MINING INDUSTRY IN CONGO - DRC

MINING INDUSTRY IN CONGO- DRC

The Democratic Republic of the Congo (abbreviated DR Congo or DRC), previously known as Zaire, is rich in resources. The Democratic Republic of Congo (DRC) is home to vast reserves of a wide variety of natural resources – primary among them being metals such as cobalt, copper, gold and precious stones, including diamonds. DRC is believed to contain around 4% of the world‟s copper reserves and one-third of its cobalt reserves. The mining industry, like the rest of the economy in the central African nation, had suffered due to an unstable political environment, coupled with widespread strife caused by the six-year civil war that ended in 2003. However, there are indications that investors are now willing to discount the political risk premium of investing in the DRC, given the high prices of minerals on global markets, and therefore the potential of holding mineral rights within the country. The Democratic Republic of the Congo (DRC), Africa's largest nation, has abundant mineral resources including, cobalt, copper, gold and diamonds. A majority of the mineral resources are concentrated in the southern and eastern provinces of the nation. The DRC is the world's largest producer of cobalt. However, the production of cobalt is not expected to chart an exceptional growth path, with many small mining players switching from the metal to copper. Constrained supply and political instability are pushing up cobalt prices. All mineral deposits in the DRC are state-owned and the holder of mining rights also gains ownership of the mineral products for sale. Governed by the National Mining Code, the Ministry of Mines regulates the Mining Registry, Directorate of Mines, and the Geological Directorate in the DRC. A peculiar feature of the mining industry in the DRC is that artisanal mining (i.e. non-mechanized small-scale mining) accounts for 70% of the national diamond production. Thus, in spite of being the world‟s third-largest diamond producer in terms of output, the country is ranked only seventh in terms of value. Further, use of archaic mining techniques has restricted possible growth in the diamond mining segment. Civil unrest and the looting of minerals and precious stones by armed militia continue to drain the country‟s rich natural resources. Speaking to Reuters in June 2008, Vincent Ngonga, the central bank‟s director of research, believed that GDP growth in DRC should reach 12% in 2009, driven by the high levels of investment into the mining sector. Speaking to Reuters, Deputy Mines Minister Victor Kasongo confirmed that state-controlled miner La Générale des Carrières et des Mines (Gécamines) – which is seeking greater ownership of the mining sector – had asked for more time to complete contract review talks. Of the current 61 mining contracts under review. One of the projects earmarked to have greater state participation is the Tenke Fungurume project, which covers one of the world‟s largest unexploited copper and cobalt resources and is scheduled to begin commercial production in 2009 or 2010.

INDUSTRY FORECAST The DRC government has been focusing on improving the state of the mining industry by reviewing its mining agreements – a decision that has raised fears among overseas investors. That said, most foreign players remain of the opinion that a revival of DRC‟s mining industry remains unlikely without forging alliances with foreign mining enterprises – a situation evidently well understood by countries like China and Australia. BMI expects an average mining industry growth rate of 9.0% for DRC for the 2008-2012 forecast periods. At the present time, the ongoing economic crisis gripping world markets is continuing to play out. BMI is choosing to wait until the Q109 reports to carry out a comprehensive review of its mining sector reports, in light of the current economic difficulties. All mineral deposits are state owned but the mining rights holder gains the ownership of the mineral products for sale. The regulatory framework is composed of three main bodies: Ministry of Mines, the Mining Registry and the Geological Directorate. Both the Mining Registry and the Geological Directorate function under the supervision of the Ministry of Mines. State-owned Gécamines dominates mining activity in the DRC and has principal interests in copper, cobalt, zinc and uranium. Its major mines include Kakanda/Kambove, Kamoto, Kipushi, Kolwezi and Kov.

OVERVIEW The Katanga Province hosts the Central African Copper belt, which extends from Angola through the DRC into Zambia. The Copper belt is one of the world's greatest metallogenic provinces containing 34% of the world's cobalt reserves and over 10% of the world's copper reserves. State run Gecamines (La Generale des Carrieres et des Mines) has attempted to improve its declining production figures from the copper belt by promoting several ailing mines and projects to foreign investors. The company had an estimated copper production of 19,495 t in 2002 compared to 20,621 t in 2001. Gecamines holdings in the copper belt contain the world's biggest concentrations of cobalt and copper metal in the world. Gecamines was rated as the world's lowest cost copper producer in the 1970's, but is now considered one of the more expensive. Reserve estimates from the copper belt total 55.5 Mt of copper and 3.6 Mt of cobalt. However, since 1993, production has stagnated with total capacity utilizations estimated at less than 10%. During 2004 South Africa's Metorex has reached an agreement with the Government of the DRC, La General des Carrieres et des Mines and Sentinelle Global Investments (Proprietary) Limited to mine and treat the high grade copper/cobalt Ruashi ore body and the Ruashi and Etoile stockpiles situated in the Katanga Province of the DRC, approximately 10 kilometres from Lubumbashi. The project will be implemented in two-phases. Phase 1 will mine and process the oxide stockpiles at Ruashi and Etoile with operations strategically separated between Zambia and the DRC to reduce capital cost exposure and mitigate risk. Phase 2 will involve the mining and processing by direct leaching of the

high grade copper / cobalt oxide ore resources for the production of copper and cobalt metals on the Ruashi mine site on the outskirts of Lubumbashi. Mining is envisaged at a rate of 120,000 tons per month with the higher copper and cobalt recoveries resulting in an estimated 40,000 tons of copper metal and 3,000 tons of cobalt metal being produced annually. In 2002 Société des Terrils de Lubumbashi (STL), a partnership formed between the Malta Forest Group, Outukumpu Mining Group (OMG) and Gécamines, produced 1,930 t of cobalt contained in white metal alloy during 2002, and 1,289 t of copper. Anvil Mining owns and operates the Dikulushi copper-silver mine in the Katanga Province of the DRC, which it brought into production in October 2002. In the 2003 financial year the Dikulushi Mine produced 13,587 tonnes (29.95 million pounds) of copper and 1.2 million ounces of silver at a total cash cost of US$0.49 cents per pound (net of silver credits). The Company completed an expansion of the Dikulushi Mine at the beginning of October 2004 that is expected to increase production by approximately 50% to 20,000 tonnes of copper and 1.6 million ounces of silver per year. The only other major copper producer, Sodimco also experienced a major drop in production, producing only 610t of copper in 2001. Sodimco is faced with deterioating machinery, bad trade debts as well as struggling to maintain its facilities at the Musoshi and Kinsenda mines, where reserves estimated at 2.4 Mt grading over 3% copper remain. The Copper belt hosts several tailing dumps that contain average grades higher than most hard rock mines globally. The role of SX-EW technology has made the exploitation of these tailings feasible, with American based OMG, Luxembourg's Forrest Group and Gecamines spending $150 million on a smelter to process a 5 Mt stockpile containing 2% Co and 1.5% Cu. First Quantum has several projects in the DRC, which have been suspended pending improvement of the security situation in the country. First Quantum has a 51% interest in the Likasi, Kingamiambo and Likasi tailings projects (Gecamines has the remaining 49%). First Quantum also has an interest (20%) in Anvil Mining NL that is evaluating the high grade Dikulushi copper – silver project located in the copperbelt. Dikulushi has been described as one of the world's highest grade unexploited copper silver orebodies. First Quantum has begun exploiting the Lonshi deposit that is located a mere 30km southeast of FQ's Bwana Mkubwa copper facility in neighbouring Zambia. Resource estimates at Lonshi have been increased substantially and now stand at 295 000t of contained copper. Mining has begun at Lonshi with First Quantum aiming to stockpile 500 000t destined for processing at Bwana Mkubwa, where the plant is being expanded to cope with the increase in production capacity. International Panorama Resources Corp. (IPR) of Canada has acquired a 51% share with Gecamines to reprocess copper/cobalt tailings from the Kambove and Kakanda mines. The Kakanda tailings project has an estimated reserve of 18.4 Mt grading at 1.22% copper and 0.15% cobalt. Solvent extraction electrowinning (SX-EW) technology will be utilised for the tailings operations. This operation has been downscaled by Panorama on the back of the security situation. Panorama were also investigating

the Kakanda North open pit whose reserves were estimated at 11.3 Mt at 3.14% copper and 0.19% cobalt. Independent resource verification was being carried out by South African geoconsultants SRK. Tenke Mining Corporation, a subsidiary of Phelps Dodge, along with Gecamines own the Tenke Fungurume copper - cobalt deposits, which has the potential to be the richest and lowest cost producers of cobalt and copper. Resources are estimated at 222 Mt grading at 4.59% copper and 0.36% cobalt and reserves at 93 Mt grading at 4.59% copper and 0.36% cobalt. By the end of 2008, Phelps Dodge intends to annually produce 100,000 tonnes of copper and 8,800 tonnes of cobalt. According to official reports, copper production in the region could rise to 400,000, sustaining levels for 20 years or more. DRC Mining Report Q2 2009 - a new market research report on companiesandmarkets.com The big news from the Democratic Republic of Congo‟s (DRC) mining industry in early 2009 was the news in March that the country plans to accept US$9bn in investments from China, to be spent on mining and infrastructure, despite the opposition of the IMF. The IMF has expressed concern that this deal – which was originally agreed at the end of 2007 – will only add to DR Congo‟s current debt burden. According to a recent report in Bloomberg, the deal will see China build roads, railways, hospitals, and schools in return for metals worth some US$50bn at current prices. Reuters also reported that negotiations on an initial US$6bn-worth of public works and mining infrastructure projects have already been finalised, with both sides still discussing the terms of the remaining US$3bn in funding. It is reported that this US$3bn will be used to fund Sicomines Sarl, a mining joint venture between state-owned metals producer La Générale des Carrières et des Mines (Gécamines), and various Chinese miners. This new joint-venture (JV) – to become operational in 2011 – is reportedly set to produce up to 400,000 tons of copper and 19,000 tons of cobalt per annum. China‟s ambassador to DR Congo, Wu Zexian, has denied that the country will be burdened with debt as a result of the deal, saying that the work is being carried out by China Railway Engineering Corporation and Sinohydro Corporation, who have in turn received funding from China Exim Bank and China Railway. DRC is home to vast reserves of a wide variety of natural resources – primary among them being metals such as cobalt, copper, gold, and precious stones, including diamonds. DRC is believed to contain around 4% of the world‟s copper reserves and one-third of its cobalt reserves. The mining industry, like the rest of the economy in the central African nation, has suffered due to an unstable political environment, coupled with widespread strife caused by the six-year civil war that ended in 2003. However, for some time it appeared that, given high prices of minerals on global markets, investors would be willing to discount the political risk premium of investing in the DRC. But recent plummeting mineral prices and escalating costs have already seen – according to the government, quoted by Reuters – some 40 of the mining companies working in Congo suspending exploration, development and production operations.

All mineral deposits in the DRC are state-owned and the holder of mining rights also gains ownership of the mineral products for sale. Governed by the National Mining Code, the Ministry of Mines regulates the Mining Registry, Directorate of Mines, and the Geological Directorate in the DRC. A peculiar feature of the mining industry in the DRC is that artisanal mining (i.e. non-mechanised small-scale mining) accounts for 70% of the national diamond production. Thus, in spite of being the world‟s third largest diamond producer in terms of output, the country is ranked only seventh in terms of value. Furthermore, use of archaic mining techniques has restricted possible growth in the diamond mining segment. Outbreaks of violence and civil unrest, and the looting of minerals and precious stones by armed militia continue to drain the country‟s rich natural resources. Though things looked up after the formation of a new government following the 2006 elections, analysts do not expect the macroeconomic and political environment to stabilise any time soon. Indeed a fresh wave of fighting between a rebel group led by renegade general Laurent Nkunda and government forces swept through North Kivu province, eastern Congo from late August 2008. In addition, although multinational miners have started investing in the country‟s mineral and metals sector, the physical infrastructure remains extremely poor or even nonexistent at times. Speaking to Reuters, Deputy Mines Minister Victor Kasongo announced in December 2008 that the government review of 61 mining contracts had been completed. State-controlled miner Gécamines – which is seeking greater ownership of the mining sector – had asked for more time to complete contract review talks, aimed at overhauling deals signed in the chaos for the 1998-2003 war. Of the current 61 mining contracts under review, Reuters cites 14 as being „green‟ (or acceptable), 26 as „orange‟ (needing further agreement), and 21 as „red‟ (facing cancellation). However, Reuters also reported that six major companies had walked away from the talks, including USbased Freeport McMoran which is developing the Tenke Fungurume project, due to come on line in late 2009. Several firms denied this, stating that they were waiting to be invited back to the talks. Kasongo announced that the talks would be extended by 45 days to allow the remaining six contracts to be addressed. In December 2008, Congo‟s central bank governor cited the dragging process as a contributory factor to the acute downturn of the mining sector. During the review, Kasongo had announced that the government would seek to privatise some of the state-owned mining companies. He indicated that the first flotation would take place within 12 months. At the time of going to press, it is unclear whether these plans have been affected by economic developments. BMI launched coverage of DR Congo‟s tin mining sector in Q408. Congo is Africa‟s largest producer of tin and the east of the country is host to extensive cassiterite reserves. Over the long term, tin could play an increasingly crucial role in DR Congo‟s wider mining industry. However, the near-term outlook for the sector remains clouded. Armed groups continue to dominate illegal tin mining in the still war-ravaged east of DR Congo. This is preventing legitimate mining

concerns from exploiting this resource successfully. In the most recent example, Kivu Resources announced in early October 2008 that it was declaring force majeure at its Mpama Bisiye mine in Kivu province, having failed to reach an accommodation with the Congolese soldiers who have occupied the site since December 2004. Global Overview It is not just in DR Congo where China is actively purchasing mining assets. On page 8 of this report, BMI examines the phenomenon of increased Chinese activity in the global mining sector and what this means for the industry moving forward. Industry Forecast The DRC is ranked third in the world in the production of diamonds in volume terms. However, whereas this area was seen as a strong growth prospect for the country, the current slump in demand for diamonds is forcing producers to cut back on production and exploration. For example, in November 2008, Gem Diamonds announced the immediate suspension of all alluvial and dredging exploration in the Democratic Republic of Congo. Meanwhile, copper and cobalt mining has also been severely impacted by a massive decline in demand, particularly from China, and plummeting prices. Consequently, numerous operations have been suspended, and projected copper production for 2009 has been halved. BMI forecasts a 6.96% average annual industry growth rate over 2008-2013, taking the DRC mining industry to a value of US$1.26bn in 2013. The Democratic Republic of Congo (DRC) is home to vast reserves of a wide variety of natural resources primary among them being metals such as cobalt, copper, gold and precious stones, including diamonds. DRC is believed to contain around one-tenth of the worlds copper reserves and one-third of its cobalt reserves. The mining industry, like the rest of the economy in the central African nation, had suffered due to an unstable political environment, coupled with widespread strife caused by the six-year civil war that ended in 2003. However, there are indications that investors are now willing to discount the political risk premium of investing in the DRC, given the high prices of minerals on global markets at present, and therefore the potential of holding mineral rights within the country. All mineral deposits in the DRC are state-owned and the holder of mining rights also gains ownership of the mineral products for sale. Governed by the National Mining Code, the Ministry of Mines regulates the Mining Registry, Directorate of Mines, and the Geological Directorate in the DRC. A peculiar feature of the mining industry in the DRC is that artisanal mining, i.e., non-mechanised small-scale mining accounts for 70% of the national diamond production. Thus, in spite of being the worlds third-largest diamond producer in terms of output, the country is ranked only seventh in terms of value. Further, use of archaic mining techniques has restricted possible growth in the diamond mining segment. Civil unrest and the looting of minerals and precious stones by armed militia continue to drain the countrys rich natural resources. A transitional government that came to power in 2003 failed to tackle the law and order situation in the country. Though things are looking up after the formation of a new government, following the 2006 elections, analysts do not expect the macroeconomic and political environment to stabilise anytime soon. Though multinational miners have started investing in the

countrys mineral and metals sector, the physical infrastructure remains extremely poor or even nonexistent at times. Speaking to the Reuters in June 2008, Vincent Ngonga, the central banks director of research, believed that GDP growth in DRC should reach 12% in 2008, driven by the high levels of investment into the mining sector. Industry Forecast The DRC government was focusing on improving the state of the mining industry by reviewing its mining agreements a decision that raised insecurity among overseas investors. However, the review has now been completed and negotiations with mining companies are in progress, beginning to give them a sense of how concession terms may be adjusted. Most are of the opinion that the revival of DRCs mining industry is unlikely without forging alliances with foreign mining enterprises a situation evidently well understood by countries like China and Australia. BMI expects an average mining industry growth rate of 9.0% for DRC for the 2008-2012 forecast period. MINE TAILINGS AT A LUBUMBASHI COPPER MINE DR Congo is estimated to have $24 trillion (equivalent to the combined Gross Domestic Product of Europe and the United States) worth of untapped deposits of raw mineral ores, including the world‟s largest reserves of cobalt and significant quantities of the world‟s diamonds, gold and copper. The major ores found throughout the DRC are:
    

Cobalt Diamonds Gold Copper Coltan

Much of the resource extraction is done in small operations, known as "Artisanal and Small-Scale Mining" (ASM) which are unregulated in the DRC. Recently, more money is being invested into the extraction and refining of some of the ores found in the DRC, primarily copper and cobalt, which may help regulate the extraction and reduce environmental impacts. However, many ASM operations still exist for minerals such as coltan that can be mined with little capital investment.] ASM operations employ a significant number of DRC's population, with estimates of up to one fifth of the country or 12.5 million people. Because artisenal mining operations require little capital they are unregulated and occur primarily within protected areas, around endangered or threatened species.] Artisenal mining often occurs in riparian zones. During periods of violence, resources have been looted from the original collectors by both Congolese and foreign soldiers, and civilians or they are extracted by soldiers, locals organized by military commanders (much of the time Rwandan and Ugandan commanders) and by foreign nationals Problems stemming from mining practices include disruption of families, mining-related illnesses, environmental damage, child-labor, and abuse of women including prostitution and rape. COBALT MINING & COBALT DEMAND Cobalt is an element that has many diverse and critical uses. In most applications, substitution for cobalt yields lower product performance. Below are cobalt‟s most common usages.

2007 Global Cobalt Use Batteries - Cell phones, computers, hybrid vehicles, portable tools, etc. Super Alloys - Turbine blades, mainly jet engines Chemicals - Includes pigments and dyes Wear Resistant Alloys - Hard facing and cobalt carbide Catalysts - Includes Gas-to-Liquid conversions Magnets - High performance applications

% of Market 25 22 26 12 9 6

Cobalt in rechargeable batteries is the fastest growing use, and notably in 2007 the percentage of cobalt use for rechargeable batteries rose to 25% of total cobalt demand from 22% in 2006. Nickel metal hydride and lithium-ion batteries both contain cobalt and are used in hybrid electric vehicles (HEVs), computers, cell phones, portable tools, audio/visual units, and numerous electronic devices. The fastest growing segment of battery applications is for HEVs, which reduce air pollution and fuel consumption by at least 50% compared to conventional vehicles. The HEV “plug-in” option is even more environmentally friendly, and includes an extra cobalt-bearing battery that can be charged from electrical outlets and achieve fuel economies that exceed 100 miles per US gallon. In the US, roughly one-third of all CO2 emissions come from transportation sources. The Toyota Prius HEV was named 2004 Motor Trend Car of the Year and 2005 European Car of the Year. The one millionth unit was sold in April 2008, and Toyota estimates sales of one million hybrid vehicles annually "as early as possible in the 2010s". In the next few years, the Company plans to offer all Toyota and Lexus models as hybrids. General Motors, Ford, Daimler-Chrysler, Mercedes, and others are attempting to catch up with Toyota‟s hybrid success. Nearly all current HEVs use nickelmetal hydride batteries that contain about 22 pounds of nickel and 3 to 5 pounds of cobalt. Lithiumion batteries containing 5 to 7 pounds of cobalt and little or no nickel are expected to dominate future HEV markets because they charge in minutes rather than hours and offer many other economic and technical advantages. Global production of HEV‟s in 2007 was about 400,000-500,000 units, and is estimated to increase to 8 million units by 2015(2), thereby increasing annual cobalt demand by nearly 22,000 tonnes/year. In 2006, the world produced 69 million conventional cars and light trucks, and is expected to produce over 80 million units by 2015. COBALT SUPPLY & DEMAND The cobalt market is dynamic but small in comparison with other base metals. Consumers purchase cobalt through negotiated agreements, bids, and open markets from producers, traders and to a lesser degree, government stockpiles and private inventories. Approximately 48% of the world‟s 2007 cobalt mined was a byproduct of nickel from sulfide and laterite deposits. An additional 37% was produced as a byproduct of copper operations, mainly in the Democratic Republic of the Congo (DRC) and Zambia. The remaining 15% of cobalt mining came from primary producers.

Several new projects are deemed to be sufficiently advanced and financed to produce significant quantities of cobalt in 2009-10 (mainly as a byproduct), including those listed below. However, until that time cobalt demand is expected to significantly exceed production due to limited new production and the absence of stockpiles. Additional projects may also come on stream in the intermediate term, however political and logistical issues in the DRC may endanger the viability of some of the larger projects. Annual Prod. Major New Projects Start Up Year Country Cobalt Tonnes Tenke Fungurume 2009 DRC 4,000 Talvivaara 2009 Sweeden 2,500 Goro 2009 New Caledonia 1,500 Kamoto 2010 DRC 1,000 Katanga 2011 DRC 1,000 Camec 2011 DRC 1,000 Nama 2011 Zambia 1,000 Idaho 2011 U.S. 1,000 Total n/a 13,000 Cobalt consumption in 1995 was only 24,000 tonnes, but grew to 60,800 tonnes in 2008, for a compound annual growth rate (CAGR) of 7.4% for the 13-year period. Geovic's preliminary estimate for 2009 world demand is 52,600 tonnes, or a 13% decrease from 2008 demand, principally due to the impact of the global economic crisis in the first half of the year. On the supply side, Geovic estimates that 2009 cobalt production will fall by approximately 5% compared to 2008, to around 53,000 tonnes. In the chart below, actual world supply and demand data from external sources are used through 2008, whereas the projections from 2009 through 2015 are based on an 11% CAGR (principally due to the "catch-up effect" following the aforementioned significant demand decline in 2009). The combination of production from existing mines and new production is expected to yield 10% CAGR between 2008 and 2015, however the aforementioned demand growth is expected to yield a relatively tight supply/demand balance during that period. WORLD COBALT SUPPLY Roskill Consulting, an international group that researches mineral industry information, estimates growth in demand by 2011 in a most likely case to be 72,500 tonnes(3). However, this forecast could be considerably understated given the exponential growth in batteries for hybrid vehicles and new demand from emerging markets such as China and India. Global cobalt consumption by country and the increase for the four-year period ending 2006 is shown below. Tonnes Cobalt

Country Europe Japan China USA Other Total

2002 11,100 7,250 4,300 9,250 5,200 37,100

2006e 13,730 12,300 11,000 11,450 7,520 56,000

% Change 24 70 156 24 45 51

The table below shows approximate production of refined cobalt and reserves and resources by country. Refined Cobalt Production in 2007 & Reserves Tonnes x 1000 Tonnes x 1000 Country Mine Production Reserves Reserve Base* Australia 3,700 1,500 1,800 Brazil 1,150 29 40 Belgium 2,900 Canada 5,650 120 350 China 13,250 72 470 DRC 600 3,400 4,700 Cuba 3,900 1,000 1,800 Finland 9,100 France 300 India 1,000 Japan 1,100 Morocco 1,600 20 n/a New Caledonia 0 230 860 Norway 4,000 Russia 3,600 250 350 South Africa 250 United States 0 33 860 Uganda 700 Zambia 4,600 270 680 Other 180 1,100 Total 53,500 7,100 13,000 *includes reserves plus measured and indicated resources There are no published statistics on world use of cobalt scrap, but the USGS estimates 2006 U.S. scrap consumption was about 25% of reported US consumption.

PRICES Cobalt prices fluctuate significantly in response to world events and changes in the overall supply/demand balance. Historically, cobalt prices have had limited transparency, although quotes can be found from sources such as Platt's Metals Bulletin and www.minormetals.com. In late 2009, or early 2010 the latest, the London Metals Exchange (LME) plans to launch the firstever cobalt futures contract, which should materially improve such transparency. As of April 2009, the 3-year and 20-year average prices of 99.8% cathode cobalt are approximately $18/lb. and $28/lb, respectively. COPPER SUPPLY WON‟T MEET DEMAND Global copper production is unlikely to cover booming demand during 2007, according to German copper producer Norddeutsche Affinerie, as reported in the NYMEX Direct subscription-only newsletter. “Although everything is being done worldwide to increase and expand copper production in view of the high prices, it will probably not suffice to cover the booming demand,” according to Europe's largest copper refiner, who has said demand for the metal will remain strong for years led by Asian countries such as China. Copper has led the latest nonferrous pricing charge, rising 60% since February when China‟s surging imports slowly began to be felt by the market. And even the more-bearish analysts who suggest the red-hot red-metal market may be due for a slight cool-down now believe the second quarter bull run isn‟t over yet. J.P. Morgan Securities‟ Commodity Strategist has moved the 2007 forecast for copper cathode to $2.96/lb, up from the earlier forecast of $2.55/lb. London Metal Exchange cathode averaged $3.06/lb last year, a record. TOP 10 EXPORTERS- 2008 1. Frontier – 310741 mt 2. Boss Mining – 80218 mt 3. Ruashi Mining – 79892 mt 4. GCM – 73448 mt 5. CMSK -54967 mt 6. Group Bazana – 53310 mt 7. CDM – 36415 mt. 8. DCP – 35532 mt. 9. GTL – 25778 mt. 10. AMCK-21801 mt.

TOP 10 EXPORTERS 2008 IN MT 350000 310741 300000 250000 200000 150000 80218 79892 73448 100000 54967 53310 36415 35532 25778 21801 50000 0

Frantier

CMSK

DCP

Boss Mining

Ruashi Mining

TOP 10 EXPORTERS 2007 IN MT 100000 90000 83000 90000 80000 70000 55000 49000 48000 60000 39000 38000 50000 30000 29000 25000 40000 30000 20000 10000 0

Group Bazano

Frontier

CMSK

Bolfast

DCP

GCM

Group Bazano

Ruashi Mining

Boss Mining

Anvil Mining

GIL

AMCK

CDM

GCM

GTL

COPPER DEAMND IN CHINA

Collected by Abdul Gafoor shaikgafoor@hotmail.com