Boliden 05/05/20101
Interim ReportJanuary – March 2010
Lennart EvrellPresident & CEO
Johan FantCFO
Boliden 05/05/20102
First quarter 2010
The MarketImproving European demand China, the global driving forcePositive price trend – especially for CopperCopper concentrate– Tight market– Lower TC/RC– Sulphuric acid market improving
BolidenRevenues MSEK 8,316 (5,879)EBIT ex PIR* MSEK 1,043 (269)– Operating profit SEK 1,230 (788)
Cash Flow MSEK -52 (-1,811)Mines improving resultsLower copper smelter volumesand resultsAitik – new concentrator in productionInvestment to increase e-scrapcapacity at Rönnskär
*: PIR=Process Inventory Revaluation
Boliden 05/05/20103
Group EBIT development
-500
0
500
1,000
1,500
2,000
2,500
Q207 Q307 Q407 Q108 Q208 Q308 Q408 Q109 Q209 Q309 Q409 Q110
MSEK
Quarterly EBIT
Quarterly EBIT excl PIR*
* EBIT excl Process Inventory Revaluation
Boliden 05/05/20104
The Market
Boliden 05/05/20105
Industrial production
Manufacturing - year over year %Industrial production growth
Source: Reuters EcoWin
apr jul okt jan apr jul okt jan apr jul okt jan07 08 09 10
Yea
r ove
r yea
r %
-40
-30
-20
-10
0
10
20
30
40
Eurozone Japan USA China - value added
GDP growth - year over year %
2007 2008 2009 2010-10
-5
0
5
10
15
JapanUSA
Eurozone
China
Source: Thomson Reuters Datastream
Higher industrial activity and inventory buildChina’s dominant role for metalsremain
Boliden 05/05/20106
Automotive
Year over year %Car production
Germany Japan
United States, Ligh vehicle assemblies, AR China
Source: Reuters EcoWin
2007 2008 2009 2010
Yea
r ove
r yea
r %
-75
-50
-25
0
25
50
75
100Car marketChina
Domestic sales of passenger cars Production of carsSource: Reuters EcoWin
2005 2006 2007 2008 2009
Num
ber o
f (m
illion
s)
0,5
1,0
1,5
2,0
2,5
3,0
3,5
4,0
Recovery in Western World production from low levelsVery strong growth in China
Boliden 05/05/20107
Construction
Year over year %EU27 Construction Production
Total Construction Civil Engineering BuildingsSource: Reuters EcoWin
2006 2007 2008 2009
Yea
r ove
r yea
r %
-15,0
-12,5
-10,0
-7,5
-5,0
-2,5
0,0
2,5
5,0
7,5
10,0Year over year growth %
USA - Construction spending
Source: Reuters EcoWin
2005 2006 2007 2008 2009 2010
Yea
r ove
r yea
r %
-15
-10
-5
0
5
10
15
20
Total spending (value) Public non-residential (value)
Governments financing infrastructureCommercial and residential building markets weak in EU and USA
Boliden 05/05/20108
Zinc – Prices and Inventory
0
100 000
200 000
300 000
400 000
500 000
600 000
700 000
800 000
900 000
2003 2004 2005 2006 2007 2008 2009 2010
Tonnes
0
500
1 000
1 500
2 000
2 500
3 000
3 500
4 000
4 500
5 000
USD/TonneInventory Shanghai inventory Cash Price LME Quarterly average Zinc price (LME average)
USD/tQ1-10 vs period
Q1 09 1,174 + 95%Q2 09 1,476 + 55%Q3 09 1,757 + 30%Q4 09 2,211 + 3%Q1 10 2,288 -
Small average price movements vs Q4Inventory continued to increase
88
Boliden 05/05/20109
Zinc – TC and Premia
Zinc treatment charge (TC)
0
100
200
300
400
500
600
USD/ t of concentrate
Realised TC (including price participation) Spot TC - Asia
Source: CRU, Brook Hunt
2006 2007 2008 2009 2010
Zinc metal price premium
-
50
100
150
200
250
300
350
400USD/t of metal
US Midwest Delivered Europe ex-works Far East (Western)Source: CRU, Brook Hunt
2005 2006 2007 2008 2009 2010
2010 benchmark for TC– Realized TC lower vs Q4 2009 but higher than average 2009Pressure on spot TCPremia up – metal demand higher
Boliden 05/05/201010
Copper – Prices and Inventory
Copper price (LME average)
USD/tQ1-10 vs period
Q1 09 3,435 + 111%Q2 09 4,676 + 55%Q3 09 5,840 + 24%Q4 09 6,643 + 9%Q1 10 7,243 -
Prices continued upward trend end of quarter after dip Copper hedges in 2010 at 7,609 USD per tonne and USD/SEK at 8.22Global inventories higher than year end. LME inventory down
0
200 000
400 000
600 000
800 000
1 000 000
1 200 000
1 400 000
2003 2004 2005 2006 2007 2008 2009 2010
Tonnes
0
1 000
2 000
3 000
4 000
5 000
6 000
7 000
8 000
9 000
10 000
USD/TonneInventory Shanghai inventory COMEX Inventory LME Cash Price Quarterly average
1010
Boliden 05/05/201011
Copper – TC and Premia & Sulphuric Acid
TC 46.5/4.65 – shortage of concentrateSulphuric acid price up– Fertilizer demand main driver
Slightly higher premium –European demand improving
Copper treatment charge
0
20
40
60
80
100
120
140
160
USD/t of concentrate
Standard grade TC Cif Japan/Pacific rim (USD/t of concentrate TC benchmark
Source: CRU
2006 2007 2008 2009 2010
Copper metal price premium
0
40
80
120
160
200
USD per tonneof metal
Spot Copper premium CIF W. Europe Benchmark CIF Europe
Source: CRU, Brook Hunt
2005 2006 2007 2008 2009 2010
Sulphuric acid prices
0
100
200
300
400
500
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2003 2004 2005 2006 2007 2008 2009 2010
USD/tEUR/t
cfr NW Europe 6-month contract €/t cfr Brazil contract $/t ex-terminal Tampa $/st
Source: CRU, British Sulphur
Limited information on price quotations
Boliden 05/05/201012
Lead, silver and gold
0
5
10
15
20
25
2003 2004 2005 2006 2007 2008 2009 2010
USD/oz
0
100
200
300
400
500
600
700
800
900
1 000
1 100
1 200
2003 2004 2005 2006 2007 2008 2009 2010
USD/oz
0
20 000
40 000
60 000
80 000
100 000
120 000
140 000
160 000
180 000
200 000
2003 2004 2005 2006 2007 2008 2009 2010
Tonnes
0
500
1 000
1 500
2 000
2 500
3 000
3 500
4 000
4 500
USD/TonneInventory LME Cash Price Quarterly average
Gold
Silver
Prices – Q1 2010 vs periodQ1-09 Q4-09
Lead + 91% - 3%
Lead
Silver + 34% - 4%Gold + 22% + 1%
Boliden 05/05/201013
Business Area Mines
Boliden 05/05/201014
Mines - Production
Copper
0
1,000
2,000
3,000
4,000
5,000
6,000
Q207
Q307
Q407
Q108
Q208
Q308
Q409
Q109
Q209
Q309
Q409
Q110
Milled ore, ktonnes
0
3,000
6,000
9,000
12,000
15,000
18,000
Metal content, tonnes
Milled ore (Aitik) Metal content
Zinc
0
200
400
600
800
1,000
1,200
1,400
1,600
Q207
Q307
Q407
Q108
Q208
Q308
Q409
Q109
Q209
Q309
Q409
Q110
Milled ore, ktonnes
0
20,000
40,000
60,000
80,000
100,000
Metal content, tonnes
Milled ore Zinc metal content
Higher grades and volumes in AitikSome contribution from Aitikexpansion
Warranty update of Tara mill
Boliden 05/05/201015
Mines – Financial summary
0
200
400
600
800
1 000
1 200MSEK
Quarterly EBIT
EBIT 800 MSEK (404)– 541 in Q4 2009
Higher copper volumesPrices and TC/RC terms had positive impact
Boliden 05/05/201016
AITIK copper mine expansion
First concentrate deliveries from new Aitik mill to the new railway terminal at Rönnskär on 11 March
Boliden 05/05/201017
AITIK copper mine expansion
StatusMill section 1 in production earlier than plannedProduction not yet stableCommissioning continues in Q2Mill section 2 in production 1 JulyInauguration 31 August
FundamentalsDouble ore production– High productivity– Profitable mining of lower grades– Average reserve grade 0,25%– Cu annual production +50% over time– Life of mine - 2029
Lower grades– Current production plan has lower than
average grades 2011-17
Capex– 6,1 bSEK capex
Boliden 05/05/201018
Business Area Smelters
Boliden 05/05/201019
Smelters - Production
Zinc
0
50,000
100,000
150,000
200,000
250,000
Q207
Q307
Q407
Q108
Q208
Q308
Q408
Q109
Q209
Q309
Q409
Q110
Total feed, tonnes
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
Metal production,
tonnes
Zinc feed, total Zinc metal production
Copper
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
Q207
Q307
Q407
Q108
Q208
Q308
Q408
Q109
Q209
Q309
Q409
Q110
Total feed, tonnes
0
20,000
40,000
60,000
80,000
100,000
Cathode production,
tonnes
Copper feed total Copper cathode production
Feed shortage decreased productionCopper Metal production -24% vsQ4 2009Higher production end of period
Zinc Metal production stable –slight decrease, -3 % vs Q4 2009
Boliden 05/05/201020
Smelters – Financial summary
-500
-300
-100
100
300
500
700
900
1,100
1,300
Q207
Q307
Q407
Q108
Q208
Q308
Q408
Q109
Q209
Q309
Q409
Q110
MSEK
Quarterly EBIT
Quarterly EBIT excl PIR*
EBIT excl. PIR256 MSEK (-35)– 356 in Q4 2009
Lower copper volumesLower TC/RC termsImproved sulphuric acid prices
* EBIT excl Process Inventory Revaluation 20
20
Boliden 05/05/201021
E-scrap recycling
Boliden 05/05/201022
E-scrap expansion in brief
Investment rationaleTight Cu concentrate market continuesBig increase in e-scrap supply– Volume of electronic products
increasing– Shorter product life cycles
Proprietary technologyLeading position within e-scrap recyclingIncreased contribution to sustainable development– More recycling less land fills– Lower resource usage vs Cu
concentrates
Brief description of investmentE-scrap recycling capacity from 45,000 to 120,000 tonnes per yearInvestment of approx. SEK 1.3 billionExpected start up end of 2011/ beginning of 2012Increases metal production– Gold +2 tonnes– Silver +32 tonnes– Copper +14,500 tonnes
Synergies with existing production – Pay back less than 4 years
05/05/2010Boliden 22
Boliden 05/05/201023
E-scrap recycling within EU – legislation will drive e-scrap volumes
Existing WEEE*-directiveTarget to collect 4 kg per person and year
WEEE-directive 2016 (not yet decided)Target to collect approx. 13 kg per person and year
The average EU citizen’s electronic product purchases currently equate to 24 kg of e-scrap per year
*WEEE = Waste from electrical and electronic equipment
9%
20%
19%
32%
11%
6%
2%
=main source of supply
05/05/2010Boliden 23
Boliden 05/05/201024
Smältning av e-skrot jämfört med potential
E-skrot, potential
E-skrot, smältning
Nedgrävning/deponi
Japan
Kanada
Australien
KinaUSA
EU25
05/05/2010Boliden 24
Boliden 05/05/201025
Boliden’s value chain
The smelters use technologies that enable processing of various kinds of raw material – from mined concentrate to e-scrap
Exploration Mining Smelting Customers
1 2
1. Recyclable (secondary) materials accounts for approx. 24% of Rönnskär’s feed
2. ... and e-scrap alone accounts for approx. 6% of the feed
After the expansion, e-scrap’s share of Rönnskär’s feed will increase to 14%. Secondary materials’ share as a whole will increase to 31%After the expansion, e-scrap’s share of Rönnskär’s feed will increase to 14%. Secondary materials’ share as a whole will increase to 31%
05/05/2010Boliden 25
Boliden 05/05/201026
The value chain for electrical and electronic waste
* Types of e-scrap– WEEE-scrap (e.g. low-grade circuit
boards)– Granules– High grade circuit board scrap– Alloyed scrap with precious metals– Production waste from machinery
industry– Telecom scrap
PlasticPlastic AluminiumAluminium
IronIronGlassGlass
Collection of e-waste from industry and households
Collection of e-waste from industry and households
E-scrap*E-scrap*
Inspection/CleaningInspection/Cleaning
Partition/FragmentationPartition/Fragmentation
SeparationSeparation
BOLIDENBOLIDEN
05/05/2010Boliden 26
Boliden 05/05/201027
Material flow at Rönnskär (schematic)
CopperGoldSilverLeadZinc clinkerSulphuric acidBy-productsEnergy
CopperGoldSilverLeadZinc clinkerSulphuric acidBy-productsEnergy
RefiningRefining
Smelting ofCu concentrateSmelting ofCu concentrate
Smelting ofe-scrapSmelting ofe-scrap
Synergies in processing copper concentrate and e-scrap Available process capacity facilitates increasede-scrap volumes
05/05/2010Boliden 27
Boliden 05/05/201028
Financials
Boliden 05/05/201029
Financial Summary
MSEK Q1 2010 Q1 2009
Revenues 8,316 5,879
Operating profit (EBIT) 1,230 788
EBIT margin 15% 13%
EBIT excl Process Inventory Revaluation 1,043 269
Free cash flow -52 -1,811
Capex 598 1,019
Earnings per share, SEK 3.21 2.06
Gearing 43% 52%
Boliden 05/05/201030
Group EBIT Q1 2010versus Q1 2009 and Q4 2009
MSEK Q1 2010 Q1 2009 Q4 2009EBIT 1,230 788 1,232Process Inventory Revaluation 187 519 362EBIT excl Process Inventory Revaluation
1,043 269 870
Deviation 774 173Specification of deviation:Volume -14 -223Costs -125 110Prices & Terms 1,290 199
Metal prices and terms 1,258 19
Realised Metal- Currency hedge 6 268
TC/RC terms 56 -70
Premiums 14 15
Definitive pricing (MAMA) -44 -33
Currency effects -367 99whereof translation effects 1 -23
Others -10 -12Deviation 774 173
Specification of hedges and MAMARealised Metal-, Currency hedge 196 190 -72Definitive pricing (MAMA) -14 30 19
U.S dollar hedges up +27 SEK and metal hedges up +241 MSEK
• Shortage of Copper Concentrate
• Copper feed -20 %
Changed TC terms for both zinc and copper, effective as of January
USD/SEK: + 3 %EUR/SEK: - 4 %
Higher reclamation cost and variable pay in Q4
Boliden 05/05/201031
Capital Structure
SEK bnUnless otherwise stated
31 Mar2010
31 Mar 2009
Total Asset 33,4 31,4
Capital employed 26,8 26,2
Shareholders' equity1 16,8 15,9
Net debt 7,2 8,2
Gearing % 43 52
Equity/asset ratio, % 50 50
Average maturity in years 3,5 4,5
Average interest rate, % 2,56 3,85
Interest duration, years 2,0 0,1
Liquidity reserves2 7,2 6,4
Gearing
52%55%
48%46%
43%
0%
10%
20%
30%
40%
50%
60%
Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010
1. Shareholders’ equity includes the value of outstanding hedge contracts
2. Defined as unutilised credit lines and cash less outstanding commercial papers
Boliden 05/05/201032
Sensitivity Analysis
Changein metalprices,+10%
EBITeffect, SEK m
Change inUSD, +10%
EBITeffect, SEK m
Change inTC/RC,+10%
EBITeffect,SEK m
Copper 530 USD/SEK 1 030 TC Zn 75
Zinc 650 EUR/USD 470 TC/RC Cu 55
Lead 105 USD/NOK 100 TC Pb -15
Gold 115
Silver 95
Estimate of the 12-month effect on Group EBIT on 31 March 2010, based on planned production volumes. Effects of hedging, contracted TC/RC or stock exposures are not taken into account
Boliden 05/05/201033
Summary
Improving demand in mature economiesChina - the major driving forceTight Copper concentrate marketExpansion electronic recyclingAitik expansion– Started ahead of plan– Not yet stable– Section 2 starts 1 July– Depreciation, finance cost from Q2– Variation in production and grades 2010
Boliden 05/05/201034
Forward-looking statements
Certain statements in this presentation are forward-looking, and the actual outcome could be materially different. Such forward-looking statements are based on Boliden’s present plans, estimates, assumptions, projections and expectations and are subject to risks and uncertainties. In addition to the factors explicitly discussed, other could have a material effect on the actual outcome. Such factors include, but are not limited to, general economic or political conditions, fluctuations in exchange rates, interest rates and in metal prices, production disruptions, technological issues, interruptions in supply, actions of courts, regulators, government agencies, competitors,customers, suppliers, employees and other third parties.
Boliden 35 2010-05-05
Boliden produces metals that make modern life workBoliden produces metals that make modern life work