1 29 th September 2009 Impact of EU Emission Trading Directive and renewable energy tax on the copper industry Ulf Gehrckens Senior Vice President Corporate Energy Affairs

2 Copper – Contributing to the solution of Climate Change Problem Copper content in different applications ~25 kg copper ~115 kg copper~200 kg copper ~4000 kg copper ~7300 kg copper~8-30 tonnes copper Source: Financial Mirror Ltd 2008, WVM

3 Japan Western Europe U.S.A. Africa Global copper demand will increase despite current economic crisis India China Russia Eastern Europe Copper demand per capita (in kg) GDP per capita (in US $) Strong growth in China, India and Eastern Europe foreseeable Physical demand will stay at high level despite current economic downswing Source : United Nations 2008, Brook Hunt 4Q 2008 Copper markets

4 Production sites and employees Well positioned production sites in European core market Copper Processing More than 4,700 people are working in the new group directly and more than 9400 persons are working indirectly. Primary Copper Production Recycling / Precious Metals » Hamburg » Olen » Pirdop » Röthenbach » Hamburg » Olen » Avellino » Emmerich » Stolberg » Lunen » Hamburg » Olen » Pirdop » Fehrbellin » Yverdon- les-Bains » Smethwick » Dolný Kubín Olen: 496 Hamburg: 2094 Fehrbellin: 49 Röthenbach: 37 Avellino: 108 Emmerich: 115 Lunen: 473 Yverdon-les-Bains: 39 Pirdop: 758 Dolny Kubin: 11 Stolberg: 537 Smethwick: 28

5 The processing fee is independent of the Copper price, and Aurubis can not pass on its additional costs to its customers Source: CRU Cu-Price TC/RCs and Copper Price (in US cts/lb)

6 Main production units in Aurubis Bulgaria production capacity (up to) Anode copper 249,000 t Cathode copper 180,000 t Sulphuric acid 900,000 t Processed slag486,000 t SmelterRefinerySulphuric acid plant Flotation

7 Aurubis Bulgaria‘s Copper processing is among the cleanest in the world. Source: Brook Hunt 2008, certified data SO 2 -Emissions of Copper Smelters (in kg SO 2 per t Copper) Pirdop Site 10  European Copper Smelters 28  International Copper Smelters 352 Ø international Pirdop Ø Europa

8 Aurubis Bulgaria’s Copper production is among the most energy efficient in the world. Source: Brook Hunt 2006 Energy efficiency of Copper industry (in MJ/ t cathode) Aurubis Bulgaria in in Pirdop : is 8,760 MJ/t

Aurubis Bulgaria at Pirdop has already done a lot to decrease CO 2 emissions » Direct Emissions: 92 % Decrease in Direct Emissions since 1990 » Further decrease is technically limited and is economically unrealistic. » Indirect Emissions: Electricity mix of Bulgaria determines the indirect emissions for Aurubis Bulgaria at Pirdop. CO 2 -emission Aurubis Bulgaria since 1990 (in t CO 2 /t copper) 92 % decrease since 1990

10 Uneven Industrial Electricity prices in Europe In Bulgaria, industrial electricity costs more than in other European Countries. This must be solved. Industry supports the economy and EU considers low industrial electricity prices as normal and not as a state aid. Source IVH Average price in 2009 for 2010 baseload for energy intensive industrial consumers

11 Electricity costs are very important for Aurubis Bulgaria Electricity costs of Aurubis Bulgaria (in Mio. €) Every additional Cent per kWh Electricity price increase means an additional financial burden of about 3.4 Mio. €/y in Aurubis Bulgaria. Inclusion of Copper industry in ETS means additional cost of t x 30,- €/t = Mio. €/a (direct emissions) With complete auctioning of Emission rights, extra cost through electricity of about 386,000t x 30 €/t = + 11,6 Mio. €/a (indirect emissions) More than 30% of the electricity is used for environmental protection With the additional tax due to Renewable Energy in Bulgaria, Industry’s burden has increased

12 Aurubis Requests »Energy Intensive Industry should be freed from the renewable energy tax like in Germany. »Recycling and environmental protection measures must be exempt from Carbon related taxes. »A performance based, full compensation for direct and indirect Carbon taxes is essential as long as no compareable system is installed worldwide. The decisions of the EU in December 2008 should in no case be changed during the implementation process. »The list for carbon leakage should not be shortened for indirect emissions related compensation. »The compensation for indirect emissions must be based on real costs. »Capacity expansion should be free from the extra CO2 related financial burden. Without these measures, Copper production will move out of Europe to more CO2 emitting parts of the world and this will result in a real damage to European employment and world environment.

13 Historical legacy is cleaned with enhanced attention to the environmental protection. » Pirdop site in 1999Pirdop site in 2005