November 2005 International Policy Issues and Their Importance for Minerals and Metals Markets

2 Mining and Metals Sector Issues Demand for minerals and metals essential for strong growth in the mining sector Certain policies can have far reaching and sometimes unintended consequences Policy debates often do not consider or understand the implications for raw materials suppliers Market distortions or disruption can have significant consequences – rocks or resources?

3 Some Emerging Trends Globalisation leading to greater integration across international borders: Raw materials mined in one country, refined in another, manufactured in a third and exported again to the final consumer Policy makers in end-use markets set the agenda Growing dependence on single end-use markets for a number of minerals and metals Increasing scrutiny over environment and social costs associated with minerals and metals

4 Major end-uses for minerals & metals Lead – 75% for lead-acid batteries Copper – 55% for wire applications Zinc – 50% for galvanized steel Nickel – 65% for stainless steel Platinum – 45% for auto-catalysts Gold – 80% for jewellery Cadmium – 80% for nickel-cadmium batteries Crysotile – 90% for asbestos cement products

5 The Threats to Markets The ever increasing dependency on fewer end-use markets leaves individual metals vulnerable to a loss of that market as a result of substitution brought about by changes in regulations or technology Loss of the market will result in reduced demand and fewer opportunities for future investments in new mine development

6 Policy drivers that can affect markets Precautionary Principal Hazard identification and classification policies Chemicals policies Waste management policies Risk assessments Substitution policies Integrated product policies and “Green” procurement

7 Key Issues on the International Agenda Strategic Approach to International Chemicals Management (SAICM) EU Registration, Evaluation and Authorisation of Chemicals (REACH) EU Risk Assessments for metals (Zn, Ni, Cu & Pb) EU RoHS and WEEE Directives UN-ECE Heavy Metals Protocol UNEP Chemicals – Hg, Cd, and Pb OECD Sustainable Materials Management Rotterdam Convention - PIC

8 Underlying Drivers for these Actions Focus on hazard characteristics, not risk Concern with large volumes/loads Concern with “heavy metals” Detoxification/dematerialisation Substitution, bans and phase-out over risk management Broad application of the Precautionary Principle Substance-by-substance rather than holistic life- cycle approach

9 Problems With This Approach Do not always recognise: That metals unlimited recyclability When properly managed, minerals and metals provide a benefit and can be used safely The need for a life-cycle assessment to identify environmental impacts The properties and characteristics that set metals apart from synthetic organic compounds Co-production and co-dependence of metals (polymetallic mines)

10 How the Forum can respond Recognise that policy or regulatory decisions affecting products will affect suppliers of raw materials Collaborate to develop better linkages between governments to inform international forums addressing issues of common concern Develop and promote consistent messages about mining and metals Develop and share information to inform and promote a life-cycle approach in policy making