1. Major Challenges in Minor Metals
Dr. Heinz Schimmelbusch
Chief Executive Officer
AMG Advanced Metallurgical
21 March 2011 Group N.V.

2. Cautionary Note
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2

3. Introduction
3

4. AMG Advanced Metallurgical Group N.V.
Listed: NYSE-Euronext Amsterdam: AMG
Founded: 2006
Revenues: $990.5M
Employees: 2,600
Production facilities: Netherlands, Germany, UK, USA, Brazil, France,
Turkey, Canada, Czech Republic, China, Mexico,
Belgium, India, Poland, Sri Lanka
Enterprise Value: €560 million
52 week range: €6.25–€14.55
Recent share price: €14.49 (18 March 2011)
4

5. Critical Raw Materials: AMG’s Involvement
1 2
H He
Hydrogen Helium
1.0 4.0
4 5 6 7 8 9 10
3
Li Be B C N O F Ne
Beryllium Boron Carbon Nitrogen Oxygen Fluorine Neon
Lithium
9.0 10.8 12.0 14.0 16.0 19.0 20.2
6.9
11 12 13 14 15 16 17 18
Na Mg Al Si P S Cl Ar
Sodium Magnesium Aluminum Silicon Phosphorus Sulfur Chlorine Argon
23.0 24.3 27.0 28.1 31.0 32.1 35.5 40.0
19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36
K Ca Sc Ti V Cr Mn Fe Co Ni Cu Zn Ga Ge As Se Br Kr
Potassium Calcium Scandium Titanium Vanadium Chromium Manganese Iron Cobalt Nickel Copper Zinc Gallium Germanium Arsenic Selenium Bromine Krypton
39.1 40.1 45.0 47.9 50.9 52.0 54.9 55.9 58.9 58.7 63.5 65.4 69.7 72.6 74.9 79.0 79.9 83.8
37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54
Rb Sr Y Zr Nb Mo Tc Ru Rh Pd Ag Cd In Sn Sb Te I Xe
Rubidium Strontium Yitrium Zirconium Niobium Molybdenum Technetium Ruthenium Rhodium Palladium Silver Cadmium Indium Tin Antimony Tellurium Iodine Xenon
85.5 87.6 88.9 91.2 92.9 95.9 99 101.0 102.9 106.4 107.9 112.4 114.8 118.7 121.8 127.6 126.9 131.3
55 56 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86
Cs Ba 57-71 Hf Ta W Re Os Ir Pt Au Hg Tl Pb Bi Po At Rn
Caesium Barium Hafnium Tantalum Tungsten Rhenium Osmium Iridium Platinum Gold Mercury Thallium Lead Bismuth Polonium Astatine Radon
132.9 137.4 178.5 181.0 183.9 186.2 190.2 192.2 195.1 197.0 200.6 204.4 207.2 209.0 210.0 210.0 222.0
87 88 104 105 106 107 108 109 110 111 112 113 114 115 116
Fr Ra 89-103 Rf Db Sg Bh Hs Mt Ds Rg Uum Uut Uuq Uup Uuh
Francium Radium Rutherfordlium Dubnium Seaborgium Bohrium Hassium Meitnerium Darmstadtium Roentgenium Ununbium Ununtrium Ununquadium Ununpentium Ununhexium
223.0 226.0 261 262 263 264 265 266 269 272 277 284 289 288 292
57 58 59 60 61 62 62 64 65 66 67 68 69 70 71
La Ce Pr Nd Pm Sm Eu Gd Tb Dy Ho Er Tm Yb Lu
Lanthanum Cerium Praseodymium Neodymium Promethium Samarium Europium Gadolinium Terbium Dysprosium Holmium Erbium Thallium Ytterbium Lutetium
138.9 140.1 140.9 144.2 147.0 150.4 152.0 157.3 158.9 162.5 164.9 167.3 168.9 173.0 175.0
89 90 91 92 93 94 95 96 97 98 99 100 101 102 103
Ac Th Pa U Np Pu Am Cm Bk Cf Es Fm Md No Lr
Actinium Thorium Protactinium Uranium Neptunium Plutonium Americium Curium Berkelium Californium Einsteinium Fermium Mendelevium Nobelium Lawrencium
132.9 232.0 231.0 238.0 237.0 242.0 243.0 247.0 247.0 251.0 254.0 253.0 256.0 254.0 257.0
5

6. Ti Alloys for Aerospace
6

7. Technology Leaps Trigger Rapid Demand Growth
 Consumer Electronics
 Tantalum for capacitors
 Aerospace
 Titanium quantities for the Airbus A350 and Boeing 787 is
over 2.5 times the amount used on aircraft they are replacing
 Solar
 Silicon metal demand for solar applications was 180,000 tons
 10% of global production
 20% growth per annum estimated
 Electric car “E-Car”
 Mineral Lithium
 Cathodes - 10-20% estimated growth per annum
 Natural Graphite
 Anodes
 Nuclear waste solutions
7

8. E-Cars – Natural Graphite
→ →
Anode e- e- Cathode
(Graphite) Separator (Lithium)
− +
Li+ Li+ Li+
Li+ Li+ Li+ Nissan Leaf (25 kWh) BMW Mini EV (35 kWh)
Li+
Li+ Li+
Li+ Li+ Li+ One car* battery = 24 kg of graphite
* Based on 30 kWh
Electrolyte Electrolyte
2010 2015
Total Auto Sales (units) 70,169,000 91,872,000
% E-Car 1.1% 3.8%
E-Car Sales (units) 774,000 3,484,000
Natural Graphite Needed (mt) 37,152 167,232 4.5x in 5 Years!
8 Sources: Credit Suisse, GK, company estimates

9. Critical Metals and Technology Development
Demand Growth
Ti
Mg Cr
Sb Nb
V Ta
Si
C
Technology Development
9

10. Critical Metals and Technology Development
Ti
Mg
Cr
Demand Growth
Ta
Sb Si
Nb
V
C
Technology Development
10

11. Reserve Depletion and Big New Finds
 Tantalum
 Greenbushes Tin – Talison – Global Advanced Metals,
Australia (founded 1889)
 Niobium
 CBMM, Brazil (founded 1955)
 Molybdenum
 Jin Dui Cheng, Shanxi Province, China (founded 1970s)
 Rare Earths (“REE”)
 Bayan Obo, Inner Mongolia, China (founded 1980s)
All are still the world’s largest mines – the same as 30 years ago
11 (1) World Titanium Market 2009 PSC VSMPO-Avisma Corporation

12. Recycling – Only a Partial Solution, but Growing
 Hurdles
 Lack of collection systems, unattractive economics
 Lack of technologies, expensive development
 Dissipation – metals “vanishing” into the end products
 Conclusion
 What can be (easily) recycled, is recycled
 Rarely big technology developments
12 (1) AMG estimates

13. Critical Raw Materials: Primary Supply, Recycling, Demand
Severe Rapid
Supply Demand
Risk Growth
Tantalum
Niobium Magnesium
Chromium Metal Graphite Silicon Metal
Lithium Titanium
Vanadium
Cerium
Limited
Recycling
Potential
The world without government action
13 Source: Institute for Applied Technology, UNEP, July 2009; AMG

14. Critical Raw Materials: Primary Supply, Recycling, Demand
Severe Rapid
Supply Demand
Risk Growth
Silicon Metal
Titanium Tantalum
Graphite Niobium
Magnesium Vanadium
Cerium
Chromium Metal
Lithium
Limited
Recycling
Potential
The world with government action
14 Source: Institute for Applied Technology, UNEP, July 2009; AMG

15. Volatility
Titanium Sponge Fe Vanadium
$40,000
$70
$35,000
$60
$30,000
$50
$25,000
$40
$20,000
$30
$15,000
$10,000
$20
$5,000 $10
$0 $0
00 01 02 03 04 05 06 07 08 09 10
00 01 02 03 04 05 06 07 08 09 10
Antimony Silicon Metal
$14,000 $4,500
$12,000 $4,000
$3,500
$10,000
$3,000
$8,000
$2,500
$6,000 $2,000
$1,500
$4,000
$1,000
$2,000
$500
$0 $0
00 01 02 03 04 05 06 07 08 09 10 00 01 02 03 04 05 06 07 08 09 10
15 Sources: AMG, Bloomberg

16. Volatility - Cerium
$70,000
$60,000
$50,000
$40,000
$30,000
$20,000
$10,000
$0
00 01 02 03 04 05 06 07 08 09
16 Sources: AMG, Bloomberg

17. Critical Raw Materials:
Definition
17

18. Critical Raw Materials EU Definition
 “The EU is highly dependent on imports of „high tech‟ metals
such as cobalt, platinum, rare earths, and titanium. Such materials
play an essential role in the development of innovative
„environmental technologies‟ for boosting energy efficiency and
reducing greenhouse gas emissions.
 Some raw materials can be considered to be particularly critical,
because of three reasons:
 their significant economic importance for key sectors
 high supply risks
 lack of substitutes”
- ad hoc group of the Raw Materials Supply Group in a report to the European Commission, June 2010
18

19. Critical Raw Materials EU Listing 14
 The EU identified 14 critical raw materials to the European economy
 Antimony  Indium
 Beryllium  Magnesium
 Cobalt  Niobium
 Fluorspar  PGM
 Gallium  Tungsten
 Germanium  Tantalum
 Graphite  Rare Earth
19 (1) EU Report on Critical Raw Materials, June 2010

20. Critical Raw Materials
“Critical” raw
materials
20 (1) European Commission Annex V to the Report of the Ad-hoc Working Group on defining critical raw materials

21. Critical Raw Materials
 In addition to the “EU 14” materials, AMG believes that following
are critical based upon the EU criteria:
 Vanadium (1)
 Silicon metal
 Titanium sponge (1)
 Chromium metal
 Mineral Lithium (1)
 Antimony
 This critical list would include 12 materials that involve AMG
That would bring the 14 “EU Critical Materials” to 20
21 (1) Included as “critical” by the U.S. National Academies (U.S. Congress‟ Scientific arm)

22. Critical Raw Materials:
Geography
22

23. Critical Raw Materials – Government Controls
Titanium Vanadium
Chromium Magnesium
Chromium
Titanium Antimony Graphite
Magnesium Antimony REE Magnesium
Silicon Titanium Titanium
Magnesium
Vanadium
Graphite
Graphite
Tantalum
Tantalum
Niobium
Magnesium Tantalum
Tantalum
Vanadium
Government Controls
23 Source: AMG

24. Sovereign Strategies:
an Interpretation

25. Critical Raw Materials - Sovereign Strategies
Sovereigns
Reduced domestic
production Foreign processors welcome
to produce in country
Export Restrictions
Reduced depletion,
environmental impact
Acquisition of Global industry leadership
foreign assets and headquartered in country
technology
Price increases
25

26. China’s Position in Critical Minor Metals
Metal Activity Trade Restrictions Market Share
Antimony Mining Export Quotas 90%+
Tantalum Processor ----- 10%
Silicon Metal Mining Tariffs 50%+
Vanadium Slag ----- 33%
Graphite Mining, Smelting Tariffs 70%
Titanium Sponge Production Tariffs 33%
Niobium Processing ----- N/A
Strontium Production Export Quotas 90%+
Cerium Mining Export Quotas 90%+
Chromium Metal Smelting ----- 50%+
Magnesium Production ----- 80%+
26 Sources: AMG,

27. Cerium Revisited
Volatility will be even higher in the future
27 Sources: AMG

28. Germany’s dependency on China – selected metals:
Metal China’s Production Germany’s Import
Rank Percentage
Titanium 1 100
Vanadium 2 100
Silicon Metal 2 85
Chromium Metal 1 100
Strontium 1 100
28 Source: AMG

29. Magnesium
 Market Statistics
Conclusion
29

30. AMG’s Strategy
■ Serve growing end markets with high value-added specialty metal
products and engineering solutions, related to CO2 reduction and
conservation of natural resources
■ Execute through a combination of:
■ Vertical integration
■ Industry consolidation
■ Continuous investment in productivity and technology
30

31. Conclusion
 Minor Metals are essential to the global economy
 Governments now have significant and increasing roles
 Very attractive rewards, but very high barriers of entry
 Due to technology, this will remain a long-term business
31