When asked, "What are the technological content and barriers of the company's rolled copper foil? Who are the domestic and international competitors? Which companies are downstream clients?" North Copper responded on the investor interaction platform on June 25: The technological content and barriers of the company's rolled copper foil are reflected in: 1. The long process flow of rolled copper foil, involving disciplines such as smelting, rolling, metal heat treatment, and electrochemistry, requires continuous trial production to accumulate a process database. This represents a long-term experiential barrier that cannot be quickly reverse-engineered. 2. Capital and hardware thresholds, with extremely high equipment investment, high barriers for equipment installation, commissioning, and operation, and severe limitations on product width and ultra-thin gauge. 3. Barriers in rolling and forming processes, which are also the highest thresholds—covering product thickness, sheet flatness, internal structure, and mechanical properties, as well as the synergistic barriers of dozens of interconnected processing steps. The consistency control across the entire process is far more demanding than the single-step electrodeposition process for copper cathode foil. Regarding the statement, "The CCL construction portion of the company's 50,000 mt high-performance rolled copper foil and 2 million m² copper clad laminate (CCL) project has not yet commenced due to insufficient relevant technology and talent reserves, out of prudence. Next, the company will decide on the CCL investment and construction plan based on thorough market surveys and scientific validation," North Copper responded on the investor interaction platform on June 25: The CCL construction portion of the company's 50,000 mt high-performance rolled copper foil and 2 million m² CCL project has not yet commenced due to insufficient relevant technology and talent reserves, out of prudence. Next, the company will decide on the CCL investment and construction plan based on thorough market surveys and scientific validation. North Copper responded on the investor interaction platform on June 25: The company seizes market opportunities, closely monitors downstream market demand, focuses on R&D for mid-to-high-end copper strip products and structural adjustments for rolled copper foil products, and is committed to filling gaps in its process lines and reaching its capacity standard, striving to turn losses into profits as soon as possible. Regarding the question, "When will the company's semi-annual report performance forecast announcement be released?", North Copper responded on the investor interaction platform on June 25: The company has scheduled the disclosure of its 2026 semi-annual report for August 27. If the conditions for a performance forecast are met, the company will release the announcement within the stipulated time. When asked, "After the implementation of the 'Regulations on the Implementation of the Mineral Resources Law of the People's Republic of China', has the related work on applying for the mining permit for the newly added copper ore at the Tongkuangyu Mine been accelerated? Could you discuss the company's near-term plans? If progress goes smoothly, based on the ore's copper grade and after deducting relevant costs, how much profit is this expected to bring to the company?" North Copper responded on the investor interaction platform on June 24: The detailed survey of deep-seated replacement resources at the Tongkuangyu Mine is a project to add reserves outside the current mining right's boundary at depth (elevation range: 80m to -325m), which is conducive to increasing the company's copper resource reserves and extending the mine's service life. Given that the replacement resources identified by the detailed survey have reached a large scale, according to reserve review and filing requirements, the exploration level must be achieved for resource reserve filing and for initiating the transition from exploration to mining. As the mine's production level shifts downward, the company will conduct further exploration work for deep-seated replacement resources at the next production level. The company currently has no relevant deep exploration plans. Regarding the question, "As a third-generation core substrate material for IC lead frames, could you briefly introduce the production and latest order status of your company's 5,000 mt chromium zirconium copper alloy product?", North Copper responded on the investor interaction platform on June 23: Our company has completed the casting ingot product for C18150 (chromium zirconium copper alloy); the subsequent copper strip process is currently under trial production. There are no orders at present. On June 17, North Copper stated on the interaction platform in response to an investor's question that the company has not yet established a cooperative relationship with NVIDIA. On June 17, North Copper stated on the interaction platform in response to an investor's question that the company has a comprehensive market cap management system, consistently centering market cap management on enhancing intrinsic value. Through methods such as focusing on core business growth, optimizing governance structures, strengthening information disclosure, and implementing shareholder return plans, it is committed to achieving long-term alignment between the company's value and its market performance. Should there be arrangements such as share buybacks or capital increase plans, the company will promptly issue relevant announcements. On June 15, North Copper stated on the interaction platform in response to an investor's question that, relying on scientific research breakthroughs at the Shanxi Provincial Key Laboratory of New Copper-based Materials, the company's copper strip and foil product structure is undergoing further adjustment and optimization. All production and operation activities are proceeding in an orderly manner, and product orders are growing steadily. On June 4, North Copper stated on the interaction platform in response to an investor's question that the company's management places high importance on extending the industry chain and has made positive progress in deep copper processing. During the 15th Five-Year Plan period, the company will rely on its existing copper strip and foil production lines to achieve new breakthroughs in scientific research, product structure adjustment, and capacity enhancement, thereby empowering the company's high-quality development. Performance: North Copper's previously released 2026 Q1 report showed that in Q1, the company achieved operating revenue of 10.044 billion yuan, up 46.89% YoY; net profit attributable to shareholders of the parent company was 615 million yuan, with a YoY increase reaching 65.74%. Regarding the reasons for the increase in operating revenue, North Copper stated in its Q1 report that it was mainly due to an increase in product sales volume and rising prices. Additionally, North Copper's 2025 annual performance report showed that the company achieved operating revenue of 27.916 billion yuan in 2025, up 15.80% YoY; net profit attributable to the parent company was 791 million yuan, up 29.01% YoY. 2025 main product production: copper cathode produced was 300,300 mt, sulphuric acid 766,000 mt, gold ingots 6.4 mt, and silver ingots 68.5 mt. In its 2025 annual report, North Copper described: The company's main business is the mining, beneficiation, smelting, and rolling processing of copper metal. Currently, its captive mine has an annual ore processing capacity of 9 million mt and self-produced copper content of 43,000 mt. Its copper smelting capacity is 320,000 mt, along with gold ingots 10.8 mt, silver ingots 170 mt, and sulphuric acid 1.22 million mt, while it also comprehensively recovers valuable metals like platinum, palladium, selenium, and bismuth. Deep copper processing products include high-performance copper and copper alloy strips, rolled copper foil, etc., of which copper alloy strip capacity is 25,000 mt/year and rolled copper foil capacity is 5,000 mt/year. The company already possesses an integrated industry chain from mining, beneficiation, and smelting to rolling processing. The company's 'Zhongtiaoshan' brand Grade A copper is registered on the Shanghai Futures Exchange and the Shanghai International Energy Exchange, and its 'Zhongtiaoshan' brand gold and silver ingots are registered on the Shanghai Futures Exchange. The mineral exploration situation disclosed in North Copper's 2025 annual report showed that the company completed the detailed survey project of deep-seated replacement resources at the Tongkuangyu Copper Mine (below 80m elevation), with primary completed workloads: prospecting roadway 140.6m, 12 drill chambers/2,823.6m³, 12 drill holes (including 3 hydrogeological holes), drilling footage 7,268.62m, 1:2000 special hydrogeological, engineering geological, and environmental geological survey 6㎢, geophysical logging 2,065.61m, and pumping tests for 3 holes; 8,091 samples analyzed and tested, 46 rock/mineral test groups, 99 small-weight samples, 20 copper phase analysis samples, 10 complete chemical analysis samples, and 12 complete water quality analysis samples. On February 20, 2025, the Shanxi Mining Association organized the completion of supervision and field acceptance work for the resource detailed survey project, issuing supervision and field acceptance reports. In early March, the company completed the compilation of the 'Special Hydrogeological, Engineering Geological and Environmental Geological Detailed Survey Report for the Deep Part of the Tongkuangyu Mine'. On March 17, the Shanxi Mining Association organized an expert review which was passed. In May, the company completed the compilation of the 'Detailed Survey Report on Deep-seated Replacement Resources at the Tongkuangyu Copper Mine in Yuanqu County, Shanxi Province' (hereinafter referred to as the report). On May 23, the Shanxi Mining Association organized an expert review which was passed, and an review opinion was issued. According to the report, as of December 31, 2024, within the 80m to -325m elevation range of the Tongkuangyu mining area, cumulative identified industrial orebody (No. 5) resources amounted to 103.718 million mt of copper ore with an average grade of 0.84% and a metal content of 869,600 mt. Associated gold metal content was 8,930 kg at an avg. grade of 0.09g/t; associated molybdenum metal content was 3,727 mt at an avg. grade of 0.011%. Low-grade copper ore resources amounted to 34.625 million mt with an avg. grade of 0.25% and a metal content of 88,200 mt. The scale of discovered resources reached large-size, marking a significant prospecting achievement and providing a solid resource guarantee for the company's industry chain layout. Regarding the company's copper ore resource reserves, North Copper announced in its annual report, As of year-end 2025, the Tongkuangyu Mine had retained copper ore resources above 80m elevation of 204.664 million mt, with a copper metal content of 1.2501 million mt. Additionally, below 80m elevation at the base of the Tongkuangyu Mine's current mining right, the cumulative identified industrial orebody (No. 5) copper ore resources was 103.718 million mt, with an average grade of 0.84% and a metal content of 869,600 mt. For the 2026 production and operation plan, North Copper mentioned in its 2025 annual report: Main product production: copper cathode 300,000 mt, sulphuric acid 800,000 mt, gold ingots 6 mt, silver ingots 60 mt, to maximize economic benefits. A research report from Huaxi Securities on June 14 pointed out: In the medium and long term, copper, as a key metal for energy transition, possesses strategic allocation value under the policy guidance of the 15th Five-Year Plan. On the supply side, entering 2026, major mines globally have continued to experience strikes and production halts this year, keeping the supply profile relatively tight. From a macro perspective, the probability of a US Fed interest rate cut during the year still exists. In the long term, the macro environment supports copper prices, and the US dollar is expected to continue depreciating, supporting a positive outlook on copper prices. Furthermore, strong supply-demand fundamentals support copper prices. China's macro policies are expected to continue exerting force, and stimulus measures in sectors like electric power infrastructure, NEVs, and home appliance consumption could further expand. Beneficiary stocks: [Zijin Mining], [CMOC], [JCHX], [Jiangxi Copper Corporation], [Western Mining Co., Ltd.], [North Copper], [Tongling Nonferrous Metals], [Yunnan Copper].

The investor relations activity record of Yunnan Copper for May 26–27, 2026 shows: 1 What is the company's planned copper concentrate production from captive mines this year, and what is the approximate cost level of the mining enterprises? According to the company's 2026 financial budget and production plan, full-year self-produced copper concentrates are expected to contain 69,800 mt of copper metal content. The company's current mining enterprises mainly include Diqing Nonferrous, Liangshan Mining, Yuxi Mining, and Diqing Mining. Due to differences in resource endowment and the life cycle stage of each mine, cost levels vary, with Diqing Nonferrous, Liangshan Mining, and Yuxi Mining having relatively lower costs. Meanwhile, the company strives to maintain overall cost stability through measures such as lean operations and increasing mining volumes. 2 What is the progress of the Hongnipo copper mine construction project of Liangshan Mining? The Hongnipo copper mine is currently under construction, with cumulative verified resource reserves of 16.06 million mt of ore, an average copper grade of 1.42%, and copper metal content of 592,900 mt. The project is progressing in an orderly manner as planned and is expected to be completed and ready for commissioning in 2026. 3 Will the mine resources under the company's major shareholder be injected into the publicly listed firm? Asset injection involves complex systematic work that requires comprehensive consideration of development strategy, asset conditions, regulatory requirements, and shareholder interests. The company will continue to focus on and strive to enhance the quality of the publicly listed firm, and if there are any new relevant arrangements, it will strictly follow prescribed decision-making and disclosure procedures. 4 Has the company set a target for resource self-sufficiency rate? The company regards improving resource self-sufficiency rate as an important long-term strategic task, relying primarily on three paths: commissioning of projects under construction, tapping potential of existing mines, and external resource acquisitions. Regarding projects under construction, the company successfully completed the acquisition of 40% equity in Liangshan Mining in December 2025, and the Hongnipo project is expected to be completed and ready for commissioning in 2026. Regarding tapping potential of existing mines, the company leverages its major mines to continuously intensify deep and peripheral exploration efforts, steadily advancing resource succession and reserve additions. Regarding external resource acquisitions, while managing existing mines and smelters well, the company actively monitors quality mineral resource projects and prudently conducts field trips and evaluations based on strategic positioning and market demand. 5 What proportion can the company's copper smelting TC long-term contracts approximately reach? The company follows the principles of marketization and maximization of comprehensive benefits in externally purchasing raw materials. As one of the larger copper concentrate purchasers in China, the company has long maintained good, stable, long-term cooperative relationships with major suppliers, and actively negotiates with copper concentrate suppliers to stabilize long-term contract supply and ensure orderly production. 6 What were the company's sulphuric acid selling price and production in Q1 2026? According to the company's 2026 production plan, planned annual sulphuric acid production is 5.76 million mt. In Q1 2026, sulphuric acid production progressed in an orderly manner as planned. Price side, as a by-product of copper smelting, sulphuric acid selling prices are influenced by multiple factors including regional market supply and demand, transportation conditions, and industry prosperity. Since the beginning of this year, driven by robust downstream demand and tight supply in some producing areas, sulphuric acid selling prices have stayed high. The company seized market opportunities, reasonably arranged production and sales, and made positive contributions to operating performance. Meanwhile, the company will continue to monitor price changes and dynamically optimize production and sales pace. 7 Does the company have further cost reduction plans? The company's mining and smelting enterprises continuously pursue lean cost reduction to build low-cost competitive advantages. For example, the company is comprehensively advancing the "Three-Year Cost Reduction 3.0" initiative, continuously promoting cost reduction and efficiency improvement, and lowering unit production costs through technological upgrades, process optimization, and improved management efficiency. 8 What major capital expenditures are expected in the future? The company's future major capital expenditures will primarily focus on the following strategic directions: first, resource acquisition—continuously strengthening exploration and acquisition of quality copper mineral resources in and outside China to enhance resource security capabilities; second, intelligent manufacturing—advancing automation, digitalization, and intelligent upgrades of mines and smelting plants to improve production efficiency and safety levels; third, green and low-carbon development—increasing investment in environmental protection, energy conservation, and other areas to promote sustainable development. Performance side: Yunnan Copper's Q1 2026 report disclosed on April 24 showed that the company achieved total operating revenue of 52.959 billion yuan, up 49.62% YoY; net profit attributable to the parent was 675 million yuan, up 7.93% YoY. Regarding the reasons for the increase in operating revenue, Yunnan Copper stated that it was mainly due to higher product prices compared to the same period last year and increased sales volumes compared to the same period last year. Yunnan Copper's 2025 annual report showed that in 2025, the company firmly established market entity awareness, strengthened its lean operations system, and solidly carried out production organization, cost control, indicator optimization, marketing value creation, and other work, with main product production reaching record highs and key technical and economic indicators continuously optimized. Full-year production included copper cathode of 1.6411 million mt, gold of 26.04 mt, silver of 735.38 mt, and sulphuric acid of 6.189 million mt, with copper cathode, gold, and silver production all reaching record highs. Full-year operating revenue reached 79.542 billion yuan and net profit attributable to the parent was 1.301 billion yuan, with operating efficiency steadily improving. Cost and technical indicators were continuously optimized, with mine concentrate copper content and smelting copper cathode unit full cost outperforming annual cost reduction targets. Key technical indicators for smelting and mining remained stable with improvement. In 2025, the copper smelting total recovery rate exceeded the target by 0.07 percentage points, and slag flotation tailings copper content was optimized by 0.01 percentage points versus the target, both reaching industry-leading levels. Yunnan Copper announced that in 2025, the company's concentrate copper content production, on a consolidated statement basis, was 69,400 mt, up 26.64% YoY from 2024, mainly because the company issued shares to acquire 40% equity in Liangshan Mining held by Yunnan Copper Group during 2025, and Liangshan Mining was included in the consolidated statements as of December 31, 2025, with its full-year production included in the statistics. Regarding the company's main businesses, Yunnan Copper introduced in its 2025 annual report: The company's main businesses cover copper exploration, mining and beneficiation, smelting, extraction of precious metals and rare scattered metals, sulphur chemicals, and trading. It is an important copper, gold, silver, and sulphur chemical production site in China. The company has established a relatively complete industry chain in copper and related nonferrous metals and is a copper enterprise with deep industry heritage. Main products include copper cathode, gold, silver, industrial sulphuric acid, and rare and scattered metal products such as molybdenum, platinum, palladium, selenium, and tellurium. The company's main products are all produced according to international standardization organization standards, operating effectively under the international ISO9001 quality management system to ensure strict quality control. The company's main product, copper cathode, is widely used in electrical, light industry, machinery manufacturing, construction, national defense, and other fields; gold and silver are used in finance, jewelry, electronic materials, etc.; industrial sulphuric acid is used as raw material for chemical products and in other sectors of the national economy. The company's "Tiefeng" brand copper cathode is registered on the Shanghai Futures Exchange and the London Metal Exchange; "Tiefeng" brand gold is registered on the Shanghai Gold Exchange (SGE) and the Shanghai Futures Exchange; "Tiefeng" brand silver is registered on the Shanghai Gold Exchange (SGE), the Shanghai Futures Exchange, and the London Bullion Market Association. Regarding the company's future development outlook, Yunnan Copper introduced in its 2025 annual report: Yunnan Copper adheres to the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, fully implements the spirit of the 20th National Congress of the Communist Party of China and its successive plenary sessions, and upholds and strengthens the Party's overall leadership. The company actively serves major national strategies, adheres to promoting high-quality development as the theme, fully, accurately, and comprehensively implements the new development philosophy, continuously enhances core functions and improves core competitiveness, and better plays its role in scientific and technological innovation, industrial control, and security support in building a modern industrial system and constructing a new development pattern. The company emphasizes "two guarantees" (important mineral resource guarantee and important metal material guarantee), "two innovations" (scientific and technological innovation and management innovation), "two constructions" (strengthening Party building, especially cadre team building), and "three unwavering commitments" (unwavering in accelerating structural adjustment, unwavering in deepening enterprise reform, and unwavering in international operations and increasing "going global" efforts). The company focuses on "digital-intelligent transformation, expanding resources, refining mines, optimizing smelting, solidifying recycled (copper), and detailing rare scattered (metals)," accelerating the construction of a world-class excellent copper company, and continuously opening new prospects for Yunnan Copper's high-quality development. Guosen Securities' research report commenting on Yunnan Copper on April 11 showed: Quality asset consolidation. Production side, the company's copper ore production was close to 70,000 mt, with major mines maintaining stable production. Copper smelting side, after Southwest Copper reached full production, the company's 2025 copper cathode production was 1.64 million mt, up 440,000 mt or 36% YoY. During the reporting period, the company purchased 40% equity in Liangshan Mining through share issuance to its major shareholder, achieving consolidation. Liangshan Mining is a quality asset, with its mines featuring open-pit mining, abundant reserves, higher grade than the publicly listed firm's existing copper mines, and lower costs than the publicly listed firm's existing copper mines. In H2 2025, profitability of major subsidiaries generally declined. Although copper, gold, and silver prices rose significantly in H2 2025, the company's mining operations saw profit decline QoQ. Smelting operations also declined significantly in H2 2025, which was related to the sharp drop in copper concentrate TCs. As sulphuric acid prices are expected to stay high, the company's smelting business profitability is expected to improve. Gross profit by product side, the company produces over 6 million mt of sulphuric acid annually. Benefiting from sulphuric acid price increases, sulphuric acid business gross profit in 2025 was 2.03 billion yuan, up 1.5 billion yuan YoY, representing a performance highlight. Since early 2026, sulphuric acid prices have continued to rise, and this is expected to further boost earnings. Leveraging the copper industry's high-prosperity cycle in recent years, the company's asset quality has improved, and during the reporting period it achieved consolidation of Liangshan Mining, a quality asset. As the sole copper publicly listed platform under Chalco Group, injection of other quality assets from the major shareholder is anticipated. Although the copper smelting business is under pressure in the short term, the government has issued policies to strictly control new copper smelting capacity, and the company benefits from global copper smelting capacity rationalization, with a favorable long-term industry landscape. Maintain "Outperform" rating.

When asked, "What were the sales volume and pricing of copper foil produced by your company in April 2026?" North Copper responded on May 19 via the investor interaction platform: The company's copper foil sales are performing well with balanced production and sales; the product is priced and sold on a market-based basis according to market supply and demand. North Copper also responded on May 19: The company's share price fluctuations are influenced by a combination of factors including the macro environment, market sentiment, capital flows, and the company's own performance. The recent share price fluctuations have been largely in line with the trend of publicly listed firms in the copper sector. The company has always focused on enhancing intrinsic value as the core of its market capitalization management, and is committed to the long-term alignment of corporate value and market performance through focusing on core business growth, optimizing governance structure, strengthening information disclosure, and implementing shareholder return plans. The content of the earnings briefing announced by North Copper on May 8 showed: 1 What is the current construction progress of the new 10kt rolled copper foil production line, and in which month of 2026 is it expected to be completed? North Copper responded: Some production lines of the company's 50,000 mt/year high performance rolled copper strip and foil and 2 million m² CCL project have reached the intended usable condition. The main products include high performance copper and copper alloy strip and rolled copper foil, of which copper alloy strip capacity is 25,000 mt/year and rolled copper foil capacity is 5,000 mt/year. 2 What caused the negative operating cash flow, and what is the impact on the company going forward? North Copper responded: The negative net cash flow from operating activities in Q1 was mainly due to two reasons: first, rising non-ferrous metal prices led to higher overall value of copper raw materials, increasing capital occupation; second, under the impact of geopolitical factors, international shipping rerouting and tight domestic railway dispatching caused copper raw material arrivals at the plant to be delayed versus plan, extending the capital turnover period. The company's current cash flow level can effectively support daily operations and debt repayment. Going forward, the company will take targeted measures to improve the situation. 3 Questions regarding the progress of Hujiaoyu mine asset injection. Specifically: Has the preliminary preparation work for the asset injection (such as auditing, valuation, and plan evaluation) been initiated? Does the company plan to complete this asset injection within 2026? Are there any material obstacles or uncertainties in the process that need to be disclosed to investors? Beyond strictly fulfilling the commitment to inject within 24 months, does the company's management have a clear goal and timetable to "strive for early completion"? What specific stage has the related work progressed to? North Copper responded: Hujiaoyu Mining Company, a subsidiary of the company's controlling shareholder Zhongtiaoshan Group, obtained the mining permit for newly added reserves on March 27, 2026. Preliminary work for obtaining the mine safety production permit is currently being actively advanced, and the conditions for injection into the publicly listed firm are not yet met. The company will initiate the asset injection process in a timely manner after all the above mining permits are obtained, fulfilling the relevant commitments. 4 After the completion of the 50,000 mt rolled copper foil and strip project, are there any further plans for new copper foil capacity construction and expansion? North Copper responded: Some production lines of the company's 50,000 mt/year high performance rolled copper strip and foil and 2 million m² CCL project have not yet been completed, and capacity has not been fully released. There are currently no new copper foil capacity expansion plans. 5 How does the company's management plan to manage market capitalization? North Copper responded: In accordance with the requirements of Regulatory Guidelines for Listed Companies No. 10 — Market Capitalization Management, the company will make comprehensive utilization of lawful and compliant methods, promote positive interaction between value and market capitalization through improving operational quality, strengthening information disclosure, and deepening investor communication, continuously improve and strengthen market capitalization management, and carry out scientific, effective, and compliant market capitalization management practices. 6 Given the strong Q1 2026 results, the share price has underperformed peers with weaker results. Does the company have any undisclosed adverse events? North Copper responded: In addition to operating performance, the company's share price is also influenced by various factors including the international situation, policy environment, financial market liquidity, capital market atmosphere, and investor psychological expectations. The company strictly fulfills its information disclosure obligations in accordance with relevant laws and regulations, and there are no material matters that should have been disclosed but were not. 7 What new progress will the company make in smart mines and digital factories this year? North Copper responded: The company will continue to advance the construction of smart mines and digital factories, deepen and expand new scenarios for digital-intelligent integration applications, and accelerate the implementation of the Tongkuangyu mine smart mine project. Within the year, the company plans to complete the installation of system equipment for the data center, integrated management and control hall, and other facilities. The digital-intelligent building is expected to be completed and put into operation. The 5G smart communication hub, industrial-grade ring network, and LHD operation positioning and metering projects are expected to achieve phased results, effectively enhancing the digital-intelligent level and operational efficiency of mining operations. 8 What are the main directions of R&D expenditure? North Copper responded: The company's R&D expenditure is focused on six core areas: resource reserve expansion and production increase, efficient mining and beneficiation technologies, smelting technology innovation, high-end copper-based materials, comprehensive utilization of resources, and intelligent mining. North Copper's Q1 2026 report released on April 29 showed: In Q1, the company achieved revenue of 10.044 billion yuan, up 46.89% YoY; net profit attributable to the parent company's shareholders was 615 million yuan, up 65.74% YoY. Regarding the reason for the revenue increase, North Copper stated in its Q1 report: It was mainly due to increased product sales volume and price increases. In addition, North Copper's 2025 annual report showed: The company achieved revenue of 27.916 billion yuan in 2025, up 15.80% YoY; net profit attributable to the parent company's shareholders was 791 million yuan, up 29.01% YoY. Major product production in 2025: copper cathode 300,300 mt, sulphuric acid 766,000 mt, gold ingots 6.4 mt, and silver ingots 68.5 mt. North Copper stated in its 2025 annual report: The company is primarily engaged in copper mining, ore beneficiation, smelting, and rolling processing. It currently has captive mines with annual ore processing of 9 million mt and self-produced copper metal content of 43,000 mt, copper smelting capacity of 320,000 mt, gold ingots 10.8 mt, silver ingots 170 mt, and sulphuric acid 1.22 million mt. It also recovers valuable metals including platinum, palladium, selenium, and bismuth through comprehensive utilization. Copper deep-processing products include high performance copper and copper alloy strip and rolled copper foil, of which copper alloy strip capacity is 25,000 mt/year and rolled copper foil capacity is 5,000 mt/year. The company has established an integrated industry chain from mining, ore beneficiation, smelting to rolling processing. The company's "Zhongtiaoshan" brand Grade-A copper is registered on the Shanghai Futures Exchange and the Shanghai International Energy Exchange, and the "Zhongtiaoshan" brand gold and silver ingots are registered on the Shanghai Futures Exchange. The company's mineral exploration status disclosed in North Copper's 2025 annual report showed: The company completed the detailed exploration project for deep replacement resources at the Tongkuangyu copper mine (below the 80m elevation), with the following main work completed: exploration tunnels 140.6 m, drilling chambers 12/2,823.6 m³, drilling 12 holes (including 3 hydrogeological holes), drilling volume 7,268.62 m, 1:2000 specialized hydrogeological and environmental geological survey 6 km², geophysical logging 2,065.61 m, and pumping tests on 3 holes; 8,091 sample analyses and tests, 46 sets of rock and ore tests, 99 bulk density samples, 20 copper phase analyses, 10 complete chemical analyses, and 12 complete water quality analyses. On February 20, 2025, the Shanxi Mining Association organized and completed the supervision and field acceptance of the detailed exploration project, issuing the supervision report and field acceptance report. In early March, the company completed the compilation of the Detailed Hydrogeological and Environmental Survey Report for the Deep Part of Tongkuangyu Mine. On March 17, the report was reviewed and approved by experts organized by the Shanxi Mining Association. In May, the company completed the compilation of the Detailed Exploration Report for Deep Replacement Resources at Tongkuangyu Copper Mine, Yuanqu County, Shanxi Province (hereinafter referred to as the Report). On May 23, the report was reviewed and approved by experts organized by the Shanxi Mining Association, and review opinions were issued. According to the Report, as of December 31, 2024, within the 80m to -325m elevation range of the Tongkuangyu mining area, the cumulative identified industrial ore body (No. 5) copper ore resources totaled 103.718 million mt, with an average grade of 0.84% and metal content of 869,600 mt. Associated gold metal content was 8,930 kg with an average grade of 0.09 g/t; associated molybdenum metal content was 3,727 mt with an average grade of 0.011%. Low-grade copper ore resources totaled 34.625 million mt, with an average grade of 0.25% and metal content of 88,200 mt. The explored resources reached a large scale, achieving significant exploration results and providing solid resource support for the company's industry chain layout. Regarding the company's copper ore resource reserves, North Copper disclosed in its annual report that as of the end of 2025, the Tongkuangyu mine retained copper ore resources of 4.664 million mt above the 80m elevation, with copper metal content of 1.2501 million mt. Meanwhile, below the 80m elevation at the bottom of the company's existing Tongkuangyu mine mining rights, the cumulative identified industrial ore body (No. 5) copper ore resources totaled 3.718 million mt, with an average grade of 0.84% and metal content of 869,600 mt. Regarding the 2026 production and operation plan, North Copper mentioned in its 2025 annual report: Major product production targets: copper cathode 300,000 mt, sulphuric acid 800,000 mt, gold ingots 6 mt, and silver ingots 60 mt, to maximize economic benefits. Regarding the outlook for copper, some institutions hold the following views: Tony Sage, CEO of Critical Metals, noted in a recent report that market participants remain bullish on the copper price outlook, driven by long-term demand from AI infrastructure, power grid modernization, and the global energy transition, coupled with supply constraints. He added that in the long run, the copper market may face a potential supply deficit, which will provide support for copper prices. (Jin10 Data) A CITIC Securities research report noted that as Freeport once again delayed the production resumptions schedule for its Indonesian project and comprehensively lowered its production guidance for 2026-2027, global major miners' 2026 production expectations have officially entered a decline, and the potential impact of subsequent extreme weather may further amplify supply disruptions. We expect that the solid supply-demand fundamentals demonstrated by the better-than-expected destocking in China, along with easing macro headwinds, will support copper prices to stabilize at $13,000/mt in 2Q26, while the gap between supply-demand expectations could drive copper prices to challenge previous highs. We are optimistic about the allocation opportunity in the copper sector where earnings elasticity and valuation elasticity resonate.

Since the beginning of this year, the spot treatment charge market for copper concentrates has shown an unprecedented and severe downward trend. The SMM Copper Concentrate Spot Index has fallen from -45 USD/dmt at the start of the year to near -70 USD/dmt, with the speed and magnitude of the decline being historically rare. A negative treatment charge means that when smelters purchase copper concentrates, they not only fail to receive traditional processing income from miners but instead must pay the sellers. Based on the current TC of -70 USD/dmt, the actual cost smelters pay sellers in the copper smelting process is equivalent to a TC of 70 USD, or further converted to a TC+RC of approximately 112 USD. This extreme price signal has quickly drawn high market attention to smelter profitability and even sparked concerns about the sustainability of domestic copper smelting production. Despite treatment charges falling to historic lows, copper cathode production by Chinese smelters remains at high levels, currently around 1.2 million tons per month. This phenomenon of "producing more while losing more" appears, on the surface, to contradict market logic, but actually reflects smelters' passive choices and structural supporting factors in the current complex environment. Historically, extreme treatment charge scenarios are not unprecedented. In past industry downturns, smelters often relied on one or several factors—exchange rate fluctuations, rising sulfuric acid prices, or treatment charges themselves—to barely maintain cash flow balance. In the current cycle, the sharp rise in sulfuric acid prices has become a key variable supporting smelter survival. Currently, the ex-factory prices of smelter acid sold by domestic copper smelters generally range from 800 to 1,600 yuan per ton. The latest SMM Copper Smelting Acid Index stands at 1,235.5 yuan/ton. As a crucial byproduct of copper smelting, sulfuric acid price fluctuations significantly impact smelters' comprehensive earnings. Typically, smelters produce approximately one ton of sulfuric acid for every dry metric ton of copper concentrate processed. Based on the current sulfuric acid price of 1,235.5 yuan/ton, after deducting value-added tax (at a 13% rate) and converting to US dollars (using an exchange rate of 6.9), each ton of sulfuric acid can contribute about 158 USD in revenue for the smelter, equivalent to an additional 158 USD per dry metric ton of copper concentrate. If further converted to the TC+RC metric, this amounts to about 99 USD. Thus, the rise in sulfuric acid prices has significantly offset the loss pressure from negative copper concentrate treatment charges, with some more efficient smelters even achieving marginal profitability. It is precisely this "stabilizer" role of sulfuric acid that allows smelters to maintain high operating rates under extreme treatment charge conditions. However, the support of sulfuric acid for smelting profits is not unlimited, as its price trend is itself influenced by more complex international geopolitical factors. The recent sharp escalation of the Middle East situation has brought significant uncertainty to the global sulfuric acid and sulfur supply chain. Since the joint US-Israeli military strike against Iran on February 28, 2026, the Strait of Hormuz, the world's most critical energy transport route, has rapidly fallen into a severe transit crisis. After taking office, Iran's new Supreme Leader, Mojtaba Khamenei, immediately declared that the strait would remain closed as a strategic lever against the US-Israeli alliance and suggested that neighboring countries close US military bases. The Islamic Revolutionary Guard Corps subsequently explicitly announced a ban on any vessels associated with the US or Israel from passing through the Strait of Hormuz, warning of severe consequences for unauthorized passage. The Strait of Hormuz is a critical chokepoint for global sulfur transport. Statistics show that before the conflict, over 100 ships passed through the strait daily. However, after the conflict erupted, transit traffic plummeted by over 90%, with extreme cases of no ships passing for an entire day, leaving over 3,000 vessels stranded in nearby waters. This effective blockade has not only directly impacted the crude oil market—with Brent crude futures rising over 50% within a month to exceed 114 USD per barrel—but has also severely disrupted the global supply chain for sulfur and sulfuric acid. War risks have caused shipping insurance costs to soar to over 20% of the cargo value, further increasing logistics costs and plunging global sulfur supply into a logistical crisis. Although Iran claims to allow passage for vessels from "non-hostile" countries, requiring them to obtain prior permission, actual transit volumes remain extremely low, far below global trade demand. Simultaneously, the Houthi armed group in Yemen has announced its involvement, posing new security threats to the Red Sea-Suez route. The compounding pressure on the two major shipping chokepoints of the Strait of Hormuz and the Red Sea is posing a systemic challenge to the global supply chains for energy and chemical raw materials. As the primary raw material for sulfuric acid production, the disruption in sulfur supply directly drives international and domestic sulfuric acid prices progressively higher. Given the current situation, geopolitical conflicts show no signs of easing in the short term, implying further room for sulfuric acid price increases. The continued rise in sulfuric acid prices will have a dual impact on the domestic copper smelting industry. On the one hand, increased sulfuric acid revenue will continue to provide crucial profit supplementation for smelters, enabling them to maintain production even at lower TC levels and potentially further depressing spot copper concentrate treatment charges. On the other hand, this surge in sulfuric acid prices, driven by geopolitical conflict, also makes smelter profitability highly dependent on external unstable factors, rendering the industry's overall risk resilience increasingly fragile. Notably, the extreme treatment charge environment has begun to have a tangible impact on the global layout of copper smelting capacity. Mitsubishi Materials of Japan recently announced its plan to cease operations at its Onahama copper smelter by the end of March 2027. The smelter has a crude and refined capacity of 230,000 tons, and the main reason for the closure is precisely the intensified competition in the global copper smelting industry, leading to a sharp deterioration in copper concentrate TC/RC and persistent pressure on business prospects. This decision sends a clear signal: against the backdrop of continuously bottoming treatment charges and industry profits highly dependent on byproducts and external environments, some high-cost smelting capacity or those lacking comprehensive recovery capabilities are facing pressure to exit the market. In summary, China's copper smelting industry is currently at a highly unusual cyclical juncture. On one hand, smelters, benefiting from high sulfuric acid prices, have temporarily weathered the impact of negative treatment charges, maintaining high output. On the other hand, sulfuric acid prices themselves are heavily dependent on geopolitical situations, and external variables like the Strait of Hormuz blockade introduce significant uncertainty into the sustainability of smelting profits. If tensions in the Middle East persist, sulfuric acid prices may continue to rise, leaving room for TC to fall further, potentially enhancing smelters' tolerance for extreme treatment charges in phases. However, if geopolitical tensions ease, sulfur supply chains recover, and sulfuric acid prices retreat from their highs, smelters would face the risk of a "double blow" from both low treatment charges and reduced byproduct revenue, potentially heralding a genuine phase of capacity reduction and deep adjustment for the industry. Therefore, the current apparent "resilience" of the copper smelting industry is essentially built upon a fragile balance between geopolitical factors and the byproduct market. For market participants, besides monitoring TC trends, it is crucial to closely track changes in sulfuric acid prices and the underlying geopolitical factors to make more accurate judgments regarding the production sustainability and profitability prospects of the smelting industry.

[SMM Analysis: Key Anchor in Great Power Rivalry: The U.S. "Project Vault" and the Changing Resource Landscape in Latin America] Amid the current accelerated reshaping of the global resource competition landscape, China's copper concentrate import pattern is undergoing a profound structural transformation. The latest trade data from 2025 clearly outlines this trend: China is significantly enhancing its capacity to acquire copper concentrate resources from neighboring countries.

[SMM Analysis:In 2025, China’s total copper concentrate imports exceeded 30 million tons, yet geopolitical risks intensified supply chain shifts.] It is worth noting that in recent years, major global copper-producing countries have increasingly strengthened control and strategic competition over key mineral resources, leading to significant volatility and uncertainty in the international copper supply chain. As the world’s largest copper consumer, China’s copper concentrate import sources are influenced by multiple geopolitical and trade policy factors.

[SMM Analysis:Benchmark Loosening and Capacity Restructuring: The Global Copper Smelting Industry Faces Dual Transformation in "Pricing and Capacity."] Since 2022, multiple copper smelting projects have been launched across Asian countries, notably China and Indonesia. This has directly led to a rapid increase in smelters' demand for cu cons, an imbalance in the global cu cons supply and demand balance, and a sharp decline in spot and long-term TC/RCs for cu cons.

The market widely expects that 2026 long-term contract TC will likely remain negative. From a supply-side perspective, global greenfield project additions are extremely limited. At the same time, existing mines have faced frequent operational disruptions, with some producers failing to meet output targets. The incremental ramp-up of smelters in Indonesia and Africa has also temporarily diverted copper concentrate flows. Against this backdrop, the supply-demand imbalance in copper concentrate is deepening.

Satellite-based monitoring firm reports that as of August 2025, only about 11.8% of global copper smelting capacity was inactive — down from July. This suggests that primary smelter activity remains strong, while scrap-based copper production is becoming increasingly significant.

[SMM Analysis:Grasberg Production Incident Heightens Expectations of Disruptions on Copper Supply Side] According to a report by Freeport-McMoRan, since the slurry accident at the Grasberg copper mine in Indonesia on September 8, two people have died and five are missing. The incident directly led to the suspension of operations at the world’s second-largest copper mine. Freeport-McMoRan estimates that its 2026 production could be 35% lower than previously projected. Based on SMM's assessment, Grasberg’s copper production is expected to be 488,000 metric tons in 2025 (previously estimated at 750,000 metric tons) and 500,000 metric tons in 2026 (previously estimated at 730,000 metric tons). This incident not only affects copper concentrate supply but also impacts copper smelting demand, represented by facilities such as Indonesia’s Gresik and Manyar, resulting in a reduction in both supply and demand. SMM predicts the supply-demand balance for 2025 will be -268,000 metric tons and -308,000 metric tons for 2026.