Presentation to the Market

June, 2010

1

Agenda

Overview of the Group …………………………………………………….. 03Copper Division ……………………………………………………………….. 08Economic and Financial Data…………………………………………….. 12Outlook …………………………………………………………………………… 21

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Page

DIAS D’ÁVILA - BA SANTO ANDRÉ – SP(UTINGA)

SERRA - ESSANTO ANDRÉ – SP(CAPUAVA)

Presenting Paranapanema

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Presenting Paranapanema

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The largest refined copper producer and the largest copper and its alloys semi-manufactured producer in Brazil

Paranapanema was established in 1961 and listed as a publicly held company at São Paulo Stock Exchange since 1971Paranapanema was established in 1961 and listed as a publicly held company at São Paulo Stock Exchange since 1971

Integration of the copper business with the fertilizer business via byproductsIntegration of the copper business with the fertilizer business via byproducts

Integration in smelting, refining, casting and production of semi-manufactured of copper

Copper smelting and refining resulting in cathode of 99.99% purity

Location: 1 plant at Camaçari Industrial Complex (State of Bahia)

Major producer of refined primary copper in Brazil

Installed capacity: 240,000 t/ year Market share volume in Brazil: 35% Products: anodes, cathodes, rods and

drawn copper wire Byproducts: sulphuric acid, oleum and

anodic mud (precious metals) Raw material: domestic and imported

copper concentrate Brand:

Semi-manufactured products of copper and its alloys (brass and bronze)

Location: 2 industrial plants in the state of São Paulo and 1 in the State of Espirito Santo

1st largest producer of semi- manufactured products of copper and its alloys in Brazil by revenue since 2009

Installed capacity: 72,000 ton/year Market share volume in Brazil: 36% Products: rollings, seamless tubes and

fittings, bars and profiles and wires Raw material: cathode and scrap Brand:

Fertilizer production integrated with Caraíba Metais

Location: 1 plant at Camaçari Industrial Complex (State of Bahia)

Integration: acid pipeline of sulphuric acid through Caraíba and Cibrafértil

Installed capacity: 300,000 t/year Products: superphosphate, complex

fertilizers and NPK Raw material: sulphuric acid and

imported phosphate rock Brand:

Significant presence in the Copper Division: 98% of total revenuesSignificant presence in the Copper Division: 98% of total revenues

Contribution of each sub-division for the consolidated net revenues (12M09)

75% 23% 2%

Copper smelting & refining Copper semi-manufactured Fertilizer Division

Organizational Structure

Merger of Caraíba at Nov 13, 2009Merger of Eluma at March 31, 2010

CARAÍBA

INCORPORATED LTD.

CARAÍBA ENERGIA

LTDA.

99.09% 100.00% 100.00%

100.00%

Shareholding Structure

Shareholder Distribution per Segment Reference Date 04/30/2010

Current Shareholding Structure

Market

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23.96% 17.23% 11.82% 7.35% 39.19%

Major Shareholders

Common shares 319.176.942

100%

Total of shares 319,176,942 100%

Free Float 318,091,740 99.66%

Rótulos de Linha Total of Shares % Total

Pension Funds 135,856,595 42.8%

Banks with Portifolios 57,660,707 18.1%

Foreign Investiment Funds 42,918,558 13.5%

Individuals 38,375,961 12.1%

Investment Funds 21,651,300 6.8%

Non-Institutional Corporates 17,894,014 5.6%

Investiment Clubs 2,963,393 0.9%

Brokerage houses 312,294 0.1%

Others 43,112 0.0%

Treasury stocks 24,330 0.0%Total 319,176,942 100.0%

Previ, Bndespar and Petros are stated-owned pension funds

Share Trading Policy implemented Information Policies Voting Manual for shareholders at General Meetings Management Committees:

• Finance• Taxation• Risks• HR• Budget

Financial Risk Management Policy on 08/11/2009 100% Tag Along on common shares Joined the arbitration chamber contemplated in the bylaws Dividends of 25% of adjusted net income Company joins Novo Mercado of the BM&FBovespa in 2010 100% of voting shares

Corporate Governance

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Copper Division

Brands: Caraíba and Eluma

8

Copper Consumption

• Industries requiring copper worldwide :

Civil construction

Transportation (air, sea and land)

Automotive (hybrid cars, trucks)

Infrastructure (electricity and telecommunications)

Electroelectronics

Cooling and heating

Clean energy (solar, biodiesel, ethanol)

Apparel• Industries requiring copper in Brazil: the same, boosted by already approved government economic stimulus measures

and others still in the pipeline, which are driving consumption and demand for copper in several industries such as: (i) consumption: popular refrigerator substitution program; (ii) solar energy: new municipal legislation determies the use of clean (solar) energy and the popular housing program; (iii) electrical energy: “Luz Para Todos” (“Light for Everyone”) is also likely to encourage the industry; (iv) civil construction: “Minha Casa Minha Vida” (“My Home, My Life”) foresees construction of 1 million homes; (v) extension to the IPI tax exemption or reduction period: electroelectronics: extended IPI benefits on certain white goods until 10/31/09; automotive: benefits for cars were extended to 09/30/09; and for trucks: exemption until 12/31/09, with the gradual return of taxation after these periods; (vi) Reduction in IPI: capital goods: machinery and equipment intended for industry and special funding facilities for small and mid-size companies via BNDES and Banco do Brasil; and some civil construction items; and (vii) Reduction of PIS and COFINS taxes: motorcycles up to 12/31/09, with the industry agreeing to retain jobs.

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10

Refined Copper Supply and Demand in Brazil

Strategic actions by Paranapanema:Expand the domestic market, taking up the slack left by imports;Expand sales of higher value-added products, like bars and drawn wire; Offer clients more logistics services, reducing time frames, quantities and

transport management risk by creating the CDPC.

Apparent Consumption of Refined Copper in Brazil

Products (thousand t) 2004 2005 2006 2007 2008C¹ 2009¹Change

2009/2008CAGR

2004-09

Refined copper production 208.0 199.0 219.7 218.4 227.8 208.4 -8.5% 0.0%Variation in inventories -7.8 1.4 0.1 -4.0 3.3 1.7 -49.5% NSRefined copper imports 154.1 167.4 175.4 217.9 251.0 203.5 -18.9% 5.7%Refined copper exports -21.9 -32.9 -56.0 -102.0 -93.1 -88.6 -4.8% 32.3%Apparent consumption in Brazil 332.4 334.9 339.2 330.3 389.0 325.0 -16.5% -0.4%Population (in million) 180.7 186.4 186.4 186.5 189.6 191.9 1.2% 1.2%Per capita consumption (kg per inhab.) 1.84 1.80 1.82 1.77 2.05 1.69 -17.5% -1.6%Sources: Sindicel - Sindicato da Indústria de Condutores Elétricos, Trefilação e Laminação de Metais Não Ferrosos do Estado de São Paulo;

ABC - Associação Brasileira do Cobre; MDIC/Secex; IBGE e Brook Hunt

¹ Estimated population /4 Kt of refined copper from Vale and Mineração Caraíba.

C=Changed

Eluma: Revenue Distribution per Segment

• Significant sector diversification in different transformation industries• Competitive advantage and good thermometer of economic activity• Entry into the copper wire and bar segments with the Bus Bar project• Launch of new products like flexible cables (insulated electric wiring)

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Civil Construction28%

On-Selling15%

Eletrical-Eletronics11%

Machanics and Metallurgy

8%

Automotive11%

Clothing5%

Refrigeration16%

Others2%

Military Material4%

Net Revenues by Segment 2009

Civil Construction26%

On-Selling22%

Eletrical-Eletronics10%

Machanics and Metallurgy

6%

Automotive13%

Clothing4%

Refrigeration14%

Others2%

Military Material3%

Net Revenues by Segment 2008

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Economic and Financial Data1Q10

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Consolidated Economic-Financial Data• Revenues and volumes grow up in 1Q10

Paranapanema S/A - Consolidated

Result in R$ thousand 1Q09 2Q09 3Q09 4Q09 1Q10Change

1Q10/1Q092008 2009

Change 2009/2008

Gross revenues 598,372 726,189 784,497 884,498 849,376 41.9% 4,284,931 2,993,556 -30.1%Domestic market 328,903 360,706 419,630 424,609 521,770 58.6% 2,249,717 1,533,848 -31.8%Foreign market 269,469 365,483 364,867 459,889 327,606 21.6% 2,035,214 1,459,708 -28.3%

Net revenues 493,341 597,707 668,660 752,205 733,242 48.6% 3,481,354 2,511,913 -27.8%COGS (549,598) (610,029) (641,617) (724,742) (684,411) 24.5% (3,301,815) (2,525,986) -23.5%

Gross profit (56,257) (12,322) 27,043 27,463 48,831 NS 179,539 (14,073) -107.8%Operating expenses (26,220) (27,160) (26,561) (29,549) (31,072) 18.5% (114,460) (109,490) -4.3%Other operating revenues (expenses), net 20,191 (24,729) (36,040) 181,273 (6,636) -132.9% 444,277 140,695 -68.3%

EBIT (Result of activity) (62,286) (64,211) (35,558) 179,187 11,123 NS 509,356 17,132 -96.6%Financial revenues (expenses), net 14,657 84,485 (135,683) (69,951) (5,967) -140.7% (335,843) (106,492) -68.3%Income (loss) before income and social contribution taxes (47,629) 20,274 (171,241) 109,236 5,156 NS 173,513 (89,360) -151.5%

Net income (loss) (62,480) (3,353) (43,681) 303,543 24,835 NS 133,014 194,029 45.9%Number of shares outstanding ex-treasury (in thousand) 313,796 313,796 313,796 317,700 319,153 1.7% 313,796 317,700 1.2%Earnings per share (0.1991) (0.0107) (0.1392) 0.9554 0.0778 NS 0.4239 0.6107 44.1%Depreciation and amortization 20,945 20,911 20,463 20,332 20,730 -1.0% 101,752 82,651 -18.8%EBITDA (41,341) (43,300) (15,095) 199,519 31,853 NS 611,108 99,783 -83.7%Shareholders' equity 1,130,751 1,126,815 1,082,402 1,407,699 1,439,753 27.3% 1,193,231 1,407,699 18.0%Total assets 2,759,970 2,816,696 3,103,550 2,845,063 2,811,279 1.9% 3,320,395 2,845,063 -14.3%Margins - % of net revenues Change bp Change bpGross profit margin -11.4% -2.1% 4.0% 3.7% 6.7% 1,810 5.2% -0.6% (580)EBIT margin -12.6% -10.7% -5.3% 23.8% 1.5% 1,410 14.6% 0.7% (1,390)EBITDA margin -8.4% -7.2% -2.3% 26.5% 4.3% 1,270 17.6% 4.0% (1,360)Net income margin -12.7% -0.6% -6.5% 40.4% 3.4% 1,610 3.8% 7.7% 390

% Share 1Q09 2Q09 3Q09 4Q09 1Q10 Change 1Q10/1Q09

2008 2009 Change 2009/2008

Gross revenues 100.0% 100.0% 100.0% 100.0% 100.0% 0 100.0% 100.0% 0Domestic market 55.0% 49.7% 53.5% 48.0% 61.4% 640 52.5% 51.2% (130)Foreign market 45.0% 50.3% 46.5% 52.0% 38.6% (640) 47.5% 48.8% 130

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Volume by Operating Subsidiary

• Sustentable growth of sales volume in the last quarters;

• Volume in 1Q10 vs 1Q09 up to 31.8% shows recovering in whole products chair.

Sales volume by product (tons) 1Q09 2Q09 3Q09 4Q09 1Q10Change

1Q10/1Q092008 2009

Change 2009/2008

Paranapanema(Branch Bahia)¹_² 41,838 45,903 45,907 41,330 51,238 22.5% 236,938 174,978 -26.2%Anode/Cathode 21,374 23,303 24,793 18,965 24,679 15.5% 106,603 88,435 -17.0%Wire rod 16,565 18,979 17,611 18,583 21,892 32.2% 110,415 71,738 -35.0%Drawn wire 3,061 2,886 2,751 3,039 3,851 25.8% 14,484 11,737 -19.0%Other copper products 838 735 752 743 816 -2.6% 5,436 3,068 -43.6%

Byproducts 162,178 198,816 202,104 218,398 252,750 55.8% 811,211 781,496 -3.7%Sulphuric acid 79,000 116,827 125,422 126,854 146,292 85.2% 459,302 448,103 -2.4%Other³ 83,178 81,989 76,682 91,544 106,458 28.0% 351,909 333,393 -5.3%

Paranapanema(Branches São Paulo and Espírito Santo) 12,584 14,143 16,218 17,385 15,939 26.7% 63,917 60,330 -5.6%Semi-manufactered copper products 12,584 14,143 16,218 17,385 15,939 26.7% 63,917 60,330 -5.6%

Cibrafértil 15,443 42,621 84,657 44,156 24,777 60.4% 171,204 186,877 9.2%SSP Fertilizers (powder and granulated) 10,312 33,713 74,767 39,506 23,043 123.5% 158,190 158,298 0.1%NPK fertilizers 5,131 8,908 9,890 4,650 1,734 -66.2% 13,014 28,579 119.6%

Consolidated Paranapanema 69,865 102,667 146,782 102,871 91,954 31.6% 478,957 422,185 -11.9%¹There is no intercompany effect into volume of copper products .

²Byproducts are not counted in the total volume of Caraíba.

³Includes anode sludge, oleum and slag.

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Contribution of each subsidiary in quarter…

Consolidated main indicators and operanting subsidiaries in 4Q09 and 1Q10

Result in R$ thousand Paranapanema Eluma Cibrafértil Paranapanema CibrafértilGross revenues 884,498 297,470 12,267 849,376 8,100

Domestic market 424,609 235,322 12,267 521,770 8,100 Foreign market 459,889 62,148 - 327,606 -

Net revenues 752,205 240,149 11,759 733,242 7,659 COGS (724,742) (211,762) (12,119) (684,411) (7,884)

Gross profit 27,463 28,387 (360) 48,831 (225) Operating expenses (29,549) (13,422) (617) (31,072) (766) Other operating revenues (expenses), net 181,273 (881) (4,825) (6,636) (186)

EBIT (Result of activity) 179,187 14,084 (5,802) 11,123 (1,177) Financial revenues (expenses), net (69,951) 7,686 (2,326) (5,967) (2,318) Income (loss) before income and social contribution taxes 109,236 21,770 (8,128) 5,156 (3,495)

Net income (loss) 303,543 15,297 (7,446) 24,835 (3,478)Number of shares outstanding ex-treasury (in thousand) 317,700 18,433 443 319,153 443 Earnings per share 0.96 0.83 (16,808.13) 0.08 (7,851.02) Depreciation and amortization 20,332 2,809 692 20,730 697 EBITDA 199,519 16,893 (5,110) 31,853 (480)Shareholders' equity 1,407,699 443,231 (42,580) 1,439,753 (46,058) Total assets 2,845,063 749,271 55,689 2,811,279 64,006 Margins - % of net revenuesGross Profit margin 3.7% 11.8% -3.1% 6.7% -2.9%EBIT margin 23.8% 5.9% -49.3% 1.5% -15.4%EBITDA margin 26.5% 7.0% -43.5% 4.3% -6.3%Net income margin 40.4% 6.4% -63.3% 3.4% -45.4%

% ShareGross revenues 100.0% 100.0% 100.0% 100.0% 100.0%Domestic market 48.0% 79.1% 100.0% 61.4% 100.0%Foreign market 52.0% 20.9% 0.0% 38.6% 0.0%

4Q09 1Q10

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Contribution of each subsidiary in 2008 e 2009

Consolidated main indicators and operanting subsidiaries in 2008 and 2009

Result in R$ thousand Paranapanema Eluma Cibrafértil Paranapanema Eluma CibrafértilGross revenues 4,284,931 1,053,929 93,252 2,993,556 908,990 60,915 Domestic market 2,249,717 912,024 85,219 1,533,848 782,722 60,915 Foreign market 2,035,214 141,905 8,033 1,459,708 126,268 - Net revenues 3,481,354 789,343 90,506 2,511,913 705,674 56,623 COGS (3,301,815) (670,706) (81,831) (2,525,986) (604,145) (79,142) Gross profit 179,539 118,637 8,675 (14,073) 101,529 (22,519) Operating expenses (114,460) (58,812) (2,157) (109,490) (56,569) (2,779) Other operating revenues (expenses), net 444,277 18,140 (12,448) 140,695 7,363 (2,851) EBIT (Result of activity) 509,356 77,965 (5,930) 17,132 52,323 (28,149) Financial revenues (expenses), net (335,843) (49,062) (24,580) (106,492) 40,313 (3,942) Income (loss) before income and social contribution taxes 173,513 28,903 (30,510) (89,360) 92,636 (32,091) Net income (loss) 133,014 18,475 (22,779) 194,029 59,690 (37,992) Number of shares outstanding ex-treasury (in thousand) 313,796 18,433 443 317,700 18,433 443 Earnings per share 0.42 1.00 51,419.86- 0.61 3.24 85,760.72- Depreciation and amortization 101,752 12,638 4,924 82,651 10,876 3,900 EBITDA 611,108 90,603 (1,006) 99,783 63,199 (24,249) Shareholders' equity 1,193,231 396,509 (4,588) 1,407,699 443,231 (42,580) Total assets 3,320,395 748,156 90,764 2,845,063 749,271 55,689 Margins - % of net revenues 0 0 0 0 0Gross margin 5.2% 15.0% 9.6% -0.6% 14.4% -39.8%EBIT margin 14.6% 9.9% -6.6% 0.7% 7.4% -49.7%EBITDA margin 17.6% 11.5% -1.1% 4.0% 9.0% -42.8%Net income margin 3.8% 2.3% -25.2% 7.7% 8.5% -67.1%

% ShareGross revenues 100.0% 100.0% 200800.0% 100.0% 100.0% 200900.0%Domestic market 52.5% 86.5% 100.0% 51.2% 86.1% 100.0%Foreign market 47.5% 13.5% 91.4% 48.8% 13.9% 100.0%

2008 2009

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• Positive evolution of gross revenues during 2009 and strong recovery of 1Q10 vs 1Q09

• Consolidated gross revenue of R$849.4 million grows by 41.9% in 1Q10 against 1Q09

• Consolidated sales volume grows by 31.8% in 1Q10 against 1Q09, reaching 92.1 million tons

• Sales volume in the Copper Division for 1Q10 was up by 23.7% against 1Q09 and 14.6% against 4Q09, totaling 67.3 thousand tons

• An increase in internal market share given a growth of 58.6% in gross revenue, and of 74.1% in domestic sales

• Exports increase by 22% in 1Q10 over 1Q09, representing 39% of revenues

Gradual and consistent recovery on pre-crisis period …59

9

727 78

5

885

850

329 36

1 420

425

522

270

366

365

460

328

1Q09 2Q09 3Q09 4Q09 1Q10

Paranapanema S/AConsolidated Gross Revenues by Market(R$ million)

Gross Revenues Domestic market Foreign market

55% 50% 53% 48%61%

45% 50% 47% 52%39%

1Q09 2Q09 3Q09 4Q09 1Q10

Paranapanema S/AGross Revenues by Market (%)

Foreign market Domestic market

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Gross Profit

• R$ 49 million of gross profit and 7% of margin in 1Q10 versus R$ 27 million of loss in 1Q09;

• In 1Q10, gross profit was 77.8% up in 4Q09, when was R$ 27.5 million, showing that the Corporate Hedge Policy have been satisfatory.

(27)

(56)

(12)

27

27

49 -5.2% -11%

-2% 4% 4% 7%

-2.00

-1.50

-1.00

-0.50

0.00

0.50

-80.00

-60.00

-40.00

-20.00

0.00

20.00

40.00

60.00

4Q08 1Q09 2Q09 3Q09 4Q09 1Q10

Paranapanema S/AGross Profit (R$ million)

Gross Profit Gross Margin (% Net Revenues)

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Net Income

• R$ 25 million of net income and 3% of net margin in 1Q10 agaisnt R$ 62 million of loss in 1Q09;

• Adjusted net income of R$ 31 million and 4% of net margin in 1Q10.

(62) (3

)

(44)

304

25

-13%-1% -7%

40%

3%

-2.00

-1.50

-1.00

-0.50

0.00

0.50

-100.00

-50.00

0.00

50.00

100.00

150.00

200.00

250.00

300.00

350.00

1Q09 2Q09 3Q09 4Q09 1Q10

Paranapanema S/A - Net Income (R$ million)

Net income (loss) Net margin (% Net Revenues)

20

EBITDA – Evolution quarter to quarter

• Adjusted Ebitda of R$38 million and 5% net revenues margin in 1Q10, decreasing the volatility in earnings after restructuring conclusion.

(62)

(19)

21

18 38

-12%-3% 3% 2% 5%

-2.00

-1.50

-1.00

-0.50

0.00

0.50

-80.00

-60.00

-40.00

-20.00

0.00

20.00

40.00

60.00

1Q09 2Q09 3Q09 4Q09 1Q10

Paranapanema S/A Adjusted EBITDA (R$ million)

Adjusted EBITDA R$ million Adjusted EBITDA Margin - % Net Revenues

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Outlook

• For 2010, following conclusion of the financial, corporate and tax restructurings of the last two years, management will now face new and interesting challenges, but in a much more comfortable situation given the current capital structure and the improved adaptation of the balance sheet to international accounting standards, enabling us to establish more ambitious goals, such as:

(i) focus on organic growth by expanding the installed capacity in Bahia (up to 276,000 t/year in primary copper and 30,000 t/year in laminates) and in São Paulo (up to 90,000 t/year in semi-manufactured goods) which will imply investments of R$510 million between 2010 and 2012;

(ii) analysis of the opportunities for strategic partnerships and alliances, in order to maximize the Company’s profitability;

(iii) strategic measures to conquer local and international markets; (iv) Adding greater value to products, improving margins and competitiveness through

economies of scale and permanent reductions in costs; (v) adapting the organizational structure to the new operating structure of the copper

chain within a single company, Paranapanema, while creating a corporate culture intended to maximize shareholder returns.

Outlook for Paranapanema

22