Daiwa Investment Conference Tokyo 20162015 3-Year Business Plan
Aiming to be a World Leader in the Non-Ferrous Metals Industry
and an Excellent Company of Japan-Stage 2-

March 2016

Yoshiaki Nakazato
President and Representative Director
SUMITOMO METAL MINING CO., LTD.

Contents

Ⅰ Business Overview
ⅡLong-Term Vision (LTV) &Basic Strategy of 2015 3-Yr Business Plan

Ⅲ Core Business Growth Strategies
Ⅳ Supplemental materials

SUMITOMO METAL MINING CO., LTD.

2

I. Business Overview

Ⅰ Business Overview
ⅡLong-Term Vision (LTV) &Basic Strategy of 2015 3-Yr Business Plan

Ⅲ Core Business Growth Strategies
Ⅳ Supplemental materials

SUMITOMO METAL MINING CO., LTD.

31)Business Overview: Company Information

Ⅰ

Business Overview

Sumitomo Metal Mining Co., Ltd.
Founded

1590

Incorporated

1950

Paid-In
Capital¥93.2 billion

Net Sales¥921.3 billion (FY2014)

Recurring
Profit¥174.2 billion (FY2014)

Number of
Employees

8,776 (consolidated) (FY2014)

Operations

Mining, smelting and refining, manufacturing ofsemiconductor and advanced materials, andother operations(As of March 31, 2015)

SUMITOMO METAL MINING CO., LTD.

42)Business Overview: Timeline(1)Ⅰ

400 Years of History̶Sumitomoʼs Copper Smelting

Business Overview

Founded in 1590
Our roots date back to Soga Riemonʼs copper smelting and smithingbusiness.
Nanban-bukiTheestablishmentof theadvancedsmelting
technology“nanban-buki”
that separated
silver fromcrude copper,using knowhow
acquired fromabroad, wasattributed to
Soga Riemon.

Copper Wire Bars
Copper wire
bars, known as“Japan Copper,”were refinedand cast in
Osaka andexported from
Nagasaki.

SUMITOMO METAL MINING CO., LTD.

52)Business Overview: Timeline(2)Ⅰ

Business Overview

1590

Soga Riemon opened a copper smelting
and smithing business in Kyoto

1500年
1500s

1600年
1600s

1700年
1700s

1800年
1800s

1691

Operation of Besshi Copper Mine
startedThe Besshi Copper Mine underpinned Sumitomoʼs operations for 280 years.

SUMITOMO METAL MINING CO., LTD.

62)Business Overview: Timeline(3)

1905
1939
1952

New copper smelter established on
Shisaka Island to ease air pollution

Electrolytic nickel production started
1590年
Renamed to Sumitomo Metal Mining
Co., Ltd.
Expanded into electronic materials
industry

Ⅰ

Business Overview

1971

Toyo Smelter & Refinery completed

1973

Besshi Copper Mine closed

1985

Hishikari Mine (gold) opened

蘇我理右衛⾨が京都で銅製錬を開業
Capital investment in Morenci Copper
1986

1960

1900s
2005
2005
2006
2013
2014

Mine (USA)

2000s

Capital investment in Cerro Verde Copper
Mine (Peru)
Production began at Coral Bay Nickel Corporation(Philippines)

Operations began at Pogo Gold Mine (USA)
Production began at Taganito HPAL Nickel
Corporation (Philippines)
Production began at Sierra Gorda Copper
Mine (Chile)

Taganito HPAL Nickel Corporation (THPAL),
Philippines

SUMITOMO METAL MINING CO., LTD.

73）SMMʼs Mines and Smelters / Refineries

Ⅰ

Business Overview

As of January 2016

SUMITOMO METAL MINING CO., LTD.

84)Business Strategy:

Ⅰ

Business Model—3 Core Businesses

Business Overview

Mineral Resources
Business

Smelting & Refining
Business

Materials Business

Developing andmining resources

Extracting metals
from ore

Producing cutting-edge
electronic and functional
materials

Sierra Gorda
Hishikari Mine
Mine (Chile; (Kagoshima, Japan;
Copper)Gold)

Copper
ore

Gold
ore

Taganito HPAL
Toyo Smelter &Nickel Corporation Refinery (Ehime,(Philippines; Nickel) Japan; Copper)

Electrolyti
c nickelElectroly
tic
copperGold

Isoura Plant(Ehime, Japan)

Ome District
Division (Tokyo,
Japan)

Lithium nickel
oxide (forbatterymaterials)

Thick film paste(for capacitors,
etc.)

SUMITOMO METAL MINING CO., LTD.

95）Segment Profit

Ⅰ

Business Overview

JPY 100M

2,000
1,500
Diff. Adjustment

1,000

Others500

Materials

0-500

Smelting & Refining

2010

2011

2010

2012

2011

2013

2012

2014

2013

2015
Forecast

2014

15 3-Yr
2018

2015
(F)

Mineral Resources

15 3-Yr2018

JPY 100M
Net Sales
2015(F)

15 3-Yr
2018

704

806

652

691

538

-460

660

1,140

1,800

Smelting &Refining

495

256

339

291

813

280

800

6,410

7,000

Materials

54

-3

38

111

129

50

200

1,720

2,800

Others

23

34

16

16

-1

-10

-20

150

100

Diff. Adjustment

-39

-5

105

35

263

100

60

-870

-1,100

1,237

1,088

1,150

1,144

1,742

-40

1,700

8,550

10,600

Segment Profit

MineralResources

Total（Recurring Profit /Net Sales)

SUMITOMO METAL MINING CO., LTD.

10

Ⅱ. Long-Term Vision (LTV) & Basic Strategy of 15 3-Yr Business Plan

Ⅰ Business Overview
ⅡLong-Term Vision (LTV) &Basic Strategy of 2015 3-Yr Business Plan

Ⅲ Core Business Growth Strategies
Ⅳ Supplemental materials

SUMITOMO METAL MINING CO., LTD.

11Ⅱ1) Today’s Agenda

LTV & Basic Strategy
of 15 3-Yr Business Plan

Management issues
Changes in Business Environment
・End of commodity supercycle

・Slump in metal prices
Condition of Mineral Resource development projects become more difficult

Metal Prices

In the mid to long term trend is estimated to be stable
・Demand grows together with GDP growth・Demand and supply is balancing

Top priorities in 3 core businesses
Mineral Resources and Smelting & Refining Business・Strengthened cost competitiveness, improve operability and productivity
・Prepare for long-term growth strategy

Materials Business・ Profit contribution from expanded project・ Change into stable profit structure

SUMITOMO METAL MINING CO., LTD.

12Ⅱ2) Long-Term Vision

LTV & Basic Strategy
of 15 3-Yr Business Plan

Aiming to be a World Leader in the Non-Ferrous Metals Industry
and an Excellent Company of JapanTARGET
Targets

World Leader in the Non-Ferrous
Metals Industry

Excellent Company of Japan

FY2021
NickelCopper interests

150 kt300 ktGold

New materials

30 t

Recurring profit

Net Sales
Net Income*¥1 trillion¥100 billion(Recurring profit ¥150 billion)¥5 billion• Grow steadily to achieve on our Long-Term Vision• Reconsideration of strategy based on external business environment changes* Profit attributable to owners of parent
SUMITOMO METAL MINING CO., LTD.

133）Positioning of the 3-Yr Plans in the Long-Term VisionⅡ

LTV & Basic Strategy
of 15 3-Yr Business Plan

Become a World Leader in the
Non-Ferrous Metals Industry andan Excellent Company of Japan

Long-Term
VisionFY2016-20182015 3-Yr Business Plan

Respond to changes inbusiness environment

FY2013-2015
12 3-Yr Business Plan

Strengthen global
competitiveness

Execute a continuous
growth strategy

FY2010-2012
09 3-Yr Business Plan
FY2004-2009
03 & 06 3-Yr
Business Plans

Strengthen platform for global competition

SUMITOMO METAL MINING CO., LTD.

144) Major Projects in 03〜12 3-Yr Business Plans (1)〜03 3-Yr Plan

06 3-Yr Business Plan

Smelting & Refining

Mineral Resources

–2006

Cu

Sierra Gorda
Mine

Cu

Morenci Mine

Cu

Cerro Verde
Mine

Au

Pogo Gold
Mine

Ni

E-Ni
65 kt

Ni

Coral Bay
NickelNi

Taganito HPAL

Ni

Goro

Ni

Materials

Cu

Harima Refinery
Nickel sulfate

2007

2008

2009

2010

2011

LTV & Basic Strategy
of 15 3-Yr Business Plan

12 3-Yr Business Plan

09 3-Yr Business Plan

2012

2013

2014

Decision to participate

2015
Start commercial
production

Decision to expand projectStart full production

2004
Decision toparticipate

Decision to expand projectStart production

2006
Start production

Acquire additional interest

65kt Production
structure completed

Decision on investment

2005
Start first line production
F/S contract concluded

Start second line production
Decision on projectStart full-scale operations

2005
Decision toparticipate
Start nickel sulfate
production

Toyo Smelter & Refinery

450 ktⅡ

Completion of production structure

Materials Business
Copper-cladpolyimide film

NCA850t
Production structurecompleted

Sapphire
Start mass production

LT/LN
Decision to
expand production

SUMITOMO METAL MINING CO., LTD.

Withdraw fromsapphirebusiness15Ⅱ4) Major Projects in 03–12 3-Yr Business Plans (2)LTV & Basic Strategy
of 15 3-Yr Business Plan

2012 3-Yr Business Plan Review

2012 3-Yr Business Plan Priorities
Mineral Resources

Smelting & Refining

Materials

Morenci Mine
Complete expansion

Expand Battery materials production

Cerro Verde Mine
Expansion: solid progress

Taganito HPAL
Smooth ramp-up to full-scale
operations
E-Ni
Complete 65 kt production
structure
Harima Refinery
Start nickel sulfate production

Expand copper interest

Establish 100k -t
nickel production structure

Create the foundation
for the growth

Expand LT/LN substrate production2012 3-Yr Business Plan goals unmet
Delay of Launch Sierra Gorda Mine

Withdraw from sapphire substrates（Delay to involve as an active partner） （Cost reduction targets not achieved）
SUMITOMO METAL MINING CO., LTD.

16Ⅱ5) Initiatives Towards Long-Term Vision

Cu

Ni

Annual Production Interest

LTV & Basic Strategy
of 15 3-Yr Business Plan

Annual Production Capacity

Targetkt

280 kt300
200

300 ktAu

2013 2014 2015

2018

2021

100 kt120 kt

30 t

30
16 t

15 t

10
2013 2014 201502013 2014 2015

2018

2021

Materials Business Recurring Profit

Annual Productiont

0

150 kt150

50

Target

20

kt

100

170 kt100
0Target2018

2021

Recurring profit(JPY100M)

250
200
150
100
50
0

15 3-Yr

Target¥20.0 B
New products¥5.0 B¥5.0 B

2013 2014 20152018

SUMITOMO METAL MINING CO., LTD.

2021
17

6) Business Environment (1)Ⅱ

Lehman’s collapse
World financial crisis

Uncertain future for world economy
End of commodity supercycle

Growth of economies in emerging countries
Infusion of funds from financial markets

China: Massive increase in energy
resource consumption

LTV & Basic Strategy
of 15 3-Yr Business Plan

Fiscal fears in emerging countries,
deteriorating economies
Speculation on monetary policy andvolatility expansion for product prices

Towards “new normal” in economic growthEstablishment and oligopolization of
Huge resource companies

Financial damage...asset reorganization, re-organization trends, reshuffle?

Rise of resource nationalism

Further increase・ Slump in metal prices
・ Balanced supply and demand・ Capex hovering at high levels,
increased operating costs

2000

2005

2008

2010

2015
SUMITOMO METAL MINING CO., LTD.

18Ⅱ6) Business Environment (2)LTV & Basic Strategy
of 15 3-Yr Business Plan

Slowing growth rate in emerging countries
Social landscape regarding metal resources Metal prices dropping  Acquisition of resources by China  Progression of resource nationalism

Landscape regarding resource development/mining operations• Operations becoming more difficult due to location (higher, more remote locations)• Decreasing ore grade of operating & new mines• Intensifying environmental regulations; resource development receiving more scrutiny
Investment costs increasing; greater initial CAPEX
Operating costs increasing

Fierce global competition continues in the electrical/electronic parts industries• Smartphones requiring more parts to accommodate more functions and communication speed• Energy, loT, and communications infrastructure greatly influencing next-generation tech trends

Companies' capital policy being discussed more in the reflection of
the Corporate Governance Code and Stewardship Code of JapanSUMITOMO METAL MINING CO., LTD.

19

7) Financial Situation of Resource Producers
Interest-bearing debt
(billion US$)Ⅱ

LTV & Basic Strategy
of 15 3-Yr Business Plan

The size of the sphere and numbers in ( ) are total market value
Billion US$, as of Jan. 15, 2016, and Jan. 7, 2013

60

Glencore
2015(15)Company managing
with debt leverage→increase total assets→decreasing in total market value
due to drop in price of resources

40

Glencore
2012(33)

BHP

Vale

2015(52)

2015(11)

FCX

Rio Tinto

2015(4)2015(45)20

BHP

2012(155)

SMM

2012(6)SMM

2015(6)

Vale

FCX

2012(84)

2012(26)

0
0

20

40

60

80

BHP Billiton/RioTinto, Glencore's financial numbers are as of June end, 2012 and 2015.
Numbers for the others are as of September end, 2012 and 2015.

Rio Tinto
2012(86)

100

120

140

160

Total assets (billion US$)SUMITOMO METAL MINING CO., LTD.

20

8）Cu Supply & Demand Balancekt

Ⅱ

LTV & Basic Strategy
of 15 3-Yr Business Plan

(Source: SMM)

30,000Total Refined Cu Production
Refined Cu Consumption
25,00020,00015,00010,0002005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Although the time of rapid growth is done, demand is likely to rise with economic growth. Supply and demand are in balance.
Worsening of ore grade and increases in high altitude operations will drive costs up.

SUMITOMO METAL MINING CO., LTD.

21Ⅱ9）Ni Supply & Demand Balancekt

LTV & Basic Strategy
of 15 3-Yr Business Plan

(Source: SMM)

2,500
Nickel Production
Nickel Consumption
2,000

1,500

1,000

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Surges in production caused rapid inventory increases.
Demand likely to increase at a slow pace.

SUMITOMO METAL MINING CO., LTD.

2210) Economic Growth Rates and Metal Product Demand Growth

Ⅱ

INDEX 1960=1.0

14

12

10

8

LTV & Basic Strategy
of 15 3-Yr Business Plan

(Source: SMM)

(annual growth rate)
Aluminum

4.7%

Nickel

4.1%

GDP

3.5%

Copper3.0%

Crude steel 2.9%

6

4

2

0

1960 1963 1966 1969 1972 1975 1978 1981 1984 1987 1990 1993 1996 1999 2002 2005 2008 2011 2014 2017

SUMITOMO METAL MINING CO., LTD.

23Ⅱ11) Positioning of the 15 3-Yr Business Plan

LTV & Basic Strategy
of 15 3-Yr Business Plan

Long-Term Vision
Positioning of the 15 3-Yr Business Plan
towards long-term vision achievement
Large Scale Mineral Resources/Smelting & Refining projects
mostly completed in 2012 3-Yr Business Plan

Sowing seeds and planting towards further growth in the
15 3-Yr Business Plan

Changes in the externalbusiness environment
09 & 12 3-Yr Plans
03 & 06 3-Yr Plans
Move toward growth strategies
Become major player in nonferrous metals industry
Achieve world top share in each ofmaterial business productPromote Long-Term Visionoriented growth strategies
in the three core businesses

Become a World Leader
in the Non-Ferrous Metals Industry
and an Excellent Company of Japan
3rd HPAL
Sierra Gorda
Phase 2/ oxide ore development
New interest in gold mine
Exploration activities
Expanded production ofbattery materials
New materials products

15 3-Yr Plan
Respond to external environment changes(Promote strategies focused on cost/investment
benefit)
Prepare for future growth
Grow materials business as core business

SUMITOMO METAL MINING CO., LTD.

2412) Recurring Profit Analysis 15 3Year 2018 vs FY2015 Forecast (Feb)

2,000

Ni Price+450

Strategy Effect

1,750

Cu Price
+230

1,500
Taganito/
NickelCerro Verde Quantity+100
Expansion+130
Morenci

1,250
1,000

Materials
Business

Exchange-20
Hishikari Others
Gold-60
Quantity-70+150

Equity
+140

750

1,700

Sierra Gorda

500

+690

250

-250

LTV & Basic Strategy
of 15 3-Yr Business Plan

Price/Exchange

JPY100M

0Ⅱ-40

FY2015

15 3-Yr

Forecast

2018

in FebSUMITOMO METAL MINING CO., LTD.

2513) Positioning of Businesses in the 2015 3-Yr Business PlanⅡ

LTV & Basic Strategy
of 15 3-Yr Business Plan

Mineral Resources
Smelting & Refining
up to
12 3-Yr Plan

Make great leap forward with large overseas projects• Effective operation of existing mines and smelters/refineries
15 3-Yr Plan

Cut costs to secure profits• Sowing seeds and planting towards the next 3-Yr Business Plan and beyond

Materials
up to
12 3-Yr Plan

15 3-Yr Plan

• Increased production of battery and crystal materials--> Complete business structure change through selection and concentration• Harvesting of 2012 3-Yr Business Plan investments• Continually create next-generation products that satisfy customer needs

The 2015 3-Yr Business Plan is a period of extensive growth to become authentic core business

SUMITOMO METAL MINING CO., LTD.

2614) Top Priorities in the 15 3-Yr Business Plan
Mineral Resources

Ⅱ

LTV & Basic Strategy
of 15 3-Yr Business Plan

Materials• Full-scale production at the Sierra Gorda Copper Mine
• Acquire new Gold mine interests• Profit contribution from expanded battery material and LT/LN
production• Continuously create and adapt next-generation products

Smelting & Refining

R&D• Expand Taganito HPAL
• Advance growth strategies using HPAL peripheraltechnologies• Enhance competitiveness of Copper Smelting business•

Develop new products and processes

Platform Reinforcement
Corporate Governance

Globalization Measures• Action for Japan’s Corporate Governance CodeCorporate Governance Guideline
Corporate Governance Report• More Outside Director to strengthen governance• Publish integrated report (FY2016)
Continually improve engagement• Develop global staff
and improve diversity in human resources• Consider transitioning to IFRS
(plan to implement during the 15 3-Yr Business Plan Period)• Build a global management IT system

SUMITOMO METAL MINING CO., LTD.

27

Ⅱ15) Major Projects in 2015 3-Yr Business Plan

Mineral Resources

Project name

Cu

Sierra Gorda Mine

Cu

Morenci Mine

Cu

Expansion of Cerro
Verde Mine

Ni

SolomonNi

Taganito HPAL

Ni

Pomalaa Project

Ni

Harima Refinery
Nickel sulfate

FY2013

FY201415 3-YrBusiness Plan

FY2015

Start commercial
production
Start expanded full-scale
production

LTV & Basic Strategy
of 15 3-Yr Business Plan

18 3-Yr Business Planand later

110 kt production
structure

Phase 2: project toincrease production

Additional Interest
acquired

2016
Start full-scale operations

2018
Start operation

Smelting & Refining

2018
Opening
ceremony

36 kt production
structure

Start full operation

Conduct FS

2016
Second line launchStart first line
production

Materials

2017

Battery materials

Completion of NCA
850 t structure

NCA1,850 t
structure

Decision on production
increase2018

NCA 2,550 t
structure

2016

Crystal materials (LT/LN)

Decision on
investment

2017

300k pieces
production structure

Ternary type
Increase production

400k pieces
production structure

SUMITOMO METAL MINING CO., LTD.

28Ⅱ16) Consolidated Recurring Profit

LTV & Basic Strategy
of 15 3-Yr Business Plan(¥100 million)

2,000

Net income *Recurring profit

1,750
1,500
1,250
1,000
750
500
250
0
-250

2010

2011

2012

2013

2010

2011

2012

2013

2014

Recurring profit (¥100 million)

1,238

1,088

1,150

1,144

Net income* (¥100 million)

841

653

866

Cu price ($/T)

8,140

8,485

Ni price ($/lb)

10.7

Au price ($/toz)*Profit attributable to owners of parent

Forex (¥/$)

2014

2015
Forecast

15 3-Yr Plan
2018
2015
Forecast

15 3-Yr
Plan
2018

1,742

-40

1,700

803

911

50

1,200

7,855

7,104

6,554

5,174

6,000

9.6

7.7

6.5

7.6

4.7

7.0

1,294

1,646

1,654

1,327

1,248

1,124

1,150

85.7

79.1

83.1

100.2

109.9

121.3

120.0

SUMITOMO METAL MINING CO., LTD.

29Ⅱ17) Maintenance of a Sound Financial Structure

Total assets

Interest-bearing debt

Shareholder's equity

Equity ratio

Debt-to-equity ratio

LTV & Basic Strategy
of 15 3-Yr Business Plan

ROE(¥100 million)％

20,000100.0

17,500Equity ratio65%

15,00075.0

12,50050.0

10,0007,500

D/E ratio
0.33

5,000
2,500

ROE
10%

0
2010

2011

2012

2013

2014

2015
Forecast

25.0

0.0
15 3-Yr Plan
2018

SUMITOMO METAL MINING CO., LTD.

30

Ⅱ18) Financial Strategies — Capital Policy

LTV & Basic Strategy
of 15 3-Yr Business Plan

Financial Policy for 2015 3-Yr Business Plan Period
Dividend Policy

Financial Structure

Policy on return to shareholders focused oncontinuing performance linked dividends

Prepare for large-scale projects or M&A
by maintaining sound financial standing

Consolidated dividend payout ratio raised from
25% or higher ⇒ 30% or higher

Maintain an equity ratio of 50% or higher

Focus on efficiency with investments
for improved ROA / ROE

SUMITOMO METAL MINING CO., LTD.

31Ⅱ19) Capital Expenditure

LTV & Basic Strategy
of 15 3-Yr Business Plan(¥100 million)

12 3-Yr Plan

2012 3-Yr Plan Forecast

15 3-Yr Plan

(Total of 3 Years)(Total of 3 Years)(Total of 3 Years)

R&D,
Other

R&D,
Other
Materials

260

140¥1,700JPY
100M

MineralResources

Materials

480
480

MineralResources

100

Materials¥1,840
JPY
100M

820

R&D,
Other

170
360

520
610

¥1,800
JPY
100M
660

740
Smelting &Refining

Acquisition of overseas interest

MineralResources

Smelting &Refining

Smelting &Refining

Acquisition of overseas interest(Morenci, 1,200 (JPY100M))
SUMITOMO METAL MINING CO., LTD.

32

Ⅱ20) R&D Expenses, Exploration Expenses

R&D Expenses, Exploration Expenses(¥100 million)

R&D Expenses

400

Exploration Expenses

300

180
200

R&D
Accelerate new product development inMaterials BusinessTechnological innovations in
Mineral Resources and Smelting & Refining
Promotion of process development

Exploration

100
0

LTV & Basic Strategy
of 15 3-Yr Business Plan

160
09 3-Yr Plan
Results

12 3-Yr Plan
Forecast

15 3-Yr Plan

Targeting regions for each metal (Au & Cu)
Acquisition of advance-stage exploration
projects

SUMITOMO METAL MINING CO., LTD.

33Ⅱ21) Cash Flow(¥100 million)

Operating CF

Investment CFFree CF

1,500

LTV & Basic Strategy
of 15 3-Yr Business Plan

Cash Flow Projection(15 3-Yr Plan 3 year Totals)(¥100 million)

3-Year
Total

1,000
500
0
-500
-1,000

Profit before tax

4,600

Depreciation

1,700

Working capital/
equity method profit/loss/
debt/tax/dividend-4,100Investment and financing-3,000Total Cash flow-800

-1,500
2013

2014

2015
Forecast

15 3-Yr
2018

Expect minus total cash flow due to acquisition of overseas mining
interests and aggressive investment in growth businesses
SUMITOMO METAL MINING CO., LTD.

34

IIl. Core Business Growth Strategies

Ⅰ Business Overview
ⅡLong-Term Vision (LTV) &Basic Strategy of 2015 3-Yr Business Plan

Ⅲ Core Business Growth Strategies
Ⅳ Supplemental materials

SUMITOMO METAL MINING CO., LTD.

35

1) Mineral Resources

Ⅲ(1) Cu: Development Project Completion: Sierra Gorda Mine

Core Business
Growth Strategies

Sierra Gorda Mine (Chile)
Equityinterest
ratio

KGHM
SMM
Sumitomo Corp.

55%
31.5%
13.5%

2015 3-Year Business Plan Initiatives
Establish stable operations for Phase I
Promote mutual understanding among shareholders andtake part in local management--> Achieve capacity (recovery rate and operation rate)
Aggressively reduce costs

Draft Phase II plan
After completing Basic Engineering, continue to try CAPEX reduction--> Implementation in or after the 2018 3-Yr Business Plan period

Draft Oxide Ore Project plan
Resolve technical issues

Cu Production(100%)

kt
200

100

0
2013

2014

SUMITOMO METAL MINING CO., LTD.

2015
(F)

15 3-Yr
Avg.

361) Mineral Resources

Ⅲ(2) Cu : Stable Operation of Existing Mine : MorenciCore Business
Growth Strategies

Morenci Mine （Arizona, US）
Feb 2016
Contract of Acquisition of additional Interest
Investment :US$1.0B
Interest
ratio

FCX
85%→72％SMM
12%→25％
Sumitomo Corp. 3% → 3%

Schedule
Feb 2016
Contract of acquisition of additional interest
Middle of 2016
Expected to be closing andcompleting transfer of interest
Expected to contributing to profit
from the middle of FY2016

Cu Production(100%)kt
600

SMM's Interest

400
200
0

2013

2014

SUMITOMO METAL MINING CO., LTD.

2015
(F)

15 3-Yr
Avg.
371) Mineral Resources

Ⅲ(3)Cu : Expansion Project : Cerro Verde

Core Business
Growth Strategies

Cerro Verde Mine Expansion Project (Peru)
Total
53.56%
FCX
Equity SMM
16.80% investment
interest Sumitomo Corp.
$4.6B
4.20%
ratio
Other
25.44%

Expansion details/production
Construction of new millConstruction of new tailings dam
Expansion of electrical, water intake, andancillary equipment
Full production to be achieved in 2016 1Q
500 kt/year Production

kt

Cu Production(100%)

600

400

200

0
2013

2014

SUMITOMO METAL MINING CO., LTD.

2015
(F)

15 3-Yr
Avg.
381) Mineral ResourcesⅢ(4) Au : Stable Operation of Existing Mine : HishikariCore Business
Growth Strategies

Hishikari Mine (Kagoshima, Japan)
Equityinterest SMM
ratio

100%

Develop lower ore bodies
Construction of dewatering facilities at -80ML(30 t in gold reserves)
Production to be started in FY2019

Continue active exploration
Explore upper limit of ore bodies and below the water level
Explore poorly explored areas and undeveloped veins

Au Production

t
10
8
6

Mining Plan (maximizing mine life)

4

Plan for annual production of 6 tonnes for the 2015
3-Year Business Plan period

2
0
2013

2014

SUMITOMO METAL MINING CO., LTD.

2015
(F)

15 3-Yr
Avg.
391) Mineral ResourcesⅢ(5) Au : Stable Operation of Existing Mine : Pogo Gold Mine

Core Business
Growth Strategies

Pogo Gold Mine (Alaska, US)
Equityinterest
ratio

SMM
Sumitomo Corp.

85%
15%

• To extend mine life, continually explore
peripheral areas• Start planning for the end of mining in the future
Au Production (100%)t
12Mining plan
Plan for annual average production of 9 tonnes forthe 2015 3-Year Business Plan period

10
8
6
4
2
0

2013

2014

SUMITOMO METAL MINING CO., LTD.

2015
(F)

15 3-Yr
Avg.
40

Ⅲ

1) Mineral Resources (6) Exploration by SMM

Core Business
Growth Strategies

FY 2016–2018 exploration plan

Alaska, US(Au)

North America

Canada(Au)

Asia

South America

Philippines(Au)

Brazil(Cu, Au)
SolomonIslands (Ni)Oceania

Australia
(Au)

Peru
(Cu, Au)
Chile
(Cu)

SUMITOMO METAL MINING CO., LTD.

41

2) Smelting & Refining

Ⅲ(1) SMM’s Nickel ProductsCore Business
Growth Strategies

Creating nickel products from HPAL raw materials
HPAL Process (High Pressure Acid Leach)→ Technology to retrieve Ni and Co from low-grade nickel oxide ores
• CBNC first in the world to succeed at large-scale commercial production
Production started in 2005 Current annual production: 24 kt

2015 3-Yr Business Plan
Ni-Kt Composition of nickel products and raw materials
100• Taganito began operations in 2013 as second production facility
Current annual production: 30 kt
75
Matte/Otherraw materials

Intermediate products(MS) from
CBNC/Taganito(Ehime, Japan)

E-NickelHarima Refinery

Nickel sulfate(Harima Refinery)

Matte, etc.

Nickel sulfate, etc.
(Niihama Nickel Refinery)

50
Taganito

Niihama Nickel Refinery

Ferro-nickel

Ferro-nickel raw material

E-Ni(Niihama Nickel Refinery)25(Hyogo,Japan)
CBNC

Nickel sulfate
Other chemical products

Nickel sulfate

To customers

Use to produce battery0
Raw material composition

By productmaterials in materials business
SUMITOMO METAL MINING CO., LTD.

422) Smelting & Refining

Ⅲ(2) Taganito/CBNC 60 kt HPAL structureCore Business
Growth Strategies

Build a production structure for increasing capacity
by 20% at Taganito
Increase production toPhilippines

36 kt/year at Taganito

２HPAL

starting in 2018 2H

60 kt structure
Investment to increase
production¥300 million

Taganito 36kt
CBNC 24kt

Production plan of MS(2018:Capacity)

Ni-Kt

60
50
40

THPAL

30

CBNC

20
10
0
2014

2015

2018
SUMITOMO METAL MINING CO., LTD.

43

2) Smelting & Refining

Ⅲ(3) Recover rare earth in HPAL process

Core Business
Growth Strategies

Scandium
Extract Scandium in Taganito HPAL Plant
2016 — Start of construction¥4 billion

2017 — Completion of constriction, Commissioning

investment

2018 — Commercial Production

Main use of Scandia (scandium oxide)• Solid Oxide Fuel Cells (SOFCs)
High efficiency and cleaner energy
Steady increase of demand is expected.
• Aluminum-Scandium Alloys
Enhance strength, corrosion resistance, heat
resistance and give weldability
Aerospace/ Automobile application expected• Others: Create new usage and develop the market
Current world demand is 10–15 t/year (scandia equivalent)

Production plan
Production of SMM
World Demand(SMM estimate)

10〜15t/Year

15 3-Yr

18 3-Yr

SUMITOMO METAL MINING CO., LTD.

After
21 3-Yr

442) Smelting & Refining(4) Toward a 150 kt Nickel Production Structure

ⅢCore Business
Growth Strategies

Pomalaa Project (Indonesia)
Schedule
2015 — Investigation plant location2017 — Conduct DFS
Begin construction during 2018 3-Yr Business
Plan periodPlan to conduct MS production by HPAL

2015 3-Year Business Plan period is
the seed sowing stage
Advance discussion in next Business Plan period

SUMITOMO METAL MINING CO., LTD.

45

2) Smelting & Refining

Ⅲ(5) Expand the Ni Sulfate capacity

Core Business
Growth Strategies

Harima Refinery – Increasing production of nickel sulfate(Nickel sulfate
volume)kt

80

Production volume of nickel sulfate

Harima second line
Harima first line

60

Niihama Nickel Refinery

40
20
0

2015

2016

2017

2018

2016

2017

2018

Begin second line production
at Harima (2H)
Achieve 45 kt/year at Harima

Full-scale production at second line plant
Invest towards achieving 49 kt/year structure
at Harima
Consider precursor for battery materials

49 kt/year structure at
Harima(Nickel sulfate volume)

SUMITOMO METAL MINING CO., LTD.

46

2) Smelting & Refining

Ⅲ(6) Strengthening Competitiveness in Copper Smelting (1)Core Business
Growth Strategies

Toyo Smelter & Refinery production plan
Metal prices are falling but TC/RC is on the rise

Benefit from TC/RC increase through full,and stable production under 450 kt structure

TC/RC (benchmark)

$/t

￠/lb

12.5

500

10

400

75

7.5

300

50

5

200

25

2.5

100

0

0

0

125

TC($/t)100

RC(￠/lb)

2011

2012

2013

2014

2015

2016

E-Cu Production

Kt

2013

2014

SUMITOMO METAL MINING CO., LTD.

2015
(F)

15 3-Yr
2018472) Smelting & Refining

Ⅲ(6) Strengthening Competitiveness in Copper Smelting (2)Core Business
Growth Strategies

Strengthening Toyo Smelter & Refinerycost competitiveness
Further improve operational technology
Strengthen impurity-handling capability
Enhance secondary raw material pickup

Increase processing of profitable raw
materials and cut costs
to further improve profitability
as world-leading Copper Smelter

Index
2013=1.0

Enhance expanded pickup of
secondary raw materials

1.50

1.00

0.50

0.00
2013

2014

SUMITOMO METAL MINING CO., LTD.

2015
(F)

15 3-Yr
2018

48

Ⅲ

3) Materials (1) Basic PolicyCore Business
Growth Strategies

Business strategies in the 2015 3-Yr Business Plan
Aggressive investment in growth strategies
Fields of in-vehicle devices, environment, andinformation and communications

Achieve smooth transition to next-generation products
through selection and concentration

Strengthen relationships with customers as partner
Collaborate from the development stage to
new products

Bolster new business development capability
Build systems for creating new products

FY2018 Segment profit target: ¥20 billion(¥100 million)

200

Segment profit of Materials Business

150
100
50
0

2012

2013

2014

2015
(F)

15 3-Yr
2018
SUMITOMO METAL MINING CO., LTD.

49

Ⅲ3) Materials (2) Battery Materials BusinessCore Business
Growth Strategies

Expand Production capacity to the 2018 3-Yr Business Plan
Environmental changes concerning battery materials
Nickel cathode materials usage growing for EV increase
Change occurred in vertically integrated structure ofautomobile and battery manufacturers
Importance of stable supply in light of growing cobalt
usage

15 3-Yr Business Plan Initiatives
・Further boost production of NCA for EV
Expand from 1,850 t/month

2,550 t/month• Expand production of ternary type for rapidly
growing demand

SMM strengths
The only refiner of E-nickel and cobalt in Japan
Produce nickel and cobalt from Philippines-sourced
HPAL raw materials
Can supply diverse product types, from products thatare very nearly raw materials to high added value
products

SMM Battery Materials (cathode material)
Usage
NCA:
Tesla Motors, Inc.
Used in electric vehicle lithium-ion batteries
Nickel Hydroxide:
TOYOTA Motor Corporation, used in hybrid
vehicleTernary Material:
TOYOTA Motor Corporation
Used in the new Prius lithium-ion battery(Photo : TOYOTA Motor Cop.)

SUMITOMO METAL MINING CO., LTD.

50

Ⅲ3) Materials (3) Crystal substrate（LT/LN）

Core Business
Growth Strategies

Build an expanded production system for crystal materials
LT/LN crystal substrates for SAW filters
Demand booming due to growth of multiband, high-speed communications

December, 2014

SAW filter(photo : MURATA MANUFACTURING CO., LTD)

Decision to expand from 120K to 210K substrates/month

March, 2015
Decision to expand from 210K to 300K substrates/month
to worldwide top share2015 3-Year Business
Plan period
Will further expand to accommodate 400K substrates/monthMore share in worldwide

Strengthen competitivenessby improving recovery rate and reducing costs

Grow together with customers as partner

Production capacity

Pieces(thousands)(planned)

400
350
300
250
200
150
100
50
0
2014

2015

2016

SUMITOMO METAL MINING CO., LTD.

2017

2018

51

Ⅲ

4) R&D

Core Business
Growth Strategies

Core
Technologies

Concentrate R&D in Strategic Growth Areas
Mine Development/
Operation Technology

Smelting & Refining/
Processing Technology

Material Processing
Technology

Crystal Fabrication
Technology

Development of
Smelting & Refining Processes
Competitive Ni refining processes
Strengthen handling of impurities inCu smelting

Resin Technology

Powder Synthesis
Technology

Surface Treatment
Technology

Materials Development
Secondary Battery Cathode Materials(NCA)(Ternary material)(Next-generation cathode materials)

Crystal Materials(LT/LN)

Paste Materials(Nickel paste for MLCC, resistor paste)

Ink Materials (near-IR shielding ink)

Technology
Base

Development of new products in materials business
Basic research on
Powder materials
Evaluation & Analysis Technology
Numerical Analysis (simulation) Technology

SUMITOMO METAL MINING CO., LTD.

52

Ⅳ. Supplemental Materials

Ⅰ Business Overview
ⅡLong-Term Vision (LTV) &Basic Strategy of 2015 3-Yr Business Plan

Ⅲ Core Business Growth Strategies
Ⅳ Supplemental Materials

SUMITOMO METAL MINING CO., LTD.

53

1) Business Spirit, Corporate Philosophy, Management VisionⅣ

Supplemental Materials

The Sumitomo Business Spirit
Article 1
Sumitomo shall achieve strength and prosperity by placing prime importance on
integrity and sound management in the conduct of its business.
Article 2
Sumitomo shall manage its activities with foresight and flexibility in order to cope
effectively with the changing times. Under no circumstances, however, shall it pursue
easy gains or act imprudently.
SMM Group Corporate Philosophy

SMM Group Management Vision

Sumitomo Metal Mining Co., Ltd. (SMM), in accordancewith the Sumitomo Business Spirit, shall, through theperformance of sound corporate activities and thepromotion of sustainable co-existence with the global
environment, seek to make positive contributions tosociety and to fulfill its responsibilities to its
stakeholders, in order to win ever greater trust.

By developing and employing innovative technology, we
shall fulfill our social responsibilities as a manufacturing
enterprise.

SMM shall, based on respect for all individuals andrecognizing each person’s dignity and value, seek to bea forward-minded and vibrant company

Based on the principles of compliance, environmental
protection and operational safety, the Sumitomo Metal
Mining Group shall pursue maximum corporate value
through the provision, via its global network, of highquality materials such as non-ferrous metals andelectronics and advanced materials.

SUMITOMO METAL MINING CO., LTD.

54

2) Corporate Governance (1) Governance System

Ⅳ

Supplemental Materials

SMM’s Corporate GovernanceMaximizing the corporate value of the
SMM Group
Ensuring sound management practices

Framework with which to bring discipline toour corporate activities

Annual General Meeting of Shareholders

Board of Directors(Decision-Making and Supervision)
Governance Committee（appointment and compensationof executives, etc）

Audit & Supervisory
Board(Auditing)

AdviseBusiness Execution(Executive Officer System)

Increase the ratio of Outside Directors on the Board of Directors to 1/3
Strengthen corporate governance
SUMITOMO METAL MINING CO., LTD.

55

2) Corporate Governance(2) Governance Policy

Corporate Governance Guideline

Ⅳ

Supplemental Materials

Corporate Governance Framework

Establish new policies regarding the basic
framework for views based on our
corporate governance

Basic Concept

・Corporate governance structure is toachieve SMM Group Corporate Philosophy
・Fulfill responsibility to stakeholders

Major Items

・Secure shareholderʼs rights
・Policy of communication and openness

with shareholders
・Corporate governance structure
・Clearly state the independence guidelineof Outside Directors and auditors
・Expand support structure for Outside
Directors and auditors

Work to bring corporate governance to a higher level
to increase corporate value
SUMITOMO METAL MINING CO., LTD.

56

3) Takeover Defenses -Necessity, Change of Scheme

Ⅳ

Supplemental Materials

Renewal of our takeover defense measures
Introduced at 2007 Annual General
Meeting of Shareholders (AGM)

Renewed at 2010 and 2013 AGMs

A proposal for renewal is expected to besubmitted at the 2016 AGM

Ensure the necessary time and information is made available for shareholders

Necessity

Actions and Governance

If a large-scale acquisition of shares of thecompany harms its corporate value or the common
interests of its shareholders

To improve transparency and clarity, the BOD will, as generalrule, convene a meeting of shareholders and confirm theintents of its shareholders before making a resolution
Strengthening Corporate Governance

Need to ensure the corporate value or thecommon interests of its shareholders bytaking the necessary and reasonablecountermeasures against such a largescale acquisition

Increase the number of independent outside directors to three (3),the ratio of the board of directors more than 1/3
Form an independent committee composed of the outside directors

Have cleared all the recommended standards of the large voting
advisory organizations

SUMITOMO METAL MINING CO., LTD.

57

Ⅳ4) CSR Activities (1) CSR Policies

Supplemental Materials

SMM CSR
Goal: Sustainable co-existencewith society and the global
environment

Solve social issues through our core businessCommunication with Stakeholders

CSR Policy

1

SMM shall work to combat global warming by promoting recycling and effective resource utilization
while also targeting technological innovation and continuous improvements in energy efficiency.

2

SMM shall promote sustainable co-existence with society by respecting the needs of local communities
in which we operate around the world.

3

To continue sound business activities, SMM shall respect human rights and shall try to be a company
in which diverse human resources take active parts.

4

According safety the highest priority, SMM shall provide safe, comfortable working environments
and seek to eliminate occupational accidents.

5

SMM shall strengthen communications with all stakeholders to build healthy, trust-based relationships.

SUMITOMO METAL MINING CO., LTD.

58

4) CSR Activities (2) Six Key CSR Areas and Vision for 2020

Ⅳ

Supplemental Materials

Six Key CSR Areas and Vision for 2020
Effective Use of Resources

A company that generates resources using innovative technology

Environmental Preservation

A company that uses advanced technologies to reduce environmental
impacts and contributes to preserving the global environment

Contribution to Society and
Local Communities

A company that earns trust and contributes to regional development throughour business and social contribution activities rooted in each region

Respect for People andHuman Rights

A company where diverse human resources exercise their ability sufficiently
and take a vibrant and active part in each field
A company that works with its stakeholders to strive
for a society that actively respects human rights

Occupational Health and
SafetyA company that accords safety the highest priority and provides
comfortable working environments

Stakeholder Communication

A company that works to communicate transparently with allworldwide stakeholders to deepen mutual understanding

SUMITOMO METAL MINING CO., LTD.

59Ⅳ5) Safety Initiatives

Supplemental Materials

Safety — To achieve by FY2018
Use top-down approach to conduct effective safety
activities at business sites and reduce major risks throughappropriate equipment improvements.

2015 3-Yr Plan period

Targets
Accidents
80

Practice good communication to improve safety
awareness among all employees and conduct proper line
management to ensure safety.

Limit domestic work-related accidents to 5 or less
Limit overseas work-related accidents to 9 or lessDomestic Work-Related Accidents
64 (2000)

60
40
20
0

2012 3-Year Plan
target10

2015
81998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

SUMITOMO METAL MINING CO., LTD.

2015 3-Year Plan
target5
15中計

60

6) Human Rights Policy and Human Resources Development

Ⅳ

Supplemental Materials

SMM Group Policy on Human Rights (key elements)
1. Compliance with domestic laws and ordinances, as well as international standards inregards to human rights
2. No discrimination
3. Prevention of child labor and forced labor
4. Establishment of appropriate measures and procedures for responding to human rights

problems if they should occur
5. Ongoing implementation of human rights awareness and outreach activities

Human Resources Development Policy
1. Develop and train the human resources necessary to ensure growth strategy success
2. Build systems that allow diverse human resources to exercise their potential
3. Develop organizations and a corporate culture that are proactive, collaborative, and self-

drivenSUMITOMO METAL MINING CO., LTD.

61

7）Performance Trends

Ⅳ

Supplemental Materials

2015
Forecast

15 3-Yr
2018

9,213

8,550

10,600

754

1,258

620

1,400

1,150

1,144

1,742

-40

1,700

232

171

298

239

-750

270

840

653

866

803

911

50

1,200

ROA（%）

8.3

5.9

6.9

5.5

5.5

0.3

6

ROE（%）

13.8

10.1

12.1

9.5

9.3

0.5

10

Dividend Per Share(¥)

32.0

28.0

34.0

37.0

48.0

31.0

N/A

Copper ($/t)

8,140

8,485

7,855

7,104

6,554

5,174

6,000

Nickel ($/lb)

10.7

9.6

7.7

6.5

7.6

4.7

7.0

Gold ($/Toz)

1,294

1,646

1,654

1,327

1,248

1,124

1,150

Exchange(¥/$)

85.7

79.1

83.1

100.2

109.9

121.3

120.0

2010

2011

2012

2013

2014

8,641

8,479

8,085

8,305

Operating Income

960

886

958

Recurring Profit

1,237

1,088

Equity Method profit

348

Net Income

Net Sales(Profit attributable to owners of parent)

SUMITOMO METAL MINING CO., LTD.

628）Segment Profit

Ⅳ

Supplemental Materials

JPY 100M

2,000
1,500
Diff. Adjustment

1,000

Others500

Materials

0-500

Smelting & Refining

2010

2011

2012

2010

2013

2011

2014
2012

2015
Forecast
2013

15 3-Yr
2018

2014

Mineral Resources

JPY 100M

2015
Forecast

15 3-Yr
2018

704

806

652

691

538

-460

660

Smelting & Refining

495

256

339

291

813

280

800

Materials

54

-3

38

111

129

50

200

Others

23

34

16

16

-1

-10

-20

Diff. Adjustment

-39

-5

105

35

263

100

60

1,237

1,088

1,150

1,144

1,742

-40

1,700

Segment Profit

Mineral Resources

Recurring Profit Total

SUMITOMO METAL MINING CO., LTD.

639）Balance SheetⅣ

Balance Sheet (Projections)
2019/3
Projection

2016/3
Forecast

Supplemental Materials

JPY100M

Diff

Current Assets

4,970

4,700

+270

Fixed Assets

14,34011,830+2,510Total Assets

19,31016,530+2,780Interest-bearing debt

4,130

4,180

-50

Other liabilities

1,520

1,330

+190

Total Liabilities

5,650

5,510

+140

Total Net Assets

13,66011,020+2,640Total Liabilities & Net
Assets19,31016,530+2,780Equity Ratio(%)

65%

61%

+4%

D/E

0.33

0.41

-0.08

12,54010,090+2,450

Ratio

Shareholder's equity

SUMITOMO METAL MINING CO., LTD.

6410）Sensitivity

Ⅳ

Supplemental Materials

JPY100M

Element

Degree of variation

Operating income/Recurring profit

Cu±100$/t

19/36

Ni±10￠/lb

19/22

Au±10$/toz

5/5

JP¥／＄

±¥1/$

13/15

（Remark） USD/JPY translation include RC-related and Conversion rateof overseas consolidated / equity-method affiliate companies' profit.

SUMITOMO METAL MINING CO., LTD.

6511) Prices of Metals
$/toz
2,400

2,000

Ⅳ

Supplemental Materials$/t
60,000Au($/toz)Cu($/t)50,000Ni($/t)1,600

40,0001,200

30,000800

20,000400

10,0000

0

SUMITOMO METAL MINING CO., LTD.

66

Ⅳ12) Forex Trends

Supplemental Materials

¥/$

$/€

130

1.60
JPY/US$120

123.75

US$/EUR

1.50

1.442

110

1.40

100

1.30

90

1.20

80

1.079

1.10

76.75
70

1.00

SUMITOMO METAL MINING CO., LTD.

67

Note

The materials provided herein are not intended as disclosure under the Securities
Law, and no warranty is made 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, competitive conditions, and a number of other factors.
Therefore, we ask that you refrain from making any investment decisions basedon these materials alone. The Company cannot be held responsible in any way
for any losses that may occur as a result of the use of these materials.
All copyrights, trademarks, and intellectual property rights attaching to thematerials herein are the sole property of Sumitomo Metal Mining Co., Ltd.

Sumitomo Metal Mining Co., Ltd.

SUMITOMO METAL MINING CO., LTD.

68