No 1 / 20 Apr 2023

Group IntroductionGroup Introduction

Lead & Lead Oxide Lead & Lead Oxide MarketsMarkets

Group IntroductionGroup Introduction

Lead & Lead Oxide Lead & Lead Oxide MarketsMarkets

PENOX - GROUPPENOX - GROUP PENOX - GROUPPENOX - GROUP

No 2 / 20 Apr 2023

PENOX PLANTS LOCATIONPENOX PLANTS LOCATION

No 3 / 20 Apr 2023

• Penox (formerly Penarroya Oxide) Penox (formerly Penarroya Oxide) is the is the largest European producer of chemical grade largest European producer of chemical grade lead oxidelead oxide (litharge and red lead), holding 20% of the global market, but with significantly (litharge and red lead), holding 20% of the global market, but with significantly higher market share in Europe. Its position in the North American market is growing via its higher market share in Europe. Its position in the North American market is growing via its 50% joint venture in Mexico and 20% joint venture in Brazil. 50% joint venture in Mexico and 20% joint venture in Brazil.

• Penox was formed in 1994 by the merger of the leading PbO producers in Germany Penox was formed in 1994 by the merger of the leading PbO producers in Germany (Cologne), France (Rieux), Italy (La Spezia) and Spain (Barcelona). The combination created (Cologne), France (Rieux), Italy (La Spezia) and Spain (Barcelona). The combination created significant operational efficiencies and supported the needs of multinational clients to significant operational efficiencies and supported the needs of multinational clients to source their PbO needs from one supplier throughout Europe and North America with source their PbO needs from one supplier throughout Europe and North America with consistent quality.consistent quality.

• Existing legislation treats PbO as a toxic material, but in its most significant applications Existing legislation treats PbO as a toxic material, but in its most significant applications there are at present no viable substitute products. For the foreseeable future PbO will there are at present no viable substitute products. For the foreseeable future PbO will continue to be an essential component in the production of technical glass, plastics, continue to be an essential component in the production of technical glass, plastics, batteries, stabilisers and certain pigments. Few companies can comply with the stringent batteries, stabilisers and certain pigments. Few companies can comply with the stringent environmental safety requirements imposed on PbO producers, creating a highly effective environmental safety requirements imposed on PbO producers, creating a highly effective barrier of entry to new producers. barrier of entry to new producers. PenoxPenox, thanks to its , thanks to its consistent investment and consistent investment and compliance with environmental safety measurescompliance with environmental safety measures, has been able to increase it’s market , has been able to increase it’s market share all along the years. share all along the years.

• Penox is also the Penox is also the technological world leader in the design of lead oxide plant and technological world leader in the design of lead oxide plant and equipmentequipment. As well as providing its in-house needs, this has permitted Penox to generate . As well as providing its in-house needs, this has permitted Penox to generate significant business from the design, engineering and supply of lead oxide plant for third significant business from the design, engineering and supply of lead oxide plant for third parties (to date mainly battery producers, where plant supplied is not employed in the parties (to date mainly battery producers, where plant supplied is not employed in the manufacture of chemical grade oxides).manufacture of chemical grade oxides).

EXECUTIVE SUMMARYEXECUTIVE SUMMARY

No 4 / 20 Apr 2023

ENGINEERING - SCOPEENGINEERING - SCOPE

AVAILABLE MODULESAVAILABLE MODULESTransportTransport• Automated Ingot HandlingAutomated Ingot Handling• Oxide Handling, etc.Oxide Handling, etc.

Grey OxideGrey Oxide• BartonBarton HRB-140/180 HRB-140/180 • P20 Reactor P20 Reactor • Primary FurnacePrimary Furnace

LithargeLitharge• LE2 FurnaceLE2 Furnace Red Lead Red Lead • SA3 FurnaceSA3 Furnace

Environment Environment • Filter SystemsFilter Systems• Lead Blood LevelsLead Blood Levels

Recent ProjectsRecent Projects• 20,000 t unit in Mexico 3 B180 + 2 PF • 10,000 t unit in Turkey 3 B140 + 3 LE2 • 4,000 t unit in Spain 2 LE2• 16,000 t unit in UK 1 B180 + 1 PF + 9LE2• 10,000 t unit in Germany 1 SA3• 2,000 t unit in India 1 LE2• 10,000 t unit in Brasil 3 B140 + 2 LE2

No 5 / 20 Apr 2023

LEAD OXIDE LEAD OXIDE

MARKETMARKET• LeadLead

• Lead OxideLead Oxide

LEAD OXIDE LEAD OXIDE

MARKETMARKET• LeadLead

• Lead OxideLead Oxide

EUROPEAN PbO MARKETEUROPEAN PbO MARKET

No 6 / 20 Apr 2023

Lead Oxide priceLead Oxide price

Lead LME Lead Premium Freight Others Margin Sale Price

Low LME High LME

No 7 / 20 Apr 2023

EUROPEAN EUROPEAN LEAD LEAD

MARKETMARKET

2004 situation2004 situation

EUROPEAN EUROPEAN LEAD LEAD

MARKETMARKET

2004 situation2004 situation

EUROPEAN LEAD MARKETEUROPEAN LEAD MARKET

No 8 / 20 Apr 2023

PRIMARY LEAD economical rulePRIMARY LEAD economical rule

LEAD SMELTER

LEAD CONCENTRATES

FROM MINERS

LEAD INGOTS TO THE

CUSTOMER

PURCHASE concentrates at LME - TC

SALE lead ingots at LME + Premium

SMELTER REVENUES = TC + Premium

No 9 / 20 Apr 2023

CONCENTRATE NEED IN EUROPECONCENTRATE NEED IN EUROPE

2003 2004TONNAGE TONNAGE

Western MINE 111 502 114 000

EUROPE PRIMARY SMELTER 367 155 307 000SECONDARY SMELTER 1 036 500 1 019 000

LEAD PRODUCTION 1 403 655 1 326 000

Eastern MINE 184 000 184 000

EUROPE PRIMARY SMELTER 242 504 250 000SECONDARY SMELTER 251 000 251 000

LEAD PRODUCTION 493 504 501 000

NEED TO IMPORT LEAD CONCENTRATE in EUROPE

No 10 / 20 Apr 2023

CHINA concentrate importsCHINA concentrate imports

Strong competition between smelters to buy concentrates : China purchases agressively with very low TC (50 $/t instead of 100-110). Less concentrates available for others : smelter closures in Western countries

EXPORTS OF CONCENTRATES TO CHINA

0

100

200

300

400

500

600

700

800

0 2 4 6 8 10 12

Th

ou

san

ds

of

ton

s

conc 99 conc 00 conc 01 conc 02 conc 03

No 11 / 20 Apr 2023

Competitors

LOCATION OF SMELTERS 2002LOCATION OF SMELTERS 2002

Smelter producing less than 100 kt for

the market

Boliden : Sweden

PZ : Morocco

Smelter producing more than 100 kt

for the market

No 12 / 20 Apr 2023

PRIMARY LEAD estimation in EuropePRIMARY LEAD estimation in Europe

COUNTRY LOCATION 2002 2003 2004

GERMANY Nordenham 133 000 110 000 110 000Stolberg 110 000 110 000 110 000

Duisbourg 35 000 10 000 0FRANCE Noyelles Godault 125 000 10 000 0

UK Avonmouth 34 770 4 655 0Northfleet 176 482 140 000 140 000

ITALY Porto Vesme 50 700 74 500 0

BELGIUM Hoboken 54 000 30 000 30 000

SWEDEN Ronnskar 17 753 18 000 18 000MOROCCO Oued El Heimer 84 000 70 000 60 000

WESTERN EUROPE 820 705 577 155 468 000

POLAND Miasteczko 34 000 34 000 34 000

KAZAKHSTAN Ust Kamenogorsk 110 000 110 000 110 000Chimkent 20 000 20 000 20 000

BULGARIA Plovdiv 50 000 50 000 50 000Karjali 1 000 5 000 5 000

ROMANIA Copsa Mica 10 000 10 000 10 000Firizo (Baia Mare) 5 000 5 000 5 000

SERBIA Zvecan 23 000 0 0Titov Veles - Macedonia 20 000 15 000 0

EASTERN EUROPE 273 000 249 000 234 000

TOTAL EUROPE 1 093 705 826 155 702 000

ESTIMATED TONNAGE

No 13 / 20 Apr 2023

Competitors

LOCATION OF SMELTERS 2004 LOCATION OF SMELTERS 2004

Boliden : Sweden

PZ : Morocco

?

?

?

?

No 14 / 20 Apr 2023

AMERICA PRODUCTION estimationAMERICA PRODUCTION estimation

Since the closure of East Helena smelter in 2001, USA primary lead production has kept on decreasing until recently with the announcement from DOE RUN of the closure of Glover smelter on December 2003 …

less US lead available for exports to Europe !

COUNTRY LOCATION 2002 2003 2004

USA Herculaneum (Mo) 138 000 140 000 140 000Glover (Mo) 122 000 110 000 0

Canada Belledune 90 167 78 000 70 000Trail 80 700 93 000 80 000

MEXICO Torreon 125 735 125 000 125 000PERU LA OROYA 120 000 110 000 110 000

AMERICA TOTAL PRIMARY LEAD 676 602 656 000 525 000

ESTIMATED TONNAGE

No 15 / 20 Apr 2023

Primary Lead production in CHINAPrimary Lead production in CHINA

CHINA is certainly the only country investing in new lead smelters to increase the capacity of production of primary lead : growth of their internal market !

COMPANY LOCATION 2004 2003 2002

SHAOGUAN Shaoguan (Guandong) 70 000 70 000 63 000

Zhuzhou (Hunan) 90 000 90 000 96 395XUZHOU CHUNXIN Alloy Xuzhou (Jiangsu) 50 000 50 000 58 054

BAIYIN Baiyin (Gansu) 15 000 15 000 15 000WESTERN METALS Hanjiang - Laochekou (Hubei) 30 000 30 000 30 000

YUBEI GOLD Yubei (Henan) 110 000 110 000 78 630SONGBAI Shuikoushan (Hunan) 66 000 62 000 67 519

XINLI Non Ferrous Metals Kunming (Yunnan) 60 000 60 000 57 105WESTERN METALS Xining (Hubei) 30 000 30 000 50 000

YUGUANG Gold & Lead Yuguang (Henan) 220 000 200 110 135 055YUNNAN CHIHONG Huize (Yunnan) 20 000 20 000 20 000JIYUAN WANYANG Jiyuan (Henan) 32 000 32 000 16 000

GEJIU SHADIAN Electrolytic Gejiu (Yunnan) 25 000 25 000 24 973CHIZOU Anhui Chizou 33 000 33 000 24 000

JINCHENGJIANG CHENGYUAN 25 000 25 000 14 000Dongfang Gold & lead Xiuwu (Henan) 35 000 0 0

HECCHI SOUTH Non Ferrous Hecchi (Guangxi) 20 000 27 000 24 000Zhongjin-Lingnan Zhongjin (Guandong) 75 000 75 000 75 000

Jinyang metallurgical Inc. of China Hubei 30 000 25 000 15 000Others (Fankou, Huladoa,Boading Fen Fan, Nanjing Lead Zinc,…) 210 000 186 758 120 235

TOTAL PRIMARY LEAD 1 246 000 1 165 868 983 965

•ESTIMATED TONNAGE

No 16 / 20 Apr 2023

CHINA lead exportsCHINA lead exports

Higher production than in 2002 but internal growth of the Chinese market is such that monthly lead exports has decreased since end of 2003

LEAD EXPORTS FROM CHINA

0

50

100

150

200

250

300

350

400

450

500

0 2 4 6 8 10 12

Th

ou

san

ds

of

ton

s

lead 99 lead 00 lead 01 lead 02 lead 03 lead 04

No 17 / 20 Apr 2023

Western EUROPE market evolutionWestern EUROPE market evolution

2003 2004 evolution

LEAD DEMAND 1,650 kt STABLE

LEAD Production 1,350 kt

- 90 / 100 kt (smelter closures)

LEAD Imports 300 kt-100 / 200 kt

(China & USA)

BALANCE 0 - 200 / 300 kt

No 18 / 20 Apr 2023

LME LEAD PRICE LME LEAD PRICE (in $ & € - cash)(in $ & € - cash) since 1996 since 1996

LME Lead Prices in $ & € (cash) 1996 -

300

350

400

450

500

550

600

650

700

750

800

850

900

950

1 00025

-02-96

10-06

-96

19-09

-96

02-01

-97

16-04

-97

29-07

-97

07-11

-97

23-02

-98

09-06

-98

18-09

-98

31-12

-98

15-04

-99

28-07

-99

05-11

-99

21-02

-00

05-06

-00

14-09

-00

27-12

-00

09-04

-01

20-07

-01

30-10

-01

13-02

-02

28-05

-02

05-09

-02

16-12

-02

31-03

-03

11-07

-03

21-10

-03

03-02

-04

17-05

-04

25-08

-04

CashForwardAvgCashMonthCASH euro

No 19 / 20 Apr 2023

LME METALS PRICE EVOLUTION LME METALS PRICE EVOLUTION (since Jan 02)(since Jan 02)

0,00

0,50

1,00

1,50

2,00

2,50

3,00

3,50

janv-02 avr-02 juil-02 sept-02 déc-02 mars-03 juin-03 sept-03 déc-03 mars-04 juin-04

Al Cu Ni Pb Sn Zn

No 20 / 20 Apr 2023

LME lead stocks evolutionLME lead stocks evolution

LME stocks evolution (from Sept 02 to 2004)

0

20000

40000

60000

80000

100000

120000

140000

160000

180000

200000

sept-02 janv-03 juin-03 nov-03 mars-04

EUROPE DUBAI SINGAPORE USA

No 21 / 20 Apr 2023

LME METALS STOCK EVOLUTION LME METALS STOCK EVOLUTION (since July 03)(since July 03)

0,00

0,20

0,40

0,60

0,80

1,00

1,20

1,40

1,60

01/07/2003 01/10/2003 01/01/2004 01/04/2004

Al (1200 kt) Cu (600 kt) Pb (170 kt) Ni (25 kt) Sn (20 kt) Zn (700 kt)

No 22 / 20 Apr 2023

SUMMARYSUMMARY

CONCENTRATE MARKET :• depressed lead and zinc price in 2001-2002-2003 have led to mine closures• agressive purchase of concentrates at low TC from Chinese smelters

LEAD PRODUCTION in Western Europe :• tight concentrate market (pressure on primary lead)

• decrease of primary lead production due to lack of concentrates, environmental constraints and importance of financial losses

LEAD IMPORTS :

• reduction of Chinese exports due to internal growth

• reduction of « taxes rebate » on Pb exports from China (from 15 to 11%)

• strong increase of maritime freight costs from China

CONSEQUENCES• Reduction of lead availability & inventories / speculation LME increase

• Tight 2004 European primary lead market lead premium increase

No 23 / 20 Apr 2023

LEAD OXIDELEAD OXIDE

MARKETMARKET

LEAD OXIDELEAD OXIDE

MARKETMARKET

EUROPEAN LEAD OXIDE MARKETEUROPEAN LEAD OXIDE MARKET

No 24 / 20 Apr 2023

Prim

LEAD OXIDESLEAD OXIDES

Battery Oxide

Red Lead

Gran. Litharge

Powder Lith.

-ary

LEAD

Raw Mat.Raw Mat. Oxide TypeOxide Type Intermediates Intermediates Enduse Enduse

BatteriesBatteries

GlassGlass

CeramicsCeramics

PVCPVC

PaintsPaints

Ceramic Frits

Lead SulfateLead PhosphiteLead SilicateCa. PlombateLead StearateChromate

No 25 / 20 Apr 2023

ENDUSEENDUSE OF LEAD OXIDES OF LEAD OXIDES

BatteriesBatteries

GlassGlass

PVCPVC

Starter batteries containStarter batteries containon avg 5-6 kg of lead oxideon avg 5-6 kg of lead oxide

One TV-set containsOne TV-set containson avg 1.5++ kg of lead oxideon avg 1.5++ kg of lead oxide

PVC contains 1-2% ofPVC contains 1-2% oflead oxide as stabilizerlead oxide as stabilizer

CeramicsCeramics Enamels on tiles, etc.Enamels on tiles, etc.

PigmentsPigmentsChrome yellow Chrome yellow Molybdate redMolybdate red

OtherOther Rubbers, Brake Pads, etc.Rubbers, Brake Pads, etc.contain lead oxidecontain lead oxide

No 26 / 20 Apr 2023

TV glass

Crystal

PVC stab

Ceramics

Pigments

Batteries

Misc.

EUROPEEUROPEAMERICAAMERICAASIAASIA

22110 kt0 kt 400400 kt kt11110 kt0 kt

WORLD CONSUMPTION: 7WORLD CONSUMPTION: 7220 kt - 0 kt - CAPTIVE : 210 ktCAPTIVE : 210 kt

SALES WORLDWIDE: 5SALES WORLDWIDE: 5110 kt 0 kt PENOX SALES 2003: 120 ktPENOX SALES 2003: 120 kt

DECLINE

GROWING

LEAD OXIDE MARKETSLEAD OXIDE MARKETS

DECLINE

No 27 / 20 Apr 2023

WORLD MARKETWORLD MARKET

PbO World Market (t) 1995-2005

Asia

Americas

Europe

0

100.000

200.000

300.000

400.000

500.000

600.000

700.000

800.000

1995 2000 2005 2010Asia Americas Europe

No 28 / 20 Apr 2023

SIGNIFICANT DEVELOPMENTS TV market SIGNIFICANT DEVELOPMENTS TV market

0

1.000

2.000

3.000

4.000

5.000

6.000

1999 2000 2001 2002 2003

Flatscreens Sales vs CRT in Germany (000)

CRT Flatscreens

No 29 / 20 Apr 2023

PbO vs CaZn Stabilisers in Europe April 2003 (in tonnes)

Denmark Rest of Totalperiod UK + France Germany Italy + Fin Benelux Port + Western WesternYTD Ireland + Nor Spain Europe Europe

+ SwePb 23 113 12 965 29 409 16 678 1 493 9 397 11 271 9 052 113 378CaZn 815 1 634 6 231 4 555 1 475 1 015 824 1 439 17 988Pb+CaZn Total 23 928 14 599 35 640 21 233 2 968 10 412 12 095 10 491 131 366CaZn/Total 3,4% 11,2% 17,5% 21,5% 49,7% 9,7% 6,8% 13,7% 13,7%Pb 22 427 11 376 30 565 16 628 1 174 9 741 10 883 10 462 113 256CaZn 1 603 2 183 8 298 5 392 2 683 1 104 1 132 1 551 23 946Pb+CaZn Total 24 030 13 559 38 863 22 020 3 857 10 845 12 015 12 013 137 202CaZn/Total 6,7% 16,1% 21,4% 24,5% 69,6% 10,2% 9,4% 12,9% 17,5%Pb 6 353 3 056 7 471 4 441 260 2 580 3 129 1 895 29 185CaZn 550 817 2 401 1 583 755 578 479 460 7 623Pb+CaZn Total 6 903 3 873 9 872 6 024 1 015 3 158 3 608 2 355 36 808

CaZn/Total up to Apr 03 8,0% 21,1% 24,3% 26,3% 74,4% 18,3% 13,3% 19,5% 20,7%

2001

2002

2003

Source: ELSA 2003

RATE OF REPLACEMENT INCREASING in PVCRATE OF REPLACEMENT INCREASING in PVC

No 30 / 20 Apr 2023

Lead oxides 2000-2010 - Europe

0

50.000

100.000

150.000

200.000

250.000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

TV glass Techn. Glass Crystall Battery Stabiliser Ceramics Miscellaneous

LEAD OXIDE EUROPEAN MARKETLEAD OXIDE EUROPEAN MARKET

No 31 / 20 Apr 2023

SUMMARYSUMMARY

LEAD MARKET

• current high LME lead price should decrease a bit but should remain higher than 750 $/t (according to « lead experts ») based on production/demand balance and on the low levels of lead in LME warehouses

• speculative market: disconnection between LME and physical market

• primary lead production moving to Asia – tight situation in Europe

• 2005 premium depending highly on China & Australia exports to Europe

LEAD OXIDE MARKET

• due to environmental pressure (PVC, paints, pigments) or to strong Asian competition (TV glass), European lead oxide market shrinks year after year need for consolidation of the market with only few producers remaining

• high lead LME price and premium make lead oxide more expensive than in the past leading to substitution process for non-leaded products need for diversification with new products (PENOX antimony trioxide)