Lisbon, 14 April 2011

The Standing Committee of the International Lead and Zinc Study Group held its Spring meetings in Lisbon on 13 April 2011 under the Chairmanship of Mr. Bard Dagestad (Norway). During the meeting the Committee received a review of the current outlook for trends in world supply and demand for lead and zinc during 2011.

The Committee noted that global economic uncertainties, including the impact of the tragic events in Japan and, to a lesser extent, disturbances in the Middle East and North Africa, underlined the need for caution when considering forward‐looking forecasts.

Forecasts: Lead ‐ Outlook for 2011

Usage

Global demand for refined lead metal is forecast to increase by 5.5% to 10.04 million tonnes in 2011. Increased sales and exports of both original equipment and replacement lead‐acid batteries together with higher demand from the e‐bike sector are expected to result in a further rise in Chinese usage of 8.6%. In Europe, it is anticipated that usage will rise by 6.3% and in the United States, by 1.7%.

Though the impact of the recent Tohoku earthquake on future lead demand in Japan is difficult to quantify at the present time, any variation from the current Japanese usage forecast of a 2.2% rise is not expected to be large enough in absolute terms to significantly alter the current outlook for global demand.

Supply

An expected increase in global lead mine production of 7.8% to 4.46 million tonnes will be primarily driven by higher output in Australia, China, India, Ireland, Mexico and the Russian Federation. However, the Group notes that output in Australia may ultimately be lower than forecast should the Magellan mine in Western Australia, at which operations were recently voluntarily suspended by Ivernia for environmental reasons, remain closed for a prolonged period.

At 10.16 million tonnes, it is anticipated that world production of refined lead metal will be 6.1% above that recorded in 2010. This increase will be influenced by the opening of a significant volume of new capacity in China together with the commissioning of Hindustan Zinc’s Rajpura Dariba operation in Rajasthan, India and Johnson Controls’ Enertec plant in Monterrey, Mexico. In addition, Australian production is expected to recover after a reduction in 2010 caused by technical problems at Nyrstar’s Port Pirie smelter.

World Refined Lead Metal Balance

After having taken into account the latest forecasts received from the Group’s Member Countries and their industry advisors it is currently expected that global supply of refined lead metal will exceed demand by 123,000 tonnes in 2011.

Zinc ‐ Outlook for 2011

Usage

Global demand for refined zinc metal is forecast to increase by 6.3% to 13.4 million tonnes in 2011.

In China, demand growth is expected to remain strong but, at 9.4%, is expected to be lower than in 2010. This is mainly as a consequence of government measures to limit the pace of economic expansion and control inflation. In Europe and the United States rises of 4.4% and 6.6% respectively are anticipated.

In Japan, the current forecast indicates that usage will increase by 1.9%. However, it is likely that this will be revised when it becomes possible to fully take into account the consequences for zinc demand of the Tohoku earthquake and necessary reconstruction initiatives.

Supply

In 2011, new zinc mine capacity is scheduled to be brought on stream in a number of countries including Australia, Canada, India, Saudi Arabia, Tajikistan, and Uzbekistan. In addition, higher output is expected in China, Kazakhstan, Mexico, the Russian Federation and the United States. This is forecast to result in further strong growth in global production of 9.1% to 13.44 million tonnes.

An anticipated rise in world production of refined zinc metal of 5.6% to 13.59 million tonnes will be principally driven by increases in China, India and Peru. Additions to capacity in a number of provinces, including Shaanxi, Sichuan, Jiangxi and Yunnan are forecast to result in a rise in China of 9.2%. In India and Peru, rises in output will be influenced by increased output at refineries recently commissioned at Rajpura Dariba and Cajamarquilla.

World Refined Zinc Metal Balance

After having taken into account the latest information regarding zinc supply and demand received from its Member Countries, the Group expects that, in 2011, the global refined zinc market will remain in surplus for the fifth successive year. The extent of the over‐supply is forecast at just under 200,000 tonnes.

Ends --