Nippon Denko Compendium 2017

1 2017 Nippon Denko Co., Ltd. August 2017 Nippon Denko Compendium 2017 2017 Nippon Denko Co., Ltd. Contents Company Overview Ferroalloys Functional Materials Environmental Recycling Systems Other Research and Development 1 Functional materials products Lithium-manganese oxide Hydrogen storage alloys Ferroboron: Key to energy saving and advanced functionality Manganese inorganic chemical products Zirconium oxide: material essential in digital devices Zirconium oxide: Expanding application to new fields What are environmental recycling systems? Melting and Solidification of Incineration Ash in Electric Furnace Electric power businesses Fertilizer businesses Research and Development 19 20 21 22 23 24 25 27 28 30 31 33 3 4 5 6 8 9 10 11 12 13 14 15 16 17 Company Overview Business sectors and products

2 History History of Chuo Denki Kogyo Co., Ltd. What are ferroalloys? Ferroalloys, materials essential to steel How are ferroalloys made? Global crude steel production in each country and ferroalloy production by product Ferroalloy production in Japan: Ferromanganese is produced domestically Ferroalloy raw material : Global production and trade in manganese ore Ferroalloy market prices and manganese ore prices Business strategy of Nippon Denko Ferroalloys business of Nippon Denko SLP ferromanganese production capacity raised to 40,000 t annually in 2010 Resource strategy and optimal location are the way to win out over rivals Kudumane manganese mining area 2017 Nippon Denko Co.

3 , Ltd. Company Overview 2 2017 Nippon Denko Co., Ltd. Hokuriku Plant: Functional materials Takaoka Plant: Functional materials Head Office, Plants, Research Laboratory (As of June 30, 2017 ) Chuo Denki Kogyo Kashima Plant: Ferroalloys Pertama Ferroalloys(Malysia) Hidaka Plant: Electricity and fertilizers Horomangawa Hydroelectric Power Plant Koriyama Plant: Environmental recycling systems Tokyo Head Office Tokushima Plant: Ferroalloys, functional materials, fertilizers Research Laboratory Chuo Denki Kogyo Myoko Plant: Functional materials Overseas Affiliates (As of June 30, 2017 ) WSK/Environmental recycling systems Kudumane Investment Holding (Hong Kong) Company Overview (As of June 30, 2017 ) Established Head Office Employees Business Operations Group Affiliates Scale Stock October 1925 1-4-16, Yaesu, Chuo-ku, Tokyo 955 in Nippon Denko and its consolidated subsidiaries (483 in Nippon Denko ) Ten domestic, three overseas affiliates (Fiscal year ended December 31, 2016; consolidated) (mil) (As of June 30, 2017 ) Manufacture and sale of ferroalloys, manufacture and sale of functional materials, manufacture and sale of environmental recycling systems, and other (electric power generation and supply, fertilizers, etc.)

4 Company Overview 3 Net sales 58,486 Total assets 84,563 Owner s equity 61,233 Capital 11,026 Interest-bearing Liabilities 7,891 2017 Nippon Denko Co., Ltd. Ferroalloys Ferroalloys Steel, stainless steel, and specialty steel Sector Typical Products Markets Functional Materials Lithium-manganese oxide Hydrogen storage alloys Ferroboron Zirconium oxide Boron oxide, boric acid Manganese inorganic chemical products Lithium-ion batteries Nickel-metal hydride cells Neodymium magnets, amorphous metals, Electronic parts optical lenses glass, surface treatment Supplements, additives for laminated ceramic capacitors, etc. Environment Chromic recovery, boron recovery, nickel recovery, water and wastewater treatment facilities, Melting and solidification of incineration ash in electric furnaces Surface treatment, electronic parts, automobile parts, industrial waste disposal plants Local governments and companies discharging industrial waste Other Electric power, calcium silicate fertilizer Power companies, agricultural cooperatives Company Overview Business Sectors and Products 4 2017 Nippon Denko Co.

5 , Ltd. 1925 Ogaki Denki Yakin Kogyosho Co., Ltd. (later Nippon Denki Yakin Co., Ltd.) established, begins production and sale of various ferroalloys 1937 Begins production and sale of chromium chemicals in Kuriyama, Hokkaido 1963 Nippon Denko Co., Ltd. formed with merger of Nippon Denki Yakin Co., Ltd. and Toho Denka Co., Ltd. 1969 Tokushima Plant built, begins operation (equipped with pier facilities and large electric furnace) 1971 Merges Kyokuto Kogyo 1973 Starts up chromic acid recovery operations 1984 Begins production and sale of ferroboron using an electric furnace 1989 Begins production and sale of zirconium oxide 1992 Completes new chromic acid recovery plant in Koriyama 1993 Establishes NST Ferrochrome (Pty) Limited jointly with South African firm Samancor 1996 Begins sale of AQUA PACK cartridge-type demineralizer 1999 Begins sale of MR-PACK pure water production unit 2000 Completes expansion of ferroboron production facility Completes construction of boron recovery facility Completes new zirconium oxide plant 2001 Forms strategic alliance with Nippon Rensui 2002 Establishes ND Recycle in South Korea for ion exchange resin recycling Starts up nickel recovery and recycling 2003 Acquires lithium manganese battery materials business Completes the ND Recycle plant in South Korea 2004 Starts fluorine and phosphorus recovery and recycling business Begins delivery of pure water production units for fuel cell use 2005 Installs an in-house power generator making use of gas from the electric furnace at the Tokushima Plant

6 2008 Boosts SLP ferromanganese production capacity to 30,000 t/year Increases ferroboron production capacity 2009 Establishes high-carbon ferromanganese production system of 220,000 t/year 2010 Completes first stage of large-scale plant for automotive battery materials Further boosts SLP ferromanganese production capacity to 40,000 t/year 2011 Completes second stage of large-scale plant for automotive battery materials 2012 Transfers chromium chemicals business to Nippon Chemical Industrial Co., Ltd. Invests in Pertama Ferroalloys Sdn. Bhd. 2013 Announces merger with Chuo Denki Kogyo Co., Ltd. Acquires manganese mining interests in South Africa 2014 Changes Japanese name upon merger with Chuo Denki Kogyo Co., Ltd. (English name unchanged) Ferroalloys Functional Materials Industrial Chemicals Environment Company Overview 5 History 2017 Nippon Denko Co.

7 , Ltd. History of Chuo Denki Kogyo 1934 Chuo Denki Kogyo Co., Ltd. was established as a partnership of Chuo Denki (electric power and equipment provider) and Chichibu Denki Kogyo (provider of ferroalloy manufacturing technology), and began electric furnace production of ferroalloys at the Taguchi Plant (current Myoko Plant in Niigata Prefecture). 1941 Began producing electrolytic manganese metals. 1969 Began construction of Kashima Plant (Ibaraki Prefecture). 1970 Completed first electric furnace (40,000 KVA) at Kashima Plant. 1974 Completed second electric furnace (50,000 KVA) at Kashima Plant. 1976 Began producing manganese sulfates at Taguchi Plant (current Myoko Plant 1979 Began producing manganese carbonates at Taguchi Plant (current Myoko Plant), and started research on hydrogen storage alloys. 1983 Test-produced hydrogen fuel cell vehicle at Taguchi Plant (current Myoko Plant) and began testing waste heat recovery system .)

8 1986 Began producing complex manganese dioxide at Taguchi Plant (current Myoko Plant). 1992 Began producing hydrogen storage alloys at Taguchi Plant (current Myoko Plant). 1997 Acquired ISO 9001 certification at Myoko Plant. 2001 Began ordinary waste treatment at Kashima Plant. 2002 Completed construction of waste melting furnace (EM1) at Kashima Plant and began treatment of industrial waste and special industrial waste. 2004 Completed construction of waste melting furnace (EM2) at Kashima Plant. Acquired ISO 14001 certification at Kashima Plant. 2005 Kashima Plant recognized as "Ibaraki Prefecture Superior Recycling Facility." 2006 Began producing manganese sulfates for lithium-ion batteries at Myoko Plant. 2010 Acquired ISO 9001 and OSHMS (Occupational Safety and Health Management system ) certification at Kashima Plant. 2011 Acquired Sumikin Molycorp, Inc.

9 (magnet alloys business) from Sumitomo Metal Industries, Ltd. (current Nippon Steel & Sumitomo Metal Corp.) and took over its lithium-ion battery anode materials business Began producing graphite for lithium-ion batteries at Myoko Plant. 2013 Obtained approval for soil decontamination at Kashima Plant. Acquired superior certification for industrial waste treatment at Kashima Plant. Acquired ISO 14001 certification at Myoko Plant. Announced merger with Nippon Denko Co., Ltd. (current Nippon Denko Co., Ltd.). Acquired superior certification for specially controlled industrial waste treatment at Kashima Plant. 2014 Merged with Nippon Denko Co., Ltd. 2016 Transferred magnet alloys business to Santoku Corporation and Sojitz Corporation. Company Overview 6 Ferroalloys Functional Materials Environment 2017 Nippon Denko Co., Ltd. Ferroalloys 7 2017 Nippon Denko Co.

10 , Ltd. Iron ore Limestone Coal Ferromanganese Silicomanganese Make steel stronger Ferrovanadium Oil well casings, line pipes, springs Ferrochrome Stainless steel products Ferrosilicon Deoxidizing Typical ferroalloy products and applications Ferroalloys are of vital importance in making steel, as they are a necessary seasoning found in every piece of steel. Steelmaking process Completion as steel Converter furnace Blast furnace Coke Sinter Ferroalloys market scale (outlook for 2017 ) Trading takes place at a price calculated by converting the global price in US dollars to yen at foreign exchange rates. (Similar to the export industry, the profit structure is such that a Nippon Denko main product: Ferromanganese In Japan, approx. 312 billion yen (Source: Nippon Denko estimate) They make steel stronger and tougher, as well as more resistant to heat and corrosion. Ferroalloys Nippon Denko 8 2017 Nippon Denko Co.)