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Presentation Contents
Introduction to Copper AllianceTM and its Value Proposition
Program examples
Defense against substitution
Health, Environment and Sustainable Development
Market Intelligence, Data and Measurement
What is Copper Alliance™?
• In 2011, the ICA Network adopted a branding campaign referred to as Copper Alliance. • The Copper Alliance brand is being utilized by a network of 26 regional copper
centers, led by ICA • Use of the Copper Alliance brand permits the ICA Network to maintain a stronger
web presence and better position copper centers within the ICA
• Never before have copper and the copper industry been in a position to make a positive impact on so many of society’s greatest challenges
• As global issues like energy, CO2 and health become more urgent, copper has an increasing role to play in almost every industry
• Copper Alliance is positioning copper – the material and the industry – based on its unique benefits to society
3
4
A member-driven organization
Leading organization for promoting copper
43 global-level members
Producers representing 60% of world copper production
11 of the world’s largest copper and copper alloy fabricators
Nearly 500 local members and partners
Activities in more than 60 countries on 6 continents
2012 budget, including co-funding: $95 million
5
43 Global Member Companies
Anglo American Chile Antofagasta Minerals S.A. AurubisBHP Billiton PlcBoliden ABCompañia Minera Doña Inez CollahuasiCompañía Minera ZaldívarCODELCOFreeport McMoRan Copper & GoldKennecott Utah Copper Corp.KGHM Polska Miedź S.A.LS-Nikko Copper Inc.Mexicana de Cananea, S.A. de C.V.Mexicana de Cobre, S.A. de C.V.Minera Alumbrera Ltd.Minera Antamina S.A.Minera Escondida LimitadaMinera EsperanzaMinera Los PelambresMinera El TesoroMitsubishi Materials CorporationPalaboraPan Pacific Copper
Rio Tinto PlcSociedad Contractual Minera el AbraSociedad Minera Cerro Verde S.A.A.Southern Copper CorporationSumitomo Metal Mining Co., Ltd. TeckTenke FungurumeXstrata CopperYunnan Copper Industry (Group) Ltd.
FABRICATORS Chinalco LuoyangDaechang Co., Ltd.Golden Dragon Precise Copper TubeHalcor S.A.KME Group SpALuvataMueller IndustriesNexansOutotec OyjRevere Copper Products, Inc.Wieland-Werke AG
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Contribution to date
Human health, environmental science and sustainable development Maintain copper industry license to operate
Maintain and expand the critical position of copper in broad regulatory frameworks
Ensure market access for copper products
Provide technical support to supply chain: Strengthen commitment of users to copper
Defend against material substitution In partnership with industry
Grow copper demand Promote copper-intensive solutions
Develop leading-edge copper technologies
7
Mission Statement
Defend and grow markets for copperbased on its superior technical performance
and its contribution to a higher quality of life worldwide.
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Value Proposition
Position copper and the copper industry as delivering significant benefit to society in areas of critical current concern:
Sustainable development
CO2 reduction
Green building
Energy access (electrification)
Alternative (renewable) energy
Public health
Food supply
9
Value Proposition
Maintain copper industry license to operate and ensure market access for copper products
Deliver an estimated positive impact on annual copper demand of 1 million tonnes by 2016:
Create new copper end-use opportunities through technological innovation and active promotion
Increase copper intensity-of-use in existing products and systems
Defend existing copper end-use markets in an environment of persistent high relative material costs
10
2012-16 Strategic Plan
Core Initiatives Sustainable Energy Building Construction Antimicrobial Copper Health, Environment and Sustainable Development Technology Development and Transfer
Support Functions Communications Market Intelligence, Data and Measurement Technical and Market Support Funding (Revenue Strategy) Administration
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2012 Operating Plan: $68.8M(Budget by Initiative, $M)
$11.90
$6.70
$8.00
$7.00$6.00
$6.20
$4.40
$1.80
$3.30
$1.30
$11.40
Sustainable Energy (17.3%)
Building Construction Electrical (9.7%)
Building Construction Non-Electrical(11.6%)Antimicrobial Copper (10.2%)
Health, Environment & SustainableDevelopment (8.7%)Technology Development & Transfer(9.0%)Communications (6.4%)
Market Intelligence, Data &Measurement (2.3%)Technical and Market Support (4.8%)
Funding (1.9%)
Administration (16.6%)
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Societal Concern: Public Health
25 million people worldwide acquire a Hospital-Acquired Infection (HAI) each year
Mortality rates vary from 4% to 10% in developed countries
Higher in less-developed parts of the world
Greater number of deaths than HIV and breast cancer combined
In the U.S. each year costs $30 billion, 2 million HAIs, 100,000 deaths
80% of bacteria and viruses that cause infection are spread by touch
Hand-washing and regular cleaning not enough
Traditional materials and silver-ion coatings do not work
Antimicrobial CopperTM works
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Use of Antimicrobial CopperTM touch surfaces in healthcare delivers: >99% reduction of harmful
bacteria 40-70% reduced infection rates $10-14 billion cost savings in fight
against HAIs Nearly 300 different copper alloys
registered by the U.S. EPA Including tarnish-resistant ones
Copper AllianceTM Value Proposition to Healthcare Sector
15
Copper AllianceTM Leading the Promotion of Antimicrobial Copper
Tonnage 40-50,000 tonnes in new copper demand in
touch surface applications in healthcare
Fabricator Opportunities New end-use segment for copper and
copper alloys
Image Value Highly visible project, with global attention
Strong link between copper and the copper industry and public health
17
Societal Concern:CO2 Reduction
Much debate among nations, few agreements
Targets for the efficient use of electricity (and corresponding)CO2 reduction tend to focus on highly visible areas
Compact fluorescent lights
High-efficiency appliances
These have relatively limited potential for impact
Every energy-saving effort is important, but high-impact areasare often ignored
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CO2 reduction through Electrical Energy Efficiency - Example of motor systems
Motor systems use nearly half of all electricity globally; by 2030: 13+ trillion kilo-watt hours p.a.
8.6 giga-tons CO2 emissions p.a.
Current best practices for just industrial motor systems would result in reduction of: 320 billion kilo-watt hours of electricity
200 million tons CO2 emissions
19
Copper Increases Efficiency and ReducesCO2 Emissions from Motor Systems
0
10
20
30
Standard High Premium Super Premium
10 HP Motor
Cop
peru
se (k
g)
Motor Efficiency
86% 89.5% 91% 92.9%
20
Copper Alliance Leading the Promotion of Energy-Efficient Motors
Tonnage 100,000+ tonnes in new copper demand by
2016
Fabricator Opportunities Displace competing materials with copper
Copper AllianceTM creating new motor technologies
Image Value Highly visible project, with global attention
Strong link between copper and the copper industry and energy efficiency and CO2 reduction
22
Societal Concern: Food Supply
Growing global population requires additional protein sources
The world’s oceans, seas and rivers cannot be depended on for food
Nearly 75% of the world’s fisheries are fully exploited or worse
Aquaculture provides a healthy diet for people around the world
23
Copper Solves Aquaculture Industry Challenges
No need for cleaning
Increased worker safety
Reduced cost
Reduced stress, disease and mortality
Reduced antibiotics and chemical treatments
No predator penetration
Net life measured in years
At end-of-life, copper net is fully recyclable
24
Program Impact
Tonnage
100% market uptake would result in50,000 tonnes of new copper demand annually
Fabricator Opportunities
Entirely new end-use segment for copper and copper alloys
Copper alloy fabrication added value estimated at $250 million per year
Image Value
Strong link between copper and the copper industry in making a positive impact on an important societal issue: food supply
25
Brief examples of other programs:
- World Electrification- Electrical Safety- Green Building- Earthquake Protection
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World Electrification
1.3 billion without access to electricity
Currently, 100,000 people added to electrical grid each day
Rate would need to triple to achieve universal access by 2030
$20 trillion investment needed
Copper AllianceTM works with code-setting bodies to ensure safe, energy efficient, copper-based codes and standards globally
Copper AllianceTM coordinates and co funds urban slum and rural electrification programs
Brazil
India
27 27
Electrical Safety
Older housing stock frequently has unsafe electrical installations New housing stock in developing regions require strong electrical
code setting Copper AllianceTM partners with cable makers, contractors and
consumer groups to create joint programs and institutions e.g.: Forum for European Electrical Domestic Safety (FEEDS)
Casa Segura (Latin America)
The FEEDS and Casa Segura campaigns: Build statistical case for electrical safety at national and regional levels
Influence regulations for periodic inspection
Communicate with home users to take responsibility
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Green Building – US example
Electrical energy efficiency is critical to green building:
40% of total energy usage
70% of electricity consumption
Green building not just about CO2 reduction, but also makes economic sense; LEED-certified buildings command a premium of:
10% on rentals
30% on sales
Many of the components that lead to Green certification require copper
Efficiency in heating and cooling systems; motor-driven systems; lighting.
Copper AllianceTM works closely with Green organizations and materials decision-makers to ensure copper is the material of choice
29
Earthquake Protection for Buildings
Energy Dissipation Devices (EDD)
Copper energy dissipation devices in buildings reduce earthquake damage
Potential applications include public buildings, hospitals, bridges and mining facilities
Potential market impact of 25,000 tonnesby 2015
Tremendous image impact for copper and the copper industry
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The Value of Copper AllianceTM Science
Maintain industry license to operate
Defend and grow market access for copper products
Develop a sustainable image for copper
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Maintaining License to Operate:REACH, Classification & Labeling
Fourteen dossiers on copper and related products
ONE copper dossier, with 144 members and NO free riders
> $2.5M from non-members
European Chemicals Agency evaluation underway
Successful notification of Classification & Labelling for copper ores and concentrates
5 concentrate grades cover Copper Alliance membership
70% require no classification
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Defending Market Access
Copper removed from list of substances of environmental concern for EU surface waters
Copper AllianceTM science integrated into US Environmental Protection Agency criteria for saltwater quality
Peer review shows copper does not cause, or worsen, Alzheimer's Disease
Providing clear information on the antimicrobial mechanism-of-action of solid copper
Regulatory monitoring expanded in China, Korea, Japan and India
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Growing Copper’s Sustainable Image
Six major mines contributed to update of global life cycle data
EU Life Cycle Assessments for key end-use products
Global copper flow model
International Copper Study Group reports 35% of global demand met from recycling
How much is this relative to what is available?
HESD initiative goal: develop SD messaging for all Copper AllianceTM
programs
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Defend against substitution using Technology Development and Transfer (TDT)
Program example: Air Conditioning:
Address threat from aluminum in > 500 kt/p.a. global air-conditioning market
Development of small diameter tubes
(< 5 mm) now applied in ≈ 15% of 57 million room air conditioning units produced in China
Delayed substitution by aluminum tube by all major Chinese OEMs
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Defend against substitution using Technology Development and Transfer (TDT)
Program example: Air Conditioning:
Transfer to the market through the MicroGroove™ Campaign
Developed platform with nine fabricator members
Launched campaign on B2B promotion of small diameter copper tubes
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Market Intelligence, Data and Measurement Current activity
Comprehensive end-use data 24 million tonne of copper use covered (2010)
Annual material substitution survey 21 product sectors and 24 different countries
Quantification and detailed understanding of annual copper substitution
Copper Flow Model To address widespread requests for recycling indicators
Data for Life Cycle Inventory (LCI) and Life Cycle Assessment (LCA)
Current global survey of future plans for electric vehicle infrastructure
MIDM initiative audits performance of Copper Alliance market development programs Includes assessment of market impact
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16.9 18.5 19.2
4.95.7 5.9
0
5
10
15
20
25
30
2009 2010 2011E
Refined copper Direct use scrap
21.824.2
25.0e
Mt
Data: CRU
TOTAL COPPER SEMIS USE 2009 - 11(e)