Global Lead Metal Market Review Good Afternoon. My name is Harry Yoo and I am Senior Director of metal sales for Korea Zinc Group. Today I would like to discuss with you on Current Global Lead Metal Market

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Table of Contents Section 1. Introduction of Korea Zinc Group Global Lead Market Review Section 3. Conclusion This presentation is simply divided into three sections. In the first section, I would like to briefly introduce about Korea Zinc Group. Then Second section, I am going to give general market review of lead industries, focusing on global demand and supply Third I am going to draw a conclusion with the data and trend that I am showing in Section 2

Introduction to Korea Zinc SECTION 1 Introduction to Korea Zinc Now, I would like to introduce about Korea Zinc 4 4 4

Korea Zinc Group Korea Zinc is a leading Zinc / Lead metal producer in the world. Korea Zinc produces 320,000mt of Lead metal currently and it is expected to increase by the end of this year Korea Zinc produces LME registered 99.995% Lead, which is highest grade among all LME Brands, as well as various tailored alloys Under Korea- India CEPA agreement, Korean origin Lead metal exporting to India is exempted from custom duties which makes key factors to Indian customers Typical Assay of Korea Zinc’ LME Registered Lead Ingot (%) Korea Zinc is one of the largest zinc /lead smelting group producing 1.1 million tone of zinc, 320,000mt of lead respectively. By end of this year, we are completing expansion of capacity of lead as well. Our product is 99.995% purity lead, which is the highest purity grade lead among all LME registered brand. We also do produce custom alloys for various battery customers. From year 2013, Korean origin Lead metal exporting to India is free from custom duty, so it becomes economical advantage as well. Here is our standard typical assay.

KZ Lead Refinery Flow QSL Anode Casting Electro-Refining Casting From Zinc Smelter From Cooper Smelter Anode Casting Electro-Refining Here I am giving brief flow of lead refining of our company We have three different types of raw material feeding one is QSL, and zinc smelter and cooper smelter because from zinc and copper smelter there is lead residue. During QSL Process Lead concentrate containing about 60% of lead is oxidized and recued in one furnace, resulting in lead bullion, sulfuric acid and slag From these we are sending this to Anode casting to get low purity lead and also copper and other impurities are recovered Then we send this to Electro Refining and Anode shall become more purified and during this precious metal Ag, Au, Bi are recovered Finally we send this to Casting to produce final product. Casting Precious Metal Ingot 320,000 t/y Ag, Au, Bi, Sb2O3, Te, Pd, Pt

Global Lead Market Review SECTION 2 Global Lead Market Review Next , I would like to give an presentation on global lead market. 7 7 7

Global Lead Market Supply / Demand From Y12 to Y15, primary lead metal supply to be expanded 18% however major production increase contribution by Chinese where increased 1.3Mil MT from y2012 to y2015 (27% growth) From Y12 to Y15, secondary lead metal supply to be expanded 3% -> Low LME Price seems to be main reason for sluggish growth From year 2012 to y2015, primary lead metal supply has been expanded by the 18% on average. Major production increase, or course from china, where contributed 1.3Millon Tone increase for last for years, it is 27% annualized growth In contrast, secondary lead smelting only expanded by 3% and main reason seems to be sluggish LME price then 5 or 7 years ago. *Data: Wood Mackenzie

Global Production *Data: Wood Mackenzie In Asia, there are 3 major production countries which are China, India and South Korea Asia accounts for about 60% global production and other country growth are still limited and North and Latin america there was closure of production in y2014 *Data: Wood Mackenzie

China/India Lead Market Production Primary 23% or 1.4m MT Sustainable, Recycled 77% or 4.6m MT China 44% or 4.8m MT Rest of World 56% or 6.0m MT 32% or 1.525m MT Primary (Mines) 68% or 3.25m MT This is interesting figure shows difference of portion between primary / secondary Globally Secondary and Primary ratio is 50% and 50% However in china around 70% is primary and India 16% is only primary. Total (2014) : 11Mil MT Total (2014) : 5.2Mil MT Total (2014) :0.7Mil MT *Data: Wood Mackenzie

Major Primary Lead Smelters There is no supplier who covers market share more than 6% -> Highly Competitive market This table show five largest smelters in the world as of now and out of five, three smelters are in China and rest is Korea Zinc Onsan plant and nystar Port Pirie plant which produce 99.97% grade. *Data: Wood Mackenzie

Global Lead Market Demand Lead Acid Batteries accounts for 80% out of total Lead Consumption As people here well know, Lead Acid batteries current account for 80% of total demand of lead and the ratio is very much aggressively increased last a few decades.

Global Lead Market Demand (Y15) Globally Around 12Mil MT of Refined Lead is demanded annually In Asia, 7.8 Mil MT Refined Lead Metal is demanded annually Here is global lead market demand as of this year. It is estimated that 12Million MT is demanded annually and as you can expect Asia is the biggest share with 78Million MT demand in 2015 China will be requiring 56Miillonton and global annual growth is around 4.0%. For your reference, demand in India is around 850,000mt in y2015 *Data: Wood Mackenzie

LME-SHFE Price arbitrage Market requirement of Lead in China 5 Mil MT In China, both Export / Import are not commercially viable due to existence of 10% export tax, VAT as well as 3% import tax This chart shows recent price trend between Shanghai price and LME SHFE is currently higher than LME by usd 100-150 per MT and regardless of price difference, both Export and Import are not commercially viable due to VAT and 10% export tax and 3% import tax. So China, though market is big, It is also almost independent market

Chinese Battery Market China E-Bike/Tricycle is major demand for the Lead Industrial Usage and Auto Batteries have more potential to grow In China, main drive of the lead consumption was from E-Bike, which is very characteristic figure compared to other countries where most of demand came from automotive batteries. However we also see potentinal fast growth of automotive and industrial demand *Data: Wood Mackenzie

Chinese Battery Market China E-Bike/Tricycle segment growth now stagnated and market now reached at maturing phase and lowered lithium price is now big challenge of Lead based E-bike China E-Bike/Tricycle segment growth now stagnated and market now reached at maturing phase and lowered lithium price is now big challenge of Lead based E-bike.

Indian Battery Market Indian Battery market average growth expected 16.5% during Y14-Y18 Ratio between Industrial / Automotive Battery will be stable in coming years due to steady growth of both segments Over the next five years the Indian battery market is forecast to grow 16.5%. The key drivers for this sustained growth will be the continuing need for UPS systems due to unreliable power supply plus developing telecoms, transport and industrial infrastructures, increasing OEM automotive demand. Industrial batteries in particular will benefit from the rising population and increased industrialization of India requiring telecoms providers to install increasing capacity and which can be also interpreted increase of higher purity lead to some extent. *Data: Wood Mackenzie

SECTION 3 Conclusion Finally based on current scenario, I would like to summarize key points on lead metal industry in next page. 18 18 18

Conlusion Global Demand of Lead will be increased 3-4% in coming 3 years. Demand growth will be mainly driven by Asian region where growth rate expected be around 4-5% As of Y2014, 51% of Lead production come from Secondary production however if LME price maintained current LME price level, primary production will overtake secondary production in Y2015 China is the biggest market for both production / demand, however it is also independent market due to higher SHFE price as well as export duty and no VAT (17%) refund applied to importers India market is rapidly growing 5-6% per annum and both automotive/industrial consumptions are evenly in a growth stage High Potential of 4N Lead Demand in India expected due to growth of telecommunication industry