May 10, 2022
To whom it may concern,
Company name:
Representative:

Head Office:Contact:

PACIFIC METALS CO., LTD.
Aoyama Masayuki, President andRepresentative Director(Securities code: 5541
TSE Prime Market)
1-6-1 Otemachi, Chiyoda-ku,
TokyoMatsuyama Terunobu,
Managing Executive Officer andDirector(Telephone: +81-3-3201-6681)

Notice Concerning Formulation of the Medium-term Business Plan “PAMCO-2024”(from FY2022 to FY2024)
PACIFIC METALS CO., LTD. (the “Company”) established the long-term vision, “Become a world-classferronickel manufacturer with comprehensive power” in fiscal 2016 in order to establish a management
platform capable of responding to changes in the business environment and to achieve continuous growth.
Previously, we formulated the Medium-term Business Plan PAMCO-30 and then the Medium-term Business
Plan PAMCO-2021, and endeavored to achieve this long-term vision.
However, during the period covered by these plans the business environment surrounding the Company has
become increasingly severe due to the materialization of resource nationalism in the nickel ore-producing
countries, changes in the market structure of mainstay products, and other factors. The situation is unpredictable
due to soaring resource and energy prices, etc., caused by the tense situation in Ukraine.
In this business environment, having positioned further strengthening of the platform, contributing to theSDGs, and becoming carbon neutral as important issues for the Company, we aim to evolve as a sustainable
company by building and developing a business structure based on problem-solving.
Based on the above, we have set forth a new long-term vision, “A comprehensive materials company thatco-creates a sustainable, recycling-oriented society,” and have formulated a new Medium-term Business Plan
(PAMCO-2024) to realize this vision.

Overview of the new Medium-term Business Plan PAMCO-2024(1) Period: Three years from FY2022 to FY2024(2) Long-term vision:“A comprehensive materials company that co-creates a sustainable, recycling-orientedsociety”(3) Theme of PAMCO-2024:“Further strengthen the platform and promote the sustainability strategy”

1(4) Positioning of the Medium-term Business Plan

(5) Materiality and Priority Measures (1) to 9))—Contribute to the achievement of the SDGs through the resolution of materialissues—
Restructuring of ferronickel production and sales systems with emphasis on profitability
1) Establishment of optimal production system by reviewing production strategy
2) Strengthening of cost competitiveness by reviewing procurement strategy
Acceleration of consideration of expansion into overseas smelting business3) Promotion of overseas smelting projects and start-up of production
Creation of new businesses that contribute to society4) Promotion of production and sales of raw materials for LIB materials
Diversification of business in Japan to contribute to a recycling-oriented society5) Restructuring of recycling business
Enhancement of corporate value by addressing sustainability issues6) Sustainability Promotion Council—Promotion of medium- and long-term initiatives related to material sustainability issues—7) Reduction of GHG emissions
8) Promotion of symbiosis by contributing to the development of regions and resource-richcountries
9) Promotion of constructive dialogue with stakeholders(6) Indicators for each fiscal year (earnings plan)
Period covered by PAMCO-2024
FY2022
FY2023
FY2024
Production
volumeSales
volumeConsolidated(Millionyen)

Total

Ni (t)

20,81029,03728,45478,301Ni (t)

20,50027,50027,50075,500Net sales
Operating profit
Ordinary profit
Profit attributable toowners of parent

50,210925
3,844

60,958225
2,822

60,801
1,809
4,549

171,969
2,959
11,215

3,513

2,415

4,058

9,986

For details, please refer to the attached Medium-term Business Plan PAMCO-2024.

2

PACIFIC METALS CO., LTD.

Medium-term Business Plan
PAMCO-2024
May 10, 2022

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

2Table of Contents
1. Review of Previous Medium-term Business Plan PAMCO-2021(1) Achievement of basic policies(2) 3-year plan vs. results (consolidated)

34

2. Overview of New Medium-term Business Plan PAMCO-2024(1) Positioning of the medium-term business plan5(2) Business environment surrounding PAMCO: Emerging risks and opportunities 6(3) Material issues (materiality)
6(4) Priority measures
7(5) Investment plan8(6) Capital policy
8(7) Indicators for each fiscal year9

1. Review of Previous Medium-term Business Plan PAMCO-2021(1) Achievement of basic policies•PAMCO-2021 was the second stage for achievement of
the long-term vision and focused on“Strengthening the platform and refinement of strategies
toward continuous growth”

Basic policies① Strengthening of facilities and stableprocurement of ore to develop theoptimal production system

Achievement status (○: Achievement made △: Issues remain)○

Systematic investment in facilities that contribute to an optimal production system○

Stable procurement of ore necessary for production during the period△

No new ore procurement from third countries other than the Philippines and New Caledonia② Initiatives with view to expanding overseas business△

Shortlisting overseas smelting projects in cooperation with resource-rich countries③ Diversification of business in Japan△

Sowing seeds for domestic business candidates and shortlisting with a view to rebuilding the recycling
business④ Strengthen profitability○

Cost reduction through various rationalization measures (total of 2.2 billion yen improvement over 3years)△

Cost competitiveness was not achieved due to soaring prices of raw materials and fuels, etc.

○

Minimized the impact of market fluctuations by utilizing hedging to secure stable income⑤ Strengthening of organization and human resources in
anticipation of changes in the business environment○

New organizational structure strengthened the responsiveness of the organization○

Secured necessary personnel based on future-oriented human resource development and recruitment
plans⑥ Management focused on cash flow○

Reduce the risk of shortfall of funds through appropriate cash flow management⑦ Contribution toward achieving a sustainable society○

Reduced CO2 emissions by promoting energy-saving activities△

No major occupational accidents, although we did not achieve zero accidents○

Strengthened compliance and responded to the principles of the Corporate Governance Code

Although certain results were achieved in accordance with the basic policies, it is necessary to "furtherstrengthen the platform and promote the sustainability strategy" in light of the business environment
surrounding the Company and social needs.

31. Review of Previous Medium-term Business Plan PAMCO-2021(2) 3-year plan vs. results (consolidated)
FY2019-FY2021 (3-year total)
PlanResults

Reason for increases/decreases

Comparison

Production volume (Ni t)

94,50075,548-18,952

Sales volume (Ni t)

95,50076,386-19,114

Applicable LME nickel
price (US$/lb.)

6.48

7.23

0.75

Temporary slump due to COVID-19, etc., but steady
growth due to resumption of economic activities invarious countries, etc.

Applicable exchange rate(¥/US$)

109.72108.72-1.00

Resumption of economic activities amid the pandemic
and the impact of financial and capital markets, etc.,
caused the yen to appreciate against the U.S. dollar.

Net sales (million yen)

157,785

133,480-24,305

Operating profit (millionyen)

2,770

2,434-336Ditto

Ordinary profit (millionyen)

10,853

17,316

6,463

Increase in share of profit of entities accounted for using
equity method

Profit attributable toowners of parent (millionyen)

9,768

13,156

3,388

Ditto

Investment (million yen)

10,7072,466-8,241

Postponement of overseas investment, etc. due to theimpact of COVID-19, etc.

Depreciation (million yen)

1,253

965

-288

Postponement of capital investment and impairment loss

Volume adjustment due to changes in stainless steelmarket conditions and demand due to COVID-19, etc.

Affected by a decrease in sales volume4

2. Overview of New Medium-term Business Plan PAMCO-2024

5(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 and recycling offinite 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 sustainabilitystrategy”*Further strengthen the foundation established under PAMCO-2021 to enable flexible and rapid response to changes in thebusiness environment.
*Promoting a sustainable strategy to solve society's issues and PAMCO’s material issues.
A comprehensive materials company that co-creates asustainable, recycling-oriented society
FY2024

PAMCO-2024
Further strengthen theplatform and promote thesustainability strategy

2027

Promote growth strategy and expand
sustainability strategy

2030-2. Overview of New Medium-term Business Plan PAMCO-2024(2) Business environment surrounding PAMCO: Emerging risks and opportunities
Segment

Risks expected in the period covered by PAMCO-2024

Segment

Opportunities 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 ofUkraine, and changes in the social and economic structure
due to COVID-19.

Ferronickel
businessResources

・Export ban of Indonesia, a major resource-rich country, isfirmly in place. The decline in ore grades in the Philippines
and the shift in resource policy.
・Gradual increase in demand for non-FeNi and NPI due toexpanding demand for EVs

・Global demand for stainless steel is expected to continue togrow steadily.
・Expanding commercial opportunities for low-carbon products
against the backdrop of the global trend toward a low-carbonsociety.

Growth andexpansion ofnew productmarkets (EV)・As the automotive industry shifts to EVs, demand for nickel forbattery applications is expected to grow.
・Expanding opportunities to address rising demand for nickel
sulfate and cobalt sulfate in the growing market for LIBs.

Recyclingbusiness・Expectations for a recycling-oriented society and economy aregrowing.
・Greater opportunities to launch new businesses throughcollaboration with other companies
・Greater demand for special construction materials due to theacceleration of various measures for disasterprevention/mitigation and national land resilience.

Market・Intensifying market competition due to continuous
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 workstylereform, diversity, etc. triggered by COVID-19

Increased momentum of initiatives to minimize “risks” and exploit “opportunities”(3) Material issues (materiality)Restructuring of ferronickel production and sales systems with emphasis 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 recycling-oriented societyEnhancement of corporate value by addressing sustainability issues

67

2. Overview of New Medium-term Business Plan PAMCO-2024(4) Priority measures
Contribute to the achievement of the SDGs through the resolution of material issues
Restructuring of ferronickel production andsales systems with emphasis on profitability① 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 business③ 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 contributeto 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 hydrometallurgicaltechnologies.

Diversification of business in Japan tocontribute to a recycling-oriented society⑤ Restructuring of recycling business・Promote restructuring of our recycling business through collaboration with other companies, etc.

Enhancement of corporate value byaddressing sustainability issues⑥ Sustainability Promotion Council
・Positioning the response to climate change and the realization of a sustainable society as the most importantmanagement issue, promote specific measures across PAMCO, including discussions on medium- to long-term
initiatives and directions concerning material sustainability issues.
CO2 emissions
Over 46% reduction⑦ Reduction of GHG emissions
・To achieve carbon neutrality by FY2050, implement measures with clear targets,including use of carbon-free energy and introduction of new technologies.
FY2013

FY2030Net zero

FY2050⑧ Promotion of symbiosis by contributing to the development of regions and resource-rich countries
・Promote symbiosis through activities that contribute to the development of the region and resource-richcountries.
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.

82. Overview of New Medium-term Business Plan PAMCO-2024(5) Investment plan
① Capital investment•Capital investment that contributes to the maintenance, efficiency, and longevity of facilities② Strategic investment•1) Domestic business Business investment based on business profitability evaluation of domestic business candidates
considered in PAMCO-2021
2) Overseas business, resources
 Business investment based on decision to participate in overseas smelting projects
 New mining area development surveys, etc., to secure resources
3） R&D investment
 R&D investment for sustainable nickel business••(Million yen)

Period covered byPAMCO-2021

Period covered by PAMCO-2024
FY2022

FY2023

FY2024

Total

2,466

1,495

1,351

1,0043,850② 1) Domestic business－535007,472

8,025② 2) Overseas business, resources－5,506

1885,532② 3) R&D investment

－350

1,000

1,035

2,466

7,089

1,869

9,484

18,442① Capital investment

Total

Promoting investment to achieve the priority measures of new medium-term business plan PAMCO-2024(6) Capital policy① 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 the fund to secure resources, develop
new technologies, make capital investments, and acquire treasury shares as part of its capital policies.

2. Overview of New Medium-term Business Plan PAMCO-2024

9(7) Indicators for each fiscal year (earnings plan)
Period covered by PAMCO-2024
FY2022

FY2023

FY2024

Total

Production
volumeNi t

20,81029,03728,45478,301

Sales volume

Ni t

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

9.73

8.79

8.75

9.03

Applicableexchange rate（¥/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－Consolidated(Million yen)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 tochanges 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.