Opportunities for copper smelting

LATAM is one of the key upstream mining destinations across the globe with production of approximately 8.4 millionmetric ton (MT) in 2012, with Chile being the largest, contributing 75 percent of mining output. Globally, Chile is the largest producer of copper with mined production exceeding 6 millionMT.

Grupo Mexico,one of the world's largest copper reserves invested US $1.9 billion in its mining division to increase outputrevamping itsCananea copper mine, which resumed production after a three-year strike.

The Semis (Wire,Rods, Bars, Plate, Sheet, Strip, Tube, Copper Alloys) industry consumption is still underdeveloped as only 0.95 million MT is consumed domestically, while the balance smelter output is exported to many countries such as Japan, China, India, Germany, South Korea, Europe, etc.

Exhibit 1: Copper Value Chain

Exhibit 2: Overview of Major Copper Mining Upstream Producers in Latin America

Exhibit 3: Major Copper Smelter Capacity in Latin America

Exbibit 4: Global Copper Smelting Production Overview and Latin America Share, 2012

• Globally, copper smelting production was estimated at approximately 18.5 million MT in 2012, with LATAM having a share of 14.5 percent, which constitutes to 2.7 million MT, Major LATAM countries contributing to copper smelting production are Chile with 65.6 percent, Peru with 14.2 percent, Brazil with 10.7 percent,and Mexico with 9.5 percent of total production.

Exhibit 5: Refined Copper Production and Latin America Share, 2012

• LATAM with 19 percentis a major contributor to the overall global refined copper production: almost one-fifth of the totalFlora Lee Mei Yun