Summer 2007 Issue

Initiative Highlights

A special note from ICA's President
	It is with great pleasure that I announce that Hernan Sierralta is the recipient of ICA’s annual President’s Award. Hernan, based in Santiago, is the Executive Director of Procobre-Chile. Hernan has been with ICA for 17 years and, during that time, he has demonstrated resiliency, dedication and passion for our organization, and for copper. Hernan’s position is a highly strategic one, as it puts him at the forefront of our efforts in the world’s largest copper-producing area and, consequently, places him alongside many of ICA’s largest members. Five years ago, Hernan faced a difficult challenge in his career with ICA – a challenge, I am sure, not many would have conquered with the fortitude of Hernan. At that time, ICA Latin America was going through a region-wide reorganization and, in December 2002, Hernan and more than 30 other employees were informed they would be leaving the ICA. Instead of conceding defeat, Hernan used this as an opportunity to prove his worth to the organization, and he successfully reestablished himself and has done a remarkable job in leading Procobre-Chile. Hernan also serves as Regional Director for ICA Communications in Latin America, and he is an integral and trusted member of ICA’s Global Communications Team and new Communications Steering Committee. In only a few years, Hernan dramatically has implemented a highly effective media relations program in the region that has led to unprecedented, positive exposure for copper across Latin America. A recent audit of the Communications program in Latin America has shown that, in 2006, the equivalent dollar-value of press (television, radio and print) achieved through Hernan’s media relations program was nearly four times his budget. This is a remarkable accomplishment, and represents steadily increasing improvement in regional communications. This award not only recognizes Hernan’s accomplishments of the past year, but also his many years of hard work and dedication to the ICA. Hernan is a valuable asset to the ICA organization – not just in Latin America, but around the world – and I look forward to continued success and partnership with him. Please join me in congratulating Hernan on this achievement, and in thanking him for his contributions to the ICA and the copper industry. Francis J. (Frank) Kane President International Copper Association, Ltd.

Building Construction
	ICA Latin America has taken part in the creation of a website to increase awareness of its “Safe House Program,” which seeks to stimulate the replacement of obsolete and residential electrical installations greater than 20 years old. The website contains, for multiple countries, regulations, data, advice, and other information regarding diagnosis of the main problems of unsafe and obsolete electrical installations. Also offered are some solutions that can be achieved through rewiring those installations. The website has become a successful way of communicating important information regarding the Safe House Program. Since it was launched in May, the number of visitors has increased in a short period of time. The Safe House Program was created in 2005 to guide people on the need of improving the quality of electrical systems. It was envisaged by ICA Latin America with the partnership of entities worried about reducing the risks of domestic accidents, increasing the economic value of buildings, and to promote energy efficiency – all of which can be achieved through the rational and safe use of energy. At the beginning, regional actions were developed, and each country – with the support of organizations and Governments – implemented projects considered by them as suitable for local needs. The first milestone was the creation of a local website in Brazil. The experience was so successful, it was implemented by other copper centers across Latin America, transforming a local website in a regional one, with the participation of stakeholders from Chile, Peru and Mexico. The goal is to generate awareness, at a regional level, for public opinion and industrial decision-makers, highlighting copper’s benefits in improving quality of life.

Funding
	Proposals to support the Africa Healthcare Initiative, launched by CDA-Africa, have been accepted into the approval process of the U.S. Department of State (PEPFAR) and the World Bank (GPOBA). The holistic approach to install electricity, clean water and infection control (antimicrobial copper-alloy touch surfaces) while relying on community-based enterprise to ensure long term sustainability received great interest. During EEMODS 2007 (Beijing, 10-15 June 2007), the fifth international conference on Energy Efficiency in Motor-Driven Systems, and many side events and workshops about energy efficiency policies and market transformation activities in general, new partnership and co-funding opportunities were developed. In-principle agreements were reached with the International Energy Agency, the Australian Greenhouse Office, Brazilian Eletrobas-Procel, among others. Renewed support was obtained from traditional partners and sponsors. Details will follow when agreements are being concluded. The ICA China SEE staff received high praise for the organization of the week’s events, including from the European Commission’s representative and co-chair of EEMODS, who considered it the best organized conference ever.

Technology
	Under the guidance of the ICA Technology Steering Committee, ICA is in the process of developing a Technology Roadmap towards future applications of copper. The Roadmap will be used for several purposes: - To set the priority areas for R&D for ICA’s Technology activities - To inform academic researchers, industrial scientists and engineers, and the industry in general about how they can contribute to applied R&D focused on copper applications - To influence governments, NGOs, and other sources of co-funding that the ICA has a credible and exciting plan to apply copper to meet important societal needs and is aligned with their interests - To deepen ICA’s engagement with participants in the global copper industry value chain to sustain copper in key existing applications and to develop new applications - To communicate the future potential of copper with interested parties In 2004, the copper mining industry developed an upstream Technology Roadmap (from mine to cathode) with the specialist consulting firm Energetics. This Roadmap has been effective on focusing research on the shared technology needs of the copper mining industry. The downstream Roadmap (from cathode to end product) also is being developed with assistance from Energetics. The ICA Roadmap begins where the upstream Roadmap ends: it starts with refined copper cathode; identifies priority areas for R&D in the design, engineering and manufacture of products that contain copper; and follows the copper through product use and into recycling. The Roadmap should represent the views of the global copper industry. This will require global input from the ICA Network, other copper industry associations, producers of semi-fabricated and fabricated products, and end-use equipment manufacturers. The Roadmap focuses on copper’s applications: evolving applications and emerging applications. Evolving applications exist today and are affected by advances in technology, changing regulations, and inter-material competition. Emerging applications exist today at very limited scale but hold the potential to become large future markets for copper. We are at the beginning stage of Roadmap development and comments and guidance now can have a big effect on the final Roadmap. Please contact Hal Stillman, ICA’s Director of Technology for more information and to participate in the Roadmap development process.

Health and Environment
	ICA’s initiative, Biomarkers of Copper in Humans, is on target to provide an early-warning indicator of copper deficiency or excess. ICA has brought together a world-class team with the mission to develop a human biomarker for copper. The first promising biomarker – copper chaperone for copper-zinc superoxide dismutase or CCS – was confirmed in laboratory animals in 2007, representing a breakthrough for the scientific world and the copper industry. CCS now is being confirmed in humans. Copper is an essential nutrient for humans. In sensitive populations, even slight copper deficiency can have detrimental health effects. Copper deficiency has been estimated to be common in every region of the world, even in well-developed societies. This conclusion is derived from nutritional intake studies. There is no reliable means of confirming deficiency through more direct measurement of copper in the body. Copper in blood and urine does not indicate how much is actually present in important organs, chiefly liver and brain. The world receives its nutritional copper through daily diet. There is widespread attention on a balanced diet for nutritional health, the global spread of microbial pathogens, and diseases of aging. Healthcare practitioners are realizing that copper plays a vital role in maintaining good health and combating illness. There also is recognition of the harmful effects of too much copper in the body. With proper balance as the key, only through measurement of a biomarker as an expression of copper status in the body can potentially widespread copper deficiency or excess be confirmed.

Operations
	After several years of inactivity, the Management and Accounting Control Team (MAC) has been re-organized and is now led by ICA’s Controller, J. Joseph Maldonado. The first face-to-face team meeting was held in Shanghai, China on 23 and 24 April 07, and included financial representatives from all the regions, as well as the team’s co-sponsors, Frank Kane and Miguel Riquelme. The team has been brought together once again in order to accomplish several goals, which were delayed for various reasons. Some of the team’s current goals include: - Identifying relevant management information (Network Operating Costs, co-funding, etc) and providing this information to ICA management on a timely basis. - Revamping the Chart of Account to enable reporting by region, country, and center, as well as by initiative. - Rollout the ICA-NY accounting system, Financial Edge, to all the Regions across the globe. In other Operations news: Effective June 20, 2007 Kevin Krizman has joined the ICA as Assistant Director of Technology. He worked on automotive technology and market analysis with Siemens, on communications technology with Bell Laboratories, Lockheed Martin, and a venture capital-backed start-up, and has also worked as an independent consultant on new ventures. Kevin has a Bachelor of Science in Aeronautical and Astronautical Engineering from Purdue University, a Master of Business Administration from the College of William and Mary in Virginia, and has completed coursework towards a Master of Science in Electrical Engineering at Virginia Tech. Kevin grew up around a family-owned machine shop and auto part manufacturing business; gained a formal education in engineering, accounting, and business management; and has provided technical and managerial leadership on many technology projects. Colin Bennett has been named Market Intelligence and Data Manager. This is a new position to manage the market intelligence function in Europe, as well as to coordinate data for ICA worldwide. Colin Bennett brings a wealth of market intelligence experience to the ICA Network. For most of his career, Colin has worked in the field of market intelligence, a field he turned to after working as a Senior Account Executive at the Public Relations firm Hill and Knowlton. Since then, Colin has worked for a number of leading companies, progressing his research career. Before joining ICA, Colin worked at the superbrand company Mintel, whose business is providing world-leading market intelligence reports. Colin rose to be a senior market analyst during his four years at Mintel.

MIDM
	As part of the 2007-2011 ICA Strategic Plan, a new Market Intelligence, Data and Measurement (MIDM) initiative was launched in January 2007. Significant progress continues to be made in the second quarter. The recent critical market intelligence on material substitution has been rolled out across the ICA Members and Management Network via a series of successful teleconferences and regional presentations. In this way, this vital information has been placed into the hands of key program management most able to act upon the research. Another important review group for this intelligence work was the Global Strategy Team (GST). The GST used the input together with further market research and data analysis to develop a series of scenarios for the 2008 Operating Plan. For this meeting, a collection of world indicators such as copper use per-capita were collected. These data may be used in future projects to establish macro trends in copper use. The output from the GST was reviewed by the ICA Management Committee before being passed to the Advisory Committee for their guidance and recommendations in early June. A further conference call of the member group for MIDM was held in May. This call was held to produce direct guidance on the development of the MIDM element of the 2008 plan. In the call, and among other matters, the focus of future audits was discussed. Any member interested in participating in this group should contact Tony Lea at ALea@copper.org. To increase the availability of written research for European copper markets, three mini-reports and three tonnage impact models were drafted in the last quarter. The markets covered were motors, ballasts and transformers. These mini-reports offer concise analysis for each of the markets covered. They offer a useful initial source of information for future ICA audits. Refinement of the world copper end-use dataset continues. Regional ICA managers have continued to submit their data and confirmed figures have now been collected from Europe, China, India, Latin America and Korea. Once data has been collected from all regions the dataset will offer a more complete picture of copper end-use, in the standard ICA format. In June 2007, a Market Intelligence Advisory Committee meeting was held for China. ICA members and ICA staff attended the meeting in Beijing to discuss current and future market intelligence projects. ICA China recently completed a preliminary study into copper scrap, in the China region. This study will now be extended in order to further investigate the initial findings. Also, ICA China has recently completed a study into copper end-use in Korea. Findings from these regional studies contribute to our growing understanding of world copper markets.

OEM
	ICA continues to win important converts to CuproBraze heat exchanger technology, a key factor in preventing and reversing the penetration of aluminium alternatives. Most recently, Bombardier, a Canadian OEM employing 55,000 people and one of the largest manufacturers in the transportation sector, has chosen to use CuproBraze for its next refurbishment cycle of trains. These electric locomotives require large heat exchangers (64 by 13 by 30 inches) for cooling the electric transformers and inverters that convert the high-voltage electricity from the transmission lines into the lower-voltage, higher-amperage electricity necessary to drive the trains. As part of the CuproBraze development process, new designs and changes to fin spacing were introduced to allow for higher performance and easier cleaning and maintenance. CuproBraze also turned out to have a lower first cost than the previous heat exchanger design. The train transportation market globally is growing, innovation is high and speed of passenger trains are increasing all the time – requiring larger amounts of copper for heat exchange and electrification generally. CuproBraze is at the forefront of technologies deployed in this rapidly advancing sector.

SEE
	Sustainable energy is good news for copper. Each gigawatt-hour (GWh) of additional electricity demand requires a tonne of copper. Renewable energy systems need about ten times more copper per GWh, compared to conventional generation. Finally, each percent efficiency improvement in industrial equipment is matched by a percent increase in copper usage. These opportunities are addressed in the Leonardo ENERGY (LE) initiative. As an integrated campaign, LE currently is an umbrella for 15 campaigns dealing with sustainable energy in its various aspects. The platform approach has enabled a significant increase in geographical scope and activity in a cost-effective manner. Recent new campaigns have been launched on asset management, industrial heat, heat pumps, wind power, small hydro, photovoltaics, cogeneration, ocean power, quality of supply regulation and demand management. Visits to the website have tripled since the beginning of 2007, and continue to grow. Over 2000 professionals have so far registered their profile from around the globe. Three communities of practice have been launched, on energy efficiency, energy policy and energy technology, which join now almost 900 professionals. LE uses all but one AoC approaches, from regulation (e.g. on voltage quality) over standards (IEC building codes) to education (e.g. Leonardo Power Quality Initiative), technology (e.g. copper rotor promotion with FAVI) and alliance building (over 150 partners from leading industry & academia have already joined). Various audits and formal market research demonstrate copper impact. Wiring intensity in non-residential buildings increased by 20%. An assessment of increased copper usages for industrial equipment shows an impact of at least 20,000 tonnes.

Communications
	Flora Fu, Communications Manager of ICA China, has been promoted to Regional Communications Manager for Asia. ICA’s Global Communications Team, led by Steve Kukoda in ICA New York, is comprised of Communications Manager from each of ICA’s four primary regions (Asia, Europe, Latin America and North America), In 2005, the Team was expanded to include additional representation from Asia and direct representation from China. Since that time, China’s importance to world demand for copper has continued to grow. At the same time, ICA China’s communications efforts and influence in the region under Flora Fu’s leadership has grown. In six years at ICA, Flora has led development of China’s communications program, which has evolved rapidly and successfully. Her responsibilities have included managing media relations and marketing communications publications to support ICA China’s programs. She successfully has managed several media events in China, and effectively has developed relationships with China’s media. Her achievements include developing a fresh new Visual Identity (VI) package to provide consistency in image for the increasing number of projects in China. The VI package has since been adopted by the ICA Network copper centers across Asia. As we move forward, Flora will continue to assist in developing the Asia region’s communications budget, which has program elements in Australia, China, India, Japan and Southeast Asia. She also will be responsible for helping to develop and implement Asia’s part in a number of global communications activities, including a worldwide campaign, planned for this October, related to pending US EPA registration of copper’s antimicrobial properties, as well as studies to determine perceptions of copper by relevant publics across the globe.

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Top Regional Stories

Asia
	A press conference to launch ICA China’s copper-tank water dispenser was held on 12 June 2007 in Beijing. Since ICA is not only promoting a new product but also introducing an entirely new concept of the “antimicrobial appliance,” the main theme of this official press conference was “the beginning of a new era of China’s water dispenser industry.” The General Manager of Boqiang, Mr. Hu Zhongqiang, delivered opening remarks to the media. By sharing with the audience a bright blueprint for copper-tank water dispensers in China, this brand-new product is regarded as a milestone of the industry – ushering in a new era that moves away from a traditional focus on convenience to one more focused on health. Mr. Guan Jinchun, Chief Eengineer of Boqiang, briefly introduced the current issues and development status of water dispensers in China, and demonstrated the copper-tank water dispenser’s uniqueness. Finally, Mr. Wenson Zheng, Deputy Director of ICA’s Technology Program, delivered a speech about ICA’s long-term commitment of dedication to the improvement of the Chinese electric appliance industry. The press conference received significant attention from media: a total of 30 media attended the event and participated in the media Q&A session that followed, including 29 local Beijing media and one from Guangzhou. This press conference is an excellent example of increased, meaningful integration between ICA Communications and market development programs.

Europe and Africa
	ECI has signed-up to be one of the core industry members of the new Energy Efficiency Watch, an initiative of members of the European Parliament. Its primary goal is to ensure the progressive and ambitious implementation of the Member State Energy Efficiency Action Plans, prepared under the EU’s Energy Services Directive. Over the past five years, advocacy and communications efforts have substantially increased the visibility of the renewable energy industries. This has resulted in a number of fiscal and investment incentives being provided to support the growth of this sector. In the recent EU summit meeting, specific targets were also well publicized, including 20% of EU energy being sourced from renewables by 2020, versus around 6.5% today. The energy efficiency lobby in Europe is less well structured, with ECI having tried, on several occasions, to encourage the formation of a common interest group (similar to that achieved by the Alliance to Save Energy in the USA). Championed by a handful of members of the European Parliament, the Energy Efficiency Watch has now been launched. Core industry association partners include representatives from the cogeneration, insulation, glass, lighting and appliance industries, plus ECI. Participation in the steering committee of this initiative, which also includes representatives from Friends of the Earth and the WWF, will allow ECI to ensure that the appropriate emphasis is placed on electrical energy efficiency. With >90% of the environmental footprint of a typical electrical energy system being in its use phase, tools, such as our Eco-Design model, will help to build the case for using higher intensity of use copper applications, despite these frequently having higher upfront costs.

Latin America
	In Chile, with the support of four important mining industries, along with the Energy Efficiency Country Program (Programa País de Eficiencia Energética), the Mining Ministry and the motor manufacturing industry, a pilot project is being launched to replace standard-efficiency electric motors with more efficient units. This could include VSD (variable speed drive) in the mining industry, with the goal of proving the economic feasibility of this type of initiative. A commitment to these types of increased energy-efficiency levels will result in increased copper consumption. Estimated total cost of the project is around $80k US, with expected results as follows: - Develop a practical case study of the replacement of motors in Chile verified by suitable and internationally recognized organizations; - Prove that the replacement of motors for more efficient units is a business case, and the decision primarily is an economic one; - Use the mining industry as an effective example of success, and to disclose the high potential for increased copper consumption in Latin America; - Support the Energy Efficiency Country Program by supplying information regarding energy saving that can easily be applied to other industrial and commercial sectors; - Endorse the implementation of regulatory measures (labeling) based on the Chilean norms for efficient motors issued in 2006; - Build a solid foundation to justify energy-efficiency projects that are looking for funds through the Mechanism of Clean Development (MCD): - Quantify the potential impact in terms of increased copper demand.

North America
	The Copper Development Association Inc. has submitted interim guidelines regarding site-specific copper quality criteria in estuarine and marine waters to the U.S. Environmental Protection Agency, according to Ray Arnold, CDA Vice President of Environmental and Governmental Affairs and principal author of the document. The submission follows EPA’s request to prepare the guidelines as an alternative to the current Water-Effect Ratios procedure and to prepare the way for adoption of a saltwater BLM (similar to its freshwater counterpart, already adopted by EPA). CDA has been working with the U.S. Navy’s San Diego Space and Naval Warfare Systems Center, HydroQual Inc. (the developer of the freshwater biotic ligand model), as well as several universities and private laboratories to calibrate and verify a saltwater BLM. Model development should be completed within a year. The proposed interim guidelines are based on a regression-based model similar to the hardness-based regression equation formerly used to calculate the freshwater aquatic life quality criteria for copper. In place of water hardness, site-specific dissolved organic carbon (DOC) concentrations are used to calculate the site-specific dissolved copper saltwater quality criteria. Depending on DOC concentrations, the site-specific criteria developed using this model can be less than or greater than the current dissolved copper saltwater quality criteria. But, according to Arnold, not only is the DOC-based alternative far more accurate and helpful in determining true copper impact, it is also less expensive and less time consuming than the WER-based method. The interim guidelines are based upon and validated by Arnold’s peer-reviewed paper, “Validation and Update of a Model Used to Predict Copper Toxicity to the Marine Bivalve Mytilus sp.” published in the Journal of Environmental Toxicology. The paper was coauthored by J.S. Cotsifas, Pacific EcoRisk Inc., and K.M. Corneillie, Larry Walker Associates, Inc.

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