Mining On Top: Stockholm 2013 26-27 Nov 2013 Base metals: outlook for supply and demand – Jim Lennon, Macquarie Capital; Commodities Research, Chairman

1. Base metals outlook
Demand thrust into supply headwinds
November 2013
Macquarie Commodities Research
Jim Lennon
Macquarie Capital (Europe) Limited
Ropemaker Place
28 Ropemaker St
London, UK EC2Y 9HD
In preparing this research, we did not take into account the investment objectives, financial situation and particular needs of the reader. Before making an investment decision on the basis
of this research, the reader needs to consider, with or without the assistance of an adviser, whether the advice is appropriate in light of their particular investment needs, objectives and
financial circumstances. Please see disclaimer.
Page 1

2. Our commodity price forecasts…in pictures!
Page 2

3. Impact of China on global markets….
Page 3

4. Commodity prices – iron ore still the stand-out
performer
Index of monthly average commodity prices (Jan 2000 = 100)
1200
1000
600
400
200
Alumina
Steel
Stainless Steel
Iron ore fob
Thermal coal
Coking coal
Base metals
Precious metals
Page 4
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
0
2000
Index
800
WTI oil

5. Base metal prices – not all the same
Index of monthly average commodity prices (Jan 2000 = 100)
800
 Lead, copper and tin outperform nickel,
aluminium and zinc
700
 All metals except aluminium rose strongly
in the boom period for Chinese demand
growth and supply shortages up to mid2008
600
Index
500
 Supply-side performance made the big
difference in the recovery after 2008
financial crisis.
400
300
 Chinese over-supply in zinc, nickel and
aluminium combined with weak nonChinese demand led to weakness.
200
100
Aluminium
Copper
Nickel
Zinc
Lead
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
0
Tin
 Nickel has suffered since the advent of
Chinese nickel pig iron; aluminium
from soaring domestic production
Source: LME, Macquarie Research, November 2013
Page 5

6. Base metal relative price performance in line
with surplus/deficits recorded
Accumulated market balance as a percent of global consumption
% of average consumption
25%
21%
21%
22%
20%
15%
10%
5%
4%
2%
0%
-5%
-10%
-8%
-11%
-15%
Al
Ni
-13%
Zn
2003-07
Source: Macquarie Research, November 2013
Page 6
Cu
2008-2012
-7%
-5%
Pb
-3% -3%
Sn

7. Year-by-year performance of base metal
surplus/deficit
7%
6%
40%
5%
4%
30%
3%
20%
2%
1%
10%
0%
0%
-1%
-2%
-10%
-3%
Aluminium
Copper
Nickel
Zinc
Source: Macquarie Research, November 2013
Page 7
Lead
Tin
2013F
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
-4%
2000
-20%
Average
Average for all metals
Cumulative surplus(+)/deficit(-)
50%
Global market surplses/deficits for base metals (expressed
as % of demand

8. Nickel and aluminium have the largest
inventory overhang of any base metals…
Estimated total stocks for base metals at end-August 2013
(weeks of annual consumption)
30
30
25.3
25.4
25
25
Non-China in raw materials
China other
China SRB (e)
20
20
China- SHFE
wks
Reported Producer
14.7
15
15
9.4
10
8.7
10
5
0
0
Zn
Cu
Sn
Source: LME, SHFE, Comex, IAI, ICSG, ILZSG, INSG, CRU, Macquarie Research,
November 2013
Pb
Page 8
LME
In China raw materials
5
Ni
Non-LME Ex-China
Comex
6.0
Al
Japanese ports

9. Better growth in prospect in 2014
 Global GDP growth since 2010 has been on a downward trend and become more lopsided with China accounting for an ever larger share.
 2Q 2013 could have been the start of a new dynamic, as developed economies’ growth
accelerates and that of many emerging markets declines. For now it remains a second
derivative argument – in absolute terms growth is still higher in the emerging economies –
but the trend seems clear. China so far is an exception, with growth accelerating in recent
months.
 As growth strengthens in developed economies the normalisation of US monetary policy
will have a far-reaching impact. How countries, and their capital, financial and commodity
markets cope will be one of the key themes of 2014.
 Although global growth will be better balanced, for base metals, China’s huge share of
demand means it plays a larger role than its economic size would suggest. Chinese
growth could still surprise on the upside, and even if it slows, the absolute growth rate will
remain high. And faster growth in the rest of the world should mean global growth is more
robust and market confidence higher.
Page 9

10. Backdrop of last 3 years is slowing world GDP growth
 Before the crisis world GDP growth was rising by 4-5% a year (in PPP terms) but after
2010 recovery has slowed sequentially to just over 2% a year.
 Slowdown most pronounced in developed economies, with very little growth in
Europe/Japan. China has held up well but other emerging markets have also weakened.
World GDP growth, quarterly, year-on-year, %
6%
Other developed
US
China
Other emerging
World
2011
2013
4%
2%
0%
(2%)
(4%)
2006
2007
2008
2009
2010
Source: Bloomberg, Macquarie Research, November 2013
Page 10
2012
Recovery
?

11. Developed market recovery – fragile but unmistakable
 In 2Q 2013 the four main developed economies saw GDP growth for first time since 1Q 2011 with the
pace of expansion accelerating in the US and UK and the Eurozone returning to growth. 3Q has seen
further acceleration in US, UK, and continued growth, although slower, in Eurozone & Japan.
 Manufacturing (and service) PMIs show growing optimism across all key regions.
Developed economies GDP growth, %
QoQ
US
Eurozone
UK
Japan
2.0
1.5
Index
1.0
Developed economies manufacturing PMI, > 50 =
expansion
65
US
UK
60
Japan
Eurozone
55
0.5
50
0.0
45
-0.5
-1.0
2010
2011
2012
40
Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13
2013
Source: Bloomberg, Macquarie Research, November 2013
Source: Bloomberg, Macquarie Research, November 2013
Page 11

12. Recovery can be seen from recent data exChina
70
65
40%
65
30%
60
60
55
50
45
40
35
20%
55
10%
50
0%
45
-10%
-30%
35
30
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
40
-40%
30
-20%
World Ex-China Base metals app. demand
World Ex-China steel app. demand
US/Europe/Japan PMI
US/Europe/Japan PMI
Page 12
US/Europe/Japan PMI (3mths
fwd)
50%
% change yoy - 3MMA
70
US/Europe/Japan PMI
(3mths fwd)
30%
25%
20%
15%
10%
5%
0%
-5%
-10%
-15%
-20%
-25%
-30%
Changes in non-Chinese steel demand and G3
PMIs
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
% change yoy - 3MMA
Changes in non-Chinese base metals' demand
and G3 PMIS

13. Emerging markets – China resilient, others…?
 China’s economy has held up, despite a 2Q slowdown, with growth picking up in recent
months.
Source: Bloomberg, Macquarie Research, November 2013
 Some other emerging markets are under strain, with GDP growth falling & financial market
stresses rising. Equity indices have underperformed the developed economies.
GDP growth, China & other emerging markets, % YoY
14%
12%
Equity Markets, start 2013 = 100
130
125
10%
120
8%
115
6%
Japan
110
4%
Emerging markets
105
China
2%
US
100
Other emerging
95
0%
90
(2%)
(4%)
2007
Eurozone
85
2008
2009
2010
2011
2012
2013
Page 13
80
Jan-13
Apr-13
Jul-13
Oct-13

14. China – rebounding strongly but debt concerns grow
 China’s economic growth weakened in 1H 2013 but commodity demand remained strong thanks to
sectoral composition of growth and sheer size of economy.
 Growth has accelerated (both in IP and Macquarie’s LKQ index) and short-term outlook positive but
structural problems, including high debt levels, suggest cautious outlook for 2014.
Local government investment increasingly to pay off
debts, %
LKQ index & industrial production, % YoY
25
100
20
80
15
60
10
40
5
20
0
0
1999
2001
2003
2005
2007
2009
Source: CEIC, Macquarie Research, November 2013
2011
2013
2009
2010
2011
2012
Source: NBS, Macquarie Research, November 2013
Page 14
2013

15. Other emerging markets feel the strain
 Emerging markets face challenges both internal and external. Key economies have seen
growth slow dramatically in recent years as structural problems mount.
 The prospect of Fed tapering has seen capital outflows, falling currencies and the need for
a policy response.
Key emerging market FX v US dollar, start 2012=100
115
Key emerging markets, GDP growth, % YoY
15
110
105
10
100
5
95
0
90
85
(5)
80
(10)
(15)
2007
75
Brazil
2008
Mexico
2009
2010
India
2011
Russia
2012
2013
70
Jan-12
India
Turkey
China
Jul-12
Indonesia
Brazil
Jan-13
Jul-13
Source: Bloomberg, Macquarie Research, November 2013
Source: Bloomberg, Macquarie Research, November 2013
Page 15

16. 2012 demand structure…all about China
2012 share of global copper demand
2012 share of global aluminium demand
13%
18%
25%
26%
11%
10%
5%
5%
42%
Europe
USA
45%
Japan
China
Other
Europe
2012 share of global nickel demand
18%
USA
Japan
China
Other
2012 share of global zinc demand
19%
20%
25%
9%
9%
4%
8%
45%
43%
Europe
USA
Japan
China
Europe
Other
Source: CNIA, ILZSG, INSG, IAI, ICSG, Macquarie Research, November 2013
Page 16
USA
Japan
China
Other

17. Strength of Chinese demand this year is surprising…
Year-on-year changes in demand, JanuaryOctober 2013 vs. 2012
% change YoY
20%
17.2%
14.6%
15%
12.0%
11.4%
9.0%
10%
5%
0.9%
0.5%
2.2%
0%
-2.5%
-5%
Aluminium
Copper
China
Zinc
Ex-China
Source: ICSG, INSG, ILZSG, IAI, Macquarie Research, November 2013
Page 17
Nickel
World total
-2.3%
Steel

18. China still leads the way in demand, but rest of
world starts to recover also…
World base metals demand
Chinese base metals demand
World Ex-China base metals demand
25%
50%
25%
45%
20%
20%
40%
15%
15%
35%
5%
0%
-5%
-10%
% chge YoY (3MMA)
10%
% chge YoY (3MMA)
% chge YoY (3MMA)
10%
30%
25%
20%
15%
-15%
0%
-5%
5%
-25%
0%
10%
-20%
5%
-10%
-30%
2007
-15%
-5%
2008
2009
2010
2011
2012
2013
2007
2008
2009
2010
2011
Source: ICSG, INSG, ILZSG, IAI, Macquarie Research, November 2013
Page 18
2012
2013
-20%
2007
2008
2009
2010
2011
2012
2013

19. Non-China recovery evident in all the metals…
Non-Chinese base metals demand changes
Change in base metals apparent demand
50%
60%
40%
% change yoy - 3MMA
50%
% change yoy (3MMA)
30%
20%
10%
0%
40%
30%
20%
10%
0%
-10%
-10%
-20%
-20%
-30%
Zinc
Copper
Aluminium
China
Source: ICSG, INSG, ILZSG, IAI, Macquarie Research, November 2013
Page 19
World Ex-China
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2001
Nickel
2002
-30%
-40%
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

20. The historical context – Chinese demand growth was
staggering and largely unexpected
World steel demand growth by decade
563
m tonnes crude steel
600
600
500
500
400
400
300
200
100
300
257
157
32
12
23
46
200
128
51
49
66
100
China
Rest of world
Source: worldsteel, Macquarie Research, November 2013
Page 20
2000-10
1990-00
1980-90
1970-80
1960-70
1950-60
1940-50
1930-40
1920-30
1910-20
1900-10
-

21. Impact of China - enormous
Average growth in consumption, 200030%
2010
50%
24.1%
25%
10%
1.3%
1.0%
25%
20%
10%
0%
-5%
38%
30%
15%
5%
12%
7%
5%
5%
-0.8%
-1.0%
Copper
Aluminium
Zinc
China
-1.6%
Nickel
-1.7%
Lead
39%
35%
16.0%
13.9%
15%
43%
43%
41%
41%
40%
18.9%
17.7%
15.0%
45%
% of total
20%
% CAGR
China's share of global consumption
16%
15%
13%
8%
4%
3%5%
6%
4%
2%
10%
7%
4%
9%
6%
0%
Copper
Steel
Aluminium
1980
Rest of world
Source: worldsteel, INSG, ICSG, IAI, ILZSG, Macquarie Research, November 2013
Page 21
Zinc
1990
Nickel
2000
Lead
2010
Steel

22. What happened to demand after 2008 global financial
crisis? Terrible outside China!
Change in demand from 2007 to 2012
Change in demand from 2007 to 2012
120%
5%
1%
0%
82%
80%
2012/2007 %
2012/2007 %
-5%
-10%
-11%
-15%
-20%
97%
100%
-14%
-14%
-17%
-18%
-15%
-16%
74%
60%
53%
52%
40%
-20%
-18%
-20%
-20%
-25%
20%
-23%
-26%
-30%
-28%
Europe
Copper
0%
N.America
Aluminium
Crude Steel
China
Japan
Nickel
Copper
Zinc
Source: LME, Macquarie Research, November 2013
Page 22
Aluminium
Crude Steel
Nickel
Zinc

23. Sources of Chinese GDP growth – investment boost
“saved” China in 2009
Chinese GDP Growth contributions
16
14
12.8
11.3
% change YoY (real)
12
10
8
6
16
14.3
7.6
0.1
1.8
8.4
1.0
1.9
8.3
4.1
9.1
0.7
4.4
10.0
0.1
10.1
0.7
2.1
5.5
0.9
6.0
5.5
6.3
10.4
0.4
9.6
2.6
14
9.1
2.6
4.3
12
9.3
10
7.8
5.5
4.5
7.5
0.1
8
3.9
8.1
3.6
6
4.4
4
2
4
5.7
5.5
0
4.2
4.0
3.6
3.9
4.4
5.1
5.6
4.2
4.6
4.5
0.0
5.3
-0.4
4.1
3.8
0
-0.2
-3.5
-2
2
-2
Consumption
Gross capital formation
Source: NBS, Macquarie Research, November 2013
Page 23
Net exports
Total
2013F
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
-4
1999
-4

24. The changing structure of Chinese growth – less steel
and metals intensive
Source: Dragonomics, Macquarie Research, November 2013
Page 24

25. Unbalanced growth? Too much investment?
 China has invested a lot more than many
developing countries that got caught in a
“middle-income” trap (failed to boost
productivity when incomes reached $1015kt, but not much for economies which
escaped it (e.g., Japan, Korea, Taiwan)
Share of total Chinese GDP
55
% of total
50
45
 China has invested more due to low
interest rates, capital abundance, and a
low capital stock when growth took off.
40
35
 Consumption is underestimated in GDP by
4-10%
Gross capital formation
2012
2010
2008
2006
2004
2002
2000
1998
1996
1994
1992
1990
1988
1986
1984
1982
1980
1978
30
 Bottom line: not such a worry.
Private consumption
Source: NBS, Macquarie Research, November 2013
Page 25

26. Chinese monetary policy now quite “loose” –
partly loans to service debts
Loan and money supply growth minus nominal GDP
Quartery: % change YoY
30
25
20
15
10
5
0
-5
Mar-00
Sep-00
Mar-01
Sep-01
Mar-02
Sep-02
Mar-03
Sep-03
Mar-04
Sep-04
Mar-05
Sep-05
Mar-06
Sep-06
Mar-07
Sep-07
Mar-08
Sep-08
Mar-09
Sep-09
Mar-10
Sep-10
Mar-11
Sep-11
Mar-12
Sep-12
Mar-13
Sep-13
-10
Loans
Source: NBS, Macquarie Research, November 2013
Page 26
M2

27. Debt levels too high and a crisis on the
horizon?
 Remember banks owned by government; government budget deficit is only
1.9% of GDP. Loans are all in RMB (not much foreign bank debt as happened in
Asian crisis).
 Worst case scenario: many loans could be written off by government without
creating collapse
 At over 50% of GDP, Chinese savings rate is high so can finance debt internally.
 This doesn’t mean the government doesn’t want to deleverage and cut
investment in inefficient areas (local govt spending, adding to over-capacity in
industry, etc) – this is crucial for long term stability.
 However, there is no sign of imminent stress or a “Lehman” moment! June spike
in interbank lending rate to 25% was a “warning” by government about
restraining loose lending.
Page 27

28. Too much supply in many metals
 As demand growth slowed after the global financial crisis, supply growth started
to accelerate (copper growth was delayed but has now caught up)
 China has dominated refined supply growth in recent years based on
construction at low capex of conversion capacity, partly based on imported raw
materials.
Changes in refined metals production, 2008-2012
2500
2000
1974
China
'000t
1500
Ex-China
900
1000
312
500
312
55
150
0
-500
-216
Al
-55
Cu
Ni
Source: CNIA, ICSG, IAI, INSG, ILZSG, Macquarie Research, November 2013
Page 28
Zn

29. Base metal raw material constraints have been removed
in China by high imports of raw materials
Nickel ore/conc. imports
8000000
7000000
7000000
6000000
6000000
4000000
1200000
1000000
800000
5000000
tonnes
5000000
tonnes
tonnes
Copper concentrate imports
Bauxite imports
8000000
4000000
3000000
3000000
2000000
2000000
1000000
1000000
0
0
600000
Indonesian government policy change in 2014 to impact bauxite/nickel?
Source: Chinese Customs Statistics, Macquarie Research, November 2013
Page 29
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
0
2000
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
200000
2000
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
400000

30. China to the end of the decade?
 Growth rates to continue to slow due to:
1. Demographics making labour tight, urbanisation less: Potential growth
rates for the economy lower
2. Restructuring of the economy to reduce debt levels, increase efficiency,
reduce over-capacity, encourage more consumption driven growth
 However, growth will continue: China is still a “developing” economy
 Government measures designed to make growth sustainable (albeit at
a lower rate than in past)
Page 30

31. Our assumptions to 2020
Trend growth in Chinese consumption
Trend growth in Ex-Chinese consumption
5.0%
30%
3.8%
4.0%
1.8%
2.0%
1.0% 1.0%
1.3% 1.3%
1.3%
1.0%
% CAGR
% CAGR
3.0%
24.1%
25%
2.9%
20%
16.0%
15.0%
13.9%
15%
9.6%
10%
0.0%
6.2%
-1.0%
-2.0%
-1.6%
Copper
Aluminium
Zinc
2000-10
6.1%
7.3%
7.3%
3.5%
5%
-0.8%
-1.0%
18.9%
17.7%
Nickel
-1.7%
Lead
0%
Steel
Copper
Source: ICSG, ILZSG, INSG, NBS, Macquarie Research, November 2013
Page 31
Zinc
Nickel
2000-10
2010-20F
Aluminium
2010-20F
Lead
Steel

32. What this means in quantities – still large
Actual and "needed" supply growth for copper
Actual and "needed" upply growth for aluminium
35.0
9
6
5
4.0
4.1
4
Mine
and
scrap
3
mt refined lead
mt refined copper
30.0
7
2
1.5
25.0
20.0
10.0
6.1
3.1
0.0
0
1980-90
1990-2000
2000-10
1980-90
2010-20F
Actual and "needed" supply growth for zinc
5.0
2000-10
2010-20F
800
711
700
'000t refined nickel
3.7
3.5
3.0
2.2
2.5
1990-2000
Actual and "needed" supply growth for nickel
4.4
4.5
4.0
mt refined zinc
16.7
15.0
5.0
1
2.0
1.5
1.0
0.5
31.5
7.8
8
0.6
600
500
344
400
300
183
168
1980-90
200
1990-2000
100
0
0.0
1980-90
1990-2000
2000-10
2010-20F
Source: Macquarie Research, November 2013
Page 32
2000-10
2010-20F

33. Capex cuts continue – the first of three years
of underinvestment?
Macquarie forecasts for YoY changes in global
mining capex
Changes in copper mine output forecast, Oct 13 vs May 2012
30%
2018f
25%
20%
-1568
2017f
-577
15%
2016f
10%
280
5%
-346
2015f
0%
-5%
2014f
165
-10%
2013f
-15%
326
-20%
-2000
-25%
2010
2011
2012
2013f
2014f
2015f
2016f
2017f
2018f
-1500
-1000
-500
kt
Source: wood Mackenzie, Macquarie Research, November 2013
Page 33
0
500

34. We should be in a phase of taking supply
offline (ex-copper), but the process is slow
LME Aluminium prices and cash costs
50000
40000
1500
9 0 t h p ercent ile
LME copper prices and cash costs
Jan-11
Jan-10
Jan-09
Jan-08
Jan-07
Jan-06
Jan-05
Jan-04
Source: LME, Wood Mackenzie, Macquarie Research, November 2013
Page 34
Jan-13
Jan-11
Jan-10
Jan-09
LM E cash
Jan-08
Jan-07
Jan-05
Jan-04
Jan-03
9 0 t h p ercent ile
Jan-12
500
0
Jan-02
Jan-13
Jan-12
Jan-11
Jan-10
Jan-09
Jan-08
Jan-07
Jan-06
Jan-05
Jan-04
0
1500
1000
Jan-01
2000
2500
2000
Jan-00
4000
3500
3000
Jan-06
$/tonne zinc
6000
Jan-03
Jan-03
4500
4000
8000
Jan-02
LME zinc prices and cash costs
5000
LM E cash
10000
Jan-01
Jan-02
Jan-00
Jan-13
Jan-12
Jan-11
Jan-10
Jan-09
Jan-08
Jan-07
Jan-06
Jan-05
Jan-04
Jan-03
Jan-02
Jan-01
Jan-00
LM E cash
0
12000
Jan-00
10000
LM E cash
1000
9 0 t h p ercent ile
y
20000
Jan-01
9 0 t h p ercent ile
30000
Jan-13
2000
Jan-12
2500
$/tonne nickel
$/tonne aluminium
3000
$/tonne zinc
LME nickel prices and cash costs
60000
3500

35. In summary: Surpluses to 2015 then markets
to tighten: Zn, Pb, Cu and Sn to outperform?
Global market surplses/deficits for base metals (expressed as % of
demand
50%
7%
Accumulated market balance as a percent of
global consumption
6%
25%
40%
4%
3%
20%
2%
1%
10%
0%
0%
-1%
-2%
-10%
20%
% of average consumption
30%
-3%
15%
10%
5%
7%
Nickel
Tin
0%
-1%
-2%
-5%
-3%
-5%
2018F
2017F
2016F
2015F
2014F
2012
Copper
Lead
2013F
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
Aluminium
3%
2% 2%
2%
-4%
2000
-20%
22%
21%
21%
Average for all metals
Cumulative surplus(+)/deficit(-)
5%
-10%
Al
Average
Ni
Zn
Cu
Zinc
2008-2012
Source: Macquarie Research, November 2013
Page 35
2013-2017
Pb
Sn

36. Base metals detail
Page 36

37. Nickel and aluminium have similar issues
Aluminium
Nickel
 Surplus of 319kt from 2008 to 2012,
equal to 21% of 2012 world use. Large
surpluses continue in 2013; without large
supply cuts, further large surplus
predicted for 2014.
 China accounts for all of the demand
growth and 85% of supply growth since
2008
 Large surpluses due to massive growth
in Chinese nickel pig iron production –
major delays in Greenfield capacity
additions outside China have reduced
potential over-supply.
 Surplus of 8.5mt from 2008 to 2012,
equal to 21% of use. Smaller surpluses
in 2013 and 2014 but cuts needed.
 Demand and supply growth dominated
by China: 90% of demand growth and
more than 100% of supply growth
 No end in sight to the surpluses as
financial players/traders soak up excess
material from producers, pay high
physical premiums and “lock” the
material away
 Indonesian bauxite a big part of
aluminium raw material supply.
 Indonesia a big part of Chinese raw
material supply.
Page 37

38. Nickel stocks keep rising while (reported)
aluminium stocks are falling
Reported stocks for nickel and aluminium
650
8300
8100
600
7900
550
500
7500
450
7300
7100
400
6900
350
6700
6500
Jan-11
Feb-11
Mar-11
Apr-11
May-11
Jun-11
Jul-11
Aug-11
Sep-11
Oct-11
Nov-11
Dec-11
Jan-12
Feb-12
Mar-12
Apr-12
May-12
Jun-12
Jul-12
Aug-12
Sep-12
Oct-12
Nov-12
Dec-12
Jan-13
Feb-13
Mar-13
Apr-13
May-13
Jun-13
Jul-13
Aug-13
300
Nickel
Aluminium
Source: LME, INSG, IAI, Comex. SHFE, Macquarie Research, November 2013
Page 38
'000t Al
'000t Ni
7700

39. Most of the Chinese raw materials stocks are
Indonesian material… Chinese are preparing for
2014 restrictions
Estimated Chinese bauxite stocks
Estimated Chinese nickel ore stocks
35
35
25
mtt gross weight
30
25
mt gross weight
30
20
15
20
15
10
10
5
5
0
2009
0
2010
2011
2012
2009
2013
Ports and refineries
2010
2011
Ports
Source: CM, SMM, CRU, Macquarie Research, November 2013
Page 39
Producer
2012
2013

40. What could happen in Indonesia in
2014?
 2009 Mining Act requires a full ban on exports of unprocessed mineral
products (including bauxite and nickel ore) from January 12, 2014
 Recent feedback from Indonesia suggests that companies who are
planning to build nickel and alumina plants (to come on stream in 2015
and onwards) are already negotiating 2014 export quotas!
 Politically acceptable compromise may well be a rise in export tax from
20% to 50% with reductions for exporters with plants under
construction.
 Even a 30-40% reduction in exports from 2013 inflated levels may not
change Chinese production levels for nickel pig iron/alumina that much
in 2014 due to heavy destocking.
Page 40

41. Nickel supply/demand summary – surplus to
2015?
`000t
Total SS production
% Change
Ni-containing SS prod.
% Change
Nickel Consumption
% Change
2011
33666
5.7%
25080
9.3%
1597
7.3%
2012
35525
5.5%
26944
7.4%
1662
4.1%
2013f
38910
9.5%
29268
8.6%
1791
7.7%
2014f
41889
7.7%
31641
8.1%
1907
6.5%
2015f
45157
7.8%
34250
8.2%
2050
7.5%
2016f
47444
5.1%
35938
4.9%
2118
3.3%
2017f
49139
3.6%
37023
3.0%
2149
1.5%
2018f
50401
2.6%
38037
2.7%
2176
1.3%
Nickel Supply
% Change
(of which NPI)
1630
12.3%
(282)
1781
9.2%
(362)
1922
7.9%
(482)
1941
1.0%
(474)
2019
4.0%
(475)
2085
3.3%
(460)
2140
2.7%
(450)
2173
1.5%
(450)
119
131
34
-31
-33
227
7.0
795
17527
358
10.2
688
15166
World Market Balance
LME/Producer stocks
Weeks' world demand
LME Cash Price (cents/lb) nominal
LME Cash Price ($/tonne) - nominal
34
186
5.9
1036
22831
Source: INSG, Macquarie Research, November 2013
Page 41
392
10.5
703
15500
360
9.0
794
17500
327
7.9
907
20000
-8
319
7.6
998
22000
-3
316
7.4
1089
24000

42. Aluminium outlook – getting closer to balance but
massive stock overhang
 Worst fundamentals of any base metal over the past decade due to large growth in
Chinese supply
 Weak prices but high premiums have kept producers in business and supply on-stream
 Strong demand growth should help to rebalance markets eventually
 Warehousing “games” – ongoing demand for material not needed by consumers: will this
end soon?
 What can happen to turn things?
Role of Indonesia in bauxite exports to China
Chinese costs rising? (New low-cost Western capacity but closures in the East?)
Strong ex-Chinese demand growth
Production cuts due to falling premiums as new LME rules take effect?
Page 42

43. Problem for world market – China has largely been
self-sufficient….in fact a growing net exporter of
metal and semis
Chinese net Imports of aluminium, scrap alloy and
semis
Chinese Aluminium Production and
Consumption Since 1970 ('000t)
4000
22500
20000
3000
17500
2000
'000t Al
'000t Al
15000
12500
10000
7500
1000
0
-1000
5000
-2000
2500
0
1970 1975 1980 1985 1990 1995 2000 2005 2010
Production
Consumption
-3000
1970 1975 1980 1985 1990 1995 2000 2005 2010
Al and Alloy
Production
Source: WBMS, Chinese Customs, Macquarie Research, November 2013
Page 43
Semis
Scrap
Total Al units

44. Supply growth is all about China
Ex-China aluminium production and capacity
Chinese aluminium production and capacity
26
33
24
22
mt annualised production
mt annualised production
31
29
27
25
20
18
16
14
12
10
8
23
6
4
21
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Capacity
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Capacity
Production
Source: IAI, CRU, Macquarie Research, November 2013
Page 44
Production

45. Adding aluminium premiums to exchange prices
significantly shifts results of breakeven analysis
Aluminium prices and cash production costs
3,000
US$/tonne
2,500
2,000
C1 cash cost
LME price + premiums
1,500
YTD LME average price
1,000
500
0
0
10
20
30
40
50
Cumulative production, m tonnes
Source: LME, Wood Mackenzie, Macquarie Research, November 2013. Note: LME cash settlement price average 1 Jan – 19 November 2013
Page 45

46. Macquarie global aluminium S&D
'000 tonnes Al
World consumption
% change YoY
of which: China
of which: Ex-China
2011
45552
10.4%
19976
25575
World production
% change YoY
of which: China
of which: Ex-China
46174 48091 51099 54861 58032 61261 64206 66767
8.7% 4.2% 6.3% 7.4% 5.8% 5.6% 4.8% 4.0%
20000 22500 24500 26500 28500 30923 32837 34087
26174 25591 26599 28360 29532 30338 31369 32680
Global balance
All stocks (est)
Weeks' demand
LME price
2012
47906
5.2%
21942
25965
622
185
11703 11981
13.4 13.0
2395 2018
2013F
50800
6.0%
24136
26664
300
2014F
53943
6.2%
26308
27635
917
2015F
57331
6.3%
28676
28655
701
2016F
60694
5.9%
30970
29724
566
2017F
63967
5.4%
33138
30829
239
2018F
66953
4.7%
35126
31827
-186
12281 13198 13899 14465 14704 14519
12.6 12.7 12.6 12.4 12.0 11.3
1854 1863 1950 2200 2300 2500
Source: WoodMackenzie, CRU, IAI, Macquarie Research, November 2013
Page 46

47. Indonesia’s share of Chinese aluminium
production around 22% in 2013
Chinese raw material stocks rise sharply in 2013
Source of bauxite and alumina for Chinese aluminium
production needs (real consumption)
9%
10%
17%
25%
80%
70%
62%
57%
60%
55%
55%
50%
54%
53%
40%
9%
30%
10%
15%
26%
23%
11%
2011
2012
2013F
7%
15%
15%
2009
20%
7
15
6
13
5
11
4
9
3
7
2
5
1
3
22%
8%
2008
20%
10%
Al content of bauxite and alumina stocks
90%
3%
19%
17
0
0%
Indonesia
2010
Other imports
Chinese domestic
1
2009
2010
Bauxite
Imported alumina
Source: GTIS, CM, WoodMackenzie, Macquarie Research, November 2013
Page 47
2011
Alumina
2012
weeks' Al production
2013
stocks in wks of Al production
8
100%

48. Copper: Transitioning away from raw
material constraint
Chinese copper imports - YoY change
Do mestic
mined co pper
1
9%
Refined co pper
imports
29%
2500
Refined
Imported
co ncentrate
28%
Scrap
1
8%
,000t Cu contained
2000
Blister
Scrap
1500
Conc
1000
500
0
-500
Source: NBS, China Customs, Macquarie Research, November 2013
Page 48
2014f
2013f
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
-1000
2002
Imported
B lister
6%

49. Supply growth always has the propensity to
disappoint…but there’s a lot of it!
Change in copper output, 2015f vs. 2012
Batu Hijau
Ok Tedi
Sierra Gorda
Salobo
Caserones (SXEW)
MMH
Collahuasi
Sentinal
Buenavista (Cananea)
Toromocho
Oyu Tolgoi
PT Freeport Indonesia
Antapaccay
Escondida
Greenfield
Brownfield
0
50
100
150
200
250 300
,000t
Source: Wood Mackenzie, Company data, Macquarie Research, November 2013
Page 49
350
400
450
500

50. Copper mine output growth accelerates
World copper mine production by quarter
Unmistakeable rise in Chilean copper mine output
19.0
6.2
18.5
18.5
6.0
6.0
18.3
18.0
5.8
18.0
5.8
17.5
5.6
5.6
5.6
5.4
5.4
5.2
5.3
5.1
m tonnes annualised
mt Cu annualised
5.8
17.4
17.5
17.0
16.8
16.5
16.5
16.0
15.5
15.5
5.0
15.0
4.8
14.5
4.6
14.0
Q112
Q212
Q312
Q412
Q113
Q112
Q213 Q313E Q413F
Source: Wood Mackenzie, ICSG, Macquarie Research, November 2013
Page 50
Q212
Q312
Q412
Q113
Q213 Q313E Q413F

51. We expect high-single-digit mine output growth –
and above trend demand
Consistent
growth expected
Copper mine supply growth
Copper demand growth
2500
1200
China
1500
800
1000
,000 tonnes
600
,000 tonnes
World ex-China
2000
1000
400
200
500
0
-500
0
-1000
-200
Less need to
substitute/thrift
-1500
-400
-2000
Page 51
2018f
2017f
2016f
2015f
2014f
2013f
2012
2011
2010
2009
2008
2007
2006
2005
2004
2002
Source: Wood Mackenzie, ICSG, Macquarie Research, November 2013
2003
-2500
2018f
2017f
2016f
2015f
2014f
2012
2013f
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
-600

52. Turning copper on its head – the cathode market
has been tighter!
Premiums are high, helped by Johor queue
YoY change in China's Cu scrap imports, 3MMA
40%
30%
20%
10%
0%
-10%
-20%
Source: CRU, China Customs, LME, Macquarie Research, November 2013
Page 52
Jul-13
Apr-13
Jan-13
Oct-12
Jul-12
Apr-12
Jan-12
Oct-11
Jul-11
Apr-11
Jan-11
Oct-10
Jul-10
Apr-10
Jan-10
-30%

53. Financing contributed to tightening market – we’d
expect imports to fall
250
200
150
100
50
0
-50
-100
-150
-200
-250
-300
500
450
imports
encouraged
400
'000t
350
300
250
200
150
100
Source: China Customs, LME, Macquarie Research, November 2013
Page 53
Jul-13
Apr-13
Jan-13
Oct-12
Jul-12
Apr-12
Jan-12
Oct-11
Jul-11
Apr-11
0
Jan-11
Sep 13
Aug 13
Jul 13
Jun 13
May 13
Apr 13
Mar 13
Feb 13
50
Jan 13
$/tonne
Chinese cathode imports
Physical cash arbitrage - Chinese copper imports (inc.
premium)
SHIBOR spike –

54. Stocks are set to build – the question is where?
Forecast
1800
1600
1400
1200
1000
800
600
400
200
0
LME
Comex
SHFE
Bonded
Source: LME, CRU, SHFE, Macquarie Research, November 2013
Page 54
Apr-14
Jan-14
Oct-13
Jul-13
Apr-13
Jan-13
Oct-12
Jul-12
Apr-12
Jan-12
Oct-11
Jul-11
Apr-11
Jan-11
Oct-10
Jul-10
Apr-10
Jan-10
Oct-09
Jul-09
Apr-09
We expect the build in LME
inventories from ex-China
smelters delivery, however
this could come in bonded
or even off-market
Jan-09
kt
Exchange and bonded stocks

55. Smelters – some reasons to feel cheerful for once!
(c/lb)
40
Share of copper price received by smelters - spot
basis
Copper TC/RC - Spot to China
900
800
30
700
25
600
$/tonne
35
20
15
500
400
300
Source: Wood Mackenzie, LME, Macquarie Research, November 2013
Page 55
Jul-13
Jul
13
Jan-13
Jan
13
Jul-12
Jul
12
Jan-12
Jan
12
Jul-11
Jul
11
Jan-11
Jan
11
Jul-10
Jul
10
Jan-10
Jan
10
Jul-09
0
Jan-09
0
Jul-08
100
Jan-08
5
Jul-07
200
Jan-07
10

56. What returns copper to deficit – the peak of SX-EW
helps
Incentive price for 10% IRR - SxEw projects
YoY changes in SxEw output
400
14000
300
12000
200
10000
kt
$/tonne
100
0
-100
8000
6000
4000
-200
2000
Rest of World
-300
Source: Wood Mackenzie, Macquarie Research, November 2013
Page 56
La Granja
Kalakundi
Andina
El Pilar
White Range
KOV
Kolwezi
Kipoi
Boleo
2018f
2017f
2016f
2015f
2014f
2013f
2012
2011
2010
2009
2008
2007
0
Antucoya
DRC
Tia Maria
Chile

57. Copper projects are both increasingly dilutive to
the existing asset base and highly capitalintensive
Weighted average copper project by year of delivery
1.8
2000-2011
2002
1.6
Average head grade
2012-2018f
2007
1.4
2005
1.2
2001
1
0.8
2000
2006 2008
0.6
2012
2011
2013f
2009
2016f
2010
0.4
2017f
2004
2018f
2014f
0.2
2015f
0
0
5000
10000
15000
20000
25000
Life of mine capital intensity
Source: Wood Mackenzie, CRU, Macquarie Research, November 2013
Page 57
30000
35000
40000

58. Macquarie’s copper supply-demand balance
Global Refined Copper Balance
'000 tonnes
World Production
% Change Y-o-Y
2009
18,298
0.1%
2010
18,930
3.5%
2011
19,624
3.7%
2012
20,105
2.5%
2013f
20,868
3.8%
2014f
21,985
5.4%
2015f
22,972
4.5%
2016f
23,753
3.4%
2017f
24,521
3.2%
2018f
24,457
-0.3%
World Consumption
% Change Y-o-Y
17,426
-3.1%
19,188
10.1%
19,957
4.0%
19,886
-0.4%
20,698
4.1%
21,633
4.5%
22,625
4.6%
23,589
4.3%
24,500
3.9%
25,210
2.9%
873
-258
-333
220
170
352
346
163
21
-753
World Reported Stocks
Stocks (Weeks)
1,358
4.1
1,183
3.2
1,174
3.1
1,078
2.8
1,248
3.1
1,600
3.8
1,946
4.5
2,109
4.6
2,131
4.5
1,377
2.8
LME Cash Price ($/t)
LME Cash Price (c/lb)
5,164
234
7,539
342
8,811
400
7,950
360
7,351
333
6,550
297
6,525
296
7,525
341
7,875
357
7,875
357
Balance
Concentrates Market ('000t Cu)
'000t Cu
Mine Production:
Concentrates
SX-EW
Total
% Change Y-o-Y
Concs Balance
2009
2010
2011
2012
2013f
2014f
2015f
2016f
2017f
2018f
12527
3281
15809
1.8%
12658
3340
15998
1.2%
12593
3414
16006
0.1%
13036
3660
16696
4.3%
14218
3756
17974
7.7%
14715
4034
18748
4.3%
15368
4210
19577
4.4%
16177
4135
20312
3.8%
16545
4365
20910
2.9%
16319
4270
20589
-1.5%
-277
-32
-341
12
284
0
0
0
0
0
Source: Wood Mackenzie, ICSG, Macquarie Research, November 2013
Page 58

59. Zinc – The mine supply problem – too much in
2013…
7
6
m tonnes, annualised
13
12
11
Mine
output
Refined
output
10
5
4
Monthly
12MMA
3
2
1
Page 59
J 2013
J 2012
J 2011
J 2010
J 2009
J 2008
J 2007
J 2013
M 2013
S 2012
M 2012
J 2012
S 2011
J 2011
M 2011
S 2010
J 2010
M 2010
S 2009
M 2009
J 2009
Source: ILZSG, Macquarie Research, November 2013
J 2006
0
9
J 2004
m tonnes, 3MMA annualised
14
J 2005
15
Chinese zinc mine output
Global zinc mine, refined metal
output

60. …and too little in the latter part of the decade
Ex-China zinc mine output
Zinc mine major projects and depletions
7%
6%
Questions regarding
sustainability of
Chinese output
5%
Shalkiya Restart
500
3%
,000 tonnes
YoY % ch, 3MMA
4%
Ozernoe
1000
2%
1%
0%
-1%
Dugald River
McArthur River
0
Century
-500
Brunswick
Perseverence
-1000
-2%
Lisheen
-3%
-1500
J 2013
A 2013
J 2013
O 2012
J 2012
A 2012
J 2012
O 2011
J 2011
A 2011
J 2011
-4%
2013f 2014f 2015f 2016f 2017f
Source: Wood Mackenzie, ILZSG, Macquarie Research, November 2013
Page 60
Skorpion

61. Just like others, the Chinese market has been
tightening…
China's zinc mine and metal output
Reported commercial zinc stocks
China's zinc concentrate imports
2,500
450
6
Producers
400
Merchants
2,000
'000 tonnes
4
3
Mine
output
2
'000 tonnes, month end
350
300
250
200
150
Refined
output
100
1
Consumers
SHFE
LME
1,500
1,000
500
50
Source: worldsteel, INSG, ICSG, IAI, ILZSG, Macquarie Research, November 2013
Page 61
2013
2012
2011
2010
2009
2008
2007
2006
2005
0
2004
Jul-13
Jan-13
Jul-12
Jan-12
Jul-11
Jan-11
Jul-10
M 2013
J 2013
S 2012
J 2012
M 2012
S 2011
J 2011
M 2011
S 2010
J 2010
M 2010
S 2009
J 2009
Jan-10
0
0
M 2009
m tonnes, 3MMA annualised
5

62. …however higher treatment charges are
encouraging smelters back
China's refined zinc output
Zinc TCs - spot vs contract
25%
250
20%
15%
YoY % change
US$/dmt
200
150
100
10%
5%
0%
-5%
Contract
50
-10%
Spot
-15%
Page 62
J 2013
A 2013
J 2013
O 2012
J 2012
A 2012
J 2012
O 2011
J 2011
J 2011
Source: CRU, ILZSG, Macquarie Research, November 2013
A 2011
-20%
J 2013
A 2013
J 2013
O 2012
J 2012
A 2012
J 2012
O 2011
J 2011
A 2011
J 2011
0

63. The lack of LME stocks in Asia perhaps the
biggest 2014 price risk
Global refined zinc consumption
World galv. steel sheet output
15%
LME zinc stocks by region
10%
100%
9%
9%
9%
10%
5%
0%
-5%
80%
7%
6%
6%
5%
5%
4%
4%
4%
4%
3%
2%
% total, month end
7%
YoY % change
YoY % change
8%
60%
M.East
Europe
USA
40%
Asia
2%
-10%
20%
1%
1%
-15%
Source: LME, CRU, ILZSG, Macquarie Research, November 2013
Page 63
J 2013
J 2013
J 2012
J 2012
J 2011
J 2011
J 2010
J 2010
J 2009
0%
J 2009
2013 Q2
2013 Q1
2012 Q4
2012 Q3
2012 Q2
2012 Q1
2011 Q4
2011 Q3
2011 Q2
2011 Q1
J 2013
A 2013
J 2013
O 2012
J 2012
A 2012
J 2012
O 2011
J 2011
A 2011
J 2011
0%

64. Macquarie’s zinc supply-demand balance
'000t zinc
Mine production
YoY change
2012
13,250
4.0%
2013F
14,250
7.5%
2014F
14,850
4.2%
2015F
15,250
2.7%
2016F
15,000
-1.6%
2017F
15,750
5.0%
2018F
16,400
4.0%
Refined production
YoY change
12,600
-3.2%
13,100
4.0%
13,650
4.2%
14,150
3.7%
14,550
2.8%
15,200
4.5%
15,800
3.9%
Consumption
YoY change
12,446
-0.8%
12,945
4.0%
13,542
4.6%
14,147
4.5%
14,756
4.3%
15,338
3.9%
15,900
3.7%
154
155
108
3
-206
-138
-150
1,946
88
1,933
88
1,988
90
2,150
98
2,375
108
2,350
107
2,200
100
Balance
LME cash price
LME Cash Price ($/t)
LME Cash Price (c/lb)
Source: Wood Mackenzie, ILZSG, Macquarie Research, November 2013
Page 64

65. Ex-China lead mine supply struggling…
YoY change in China's Pb concentrate imports, 3MMA
Ex-China lead mine output
60%
8%
50%
40%
6%
YoY % ch, 3MMA
30%
4%
20%
10%
2%
0%
-10%
0%
-20%
-2%
-30%
Source: China Customs, ILZSG, Macquarie Research, November 2013
Page 65
Jul-13
Apr-13
Jan-13
Oct-12
Jul-12
Apr-12
Jan-12
Oct-11
Jul-11
Apr-11
Jan-11
Oct-10
Jul-10
J 2013
M 2013
M 2013
J 2013
N 2012
S 2012
J 2012
M 2012
M 2012
J 2012
-4%
Apr-10
Jan-10
-40%

66. …making future Chinese mine supply
increasingly important – more so than for zinc
Lead market balance under different scenarios
Chinese mine output as a proportion of global
400
70%
60%
200
50%
0
,000 tonnes
40%
30%
20%
-200
-400
Lead
10%
Zinc
-600
Chinese Supply falls 5%pa
Base
Jul-13
Jan-13
Jul-12
Jan-12
Jul-11
Jan-11
Jul-10
Jan-10
Jul-09
Jan-09
Jul-08
Jan-08
0%
-800
2013F
Source: ILZSG, CRU, Macquarie Research, November 2013
Page 66
Chinese Supply grow s 5%pa
2014F
2015F
2016F
2017F
2018F

67. Macquarie’s lead supply-demand balance
'000t lead
Mine production
% Change YoY
2012
4,900
8.9%
2013F
5,100
4.1%
2014F
5,200
2.0%
2015F
5,300
1.9%
2016F
5,300
0.0%
2017F
5,400
1.9%
2018F
5,550
3%
Total production
% Change
10,450
2.0%
10,850
3.8%
11,100
2.3%
11,300
1.8%
11,400
0.9%
11,700
2.6%
12,150
4%
Consumption
% Change YoY
10,400
3.5%
10,750
3.4%
11,100
3.3%
11,400
2.7%
11,600
1.8%
11,750
1.3%
12,100
3%
Refined balance
50
100
0
-100
-200
-50
50
LME cash price
$/tonne
c/lb
2061
93.0
2126
96.0
2175
99.0
2400
109.0
2250
100.0
2200
100.0
2200
100.0
Source: CRU, ILZSG, Macquarie Research, November 2013
Page 67

68. Important disclosures:
Recommendation definitions
Volatility index definition*
Macquarie - Australia/New Zealand
This is calculated from the volatility of historic
price movements.
Outperform – return > 3% in excess of benchmark return
Neutral – return within 3% of benchmark return
Underperform – return > 3% below benchmark return
Benchmark return is determined by long term nominal GDP growth
plus 12 month forward market dividend yield
Very high–highest risk – Stock should be
expected to move up or down 60-100% in a year
– investors should be aware this stock is highly
speculative.
High – stock should be expected to move up or
down at least 40-60% in a year – investors should
be aware this stock could be speculative.
Macquarie – Asia/Europe
Outperform – expected return >+10%
Neutral – expected return from -10% to +10%
Underperform – expected <-10%
Medium – stock should be expected to move up
or down at least 30-40% in a year.
Macquarie First South - South Africa
Low–medium – stock should be expected to
move up or down at least 25-30% in a year.
Outperform – return > 10% in excess of benchmark return
Neutral – return within 10% of benchmark return
Underperform – return > 10% below benchmark return
Low – stock should be expected to move up or
down at least 15-25% in a year.
Macquarie - Canada
Outperform – return > 5% in excess of benchmark return
Neutral – return within 5% of benchmark return
Underperform – return > 5% below benchmark return
* Applicable to Australian/NZ stocks only
Financial definitions
All "Adjusted" data items have had the following
adjustments made:
Added back: goodwill amortisation, provision for
catastrophe reserves, IFRS derivatives & hedging, IFRS
impairments & IFRS interest expense
Excluded: non recurring items, asset revals, property
revals, appraisal value uplift, preference dividends &
minority interests
EPS = adjusted net profit /efpowa*
ROA = adjusted ebit / average total assets
ROA Banks/Insurance = adjusted net profit /average
total assets
ROE = adjusted net profit / average shareholders funds
Gross cashflow = adjusted net profit + depreciation
*equivalent fully paid ordinary weighted average number
of shares
All Reported numbers for Australian/NZ listed stocks
are modelled under IFRS (International Financial
Reporting Standards).
Recommendation – 12 months
Macquarie - USA
Note: Quant recommendations may differ from
Fundamental Analyst recommendations
Outperform – return > 5% in excess of benchmark return
Neutral – return within 5% of benchmark return
Underperform – return > 5% below benchmark return
Recommendation proportions – For quarter ending 30 September 2013
Outperform
Neutral
Underperform
AU/NZ
50.56%
38.95%
10.49%
Asia
56.87%
25.18%
17.94%
RSA
48.78%
42.68%
8.54%
USA
41.00%
54.40%
4.60%
CA
61.75%
34.43%
3.83%
EUR
47.10%
30.89%
22.01%
(for US coverage by MCUSA, 5.85% of stocks covered are investment banking clients)
(for US coverage by MCUSA, 3.90% of stocks covered are investment banking clients)
(for US coverage by MCUSA, 0.00% of stocks covered are investment banking clients)
Page 68

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70. Country-Specific Disclaimers:
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Page 70