Copper has a number of different applications; its most common use is in wiring and cable products, such as power cables, building wiring and transformer windings. Copper is the ideal material for these products because it is the best non-precious metal electric conductor, making it both functional and affordable. Copper is used across many industries, principally construction, electric and electronic products, industrial machinery, transportation and consumer products. Outside of wire and cable products, the next largest use of copper is in copper tubing. Copper tubing has a number of different applications, which include plumbing, heating systems and air conditioners/refrigeration units. Copper is also vital to the transportation industry.

Market Sector Construction 31% Electrical Network 24% Industrial Machinery 24% Transport 11% Consumer & General 10%

Source: Wood Mackenzie (Global Copper long-term outlook Q1 2017)

Demand for copper over the past 15 to 20 years has been robust, primarily driven by emerging market growth particularly in Asia and increasingly dominated by a rapid rise in consumption in China, which now makes up nearly 50% of annual global copper demand. China's consumption growth is anticipated to be sustained through a transition to a "new normal" as the country continues to experience urbanization and an expanding middle class, buoyed by massive government economic stimulus packages on infrastructure and transportation (domestic electrical grid, rail, road) including the "One Belt One Road" initiative (development strategy focused on connectivity and cooperation between Eurasian countries).

Region China 45% Other Asia 21% Europe 18% North America 10% Rest of World 6%

Source: Wood Mackenzie (Global Copper long-term outlook Q1 2017)

Wood Mackenzie anticipates copper demand growth to continue at a rate of 1.2% to 1.8% per annum over the next decade, primarily driven by continued growth from China and other emerging markets in Asia.

Slower copper supply growth is anticipated over the medium term. Lower copper prices over the past five years resulted in a stagnant investment environment, forcing producers to focus on financial health and profitability over growth. Supply constraints were further exacerbated by grade declines and supply disruptions at existing operations, technical challenges at projects in development and historically low exploration budgets resulting in limited success in finding sizeable new discoveries. Over the medium to long-term, currently anticipated new copper mine supply will be barely sufficient to replace maturing operations. Furthermore, new mine supply is not guaranteed as most projects remain subject to permitting, engineering or require higher metal prices to justify development economics.

Source: Wood Mackenzie (Global Copper long-term outlook Q1 2017)

Chile is by far the largest primary producer of copper. Over the last two decades, Chile has significantly increased copper mine production and has defined itself as the leading copper producing country. Peru and the United States have historically been the second and third largest primary producers of copper, respectively. However, Chinese mine production surpassed that of the United States in 2010. Brazilian copper mine production accounted for approximately 2% of global copper mine production in 2016.

Geography Chile 45% Others 24% Peru 11% Africa 10% China 7% USA 7% Europe 5% Australia 5% Brazil 2%

Source: Wood Mackenzie (Global Copper long-term outlook Q1 2017)

Wood Mackenzie is forecasting global refined copper demand to grow by 1.8% per annum from 2016 to 2021. In the longer term, from 2016 to 2035, it is anticipated that global refined copper consumption will grow by 1.2% per annum. Base case copper supply, before disruptions, is expected to grow until 2020 and decline beyond 2020 unless new supply enters the market. Due to the long lead time required to bring new mines into production it is estimated that the supply gap will reach approximately 4.4 million tonnes by 2027.

The price of copper has recovered recently from a five year low of US$1.96/lb experienced at the beginning of 2016 to over US$3.00/lb in the last month. Wood Mackenzie estimates copper prices to average approximately US$3.45/lb (in 2017 dollars) from 2020 to 2025 and average approximately US$3.30/lb (in 2017 dollars) from 2026 to 2035.

Source: Wood Mackenzie (Global Copper long-term outlook Q1 2017)