.4–2019.3)

Company Name

(Note)

Gas Business(Note)

0.1
0.6

Ownership
Ratio

1.2
0.6

43.4

2021.3

0.0
0.7

56.3

34.1

30.4

2020.3

Gas business
ガス事業(2019.4–)

2022.32023.3Other
その他

Business(As of March 31, 2023)
Production and sales of ferronickel products,
ferronickel slag products, and incinerated ash
recycling

Pacific Metals Co., Ltd.

Nickel Business

0.3
0.5

0.9
0.1

◎ Taiheiyo Kosan Co., Ltd.

74.0%

Transport, contracting, real estate, etc.

＊ Taganito Mining Corporation

33.5%

Mining and sales of ore (in the Philippines)＊ Rio Tuba Nickel Mining Corporation

36.0%

Same as above＊ Pacific Sowa Corporation

33.7%

Sales of cast and forged steel products, industrial
machinery, etc.

◎ Pacific Gas Center Co., Ltd.

50.0%

Production and sales of gasses◎: Consolidated subsidiary ＊: Affiliated company accounted for by the equity method(Note) Pacific Metals has changed its business segments to be described as reportable segments of the Group since the second quarter of the fiscal year ended March 2021, and has set“nickel business” and “gas business” as the reportable segments.

6

2. Business Details  Nickel business
1) Ferronickel business—from raw-material procurement to sales—
Raw-Material
Procurement

Production* Survey by Pacific Metals

Sales<Types of nickel ores> Oxidized nickel ore: Used by
Pacific Metals<Products after smelting> Oxidized nickel ore: Ferronickel<Application by product> Ferronickel→ Stainless steel and nickel alloysteel

 Sulfurized nickel ore Nickel sulfide ore: Nickel metal

 Nickel metal→ Stainless steel, electromagnetic
materials, plating and nickel
alloy steel(Composition: Approx. 15% by nickel and approx. 85% byiron)(Composition: 99.9% by nickel)

Nickel30,000 Ni tons/year

Iron
14%

Iron

170,000 tons/year

Others72.3%

Slag1,350,000 tons/year

Crystallized water 12.0%(Moisture
evaporation)

950,000 tons/year

Composition of Nickel Ore

Purchasevolume of ore

2,500,000 tons/year

Ni
1.7%

Ferronickel
products
Ferronickel slag
products* Reference figures on the assumption that nickel ore grade is 1.7% (on a dry-basis) and annual nickel production is 30,000 tons.

7

2. Business Details  Nickel business
1) Ferronickel business—raw-material procurement—

Pacific Metals’ Purchased Volume of Oxidized Nickel Ore(14,000 Ni tons for the fiscal year ended March 2023)

Oxidized Nickel Ore Deposits in the World
The
Philippines
5% Other6%
Brazil8%

New
Caledonia
26%

Indonesia
12%
Cuba
21%

* Survey by Pacific Metals

New Caledonia
50%

The Philippines
50%

Australia
22% The Philippines

Rio Tuba Nickel Mining and Taganito Mining are joint ventures in which Pacific
Metals holds a 36% stake and a 33.5% stake, respectively. Pacific Metals has
provided full-scale technical and personnel assistance and kept mutual exchange
since the initial stage of mine development.

○ New Caledonia
Cuba

The Philippines

BrazilIndonesia
Australia

New Caledonia

Pacific Metals has had transactional relations with Montagna for more than 20
years, and has offered various forms of assistance including financing to MKM.
We have provided both companies with technical cooperation concerning theoperation of mines to procure ore stably based on 10-year long contracts.

○ Indonesia

Pacific Metals provided PT Antam with technical assistance as the generalsupervisor related to the construction of Indonesia’s first ferronickel smelting plant
as of 1975, and operational guidance. Since then, the Company has provided awide range of technical assistance in mining operations, nickel smelting, etc. over
the years.
* In January 2014, a policy to ban exports of unprocessed ore came into effect. From
January 2017 to December 2019, that policy was partially eased.

8

2. Business Details  Nickel business
1) Ferronickel business—production—
Global Ferronickel Production(Unit: 1,000 Ni
tons)

400
350

45

300

53

250

43

200
150
100
50
0

47

43

44

47

48

41

39

41

45

27
24
18
23
22
16
18
17
44

34
26
28
24
20
18
19
18
17
43

2019

2020

2021

25
34
23
23
18
28

25
22
31
20
20
12
19
24

82
2018

Ferronickel Production in Japan(Unit: 1,000 Ni tons)

60

45

43

* Survey by Pacific Metals

44

44

42

50

40
41

40

42

34

24
29
18
18
10
24
15
25
18
2022

31

30

18

South Korea

24

Japan

18

20
Year

Others overseas
海外その他

Glencore (New Caledonia)
グレンコア（ニューカレドニア）

Two Japanese companies
日本2社

Vale (South America)
ヴァーレ（南米）

CNMC (Myanmar)
CNMC（ミャンマー）Solway (Guatemala)Solway（グアテマラ）

Pacific Metals
大平洋金属

Americano Ni (Dominica)
AmericanoNi（ドミニカ）

PT Antam (Indonesia)
アンタム（インドネシア）

South32 (Columbia)
サウス32（コロンビア）

Eramet (New Caledonia)
エラメット（ニューカレドニア）

Anglo American (South America)
アングロアメリカン（南米）100Columbia

14

13

13

13

11

5

5

5

5

2018

2019

2020

2021

4

New Caledonia

2022 Year

Sumitomo
Pacific Metals
住友金属鉱山大平洋金属
Metal Mining（日向製錬所）(Hyuga Smelting)Nippon Yakin
日本冶金工業Kogyo

SNNC (South Korea)
SNNC（韓国）

Indonesia

 Ferronickel Manufacturing Process Chart
High-temperature
exhaust gas

高温排ガス
微粉炭 coal
Pulverized

Granulator
粉砕機

Ｈ/Ｃ
フェロニッケル

H/C ferronickel

石炭Coal
配合炭 coal
Blendedクラッシャー
Crusher

ドライヤー
Dryer

Crusher
クラッシャー
Nickelore
ニッケル鉱石ショット
Shot

Rotarydryer
ロータリードライヤー
Burner
バーナー
ロータリーキルン
Rotary kiln

Shot-casting
ショット鋳造機

Slag
スラグ
Metal
メタル

回収熱風
ロータリーキルンバーナーへ

Impactdryer
インパクトドライヤー

Nickelニッケル
煆焼鉱calcinated
ore

PNＰＮ脱硫装置
desulfurization
unit

machineフェロニッケル
Ferronickel
smelting
electric
furnace
製錬電気炉
風砕スラグ

クーラー

20-kg
ingot
２０Kg
インゴット

スラグ風砕機貯蔵タンク

徐冷スラグ
Annealedslag

粗フェロニッケル
Crude
ferronickel

Pig鋳銑機
machine2. Business Details  Nickel business

91) Ferronickel business—sales—
Trend in Sales Volume (by Country)(Ni tons)
40,00037,80135,0004,856

32,27430,000

4,062

3,593
2,071

25,00020,00015,00010,0005,000
033,100

3,981

3,299

6,155

11,7696,440

31,60032,000

3,444

3,782
3,081

4,640

28,5333,019
3,832

10,855

13,197

11,617

11,675

2,897

1,903

803

3,015

9,161

5,762

7,282

9,080

8,295

9,841

11,038

11,2682014.32015.32016.32017.32018.32019.3

8,279
4,908
8,494
2020.3

Trends in Net Sales of Nickel Business and LME Nickel Price LME Nickel Price

Amount(billion yen)

140.0
1,400
120.0
1,200
100.0
1,000
80.0
800
60.0
600
40.0
400
20.0
200
00
-20.0
△ 200
△-40.0400

12,44034,5252015.32016.32017.32018.3

Net
sales
売上高

2019.32020.32021.3Operatingprofit
営業利益2022.32023.3

5,926
1,813
6,435
2021.3

China
中国

7,162
12,393
151
2,689
1,658
1,605
6,290

6,236
1,509
10,3002022.3

Taiwan
台湾
South
韓国
Korea
国内
Japan

2023.3Standards for the Ferronickel Sales Price($/Ton)2014.3

20,793
800
5,819

India
インド

27,0601,854

35,00030,00025,00020,00015,00010,0005,000
0-5,000-10,000

 For Japan[The LME nickel price (Average of the previous 3 months)] ×[Foreign exchange rates (Average of the previous 3 months)]

 For export[The LME nickel price (Average of the previous month)] ×[Foreign exchange rates (spot)]→ Pacific Metals’ revenue is linked with the LME nickel price* Reference prices are adjusted in addition to the above due to changes inthe sales environment

LME
LME

(Nickel Business)

2014.32015.32016.32017.32018.32019.32020.32021.32022.32023.3

Net Sales (Million yen)

54,30259,06545,23937,35739,855

48,142

44,13330,41956,33834,135

Operating Profit (Million yen)

-3,978-7,987-16,208-3,129-3,412382-1,879

-567

4,950

-12,441

LME ($/Ton)

14,356

16,825

10,387

10,042

11,15912,893

13,991

14,99920,602

25,629FX TTS (¥/$)

101.24110.93121.14109.38111.85111.91109.74107.06113.38136.47* The LME nickel priceand FX TTS are theaverages during eachfiscal year.

10

2. Business Details  Nickel business
2) Ferronickel slag business—overview—
Ratio of Ferronickel Slag Products by
Application (Fiscal Year Ended March 2023)
Others0.7%

Earthwork
materials forlanddevelopment
41.2%

Subgradeandsubbasematerials
58.1%

Application

Main Features and Benefits(1) Subgrade andsubbase materials

Suitable for soil covering to improve soft
ground(2) Earthwork materials
for land development

Sufficient strength as subbase material andhigh freeze-thaw resistance(3) Smelting materials

Used as auxiliary raw materials to adjust thecomposition of blast-furnace slag

Trend in Sales Volume of Ferronickel Slag
Products(10,000 tons)
180
160
140
120
100
80
60
40
20
0

2019.32020.32021.32022.32023.3

Scene of Pacific Metals’ ferronickel slag products in use

11

3. Q&A List about Pacific Metals(1) How do the LME nickel price and foreign exchange rates affect operating results?
- Premise: The selling price of ferronickel products is based on the standard which is [LME nickel price] × [Exchange rates] (Seepage 9)- Therefore, a rise in the LME nickel price and a weak yen in the FX market work to Pacific Metals’ advantage.
(On the other hand, a weak yen in the FX market becomes a factor that increases purchasing costs of raw materials.)

LME nickel price trend

Price fall

Foreign exchange trend

Stronger yen

Profitdecrease

Weaker yen

Profitincrease

Price rise

* The standard composition is shown in the chart. Note that the range of increase/decrease in profit fluctuates due to adjustments to reference prices associatedwith changes in the sales environment.

(2) Which cost factors have a stronger effect on operating results?
- To cite factors impacting operating results in descending order.
(1) Nickel ore, (2) Energy (electricity and heavy oil), (3) Freight (transport of nickel ore and coal) and (4) CoalHigh

Impact on operating results

Low

12

Medium-term Business Plan
PAMCO-2024(Announced on May 10, 2022)

4. Medium-term Business Plan PAMCO-2024 (Announced on May 10, 2022)(1) Positioning of the Medium-term Business Plan
• Revision of the long-term vision

A comprehensive materials company that co-creates a sustainable,
recycling-oriented society* We aim to be a comprehensive materials company (nickel, other metals, recycled materials, etc.) that promotes the efficient use andrecycling of finite resources and continues to work with stakeholders to create a sustainable, recycling-oriented society.

• Theme of New Medium-term Business Plan PAMCO-2024“Further strengthen the platform and promote the sustainability
strategy”* Further strengthen the foundation established under PAMCO-2021 to enable flexible and rapid response to changes in the business environment.
* Promoting a sustainable strategy to solve society’s issues and PAMCO’s material issues.

A comprehensive materials company that co-createsa sustainable, recycling-oriented society

FY2024

PAMCO-2024
Further strengthen theplatform and promote thesustainability strategy

FY2027

Promote growth strategy andexpand sustainability strategy

FY2030–13

4. Medium-term Business Plan PAMCO-2024 (Announced on May 10, 2022)

14(2) Business environment surrounding PAMCO: Emerging risks and opportunities
Segment

Risks expected in the period covered by
PAMCO-2024

LME Ni price• The growing impact of factors represented by
VUCA, such as the future of U.S.-China
confrontation, the invasion of Ukraine, andchanges in the social and economic structure
due to COVID-19

Resources• Export ban of Indonesia, a major resource-richcountry, is firmly in place. The decline in ore
grades in the Philippines and the shift inresource policy.
• Gradual increase in demand for non-FeNi and
NPI due to expanding demand for EVs

Market• Intensifying market competition due tocontinuous expansion of NPI production
capacity in Indonesia• Increasing expectations for low-carbon
products

Energyenvironment• Trend toward a low-carbon society• Impact of the invasion of Ukraine on electricity
prices, etc.

Labor

• Changes in the labor market against a
backdrop of workstyle reform, diversity, etc.
triggered by COVID-19

Segment

Opportunities expected in the period
covered by PAMCO-2024

Ferronickel
business• Global demand for stainless steel is expected
to continue to grow steadily• Expanding commercial opportunities for lowcarbon products against the backdrop of the
global trend toward a low-carbon society

Growth andexpansion of
new productmarkets (EV)• As the automotive industry shifts to EVs,
demand for nickel for battery applications is
expected to grow• Expanding opportunities to address risingdemand for nickel sulfate and cobalt sulfate in
the growing market for LIBs

Recyclingbusiness• Expectations for a recycling-oriented society
and economy are growing• Greater opportunities to launch new
businesses through collaboration with othercompanies• Greater demand for special construction
materials due to the acceleration of various
measures for disaster prevention/mitigationand national land resilience

Increased momentum of initiatives to minimize “risks” and exploit “opportunities”

4. Medium-term Business Plan PAMCO-2024 (Announced on May 10, 2022)

15(3) Material issues (materiality)

 Restructuring of ferronickel production and sales systems withemphasis on profitability Acceleration of consideration of expansion into overseas
smelting business Creation of new businesses that contribute to society Diversification of business in Japan to contribute to a recyclingoriented society
 Enhancement of corporate value by addressing sustainability
issues16

4. Medium-term Business Plan PAMCO-2024 (Announced on May 10, 2022)(4) Trends in LME nickel prices and nickel inventory volumes
LME nickel price(Unit: $/t)

LME nickel inventory

SHFE nickel inventory* Surveyed by Pacific Metals
LME/SHFE nickel inventory(Unit: 1,000 Ni tons)

LME nickel price

40,000600

Due to the situation
related to Russia andUkraineIndonesia announced thebringing forward of thereintroduction of a nickel ore
export ban

30,00020,000Indonesia banned nickel ore
exports, and the Ukraine situation
destabilized

500

400

Moves of reopening economic
activities in countries
expanded in some areas

300
Indonesia relaxed thenickel ore export ban withconditions

200

10,000

Steady demand forstainless steel in China0
Trend in operating
results

2013

2014

2015

Fiscal year ended
March 31, 2013

Fiscal year ended
March 31, 2014

2016

Fiscal year ended
March 31, 20152017

Fiscal year ended
March 31, 2016

Mainly due to USChina trade tensions

2018

Fiscal year ended
March 31, 20172019

Fiscal year ended
March 31, 20182020

Fiscal year ended
March 31, 2019100

Widespread
COVID-19 infections

2021

Fiscal year ended
March 31, 2020

2022

Fiscal year ended
March 31, 2021

0

Fiscal year ended
March 31, 2022

Net sales(million yen)

58,48856,40861,22547,64938,697

41,21049,062

44,13332,217

57,129Operating profit(million yen)

2,168

-4,079-7,787-15,357-3,070-3,239176-1,879

-493

4,806

Ordinary profit(million yen)

4,920

-1,838-91-12,283

-515

-203

3,451

972

3,344

12,999

4. Medium-term Business Plan PAMCO-2024 (Announced on May 10, 2022)(5) Outlook for stainless steel production and nickel supply and demand
Nickel supply and demand(Unit: 1,000 Ni tons)

17* Surveyed by Pacific Metals

Stainless steel production(Unit: 1,000 tons)

70,0003,800
For
nonSUS
33%

3,600
3,400

65,000
Ni user(2022)

For
SUS
67%

60,0003,200

55,0003,000

50,0002,800

45,0002,600

40,0002,400

35,0002,200

30,0002,000

25,0001,800

20,000

1,600

2012

2013

2014

2015

Nickel supply

2016

2017

2018

Nickel demand

2019

2020

2021

Stainless steel production

2022

2023

15,0002024

18

4. Medium-term Business Plan PAMCO-2024 (Announced on May 10, 2022)(6) Outlook for stainless steel production and nickel supply and demand by region* Survey by Pacific Metals
Outlook for stainless steel production
Other
Indonesia
China
TaiwanSouth Korea
US
India
EuropeJapan 61,900

1,100(Unit: 1,000 tons)

67,3001,100
6,500

Outlook for nickel demand
Other
Indonesia
China
TaiwanSouth Korea
US
India
Europe
Japan

3,010

5,600

(Unit: 1,000 Ni tons)

3,580
110
530

Outlook for nickel supply
Others(Unit: 1,000 Ni tons)
AfricaEuropeNorth America and Latin America
Russia and the Middle East
Oceania
Indonesia (NPI)
3,600
China (NPI)
China
80
Asia (excluding China)

3,020
80
270

100
430

290
34,700

2,060
1,670

1,000
2,400
2,800

4,100

4,800

290
140
210

130
180

38,300

1,000
2,400
2,600

310

1,370
1,140

30
110
130
70
340

310

7,500

7,500

30
90
120
60
320

2,900

2,900

190

200

260

330

2022

2024

2022

2024

2022

2024

300
370

560

4. Medium-term Business Plan PAMCO-2024 (Announced on May 10, 2022)(7) Priority measures
Contribute to the achievement of the SDGs through the resolution of material issues
Restructuring of ferronickel
production and sales systems withemphasis on profitability

1) Establishment of optimal production system by reviewing production strategy• Establish optimal production system to further strengthen the platform.
2) Strengthening of cost competitiveness by reviewing procurement strategy• Review and strengthen procurement strategies for fuels and other raw materials,
according the highest priority to cost competitiveness.

Acceleration of consideration of
expansion into overseas smelting
business

3) Promotion of overseas smelting projects and start-up of production• Establish optimal ferronickel production and sales system by combining domestic
and overseas smelting operations.

Creation of new businesses that
contribute to society4) Promotion of production and sales of raw materials for LIB materials• Create a business to manufacture and sell raw materials for LIB materials by
utilizing hydrometallurgical technologies.

Diversification of business inJapan to contribute to a recyclingoriented society5) Restructuring of recycling business• Promote restructuring of our recycling business through collaboration with othercompanies, etc.

19

20

4. Medium-term Business Plan PAMCO-2024 (Announced on May 10, 2022)(7) Priority measures
Contribute to the achievement of the SDGs through the resolution of material issues
Enhancement of corporate value
by addressing sustainability issues6) Sustainability Promotion Council• Positioning the response to climate change and the realization of a sustainable
society as the most important management issue, promote specific measuresacross PAMCO, including discussions on medium- to long-term initiatives anddirections concerning material sustainability issues.

CO2 emissions

Over 46% reduction

7) Reduction of GHG emissions• To achieve carbon neutrality by FY2050,
implement measures with clear targets,
including use of carbon-free energy andintroduction of new technologies.
FY2013

FY2030Net zero

FY20508) Promotion of symbiosis by contributing to the development of regions and resourcerich countries• Promote symbiosis through activities that contribute to the development of theregion and resource-rich countries.
9) Promotion of constructive dialogue with stakeholders• Disclose operating and financial conditions in a timely, appropriate, and fair manner,and actively communicate and promote constructive dialogue on the market
environment and our unique strengths.

4. Medium-term Business Plan PAMCO-2024 (Announced on May 10, 2022)

21(8) Outlook for sales by country
Period covered by PAMCO-2024

India

Fiscal year ended March 2023 saw sales volumes decrease following a fall in
production volumes resulting from the molten substance leak that occurred at theend of the fiscal year ended March 2022.
Aiming for a production system recovery from the second half of the fiscal year
ended March 2023, the Company expects sales volumes to return to the level ofthe fiscal year ended March 2022.

China
TaiwanSouth Korea
Japan
27,06027,50027,500

1,854

3,600

3,600

8,400

8,500

3,800

3,300

3,000

1,509

2,000

2,400

2,400

10,300

9,500

9,800

10,000Results for the fiscal year ended
March 31, 2022

PAMCO-2024
Forecast for the fiscal year ended
March 31, 2023

PAMCO-2024
Forecast for the fiscal year ending
March 31, 2024

PAMCO-2024
Forecast for the fiscal year ending
March 31, 2025

7,162

20,500
950
4,250

6,236

22

4. Medium-term Business Plan PAMCO-2024 (Announced on May 10, 2022)(9) Ore procurement plan
1) Status of conclusion of long-term contracts
Fiscal year ended
March 31, 2021

Other party in long-term contracts

Fiscal year ended
March 31, 2022

Prior contract period Taganito Mining Corporation (33.5% stake held by Pacific Metals)

Prior contract period

 Cagdianao Mining Corporation

Prior contract period

Renewed Rio Tuba Nickel Mining Corporation (36% stake held by Pacific Metals)

Fiscal year ended
March 31, 2023

Contract period: Jan. 2022 to Dec. 2026 (5 years)
Contract period: Jan. 2022 to Dec. 2026 (5 years)

Contract period: Jan. 2014 to Dec. 2023 (10 years)

 MKM (2)Contract period: Jan. 2016 to Dec. 2025 (10 years)

 Montagna SARL

Contract period: Apr. 2016 to Mar. 2026 (10 years)
 New Caledonia

3) Status of procurement

2) Procurement ratio
Period covered by PAMCO-2024

100%

•



80%
60%




40%
20%
0%

Fiscal year ending
March 31, 2025

Contract period: Jan. 2022 to Dec. 2026 (5 years)

 MKM (1) The Philippines

Fiscal year ending
March 31, 2024

Results for the fiscal
year ended March 31,
2022

PAMCO-2024
Forecast for the fiscal
year ended March 31,
2023

New Caledonia

PAMCO-2024
Forecast for the fiscal
year ending March 31,
2024

The Philippines

PAMCO-2024
Forecast for the fiscal
year ending March 31,
2025

•


Environment surrounding nickel ore procurement
Export ban of Indonesian ore came in effect in January 2014.
The export ban was relaxed temporarily between January
2017 and December 2019.
Afterwards, the export ban was reintroduced in January 2020.
Since then, ore supply and demand has remained tight.
The Company’s ore procurement policy
As an ongoing ore procurement policy, the Company ispushing forward with the expansion of ores procurementfrom New Caledonia.

23

4. Medium-term Business Plan PAMCO-2024 (Announced on May 10, 2022)(10) Investment plan
1) Capital investment• Capital investment that contributes to the maintenance, efficiency, and longevity offacilities

2) Strategic investment• i) Domestic business Business investment based on business profitability evaluation of domestic
business candidates considered in PAMCO-2021• ii) Overseas business, resources
 Business investment based on decision to participate in overseas smelting
projects
 New mining area development surveys, etc., to secure resources• iii) R&D investment
 R&D investment for sustainable nickel business(Million yen)
1) Capital investment

Period covered by
PAMCO-2021

Period covered by PAMCO-2024
FY2022

FY2023

FY2024

Total

2,466

1,495

1,351

1,004

3,850

2) i) Domestic business

—

53

500

7,472

8,025

2) ii) Overseas business,resources

—

5,506

18

8

5,532

2) iii) R&D investment

—

35

0

1,000

1,035

2,466

7,089

1,869

9,484

18,442

新中期経営計画「PAMCO-2024」重点施策達成のための投資促進

Total

Promoting investment to achieve the priority measures of new medium-term business plan PAMCO-2024

4. Medium-term Business Plan PAMCO-2024 (Announced on May 10, 2022)

24(11) Capital policy
1) Dividends of surplus•

Positioning the return of profits to shareholders as one of the important management issues, the Company will
aim to achieve a consolidated dividend payout ratio of 30% while enhancing and strengthening its corporate
structure.

2) Internal reserve•

Use internal reserve as a fund to respond functionally to changes in the business environment and utilize thefund to secure resources, develop new technologies, make capital investments, and acquire treasury shares aspart of its capital policies.
Expansion andreinforcement ofshareholders return

Diagram of usage of funds••

Aim at a consolidated dividend
payout ratio of 30%
Acquisition of treasury shares,
etc.

Enhancementof corporate
value•

Flexibly respond tochanges in thebusiness environment

Ensuring fiscal
soundness

Growthinvestment•••

Securing natural
resources
Development of newtechnologies
Capital investments,
etc.

25

4. Medium-term Business Plan PAMCO-2024 (Announced on May 10, 2022)(12) Indicators for each fiscal year (earnings plan)(Million yen)

Period covered by PAMCO-2024
FY2022

FY2023

FY2024

Total

Production
volumeNi t

20,81029,03728,45478,301

Sales volume

Ni t

20,50027,50027,50075,500ApplicableLME nickel
price(US$/lb.)

9.73

8.79

8.75

9.03

Applicableexchangerate(¥/US$)

111.05111.06111.07111.06

Net sales

50,21060,95860,801

171,969

Operating profit

925

225

1,809

2,959

Ordinary profit

3,844

2,822

4,549

11,215

Profit attributable toowner of parent

3,513

2,415

4,058

9,986

Total assets

89,59491,934

97,914—

Net assets

81,02682,41685,797—

Investment

7,089

1,869

9,484

18,442

Depreciation

314

402

536

1,252

Consolidated(Million yen)26

4. Medium-term Business Plan PAMCO-2024 (Announced on May 10, 2022)(13) Consolidated ordinary profit and loss analysis (First year of PAMCO-2024 period)(Unit: billion yen)

-9.2 billion yen

20.0
20.0
18.0
18.0
16.0
16.0
14.0
14.0

Results forthe fiscal year
ended
March 31, 2022
13.0 billion yen

-9.1

12.0
12.0

+11.7

LME prices are projected to rise, but the Company expects
net sales to decrease due to lower volumes resulting fromthe accident involving a leakage of a molten substance atthe end of the fiscal year ended March 2022. A certain levelof profit is forecast to be recorded as equity gain. However,amid increasing uncertainty in the environment surrounding
natural resources, the Company forecasts for this period
are conservative. Although ordinary profit is projected todecrease year-on-year, profit is expected to be recorded.

10.0
10.0
-0.0

±0.0

8.0
8.0

-4.5

-0.3

-13.6

6.0
6.0

+0.4

-0.8

4.0
4.0

Forecast for
the fiscal year
ended
March 31, 2023
3.8 billion yen

+7.0

2.0
2.0
0.00
-2.0
-2.0

Results for the
fiscal year ended
March 31, 2022

Sales volume

LME price, etc.

Exchange rates

Factors in ferronickel net sales-6.9 billion yen

Sales volume

Raw material
prices, etc.

Evaluation of
inventory

Ferronickel
deprecation

Factors in ferronickel cost of sales+2.6 billion yen

Ferronickel selling
general andadministrative
expenses

Equity gains

Other-4.9 billion yen

Others

Forecast for the
fiscal year ended
March 31, 2023

This material is not disclosure material under the Financial Instruments and Exchange Act and the Company does not guarantee the accuracy orcompleteness of the information.
Any forward-looking statements in this material are based on information available at the time of preparation and may differ from actual results due
to changes in circumstances that may arise in the future. Therefore, please refrain from making investment decisions based solely on this material.
The Company assumes no responsibility whatsoever for any damage resulting from the use of this material.
All copyrights, trademarks, and other intellectual property rights related to this material are the property of the Company.