JX Nippon Mining & Metals Corporation

Review of Our Fiscal 2017-2019 Medium-Term Management PlanStable Operations at the Caserones Copper Mine; Expanded Production Systems Grow Our Advanced Materials Business

Since fiscal 2017, we have been executing strategies guided by a medium-term management plan reflecting policy to make our current core businesses more profitable and cultivate next-generation core businesses. Our business results were generally in line with all initial targets after excluding impairment losses related to the Caserones Copper Mine (Chile). Supported by rising copper prices, our Caserones Copper Mine has achieved stable operations and is now generating profits. We also experienced increased sales and other positive performance related to functional materials and thin film materials, driven by smartphone sales.
 Pursuing our main strategies, we engaged in structural reform and enacted policies to strengthen our upstream and midstream businesses. These strategies included revising our portfolio of mining rights and interests, upgrading the flash furnace at Pan Pacific Copper’s Saganoseki Smelter & Refinery (now JX Metals Smelting Co., Ltd.), and revising the operating structures for copper-related joint ventures. Downstream, we expanded our business through the acquisition of H. C. Starck Tantalum & Niobium (now known as TANIOBIS GmbH). We also launched collaborations with start-up companies, including Material Concept, Inc. and OxMet Technologies (now Alloyed Limited). Further, we expanded our production capacity for treated rolled copper foil, high-performance copper alloys, and sputtering targets for semiconductors in preparation for market expansion.
 We made strategic investments of ¥90 billion, exceeding our plan of ¥70 billion. We also invested ¥120 billion in business support, largely in line with plan. Through these efforts, I believe we have made a strong start toward becoming the technology-based company described in the JX Nippon Mining & Metals Group Long-Term Vision 2040.

The JX Nippon Mining & Metals Group Long-Term Vision 2040 Becoming a Technology-Based Company Through Redefining Our Business, Engaging in Co-Creation-Based Development, Building Our Organization, and Developing Human Resources

In 2019, we formulated the JX Nippon Mining & Metals Group Long-Term Vision for 2040. The aim of this long-term vision is to contribute In 2019, we formulated the JX Nippon Mining & Metals Group Long-Term Vision for 2040. The aim of this long-term vision is to contribute to the achievement of the Sustainable Development Goals (SDGs) by growing as a technology-based company that supplies high-value-added products and technologies through the technologies and expertise we have accumulated. This vision redefines our businesses as either Focus Businesses, which is the core of our growth strategy, or Base Businesses, which contribute to maintaining a strong organizational foundation. Focus Businesses consist of businesses that allow us to compete globally through technological differentiation. These businesses include our Functional Materials Business, Thin Film Materials Business, and Tantalum and Niobium Business. Base Businesses include our Mineral Resources Business and Metals & Recycling Business. Moving forward, we aim to grow our company through strategies that leverage the characteristics of each of these businesses.
 To speed technology development and commercialization, we will move away from our traditional in-house approach and proactively engage in development via co-creation. We believe that combining group core technologies with innovative technologies from outside sources generates greater synergies and accelerates the type of technological innovation that will transform society.
 We will build a flexible organizational structure that enables rapid decision-making and the proactive use of high-level human resources, etc. At the same time, the group will secure and develop human resources capable of creating new value and managing our organization. Our head office relocation in June of this year was one initiative in line with this policy. We designed our new head office to be a space that encourages internal and external communications and facilitates the creation of new value. In this way, every employee will be aware of and proactive in their own role in building the future of JX Nippon Mining & Metals.

New Medium-Term Management Plan for Fiscal 2020-2022A Three-Year Season of Sowing Seeds to Achieve Our Long-Term Vision

Our new medium-term management plan will be a three-year season of sowing seeds to achieve our long-term vision. To act with speed in expanding strategic investments, promoting technological development, reviewing business portfolios, and developing human resources capable of creating new value, we will engage in business management with a greater degree of autonomy, agility, and independence.
 In our Focus Businesses, we will add even more production capabilities in sputtering targets for semiconductors, an area of follow-on investments during our prior plan, treated rolled copper foil, high-performance copper alloy, and other products. Our objective here is to capture the growing demand for advanced materials in the information and communications market. The group also intends to build a more robust supply chain, aiming for sustainable growth. Here, we will review the role of overseas facilities according to geopolitical risk and actively strengthen the supply chain through coordination with other companies.
 The Mineral Resources Business, which is a Base Business, will aim to secure net profits by engaging in operating improvements and ongoing cost reductions to take a major step forward in Caserones Copper Mine profitability. In our Metals & Recycling Business, we will contribute to creating a recycling-oriented, decarbonized society by pursuing the best mix of smelting materials and recycled materials. To this end, we made the Saganoseki Smelter & Refinery a wholly owned subsidiary and integrated the smelting and recycling business in April 2020.
 In terms of technology development, we intend to pursue development through our core technologies and via co-creation with outside resources, discover new categories through open innovation, industry-academic collaboration, etc., respond to digital transformation, adopt IoT and AI in production facilities, and more.

The Impact of COVID-19 and Our ResponseComprehensive Measures to Prevent Infection and Fulfilling Our Mission as a Member of the Community

We have seen the drastic changes in the conventional wisdom of business and lifestyles caused by COVID-19, which began spreading around the globe in early 2020. The pandemic has done more than simply cause a change in work styles. COVID-19 has also had an immense impact on economic activities in general, including how people and goods are transported, how we think about consumption activities, and more.
 The JX Nippon Mining & Metals Group has maintained stable operations through comprehensive measures to prevent infection. These measures include prohibiting business trips to and from production facilities, limiting visitors, and reducing contact among employees by adjusting work shifts. In March, we shifted all head office employees to telework to prevent the spread of infection and ensure employee safety. Subsequently, we have taken a flexible approach in accordance with government guidelines, etc.
 As a member of the community, we made donations to Kitaibaraki City and Hitachi City (Ibaraki Prefecture), Samukawa Town (Kanagawa Prefecture), and Oita City (Oita Prefecture). These donations helped fight the spread of infectious diseases in these communities where we operate our main production facilities. We also provided PPE masks to medical facilities in these regions. Overseas, SCM Minera Lumina Copper Chile (operator of the Caserones Copper Mine) provided simplified COVID-19 test kits to local governments and medical institutions. In addition to these initiatives, we have endorsed and participate in the Open COVID-19 Declaration. This declaration states that companies will not enforce patent rights, utility model rights, design rights, or copyrights for activities that contribute to the containment of COVID-19.

The Mission of the JX Nippon Mining & Metals GroupA Group in Self-Transition as We Envision Our Future

We have recategorized our materialities, originally defined in 2018, to six categories. In this way, we aim to garner greater internal support and to improve our ability to communicate materialities externally. We have also taken this opportunity to establish KPIs and rededicate ourselves to our aspirations of making a significant commitment to society.

Since our founding in 1905, the JX Nippon Mining & Metals Group has provided new value to society on a consistent basis through relentless creativity and innovation, supported by our technological capabilities. The world faces challenges that will continue to change in the future. The JX Nippon Mining & Metals Group is sensitive to our mission, and we will confront social issues as we continue to evolve and contribute to the achievement of a sustainable society. Our Vision for 2040 is to grow into a technology-based company, united as an organization and working with our stakeholders to contribute to the future of the Earth and humanity.

Correspondence Between JX Mining & Metals Group Materialities and the SDGs