Boliden — Annual Report 2013

Mar 13, 2014

ANNUAL REPORT 2013

Contents

Introduction	2013 in brief Boliden in brief President's Statement The Boliden share	1 4 6 8
Strategy	Market and pricing trends Boliden's market position Boliden's cost position Strategic orientation Financial performance and sustainability development Income model	12 16 17 18 20 22
Operations	This is Boliden – from deposit to customer This is exploration How mines work How smelters work How to interpret Boliden's fi gures The Group Mines Smelters Purchasing goods and services Risk management	26 28 30 31 32 33 36 42 48 49
Sustainable development	Boliden's employees Boliden's environmental work Evaluation of business partners New sustainability goals Limited Assurance Report	56 59 63 64 65
Financial reports	The Group The Parent Company Notes to the accounts Proposed allocation of profi ts Audit report	68 72 73 98 99
	Corporate Governance Report The Board of Directors The Group management Mineral reserves and mineral resources Ten-year overviews GRI-index Defi nitions Industry concepts and explanations 2014 Annual General Meeting	102 108 110 111 115 121 123 124
	and addresses	125

Boliden's Annual Report is published in both Swedish and English. The Annual Report in Swedish is the binding version. The Annual Report comprises the Director's Report on pages 8–20, 22–53 and 98, the fi nancial reports on pages 66–97 and sections of Boliden's sustainability reporting on pages 21 and 54–65.

Boliden on the map Tara Leamington Spa Rönnskär The Boliden Area Aitik Kokkola Harjavalta Stockholm Garpenberg Neuss Bergsöe Odda

Mining areas

Tara – zinc and lead Garpenberg – zinc, silver, lead, gold and copper The Boliden Area – zinc, copper, gold, silver, tellurium and lead Aitik – copper, gold and silver

Offices

Stockholm – Head Offi ce and Business Area Smelters Boliden – Business Area Mines Neuss – Sales Offi ce Leamington Spa – Sales Offi ce

Smelters

Kokkola – zinc and sulphuric acid Odda – zinc and aluminium fl uoride Rönnskär – copper, gold, silver, lead, zinc clinker and sulphuric acid Harjavalta – copper, gold, silver, sulphuric acid and nickel smelting Bergsöe – lead alloys

The 2013 Annual Report describes Boliden's fi nancial performance, together with its work on sustainability issues and the results thereof. Sustainability is a natural and integral part of Boliden's operations. The way in which relevant sustainability issues are managed and handled exert a very considerable infl uence on the company's profi tability and risk, and hence on its value generation ability. 2013 is the fi rst year in which Boliden's GRI Index, together with the associated information contained in the Annual Report and the GRI Report, has undergone an external limited assurance engagement. For a comprehensive presentation of Boliden's sustainability work, please visit the company's website, www.boliden.com/sustainability, where you will fi nd a complementary GRI Report and additional information on Boliden's sustainability work. Boliden reports in accordance with GRI 3.0 and achieves level B+.

For further information on measurement methodology, defi nitions or other guidelines, please contact Boliden's Information Department on tel. +46 8-610 16 30.

www.boliden.com

AR

2013 in brief

" 2013 was a tough year, market-wise, with lower prices for metals and a weaker US dollar exchange rate. Boliden's production however, was good, taking into account the large scale, planned maintenance shutdowns that we carried out. We have focused heavily on the expansion projects and on process stability and safety work – all areas that will continue to be of major importance for us in 2014."

Lennart Evrell, President and CEO

SEK m 34 ,409 (40 ,001) Revenues

SEK m 2, 271 (4 ,042) Operating profi t excluding revaluation of process inventory

SEK m 1,803 (4,171) Operating profi t

SEK m –1,466 (1,389) Free cash fl ow

SEK 4.72 (12.21) Earnings per share

Awards

• Boliden received the 2013 Swedish Industry Equality Prize.
• Boliden's Garpenberg mine received the 2013 SveMin work environment prize.
• Boliden's 2012 Annual Report came 5th in the international ranking, Annual Report of Annual Reports 2013.

Important events

• Aitik's ore production corresponded to an annual rate of 37 million tonnes at the turn of the year and the goal of 36 million tonnes per year was consequently achieved one year ahead of schedule.
• Major planned maintenance shutdowns at the smelters in order to upgrade processes and improve their effi ciency.
• Cost reduction programmes at Tara and Odda.
• Increase in mineral reserves at Garpenberg and in the Boliden Area.

Boliden's performance in 2013

Sales during the year totalled SEK 34,409 million (SEK 40,001 m). Th e year on year decrease was due to lower metal prices, lower by-products prices and to lower levels of metal production by the smelters which carried out maintenance shutdowns during the year.

Th e operating profi t excluding the revaluation of process inventory fell to SEK 2,271 million (SEK 4,042 m), with the majority of the deterioration in the profi t attributable to lower prices and negative exchange rate trends. Th e costs of consumables, spare parts and energy also increased. Th e year's maintenance shutdowns aff ected the profi t to the tune of SEK –330 million (SEK –170 m).

Th e operating profi t for Mines was SEK 1,598 million (SEK 2,974 m), while the operating profi t excluding revaluation of process inventory for Smelters was SEK 679 million (SEK 1,095 m).

Net fi nancial items totalled SEK –222 million (SEK –179 m) and the net profi t for the year totalled SEK 1,294 million (SEK 3,341 m). Earnings per share totalled SEK 4.72 (SEK 12.21).

Expansion projects

Th e expansion of the Garpenberg zinc and silver mine is currently in an intensive phase and will result in an increase in production capacity from today's 1.4 to 2.5 Mtonnes of ore per year.

A facility for extracting silver from zinc concentrate, which contains increasing grades of silver, is currently being built at the Kokkola zinc smelter.

Mineral reserves and resources

Mineral reserves at Garpenberg increased by almost 11 Mtonnes as a result of the upgrading of the Kvarnberget mineral resource. Mineral reserves in the Boliden Area increased by 3.2 Mtonnes. Th ere were no major changes at either Aitik or Tara.

Employees

Th e average number of employees during the year was 4,815 (4,795). 17 per cent (17%) of the workforce are women.

Th e sick leave rate during the year was 3.9 per cent (3.7%). Th e accident frequency including contractors fell slightly during the year to 8.9 (9.1).

Key data	2009	2010	2011	2012	2013
Revenues, SEK m	27,635	36,716	40,323	40,001	34,409
Operating costs,
excl. depreciation, SEK m	9,024	9,833	10,575	10,398	10,304
Depreciation, SEK m	1,562	1,802	1,937	2,560	2,829
Operating profi t excl. revaluation
of process inventory, SEK m	2,350	4,830	5,008	4,042	2,271
Operating profi t, SEK m	3,623	5,643	4,748	4,171	1,803
Investments, SEK m	4,915	2,996	3,998	4,569	4,974
Capital employed, SEK m	26,229	27,151	30,473	31,236	34,451
Return on capital employed, %	14	21	17	14	5
Number of full-time employees	4,379	4,412	4,597	4,795	4,815
Production, Mines	2009	2010	2011	2012	2013
Zinc, tonnes	307,128	293,814	283,217	271,203	271,674
Copper, tonnes	54,602	75,977	81,205	79,363	79,302
Lead, tonnes	56,669	49,585	49,477	48,809	48,365
Gold, kg	3,130	3,727	3,681	3,644	3,849
Gold, troy oz.	100,623	119,839	118,332	117,150	123,759
Silver, kg	214,120	230,756	231,388	229,791	261,804
Silver, troy oz. '000	6,884	7,419	7,439	7,388	8,417
Tellurium, kg	–	–	–	6,791	24,457
Production, Smelters	2009	2010	2011	2012	2013
Zinc, tonnes	434,022	456,006	460,552	467,389	455,130
Copper, tonnes	302,355	303,184	335,771	338,577	324,745
Lead, tonnes	13,013	17,013	11,429	18,970	24,039
Lead alloys, tonnes	38,561	42,166	41,009	42,558	44,674
Gold, kg	15,028	14,220	12,848	16,175	16,177
Gold, troy oz.	483,157	457,168	413,052	520,011	520,094
Silver, kg	539,564	450,280	488,147	575,959	537,941
Silver, troy oz., '000	17,346	14,476	15,964	18,517	17,294
Sulphuric acid, Ktonnes	1,123	1,372	1,597	1,634	1,564

Comments and important events during the year Q1

• Weak production by Mines and weak metal production by Smelters due to disruptions to production.
• Th e leaching plant for extracting tellurium from ore at the newly opened Kankberg mine came on line in late 2012 and fi ne-tuning of production continued during the fi rst quarter.
• Boliden implemented the OECD Due Diligence guidance for Responsible Supply Chains of Minerals from Confl ict-Aff ected and High-Risk Areas.
• Cost reduction programmes in progress at Tara and Odda. Decision taken to decrease Tara's workforce by approximately 50 employees.
• New and amended accounting principles for pensions and waste rock activation and which aff ected the comparison fi gures were introduced on 1st January.

Q2

• Strong production by Mines with high production levels at Aitik. Weak metal production by Smelters due to main tenance shutdowns.
• Th e Annual General Meeting was held on 3rd May and a dividend of SEK 4 was approved.
• Th e hedging programmes utilised in conjunction with the Garpenberg expansion project expired in June.
• 23rd April was the fi nal trading day for the Boliden share on the Toronto Stock Exchange (TSX).
• Th e Swedish Tax Agency decided to impose an additional energy tax charge of SEK 212 million on Boliden in connection with the use of dyed diesel. Boliden has appealed the ruling.

Q3

• Low concentration and production levels by Mines. Metal production by Smelters normalised after the maintenance shutdowns.
• Remedial action programme launched at Rönnskär in order to get to grips with the process instability there.
• In July, the Swedish Land and Environment Court granted Boliden a new environmental permit for its operations at Rönnskär. Th e Swedish Environmental Protection Agency appealed the ruling. Proceedings in May 2014.
• Fire broke out in the Kristineberg mine and exposed three people to great danger, but no one was seriously hurt.
• In October, Boliden was served with a claim for damages of just over SEK 90 million in

relation to the export of metal residues from the Rönnskär smelter between 1984 and 1985. Boliden has contested the suit.

Q4

• Good production by Mines. Strong metal production by Smelters for all of Boliden's main metals, with the exception of silver.
• Aitik's ore production corresponded to an annual production rate of 37 Mtonnes and the goal of 36 Mtonnes was consequently achieved one year ahead of schedule.
• A ruling by the Swedish Land and Environment Court of Appeal prevented an expansion by Boliden Bergsöe. Boliden has appealed the ruling to the Supreme Court.
• Boliden's capital market days were held in Boliden and Rönnskär, with the focus on complex raw materials.

Revenues and operating profi t

Volatile metal prices and exchange rates affect Boliden's sales and results, which have varied considerably since 2004 when Boliden, in its current structure, was formed. Revenues have fallen during the year, primarily as a result of lower metal prices.

Investments and cash fl ow from operating activities per year

Boliden's investments since 2004 total in excess of SEK 33 billion. This fi gure includes not only the ongoing annual investments, but a number of major expansion projects. Boliden's cash fl ow from operating activities since 2004 totals SEK 44 billion and has fi nanced these investments.

Return on shareholders' equity and capital employed The returns on capital employed and shareholders' equity in 2013

were 5 per cent (14%) and 6 per cent (16%), respectively.

Accident frequency 1)

The number of accidents leading to absences from work (LTI) for Boliden's personnel, including contractors, fell slightly in 2013 from 9.1 to 8.9 per one million hours worked. Boliden's units had an average of 6 (8) accident-free months during the year.

1) Starting 2012 the accident frequency is reported for Boliden's own personnel including contractors.

Boliden in brief

Boliden is an integrated producer of important base metals such as zinc, copper and lead for industrial customers throughout Europe. The production of precious metals, such as gold and silver, forms an increasingly important part of Boliden's operations.

Almost 90 years' experience

Boliden's history stretches all the way back to the 1920s, since when the company has established a competitive position in the fi elds of exploration, mining operations, concentration, smelting and recycling operations. Today's Boliden has cutting edge expertise in all of these areas.

Eight mines in four mining areas and fi ve smelters

Boliden's four mining areas produce ores containing zinc, copper, lead, gold and silver, along with smaller quantities of other metals. Aitik and the Maurliden mine in the Boliden Area are open pit mines, while the others are all underground mines. Aitik's productivity is higher than that of any other copper mine in the world.

Boliden's smelters, Rönnskär, Harjavalta, Kokkola, Odda and Bergsöe, produce pure metals, customised alloys, and a number of by-products, such as sulphuric acid. Th e raw material comprises metal concentrates from mines plus metal and electronic material and scrap car batteries. Rönnskär is the world's leading recycler of electronic scrap and the Bergsöe smelter is one of the biggest lead recycling smelters in Europe.

Industrial customers in Europe

Th e majority of Boliden's metals are sold to industrial customers in northern Europe. Steelworks, which use zinc to galvanise steel, are the main customers for Boliden's zinc. Infrastructure, the construction industry and the automotive industry are among the most important spheres in which this galvanised steel is used.

Wire rod and copper rod manufacturers make up the majority of Boliden's copper customers. Important applications include the construction and automotive industries and manufacturers of electrical and electronic components. Battery manufacturers make up the majority of Boliden's lead customers, while the main customers for gold and silver are the electronics and jewellery industries.

Boliden's stakeholders in the day-to-day operations

Boliden in society

Metals have a key part to play in society. Global inequalities are being reduced thanks to the rapidly improving living standards in China and other emerging economies. Development relies on the increased production of base metals that provide the fundamental building blocks for construction, infrastructure, energy systems, vehicles and railways, computers and mobile phones. Th ey are a vital component of virtually everything we do. At the same time, however, the production of metals is complicated and has a variety of diff erent impacts on the surrounding areas. Boliden strives to be a highly respected company that generates value for all of the company's stakeholders. It is only natural, therefore, that Boliden's value creation must include showing consideration for people, nature, the environment and society throughout the value chain.

Dialogues with local communities

Boliden's operations aff ect and touch the lives of many people and stakeholders, both in society as a whole and in the communities around Boliden's facilities, where Boliden is often a major and signifi cant operator. It is, therefore, important to Boliden that we maintain a good dialogue and close cooperation with the local community.

Th is dialogue and communication naturally involve, in part, reducing the operations' environmental impact and managing the long-term eff ects, but they also entail highlighting the positive role that a responsible mining industry plays in society as a whole and in the places in which it operates – contributing to the maintenance of viable rural communities, generating job opportunities and boosting economic development. Boliden is the biggest employer in many communities and hence also a key prerequisite for fundamental societal services and facilities in the immediate area.

Th e most recent expansions at Aitik and Garpenberg are the Group's biggest investments to date. Th ey have more than doubled the mines' lifespans and have generated the preconditions for long-term social planning in communities such as Gällivare and Hedemora.

Value generation

It is important, for investors, shareholders and society alike, that Boliden conducts effi cient operations that are sustainable in the long-term. Th e past ten years have seen Boliden boost its competitiveness and longterm potential by means of investments totalling SEK 33 billion. Th ese include investments designed to enhance the effi ciency of the mines and smelters, e.g. in the form of upgrades and the implementation of new technology. A large part of the investments have been made in environmental improvements. Substantial investments have also been made in exploration and projects – both those designed to increase production and extend lifespans in existing facilities but also with a view to starting new operations, such as the Kankberg gold mine. Th ese investments have been fi nanced through internal cash fl ows.

Th e total return on the Boliden share has outperformed that of the international mining index, Euromoney (HSBC) Global Mining, over the most recent ten-, fi ve- and three-year periods. Th is builds confi dence among shareholders, lenders and employees and enhances Boliden's ability to attract the capital and

Metals for the modern society

Metals are vital to society's development. There are virtually no products or services nowadays that are not either made from or reliant on metals, and it is almost impossible to imagine how life would be without them.

expertise it needs for continued growth. Boliden's total return in 2013 was higher than that of the international mining index but lower than that of the OMX Stockholm 30.

Metals for the modern society

Metals are an ever-present and vital component of society. Th ere are virtually no products in our modern society that either contain no metal or where metal has not been used in their production.

Demand for metals is constantly increasing in the world's emerging economies where there is a need for new and improved housing, and as prosperity and affl uence increase, the demand for consumer products, such as electronics and cars, increases too. In mature economies, such as the EU, USA and Japan, demand is cyclically sensitive and is falling slightly over time, but still accounts for a substantial percentage of global metal consumption.

One of the important properties of many metals is that they can be recycled over and over again by smelting them down and turning them into new products. Boliden has decided to play an active part in this recovery and recycling work, which is expected to become increasingly important with time.

Boliden's most important metals have the following applications:

Zinc – prevents rust

Almost half of all zinc produced globally is used to galvanise steel, and modern vehicles have steel chassis. Coating the steel with zinc is a very eff ective means of providing longterm protection against rust.

Copper – technological products

Copper is a malleable metal that is extremely conductive of electricity and heat – properties that make it one of the world's most important metals. It is vital to energy supplies in every type of society, and is a critical component of today's hi-tech products. Th e increased use of renewable energy is boosting the demand for copper.

Lead – motor vehicles

Th e majority of the lead produced is used in motor vehicle batteries. Th e reason for this is that lead batteries are cheap and robust and can deliver large amounts of current quickly, which is important to vehicles' starting motors.

Gold – electronics and jewellery

Gold is a precious metal that is soft and malleable. Gold is used in jewellery and electronics and as a fi nancial asset.

Silver – heat and electricity conductor

Silver is a relatively soft metal that conducts heat and electricity better than any other metal. Over half of the silver produced today is used by the electrical and electronics industries.

Nickel – for stainless steel

Nickel is used, together with chromium, in the production of stainless steel. Nickel is also used in alloys with copper and/or zinc and is an important component in coin manufacture as nickel does not rust and is hard.

Palladium – catalytic converters

Palladium is a soft, rare metal that alloys easily with other metals. Spheres of use include catalytic converters, jewellery, watches, the dental care sector and surgical instruments.

Tellurium – solar panels and semiconductors

Tellurium is a rare, brittle metalloid. Tellurium is a semiconductor used in solar panels and as an alloy component, primarily in alloys with copper and steel.

President's Statement

Demand for Boliden's metals was relatively strong in 2013, but concerns about the global economy and increased global supplies resulted in a fall in metal prices. Production levels during the year were good, particularly at Aitik, which reached the production goal for 2014 one year ahead of plan. The smelter production was limited by the biggest planned maintenance shutdowns ever. Investments in the Garpenberg zinc/silver mine and the project to extract silver from silver-containing zinc concentrate at Kokkola both entered their most intensive phases during the year and proceeded according to plan. The focus on costs and increased productivity during 2013 helped keep costs largely unchanged. Work with cost control and productivity will continue in 2014.

Global demand for metals has continued to increase for a number of years in succession, driven by rapid economic development in densely populated countries that have begun to lift themselves out of poverty and political turbulence. Th e level of inequalities between the diff erent countries of the world has consequently shrunk and the number of poor countries is dropping rapidly. China's position as the engine that drives the world's metals markets is expected to start retreating in around 2020 and the question then is whether other countries can achieve similar improvements in prosperity, with increased urbanisation and higher standards of living. Boliden's metals are fundamental components of this

equalisation in affl uence. Th e mature economies are also important in terms of demand for metal. Th eir demand is not increasing over time, but cyclic economic patterns have a considerable infl uence on prices. Th e transition to renewable energy and the development of modern communication and information systems demand vast quantities of copper and zinc: energy systems based on wind power and solar panels, for example, require many times more copper than traditional energy forms, in that the

We have successively strengthened our longterm potential through expansion investments fi nanced from our own cash fl ow. Boliden is well-positioned for the future.

systems are dimensioned for windy or sunny days but are only utilised part of the time.

Th e New Boliden Way is Boliden's model for leadership and operations management with the aim of achieving stable processes and a reduced need for resources. Stable processes result not only in high production levels and low costs, but also help improve environmental performance and generate safer workplaces. Successful work using existing resources consequently generates substantial value in that it results in lower capital requirements and low costs. Establishing stable processes is not simply a matter of management and continuity. Th e work also leads to greater commitment and knowledge transfer within the company. Several units have taken new steps towards higher productivity and increased commitment

on the part of all employees during the year. Our New Boliden Way work is never-ending: it is a process of improvement in which each new level will be challenged and new improvements will be developed.

Boliden's two ongoing expansion projects – the Garpenberg zinc/silver mine and the silver extraction project at the Kokkola smelter – were launched in 2012 and the projects are now ready to go live in 2014. Th e majority of the facilities at Garpenberg, Boliden's second biggest investment ever, were built during the year. A new concentrator is being constructed directly adjacent to two shafts that go down to a depth of 1,200 m and has been

sited in the middle of the new production areas. At its peak, 1,000 people were working on the project's rockwork, construction and equipment installation activities.

Th e investment in silver extraction at Kokkola is important not only because larger quantities of silver-bearing zinc concentrate from Garpenberg will be processed, but also because the zinc concentrates on the global market are showing a tendency to contain increasing silver grades.

The past year

Production went well in 2013, costs were under control and the expansion projects proceeded according to plan. Yet the results weakened. Th is was due to Aitik producing in areas with low grades, the smelters carrying out planned maintenance shutdowns on an unprecedented scale, and a deterioration in market terms.

Th e Aitik copper mine achieved an ore production fi gure of 37 million tonnes, which was very good news indeed and means that the annual production target fi gure of 36 million tonnes was reached one year ahead of schedule. Th e Boliden Area and Garpenberg suff ered from the deterioration in silver and gold prices, but production levels were good, particularly in the Kankberg gold mine which became operational in 2012. Garpenberg had a strong

year, despite certain disruptions in conjunction with the ongoing expansion project during the year. Th e Tara zinc mine in Ireland continued the cost reduction programme launched in 2012 within the framework of the New Boliden Way, with strong commitment from all employees.

Th e smelters' major maintenance shutdowns in the spring were conducted largely according to plan and resulted in production levels falling in comparison with the previous year. Harjavalta improved its process stability, was able to extract valuable metals from intermediate stocks, and reported an extremely good result. Th e trend at Rönnskär was, to some extent, the opposite with poorer quality raw materials leading to deteriorations in yields and lower production. An action programme has been implemented in order to rectify these problems. Odda continued to reduce costs and Kokkola reported a stable year.

Th e most recent compilations of the world's mines and smelters show that Boliden's competitiveness has increased, the strong Swedish krona notwithstanding. Th is is partially due to the ongoing fi ne tuning of new projects, but is largely due to the work on the

New Boliden Way and to the strengthening of the purchasing organisation that has resulted in costs being cut in a number of areas. During my meetings with personnel in various functions across Boliden, it is apparent that leadership and attitudes towards safety, the environment and equal opportunities have improved in recent years. Th e consensus that has been achieved with regard to crucial change requirements is hugely important in terms of Boliden's development. One area which, despite a strong focus, has not developed as well is our safety work. Boliden does have a lower accident frequency than companies in many other sectors, but it is also clear that the best companies are better than Boliden in this respect and it is vital that we continue to improve our safety culture if we are to achieve our ambitious goals. Boliden's environmental performance during the year was good and our reduced emission and discharge goals have been met with a good margin in most areas. Boliden is a signatory to the UN's Global Compact and our eff orts to implement and promote its 10 principles continue.

Our work towards increasing equality of opportunity was rewarded with the 2013 Swedish Industry Equality prize, and our work to increase understanding of Boliden's operations was ranked fi fth of over 400 companies in the Annual Report of Annual Reports 2013.

It is 90 years since the discovery of the gold deposit in Fågelmyra outside Skellefteå that led to the creation of Boliden, both as a community and as a company. A number of unique areas of expertise within mining, smelting and leaching processes and exploration have been developed over the long years since then, and even when times have sometimes been hard, Boliden has continuously honed its expertise in critical areas and built up its own project resources.

2013 ended well at most units and we are approaching the dates when the new facilities at Garpenberg and Kokkola will go live. 2014 will be an exciting year!

Stockholm, February 2014

Lennart Evrell President & CEO

The Boliden share

The Boliden share is listed on the NASDAQ OMX Nordic Stockholm Exchange (NASDAQ OMX) in the Large Cap segment. The share price has, in common with the mining and metals sector as a whole, been affected by lower metal prices and the Boliden share fell by 19 per cent during the year, while the Euromoney (HSBC) Global Mining Index fell by 25 per cent.

Trading of the Boliden share

Th e number of Boliden shares traded on the NASDAQ OMX fell slightly in 2013, with a total of 587 million (662 m) shares traded during the year at a value of SEK 58 billion (SEK 70 b). An average of 2.3 million (2.6 m) shares were traded per trading day on the NASDAQ OMX, corresponding to 67 per cent (55%) of the total turnover in the share, while share trading in other marketplaces accounted for 33 per cent (45%) of this total. Th e Boliden share accounted for 2.0 per cent (2.6%) of the total number of shares traded on the NASDAQ OMX.

Th e biggest marketplace, after Stockholm, was the BATS Chi-X Europe, which accounted for 20 per cent of the total turnover in the share. A total of 1.1 billion shares were traded in all marketplaces in 2013 at a value of SEK 108 billion.

Th e share was delisted from the Toronto stock exchange during the year after several years of low turnover.

Price trend and dividend

At the end of 2013, the Boliden share was quoted at SEK 98.45 (SEK 122.10) on the NASDAQ OMX, corresponding to a market capitalisation of SEK 26.9 billion (SEK 33.4 b). In common with other raw material companies, the variation in the value of the Boliden share is, on average, greater than for the broad stock market indices. Th e beta value of the Boliden share over the last fi ve years against OMXSPI is 1.55.

Th e price of the Boliden share fell by 19 per cent during the year in comparison with the Euromoney (HSBC) Global Mining Index, which fell by 25 per cent. Th e OMX Stockholm 30 index rose by 21 per cent.

Th e Board of Directors proposes to the Annual General Meeting that a dividend of SEK 1.75 (SEK 4.00) per share be paid for 2013. Th e proposed dividend corresponds to 37 per cent (32.8%) of the net earnings per share and a dividend yield of 1.8 per cent (3.3%), calculated on the basis of the share price at the end of the year.

Th e Boliden share's total return (the sum of the dividend paid and the price development) over the most recent 10-year period was, on average, 16 per cent per annum.

Share capital

Th ere are a total of 273,511,169 Boliden shares. Every share has a nominal value of SEK 2.12 and the share capital totals SEK 578,914,338. Boliden's share capital comprises a single class of share in which every share has the same voting power and grants the same entitlement to dividends. Th e Boliden Articles of Association contain no provisions restricting the right to transfer shares or any limitations with regard to the number of votes that a shareholder can exercise at General Meetings of the company's shareholders. Boliden does not hold any of its own shares, nor has it issued any shares in 2013.

Boliden is unaware of any agreement between shareholders that may entail restrictions on the right to transfer shares in the company. Boliden is not party to any signifi cant agreement aff ected by any public buyout off er. Boliden has no shareholders who, either directly or indirectly, represent at least one tenth of the total number of votes for all shares.

Ownership structure

Boliden had 90,963 (90,234) registered shareholders on 31st December 2013.

Approximately 41 per cent (44%) of the shares were owned by foreign shareholders. Th e ten biggest single shareholders represent 32 per cent of the share capital.

Boliden's employees hold shares via a profi t sharing foundation for which voting rights cannot be directly exercised. Th e foundation held 700,113 (433,750) shares at the end of the year.

Th e table overleaf shows Boliden's ownership structure on 31st December 2013.

Shareholder information on the website

Boliden's website, www.boliden.com, provides information on Boliden, the performance of the Boliden share, metal prices and currencies, and fi nancial reports, along with details of how to contact Boliden. Presentations of Interim Reports and capital market days are also available on the website.

Distribution of Boliden shares on 31st December 2013
Shareholding	Number of shareholders	Number of shares	Holding, %	Votes, %
1 – 500	67,951	10,950,321	4.0	4.0
501 – 1,000	11,419	9,800,852	3.6	3.6
1,001 – 5,000	9,378	21,678,737	7.9	7.9
5,001 – 10,000	1,075	8,181,705	3.0	3.0
10,001 – 50,000	756	16,168,971	5.9	5.9
50,001 – 100,000	112	8,194,227	3.0	3.0
100,001 –	272	198,536,356	72.6	72.6
Total	90,963	273,511,169	100.0	100.0
Source: Euroclear

Banks who monitor Boliden
ABG Sundal Collier	Goldman Sachs
Bank of America	Handelsbanken
Merrill Lynch	HSBC
Carnegie	Kepler Cheuvreux
Citi	Morgan Stanley
Credit Suisse	Nordea
Deutsche Bank	Pareto
Danske Bank	SEB
Erik Penser
	Sociéte General
Exane	Swedbank

Share price, sector index and OMX

Share price, sector index and OMX. The share price fell by 19 per cent during the year and consequently slightly outperformed the Euromoney (HSBC) Global Mining sector index which fell by 25 per cent, but per-

formed more poorly than the OMX Stockholm 30 total, which rose by 21 per cent.

Trading in different marketplaces

Other, 4%

Ownership by country

Sweden, 59% USA, 17% Norway, 7% UK, 4% Other, 13%

Source: SIS Ägarservice

Trading in different market-

places. As a comparison, 48 per cent of all trade in the shares that make up the OMX30 index are traded on the OMX NASDAQ exchange in Stockholm; the fi gure for normal stock market trading for the same shares is 66 per cent (the remaining trading primarily comprises OTC trades). The corresponding fi gure for normal stock market trading in the Boliden share is 76 per cent. Boliden is one of the 30 shares that make up the OMX30 index.

Ownership by country.

Approximately 41 per cent of the shares were held by foreign investors at the end of the year.

Boliden's 10 biggest owners
on 31st December 2013
Percentage of capital and votes, %
Norges Bank Investment
Management	5.6
BlackRock Inc	5.0
SEB fonder	4.2
SHB fonder	3.2
AMF Försäkring och fonder	3.0
Swedbank Robur fonder	2.7
Nordea fonder	2.4
AFA Försäkring	2.3
Söderbloms Factoringtjänst AB	1.7
Danske Invest fonder (Sweden)	1.6
Total	31.7

Source: SIS Ägarservice

Source: Fidessa

The average total shareholder return on the Boliden share over the past 10 years was 16 per cent per annum and 349 per cent for the period as a whole. Boliden's annual total shareholder return has outperformed the international mining index in all of the one-, three-, fi ve-, and ten-year periods. The annual total shareholder return has, furthermore, outperformed the OMX Stockholm 30 index during the fi veand ten-year periods, but was outperformed by that index during the one- and three-year periods.

Source: Reuters Datastream

The share in brief

Marketplace	NASDAQ OMX Stockholm
Short name	BOL
ISIN code	SE 0000869646
ICB code	1700
Highest price paid, 2013 SEK 126.7
Lowest price paid, 2013 SEK 80.15
Closing price, 2013	SEK 98.45
Market capitalisation, 31st Dec. 2013	SEK 26.9 bn
Turnover rate, 2013	211%
Number of shares	273,511,169
Beta value (5 years)	1.55

Source: NASDAQ OMX

Strategy

Boliden shall be the natural company of choice for commercial partners, with a leading position among medium-sized metal companies. It shall achieve this status by creating competitive mines and smelters and with the aid of increased exploration that ensures future growth.

Contents	Market and pricing trends	12
	Boliden's market position	16
	Boliden's cost position	17
	Strategic orientation	18
	Financial performance and sustainability development	20
	Income model	22

Boliden is the European leader in the exploration sector and focuses primarily on identifying ores that contain zinc, copper and precious metals.

"I chose Boliden in order to develop as a geologist and because of the company's extensive exploration operations. Being able to live nearby and to combine work and family life properly helps too. My job is fun and, above all, creative. And having the opportunity to get involved in taking important decisions that are crucial to Boliden's future development is also exciting."

Ditte Kilsgaard-Möller, Geologist, Boliden Exploration

Market and pricing trends

Global demand for metals is driven by the population growth and urbanisation that goes hand in hand with economic growth and increasing prosperity in more and more parts of the world. The rapid urbanisation process in emerging economies is leading to a growing need for investments in housing and infrastructure, resulting in increased demand. The trend in treatment and refi ning charges for both copper and zinc was positive in 2013, while the average base metal prices were down from levels in 2012. Interest in precious metals waned and prices fell.

Th ere are a number of factors to indicate that the demand for metals will continue to increase. One important indicator is that the demand for metals grows most rapidly when GDP per capita grows from USD 5,000 to USD 15,000. Around 37 per cent of the world's population live in countries with a GDP per capita in this interval, while approximately 41 per cent still live in countries with a per capita GDP of less than USD 5,000.

Mature economies in the west have relatively constant metal consumption rates, but the size of these countries ensures that they still account for a signifi cant percentage of global metal consumption.

Market trends in 2013

Global GDP is estimated to have risen by 2.9 per cent in 2013, corresponding to a slow-down since the previous year, when GDP rose by 3.2 per cent. Growth levels in mature economies rose by 1.2 per cent during the year, in comparison with a rise of 1.5 per cent last year, while in developing countries, growth levels fell from 4.9 per cent in 2012 to 4.5 per cent in 2013. Th e EU as a whole continued to report zero growth, while in the USA, growth slowed from 2.8 per cent in 2012 to 1.9 per cent in 2013. China's growth rate is calculated to have been on a par with levels in 2012, at 7.7 per cent.

Demand for Boliden's main metals, zinc and copper, is driven primarily by trends in the automotive and construction industries, with the emphasis on infrastructural projects. China is currently the biggest market for base metals.

Industrial activity levels have increased in Europe but it was not until the fourth quarter that they exceeded last year's levels. Th e construction market has continued weak throughout the year, other than in a few countries such as Germany, where the trend was positive, albeit from low starting levels. European automotive production remained unchanged, overall, year on year, but increased in Eastern Europe. Industrial activity levels continued to improve in the USA and investments in the construction sector increased for the second year in succession. Automotive production increased in the USA, but did so more slowly than in 2012. Levels of growth in China's industrial production continued to be high in comparison with the preceding year and were slightly higher during the latter half of the year than the former. Th e rate of growth in infrastructural investments in China continued to be high and automotive production grew more rapidly than in 2012.

Concentrate market trends

Th e balance between the supply of concentrate from the world's mines and the smelters' demand for mined concentrate determines the trend in treatment charges, which are the payments smelters receive from mines for refi ning the concentrate into saleable metals.

Treatment charges − zinc

Smelters' production increased during the year, while global mined production remained virtually unchanged. Th is resulted in a surplus in mined concentrate in 2013, albeit a smaller one than in 2012. Spot market treatment charges rose continuously in 2012 from a very low level. 2013 saw a smaller rise in treatment charges and the yearly average for 2013 was substantially higher than in 2012. Th e annual treatment charge negotiations for 2013 resulted in benchmark contracts with a price level that was higher than in the previous year. Th e price sharing clause in place between zinc mines and smelters resulted in realised treatment charges that remained stable across the full year and which were 14 per cent higher than in 2012 as a whole.

Treatment and refi ning charges − copper

Mines' concentrate production increased during the year, resulting in a market surplus. Th is trend resulted, in turn, in a sharp rise in spot market TC/RC from the spring onwards, and by the end of the year, the spot price levels were considerably higher than those in the benchmark yearly and half-yearly contracts. Th e benchmark contracts negotiated for 2013 were approximately USD 70 (USD 62.5) per tonne of concentrate in treatment charges and USc 7.00 (USc 6.25) per pound in refi ning charges. Th e benchmark level negotiated at the end of June saw an increase in the treatment charge to approximately USD 73 and the refi ning charge to approximately USc 7.30.

Metal premiums trend

Boliden's main metals – zinc and copper – are primarily sold to industrial customers in Europe. Th e regional balance between metal consumption and smelter capacity determines the level of the metal premiums paid by industrial customers in addition to the metal price.

Zinc

Th e European contract premiums for zinc remained virtually unchanged in comparison with 2012. Spot market premiums in Europe remained stable at around USD 130−140 per tonne of metal during the fi rst six months of the year, rising during the latter half to approximately USD 150 per tonne of metal.

Copper

Th e European contract premiums for copper fell in comparison with 2012. Spot market premiums in Europe were lower than the contract premiums at the beginning of the year, but rose rapidly, and by the end of the year were considerably higher than the contract premium level.

Treatment charges − zinc

European spot metal premiums − zinc

Zinc

Price and stock trends − zinc

Demand trend − zinc

Treatment charges − copper

European metal premiums − copper

Source: CRU Jan/Feb 2014 Copper metal premiums, European benchmark contracts

The average price of zinc on the London Metal Exchange (LME) was 2 per cent lower in 2013 than in 2012. The price rose at the beginning of the year only to fall during the spring, and then stabilise from the end of June onwards and by the end of 2013, the price of zinc was USD 2,053/tonne, which was on a par with the price at the end of 2012.

Global consumption of zinc metal totalled approximately 12.8 million tonnes, corresponding to a year on year increase of approximately 3.5 per cent. Consumption increased in China by 5 per cent, while in mature economies and other developing countries, consumption increased by just over 2 per cent.

Global production of metal by zinc smelters totalled approximately 13 million tonnes, corresponding to a year on year increase of approximately 5 per cent. Production in China increased by just under 12 per cent in comparison with 2012, when production decreased by just under 9 per cent. China's share of global production increased to just under 40 per cent (38%). Production levels remained unchanged in mature economies but increased by 4.5 per cent in developing countries, excluding China.

Global mined production of zinc concentrate increased slightly compared with 2012. Production increased in China after several years of steep increases, while production in the rest of the world fell slightly, taken as a whole. Production fell in North America by just over 10 per cent and by just under 4 per cent in Europe, but increased by just over 5 per cent in South America and by just over 11 per cent in Asia excluding China. Global offi cial zinc stocks at the LME and the Shanghai Futures Exchange (SHFE) fell during the year by 23 per cent to just under 1.2 million tonnes at the end of 2013, corresponding to 33 (45) days' global consumption.

Copper

Demand trend − copper

Gold

The average price of gold fell by 16 per cent in 2013. The gold price at the end of the year was USD 1,202 per troy ounce, corresponding to a year on year price fall of 27 per cent. Gold has long been an important asset class among fi nancial investors and is often regarded as a lower risk option when the global economy is weak. Interest in gold as an investment class has, however, declined in 2013 and capital has shifted to other asset classes.

Price trend − gold

The average price of copper on the LME fell by 8 per cent in 2013 in comparison with the previous year. The price rose at the beginning of the year, only to fall again during the spring and then stabilise from the end of June onwards. By the end of 2013, the price was USD 7,376 per tonne, corresponding to a year on year fall of 7 per cent.

Global consumption of copper increased by approximately 4 per cent in comparison with 2012, to approximately 20.5 million tonnes. Consumption in China increased by just under 8 per cent and by just over 1 per cent in the rest of the world. Consumption fell in mature economies during the fi rst six months of the year, only to rise again during the latter half of the year. China's consumption totalled approximately 8.7 million tonnes, or just under 43 per cent (41%) of global consumption.

Global production of copper metal by smelters and refi neries increased by just under 4 per cent in comparison with 2012 and totalled approximately 20.6 million tonnes. Production increased in all regions with the exception of Europe, where it fell by 2 per cent. Production in China increased by 10 per cent. China produced approximately 6.2 million tonnes of copper in 2013 and increased its share of global production to just under 30 per cent (28%).

Global mined production of copper concentrate increased by just over 8 per cent in comparison with 2012. Production rates rose more rapidly than in 2012 in all of the world's regions with the exception of Europe, where production increased by just under 2 per cent. Production increased by just over 10 per cent in South America and disruptions had a lesser effect on production than in 2012. At the same time, new production capacity was added.

Global offi cial stock levels at LME, SHFE and Comex at the end of the year were down by approximately 14 per cent on levels at the end of the previous year and totalled 0.5 million tonnes. Stock levels rose sharply until the end of June, after which they successively declined. Stock levels at the end of 2013 corresponded to 9 (11) days' global copper consumption.

Silver

The price of silver was on average 24 per cent lower than during 2012. By the end of 2013, the price was USD 19.50 per troy ounce, corresponding to 35 per cent lower than at the end of 2012. Silver consumption by the manufacturing and jewellery industries is estimated to have increased by approximately 4 per cent, while the supply from mines and recycled silver is estimated to have fallen by approximately 3 per cent, yet still continued to exceed total consumption. The supply surplus is estimated to have been balanced out by fi nancial investors and increased metal exchange stocks and unoffi cial, non-reported stocks.

Price trend – silver

Lead

The average LME price of lead rose by 4 per cent in 2013. The price rose at the beginning of the year, only to fall during the spring and then stabilise from the end of June onwards, and by the end of the year, the price was USD 2,191 per tonne, corresponding to a fall of 5 per cent. Lead stock levels on the LME fell by 33 per cent in 2013.

Much of the world's lead consumption is met through metal recycling and changes in the mined production of lead have less of an effect on the market balance than is the case for other base metals.

Global demand for lead metal increased by around 2 per cent to approximately 10.8 million tonnes. Demand in China rose by just over 3 per cent, and by 1.5 per cent in the rest of the world. The demand for lead for automotive batteries, to new cars and for the replacement market, is estimated to have increased.

The supply of mined lead metal concentrate tracks, to some extent, the mined production of zinc as lead is a subsidiary metal for many zinc mines. Global mined production is estimated to have increased by just under 4 per cent during the year and there is thought to have been a balance between supply and demand in the concentrate market.

Price and stock trends − lead

Exchange rates

Boliden's revenues and costs for raw materials purchases are largely in USD, while its other costs are mainly in SEK, EUR and NOK, and the USD exchange rate consequently has a signifi cant effect on the Group's operating profi t. 2013 began with a weakened US dollar, primarily driven by risk appetite and a very expansive monetary policy in the USA. As the signals indicated an increasingly strong US economy in the spring, the market prepared itself for an impending normalisation in US monetary policy, resulting in a stronger US dollar. This trend slowed somewhat in the autumn, partly as a result of budgetary diffi culties in the USA. The strengthening of the Euro, principally during the last six months of the year, was driven by increased confi dence in a recovery in the Euro zone in the wake of the debt crisis, and the EUR/SEK exchange rate was 8.94 at the end of the year. The USD/SEK exchange rate reached a peak during the spring/summer, after which it returned to the levels seen at the beginning of the year and was 6.51 at the end of the year. The USD was generally weaker compared with 2012 against both the SEK and EUR by 4 and 3 per cent, respectively.

Exchange rate trend

Sulphuric acid

Sulphuric acid is a by-product of the smelting process (primarily at copper smelters) and is mainly used in the artifi cial fertiliser, pulp/ paper, mining, and petrochemical industries. Sulphuric acid must be stored in special tanks and it is vital, therefore, that smelters have an outlet for their sulphuric acid production and that there is a balance between demand for metal and sulphuric acid.

Demand for sulphuric acid in northern Europe is estimated to have remained stable during the full year in Boliden's key customer segments, and the price level for 2013 as a whole was on a par with the previous year. The European market price fell, according to market analysts, to an average level of just over EUR 69 per tonne, corresponding to a fall of approximately 12 per cent in comparison with 2012.

Price trend – sulphuric acid

Boliden's market position

Boliden is one of the world's biggest zinc mining and smelting companies and is one of Europe's leading copper companies. Boliden also enjoys a position as a world leader in the recycling of electronic materials and is a substantial operator when it comes to recycling lead from batteries. Boliden's position and expertise generates healthy preconditions for achieving our goal of being one of the best companies in the metals industry.

Boliden is the world's eighth largest zinc mining company and sixth largest zinc smelting company. Tara is a large zinc mine by international standards, Garpenberg is medium-sized, and the Boliden Area is a small mining area. Th e zinc mines in Sweden – Garpenberg and the Boliden Area – also receive income from other metals, such as silver, gold, lead and copper, while Tara in Ireland earns minor revenues from subsidiary metals. Th e Kokkola zinc smelter is a major zinc producer by international standards, while the Odda zinc smelter is a medium-sized plant.

Boliden is a signifi cant global player in its role as a purchaser of mined concentrate, but a smaller producer. Th e Aitik mine is a medium-sized copper mine by international standards in terms of metal production and a signifi cant copper mine in terms of ore extracted. Aitik has a high productivity level and also earns income from its subsidiary metals of gold and silver. Boliden is a mediumsized copper smelting company, ranked sixteenth in the world, and one of the three largest in Europe. Th e Rönnskär copper smelter is a medium-sized one, but a world-leader in the fi eld of electronic recycling. Th e Harjavalta copper smelter is a small one, by international standards, but its contract nickel smelting operations are the biggest in Europe.

Boliden is the fourteenth biggest lead mining company in the world, but is a medium-sized lead smelting company. In Europe, Boliden holds a more prominent role as a smelting company, as a recycler of lead batteries and as a producer of secondary lead.

The ten biggest zinc mining operators

Boliden is one of the world's ten biggest zinc mining operators. Source: Wood Mackenzie Jan/Feb 2014

The ten biggest copper mining operators

Metal production 2013, Ktonnes

				Codelco
				F-McM Copper & Gold
			Xstrata AG
			BHP Billiton
		Rio Tinto
		Southern Copper (ex SPCC)
		Anglo American plc
		KGHM Polska Miedz
		Antofagasta plc
	Norilsk
0	500	1,000	1,500	2,000	2,500

Boliden, with a production of approximately 80,000 tonnes, is Europe's third largest copper producer. Globally, Boliden is a smaller operator.

Source: Wood Mackenzie Jan/Feb 2014

The ten biggest zinc smelting operators

Metal production 2013, Ktonnes

						Korea Zinc Group
						Nyrstar
					Hindustan Zinc
				Glencore Xstrata
	Votorantim
	Boliden
			Shaanxi Nonferrous Metals
		Teck
			China Minmetals Corp
		Yuguang Gold and Lead Co
0	200	400	600	800	1,000	1,200	1,400

Boliden is one of the world's ten biggest zinc smelting operators.

Source: Wood Mackenzie Jan/Feb 2014

The ten biggest copper smelting operators

Metal production 2013, Ktonnes

						Jiangxi Copper Comp.
						Glencore Xstrata
					Codelco
				Aurubis
			JX Holdings
				KGHM Polska Miedz
				Sumitomo Metal Mining
			Tongling
			F-McM Copper & Gold
			Jinchuan
0	200	400	600	800	1,000	1,200	1,400

Boliden, with a production of approximately 325,000 tonnes, is Europe's third biggest player. Globally, Boliden is a smaller copper smelting operator. Source: Wood Mackenzie Jan/Feb 2014

Boliden's cost position

Boliden's prices are set on the global market and cost control is, therefore, an important factor for success. Cash cost is a commonly used strength metric in the mining industry. Smelters' income streams can vary and in the smelting industry cash margin is a commonly used strength metric.

Mines' competitiveness depends both on the level of operating costs and on the scale of the income received from subsidiary metals. Mines with weak competitiveness often have little or no income from subsidiary metals, while competitive mines often receive substantial income from subsidiary metals and have a good operating cost level.

Smelters' competitiveness depends on their capacity to extract metals from raw materials, on their income from other metals, and on their cost effi ciency. Including complementary operations in cash margin comparisons is often diffi cult, but these operations can have a signifi cant part to play in the overall strength position.

Cash cost in the mining industry, C1 Composite costing The graphs show global cash cost curves for zinc and copper mines, with Boliden's mines highlighted. The curves are based on the databases produced by the analysis company, Wood Mackenzie, and which comprise their estimates and assumptions. Boliden's own cash cost per mine data may differ from those of Wood Mackenzie due to differences in the basic input data. See page 123 for a description of the cash cost concept.

Wood Mackenzie's global cash cost compilation is used to compare mines' cost position. The cash costs at Garpenberg, Tara and in the Boliden Area are, based on this compilation, 48, 62 and 68 USc/lb. of metal, respectively. Garpenberg and the Boliden Area's fi gures are, in accordance with Wood Mackenzie's defi nitions, calculated using pro rata costing, while Tara's are calculated using normal costing.

Source: Wood Mackenzie Jan/Feb 2014

Aitik has, according to Wood Mackenzie's compilation, a cash cost of USc 152/lb. under normal costing.

Source: Wood Mackenzie Jan/Feb 2014

Cash margin for smelters

The graphs show global cash margin curves for zinc and copper smelters, with Boliden's smelters highlighted. The curves are based on the databases produced by the analysis company, Wood Mackenzie, and which comprise their estimates and assumptions. See page 123 for a description of the cash margin concept.

Zinc – cash margin for smelters

Wood Mackenzie's global compilation is used to compare smelters' cost position. Kokkola and Odda have, based on this compilation, cash margins of USc 10/lb. of metal and USc 1/lb. of metal, respectively.

Source: Wood Mackenzie Jan/Feb 2014

Copper – cash margin for smelters

Harjavalta and Rönnskär have, according to Wood Mackenzie's compilations, cash margins of USc 16/lb. of metal and USc 14/lb. of metal, respectively. Source: Wood Mackenzie Jan/Feb 2014

Strategic orientation

Effi cient and stable processes, fi nancial strength and respect for people and the environment are the cornerstones of Boliden's long-term profi tability and growth.

Mission Boliden produces metals that make modern life work. Metals are vital to society's development. Boliden produces base and precious metals through exploration, mining operations, smelting operations and recycling. No effort is spared, throughout Boliden's value chain, to live up to society's demands for safety, environmental consideration and good ethical conduct.

Vision Boliden shall be a world class metals company. This means that Boliden shall be among the leading companies in the industry in terms of customer satisfaction, effi ciency and responsibility. Boliden operates in a raw materials market in which the trade in metal concentrates and fi nished metals is global, while the customer base is regional. Operational excellence is critical to success in this volatile sector.

Strategy Boliden shall be the natural fi rst choice

Boliden endeavours to maintain a leading position among medium-sized metals companies by creating competitive mines and smelters and by being the natural choice for business partners. The primary focus for Boliden's mining operations is the creation of growth through increased exploration and investments in organic growth, coupled with improved productivity. For the smelters, meanwhile, the focus is on increasing profi tability by reducing costs, improving process stability and improving the ability to process complex raw materials.

To achieve these goals, Boliden focuses on:

• 1. Increased operational effi ciency – the New Boliden Way
• 1. Organic growth
• 1. Acquisitions of producing mines and mine projects

Increased operational effi ciency

Th e New Boliden Way (NBW) constitutes the Group's overall guidelines for values and areas with scope for continuous improvement. NBW describes how Boliden will develop into a world class metals company, respected for its ability to generate added value for its customers, shareholders and other stakeholders. NBW is integrated into the day-to-day operations in order to ensure high standards and a level of competitiveness that stands up well to international comparison at every stage of our value chain. Th e aim of the New Boliden Way is to implement value creation as well as attitudes and actions that will promote a natural spirit of continuous improvement in every aspect of our operations, supported by the unwavering commitment of every single Boliden employee.

Stability and sustainability are the cornerstones of NBW and the basis of Boliden's success. Boliden's values guide us to passion for improvements, personal commitment, and responsibility for the value chain. Th e improvements are based on standards and methods collectively drawn up within Boliden. Th e improvement work is driven both by personal leadership and good example. Ultimately, NBW is all about Boliden's future competitive advantages and the results can be seen in many units in the form of improvements and enhanced effi ciency.

Who we are

Organic growth

Increased stability and productivity at existing plants boost growth by enabling higher volumes to be produced without the need for additional investments. Boliden has invested signifi cant resources in a range of organic growth projects for several years now, over and above its effi ciency enhancement work, in the form both of a number of expansion-related investments in existing mines and facilities and of an increased level of investment in exploration.

Acquisition of producing mines and mine projects

Boliden is constantly evaluating acquisition projects and compares and evaluates them in competition with organic growth projects. Th is involves both operational mines and new mine projects. Any potential acquisition must enable Boliden to generate additional value in the form of knowledge and expertise within the mining operations sphere. Investments in Boliden's existing operations are always compared with the

alternative approach of new acquisitions. Boliden has participated in numerous acquisition discussions over the years but has, to date, elected to invest in organic growth because the investment calculations have proved more favourable than the potential acquisitions studied by Boliden.

Th e spider diagram illustrates the elements that make up a complete implementation of NBW. It is also a tool for measuring how far the operations have come in terms of actual implementation. Working with all 28 elements of the spider diagram enables Boliden to achieve its vision of being a world class metals company.

Financial performance and ...

Boliden operates in a cyclic and capital-intensive industry in which long-term value creation is achieved through improvements in productivity, strict cost control and investments in profi table new production. Stable processes and fi nancial stability are prereq uisites of sustainable growth and long-term value creation. Boliden's overall goal is to prioritise growth in the Group's mines and focus on profi tability throughout the operations in order to create value for its shareholders while simultaneously acting responsibly in relation both to people and the environment.

Boliden has three communicated fi nancial goals: the return on capital employed, the net debt/equity ratio, and the dividend. Follow-up work monitors not only how well Boliden's fi nancial goals are achieved, but its sustainability goals as well. Identifying and focusing on the most important and relevant challenges in

the sustainability work fi eld is an ongoing process. Th e key components of the areas that Boliden elects to prioritise are that they not only have a direct impact on Boliden's success, but also have a signifi cant impact on Boliden's stakeholders.

Returns

The investments Boliden makes shall generate a high return and shall be made in line with Boliden's strategy and available resources

Th e projects' internal interest rates shall be higher than Boliden's weighted average cost of capital (WACC) plus a risk surcharge. Th e WACC before tax is currently nominally approximately 12 per cent. Calculations for major and long-term projects are normally conducted in real terms. Th ey are based on forecast interest rates, metal prices, exchange rates, infl ation and other relevant assumptions based on internal analyses and external assessments.

The return on capital employed totalled 5 per cent (14%). The average per annum return during the period from 2009 to 2013 was 14 per cent.

Capital employed Return on capital employed

Net debt/equity ratio

The net debt/equity ratio in an economic upturn shall be no higher than 20 per cent Th e aim is to maintain a reasonable fi nancial ability to act in a recession.

The net debt/equity ratio at the end of 2013 was 38 per cent (28%). The year on year increase was due to a fall in the operating profi t, a rise in the working capital, and

Dividend

Boliden's dividend policy states that the dividend shall correspond to approximately one third of the net profi t

Th e dividend share during the period 2009–2013 totals 33.5 per cent of the aggregate net profi t for the period.

The proposed dividend is SEK 1.75 (SEK 4) per share, corresponding to 37.0 per cent (32.8) of the profi t for the year.

… sustainability development

Social goals

Zero accidents resulting in absence from work (LTI)1) every month at all units

The number of accidents suffered by Boliden's own personnel, including contractors, and which result in absence from work (LTI) fell slightly in 2013 from 9.1 to 8.9 per one million hours worked.

LTI frequency including contractors

LTI frequency for Boliden's own personnel

Female employees shall comprise at least 20 per cent of the workforce by 2018

At the end of 2013, 824, or 17.1 per cent, of Boliden's workforce were women, corresponding to an increase of 0.2 percentage points since 2012.

Percentage of female employees

A sick leave rate that does not exceed 4.0 per cent

The goal of a sick leave rate that is below 4.0 per cent has been achieved. The trend has been positive in recent years and the sick leave rate for 2013 was 3.9 per cent (3.7%), which means that the goal has been achieved for the past four years across the Group as a whole. There were four units that failed to achieve this goal in 2013.

1) The accident frequency is reported, starting in 2012, for Boliden's own personnel including contractors. The accident frequency is measured as the number of accidents/one million hours worked. An accident is defi ned as an accident that occurs at work and which results in absence from work on the following day or for a longer period of time.

Environmental goals

Discharges of metals2) to water shall be reduced by 25 per cent

Discharges of metals to water have fallen by 58 per cent (53%) since 2007.

Discharges of metals to water

Discharges of nitrogen to water shall be reduced by 20 per cent

Discharges of nitrogen to water have fallen by 26 per cent (14%) since 2007.

Discharges of nitrogen to water

Emissions of metals3) to air shall be reduced by 25 per cent

Emissions of metals to air 3) have fallen by 45 per cent (43%) since 2007.

Emissions of metals to air

Emissions of sulphur dioxide to air shall be reduced by 10 per cent

to air have fallen by 27 per cent (5%) since 2007.

Emissions of sulphur dioxide to air

Carbon dioxide emissions shall not increase by more than 3 per cent 4)

For additional comments on the results, see the Sustainability section on pages 54–65. Boliden's new sustainability goals are presented on page 64.

• 2) Copper, zinc, lead, nickel, cadmium and mercury.
• 3) Copper, zinc, lead, nickel, cadmium and arsenic.
• 4) Taking into account planned production increases.

Income model

The metals market comprises two subsidiary markets, namely the market for concentrates (raw materials), where mines and smelters are the market players, and the market for fi nished metals, where smelters and metal consumers are the market players. Boliden operates in both of these markets.

Sales between Boliden's mines and smelters are made on market terms. Th ere are a number of synergies between Boliden's mines and smelters when it comes to metallurgy and marketing, e.g. improvements to the ways in which plans and investments are adapted in line with future market trends and with natural changes in the mines' metal mixes. Th ere are numerous similarities between concentration and smelting processes and the cooperation between smelters and mines helps develop Boliden's technical expertise.

Supplying the company's own smelters with the company's own raw materials also off ers advantages in the form of lower transport costs, more reliable deliveries and revenues, and a reduced need for stockpiling.

The mines' income

Th e bases for the mines' income are the metal concentrates sold to the smelters in a global market. Th e mines' remuneration is based on the base metal prices that are set daily on the London Metal Exchange (LME) and the precious metal prices that are set by the London Bullion Market Associ ation (LBMA). Th ese prices are governed by the global supply of and demand for base and precious metals at the time.

Mines' income is also aff ected by other factors: concentrates with a higher payable metal content and only smaller amounts of impurities yield higher income.

A high valuable subsidiary metal content is another factor that has a positive impact on the mine's income and competitiveness. Boliden's primary subsidiary metals are gold, silver and lead.

Th e mines' price to the smelters comprises the metal value less treatment charges and deductions for impurities on agreed terms. Treatment and refi ning charges (TC/RC) consequently aff ect the mine's income.

Lower TC/RC mean an increase in the mine's income and a decrease in the smelter's income.

The smelters' income

Th e smelters sell the fi nished metal at the LME price plus a regional metal premium. Th e concentrate cost comprises, as noted above, the LME price and other terms. Th e zinc smelters' income is also aff ected by price sharing clauses whereby changes in the metals' market prices are shared by the mines and smelters. TC/RC and price sharing clauses are determined by the global balance between mined production and the smelters' demand for raw materials.

Th e regional metal premium is a surcharge on the LME price paid by customers. Th e premium is determined by regional supply and demand and includes such factors as localisation and transport aspects and compensation for payment terms other than

The market for concentrates (raw materials): the mines are the vendors and the smelters are the purchasers.

The market for fi nished metals: the smelters are the vendors and metal consumers are the purchasers.

those obtaining on the LME. Th e end-user may also pay for a special metal format, special alloys and technical service. Boliden almost exclusively sells its metals directly to industrial customers at a premium under contracts negotiated on an annual basis. Th ese customer relationships are important to Boliden because they not only ensure more reliable demand, but help establish a stable cash fl ow.

Th e smelters' income is also, in addition to TC/RC and price sharing terms, aff ected by the volume of free metals produced, which is determined by the smelter's ability to extract quantities of metal over and above that assumed in the concentrate agreements. Th e free metals are sold at market price.

Smelters also earn money from the sale of by-products. Th e biggest by-product is sulphuric acid, but aluminium fl uoride, sulphur dioxide, copper sulphate, nickel sulphate, cadmium and selenium are other important by-products.

The base metals market's income components
Income components
LME price, USD/tonne	A
The concentrate's metal grade, %	B
The concentrate's payable metal content, %	C
Fees for any impurities present in the metal concentrate, USD/tonne of metal concentrate	D
Percentage of metal content that individual smelters are able to refi ne, %	E
Treatment charge (TC), USD/tonne of metal concentrate	F
Refi ning charge (RC), USD/tonne of payable metal content	G
Effects of any price escalators, USD/tonne of metal concentrate	H
Income from any subsidiary metals and other by-products in the metal concentrate, USD/tonne of metal concentrate	I
Income from extraction of any subsidiary metals and other by-products in the smelting concentrate, USD/tonne of metal concentrate	J
Metal premiums, USD/tonne of sold metal	K
Transport cost for metal delivery from smelter to customer, USD/tonne of metal concentrate	L

Mines' income Metal concentrate (per tonne dry weight) A* B* C – (D+F+G) +/– H + I Smelters' income Metal concentrate (per tonne dry weight)

Treatment and refi ning charges	F + G +/– H + D
Free metals	AB(E–C)
Extraction of subsidiary metals and by-products	J
Value of metal premiums	B E (K – L)

The metals market's cyclic pattern

Th e balance between the supply of concentrates from the world's mines and the global demand for smelters' products is the primary factor controlling the metals market's price cycle.

Th is balance aff ects the price level on the London Metal Exchange (LME), where base metals are traded, as well as the treatment and refi ning charges (TC/RC) levied by the smelters for processing the mines' raw materials into a fi nished metal product.

Prices that compensate for exploration activities, risks associated with growth investments, and production costs are key to the mines' willingness to invest in future production. When metal prices fall, mines' investments in growth also fall, which, in turn, results in a reduction in supply a few years later.

Th is results in declining availability of raw materials for the smelters. TC/RC fall and this, in turn, puts pressure on the smelters' profi tability, leading to production cutbacks or the closure of smelters and ultimately a reduction in the availability of refi ned metals.

Reduced smelter capacity leads, in the long-term, to rising market prices for metals while TC/RC remain low until the pricing scenario has adjusted in line with supply and demand.

Th is means metal prices rise once more, as do TC/RC, provided that the demand for refi ned metals is good. New decisions are taken on the expansion of mine capacity in response to the increase in prices.

The metals market's cyclic pattern

Operations

Boliden's operations are conducted within two Business Areas, namely Mines and Smelters. BA Mines extracts and then concentrates ore from eight mines in four mining areas, and also conducts extensive exploration activities. Boliden's fi ve smelters, which come under BA Smelters, refi ne mined concentrates from Boliden's mines and external mines and also process secondary raw materials. The metals produced by the smelters are mainly sold to industrial customers in Europe.

– from deposit to customer	26
This is exploration	28
How mines work	30
How smelters work	31
Boliden's results – how to interpret them	32
The Group	33
Mines	36
Smelters	42
Purchasing goods and services	48
Risk management	49
	This is Boliden

Boliden's mining operations comprise eight mines located in four areas − Aitik, the Boliden Area and Garpenberg in Sweden, and Tara in Ireland. Ore has been mined at Garpenberg since the 13th century, making it the oldest mine in Sweden that is still operational. A comprehensive expansion project is currently in progress at the mine entailing, among other things, the construction of a completely new industrial park area, new shafts and a new concentrator. When the mine reaches full extraction capacity in 2015, it will result in production almost doubling.

"My job is to measure everything we're developing underground, with the aid of optical equipment. We use the data we obtain to produce maps that can be used to direct drilling, for example, along with various other types of maps for the production departments and the geologists. Measurements are taken con tinuously to ensure that we're where we should be and that the drilling is going in the right direction. The best thing about working in the mine is the people and the fact that the job brings freedom with responsibility. I know, every morning, what I need to do during the day. It's up to me, then, to get it done." Robert Norlind,

Mine surveyor, Garpenberg

This is Boliden – from deposit to customer

Boliden's value chain comprises Mines and Smelters. Mines carries out exploration, mining, concentration and concentrate sales, while Smelters handles raw materials feed and recycling, metal production and sales of metals and by-products.

Mines

1 Exploration

Boliden's exploration focuses on deposits that contain zinc, copper and precious metals. Zinc-bearing ores often also contain silver and lead as subsidiary metals. Successful explorations conducted since 2003 have resulted in an increase in Boliden's mineral reserves and mineral resources. This has enabled the expansion of the Aitik and Garpenberg mines.There were 30 active and ongoing investment projects in 2013. SEK 298 million has been invested in exploration and a total of 158,957 m of bedrock was drilled.

2 Mining

The ore extracted in Boliden's eight mines in the four mining areas contains zinc, copper, lead, gold, silver and other by-products. The work is conducted in discrete stages and comprises drilling, blasting, loading and crushing of the ore. The miners must also install ventilation and water ducting and reinforce the galleries, as the mining work progresses.

3 Concentration

When the ore comes out of the mine, the valuable mineral is bound up in waste rock. Separating the ore out from the waste rock requires the ore to be processed in a concentrator, where the ore is crushed and ground to a fi ne powder and mixed with water. When air and special additives are added, the mineral particles adhere to the bubbles formed. The particles rise to the surface, where they are skimmed off and then dried to form a fi negrained concentrate. The mineral can also be extracted with the help of chemical leaching.

All copper concentrate is delivered to Rönnskär, while zinc and lead concentrates are also sold to external customers.

4 Raw materials feed and recycling

Turning concentrates into high-quality metals requires the concentrates to be processed in a smelter. Boliden's fi ve smelters process the concentrates in a variety of different ways, depending on the type of metal to be extracted. Copper, lead and precious metals are smelted in furnaces and then purifi ed in a series of processes, while zinc can be leached and purifi ed using completely chemical methods.

The zinc and copper concentrates produced by Boliden's mines meet approximately 60 per cent and 30 per cent of the zinc smelters' and copper smelters' requirements, respectively. Approximately one third of the raw materials comprise recycling materials − primarily metal and electronic materials and lead batteries.

5 Metal production

The smelters produce zinc, copper, lead, gold and silver, along with a number of by-products such as sulphuric acid, zinc clinker, aluminium fl uoride, liquid sulphur dioxide, palladium concentrate, and small quantities of a number of other metals. The smelted metals are cast as zinc ingots, copper cathodes, lead ingots, and gold and silver granules, etc.

6 Sales

The majority of Boliden's metals and other products are sold to industrial customers in Europe. The automotive and construction industries are important end-consumers of base metals. The zinc is supplied to steel companies, among others, while the copper is supplied to manufacturers of wire rod, copper rods and copper alloys. In 2013, 91 per cent and 9 per cent were sold to industrial customers and metal dealers, respectively.

This is exploration

Exploration is the prerequisite of long-term mining operations and growth and Boliden is Europe's leading company when it comes to exploration. Boliden has over its almost 100-year history built up a level of expertise lacking in many other market players.

Priorities

Exploration involves identifying, prioritising and investigating areas in order to locate mineral deposits. Mineral reserves and mineral resources are the basis of a mining company's operations. Successful exploration means that mineral reserves and resources increase at a higher rate than mined production and thereby generate the conditions for long-term growth.

Boliden focuses primarily on identifying ores that contain zinc, copper and precious metals (gold and silver).

Exploration can be divided into fi eld exploration, which involves searching new areas, and mine-site exploration in the vicinity of already operational mines.

Boliden's strategy in recent years has been to prioritise mine-site exploration, principally because it has been very successful, but also because it saves both time and resources. Mine-site exploration is being conducted in all of Boliden's mining areas.

Th e scale of fi eld exploration has increased over the years and involves securing the company's long-term survival with the help of completely new ore deposits. Boliden conducts fi eld exploration in both Sweden and Ireland, using its own resources and, in Finland and on Greenland, via partnerships.

Exploration is associated with uncertainties and risk, not least due to the time factor. Th e fi nal outcome of exploration work is often not known until many years later and between fi ve and ten years may pass between the initial investigations and a decision being taken to open a mine.

For more information on Boliden's exploration, mineral reserves and mineral resources, see pages 111–114.

From exploration to mine

Geological potential 1–15 years				Mineral resources1) 2–10 years			Mineral reserves 2) 1–5 years
Project idea generation	Evaluation of target areas	Testing of target areas	Delimitation of mineral resources	Concept study	Pilot study	Pilot project	Decision to mine
10,000	1,000		50		5		1
Number of areas to be tested

1) Mineral resources are those parts of an indicated deposit that may be commercially extractable but which does not qualify for classifi cation as a mineral reserve due to insuffi cient knowledge.

2) Mineral reserves are those parts of an indicated deposit that can be reliably mined and processed in accordance with the company's profi tability requirements.

How mines work

Boliden has both open-pit mines and underground mines. The geometry and composition of the ore body determine how it is mined and concentrated. The ore is crushed in several stages in the concentrator. Different minerals are then separated out from one another and from waste rock through a variety of concentration methods, of which fl otation is the most common for base metals.

How smelters work

Boliden's smelters refi ne mined concentrates into pure metals. The concentrates are processed to separate out the impurities from the metals with the aid of high temperature reactions. Different processes are used to refi ne the concentrates at the zinc and copper smelters, respectively.

Copper smelters

Copper smelters have no uniform process in that they are often specialised and tailored for handling specifi c raw materials. Processes such as smelting and converting are, however, a common denominator. These processes take place at very high temperatures and often comprise a substantial part of the overall refi ning process.

enables the roasting stage to be eliminated.

Metal concentrate

Metal concentrate from mines usually comprises approximately 25 per cent copper.

Smelting The smelting takes place in different types of furnaces, depending on the raw material and process technology. An upper layer of slag and a lower one of copper matte, which has a copper content of approxi mately 55 per cent, form in the fur-

nace.

Converting

of impurities.

The copper matte is tapped into a converter where iron and other impurities, together with sulphur, are separated out. The converter is also charged with metal scrap and smelted electronic scrap, known as black copper, which is then refi ned using the same process. The result is known as blister copper, and contains 97−98 per cent copper.

Sulphuric acid plant

cent.

per litre of solution.

The process gases, primarily sulphur dioxide, are ducted away to the sulphur products plant for the production of sulphuric acid and other sulphur products.

Anode furnace and casting plant

The blister copper is further processed in an anode furnace to reduce the oxygen content. This increases the purity level to 98−99 per cent and the copper is then cast to form anodes.

Precious metals plant

ments.

Other metals, such as gold, silver, palladium and platinum, which have fallen down to the bottom of the electrolysis tanks, are refi ned.

99.9975 per cent

Electrolytic refi ning

The anodes are placed in tanks with steel cathode plates. Chemical solutions and electrical current cause the anodes to dissolve and the copper ions to migrate to the steel plates. The cathodes are then stripped from the steel plates and washed, after which they are ready for delivery.

How to interpret Boliden's fi gures

Boliden's results are reported under two Business Areas, namely Mines and Smelters. Transactions between the Business Areas are settled at market price. This presentation provides a brief summary of Boliden's accounts and profi t performance at Business Area and Group level.

1 MINES' REVENUES are affected by metal prices, exchange rates, TC/RC and metal price and exchange rate hedging.

2 THE OPERATING PROFIT is affected not only by metal prices, exchange rates and price hedging, but also by metal grades and production volumes, the metal recovery during the concentration process, TC/RC levels, and the operating costs trend.

3 SMELTERS' REVENUES are affected by metal prices and metal premiums, which are paid over and above the LME prices. The smelters' sales of a number of by-products are also an important part of the revenues. The results of metal price and exchange rate hedging are also included in this fi gure.

4 THE GROSS PROFIT is made up of metal premiums, treatment charges and income from free metals and by-products, and comprises the difference between what the smelters pay for the raw material and the sales revenues.

6

5 THE OPERATING PROFIT

comprises the gross profi t minus the operating costs. The most important cost items for the smelters are those in connection with energy, personnel and external services, which are largely affected by maintenance of the facilities. The operating profi t is shown both including and excluding the revaluation of the smelters' process inventories. Excluding the effect of process inventory revaluation provides a better picture of the underlying trend.

6 OTHER AND ELIMINATIONS

includes Group staff functions and Group-wide functions, differences in certain accounting principles between the Business Areas and the Group, and the elimination of

	Business Area Mines, SEK m	2013	2012
1	Revenues	8,303	9,509
2	Operating profi t	1,598	2,974	A
	Investments	3,763	3,570
	Capital employed	18,288	16,125

	Business Area Smelters, SEK m	2013	2012
3	Revenues	33,410	38,753	B
4	Gross profi t excl. revaluation of process inventory	6,908	7,288	C
5	Operating profi t excl. revaluation of process inventory	679	1,095	D
	Operating profi t	210	1,224
	Investments	1,200	993
	Capital employed	15,791	15,569

Other and Eliminations, SEK m	2013	2012
Revenues	–7,305	–8,261
Operating profi t, internal profi t eliminations	110	111
Operating profi t, other	–115	–138
Investments	12	6
Capital employed	372	–458

The Group, SEK m	2013	2012
Revenues	34,409	40,001
Operating profi t	1,803	4,171
Operating profi t excl. revaluation of process inventory	2,271	4,042
Investments	4,974	4,569 E
Capital employed	34,451	31,236

profi ts on intra-Group sales. See page 68 for complete Income Statements.

A REVENUES FELL by 13 per cent due to lower average prices in SEK for the majority of Boliden's metals and a stronger Swedish krona.

THE OPERATING PROFIT FELL by 46 per cent as a result of lower prices and terms, and higher costs. The year on year volume effect was positive.

B REVENUES FELL by 14 per cent due to lower metal prices and terms, and negative exchange rate effects.

C THE GROSS PROFIT excluding process inventory for the smelters fell by 5 per cent. Positive TC/RC and metal premium trends were countered by lower metal prices, negative exchange rate trends, and lower prices for by-products in general and sulphuric acid in particular.

D THE OPERATING PROFIT

excluding the revaluation of process inventory fell. Higher volumes of free metals were counteracted by poorer prices.

E INVESTMENTS INCREASED, primarily as a result of the expansion project at Garpenberg and the silver extraction investment at Kokkola.

The Group

Revenues and operating profi t

Th e year was characterised by a continued strong focus on expansion projects at mines and smelters and by eff orts to increase production stability. Major maintenance shutdowns in Smelters, coupled with lower prices for both metals and by-products and a stronger Swedish krona, resulted in a fall in profi ts.

Boliden's revenues fell, year on year, and totalled SEK 34,409 million (SEK 40,001 m). Th e fall in revenues was primarily due to the sharp fall in metal prices during the fi rst quarter of the year (since when they have been relatively stable), lower prices for byproducts, and a stronger Swedish krona, but decreases in metal production by the smelters which carried out major maintenance shutdowns during the year also played a part. Th e operating profi t totalled SEK 1,803 million (SEK 4,171 m), and the operating profi t excluding revaluation of process inventory was SEK 2,271 million (SEK 4,042 m).

Th e operating profi t for Mines totalled SEK 1,598 million (SEK 2,974 m), while for Smelters, the operating profi t excluding the revaluation of process inventory was SEK 679 million (SEK 1,095 m).

Th e volume eff ect from Mines was positive, totalling SEK 246 million, and derived from the record production levels at Aitik. Th e volume eff ect for Smelters was also positive, totalling SEK 41 million, in spite of the extensive maintenance shutdowns carried out at all smelters. Th e maintenance shutdowns aff ected the operating profi t by SEK –330 million (SEK –170 m). Th e positive eff ect derives mainly from higher volumes of free metals.

Lower average prices for all metals with the exception of lead had a combined eff ect on the profi t of SEK –1,199 million, year on year. Th e Swedish krona strengthened against the US dollar and the euro also strengthened, which, coupled with other exchange rate fl uctuations, aff ected the profi t to the tune of SEK –422 million. Th e realised profi t on metal price and currency hedging was on

2012 40,001 10,398 2,560
4,,042
4,171
2012
4,171
129
4,042
–1,770
287
–1,818
–1,199
–325
–15
108
35
–422
4
–136
–280
–1
171
7
–1,770
2012

Revenues and operating profi t

The operating profi t excluding revaluation of process inventory fell, primarily as a result of poorer metal prices and terms and negative exchange rate effects.

Breakdown of operating costs

Operating costs increased in local currencies by approximately 1 per cent.

Earnings per share

Earnings per share totalled SEK 4.72 (SEK 12.21) and a dividend of SEK 1.75 is proposed, corresponding to a dividend share of 37 per cent

a par with that reported last year and totalled SEK 227 million (SEK 242 m). Th e metal price and currency hedging utilised in conjunction with the decision to expand Garpenberg matured at the end of June. Boliden's production is now, with the exception of its gold production, fully exposed to market prices.

Th e Group's operating expenses, excluding depreciation, totalled SEK 10,304 million (SEK 10,398 m), corresponding in local currencies to an increase of 1 per cent. Th e operating expenses included non-recurring items attributable to Tara and totalling SEK 171 million. Th e non-recurring items comprised both SEK 217 million in positive eff ect due to the raising of the retirement age at Tara, and a negative eff ect of SEK 46 million in restructuring costs arising from the reduction of the workforce by 50 people. If the nonrecurring items from Tara are excluded, personnel costs were on a par with those last year. Energy, spare parts and consumables costs increased, year on year, while transport costs fell. Th e maintenance shutdowns and other maintenance accounted, in part, for the increase in costs. Increased energy costs were due both to higher prices and higher volumes.

Th e net fi nancial items for the year totalled SEK –222 million (SEK –179 m) and the profi t after fi nancial items was SEK 1,581 million (SEK 3,992 m). Interest expenses were negatively aff ected by increased loan volumes, but this was countered by lower interest rates, and by interest expenses on defi ned benefi t pension liabilities.

Th e reported tax for the year totalled SEK –288 million (SEK –651 m), corresponding to an average tax rate of 18.2 per cent. Th e net profi t for the year totalled SEK 1,294 million (SEK 3,341 m), corresponding to earnings per share of SEK 4.72 (SEK 12.21).

Investments

Investments for the year totalled SEK 4,974 million (SEK 4,569 m). Th e biggest investments during the year were in the ongoing expansion project at Garpenberg, where production capacity is expected to increase from its current level of 1.4 Mtonnes of ore per year to

2.5 Mtonnes, and the construction of a facility at Kokkola to extract the increasingly high percentage of silver present in zinc concentrate.

Investments in development work and push-backs in mines increased during the year.

Investments, SEK m	2013	2012
Investments – Mines1)	3,763	3,570
Investments – Smelters	1,200	993
Investments – Other	12	6
Total investments	4,974	4,569

1) Of which SEK 383 million is attributable to changes in accounting principles in 2012.

Cash fl ow

Th e cash fl ow from operating activities totalled SEK 4,052 million (SEK 5,518 m) in 2013. Tax paid for the year totalled SEK 303 million (SEK 1,145 m). A Swedish Tax Agency excise duty totalling SEK 173 million was paid in 2013 due to the use of incorrectly dyed diesel at the Aitik mine. Boliden has appealed the Tax Agency's taxation ruling and requested both a review and discharge from payment liability and the payment has consequently not been booked as a cost. Th e working capital increased by SEK 546 million (SEK –320 m), primarily due to lower accounts payable.

Lower profi t, a negative change in working capital, and increased investments account for the deterioration in the free cash fl ow, which totalled SEK –1,466 million (SEK 1,389 m).

Cash fl ow, SEK m	2013	2012
Cash fl ow from operating activities before changes in working capital	4,052	5,198
Changes in working capital	–546	320
Cash fl ow from operating activities	3,505	5,518
Cash fl ow from investment activities	–4,971	– 4,129
Free cash fl ow (before fi nancing)	–1,466	1,389

Investments and cash fl ow from operating activities

Free cash fl ow

Cash fl ow from operating activities and investments.

The cash fl ow from operating activities before investments fell due to reduced profi ts and a negative change in working capital.

Free cash fl ow. The free cash fl ow fell by SEK 2,855 million. Investments increased, year on year, by 9 per cent as a result both of the Garpenberg expansion and waste rock capitalisation, and of the major maintenance shutdowns in 2013.

Financial position

On 31st December 2013, Boliden's net debt totalled SEK 8,673 million (SEK 6,276 m). Shareholders' equity totalled SEK 23,075 million (SEK 22,354 m) including the net market valuation of currency, interest and raw materials derivatives totalling SEK 267 million (SEK –145 m) after fi scal eff ects. Th e negative cash fl ow for the year resulted in the net debt/equity ratio increasing to 38 per cent (28%) by the end of 2013.

Th e average term of Boliden's total granted loan facilities was 2.6 years (3.5 yrs.) at the end of the year. Th e average interest level in the debt portfolio on 31st December was 1.8 per cent (3.1%) and the average fi xed interest term was 0.7 years (0.9 yrs.). Th e interest term was extended on an ongoing basis throughout the year with the aid of interest swaps.

At the end of the year, Boliden's current liquidity totalled SEK 6,356 million (SEK 9,150 m), comprising liquid assets and unutilised binding credit facilities with terms of over one year, less commercial papers issued and other credit raised with terms of less than one year. Th e reduction in current liquidity was due to a negative free cash fl ow and dividend payment.

For further information on Boliden's debt portfolio, see Note 25 on page 93.

Capital structure and return	2013	2012
Balance Sheet total, SEK m	41,841	40,080
Capital employed, SEK m	34,451	31,236
Shareholders' equity, SEK m	23,075	22,354
Net debt, SEK m	8,673	6,276
Return on capital employed, %	5	14
Return on shareholders' equity, %	6	16
Equity/assets ratio, %	55	56
Net debt/equity ratio, %	38	28

Revised accounting regulations

Items referring to the 2012 comparison year have been adjusted in both the Income Statement, Other Comprehensive Income, and the Balance Sheet in response to new and revised accounting standards and interpretations (see Note 1 Signifi cant accounting and valuation principles and Note 30 Restatement of the fi nancial reports. Th e revision of IAS 19, Employee Benefi ts, resulted in an increase in the pension liability and a decrease in shareholders' equity, which led to an increase in the net debt. A new accounting interpretation, IFRIC 20, which addresses when waste rock costs shall be capitalised also led to an increase in waste rock capitalisation, resulting in increases in investments and increased depreciation.

The Parent Company

Th e Parent Company conducts limited operations on what is, for fi scal purposes, commission from Boliden Mineral AB and has no employees. Th e Income Statements, Balance Sheets and Statements of Cash Flow for the Parent Company are shown on page 72.

Principles for remuneration to the President and other senior executives

Th e remuneration paid by Boliden to senior executives shall comprise a fi xed salary, variable remuneration, pension benefi ts and other benefi ts. Remuneration to senior executives is described in Note 3 on pages 80–81.

Th e variable remuneration component shall be linked to the Group's profi tability and the individual in question's sphere of responsibility and shall primarily comprise one or more fi nancial parameters. Th e maximum variable remuneration shall be 60 per cent of the fi xed annual salary for the President and 40−50 per cent of the same for other senior executives. 10 percentage points of this shall be conditional upon Boliden shares being purchased for the gross sum before tax. Senior executives are, in common with all Boliden Group employees, part of a profi t-sharing system in which the maximum profi t share per full-time employee is SEK 25,000. Senior executives have a defi ned contribution pension solution and a retirement age of 65. Th e Board does not intend to propose any changes to these guidelines to the Annual General Meeting to be held in May 2014.

Mines

Boliden Mines comprises eight mines in four mining areas: Aitik, the Boliden Area and Garpenberg in Sweden, and the Tara mine in Ireland. The Business Area also includes responsibility for exploration, technological development, the environment/reclamation, and sales of mined concentrates.

Boliden has developed and refi ned its mine design, extraction methods and concentration processes over the years. Our in-house expertise in these areas, coupled with a high degree of technology development, means that several of Boliden's mines have achieved world-class productivity.

"Our focus this year has been on our major expansion projects work. The fi ne-tuning of Aitik's facilities in order to boost production has gone better than planned and we achieved the 36 Mtonnes of ore produced per year goal one year ahead of plan. The Garpenberg project is proceeding according to plan and is, so far, both on time and within the approved investment sum."

Jan Moström, President, Boliden Mines

Revenues and operating profi t

Th e majority of Mines' sales are made to the Group's smelters, with a smaller percentage sold to external smelters. All sales are made on market terms.

Revenues fell by 13 per cent to SEK 8,303 million (SEK 9,509 m), of which external sales totalled SEK 834 million (SEK 1,088 m). Mines' operating profi t fell to SEK 1,598 million (SEK 2,974 m).

Th e Swedish mines reported a fall in operating profi t, year on year, while the operating profi t at Tara improved. Tara's operating profi t was aff ected by a couple of items aff ecting comparability and totalling SEK 171 million, of which SEK 217 million was attributable to an increase in the retirement age of the mine's employees and SEK –46 million to restructuring costs in connection with reductions in the workforce.

Aitik's strong production performance resulted in an increase in Mines' milled ore tonnage. Metal production of base metals fell, while production of precious metals increased.

Metal prices had a negative eff ect on the operating profi t, with lower prices for all metals with the exception of lead. Th e operating profi t was also negatively aff ected by the strengthening of the Swedish krona.

Key data	2013	2012
Revenues, SEK m	8,303	9,509
Operating costs excl. depreciation, SEK m	4,924	5,008
Depreciation, SEK m	1,917	1,669
Operating profi t, SEK m	1,598	2,974
Investments, SEK m1)	3,763	3,570
Capital employed, SEK m	18,288	16,125
Return on capital employed, %	9	20
Average number of employees, FTE	2,459	2,440

1) Of which SEK 383 million attributable to changes to accounting principles.

Mines' operating costs before depreciation fell by 2 per cent to SEK 4,924 million (SEK 5,008 m), with a 2 per cent fall in costs also seen in local currencies. Th e reduction in costs was mainly due to lower personnel costs at Tara resulting from the raising of the retirement age for the mine's employees, but reduced purchases of external services, lower transport costs and increased waste rock capitalisation due to new accounting regulations also played a part in the fall. Th is trend was, however, countered by increased personnel costs in the Boliden Area and Aitik as a result of the expansion and maintenance work, and by increased costs for spare part purchases for Aitik. Mines also incurred higher energy and spare part costs, year on year. Adjusted for the positive pension eff ect at Tara, Mines reported a cost increase of 6 per cent in local currencies.

Depreciation increased, year on year, to SEK 1,917 million (SEK 1,669 m), corresponding to a 15 per cent increase. Th e increase in depreciation was due to the increase in fi xed assets, to a higher production rate, and to the eff ects of the new accounting regulations with regard to open-pit mines.

Profi t analysis, SEK m	2013	2012
Operating profi t	1,598	2,974
Change		–1,377
Analysis of change
Volume effect		246
Prices and terms		–1,451
Exchange rate effects		–305
Costs		–96
Depreciation		–250
Items affecting comparability		171
Other		3
Change		–1,377
Operating profi t for resp. period
Realised metal price and currency hedging	184	184

Revenues and operating profi t

Breakdown of revenue by metal

Breakdown of operating costs

Revenues and operating

profi t. All of the Swedish mines posted poorer profits than in 2012, primarily due to lower metal prices.

Breakdown of revenue

by metal. Zinc's share of revenues increased slightly, while that of silver fell slightly. The breakdown was otherwise in line with 2012.

Breakdown of operating costs. Costs fell by 2 per cent, primarily due to Tara, while depreciation increased by 15 per cent.

Production

Mines' milled ore tonnage increased in 2013, largely due to Aitik where a record production level of 37 million tonnes (34 Mtonnes) was achieved, corresponding to a year on year increase of 8 per cent. Achieving this production level meant that the goal of Boliden's biggest ever investment, Aitik 36, was reached one year ahead of plan. Lower grades and recovery countered the positive production trend, but copper production still managed to increase by 6 per cent and silver production by 4 per cent. Gold production, however, fell by 10 per cent. Aitik's production will continue in 2014 in areas with below-average grades for copper and gold in terms of the overall reserve.

Th e Boliden Area's milled ore tonnage totalled 1,809 Ktonnes (1,862 Ktonnes), corresponding to a year on year fall of 3 per cent. Th is decrease was due partly to the resetting of one of the ore lines over a six-week period in order to concentrate slag from Rönnskär. Copper production in the Boliden Area fell due to a decline in extraction at the Maurliden Östra copper mine, and indeed, the ore mix in the Boliden Area is gradually shifting towards an increased percentage of zinc and gold ore and a smaller percentage of copper ore. Zinc and silver production increased by 15 per cent and 9 per cent, respectively, due to the change in the ore mix, which now also includes tellurium, and to higher grades. Gold production

increased by 26 per cent due to the new Kankberg gold mine, which came on line in 2012, and to higher grades and recovery.

Th e milled ore tonnage at Garpenberg was on a par with last year and totalled 1,495 Ktonnes (1,484 Ktonnes). Zinc production fell by 6 per cent due to lower grades, while silver production rose by 20 per cent due to higher grades.

Th e milled ore tonnage at Tara was on a par with 2012 and totalled 2,493 Ktonnes (2,502 Ktonnes). Zinc production was on a par with last year, but lead and silver production fell due to lower grades and recovery.

Th e trend in 2013 for Mines as a whole saw production of base metals remain on a par with levels last year, while silver and gold production increased.

Investments

Garpenberg expansion

Boliden's expansion of the Garpenberg zinc and silver mine is now entering its fi nal phase. Th e new facilities at Garpenberg are expected to come on line during the fi rst half of 2014, in accordance with the previously announced plan. Th e goal is to increase the current ore production level of just over 1.4 million tonnes to 2 million tonnes in 2014. Full production of 2.5 million tonnes of ore per year is to be achieved towards the end of 2015. Th e

Copper production

Milled tonnage Metal content

Zinc production Copper production. The milled tonnage increased to 37 Mtonnes at Aitik but lower grades resulted in only a marginal increase in copper production. Production fell in the Boliden Area.

Zinc production. The milled ore tonnage fell, but better recovery resulted in production levels on a par with 2012.

Gold production

Silver production

Gold production. Gold production increased in the Boliden Area in conjunction with the start-up of the Kankberg mine at the end of 2012. Lower grades and recovery at Aitik resulted in a reduction in gold volumes.

Silver production. Higher silver grades at Garpenberg, in the Boliden Area and Aitik resulted in higher production.

Lead production. Production fell slightly, year on year, as poorer recovery counteracted the positive effect of higher grades.

investment is Boliden's second largest ever and is expected to total SEK 3.9 billion. Th e project accounts for just over SEK 1.7 billion (SEK 1.2 bn) of this year's investments.

Other investments and improvement projects

At Aitik, Boliden is continuing to investigate the preconditions for increasing production to 45 million tonnes per year and, at the same time, extending the life of mine. A decision is expected in 2014.

Th e Laver copper deposit, located approximately 100 km north of the Boliden Area, was classifi ed as a mineral resource during the previous year. Th e deposit is of a type similar to Aitik, with low grades but high volumes. Test excavations were carried out in the autumn but the project is still in an early phase and any decision on whether to commence mining operations lies some time into the future. Th e next stage involves submitting an exploitation concession application.

Focus areas

Mines is working, within the framework of the New Boliden Way, to improve processes in all areas in accordance with NBW. Th e focus over the past year has been on increasing stability within the organisation by improving the operational management structure.

Several of the mining areas have achieved and exceeded the goal of establishing reserves corresponding to at least 10 years' production and the possibility consequently now exists of a gradual shift of resources from mine-site exploration to fi eld exploration and eventually to external growth. Th e reallocation of resources in this way

increases the chances of growth in the form of new deposits in new areas while maintaining growth in existing mining areas.

Productivity will be increased through the introduction of new technology, namely mine automation, which enables continuous production, more effi cient production control, and increased safety. Th e introduction of wireless data transfer underground in Boliden's mines – something that is being successively introduced in all of Boliden's mines – is a prerequisite of mine automation.

Developing techniques for extracting metals and minerals from mineralisations that cannot currently be exploited due to their mineral composition is an important developmental area for Boliden. A range of diff erent leaching techniques has been developed and is a future focus area for the company. One example of this work in practice is the Kankberg gold mine where an in-house developed process for gold and tellurium extraction has been brought on line. Another is the deposit at Rockliden, but there the problem is the presence of antimony in the copper concentrate. By leaching the antimony out of the copper concentrate before the smelting process, it becomes possible, however, to produce a product that is acceptable to the smelters. A leaching plant on a pilot scale is currently under construction in Boliden and will be used to verify the process.

Reclamation and water treatment are important developmental areas in the fi eld of environmental technology. A number of projects are currently in progress with the aim of developing water treatment techniques, including a passive treatment method for acidic and metal-rich leaching water and the treatment of sulphur compounds in water.

Four mining areas and exploration

Boliden's mines mainly extract complex polymetallic ores that contain several different metals, and which consequently impose stricter demands on both mining techniques and the concentration process. Zinc and copper are the most important metals, but the ore also contains gold, silver, lead and tellurium in payable quantities. Boliden's mines, with the exception of Aitik, have relatively high metal grades from a global standpoint.

Boliden has developed and refi ned its mine design, extraction methods and concentration processes over the years. Th is expertise is an important reason for the high productivity and cost-eff ectiveness of the mines from an international standpoint. Our inhouse expertise in the fi elds of mine design, mining technology and extraction methods, coupled with a high level of in-house technological development, has resulted in several of Boliden's mines achieving worldclass productivity levels.

Th e majority of the zinc concentrates and all of the copper concentrates are processed to produce metals at Boliden's own smelters. Some of the metal concentrates are sold to external customers.

Boliden conducts ongoing and extensive exploration work, both in existing mining areas and elsewhere. Th e work is carried out in order both to ensure future growth as demand increases and to compensate for mine closures. Trial drilling totalling almost 160,000 m was carried out in 2013 and the

cost of exploration activities totalled approximately SEK 298 million (SEK 350 m).

All of Boliden's mines are reclaimed in accordance with legislative requirements once mining operations there have ceased.

See the illustration on page 30, "How a mine works", for a description of operations at both open-pit mines and underground mines.

Aitik is Sweden's biggest copper mine and one of the world's most productive open-pit copper mines. The deposit comprises chalcopyrite that contains copper, gold and silver. The ore is extracted in two open-pits and all the mined concentrate is delivered to Rönnskär.

The open-pits work with large scale extraction where large volumes and high levels of automation ensure high levels of productivity. High productivity and favourable waste rock conditions combined with the gold and silver subsidiary metal production ensure that in spite of the ore's low copper grades, the mine's cost position is healthy.

37 million tonnes

Aitik has been working since 2010 on the fi ne-tuning of the new facilities constructed with the aim of doubling the mine's ore production from the then current level of 18 to 36 Mtonnes per year by 2014. The fi netuning work has proceeded according to plan and in 2013, production totalled 37 Mtonnes (34 Mtonnes) of ore – which meant that the goal had been achieved one year ahead of plan – and 71 Ktonnes (67 Ktonnes) of copper. Metal production will be limited in

2014 by the fact that mining is taking place in areas with grades that are lower than the average for the mine's mineral reserve. The expansion investment, which totalled just over SEK 6 billion, is one of the biggest industrial investments made in Sweden in the last few years.

Continued expansion and exploration work

The potential for further expansion in the Aitik area is currently under investigation. An extended feasibility study suggests that further expansion would enable an increase in production to 45 Mtonnes per year.

	2013	2012
Revenues, SEK m	3,593	4,170
Operating profi t, SEK m	882	1,732
Investments, SEK m	1,143	1,207
Milled tonnage, Ktonnes	37,070 34,321
Average number of employees, FTE	675	672
Accident frequency	7.8	8.4

The Boliden Area is located in the mineral-rich Skellefte fi eld where Boliden has operated over 30 mines since production began in the 1920s. The area currently comprises the Renström, Kristineberg and Kankberg underground mines and the Maurliden and Maurliden Östra open-pit mines. All of the mines in the area supply ore to the concentrator at Boliden, which is also home to leaching plants for gold and tellurium production. Complex ores that contain zinc, copper, lead, gold and silver are extracted at all of the mines, with the exception of Kankberg.

Extensive exploration work

Extensive fi eld exploration is being conducted in the Boliden Area in addition to the minesite exploration work, and exploration successes have successively extended the life of mine of the Boliden Area. Exploration work has identifi ed new mineralisations at greater depths and in the vicinity of the ores currently being mined. A number of studies conducted during the year have enabled mineral resources to be upgraded to mineral reserves, and the Area's mineral reserves consequently increased by 3.2 million tonnes.

Gold and tellurium mine at Kankberg

The Kankberg mine, which became operational in 2012, offers an example of minesite exploration that has injected new life into a mining area. The area was previously the site of a zinc and copper mine, but exploration activities subsequently found gold in the area, too. After a total investment of SEK 475 million, the new mine is now operational and is producing gold and tellurium. 2,810 kg (1,619 kg) of gold doré bullion and 24 tonnes (8 tonnes) of tellurium were produced at Kankberg in 2013. The mine will produce an average of 1,150 kg of gold and 41 tonnes of tellurium per year, and has an anticipated life of mine that extends to 2020.

	2013	2012
Revenues, SEK m	1,317	1,552
Operating profi t, SEK m	19	369
Investments, SEK m	364	623
Milled tonnage, Ktonnes	1,809	1,862
Average number of employees, FTE	519	483
Accident frequency	16.5	12.3

Garpenberg's deposits were fi rst mined back in the 13th century, making Garpenberg one of the world's oldest mines still operational. It was acquired by Boliden in 1957.

Complex ores containing zinc, silver and lead, along with small amounts of copper and gold, are mined at Garpenberg. The metal mix and the relatively high silver grades have resulted in an advantageous cost position for the mine.

Successful exploration work in Garpenberg has resulted in the identifi cation of completely new ore bodies that led to a sharp increase in mineral resources and extended the useful life of the mine, which was scheduled for closure. Garpenberg's mineral reserves increased during the year with the upgrading of the Kvarnberget mineral resource.

Expansion increases capacity to 2.5 Mtonnes

An expansion project that will increase ore production at Garpenberg from 1.4 Mtonnes to 2.5 Mtonnes per year is being conducted between 2011 and 2014 in an investment totalling SEK 3.9 billion. Production will be successively increased, starting in the fi rst half of 2014 and reaching full production by the end of 2015. The expansion has proceeded according to plan and within approved cost frameworks in 2013.

	2013	2012
Revenues, SEK m	1,675	1,876
Operating profi t, SEK m	776	1,033
Investments, SEK m	2,045	1,459
Milled tonnage, Ktonnes	1,495	1,484
Average number of employees, FTE	376	366
Accident frequency	9.6	11.9

Tara is Europe's largest zinc mine and the ninth largest zinc mine in the world, and produces not only zinc, but also lead concentrate. Mining operations began in 1977 and the mine was acquired by Boliden in early 2004.

Tara's relative cost position is hurt by the fact that it contains no subsidiary metals, other than lead, and that mining is taking place at ever greater depths. Tara has consequently focused, in recent years, on improving its cost position through investments and cost-cutting measures designed to boost productivity.

The consolidation of Tara continued in 2013 and included both an agreement

drawn up by the parties concerned on work structures that will cut costs and boost productivity and a reduction in the workforce

of 50. Tara's mineral resources and mineral reserves remained largely unchanged during the year.

	2013	2012
Revenues, SEK m	1,542	1,727
Operating profi t, SEK m	195	100
Investments, SEK m	201	268
Milled tonnage, Ktonnes	2,493	2,502
Average number of employees, FTE	667	718
Accident frequency	10.0	4.9

Smelters

Boliden Smelters comprises the Kokkola and Odda zinc smelters, the Rönnskär and Harjavalta copper smelters, and the Bergsöe lead smelter. The Business Area also includes purchases and refi ning of mined concentrates and recycled raw materials, and sales of metals and by-products.

Boliden's smelters refi ne mined concentrates into pure metals that are sold to industrial customers in Europe. The operations are based on a high level of process technology expertise and on the ability to produce high quality metals from complex mined concentrates and recycled raw materials.

"Metal production fell during the year, mainly due to the extensive maintenance shutdowns and to process instability at Rönnskär. This was countered by the higher volume of free metals at Harjavalta. The investment in extracting silver from zinc concentrate at Kokkola is proceeding according to plan and production is scheduled to begin in the third quarter of 2014."

Kerstin Konradsson President, Boliden Smelters

Revenues and operating profi t

Revenues totalled SEK 33,410 million (SEK 38,753 m) and the gross profi t, excluding the revaluation of process inventory, was SEK 6,908 million (SEK 7,288 m). Th e falls in revenues and the gross profi t were due to lower prices for both metals and byproducts, with the market for sulphuric acid, in particular, performing poorly during the year. Higher treatment and refi ning charges (TC/RC) for copper and zinc counteracted the negative eff ects of a weaker US dollar.

All of the smelters were, therefore, positively aff ected by TC/ RC, while lower prices for metals and by-products had a negative eff ect on both the copper and zinc smelters. Harjavalta was positively aff ected by the increased volume of free metals, but this was count ered by the lower free metal volumes from Rönnskär as a result from production disturbances. Th e volume of free metals at Harjavalta should be seen as a one-off occurrence as

Key data	2013	2012
Revenues, SEK m	33,410	38,753
Gross profi t, excluding revaluation of process inventory, SEK m	6,908	7,288
Operating costs, excluding depreciation, SEK m	5,346	5,330
Depreciation, SEK m	913	891
Operating profi t, excluding revaluation of process inventory, SEK m	679	1,095
Operating profi t, SEK m	210	1,224
Investments, SEK m	1,200	993
Capital employed, SEK m	15,791	15,569
Return on capital employed, %	1	8
Number of employees, FTE	2,232	2,242

intermediate stocks with a low book metal content have been processed during the year.

Th e operating profi t, excluding the revaluation of process inventories, fell to SEK 679 million (SEK 1,095 m). If the inventory revaluation eff ect of SEK –469 million (SEK 129 m) is included in the calculations, the operating profi t was SEK 210 million (SEK 1,224 m). Th e operating profi t was impacted to the tune of SEK –330 million (SEK –170 m) by maintenance shutdowns that resulted in both reduced revenues and higher operating costs.

Smelters' operating costs, excluding depreciation, increased year on year by 0.5 per cent and totalled SEK 5,346 million (SEK 5,330 m). Th e cost increase in local currencies was 1 per cent. Th e increase was primarily attributable to the major maintenance shutdowns in the second and third quarters. Costs continued to fall at Odda during the year as a result of improvement programmes. Costs also fell at Harjavalta, where energy costs were among the cost

Operating profi t analysis, SEK m	2013	2012
Operating profi t	210	1,224
Revaluation of process inventory	–469	129
Operating profi t, excluding revaluation
of process inventory	679	1,095
Change		–416
Analysis of change
Volume effect		41
Prices and terms		–362
Exchange rate effects		–125
Costs		–67
Depreciation		–31
Other		2
Change		–416
Operating profi t for respective period
Realised metal price and currency hedging	43	58

Revenues and operating profi t

Breakdown of gross profi t excl. revaluation of process inventories

Breakdown of operating costs

Revenues and operating

profi t. Lower prices, negative exchange rate effects and increased maintenance shutdowns led to a lower year on year operating profi t.

Breakdown of gross profi t. Free metals, treatment and refi ning charges, and premiums contributed more to the gross profi t than in 2012. Revenues from by-products decreased, primarily as a result of lower sulphuric acid prices.

Breakdown of operating costs. Operating costs excluding depreciation increased in local currencies by 1 per cent.

items that were lower. Th e cost increased at Rönnskär as a consequence of maintenance shutdowns and production disturbances. Kokkola reported higher costs due to higher energy costs, while at Bergsöe, consumables costs increased in connection with the selection of diff erent input goods for the process.

Maintenance shutdowns and production disruptions resulted in a year on year deterioration in the operating profi t, excluding the revaluation of process inventories for all smelters, with the exception of Bergsöe.

Production

Metal production at the smelters fell during the year, primarily as a result of the extensive maintenance shutdowns, production disruptions and of lower input grades in the raw material. Th e maintenance shutdowns were carried out during the second and third quarters and proceeded largely according to plan.

At Rönnskär, the comprehensive maintenance shutdown meant that both the raw materials feed and copper metal production were down, year on year. Copper production fell by 4 per cent. Lead feed and production increased year on year, however. Rönnskär had

problems with production stability during the year due to lower metal concentrate grades and an increasingly high percentage of impurities in electronics material. Th e fi ne-tuning of the increased fl ow of black copper from the new e-Kaldo plant has also aff ected stability. Th is resulted in lower feeds, increased intermediate stocks, lower free metals volumes, and high costs. Th e electronic materials feed at Rönnskär totalled 109 (108) Ktonnes.

Harjavalta was also aff ected by maintenance shutdowns, resulting in a fall in copper production by 5 per cent. Th e precious metals plant remained in production throughout the maintenance shutdown and higher grades in the input concentrate resulted in slightly increased volumes of gold. Nickel feeds were slightly up on last year, when an extended maintenance shutdown was carried out in the nickel smelter.

Kokkola's production remained stable during the year and came close to repeating last year's record zinc production fi gure of 312 Ktonnes (315 Ktonnes).

Odda's production was aff ected by the maintenance work carried out in much of the facilities, including the rebuilding of a cell house and the installation of a new transformer. Th e sealing on the

feed and zinc production both fell year on year at Kokkola and Odda alike.

Copper production. Both concentrate feed and copper production fell at Rönnskär and Harjavalta alike. The secondary material feed increased at Harjavalta and decreased at Rönnskär.

Gold production

Kg

0

5,000

10,000

15,000

20,000

Lead production

Gold production. Gold production was on a par with last year at both Rönnskär and Harjavalta.

Silver production. Silver production fell at both Rönnskär and Harjavalta, with the biggest fall seen at Harjavalta where production levels were very high in 2012.

Lead production. Rönnskär's lead production increased sharply during the year.

09 10 11 12 13

Metal production

electrolysis tanks was improved in order to boost production. Th ese measures enabled an older cell house to be closed, which will cut costs. Odda's production was also aff ected by last year's breakdown in a leaching tank which meant only three of the four leaching tanks were operational during the year. Th e reduction in leaching capacity led to an increased use of zinc clinker, resulting in a slightly higher production cost. A replacement tank will be installed in early 2014. Odda's production of cast zinc fell by 6 per cent.

Bergsöe's production of lead alloys remained stable during the year and increased year on year by 5 per cent.

Investments

Silver extraction at Kokkola

An investment in constructing a facility to extract silver concentrate from zinc raw materials is currently in progress at Kokkola. Th e project has now entered an intensive phase, with production scheduled to start in the third quarter of 2014. Th e entire investment totals SEK 240 million, of which SEK 165 million (SEK 25 m) comprises investments during the year. Th e amount of silver extracted from the concentrate is expected to total approximately 25 tonnes per year.

Focus areas

Safety, the environment and other CSR work will be developed. Smelters has experienced a negative trend in accidents leading to absence from work (LTI) and the measures taken to turn this trend around are focusing on both cultural and systemic issues.

Suppliers will be trained and processes will be developed to handle diff erent types of impurities, thereby increasing the supply base for raw materials and extending the potential for optimising the input raw materials mix.

Development work is being carried out with the aim of increasing the extraction of metals and by-products, and thereby reducing the quantities sent to landfi ll.

Process improvements and investments in new process stages will enable increased extraction of existing and new metals, leading, in turn, to increased productivity and an improved cost position. NBW and continuous improvement are important tools in boosting Boliden Smelters' competitiveness.

Stable production, a high degree of delivery reliability and continuous development of alloys and new by-products will help develop the customer portfolio.

Boliden Smelters has a substantial annual requirement for reinvestment in order to secure both production and the environment and considerable planning work is done in relation to both of these prioritised areas to ensure the minimum possible impact on the company's stakeholders.

Five smelters

Boliden's smelters enjoy strong market positions. The operations are based on advanced process technology expertise, fl exible smelting processes, and the ability to produce high quality metals from complex mined concentrates and secondary raw materials. Boliden is the world's biggest operator in the electronic recycling sector.

Th e smelters are supplied with concentrates from Boliden's mines and with concentrates and recyclable raw materials from external suppliers. Boliden's in-house copper concentrate production meets approximately 30 per cent of the smelters' demand, while the corresponding fi gure for the zinc smelters is approximately 60 per cent. Th e zinc smelters primarily produce zinc metal, zinc alloys and sulphuric acid, but Odda also produces aluminium fl uoride. Kokkola is currently conducting a project with the aim of extracting silver concentrate from zinc raw materials.

Th e copper smelters mainly produce copper, gold, silver and lead, but Harjavalta also produces nickel materials for external customers. Th e copper smelters' processes also produce a number of by-products, such as

sulphuric acid, sulphur dioxide, zinc clinker, selenium, copper sulphate, copper telluride and, palladium and platinum concentrate. Th e Bergsöe lead smelter produces lead alloys from recycled car batteries. For a review of the smelter processes for zinc and copper, see the illustration entitled "How smelters work" on page 31.

Rönnskär's main products are copper, gold, silver and lead, plus a number of byproducts such as sulphuric acid and zinc clinker. Rönnskär processes Boliden's entire internal production of copper concentrate. The smelter has the capacity to handle numerous different raw materials, with recycling materials becoming increasingly important.

World leader in electronic scrap recycling Rönnskär's recycling facility enables the copper production to be complemented with the recycling of metals from electronic scrap and other secondary materials. Rönnskär has long been one of the world's biggest recyclers of electronic scrap and the expansion of the plant's capacity in recent years has made Boliden a world leader in this sphere.

Quantities of electronic waste are increasing rapidly throughout the world, but there are few smelters that can handle electronic scrap. Rönnskär has the capacity to process 120 Ktonnes of electronic scrap per annum. Rönnskär has suffered from production process stability problems during the year. The most signifi cant causes of these problems include lower metal grades in the concentrate, increases in the quantities of impurities present in the electronic scrap material, and changes in the raw material mix. Remedial action programmes have been launched during the year in order to restore stability to the production processes, including reviews of the selection of raw materials, the implementation of stronger process controls, and adaptations of the processes to handle more complex raw materials.

	2013	2012
Revenues, SEK m	2,029	2,398
Operating profi t, SEK m	53	535
Investments, SEK m	345	481
Copper production, Ktonnes	206	214
Av. no. of employees, FTE	866	859
Accident frequency	6.9	8.6

Harjavalta produces copper, gold and silver plus a number of by-products such as sulphuric acid. The raw material consists primarily of metal concentrates from external copper mines in South America, South East Asia and Portugal. Harjavalta also smelts nickel concentrate on behalf of external customers.

Harjavalta' s operating profi t was positively affected in 2013 by free metals, which was an effect of an intermediate stock with a low book value in terms of metal content being processed during the year, and the volume of free metals was, therefore, exceptionally high. At the end of the year, Harjavalta suffered a cable fi re which negatively affected the operating profi t for the year to the tune of approximately SEK 30 million.

	2013	2012
Revenues, SEK m	1,631	1,666
Operating profi t, SEK m	316	324
Investments, SEK m	246	215
Copper production, Ktonnes	119	125
Av. no. of employees, FTE	391	388
Accident frequency	10.7	14.8

Kokkola produces zinc and zinc alloys, and sulphuric acid. It is the world's eighth largest zinc smelter with a production capacity of over 300 Ktonnes.

The majority of the zinc concentrate smelted comes from Boliden's mines in Sweden and Ireland. Approximately 85 per cent of the zinc production is exported to primarily European customers.

Kokkola uses both the in-house developed direct leaching method and conventional roasting techniques, and is consequently able to optimise its raw material usage.

The next stage – silver extraction

Construction of a new silver extraction facility continued at Kokkola in 2013. The investment totals approximately SEK 240 million and production is scheduled to begin in the third quarter of 2014. The investment will improve Kokkola's competitiveness as the trend in zinc concentrate globally is towards a higher silver content.

	2013	2012
Revenues, SEK m	1,795	1,778
Operating profi t, SEK m	248	261
Investments, SEK m	318	210
Zinc production, Ktonnes	312	315
Av. no. of employees, FTE	545	561
Accident frequency	9.3	7.4

Bergsöe is one of Europe's biggest recyclers of lead batteries and its main products are pure lead and customised lead alloys. Approximately 60 per cent of the smelter's lead production is sold to the battery industry in Europe, with the remainder used in other applications, including lead sheet and radiation shields.

The shortage of battery raw materials continued in 2013, and the price of raw materials consequently continued to increase.

By recycling approximately 63 Ktonnes of scrap lead from the entire Nordic region – the equivalent of around 4 million scrap car batteries – Bergsöe helps establish an ecocycle for lead metal.

A ruling by the Swedish Land & Environment Court of Appeal is preventing Boliden Bergsöe from expanding its lead recycling operations from 50 Ktonnes to 65 Ktonnes of lead. The ruling has no impact on the smelter's operations in the short-term, but will prevent the desired long-term expansion. Bergsöe plays an important part in the recycling of lead and the restriction is, therefore, also unfortunate from an environmental viewpoint. Boliden has decided to appeal the ruling.

	2013	2012
Revenues, SEK m	715	698
Operating profi t, SEK m	39	34
Investments, SEK m	12	10
Lead alloy production, Ktonnes	45	43
Av. no. of employees, FTE	69	72
Accident frequency	7.0	0.0

Odda produces pure zinc and zinc alloys, as well as aluminium fl uoride and sulphuric acid. Approximately 55 per cent of the raw materials for production is supplied by Boliden's mines, with the remainder coming from mines in countries such as Portugal and Ireland. Zinc clinker is supplied by Boliden's Rönnskär copper smelter. The raw materials for the production of aluminium fl uoride are fl uorspar and aluminium hydrate. The majority of the zinc production is exported and primarily sold to the steel industry within the EU. Aluminium fl uoride is an additive used in the aluminium industry and the majority of the production is sold in Norway. Odda, like Kokkola, uses both the direct leaching and conventional roasting techniques, and thereby enables optimum

Odda's P100 improvement programme A comprehensive programme designed to improve the smelter's competitiveness was launched at Odda in 2011. The programme includes both cost-cutting measures and a number of other measures designed to boost productivity. The improvement programme has continued in 2013 and has focused on further cost-cutting measures and rectifying the bottlenecks in production. Odda has, in comparison with the base year of 2010, cut its annual costs by approximately SEK 120 million, adjusted for the main tenance shutdown in 2013.

	2013	2012
Revenues, SEK m	1,070	1,184
Operating profi t, SEK m	– 26	31
Investments, SEK m	269	61
Zinc production, Ktonnes	143	153
Av. no. of employees, FTE	295	297
Accident frequency	7.4	1.5

Purchasing goods and services

Boliden currently has just over 6,000 suppliers, but 160 suppliers account for 80 per cent of the purchasing volume value, excluding raw materials. The annual purchasing volume, excluding raw materials, totals just under SEK 12 billion, with investments in machinery and equipment etc. accounting for just over SEK 3.5 billion of this total. Mines and Smelters account for approximately 60 per cent and 40 per cent of the total purchasing volume, respectively.

Cost trends

Boliden's purchasing volume is divided into strategic categories which, depending on their nature, are handled at local area, Business Area, or Group level. Boliden's purchasing categories are aff ected in many different ways by market trends. Th e primary driving forces are described below.

Services – Th e market trend for services purchased by Boliden normally tracks infl ation in the country in question. Th e supplier market is generally in balance while demand and the cost trend have been steered by infl ation and specifi c indices. New business models and supplier consolidation over the past year have resulted in enhanced effi ciency and Boliden's cost trend during the year has been markedly lower than the general cost trend.

Electricity – Electricity prices in the Nordic region are primarily driven by access to hydroelectricity and nuclear power, electricity transmission capacity between the Nordic

Purchasing volume per category

Logistics, 10 % Mobile equipment, 9 % Tools and Consumables, 4 % Electrical installations and Electrical equipment, 3 %

countries, Nordic electricity consumption, and taxes and charges. Higher grid tariff s and taxes are among the factors that contributed to the negative cost trend and the past year has seen Boliden work to re assign and optimise existing contracts.

Bulk goods and chemicals – Th e market trend in 2013 was turbulent, with dramatic price reductions for a number of product groups that were countered by equally dramatic price rises for other product groups. Th is wide-ranging category is primarily driven by fl uctuations in local markets and global raw materials indices, but is also aff ected by Boliden's ability to consolidate volumes and create innovative logistics set-ups. Th e overall price trend for 2013 as a whole was slightly downwards.

Indirect materials and services, IT and other – Stable and non-infl ation-driven categories which are driven by Boliden's ability to consolidate volumes and harmonise specifi cations.

Fixed installations – Currently characterised by a market balance with long-term supplier relationships. Th e cost trend is steered by overhauled operating set-ups, low cost option elements, and indexable manpower.

Mobile equipment – Primarily characterised during the year by market balance and, at the end of the year, by markedly improved lead times and pricing scenarios. Boliden works with long-term supplier relationships where the focus is partly on productivity and total cost and partly on activities designed to promote competitiveness and on analyses of low-cost alternatives.

Tools and consumables – Primarily driven by Boliden's ability to consolidate volumes and to establish alternative suppliers, and by national rates of infl ation and access to low-cost alternatives.

Logistics – Th e market trend in 2013 was stable. Th is category is primarily aff ected by fuel costs (diesel and bunker oil), stricter legislative requirements with regard to emissions and alternative fuels, and a balance between capacity and demand. Some long-term contracts are regulated via fuel and payroll cost indices. Th e total cost level for rail, ship and road transports has remained unchanged.

Electrical installations and electrical equipment – Th e market trend for this category has largely tracked infl ation in the countries in question in 2013 and was characterised by long-term supplier relationships, safety requirements, and market balance.

Prioritised areas

Th e focus in 2013 (and in the years ahead) was on consolidating volumes within Boliden and, as a consequence, reducing the number of suppliers. Th e focus during the fi rst stage of this process is on synergies within Smelters and Mines for the majority of the above-mentioned categories. Boliden's purchasing organisation is working with the following prioritised areas:

Increase the purchasing volume analysed

Increasing the number of purchasing projects is the single most eff ective way of identifying and enabling greater cost savings.

Generate cost savings Increase procurement capacity. Focus on enhanced expertise, effi cient tools, supplier market information, and the drawing up of procurement strategies.

Operational productivity and effi ciency

Reduce internal lead times and improve delivery precision in order to minimise disruptions to production and the need for stockpiles and safety stock.

Secure supply chains Increase the ability to select the right suppliers in accordance with the strategy for each sub-category and in accordance with local requirements.

Risk management

Boliden's operations are cyclically sensitive and are exposed to fl uctuations in, fi rst and foremost, metal prices and exchange rates. The operations have an impact on the surrounding environment and many processes are associated with work environment and safety risks. Boliden works unceasingly to reduce these risks, e.g. through active scenario planning based on a range of different market fl uctuations.

Operational risks

Operational risks are managed by the operating units in accordance with the guidelines and instructions adopted by Boliden at both Business Area and Group level.

Risk	Description of risk	Management and comments for the year
Health and safety	Boliden handles large material fl ows, high tempera tures and substances that are hazardous to health. Deviations from established routines or inadequate maintenance can give rise to dangerous situations and the risk of injury to employees. The risk of serious accidents that can result in personal injury or death is ever-present and ongoing efforts to minimise it are vital.	Boliden has well-established health and safety routines, with a zero tolerance vision and a new, Group-wide safety symbol, "B-safe". B-safe entails an agreement on the part of Boliden's employees whereby they undertake to comment on risky behaviour and to take other people's views on risky behaviour seriously. Incidents are reported via an incident reporting system, followed up and reported, and result in improvement work. The number of accidents resulting in lost time (LTI) in 2013 and involving Boliden's own personnel increased year on year between 2012 and 2013 and totalled 7.0 (6.6) at the end of the year. The number of accidents including contractors fell slightly to 8.9 (9.1). A Health & Safety Director has been appointed at Group level and tasked with further coordinating and improving the health and safety work.
Environmental impact	Environmental impact − the outside world's impact on Boliden Boliden is affected by the rising global temperatures. Climate change in the form of increased precipitation creates the risk of increased discharges of metals and nitrogen to water for Boliden and, hence, a greater risk that mandated environmental limits will be exceeded.	Boliden works proactively with continuous monitoring and process optimisation and with the potential for an increase in the capacity of Boliden's water treatment processes.
	Carbon dioxide emissions – climate change Boliden's operations result in the emission of green house gases, mainly carbon dioxide. It is diffi cult, in the short term, to implement transformations that result in reduced emissions without simultaneously reducing production.	Boliden's goal is to ensure its carbon dioxide intensity does not increase. A concept study was conducted in 2013 with the aim of identifying technically and fi nancially viable opportunities to reduce both direct and indirect carbon dioxide emissions.
	Carbon dioxide emissions – fi nancial impact Boliden's smelters are subject to the EU's Emissions Trading Scheme, EU ETS. This can, potentially, result in increased costs. The mines are also indirectly affected by higher costs as a result of the power sector raising the price of electricity due to higher emissions costs.	Boliden carries out regular analyses of future emissions costs and attempts, through its industry organisations, to promote transparency and predictability in the Emissions Trading Scheme during not only the current trading period (2013–2020), but also for subsequent periods.
	Emissions and discharges of metals Metal emissions and discharges to air and water are a side-effect of the operations. The risk lies in the potential for exceeding limit values or in emissions/ discharges that damage the environment.	Efforts to manage the risk of emissions and discharges of metals are based on risk analyses. Ongoing monitoring and maintenance are carried out in line with the management systems' instructions. Boliden also invests in new technology, and effi ciency enhancing measures for its processes and operations. Continuous measure ments, follow-up work and reporting are also carried out to ensure that Boliden achieves its emissions and discharges goals.
	Dam safety Dams for tailings sand account for one of Boliden's biggest impacts on the external environment. The risks comprise both the environmental impact of building a dam and the risk of a dam failure resulting in the dis charge of contaminated water.	Boliden works proactively to minimise its safety- and environment related impact on its surroundings and works systematically with in house monitoring and inspections. Every operating unit with its own dam has a Dam Safety Manager and a Dam Operations Manager. The dams are operated in accordance with the GruvRIDAS dam safety guidelines produced by the Swedish industry organisation for mining and metal companies, SveMin.

Risk	Description of risk	Management and comments for the year
Unplanned stoppages	Boliden's production essentially comprises continuous processes and unplanned stoppages can affect produc tion, emissions and discharges to air and water, and fi nancial results. The stoppages can, in some cases, be long-term ones. Unplanned stoppages can, for example, occur due to technical problems, accidents or strikes.	Boliden carries out preventative maintenance work at all of its produc tion facilities. Major maintenance shutdowns are carried out every year within the smelting operations, while maintenance work is an integral part of the day-to-day operations for the mines. The smelting and mines operations have been working with a range of internal benchmark proj ects and knowledge exchange between the production facilities for a number of years now, and Boliden has also adopted a zero tolerance vision for accidents in order to help prevent unplanned stoppages.
Talent pool	A signifi cant percentage of Boliden's employees will retire over the next 10 years. Stiff competition for skilled employees increases the diffi culty of replace ment recruitment.	Boliden has an ongoing programme of succession and knowledge transfer work that involves replacement planning and skills develop ment as well as the transfer of skills from senior employees to less experienced employees in order to ensure the existence of internal candi dates for key positions within Boliden's operations. Boliden has also, over the past year, extended its involvement in universities, colleges of further education and networks for young academics in order to increase awareness of Boliden. The 10-year partnership with Luleå University of Technology (LTU) has, for example, resulted in the launch of the Mining Research Programme. Boliden is also involved in educational programmes and targeted recruitment activities at trade fairs.

Market and commercial risks

Boliden's market and commercial risks are primarily managed within the individual Business Areas.

Risk	Description of risk	Management and comments for the year
Metal prices	Changes to metal prices have a signifi cant impact on Boliden's profi ts and cash fl ow.	Boliden's policy is not to hedge metal prices, but rather to allow changes to be refl ected in the result. There are some exceptions to this, e.g. when mining ore bodies with short residual lifespans or in order to ensure fi nancial effectiveness in conjunction with major investment projects. See also under the "Financial risks" section. Boliden also continuously hedges Smelters' metal price and currency exposure (with the exception of process inventory) in what is known as transaction exposure. See also under the "Financial risks" section.
Treatment and refi ning charges	Treatment and refi ning charges make up a large part of the smelters' gross profi t and are determined by the supply/demand in the metal concentrates market.	The terms are negotiated annually by the major players in the mining and smelting industries. Boliden applies these terms.
Revaluation of process inventory	Stock tied up within the smelters' production process.	Boliden's policy is not to hedge price and currency exposure for the process inventory. Changes in metal prices and exchange rates affect the Group's profi t in conjunction with the revaluation of process inventory. The item is reported separately in the Income Statement in order to clarify the effect. Price changes have no effect on the cash fl ow. The exposure to price changes in any stock volumes that exceed or fall short of the production's process inventory is, however, always hedged. See also under the "Financial risks" section.
Customers	Signifi cant reliance on a small number of large copper customers. Reduced sales to industrial customers in Europe increase the risk of sales via the London Metal Exchange (LME), with slightly lower margins as a result.	Boliden endeavours to reduce the risk by expanding the customer portfolio through targeted sales activities. The number of sales resources has been increased during the year and the number of industrial customers has grown.
Raw materials supply	The raw materials supply is important in enabling the smelters to produce at high levels of capacity utilisation and consistent quality. Approximately 70 per cent and 40 per cent, respectively, of the smelters' copper and zinc requirements are met by external suppliers.	Boliden endeavours to conclude long-term agreements with external metal concentrate and recycling materials suppliers.
Energy prices	Energy accounts for approximately 18 per cent of oper ating costs and changes in energy prices can have a signifi cant effect on profi tability.	Boliden has long-term agreements with price clauses in Sweden and Norway. In Finland and Ireland, Boliden is exposed to market prices and changes in energy prices hence affect the operating profi t. Boliden monitors opportunities to enter into longer term agreements if and when such opportunities arise. Boliden contin ues to participate in collaborative projects based on investments in subsidised power generation.

Financial risks

Boliden has a centralised treasury function that is responsible, inter alia, for managing fi nancial risks with the exception of credit risks in accounts receivable. Th e treasury function is tasked with supporting the management and operating units at Parent Company and Group level. Th is structure ensures good internal risk monitoring and off ers both fi nancial and administrative economies of scale. Th e treasury function is responsible for identifying and effi ciently limiting the Group's fi nancial risks in line with the fi nancial policy adopted by the Board of Directors.

Risk	Description of risk	Management
Exchange rate and metal price risks	The pricing terms for Boliden's products are primarily determined on raw materials exchanges such as the London Metal Exchange (LME) and the London Bullion Market Association (LBMA), and the currency and money market. Boliden's products are largely priced in USD and fl uctuations in the USD/SEK/EUR exchange rates hence have a signifi cant impact on Boliden's profi ts and cash fl ow. The Group's exchange rate and metal price exposure covers transaction exposure and translation exposure:	The Group's total sensitivity to the factors listed (see sensitivity analysis table below) is calculated on the basis of the quarterly reports detailing the Group companies' planned exposure resulting from metal produc tion, exchange rates and interest. The effects of different market sce narios can be quantifi ed on the basis of the information on sensitivity to market changes, and can then act as source data for the management of fi nancial risks and be reported to the Board of Directors, manage ment, and the market.
	Transaction exposure: Boliden's transaction exposure comprises both bind ing undertakings and forecast cash fl ows.	Transaction exposure in conjunction with binding undertakings is hedged with the exception of the smelters' process inventory. Exposure in con junction with forecast cash fl ows is normally not hedged in line with Boli den's policy. See also the "Market and commercial risks" section above.
	Exposure in connection with binding undertakings This exposure arises when Boliden undertakes to par ticipate in a transaction at a fi xed value and which is not compensated for by a simultaneous opposite transac tion of a corresponding size and nature. The Group buys metals in the form of raw materials which it processes into refi ned metals, and where the acquisition value of the raw materials as well as the exchange rates may differ from the fi nal sales value. Such differences arise as a result of variations in size, purchasing date, processing and selling. Furthermore, some customers receive fi xed prices in different currencies that are sometimes set well in advance of delivery.	Boliden's policy stipulates that risks from exposure in conjunction with binding undertakings shall be hedged in full, with the exception of the smelters' process inventory. See also the "Market and commercial risks" section above. The Group uses futures contracts to ensure that the sale price and exchange rate correspond to those applicable in conjunction with the signing of a sales agreement at a fi xed price. Hedge accounting is applied to the futures contracts, thereby hedging the fair value in the Income Statement.
	Exposure in conjunction with forecast cash fl ows This exposure arises due to the fact that a substan tial percentage of the Group's future income – primar ily that relating to extracted metals and to treatment and refi ning charges – is affected by fl uctuations in metal prices and exchange rates.	Boliden continuously calculates the way in which changes in metal and exchange rate markets will affect the Group's future fi nancial position. See the sensitivity analysis of the operating profi t table below. Boliden's policy is not to hedge metal prices and exchange rates in relation to the Group's future income under normal commercial conditions. Boliden can, however, in order to limit the risk in certain situations, hedge part of the forecast cash fl ows. There may be special justifi cation in conjunction with major investments or investments in mines with a short lifespan, in order to limit the fi nancial risks. The Group can use futures and options con tracts to hedge metal prices and/or exchange rates for the cash fl ows from forecast metal sales. The derivatives are hedge accounted as cash fl ow hedging under Other comprehensive income. See page 52 for a sen sitivity analysis of how the Other comprehensive income result is affected by a change in the value of fi nancial derivatives (cash fl ow hedging).
	Sensitivity analysis – operating profi t,

excluding outstanding derivatives

The table below contains an estimation of the effect on the operating profi t, before tax, of changes in market terms for the following year. The effect is calculated on the basis of closing day prices on 31st December 2013 and is based on forecast metal sales. The sensitivity analysis does not take into account the effects of metal price and exchange rate hedging, nor does it take into account the effect of the smelter' process inventory revaluation or contracted TC/RC. The analysis does not include assumptions regarding such factors as cost infl ation, discrepancies in production trends or macroeconomic conditions. The starting point for calculating the effects of a 10 per cent change in metal prices is the so-called "cash price" on the LME or LBMA on 31st December 2013. The corresponding starting point for changes in the value of the US dollar is spot rates on the same date. The effect of changes to treatment and refi ning charges is based on changes in relation to the average level during the fourth quarter.

Change in metal prices, +10%	Effect on operat ing profi t, SEK m	Change in USD, +10%	Effect on operating profi t, SEK m	Change in TC/RC, +10%	Effect on operating profi t, SEK m
Copper	400	USD/SEK	960	TC/RC Copper	90
Zinc	485	EUR/USD	385	TC Zinc	40
Lead	90	USD/NOK	85	TC Lead	–10
Gold	140
Silver	140

Sensitivity analysis – other comprehensive income, taking into account outstanding derivatives

The table below contains an estimation of the effect on the Other comprehensive income (income and cost items including reclassifi cation adjustments not reported under the profi t), before tax, of changes in the value of outstanding derivatives based on the closing day prices on 31st December 2013.

Changes in the value of fi nancial derivatives in respect of binding undertakings and translation exposure have a very limited or no effect on the profi t or Other comprehensive income. The table below hence contains the effect of changes in the value of derivatives intended to counter the Group's forecast exposure.

Change in metal prices or exchange rates, +10%	31-12-2013 Effect on Other comprehensive income, SEK m	31-12-2012 Effect on Other comprehensive income, SEK m
Copper	–	–73
Zinc	–	–84
Lead	–	–17
Gold	–126	–244
Silver	–	–30
USD/SEK	–150	–283

Risk	Description of risk	Management
Exchange rate risk	Translation exposure A translation difference arises, when converting net investments in over seas operations into Swedish kronor, in conjunction with exchange rate fl uc tuations and which affects Other com prehensive income within the Group.	The effect of translation exposure is eliminated with the help of external borrowing and currency futures contracts in accordance with Boliden's fi nancial policy. Other comprehensive income was affected in 2013 to the tune of SEK -212 million (SEK 219 m) as a result of hedging in currency futures contracts and borrowing in foreign currencies.
Interest rate risk	Changes in market interest rates affect the Group's profi ts and cash fl ows. The rapidity with which a change in interest rate levels affects the Group's net fi nancial items depends on the fi xed interest term of the loans.	Boliden's fi nancial policy provides the scope for an average fi xed interest term of up to 3 years. The Group's loan portfolio had, on 31st December 2013, an average fi xed interest term of 0.7 years (0.9 yrs.). Interest swaps are used to extend the fi xed interest term.

Sensitivity analysis – Other comprehensive income, taking into account the market rates of outstanding interest derivatives

	31-12-2013	31-12-2012
Change in market rate, +1%	Effect on Other comprehensive income, SEK m	Effect on Other comprehensive income, SEK m
Interest derivatives	41	32

Risk	Description of risk	Management
Refi nancing and liquidity risk	The risk that Boliden will be unable to extend existing loans or meet its payment undertakings due to insuffi cient liquidity.	Boliden limits the refi nancing risk by ensuring that its loan liability has a good spread in terms of counterparties, fi nancing sources and durations. Boliden works actively to ensure satisfactory current liquidity by making appropriate use of unutilised credit facilities with market- and operations-adjusted loan durations. The refi nancing require ment is reviewed regularly by Boliden's treasury function. The refi nancing requirement is dependent, fi rst and foremost, on market trends and investment plans. The loan agreements carry loan covenants which oblige Boliden to comply with certain defi ned key ratio conditions in order to avoid early repayment. A deterioration in the global economic climate may entail increased risks in respect of profi t performance and fi nancial position, including the risk of Boliden coming into confl ict with loan terms and conditions. Boliden has complied with all loan covenants in 2013. The average term of total loan facilities is 2.6 years (3.5 yrs.), which is in accor dance with established Group policy. On 31st December 2013, Boliden's payment capacity totalled SEK 6,356 million (SEK 9,150 m) in liquid assets and unutilised binding credit facilities with a term in excess of one year, less deductions for utilised loans that mature within the space of one year. Boliden has established a cash pool structure that enables it to maintain a central overview of liquidity fl ows and ensures effi cient management of the Group's overall liquidity.

Risk	Description of risk	Management
Credit and counterparty risk	Credit risks in fi nancial operations The term, credit and counterparty risk, refers to the risk that a counter party in a transaction may fail to fulfi l their obligation, thus causing the Group to incur a loss. Boliden's fi nan cial exposure to counterparty risk mainly occurs when trading in deriva tive instruments.	In order to limit credit and counterparty risk, only highly creditworthy counterparties are accepted and, wherever possible, the commitment per counterparty is limited. These restrictions are laid down in Boliden's fi nancial policy in the form of a lowest acceptable Standard & Poor's credit rating of A when the transaction is entered into and a maximum investment of liquid assets per counterparty. The treasury function continuously monitors exposure to counterparty risks, and the creditworthiness and counterparty spread of these derivatives is deemed to have been good in 2013. Two of Boliden's counterparties have an A- credit rating in a deviation from the fi nancial policy that has been approved by the Board of Directors. On 31st December 2013, the credit risk in derivative instruments corresponded to a market value of SEK 500 million (SEK 322 m), which relates to Boliden's receivables from external counterparties. Offsetting of fi nancial assets and liabilities is regulated under ISDA agreements (International Swaps and Derivatives Association) which handles both offsetting between contracted counterparties during day-to-day operations and in conjunction with special circumstances, such as failure to pay. Boliden, during the course of its day-to-day operations, offsets market values in the same currency with a single counterparty that mature at the same time and the excess sum is paid by the party with the biggest liability. In the event of a breach of contract, all outstanding obliga tions covered by ISDA agreements are terminated in a sum that is paid by the coun terparty with the biggest liability.
	Credit risks in accounts receivable The risk of the Group's customers failing to fulfi l their obligations consti tutes a credit risk.	Credit risks are managed through an established credit rating process, active credit monitoring, short credit periods, and daily routines for monitoring payments. The requisite provisions for bad debts are also monitored continuously. The concentra tion of accounts receivable is otherwise low and the credit periods are short. The quality of the accounts receivable is deemed to be very good. Write-downs of out standing accounts receivable on 31st December 2013 have only been effected in very limited amounts and have also, historically speaking, been insignifi cant. See also Note 18 on page 88, Accounts receivable.
Risk manage ment and insurance	The risk of damage or injuries that give rise to fi nancial losses	The objective of the Risk Management function at Boliden is to minimise the total cost of the Group's damage and injury risks. This is achieved both by continuously enhancing the damage and injury prevention and control work conducted within the operations, and by introducing and developing Group-wide insurance solutions.
Financial reporting	The risk of inaccurate fi nancial and operational reporting	Boliden has an effi cient internal control structure. Control functions exist both locally, in individual units, and within Business Areas and at the Head Offi ce. All of the functions work within a Group-wide internal control framework for fi nancial reporting that is based on COSO. The framework's controls are tested annually, both internally and by external auditors. The internal tests have also resulted in the trans fer of knowledge and experience between departments and units. The operational reporting is followed up and controlled by the Group's Controller function, which works closely with the local units and Business Areas.

Other risks

Risk	Description of risk	Management
Legal risks	Boliden conducts extensive operations and may occasionally become involved in disputes and legal proceedings aris ing in the course of these operations. Boliden's various operations are, further more, widely subject to licens ing requirements and to wide-ranging environmental and other regulations. The continuation of Boliden's opera tions is, to a large degree, dependent on the retention of existing licences and the acquisition of new ones.	Boliden continuously monitors legal developments in relevant spheres and imple ments, follows up on and ensures compliance with laws, regulations and the direc tives contained in applicable legislation. Boliden is active in the environmental law sphere, among others, through its membership of industry and trade associations, in the form of lobbying activities, and by means of presentations and educational measures for decision-makers and other stakeholder groups. Information on legal proceedings and disputes is provided in Note 29 on page 96 and Note 31 on page 97.
Political risks	Political decisions can have an effect in Sweden and the countries in which Boliden and Boliden's commercial partners operate.	Boliden and industry organisations are actively involved in lobbying work and are often an expert body to which reports are referred for comment ahead of impend ing political decisions that impact Boliden's operations.
Risks to confi dence	Boliden may suffer incidents that adversely affect confi dence in the company, when, for example, suppli ers and customers fail to live up to the environmental, quality, ethical etc. requirements adhered to by Boliden.	Evaluations of customers and suppliers, Boliden's business partners, are conducted within the framework of Boliden's CSR work before entering into any partnership. This is done by means, inter alia, of what is known as an EBP (Evaluation Business Partner) checklist. Customer and supplier audits are also conducted to ensure that the standards maintained by these parties are as high as those within Boliden. Discrepancies can result in termination of the partnership.

Sustainable development

Boliden's mines and smelters create job opportunities and enable society's development. The minerals and metals that Boliden sells are indispensable components of a modern society. At the same time, the manufacturing processes have an impact on the surrounding environment and many of the stages of these processes are associated with work environment and safety risks. Sustainable development is, therefore, fundamentally a question of process stability for Boliden. Stable processes are vital to productivity and profi tability, but they are also key in ensuring the minimum possible impact on people and the environment.

Boliden sees no confl ict between profi tability and sustainability: quite the reverse. Boliden's ambition is to be a respected company in the industry and to exploit the opportunities for growth entailed thereby.

Contents Boliden's employees 56 Boliden's environmental work 59 Evaluation of business partners 63 New sustainability goals 64 Limited Assurance Report 65

Boliden's smelters refi ne mined concentrate, electronic materials and other secondary raw materials to produce pure metals. The various stages of the transformation entail processing the concentrates in order to separate out the impurities from the metals. This is done with the aid of high-temperature reactions. During the fi rst stage of the zinc process, roasting, the concentrate is processed in a furnace in order to remove sulphur dioxide. Other stages include leaching with sulphuric acid, purifying the solution, and then electrolysis during which the zinc adheres to cathode plates. The fi nal stage involves smelting the zinc cathodes and casting them into ingots.

"I'm responsible for the roasting process and for planning the concentrate mix for roasting and direct leaching. This means I have to establish a good working relationship with both the process operators and the marketing department that handles our raw materials purchases. The fun thing about my job is that I can help ensure the company does well – the production record set by Kokkola last year is a good example of that. I'm proud to work in a safe workplace where I know that my colleagues and I can all make a difference." Tommi Tuomikoski,

Operations Engineer, Kokkola zinc smelter

Boliden's employees

To generate value, Boliden must offer its employees safe work environ ments, skill development programmes, opportunities for career development, and the possibility for employees to establish a balance between their professional and private lives.

Boliden's priority areas from an employee perspective for the period from 2009 to 2013 were:

• Create a safe work environment
• Secure the future talent pool
• Create diversity and a better gender balance

Create a safe work environment

Boliden's operations entail risks such as handling substantial material fl ows, high temperatures and, from time to time, substances that are hazardous to health. A safe work environment is a top priority for Boliden and the Group has adopted a zero tolerance vision for accidents at work. Creating a strong safety culture while simultaneously eliminating risks are the preconditions for achieving this goal. Doing so demands stringent safety requirements and that every individual employee must accept personal responsibility for behaving safely and correctly. But even though a safe work environment is a given, accidents do happen, and a continuous ongoing dialogue on the subjects of health, safety, routines, attitudes and behaviour is vital.

Boliden's positive accident downward trend which had lasted since 2005 was reversed in early 2012. Th e accident frequency1) in 2013 was 8.9 (9.1), including contractors, and 7.0 (6.6) for Boliden's own employees. Safety-related eff orts focusing on contractors have been intensifi ed since 2012 within the overall framework of Boliden's safety work, and is reported in Boliden's safety statistics.

Fires occurred in four of Boliden's mines – Garpenberg, Kristineberg, Renström and Tara – during the year. Fortunately, however, no one was seriously hurt. Fire is a serious risk in a mine and safety systems and safety exercises are being reviewed and are conducted on a regular basis. Th e fi re at Kristineberg exposed three people to severe danger, but refuge chambers and individual creativity in an extremely hazardous situation meant that none of those involved suff ered any serious physical injuries, although mental stress is obviously unavoidable in such situations. Accident investigations and analyses have been carried out and preventative work will be strengthened.

A total of 112 (106) accidents that resulted in personal injuries and consequent lost time occurred during the year. Six of these accidents constituted serious workplace accidents. No accident has resulted in a fatality in the past fi ve years.

Activities for a safer Boliden

Boliden conducts risk and causal analyses throughout the Group in order to learn more about the risk of injury and to conduct more eff ective and proactive work in the safety sphere. Most accidents involve cuts, sprains or fractures, and occur when employees slip, stumble or fall. Boliden's performance in relation to the organisation's zero accident goal is followed up monthly at management meetings at both Group and unit level, and the fi ndings are reported to the Board. All operating units work with management systems based on the OHSAS 18001 work environment standard. It is diffi cult to identify any single factor that contributes to an accident occurring, but a mapping carried out during the year showed that Boliden has scope for improvement both in terms of controls and follow-up work. In 2013, an action programme with three main component parts was launched:

• 1. Increased rate and quality, which primarily involves, traffi c, admission, visitor routines and signage.
• 1. Skill inventory with the aim of raising awareness of health and safety issues within the organisation.
• 1. Organisational change to bring about a clearer focus on work environment activities.

Clear leadership and good role models are important in the creation and maintenance of the safety culture and high awareness that we aim to achieve. In 2013, all of Boliden's units mapped the 3−5 biggest process risks and the way in which they are handled, or should be handled. Health and safety inspections that include members of the Group management team have been carried out with increased frequency during the year at all units, and Boliden's CEO, or another member of the Group management team, have participated together with unit managers in nine such inspections. Not only does this tactic involve everyone in Boliden's health and safety work and concretise the concept of visible leadership, the health and safety inspections also provide an important forum for knowledge transfer within the senior management. Th ese health and safety inspections will continue in 2014.

BSafe – a concept designed to enhance awareness of safety issues and work in connection therewith – was launched in 2013.

BSafe is part of Boliden's work with visual, clear and standardised information on safety measures, correct behaviour, and correct equipment in all workplaces. In concrete terms, this means, among other things, that

all employees have a duty to draw attention to any breaches by their colleagues of safety routines and to halt production if this is required in order to improve safety. Th e implementation of the New Boliden Way continued during the year and also includes methods of ensuring a clean and tidy workplace. Consistent and

¹⁾ The number of Lost Time Incidents (LTI)/Total number of hours worked x 1,000,000. An accident that occurs at work and which results in absence from work on the following day or for an extended period of time.

committed leadership at all levels, committed employees, and strong peer pressure to eliminate tolerance of risky behaviour are all important cornerstones of this work.

Healthy employees

Being healthy is not just good for the individual in question, it also promotes Boliden's success. Boliden has established a proactive programme of health work and has seen a pleasing trend in healthrelated statistics over an extended period of time. In 2013, Boliden's sick leave rate was 3.9 per cent (3.7%).

Boliden off ers a wide range of activities, such as recurring "back schools", exercise tips, free 24/7 access to the company gym, staff canteens that specialise in healthy foods, and our recurring "Stub it out" campaigns.

Well-being also requires eff ective rehabilitation activities – something that is particularly important when it comes to reducing longterm sick leave. Th e goal of our rehabilitation work is to ensure that employees are able to return to their previous positions, but where this is not possible, Boliden strives to off er a position elsewhere within the operations.

Securing tomorrow's talent pool

Boliden's ability to attract, develop and retain employees with the right skill sets and commitment levels are vital for our competitiveness and a top priority. In a time when many of our employees are reaching retirement age, coupled with the fact that fewer and fewer students are studying scientifi c subjects, the competition for skilled employees is high.

Boliden shall provide a safe work environment that is characterised by professionalism, good developmental opportunities, good leadership and management, and a long-term sustainable approach. Our skill development and recruitment work is based on Boliden's needs and strategic goals, such as the creation of a diverse workforce, an increase in the number of women working for the Group, and the need to manage the generation shift.

Talent pools

Boliden, in common with the rest of the sector and much of heavy industry as a whole, is facing a generation shift. Th is, coupled with the fact that the Group's operations are often conducted in regions with a limited population base, demands that Boliden increases its exposure to the next generation of employees. Th e competition for certain occupational categories, such as mining engineers, geologists, geophysicists, process engineers and experienced miners, is particularly tough. Boliden's operational bases all have their own recruitment plans and are responsible for ensuring their respective talent pools are fi lled.

Interesting career opportunities are created by encouraging mobility within the Group and prioritising internal recruitment in the talent and managerial pool.

Employee development

Boliden off ers massive potential for an individual to grow while remaining within the Group and has several skill development programmes designed to generate the preconditions and structures needed for career and skill planning. Talent pools, leadership development programmes and managerial evaluation programmes are all key components of this work. A system for evaluating and

AREA	GOAL	RESULTS, 2013	COMMENTS ON RESULTS
Number of accidents every month at all units	Zero accidents	The number of accidents (accident frequency1)), including contractors, fell slightly in 2013 from 9.1 to 8.9. The accident frequency for own employees was 7.0 (6.6). Boliden's units had an average of 6 (8) accident-free months during the year.	Accidents have increased over the past two years in spite of Boliden's systematic elimination of dangerous aspects of the operations, the safe behaviour training it has organised for its employees, and the protective equipment it has provided. Mapping of the causes of accidents has fail ed to yield an unambiguous answer and Boliden will, therefore, in order to break the negative trend, strengthen its leadership and expertise in the work environment sphere. Work in this area includes appointing a safety offi cer for health and safety as of 2014. Our goal of zero acci dents remains in force.
Sick leave	<4.0 per cent	The sick leave rate in 2013 was 3.9 per cent (3.7%). Four production units, how ever, have failed to achieve the goal of <4.0 per cent.	Boliden has achieved its Group goal of a sick leave rate of below 4 per cent. Boliden's systematic and preventative health work, coupled with effective rehabilitation, has yielded positive results. Efforts to ensure that all units achieve levels on a par with or below the target level are continuing and the sick leave rate goal has been tightened up for 2018.
Number of female employees2)	>20 per cent	At the end of 2013, 17.1 per cent (16.9%) of the work force was female.	Boliden is moving in the right direction. The number of women working within Boliden increased by 0.2 per cent in comparison with 2012, and the number of women among Boliden's 100 most senior managers is 27 per cent. The fi gures do, however, differ from one area of the opera tions to another: 35 per cent of all truck drivers at the Aitik mine, 23 per cent of the staff at Boliden's mine engineering function and 33 per cent of Boliden's exploration department are women (refers to the aver age number of employees). Efforts to increase the number of women have, among other things, involved all units working to individual gender equality plans and holding recurring training days.

Social goals and results for 2013

1) Accident frequency – the number of accidents leading to lost time per 1 million hours worked.

2) Refers to full-time employees

developing employees was introduced in 2013 and is intended to result in improvements in the talent management sphere and in the ongoing improvement work carried out within the framework of the New Boliden Way.

For further information, please see Boliden's website at www.boliden.com

Securing tomorrow's talent pool

Eff orts to improve awareness of Boliden among students at universities and colleges of further education continued during the year and will, in the long term, help grow the recruitment base. One example of these eff orts is Boliden's partnership with the Luleå University of Technology. A systematic programme of work, with well-defi ned messages and clear priorities in terms of the activities to be carried out and the fora to be visited, are the cornerstones of this work. Measurements and rankings among students and "young professionals" provide relevant information, enabling Boliden to track the way in which it is perceived and what these groups are looking for in a future employer. Surveys have shown that areas linked to sustainable development are valued highly in these groups, as are a work-life balance, an equal opportunities workplace, and personal development – all opportunities off ered by Boliden.

Diversity and equal opportunities

Diversity leads to dynamism, creativity and, ultimately, to greater profi tability. Boliden endeavours to ensure its workforce is made up of people with diff erent backgrounds, of diff erent ages, and with diff erent experiences.

Th e metals industry is traditionally male-dominated and although the industry has progressed, e.g. through technological development that has reduced the heavy, manual aspects of the job, Boliden still faces a challenge when it comes to attracting women. Boliden's goal is for at least 20 per cent of its workforce to be made up of

women by the end of 2018 and if we are to achieve this goal, one in every three recruits must be female. At present, some 17 per cent (17%) of Boliden's employees are women.

Deliberate investments include equal opportunities plans at all units, recurrent training days, and female networks within the Group.

Work-life balance

Boliden regards a work environment that off ers work-life balance as a prerequisite for successfully attracting and retaining talented employees. Th is is an important component of ensuring our employees' well-being and their ability to perform.

Some of the countries in which Boliden conducts operations off er economic compensation to employees on parental leave, and employees on parental leave are also kept informed of what is going on and how things are developing at their workplace.

Boliden has received external acknowledgement of its eff orts to create a balance between employees' work and private lives and in 2012, the Unionen trade union declared Boliden to be a parentfriendly workplace.

Boliden wins the Swedish Industry Equality Prize

In 2013, Boliden was awarded the Swedish Industry Equality Prize. Th e prize was launched in 2012 by the labour market parties that make up the Swedish Industry Council. Th e jury's citation explaining why they awarded the 2013 prize to Boliden reads as follows:

"A company within one of our most important basic industries has, through deliberate eff orts, persuaded women to become miners and has a smelter where the majority of the management team are female. Th is is a company that promotes members of staff who are on parental leave and was a pioneer in emphasising the importance of paternity leave. Th e company thus not only blasts rock, it blasts a great many prejudices about the mining industry."

Boliden's environmental work

Boliden operates a systematic programme of environmental work and its ambition is to exceed legislative and regulatory requirements. Boliden shall live up to the outside world's expectations and boost its competitiveness by deve loping new methods and making investments that reduce its environmental impact.

Based on the operations' environmental impact, Boliden identifi ed the following environmental issues as priority areas during the period from 2009 to 2013:

• Minimising emissions and discharges to air and water
• Limiting our impact on the physical environment
• Handling waste in a responsible manner

Boliden shall have zero environmental accidents

Boliden's goal is zero environmental accidents1). Achieving our goal of zero environmental accidents demands effi cient systems and stable processes at every stage of the value chain. Boliden also carries out a continuous programme of risk assessments, remedial action plans, improved routines, and the introduction of new and improved technologies. Ultimately, it is the combination of a sound structural basis and the individual employee's attitude and behaviour that will determine how well Boliden succeeds in realising this ambition, which means that our work with attitudes and behaviour is key.

Th ere were 13 (9) environmental accidents in 2013, of which three involved incidents where limit values were exceeded. Th e environmental accidents during the year otherwise entailed spillages within Boliden's facilities that were immediately cleaned up. None of the accidents will cause lasting damage or have a signifi cant environmental impact.

Environmental reporting was extended during the year to bring about increased incident reporting with causal analyses, which is a prerequisite for effi cient maintenance work. All environmental goals are followed up monthly, with the exception of the carbon dioxide goal, which is followed up quarterly. Follow-up work is conducted at the Group's management group meetings and the results are presented in the Group's quarterly reports.

Environmental impact throughout the value chain

Th e scale of the operations' environmental impact varies along the length of the value chain (see illustration on the following pages

1) A serious accident that causes serious harm and/or results in breaches of legislative requirements or licences.

Environmental goals and results for 2013

AREA	GOAL	RESULTS, 2013	COMMENTS ON RESULTS
Metals to water2)	Reduce by 25 per cent.	Discharges of metals to water have been reduced by 58 per cent (53%) since 2007.	Discharges of metals and nitrogen to water have fallen to well below target levels. Considerable efforts have been
Nitrogen to water	Reduce by 20 per cent.	Discharges of nitrogen to water have been reduced by 26 per cent (14%) since 2007.	made during the goal period to increase the capacity of the water treatment plants and to process large amounts of
Metals to air3)	Reduce by 25 per cent.	Emissions of metals to air have been reduced by 45 per cent (43%) since 2007.	precipitation. A great deal of work has also been done inter nally on optimising the treatment processes and reducing disruptions.
Sulphur dioxide to air4)	Reduce by 10 per cent.	Emissions of sulphur dioxide to air have been reduced by 27 per cent (5%) since 2007.	Emissions of metals and sulphur dioxide to air have declined to well below the target level. Substantial improvements have been made with regard to planning maintenance work in a way that reduces unplanned stoppages and break downs, and on attention to detail in the way the processes are run in order to optimise the gas purifi cation.
Carbon dioxide emissions5)	Increase by a maximum of 3 per cent (taking into account planned production increases).	Carbon dioxide emissions have increased by 4 per cent (4%) since 2007 using the 2007/2008 calculation methods. The reported fi gure indicates a total increase of 22 per cent, but the calculation method has changed and the fi gures are not compara ble with those at the beginning of the period.	The goal was to ensure that absolute emissions did not increase by more than 3 per cent. This target fi gure was exceeded slightly when the comparable emissions increased by a further 1 per cent. The emissions volumes are affected by production levels and changes in the product mix.

The environmental goals are given in absolute fi gures (kilos or tonnes). Base year, 2007. The goals have been broken down by the respective operating units in order to facilitate follow-up work. They are also, in order to increase transparency, reported internally every month with the exception of carbon dioxide, which is reported quarterly.

• 2) Copper, zinc, lead, nickel, cadmium and mercury.
• 3) Copper, zinc, lead, nickel, cadmium and arsenic. 4) The fi gures for the base year 2007 have been adjusted by 630 tonnes due to the acquisition of a sulphuric acid plant.
• 5) The calculation method has changed. The original calculation was based primarily on consumption of fuels and reducing agents in production and on

indirect emissions from electricity purchased. The implementation of ETS at the smelters entailed the introduction of a more complete presentation of emission and discharge sources that takes into account the input coal for raw materials, for example. There is no source data (in the form of reliable carbon content provisions for all materials) that would enable a thorough calculation of these emissions retroactively from the beginning of the period.

For details of Boliden's new environmental goals for 2018, see page 64.

60–61). Exploration has no truly signifi cant environmental impact itself, while mining brings about changes in the landscape and causes noise and vibration. Mines and smelters give rise to waste, dust and emissions and discharges of metals to air and water. Th e operations require large amounts of energy which, in itself, gives rise to carbon dioxide emissions. Th e environmental impact is minimised through the use of the best available technology and methodologies.

All of Boliden's mines and smelters work with ISO 14001 certifi ed environmental management systems. Th e Group's energy management system is currently being updated and all of Boliden's units are working towards ISO 50001 certifi cation. Boliden Tara and Boliden Harjavalta have already achieved this certifi cation. Th e Group's smelters are also ISO 9001 (quality) certifi ed.

Emissions and discharges to air and water

Th e process of extracting metals generates emissions and discharges, and Boliden is responsible for continuously managing and minimising these emissions and discharges and their negative eff ects. Stable processes that can be run with the fewest possible maintenance shutdowns are important in reducing these emissions and discharges and Boliden is, to this end, continuously investing in process improvements and new technologies. A number of renovation work programmes were carried out during the year in order to upgrade existing equipment and implement new technologies. Aitik had the longest repair shutdown in history.

Reducing emissions and discharges of metals, nitrogen, sulphur dioxide and carbon dioxide, and reducing diff use dust emissions to the air in order to maintain good water quality have always been high priority areas for Boliden's environmental work, and will continue to be so.

Discharges to water

Th e primary environmental impact of discharges to water lies in the risk that the aff ected bodies of water and their beds are contaminated by foreign substances that may disturb their natural balance.

Boliden's operations use large amounts of water, and reusing the water and returning it to the processes enables Boliden to reduce both its water withdrawal and its discharges.

Boliden's discharges to water nowadays mainly comprise metals and nitrogen.

70 per cent (65%) of the metal discharges come from the smelters' water treatment plants that also treat the rainwater that falls on the industrial park area. Boliden's mines account for the remaining 30 per cent (35%) in the form of discharges from tailings ponds at the mines' concentrators and water treatment plants.

Th e mining operations account for 70 per cent (80%) of Boliden's nitrogen discharges, which result mainly from the use of explosives. Th e other 30 per cent (20%) come from the sedimentation tank at the Kokkola zinc smelter.

Reducing nitrogen discharges was a focus area for Boliden in 2013. Nitrogen discharges decreased by 13 per cent year on year, with Tara accounting for the biggest reduction.

Water management is critical in maintaining the quality in the water that is discharged into recipients to the standard mandated in the EU's Water Directive. Heavy precipitation is one of the main

The scale of the operations' environmental impact varies along the entire length of the value chain. Large amounts of rock are mined and successively refi ned through the addition of different input goods, such as explosives and chemicals, and are turned into fi nished metals and by-products. Emissions to air, discharges to water and waste are created throughout the process chain.

risks to Boliden's ability to meet applicable limit levels as the water treatment capacity is not always suffi cient to handle the occasional sharp rise in water levels.

Th e water treatment processes are constantly being reviewed and in 2014, Boliden's operations will implement water management plans to ensure better control over and following up on the Group's water management.

Emissions to air

Boliden's most signifi cant emissions to air comprise both the metal and sulphur dioxide emissions formed by the smelters' process gases and the direct emissions of carbon dioxide from incineration processes and transportation. Th e indirect carbon dioxide emissions from the electricity consumed by the Group account for just under half of the total carbon dioxide emissions, based on Boliden's chosen calculation method.

Boliden's direct carbon dioxide emissions are closely connected to production volumes in that the higher the production level, the higher the energy consumption and, hence, the greater the carbon dioxide emissions. One industrial phenomenon that has impacted Boliden is the fall in the metal grades of the ore extracted, which means that the ore requires additional processing and has consequently resulted in increased energy consumption per tonne of metal produced. Deteriorations in the quality of the smelters' input raw materials has resulted in reduced recovery and, hence, in emission increases per tonne of metal produced.

As part of its eff orts to reduce its carbon dioxide emissions, Boliden exploits the surplus heat generated at the smelters. It is estimated

that approximately 602 GWh (568 GWh) was used internally in 2013 and that 775 GWh (844 GWh) was supplied to external providers.

Th e mode of transport used also aff ects Boliden's carbon dioxide emissions. Most of the transportation within the mine areas uses diesel vehicles, although recent investments in electrifi ed conveyor belts, for example, have reduced the relative diesel consumption. Approximately 70 per cent of the transportation of metal concentrates and other smelting materials is done by ship or rail. Th e transport of fi nished metals from the smelters is primarily by ship or rail within Europe, and often involves reloading on to trucks for the fi nal stretch of the journey to the customer.

Th e EU's Emissions Trading Scheme (ETS) is an important issue for Boliden involving both ways of reducing emissions – given planned production levels and available technology – and predicting the costs of Boliden's future purchases of emission rights.

All of Boliden's smelters are subject to ETS for the period from 2013−2020. Th e smelters were collectively allocated preliminary emission rights for 3.87 million tonnes of carbon dioxide, corresponding to 99 per cent of the forecast emissions for that period.

Energy supply

Energy consumption and carbon dioxide emissions have increased in recent years, primarily as a result of increased production. Boliden intends to break this trend, increased production notwithstanding.

Mapping work was carried out in 2013 in order to identify Boliden's carbon dioxide footprint. Th e information obtained has, among other things, formed the basis for setting Boliden's new carbon dioxide emission goals and for identifying the ways in which Boliden shall conduct its energy and climate control work.

Boliden engages with the issue of long-term energy supply on several levels, and is a joint-owner of BasEl and Industrikraft AB − trade associations for energy-intensive industrial consumers – through which Boliden is working to secure more sustainable and effi cient energy supplies and to develop energy production in Sweden.

Th e origins of the electricity Boliden uses is determined by the energy mix provided by the diff erent countries in which the Group operates. Hydroelectricity predominates in Norway, while hydroelectricity and nuclear power are the main sources used in Sweden, and in Finland, a combination of diff erent sources are employed. In Ireland, a higher percentage of the energy used is derived from fossil fuels.

Impact on the physical environment

Boliden's operations utilise large areas of land for exploration activities, mining operations, tailings ponds and clarifi cation ponds. A mine's environmental performance throughout its lifespan can be substantially improved by identifying and planning for environmental consequences before mining commences. Reclamation is one of Boliden's most important sustainability issues and the Group's reclamation programmes shall, as far as possible, restore utilised areas of land to their original condition and make a positive contribution to biological diversity.

Boliden has a direct reclamation responsibility for 30 or so mining areas and works systematically with risk analyses for and supervision of every area. A total of SEK 1,651 million (SEK 1,618 m) had been allocated for the reclamation of mining areas and smelters by the end of 2013.

Dams

Boliden is currently responsible for around 40 dam facilities which have been used, or are being used, to deposit tailings sand or other waste and for water management. Boliden endeavours to minimise its impact on the surrounding area, both during construction and use and after the dams' operating lifespans. Boliden complies with the mining industry's guidelines for dam safety (GruvRIDAS) and supports the dam safety policy of the Swedish trade association, SveMin.

See Boliden's website for further information (http://www.boliden.com/Sustainability/Environmental-responsibility/Land/Reclamation/).

Forestry and land management

Boliden owns approximately 19,900 hectares of land. Boliden needs the land to carry out its exploration work and thereby expand its operations. Boliden's forestry is conducted in accordance with the principles of the FSC (Forest Stewardship Council) certifi cation. See Boliden's website for further information about the Group's forestry and land management (http://www.boliden.com/ Sustainability/Environmental-responsibility/Land/Forest/).

Waste management

Boliden's mines and smelters generate waste comprising waste rock, tailings sand, slag, sludge and dust. Some of the waste generated can be used as a raw material in another process. Boliden's waste management is, therefore, not just about minimising and processing end waste, it is also about converting waste into raw materials. Th e Group's waste products are sent to other companies for extraction in the same way as Boliden receives other companies' waste products for metal extraction, thereby enabling the amount of end waste that has to be sent to landfi ll to be minimised.

Boliden always attempts to identify internal solutions for recycling waste products or sending them to landfi ll. Waste products sent to other countries are subject to the legislation governing the export of waste to landfi ll sites or for recycling. Boliden also has its own routines for ensuring that waste is handled correctly and safely, such as compliance with guidelines for evaluation of business partners and, when necessary, carrying out external audits at the waste recipient sites. Remuneration for processing waste is not paid until the work is completed. Process waste with a certain mercury content must, as a result of EU legislation, be permanently stored underground in future.

Boliden generates mercury-bearing waste, and the Kokkola and Odda smelters use underground permanent storage facilities for this type of waste. Th e Rönnskär smelter is working to identify a suitable location for permanent storage of mercury-bearing waste.

Boliden's operations are expanding and new materials are being introduced into the processes. Boliden completed mapping work on the operations' process waste in 2013 in order to increase controls and generate the potential for optimum waste management.

Recycling

Metals can be recycled endlessly without any deterioration in their quality. It is important, therefore, that electronic materials and scrap, such as telephone cables, copper roofs and copper pipes, from the demolition or construction of buildings and infrastructure is reutilised. Th e Rönnskär smelter is the world's biggest recycler of electronic material, and an estimated 50 per cent (65%) of the gold, 30 per cent (30%) of the copper, 30 per cent (40%) of the silver, and 70 per cent (80%) of the zinc produced there comes from recycled materials.

Boliden Bergsöe – the only smelter in the Nordic region that recycles lead – is another shining example, producing approximately 50,000 tonnes of lead each year, 100 per cent of which comes from scrap car batteries and lead scrap.

Evaluation of business partners

Boliden can, together with its business partners, be the fi rst sustainable link in the metals' value chain. Being a responsible partner means Boliden is able to help improve sustainability within the mining and metals industry.

Business partners

Th e choice of business partner has a signifi cant impact on Boliden's profi tability and sustainability performance and it is important, therefore, that Boliden makes informed choices and endeavours to work with operators who, in partnership with Boliden, maintain high standards of sustainability in their operations. Boliden has instituted a process for evaluating its business partners with regard to their approach to business and sustainability.

In November 2013, Boliden hosted the 2013 Boliden Supplier Summit – a conference at which Boliden brought together its suppliers for a presentation of Boliden's operations and orientation. Twenty or so talks were given and the subjects addressed included safety, sustainability and evaluation of business partners.

Boliden's suppliers and customers

Boliden's suppliers can be divided into those from whom Boliden buys metal concentrates and secondary raw materials, and those from whom Boliden buys in all of its other input goods and services.

Boliden's copper customers mainly comprise manufacturers of wire rod, copper rod and copper alloys who, in turn, sell their products on to the construction, electronics and automotive industries. Approximately one third of Boliden's zinc sales are made to large steelworks.

Evaluation of business partners

Boliden has evaluated its business partners since 2010 in accordance with its Evaluation of Business Partners (EBP) programme. Partners are evaluated not only with regard to commercial aspects, but from a sustainability viewpoint that is based on the 10 principles of the UN Global Compact and on ILO and ISO standards. Th e areas addressed include human rights, working conditions, environmental responsibility and systematic environmental work, anti-corruption, and the way in which the business partners follow up on and evaluate their own sustainability work.

Boliden's process for evaluating business partners

In 2013, around 60 business partners have completed the initial self-assessment process, which is a tool designed to identify the areas that Boliden will then address more closely. Improvement work by the supplier is a precondition of a continued partnership. Th e companies are audited in special cases and these audits are followed up in the form of reports on remedial measures implemented.

Division of responsibility

Every departmental manager is responsible for ensuring that his or her department's business partners undergo the evaluation process. Feedback on business partners who have completed the self-assessment process shall be submitted every quarter. Th e departmental manager is also responsible for deciding on remedial measures in relation to the business partner. If a business partner is underperforming to such an extent that the departmental manager wishes to take a decision that poses a risk of substantial economic impact, the support of the Business Area Manager must be obtained before any such decision is taken. In 2013, Boliden drew up a manual designed to aid in interpreting the responses provided in the selfassessments.

Confl ict minerals

Boliden produces around 15 tonnes of gold every year. Half of the raw materials for this production come from recycling and the other half from mined concentrate, largely from our own mines. Boliden can guarantee that concentrate currently acquired from other mines does not come from confl ict zones as Boliden has no suppliers in high risk areas. Th e secondary raw material may, however, have passed through several links in the supply chain before the material reaches Boliden.

An external audit, based on the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Confl ict-Aff ected and High-Risk Areas1), was carried out at Boliden during the year to ensure our continued inclusion in the London Bullion Market Association (LBMA) list of recommended gold producers. Companies included in the list undertake to ensure that their raw materials chain complies with a number of ethical criteria.

Trading in materials and waste

Boliden complies with national legislation and international guidelines such as the OECD guidelines for trade in materials, waste and hazardous waste, and for some years now, Boliden has been implementing gate fees to the processing of such materials. Th is means that the operator who handles material received from Boliden for processing or permanent storage does not receive payment in full until they can demonstrate that the material has been processed. Th is clause is included in all of Boliden's agreements.

1) OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Confl ict-Affected and High-Risk Areas, second edition 2013.

New sustainability goals

Identifying and selecting the most important and relevant challenges within the context of our sustainability work is an ongoing process. The key factor shared by all of the areas that Boliden prioritises is that they have a direct impact on our stakeholders.

Th e sustainability issues that Boliden prioritises are those over which the company can exert control and which further Boliden's ambition to be the fi rst sustainable stage in the metals' value chain. Th e following areas have, starting in 2014, been identifi ed as priority areas for Boliden's ongoing sustainability work:

• Create a safe work environment
• Secure the future talent pool
• Achieve diversity and a better gender balance
• Minimise our impact on soil, air and water
• Make effi cient use of resources
• Reclamation work and protecting natural values

Measures to reduce accidents and cut the sick leave rate

Work with training, information, health and safety inspections, visible leadership, and the elimination of hazardous elements is continuing with increased vigour in order to strengthen our safety culture and reduce the number of accidents. Th e safety work action programme launched during 2013 (see section under Boliden's employees Working towards a safer Boliden) will continue in 2014. Boliden will, as of 2014, establish a new sustainability organisation within which the company will appoint a person at Group level with special responsibility for safety.

Boliden is also streamlining its health-related work in order to ensure we have an effi cient company health scheme and to achieve our new goal of a sick leave rate of less than 3 per cent. Th e work will promote health, be preventative and rehabilitative and address issues relating to the importance of work in the context of health and well-being. Th e work will be team-based and the teams will include doctors, nurses, physiotherapists and psychologists.

A Group-wide occupational hygiene project has also been running since 2013 and the work includes an in-depth mapping of standards and quality at the units' control programmes that monitor exposure to particles, noise, vibrations and chemicals.

Measures to achieve our gender balance goal

Boliden's goal is for at least 20 per cent of our workforce to be made up of women by 2018, which means that one in every three new recruits must be female. Important tools in enabling us to achieve this goal include all units working in line with individual equal opportunity plans and holding recurring training days for female networks within the Group.

Measures to reduce emissions and discharges

Th e task of stabilising its carbon dioxide emissions while simultaneously increasing production poses a very real challenge for Boliden. All of our operations have mapped their carbon dioxide emissions and identifi ed the places within the respective processes where the

biggest footprints exist. Th e results will form the basis for a new climate strategy that will include action plans designed to stabilise our carbon dioxide emissions.

Th e application of best available technology, the effi cient use of resources, and the replacement of fossil fuels with renewable fuels will all be important components of this work.

Another important focus area entails handling our nitrogen discharges to water. Th e ongoing mine expansions will generate increased nitrogen discharges and an action plan designed to limit this increase will be drawn up. Th e management and monitoring of water consumption will, at the same time, be improved by means of Water management plans, which will be drawn up for all of Boliden's operations.

All operations will analyse emission sources and dispersal patterns, in order to reduce Boliden's diff use emissions, such as dust or process gases that do not pass through a gas treatment system.

Boliden's reclamation work on mining areas is another priority issue. Boliden has direct responsibility for some 30 areas and its goal is to complete the planned measures at a minimum of fi ve such areas by 2018.

Measures to ensure zero environmental accidents

Th e "zero environmental accidents every month" goal will be achieved by means of stable and upgraded processes, more complete reporting – including incident reporting and follow-up work – and ongoing eff orts on changing attitudes.

Sustainability goals

AREA	GOALS FOR 2018
The number of accidents each month at all units	0 accidents
Sick leave rate	Less than 3.0 per cent
Percentage of female employees	At least 20 per cent women
Metal discharges to water1)	Reduce by 25 per cent
Metal emissions to air1)	Reduce by 10 per cent
Sulphur dioxide emissions to air1)	Reduce by 10 per cent
Carbon dioxide intensity for CO2 per tonne of metal produced	≤ 0.77
Number of environmental accidents per month (class A accidents2)).	0
1) Base year: 2012	2) A serious accident that causes signifi cant environ

mental harm and/or results in the limit values prescribed in permits being exceeded.

Auditor's Limited Assurance Report on Boliden AB's Sustainability Report

To the readers of Boliden AB's Sustainability Report

Introduction

We have been engaged by the Board of Directors of Boliden AB to undertake a limited assurance engagement of the Boliden AB's Sustainability Report for the year 2013. Our review has been limited to the sustainability information for the year ended December 31, 2013 and does therefore not include comparable data for previous years. Th e Company has defi ned the scope of the Sustainability Report in the GRI index on pages 121–123 in the Annual Report.

Responsibilities of the Board of Directors and the Executive Management for the Sustainability Report

Th e Board of Directors and the Executive Management are responsible for ongoing activities regarding the environment, health & safety, quality, social responsibility and sustainable development, and for the preparation and presentation of the Sustainability Report in accordance with the applicable criteria, as explained on pages 8–9 in the GRI Report, and are the parts of the Sustainability Reporting Guidelines G3, published by Th e Global Reporting Initiative (GRI), which are applicable to the Sustainability Report, as well as the accounting and calculation principles that the Company has developed and disclosed.

Responsibilities of the auditor

Our responsibility is to express a limited assurance conclusion on the Sustainability Report based on the procedures we have performed.

We conducted our limited assurance engagement in accordance with RevR 6 Assurance of Sustainability Reports issued by FAR. A limited assurance engagement consists of making inquiries, primarily of persons responsible for the preparation of the Sustainability Report, and applying analytical and other limited assurance procedures. Th e procedures performed in a limited assurance engagement vary in nature from, and are less in extent than for, a reasonable assurance engagement conducted in accordance with IAASB's Standards on Auditing and Quality Control and other generally accepted auditing standards in Sweden. Th e procedures performed consequently do not enable us to obtain assurance that we would become aware of all signifi cant matters that might be identifi ed in an audit. Accordingly, we do not express a reasonable assurance opinion.

Th e criteria on which our procedures are based are the parts of the Sustainability Reporting Guidelines G3, published by Th e Global Reporting Initiative (GRI), which are applicable to the Sustainability Report, as well as the accounting and calculation principles that the Company has developed and disclosed. Th ese criteria are presented on pages 8–9 in the GRI Report. We consider these criteria suitable for the preparation of the Sustainability Report.

We believe that the evidence we have obtained is suffi cient and appropriate to provide a basis for our conclusions below.

Limited Assurance Conclusion

Based on the limited assurance procedures we have performed, nothing has come to our attention that causes us to believe that the Sustainability Report is not prepared, in all material respects, in accordance with the above stated criteria.

Stockholm March 7th, 2014 Ernst & Young AB

Lars Träff Håkan Ulrichs Authorized Public Accountant Partner, Climate Change

& Sustainability Services

Financial reporting

Contents

The Group		68
	The Parent Company	72
Note 1	Signifi cant accounting and valuation principles	73
Note 2	Information per segment and geographical market	79
Note 3	Employees and personnel costs	80
Note 4	Auditors' fees and reimburse ment of expenses	82
Note 5	Key expense items	82
Note 6	Other operating income	82
Note 7	Interest income and other similar items	82
Note 8	Interest expenses and other similar items	82
Note 9	Government subsidies	82

	Note 10 Supplementary information to the Statements of Cash Flow	82
	Note 11 Intangible fi xed assets	83
	Note 12 Tangible fi xed assets	84
	Note 13 Leasing charges	85
	Note 14 Participations in Group companies	86
	Note 15 Participations in associated companies	86
Note 16 Taxes		87
	Note 17 Inventories	88
	Note 18 Accounts receivable	88
	Note 19 Other current receivables	88
	Note 20 Affi liates	88
	Note 21 Shareholders' equity	89
	Note 22 Provisions for pensions and similar undertakings	89
	Note 23 Other provisions	92

	Note 24 Risk information	92
	Note 25 Financial liabilities and maturity structure	93
	Note 26 Financial derivative instruments	93
	Note 27 Financial assets and liabili ties by valuation category	95
	Note 28 Other current liabilities	96
	Note 29 Pledged assets and contingent liabilities	96
	Note 30 Restatement of fi nancial reports	97
	Note 31 Events after 31st December 2013	97
	Proposed allocation of profi ts	98
Auditor's Report		99

Boliden's Market Department handles both the purchase and sale of fi nished metals to Boliden's industrial customers. The purchases comprise metal concentrates and other raw materials for the smelters, and input goods, services and logistics. The metal concentrates – primary raw materials – come mainly from Boliden's own mines, but are also bought in from twenty or so external suppliers. Electronic materials and other secondary materials are also used as raw materials in the smelters and Boliden has around 100 different suppliers for these materials.

"In the mining and metals industry, we never know the exact value of what we have bought at the time of delivery. That may seem a little odd in comparison with other industries, but it's part of the charm. Our department handles the communication between Boliden and our suppliers when it comes to establishing the value, which involves both pricing and the exchange of analyses. Playing a part in the recycling chain is fascinating too – extracting metals from 'scrap' is the eco-friendly thing to do. Scrap is tomorrow's raw material!"

Maud Mills, Department Manager, Market

Consolidated Income Statements – the Group

			Restated
Amounts in SEK million	Note	2013	2012
Revenues	2	34,409	40,001
Cost of goods sold	5	–31,419	–34,559
Gross profi t		2,989	5,442
Selling expenses	5	–340	–385
Administrative expenses	4, 5	–525	–535
Research and development costs	5	–405	–429
Other operating income	6	102	80
Other operating expenses		–18	–3
Results from participations in associated companies	15	2	1
Operating profi t	2–6, 9,11–13	1,803	4,171
Interest income and other similar items	7	31	87
Interest expenses and other similar items	8	–253	–265
Profi t after fi nancial items		1,581	3,992
Taxes	16	–288	–651
Net profi t for the year		1,294	3,341
Net profi t for the year attributable to:
The Parent Company's shareholders		1,291	3,339
Minority holdings		3	2
Earnings per share, SEK	21	4.72	12.21
There are no potential shares and hence no dilution effect
Average number of shares, basic and diluted		273,511,169	273,511,169

The Group's consolidated statement of comprehensive income

			Restated
Amounts in SEK million	Note	2013	2012
Net profi t for the year		1,294	3,341
Other comprehensive income
Items that will be reclassifi ed to the profi t or loss
Cash fl ow hedging
Change in market value of derivative instruments		728	–147
Fiscal effect on derivative instruments		–160	39
Transfers to the Income Statement		–200	–201
Tax on transfers to the Income Statement		44	53
Effect of change in tax rate on the market value of derivative instruments		–	–8
		412	–265
Year's translation difference when converting overseas operations		168	–159
Result of hedging net investments in overseas operations		–212	219
Tax on the net profi t for the year from hedging instruments		47	–48
		3	12
Total items that will be reclassifi ed to the profi t/loss		415	–254
Items that will not be reclassifi ed to the profi t/loss
Revaluation of defi ned benefi t pension plans		142	–126
Tax attributable to items not reversed to the profi t/loss for the period		–35	29
Total items that will not be reclassifi ed to the profi t/loss		107	–97
Total other comprehensive income		522	–351
Comprehensive income for the year		1,816	2,990
Comprehensive income for the year attributable to:
The Parent Company's shareholders		1,813	2,988
Minority holdings		3	2

Consolidated Balance Sheets – the Group

			Restated	Restated
Amounts in SEK million	Note	31-12-2013	31-12-2012	01-01-2012
ASSETS
Fixed assets
Intangible fi xed assets	11	3,130	3,160	3,184
Tangible fi xed assets	12–13
Buildings and land		4,626	4,317	3,711
Deferred mining costs		5,132	4,629	3,913
Machinery and other technical facilities		16,768	15,552	14,263
Equipment, tools, fi xtures and fi ttings		183	217	237
New construction work in progress		638	424	621
		27,348	25,138	22,745
Other fi xed assets
Participations in associated companies	15	9	8	7
Other shares and participations		24	24	55
Deferred tax receivables	16	68	247	220
Long-term receivables		98	104	109
		199	383	391
Total fi xed assets		30,677	28,681	26,320
Current assets
Inventories	17	8,031	8,244	7,737
Accounts receivable	18	1,048	1,016	1,014
Tax receivables		94	12	30
Interest-bearing receivables		3	3	3
Derivative instruments	26	500	322	1,257
Other current receivables	19	877	791	880
Liquid assets	10	611	1,011	355
Total current assets		11,164	11,399	11,277
TOTAL ASSETS		41,841	40,080	37,597
SHAREHOLDERS' EQUITY AND LIABILITIES
Shareholders' equity	21
Share capital		579	579	579
Other capital contributed		5,941	5,941	5,944
Translation reserve		–74	–77	–88
Hedging reserve		267	–145	120
Defi ned benefi t pension plans		–442	–549	–452
Profi t carried forward		16,788	16,591	14,342
Shareholders' equity attributable
to the Parent Company's shareholders		23,059	22,340	20,446
Minority holdings		16	14	12
Total shareholders' equity		23,075	22,354	20,458
Long-term liabilities
Provisions for pensions	22	1,047	1,382	1,266
Other provisions	23	1,512	1,511	1,011
Deferred tax liabilities	16	2,852	2,760	2,977
Liabilities to credit institutions	25	4,346	4,310	4,957
Other interest-bearing liabilities	25	4	5	10
Total long-term liabilities		9,761	9,967	10,222
Current liabilities
Liabilities to credit institutions	25	3,948	1,666	801
Other interest-bearing liabilities	25	9	0	0
Accounts payable	25	3,636	4,192	3,551
Other provisions	23	169	139	123
Current tax liabilities		13	105	450
Derivative instruments	26	36	394	810
Other current liabilities	28	1,194	1,263	1,183
Total current liabilities		9,005	7,759	6,918
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES		41,841	40,080	37,597
Pledged assets	29	None	None	None
Contingent liabilities	29	1,608	682	682

Changes in shareholders' equity – the Group

Amounts in SEK million Note

						Shareholders' equity attributable to the Parent Company's shareholders
	Share capital	Other capital contrib uted	Trans lation reserve	Hedging reserve	Defi ned benefi t pension plans	Profi t carried forward	Total – Boliden's share holders	Minority holdings	Total share holders' equity
21
Balance Sheet, 31-12-2011	579	5,944	–91	120	–	14,467	21,020	12	21,032
Restatement, IAS 191)	–	–	3	–	–452	9	–440	–	–440
Restatement, IFRIC 201)	–	–	–	–	–	–134	–134	–	–134
Balance Sheet, 01-01-2012, restated1)	579	5,944	–88	120	–452	14,342	20,446	12	20,458
Net profi t for the year1)	–	–	–	–	–	3,339	3,339	2	3,341
Other comprehensive income1)	–	–	12	–265	–97	–	–351	–	–351
Comprehensive income for the year1)	–	–	12	–265	–97	3,339	2,987	2	2,990
Reclassifi cation	–	–4	–	–	–	4	0	–	0
Dividend to Boliden AB's shareholders	–	–	–	–	–	–1,094	–1,094	–	–1,094
Dividend to minorities	–	–	–	–	–	–	–	0	0
Balance Sheet, 31-12-2012, restated1)	579	5,941	–77	–145	–549	16,591	22,340	14	22,354
Net profi t for the year	–	–	–	–		1,291	1,291	3	1,294
Other comprehensive income	–	–	3	412	107	–	522	–	522
Comprehensive income for the year	–	–	3	412	107	1,291	1,813	3	1,816
Minority holding in con junction with acquisition
Dividend to Boliden AB's shareholders	–	–	–	–	–	–1,094	–1,094	–	–1,094
Dividend to minority interests	–	–	–	–	–	–	–	–1	–1
Closing balance on Balance Sheet, 31-12-2013	579	5,941	–74	267	–442	16,788	23,059	16	23,075

1) Figures restated by reason of alterations to accounting standards, see also Note 1 Signifi cant accounting and valuation principles and Note 30 Restatement of fi nancial reports.

Other capital contributed

Refers to shareholders' equity contributed by the owners. When shares are issued at a premium, an amount corresponding to the amount received in excess of the nominal value of the shares is reported as other capital contributed.

Translation reserve

The current method is applied to convert the Income Statements and Balance Sheets of overseas subsidiaries. Any exchange rate differences arising are reported under Other comprehensive income. Boliden currency hedges net investments in overseas subsidiaries by adopting the opposite position in the relevant foreign currency. The exchange rate difference on hedging instruments is, after the fi scal effect, reported under other comprehensive income.

Net debt, SEK m	31-12-2013	31-12-2012
Liabilities to credit institutions	8,294	5,976
Other interest-bearing liabilities	13	5
Pension liabilities	980	1,310
Short-term interest-bearing assets	–3	–3
Short-term investments	0	0
Cash and bank balances	–611	–1,011
	8,673	6,276

Hedging reserve

Boliden applies hedge accounting for fi nancial derivatives acquired with a view to hedging part of the forecast currency, metal and interest fl ows. Changes in the market value of hedging instruments are reported under Other comprehensive income until such time as the underlying fl ows are reported in the Income Statement.

Defi ned benefi t pension plans

Revaluations of pension undertakings have been reported under Other comprehensive income since 2013. A restatement has been made for the 2012 comparison year.

Profi t carried forward

Refers to profi t earned.

Capital employed, SEK m	31-12-2013	31-12-2012
Intangible assets	3,130	3,160
Tangible assets	27,348	25,138
Participations in assoc. companies	9	8
Other shares and participations	24	24
Inventories	8,031	8,244
Accounts receivable	1,048	1,016
Other receivables	1,475	1,217
Provisions, other than for pensions
and tax	–1,681	–1,650
Accounts payable	–3,636	–4,192
Other non-interest-bearing liabilities	–1,296	–1,728
	34,451	31,236

Consolidated statements of cash fl ow – the Group

Amounts in SEK million	Note	2013	2012
	10
Operating activities
Profi t after fi nancial items		1,581	3,992
Adjustments for items not included in the cash fl ow:
Depreciation, amortisation and write-down of assets	11, 12	2,832	2,561
Provisions		–200	132
Other and translation differences		141	–342
Tax paid		–303	–1,145
Cash fl ow from operating activities before changes in working capital		4,052	5,198
Cash fl ow from changes in working capital
Increase (–)/Decrease (+) in inventories		216	–534
Increase (–)/Decrease (+) in operating receivables		–177	234
Increase (+)/Decrease (–) in operating liabilities		–580	615
Other		–5	5
Cash fl ow from operating activities		3,505	5,518
Investment activities
Acquisition(–)/Sale (+) of intangible fi xed assets		–16	–24
Acquisition (–)/Sale (+) of tangible fi xed assets	12	–4,954	–4,151
Acquisition (–)/Sale (+) of fi nancial fi xed assets		–3	29
Other		2	17
Cash fl ow from investment activities		–4,971	–4,129
Free cash fl ow		–1,465	1,389
Financing activities
Dividend		–1,095	–1,094
Loans raised		12,101	2,280
Amortisation of loans		–9,946	–1,916
Cash fl ow from fi nancing activities		1,060	–730
Cash fl ow for the year		–406	659
Opening liquid assets		1,011	355
Exchange rate difference on liquid assets		6	–3
Closing liquid assets	10	611	1,011

The Parent Company

Income Statements

Amounts in SEK million	Note	2013	2012
Dividends from subsidiaries	14	2,442	2,607
Write-down of participations in Group companies		–	–17
Profi t after fi nancial items		2,442	2,590
Profi t before tax		2,442	2,590
Tax on the profi t for the year		–	–
Net profi t for the year		2,442	2,590

The operations of Boliden AB are limited in scale and are conducted on its behalf by Boliden Mineral AB, which means that the profi t is reported as part of Boliden Mineral AB.

Boliden AB has no sums to report under Other comprehensive income.

Balance Sheets

Amounts in SEK million	Note	31-12-2013	31-12-2012
ASSETS
Fixed assets
Financial fi xed assets
Participations in
Group companies	14	3,911	3,911
Participations in other companies		5	5
Other long-term receivables from Group companies		8,365	7,017
Total fi xed assets		12,282	10,934
Current receivables
Current receivables
from Group companies		3,641	1,266
Total current assets		3,641	1,266
TOTAL ASSETS		15,923	12,200
SHAREHOLDERS' EQUITY AND LIABILITIES
Shareholders' equity	21
Restricted equity
Share capital		579	579
Statutory reserve		5,252	5,252
		5,831	5,831
Non-restricted equity
Profi t carried forward		4,009	2,513
Net profi t for the year		2,442	2,590
		6,451	5,103
Total shareholders' equity		12,282	10,934
Current liabilities
Liabilities to
credit institutions	25	3,641	1,266
		3,641	1,266
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES		15,923	12,200
Pledged assets		None	None
Contingent liabilities	29	8,767	7,125

Changes in shareholders' equity

Amounts in SEK million

	Share capital	Statu tory reserve	Non restricted share holders' equity	Total share holders' equity
Closing balance on Balance Sheet, 31-12-2011	579	5,252	3,607	9,438
Dividend	–	–	–1,094	–1,094
Net profi t for the year	–	–	2,590	2,590
Closing balance on Balance Sheet, 31-12-2012	579	5,252	5,103	10,934
Dividend	–	–	–1,094	–1,094
Net profi t for the year	–	–	2,442	2,442
Closing balance on Balance Sheet, 31-12-2013	579	5,252	6,451	12,282

The statutory reserve includes amounts which, prior to 1st January 2006, were transferred to the share premium reserve. The profi t carried forward comprises, together with the net profi t for the year, the total non-restricted equity. The non-restricted shareholders' equity in the Parent Company is available for distribution to the shareholders.

Statements of cash fl ow

Amounts in SEK million	2013	2012
Operating activities
Profi t after fi nancial items	2,442	2,590
Adjustments for items not included in the cash fl ow:
Write-down of participations in Group companies	–	17
Cash fl ow from
operating activities	2,442	2,607
Financing activities
Loans raised	11,920	2,616
Amortisation of loans	–9,546	–1,516
Dividend	–1,094	–1,094
Loans to Group companies	–3,722	–2,613
Cash fl ow from
fi nancing activities	–2,442	–2,607
Cash fl ow for the year	–	–
Opening liquid assets	–	–
Closing liquid assets	–	–

Notes

All amounts are in SEK million unless otherwise stated. All notes refer to the Group unless otherwise stated.

Note 01 Signifi cant accounting and valuation principles

General Accounting Principles

Boliden AB (publ.) Swedish corporate ID no. 556051-4142, is a limited liability company registered in Sweden. Th e company's registered offi ce is in Stockholm at the address: Klarabergsviadukten 90, SE-101 20 Stockholm. Th e Boliden share is listed on NASDAQ OMX Stockholm's Large Cap list. On 3rd April 2013, the Boliden share was voluntarily delisted from the Toronto Stock Exchange (TSX) in Canada where the Boliden share previously had a secondary listing. Th e fi nal trading day for the Boliden share on TSX was 23rd April 2013.

Th e Company is the Boliden Group's Parent Company, whose principal operations involve the mining and production of metals and operations compatible therewith.

Th e Consolidated Statements have been compiled in accordance with the EU-approved International Financial Reporting Standards (IFRS) and interpretations of the International Financial Reporting Interpretations Committee (IFRIC). In addition, the Group applies the Swedish Financial Reporting Board's recommendation RFR 1 "Supplementary accounting regulations for corporate conglomerates" specifying the supplements to IFRS required pursuant to the stipulations of the Swedish Annual Accounts Act.

Th e Parent Company's functional currency is the Swedish krona (SEK) and this is also the reporting currency for both the Group and the Parent Company. All amounts in the fi nancial reports are stated in millions of Swedish kronor (SEK m) unless otherwise specifi ed.

Items have been valued at their acquisition value in the consolidated accounts, with the exception of certain fi nancial assets and liabilities (derivative instruments), which have been valued at their fair value, and inventories in those cases where they are hedged at fair value.

Th e Parent Company's accounting principles follow those of the Group with the exception of the mandatory regulations stipulated in the Swedish Financial Reporting Board's recommendation, RFR 2 "Accounting for legal entities". Th e Parent Company's accounting principles are specifi ed under the heading, "Th e Parent Company's accounting principles".

Th e most important accounting principles that have been applied are described below. Th ese principles have been applied consistently for all years presented, unless otherwise specifi ed.

Th e 2012 comparison fi gures have been restated in the annual accounts in accordance with the changes to the IAS 19 and IFRIC 20 accounting principles.

Th e Annual Report was approved for publication by the Board of Directors on 12th February 2014. Th e Balance Sheets and Income Statements are subject to approval by the Annual General Meeting on 6th May 2014.

New or amended standards and interpretations from IASB and IFRIC pronouncements that came into force in the 2013 calendar year

IAS 1 Presentation of fi nancial reports (revised): Presentation of Items of Other Comprehensive Income. Th is standard prescribes a new categorisation of Other comprehensive income that diff erentiates between items that will, in future, be reclassifi ed into profi t or loss and items that will never be reclassifi ed into profi t or loss. Boliden's items that will be reclassifi ed into profi t or loss are cash fl ow hedging, translation diff erences from overseas operations, and the profi t or loss from the hedging of net investments in overseas operations. Items that will never be reclassifi ed into profi t or loss are the revaluation of defi ned benefi t pension plans. See Other comprehensive income report on page 68.

IAS 19 Employee benefi ts (revised): the revision means that revaluations of the defi ned benefi t net pension liability must be reported immediately, which means that previously used equalisation mechanisms, such as the corridor method, disappear. Actuarial profi ts and losses are reported directly under Other comprehensive income. Th e fi nancing cost of the net pension liability shall, furthermore, be calculated with the help of the discount rate for the pension liability. Th e cost of service, fi nancing costs and special payroll tax shall be reported in the Income

Statement, while the eff ects of revaluations shall be reported under Other comprehensive income. Special payroll tax shall, furthermore, be included in the pension liability. Th e eff ects of this change on Boliden have primarily been an increase in the pension liability and a reduction in shareholders' equity at the beginning of 2013 and in the 2012 comparison year. Increased disclosure requirements have entailed a presentation of a sensitivity analysis based on the assumptions of importance to Boliden when calculating the defi ned benefi t pension liability, namely the discount interest rate, salaries, and life expectancy. See Note 22 on pages 89-92 and Note 30 on page 97.

IFRS 7 Financial Instruments: Disclosures (revised): this revision refers to the requirement for disclosure of rights to net report payments of fi nancial assets and liabilities. Th e aim is to clarify the importance of the fi nancial instruments for the company's fi nancial position and results and to illustrate the company's exposure to associated risks entailed by these fi nancial instruments. Th e revised standard provides additional information by gross reporting the asset and the liability and the eff ects of off setting under specifi c circumstances, such as breach of contract or insolvency. See table in Note 26 on page 94.

IFRS 13 Fair Value Measurement (new): the standard provides a unifi ed framework for the valuation of assets and liabilities at fair value. Th e standard defi nes fair value and provides instructions on how to determine fair value, but does not change the requirements with regard to which items shall be valued at fair value. Th e aim of a valuation at fair value is to estimate the price on the valuation date for the sale of the asset or the transfer of the liability under current market conditions, including risk assumptions. IFRS 13 also states that all of Boliden's fi nancial assets and liabilities reported at fair value in the Balance Sheet, and the fi nancial assets and liabilities not reported at fair value in the Balance Sheet but for which fair value data is presented, shall be classifi ed on the basis of a threelevel fair value hierarchy. Th e new standard has no signifi cant eff ect on the valuation of fi nancial assets and liabilities, but has entailed the disclosure of supplementary information. See Note 27 on page 95.

IFRIC 20 Stripping Costs in the Production Phase of a Surface Mine: this interpretation addresses the accounting of costs for waste rock stripping during the production phase of an open pit mine. Waste rock, which is stripped in order to release the ore, and the costs of waste rock stripping, shall be carried forward as part of an asset when it is possible to identify that part of an ore body where access is improved. For Boliden, this means that waste rock stripping costs in open pit mines, which were formerly calculated using an average value for the entire open pit mine, are now calculated per individual push-back, which has resulted in higher capitalisation and higher depreciation. Fixed assets at the beginning of 2013 and in the 2012 comparison year have been revalued – see Note 12 on page 84 and Note 30 on page 97.

IAS 36 Impairment of Assets: IAS 36 was revised in conjunction with changes arising as a result of the revision of IFRS 13, and now requires disclosure of the recovery value per cash-generating unit in the 2013 annual accounts. In May 2013, however, IASB issued a revision that eliminates this requirement, and as the revision may be implemented in advance, Boliden has elected to do so.

Other revisions to standards and interpretations that have come into force in the 2013 calendar year are not adjudged to have had any eff ect on Boliden's fi nancial reporting or accounting.

New standards and interpretations that come into force in the 2014 calendar year or thereafter

Th e standards and interpretations presented are those that may, in the opinion of the Group, have an eff ect in future. Th e Group intends to implement these standards when they become applicable.

IAS 32, Financial instruments: Presentation (revised). Th e revision of the standard provides a clarifying guideline stating that fi nancial assets and liabilities shall be off set against one another when this refl ects the company's antic-

Note 01 Signifi cant accounting and valuation principles, cont.

ipated cash fl ows when settling two or more fi nancial instruments. Boliden has entered into ISDA (International Swaps and Derivatives Association) agreements that regulate off setting between contracted counterparties during operating activities and in conjunction with circumstances relating to breach of contract or early termination for all of its fi nancial instruments. Th e revised standard will not, in Boliden's opinion, have any signifi cant eff ect on Boliden's future fi nancial reporting. Th e standard will apply as of 1st January 2014.

• IFRS 9, Financial instruments, recognition and measurement. Th e revision is part of a complete revision of the existing standard, IAS 39. Th e standard entails a reduction in the number of valuation categories for fi nancial assets and means that the main categories for reporting are at accrued acquisition value and fair value, via the Income Statement. Th e potential exists, for certain investments in shareholders' equity instruments, to report at fair value in the Balance Sheet with the change in value reported directly under Other comprehensive income, where no transfer to the profi t/loss for the period occurs in conjunction with disposal. Th e standard has been complemented with regulations regarding write-downs in the Balance Sheet. A combined view on the way in which Boliden's fi nancial reporting will be aff ected will be taken in conjunction with the publication of the fi nal version of all elements of the project. Th e EU has postponed approval of the standard to an unspecifi ed later date.
• IFRS 10 Consolidated Financial Statements. Entails the introduction of a single model for determining whether a controlling infl uence exists for all of a company's investments. Th is will result in uniform regulations for consolidation. A controlling infl uence exists if the investor 1) is exposed to or is entitled to variable returns from the investment, 2) has the ability to aff ect the return through its power over the investee, and/or 3) there is a link between the return received and the power over the investee. Boliden is not of the opinion that the new standard will result in changes in terms of the companies to be consolidated within the company.
• IFRS 11 Joint arrangements. Divides existing joint ventures into joint operations – the owners are entitled to assets and undertakings for liabilities in the investment – or joint ventures – the owners are entitled to the net assets of the investment. Th e proportional method shall be used for joint operations while, for joint ventures, the equity method shall be used. Boliden is not of the opinion that the new standard will have any eff ect on its fi nancial reporting, based on a review conducted of the Group's associated companies. Th e standard will apply as of 1st January 2014.
• IFRS 12 Disclosures of Interest in Other Entities. Th is standard brings together disclosure requirements regarding subsidiary companies, joint arrangements and associated companies in a single standard. A number of new disclosure requirements are included. Th e standard will apply as of 1st January 2014.

Estimates and assessments

In order to compile the Financial Statements in accordance with IFRS accounting principles, assessments and assumptions must be made that impact the reported asset and liability amounts and the income and expense amounts, as well as other information provided in the Financial Statements. Th e estimates and assessments of the Board of Directors and the company's management are based on historical experience and forecast future trends. Th e actual outcome may diff er from these assessments.

Valuation of inventories

It is not easy, in the smelters' process inventories and stocks of fi nished metals, to diff erentiate between externally purchased material and mined concentrate from the Group's own operations. Assessments of the internally supplied percentage of process inventories and the stocks of fi nished metals are, therefore, carried out with the aid of an historically based breakdown of the raw materials feed.

Pension undertakings

Pension provisions are dependent on the assumptions made in conjunction with the calculations of the amounts. Th e assumptions refer to discount interest rates, rate of salary increases, future increases in pensions, the number of remaining working years for employees, mortality rates, infl ation and other factors, and are reviewed annually. Th e assumptions are made for every country in which Boliden has defi ned benefi t pension plans. Th e most signifi cant assumptions, in Boliden's opinion, are with regard to the discount rate, the rate of salary increases, and mortality rates, and Boliden has elected to present sensitivity analyses for these factors. Boliden's assumptions and sensitivity analyses are presented in Note 22 on pages 89–92.

Legal disputes

Boliden regularly reviews outstanding legal disputes using internal company legal counsel and, when necessary, with the help of external advisors, in order to assess the need for provisions to be made. See Note 29, Pledged assets and contingent liabilities on page 96.

Reclamation costs

Provisions for reclamations are made on the basis of an assessment of future costs based on current conditions. Provisions are reviewed regularly by internal or external specialists and updates made when necessary when the estimated useful lives, costs, technical preconditions, regulations or other conditions of mine and smelter assets change. Boliden also continuously reviews requirements with regard to closed down mines. See Note 12, Tangible fi xed assets on page 84 and Note 23, Other provisions, on page 92.

Valuation of fi xed assets

Impairment tests for tangible and intangible assets are based on the company's internal business plan and on assumptions with regard to future trends in metal prices, treatment and refi ning charges, and exchange rates, among other things. Changes in market prices of metals, treatment and refi ning charges and currencies have a substantial eff ect on the company's future cash fl ows and hence on the estimated write-down requirement. Assumptions with regard to price trends for metals, treatment and refi ning charges and currencies are made by the company management with the help of external experts. Th e assumptions are reviewed on an annual basis and adjusted when necessary. For further information, see Note 12 Tangible fi xed assets on page 84.

Th e depreciation period for deferred mining costs, installations and equipment in mines depend on future ore extraction and the lifespan of the mine. Th e assessment of these aspects is, in turn, heavily dependent on mineral reserves and, consequently, on anticipated future metal prices. Changes to conditions may entail changes to the rate of depreciation applied in future. Business Area Mines draws up annual production plans for the mines' lifespans.

Consolidated Statements

Th e Consolidated Statements cover the Parent Company and all companies over which the Parent Company through ownership, directly or indirectly, exercises a controlling infl uence. Th e term "controlling infl uence" refers to companies in which Boliden has the right to formulate fi nancial and operational strategies. Th is is generally achieved by ensuring that its ownership share, and the share of votes, exceeds 50 per cent. Th e existence and eff ect of potential voting rights that can currently be utilised or converted are taken into account when assessing whether the Group is capable of exercising a controlling infl uence over another company. Subsidiaries are included in the Consolidated Statements as of the point in time at which a controlling infl uence was attained, while companies that have been sold are included in the Consolidated Statements up to the time when the sale occurred, i.e. up to the point in time when controlling infl uence ceased to be exercised.

Th e Consolidated Statements have been compiled in accordance with the acquisition accounting method, which means that the acquisition value of a company comprises the fair value of the payment made (including the fair value of any assets, liabilities and own equity instruments issued). Th e identifi able assets, liabilities and contingent liabilities acquired are reported at their fair value on the acquisition date. A determination of whether a holding without a controlling infl uence shall be reported at fair value or at the holding's proportional share of the acquired company's net assets is conducted in conjunction with every acquisition. When required, the subsidiaries' accounts are adjusted to ensure that they follow the same principles applied by other Group companies. All internal transactions between Group companies and intra-Group transactions are eliminated when the Consolidated Statements are compiled. Unrealised losses are also eliminated unless the transaction constitutes proof of the existence of a write-down requirement.

Associated companies

Shareholdings in associated companies, in which the Group has a minimum of 20 per cent and a maximum of 50 per cent of the votes, or otherwise has a signifi cant infl uence over operational and fi nancial management, are reported in accordance with the equity method. Under the equity method, the consolidated book value of the shares in the associated companies corresponds to the Group's share of the associated companies' shareholders' equity

01

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and any residual value from the consolidated surplus values. Shares in associated companies' profi ts/losses are reported in the Consolidated Income Statement as part of the operating profi t and comprise the Group's share in the associated companies' net profi ts/losses. Shares in profi ts accumulated after the acquisition of associated companies but not yet realised through dividends constitute part of the Group's equity.

Conversion of foreign subsidiaries and other overseas operations

Th e currency in the primary economic environments in which the subsidiary companies operate is the functional currency. Th e current method is applied in the conversion of Income Statements and Balance Sheets to the Group's reporting currency. Under the current method, all assets, provisions and liabilities are converted at the rate of exchange applying on the closing day, while all items in the Income Statement are converted at the average exchange rate. Any exchange rate diff erences arising are reported as Other comprehensive income. Accumulated translation diff erences in respect of the conversion of subsidiaries are reported as Other comprehensive income.

Boliden hedges its net investments in foreign subsidiaries by taking an opposite position (in the form of loans or currency futures) in the relevant foreign currency. Exchange rate diff erences on hedging measures are reported as Other comprehensive income.

In conjunction with the sale of overseas operations whose functional currency is diff erent from the Group's reporting currency, the accumulated translation diff erences attributable to the operations are realised in the Consolidated Income Statement, after deductions for any currency hedging activities.

Financial instruments

Th e following fi nancial instruments, i.e. fi nancial assets and liabilities, are recognised in the Balance Sheet: shares, receivables, liquid assets, liabilities and derivatives.

Financial instruments are recognised in the Balance Sheet when the company becomes bound by the instrument's contractual terms (the economic approach). Liabilities to credit institutions are, however, not reported until the settlement date. Financial assets are removed from the Balance Sheet when the rights entailed by the agreement are utilised, mature or are transferred to another counterparty. Financial liabilities are removed from the Balance Sheet when the agreement's obligations are fulfi lled or if signifi cant aspects of the loan terms are renegotiated.

Financial instruments are reported at the fair value or accrued acquisition value, depending on the initial categorisation under IAS 39. On each reporting occasion, the Group performs an impairment test to determine whether objective indications exist of the need to write down a fi nancial asset or group of assets.

Valuation principles

Fair value

Th e fair value of derivatives is based on listed bid and ask prices on the closing day and on a discounting of estimated cash fl ows, and includes risk assumptions. Market prices for metals are taken from the trading locations of metal derivatives, i.e. the London Metal Exchange (LME) and the London Bullion Market Association (LBMA). Discount rates are based on current market rates per currency and time to maturity for the fi nancial instrument. Exchange rates are obtained from the Riksbank.

When presenting the fair value of liabilities to credit institutions, the fair value is calculated as discounted agreed amortisations and interest payments at estimated market interest rate levels. Th e fair value of accounts receivable and accounts payable is deemed to be the same as the reported value due to the short term to maturity, to the fact that provisions are made for bad debts, and to the fact that any penalty interest incurred will be debited.

If changes in value cannot be determined for fi nancial assets or liabilities reported at fair value, they are reported at the acquisition values of the instruments at their time of acquisition, which corresponds to the fair value at the time of acquisition plus transaction costs.

Boliden provides information on all fi nancial assets and liabilities reported at fair value in the Balance Sheet on the basis of a three-level fair value hierarchy. Level one comprises instruments that are listed and traded on an active market where identical instruments are traded. Level two comprises instruments that are not traded on an active market, but where observable market data is used for valuation of the instrument (either directly or indirectly). Level three comprises instruments where the valuation is, to a considerable extent, based on unobservable market data.

Th e assessments have been conducted on the basis of the circumstances and factors obtaining with regard to the various instruments. Metal futures are classifi ed as level two, in that the discounted prices are based on listed daily prices from the exchanges. Currency futures and interest swaps have also been classifi ed as level two, with reference to the fact that the valuation is based on observable market data. Th e fair value of liabilities to credit institutions has been classifi ed as level two. Shares and participations that are not listed have been classifi ed as level three. Exceptions to classifi cation on the basis of the fair value hierarchy are made for accounts receivable, liquid assets and accounts payable where the reported value is deemed to constitute a reasonable estimation of the fair value.

Accrued acquisition value

Accrued acquisition value is calculated using the eff ective interest rate method. Th is means that any premiums or discounts, as well as expenses or income directly attributable to them, are distributed over the duration of the contract with the aid of the estimated eff ective interest rate. Th e eff ective interest rate is the rate that yields the instrument's acquisition value as a result in conjunction with current value calculation of future cash fl ows.

Valuation category

Boliden divides fi nancial instruments into the following valuation categories. See also Note 27 on page 95.

Holdings valued at fair value

Derivatives valued at fair value and for which changes in value are reported under net fi nancial items. Th e derivatives comprise currency futures and are not included in hedge accounting.

Loans and accounts receivable

Th is category includes fi nancial investments, receivables not listed on an active market, and liquid assets. Liquid assets are defi ned as, in addition to cash and bank balances, short-term investments with a maximum term of three months at the time of acquisition and which can easily be converted to cash. Liquid assets are only exposed to an insignifi cant risk of fl uctuations in value and are reported at the accrued acquisition value. Receivables are defi ned as accounts receivable and interest-bearing short-term holdings of securities or other investments which are not classifi ed as fi xed assets and which are not attributable to liquid assets. Receivables are reported in the anticipated recoverable amount, i.e. after deductions for bad debts, which are assessed on an individual basis. Th e anticipated term of accounts receivable and other current receivables is short and the value is, therefore, reported at the nominal amount without discounting in accordance with the accrued acquisition value method.

Financial assets available for sale

Assets in this category comprise shares valued at fair value with changes in value recognised under Other comprehensive income. If it is not possible to establish the fair value of such shares, they are reported at their acquisition value, taking into account accumulated write-downs.

Derivatives used in hedge accounting

Th is category comprises derivatives valued at fair value and which form part of fair value hedging, cash fl ow hedging, and the hedging of net investments in overseas operations. Th e derivatives comprise metals futures, currency futures, and interest derivatives. See Note 26 on pages 93–94 for details of derivatives used for hedging purposes.

Other fi nancial liabilities

Financial liabilities primarily comprise liabilities to credit institutions and accounts payable. Th e anticipated term of accounts payable is short and the value is, consequently, reported at a nominal amount in accordance with the accrued acquisition value method. Liabilities to credit institutions are initially valued at amounts received, less any set-up fees, and are then valued at the accrued acquisition value. Interest expenses are reported on a rolling basis in the Income Statement with the exception of the part included in the acquisition value for tangible fi xed assets. Capitalised set-up fees are reported directly against the loan liability to the extent that the loan agreement's underlying loan guarantee has been utilised, and are periodised in the Income Statement under Other fi nancial expenses over the contractual term of the loan. If a loan agreement is terminated or otherwise ceases to obtain at a point in time prior to the end of the original contractual term, capitalised set-up fees are taken up as income. If a current agreement is renegotiated during the contractual term, any additional fees in connection with the renegotiation are periodised over the remaining contractual term of the loans.

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Note 01 Signifi cant accounting and valuation principles, cont.

Assets and liabilities in foreign currencies

Receivables, liabilities and derivatives in foreign currencies are converted to Swedish kronor at the exchange rate applying on the closing day. Exchange rate diff erences on operating receivables and operating liabilities are included in the operating profi t, while exchange rate diff erences on fi nancial assets and liabilities, including any profi t/loss, are reported under fi nancial items. Exchange rate eff ects on fi nancial instruments used in cash fl ow hedging and the hedging of net investments in overseas operations, are reported under Other comprehensive income with the exception of any exchange rate diff erences on currency swaps in foreign currencies reported under net fi nancial items.

Classifi cation and reporting of derivatives used for hedging purposes

See also "Risk management" in the Directors' Report on pages 51–53.

Fair value hedging (binding undertaking)

Changes in the value of fi nancial derivatives used to hedge a binding undertaking are reported under the operating profi t together with changes in the value of the asset or liability that the hedging is designed to counter. Th e fair value of the derivatives is reported in the Balance Sheet as other assets and liabilities. Parts of inventories constitute binding undertakings and are reported at market value as inventory value, and changes in the value of derivatives consequently eff ectively match the changes in value from hedged items in the Income Statement and Balance Sheet.

Cash fl ow hedging (forecast fl ows)

Hedge accounting is applied to fi nancial derivatives that refer to the hedging of forecast fl ows, which means that the eff ective share of the unrealised market values is reported under Other comprehensive income up to the point in time when the hedged item, such as forecast metal sales, US dollar income, and interest expenses, is realised and thus reported in the Income Statement. Realised profi ts/losses attributable to metal and currency derivatives are reported under net sales, while the profi t/loss on interest derivatives is reported under net fi nancial items. Individual interest swaps and multiple interest swaps – known as portfolio hedging – are both used to hedge future interest payments. Th e ineff ective part of cash fl ow hedging is reported under net fi nancial items.

Hedging of net investments

Hedge accounting is applied to the profi t/loss on hedging in respect of net investments in overseas operations and to cash fl ow hedging under Other comprehensive income. Any ineff ective component of these hedges is reported under net fi nancial items. Associated hedging results are, in conjunction with the sale of overseas operations, reported in the Income Statement, together with the translation eff ect of the net investment.

Offsetting fi nancial assets against liabilities

Th e off setting of fi nancial assets and liabilities is regulated by ISDA (International Swaps and Derivatives Association) agreements, which regulate both off setting between contracted counterparties as part of operating activities and in conjunction with circumstances relating to breach of contract or early termination. In its operating activities, Boliden off sets payments on undertakings with the same maturity date, which are in the same currency, which have the same counterparty, and for the same type of instrument. Only surplus amounts per instrument and currency are paid by the party with the biggest outstanding liability. All terminated undertakings comprised by ISDA agreements are, in conjunction with breach of contract or early termination, which may be caused by circumstances not directly linked to neglect by any party, in a sum that is paid by the party with the biggest outstanding liability.

State contributions and support

State support refers to subsidies, grants or premiums designed to provide an economic benefi t, or state support in the form of transfers of resources to the company that may be applied to an undertaking. State support attributable to assets is reported either by recognising the support as a prepaid income or by reducing the reported value of the asset.

Revenue recognition

Sales of metal concentrates, metals and by-products are reported at the time of delivery to the customer in accordance with the terms and conditions of sale, that is to say revenue is recognised whenever signifi cant rights and obligations associated with the title transfer to the purchaser.

Th ese sales are reported net after VAT, discounts and exchange rate diff erences when sales are made in foreign currencies.

Preliminary invoices are issued for the Group's metal concentrate at the time of delivery. Defi nitive invoices are issued when all component parameters (concentrate quantity, metal content, impurity content, and the metal price for the agreed pricing period – normally the average price on the LME in the month after delivery) have been established.

Th e Group's metals are invoiced to the customers at the time of delivery. Th e Group eliminates the price risk in conjunction with the sale and purchase of metals by hedging the imbalance between quantities purchased and sold on a daily basis. Th e smelters' income comprises treatment and refi ning charges (TC/RC), free metals, compensation for impurities in the raw materials, and the worth of by-products.

Income from activities outside the sphere of the regular operations is reported as Other operating income.

Exploration, research and development

Boliden's R&D primarily comprises exploration. Boliden is also involved, to a limited extent, in developing mining and smelting processes. Expenses associated with research and development are primarily booked as costs when they arise. When the fi nancial potential for the exploitation of a mine deposit has been confi rmed, the expenses are booked as costs up to that date. After that date, the expenses are capitalised as deferred mining costs, the governing principles of which are described under the Tangible fi xed assets heading.

Intangible fi xed assets

Intangible fi xed assets include patents, licenses, similar rights, emission rights and goodwill, which are booked at their acquisition value less amortisation and any write-downs. Goodwill comprises the amount by which the acquisition value exceeds the fair value of the Group's share of the identifi able net assets of the subsidiary company acquired as well as any contingent liabilities at the time of acquisition. Goodwill is reported in the Balance Sheet at the value given in conjunction with the acquisition, converted, where relevant, at the closing day rate, after deduction for accumulated write-downs. Calculations of the profi t or loss on the sale of a unit include any remaining reported goodwill value ascribed to the operations sold.

Goodwill has been assessed as having an indefi nite useful life. Goodwill is allocated to the smallest possible unit or group of units that generate cash where separate cash fl ows can be identifi ed, and an impairment test is performed on the reported value at least once a year to determine whether there is any need for a write-down. Such impairment tests are, however, performed more frequently if there are indications that the value may have fallen during the year.

Other intangible fi xed assets, with the exception of emission rights, are amortised over their anticipated useful lives.

Emission rights

Th e Boliden Group participates in the European system for emission rights. Rights are allocated across the European market. One emission right grants entitlement to emit the equivalent of one tonne of carbon dioxide or similar gas and is classifi ed as an intangible asset. Emission rights allocated are valued at the acquisition price of zero, while rights acquired are valued at the purchase price. An intangible asset and a provision in the corresponding amount are reported during the current year in the event of any need arising to purchase additional emission rights. Th e asset is amortised over the remaining months of the year, thereby distributing the cost in parallel with production. Th e intangible fi xed asset is thereby exhausted and the provision for emissions made is settled. If the liability to deliver emission rights exceeds the remaining emission rights allocation, the liability is revalued at the market value of the number of emission rights required to clear the undertaking on the closing day.

Tangible fi xed assets

Land, plants and equipment, and capitalised costs associated therewith for development, pre-production measures and future reclamation costs, are booked at the acquisition value less depreciations and any write-downs. Interest expenses attributable to fi nancing development and completion of signifi cant tangible fi xed assets are included in the acquisition value. Repair and maintenance expenses are booked as costs, while substantial improvements and replacements are capitalised. Estimated future expenses for the dismantling and removal of a tangible asset and the restoration of a site or area where the tangible asset is located (reclamation costs) are capitalised.

Capitalised amounts comprise estimated expenses, calculated at current value, which are simultaneously reported as provisions. Eff ects of subsequent events that result in costs that exceed the provision are discounted, capitalised as a fi xed asset, and increase the provisions, and are written off over the remaining life of the asset.

Deferred mining costs at mines comprise the waste rock excavation required to access the ore body, work relating to infrastructural facilities, roads, tunnels, shafts and inclined drifts, as well as service, electricity and air distribution facilities. Deferred mining costs arising from capacity expansion of the mining operation, the development of new ore bodies, and the preparation of mining areas for future ore production are capitalised. Mining costs arising from waste rock removal from open-pit mines are capitalised as part of an asset when it becomes possible to identify the part of an ore body to which access has been improved. Waste rock capitalisation is consequently calculated per individual push-back.

Depreciation principles for tangible fi xed assets

Depreciation according to plan is based on the original capitalised values and the estimated economic lifespan. Th e Group normally depreciates tangible fi xed assets and equipment used in the mining operations linearly over whichever is the lower of their anticipated useful life and the useful life of the mine to which they relate. Depreciation is eff ected to the estimated residual value. Estimated residual values and estimated lifespans are subject to ongoing review. Smelters and production plants are depreciated linearly over their anticipated useful lives. Th e following depreciation periods are applied to tangible fi xed assets including future reclamation costs:

Buildings	20–50 years
Land improvements	20 years
Deferred mining costs and waste rock capitalisation	Concurrently
	with ore depletion
Capitalised restoration costs	Linearly over the
	anticipated lifespan
Machinery	3–10 years
Processing facilities	10–25 years
Equipment, tools, fi xtures and fi ttings	3–10 years

Boliden applies component depreciation, which means that larger processing facilities are broken down into component parts with diff erent useful lives and thus diff erent depreciation periods.

Write-downs

On each reporting occasion, an assessment is performed to determine whether there is any indication that the value of the Group's assets has depreciated or been impaired. Should this be the case, a calculation is performed of the recovery value of the asset in question. Goodwill is, together with any intangible assets with an indefi nable useful life, subject to annual impairment tests even if there are no indications of a reduction in its value. Impairment tests are, however, performed more frequently if indications exist of a decline in value. Th e recovery value comprises whichever is the higher of the value in use of the asset in the operations and the value that would result if the asset were sold to an independent party, fair value minus selling expenses. Th e value in use comprises the present value of all incoming and outgoing payments attributable to the asset for the duration of its expected use in the operations, plus the present value of the net sales value at the end of the asset's useful life. If the estimated recovery value is lower than the book value, the latter is written down to the former.

Write-downs are reported in the Income Statement. Any write-downs are reversed if changes in the assumptions leading to the original write-down mean that the write-down is no longer warranted. Write-downs that have been performed are not reversed in such a way that the reported value exceeds the amount that would, following deductions for amortisation according to plan, have been reported if no-write down had been performed. Reversals of write-downs performed are reported in the Income Statement. Goodwill write-downs are not reversed. See also the section on Valuation of fi xed assets.

Leasing

A fi nancial leasing agreement is an agreement whereby the fi nancial risks and benefi ts associated with a title are, in all signifi cant respects, transferred from the lessor to the lessee. Leasing agreements that are not classifi ed as fi nancial leasing agreements are classifi ed as operational leasing agreements.

Assets held in accordance with fi nancial leasing agreements are

reported initially as fi xed assets in the Consolidated Balance Sheet at whichever is the lower of the market value of the assets or the present value of the future lease payments. Th e Group's liability in relation to the lessor is reported in the Balance Sheet under the heading of Liabilities to credit institutions, broken down into current and long-term components.

Lease payments are broken down into interest and amortisation of the liability. Th e interest is distributed over the leasing period so that an amount corresponding to the fi xed interest amount payable on the liability reported in each period is charged to each reporting period. Th e leased asset is depreciated according to the same principles as those that apply to other assets of the same type.

Th e leasing charges for operational leasing agreements are booked as costs on a linear basis over the leasing period.

Inventories

Th e Group's inventories primarily comprise mined concentrates, materials tied up in the smelters' production processes, and fi nished metals. Inventories are valued at whichever is the lower of the acquisition value in accordance with the fi rst-in-fi rst-out principle and the net sale value, taking into account the risk of obsolescence. Th e acquisition value of inventories of metals from the company's mines and semi-fi nished and fi nished products manufactured in-house comprises the direct manufacturing costs plus a surcharge for indirect manufacturing costs. Supplies inventories are valued at whichever is the lower of the average acquisition value and the replacement value. When mined concentrates are bought in from external sources and defi nitive pricing has not yet occurred, the acquisition value is estimated at the closing day price. Fair value hedging is eff ected in conjunction with the defi nitive pricing of mined concentrates. Th e change in the value of hedged items in the inventory value is also reported in conjunction with fair value hedging of mined concentrates.

Taxes

Th e tax expense for the period (income) comprises current tax and deferred tax. Taxes are reported in the Income Statement under Other comprehensive income and in shareholders' equity.

Current tax is the tax calculated on the taxable profi t/loss for each period. Th e year's taxable profi t/loss diff ers from the year's reported profi t/ loss before tax in that it has been adjusted for non-taxable and nondeductible items and temporary diff erences. Th e Group's current tax liability is calculated in accordance with the taxation rates stipulated or announced on the closing day.

Deferred tax is reported using the Balance Sheet method, under which deferred tax liabilities are reported in the Balance Sheet for all taxable temporary diff erences between reported and fi scal values of assets and liabilities. Deferred tax receivables are reported in the Balance Sheet in respect of loss carry-forwards and all deductible temporary diff erences to the extent that it is likely that these amounts can be used to off set future taxable surpluses. Th e reported value of deferred tax receivables is checked at the end of each accounting period and reduced to the extent that it is no longer likely that suffi cient taxable surpluses will be available for its use. Deferred tax is calculated in accordance with the taxation rates that are expected to apply to the period in which the asset is recovered or the liability settled.

Both deferred and current tax receivables and tax liabilities are off set when they relate to income tax levied by the same tax authority.

Provisions

Provisions are reported when the Group has, or may be considered to have an obligation as a result of events that have occurred and it is likely that disbursements will be required in order to fulfi l this obligation. A further prerequisite is that it should be possible to make a reliable estimate of the amount to be paid.

When a signifi cant eff ect arises due to the point in time at which a provision is made, the provision is valued at the present value of the amount estimated to be required to fulfi l the obligation. A discount interest rate before tax that refl ects current market evaluations of the time value of money and the risks associated with the provision is applied in conjunction herewith. Th e increase that is due to time passing is reported as an interest expense. Provisions are broken down into short-term and long-term provisions.

Boliden's provisions primarily, with the exception of pensions (see separate section), refer to reclamation costs that are expected to arise when operations are decommissioned. Emission rights are reported here, as are

remunerations in conjunction with termination of employment that may be payable to employees to whom a commitment of termination has been given and remuneration to employees who accept voluntary redundancy. Th e Group reports a provision and a cost in conjunction with termination when Boliden is obligated either to give the employee notice prior to the normal point in time for employment cessation, or to provide remuneration with a view to encouraging early retirement.

Contingent liabilities

A contingent liability is a potential undertaking that derives from events which have occurred and whose incidence is only confi rmed by one or more uncertain future events. A contingent liability can also be an existing undertaking that has not been reported in the Balance Sheet because it is unlikely that an outfl ow of resources will be required or because the size of the undertaking cannot be calculated. See Note 29 on page 96.

Employee benefi ts

Pension undertakings

Th e Group's companies have a variety of pension systems in accordance with local conditions and practices in the countries in which they operate. Th ey are generally fi nanced through payments made to insurance companies or through the company's own provisions which are determined through periodic actuarial calculations. Th e Group's provisions for pension undertakings are calculated in accordance with IAS 19, Employee benefi ts.

For pension systems where the employer is committed to defi ned contribution systems, the undertaking in relation to the employee ceases when the agreed premiums have been paid. Premiums paid are booked as costs on an ongoing basis.

Th e undertaking does not cease for pension systems where a defi ned benefi t pension has been contractually agreed, until the agreed pensions have been paid out. Boliden commissions independent actuaries to calculate pension undertakings relating to the defi ned benefi t pension plan arrangements in each country. Th ese calculations take account of the discount rate, future salary increases, mortality rates, infl ation and other actuarial assumptions (see Boliden's assumptions in Note 22). A sensitivity analysis for any changes in the assumptions is also presented (see Note 22) on the basis of the parameters determined by Boliden to be of signifi cance in terms of their eff ect on the net pension liability, namely the discount rate, salary increases and mortality rates. Revaluations of the defi ned benefi t net pension liability, such as actuarial profits and/or losses and the diff erence between the return on plan assets and the discount rate, are reported immediately under Other comprehensive income. Th e fi nancing cost, the cost of the net pension liability is calculated using the discount rate for the pension liability. Th e fi nancing cost of service during the current period and any previous periods, losses from settlements and costs in connection with special payroll tax are all reported in the Income Statement. Special payroll tax is regarded as part of the total net pension liability.

Share capital

Ordinary shares are classifi ed as share capital. Transaction costs in conjunction with a new share issue are reported as a net amount after tax for deduction from the issue proceeds received.

Buy-back of own shares

Boliden's holdings of its own shares are reported as a reduction in shareholders' equity. Transaction costs are reported directly against shareholders' equity.

Dividend

A dividend payment proposed by the Board of Directors does not reduce the shareholders' equity until it has been approved by the Annual General Meeting.

Information per segment and geographical market

Boliden's operations are organised into two segments: Business Area Smelters and Business Area Mines. Th e Business Areas correspond to Boliden's operating segments in that 1) the Business Area Managers are directly responsible to the CEO, 2) the CEO controls the Group's component parts via two "Business Area Boards", one for each Business Area, through which the fi nancial results in relation to fi nancial goals are evaluated, 3) fi nancial goals and investment plans and overhead budgets for the respective Business Areas are set in the business plan and budget process, 4) decisions on goals and resource allocation for units within the respective Business Areas are made within the respective Business Areas' management groups, and 5) heads of operating units report not to the CEO but to the Business Area Managers.

Business Area Mines comprises the operations of the Swedish mines, Aitik, the Boliden Area and Garpenberg, and the Tara mine in Ireland. Aitik produces copper concentrate with some gold and silver content. Th e other Swedish mines produce zinc, copper and lead concentrates with variable gold and silver content. Tara produces zinc and lead concentrates. Business Area Mines is also responsible for sales of mined concentrates.

Business Area Smelters comprises the Kokkola and Odda zinc smelters, the Rönnskär and Harjavalta copper smelters, and the Bergsöe lead smelter. Th e Business Area is responsible for all sales of the smelters' products and handles all raw material fl ows between the Group's mines, smelters and customers. Th is includes responsibility for purchases of metal concentrates and recycling materials from external suppliers. Th e zinc smelters' production primarily comprises zinc metal, but also includes aluminium fl uoride and sulphuric acid. Th e copper smelters' production primarily comprises copper, gold, silver, lead and sulphuric acid. Th e copper smelters also recycle metal and electronic scrap and smelt nickel. Th e Bergsöe lead smelter recycles lead metal, mainly from scrap car batteries.

Transactions between the Business Areas, primarily involving metal concentrates, are settled on an arms' length basis.

Group staff functions and Group-wide functions that are not assigned to Smelters or Mines are reported under the heading Other . Items where the accounting method diff ers between the Business Areas and the Group are reported under the heading Accounting principles. Th e market valuation of fi nancial derivative instruments used to manage currency risks, metal price risks and interest risks are, for example, reported under Accounting principles until such time as the underlying fl ows are refl ected in the Income Statement and distributed between the respective segments.

Note 2 contains details of revenues per segment and geographical market, showing the location of external customers, and providing information on major customers. Assets and investments per geographical market are also reported there.

The Parent Company's accounting principles

Th e Parent Company's annual accounts are compiled in accordance with the Swedish Annual Accounts Act, the Swedish Financial Reporting Board's recommendation, RFR2, Accounting for legal entities, and the statements issued by the Swedish Financial Reporting Board. Under RFR2, the Parent Company shall, in the accounts for the legal entity, apply all EU-approved International Financial Reporting Standards (IFRS) and statements to the extent that this is possible within the framework of the Swedish Annual Accounts Act and while taking into account the connection between reporting and taxation. Th e recommendation specifi es the exceptions and additions to be made in relation to IFRS. Th e diff erences between the Group's and the Parent Company's accounting principles are described below.

Reporting Group contributions and shareholders' contributions

Group contributions received or made are reported as appropriations. Shareholders' contributions are booked directly against non-restricted equity by the recipient and as an increase in the Participations in Group companies item by the contributor.

Anticipated dividends

Anticipated dividends can be reported in those cases where the Parent Company has the sole right to determine the size of the dividend and has ensured that the dividend does not exceed the subsidiary company's dividend payment capacity.

Financial instruments

Financial instruments are not valued in the Parent Company in accordance with IAS 39. Th e valuation is conducted on the basis of the acquisition value (see the Group's accounting principles).

Subsidiaries

Participations in subsidiary companies are reported in the Parent Company in accordance with the acquisition value method. Transaction expenses in conjunction with the acquisition of subsidiaries are reported as costs in the consolidated accounts, while in the Parent Company, they are reported as part of the acquisition value.

Determination of the value of subsidiary companies is eff ected when there are indications of a decline in value.

Note 02 Information per segment and geographical market

For additional information, please refer to "General accounting principles" for segment reporting on page 78.

Segment – Business Areas

31-12-2013	Mines	Smelters	Other	Accounting principles2)	Eliminations	The Group
External revenues	834	33,347	0	–	–	34,181
Effect on profi t of metal price and currency hedging	184	43	–	–	–	227
Internal revenues	7,286	20	–73	–	–7,232	0
Revenues	8,303	33,410	–73	–	–7,232	34,409
Results from participations in associated companies	2	–	–	–	–	2
Operating profi t	1,598	210	–140	25	110	1,803
Net fi nancial items						–222
Profi t after fi nancial items						1,581
Taxes						–288
Net profi t for the year						1,294
Intangible fi xed assets	88	3,042	0	–	–	3,130
Tangible fi xed assets	18,883	8,372	93	–	–	27,348
Equity shares and other fi nancial fi xed assets	4	1	29	–	–	33
Inventories	941	7,192	–	–	–102	8,031
Other receivables	842	1,636	492	329	–777	2,523
Assets in capital employed	20,758	20,242	614	329	–879	41,064
Provisions, other than for pensions and tax	1,212	437	31	–	–	1,681
Other liabilities	1,257	4,014	367	72	–777	4,932
Liabilities in capital employed	2,469	4,451	398	72	–777	6,612
Total capital employed	18,288	15,791	216	257	–102	34,451
Depreciation	1,917	913	–	–	–	2,829
Investments1)	3,763	1,200	12	–	–	4,974

31-12-2012	Mines	Smelters	Other	Accounting principles2)	Eliminations	The Group
External revenues	1,088	38,671	–	–	–	39,759
Effect on profi t of metal price and currency hedging	184	58	–	–	–	242
Internal revenues	8,237	25	–48	–	–8,213	0
Revenues	9,509	38,753	–48	–	–8,213	40,001
Results from participations in associated companies	1	–	–	–	–	1
Operating profi t	2,974	1,224	–167	29	111	4,171
Net fi nancial items						–178
Profi t after fi nancial items						3,992
Taxes						–651
Net profi t for the year						3,341
Intangible fi xed assets	85	3,075	0	–	–	3,160
Tangible fi xed assets	16,952	8,102	84	–	–	25,138
Equity shares and other fi nancial fi xed assets	2	2	28	–	–	32
Inventories	712	7,744	–	–	–212	8,244
Other receivables	971	1,593	340	162	–831	2,234
Assets in capital employed	18,722	20,516	452	162	–1,043	38,808
Provisions, other than for pensions and tax	1,172	440	38	–	–	1,650
Other liabilities	1,424	4,507	371	450	–831	5,921
Liabilities in capital employed	2,596	4,947	409	450	–831	7,572
Total capital employed	16,125	15,569	43	–288	–212	31,236
Depreciation	1,669	891	0	–	–	2,560
Investments1)	3,570	993	6	–	–	4,569

1) Excluding capitalised restoration costs and fi nancial leasing.

2) Comprises unrealised market values attributable to cash fl ow hedging and minor adjustments for other accounting principles only followed up at Group level.

The market values of the cash fl ow hedges are, when realised, reported in the respective segments.

Note 02 cont. Information per segment and geographical market

Boliden has three customers within Segment Smelters who account for 16 per cent (16%), 12 per cent (12%) and 10 per cent (11%), respectively, of Boliden's external income. Other customers each represent less than 5 per cent (5%) of Boliden's total external income. Boliden's metals are sold primarily to industrial customers, but are also sold to base metal dealers and international metal stocks, such as the LME.

Geographical areas

Sales fi gures are based on the country in which the customer is located. Assets and investments are reported in the location of the asset.

Revenues	2013	2012
Sweden	6,161	6,722
Rest of the Nordic region	4,262	4,554
Germany	11,770	13,954
UK	6,918	8,440
Rest of Europe	5,122	6,169
North America	5	6
Other markets	171	156
	34,409	40,001

Assets in capital employed	31-12 - 2013	31-12 - 2012
Sweden	33,635	31,591
Finland	3,729	3,384
Norway	1,504	1,539
Ireland	2,176	2,273
Other countries	21	20
	41,064	38,808
Investments in fi xed assets1)	31-12-2013	31-12-2012
Sweden2)	3,939	3,813
Finland	564	426
Norway	269	61
Ireland	201	268
Other countries	1	1

1) Excluding capitalised restoration costs and fi nancial leasing.

2) Of which SEK 383 million for 2012 attributable to restatement in line with IFRIC 20.

Sales of metals, sales of concentrates and other sales accounted for SEK 30,380 million (SEK 35,467 m), SEK 1,406 million (SEK 1,490 m) and SEK 2,623 million (SEK 3,044 m), respectively, of Boliden's total revenues of SEK 34,409 million (SEK 40,001 m).

Note 03 Employees and personnel costs

The Parent Company has no employees. The Group management is employed by Boliden Mineral AB.

Average number of employees1)		2013 of whom, women	of whom, men		2012 of whom, women	of whom, men
Subsidiaries
Sweden	2,888	597	2,291	2,814	582	2,232
Finland	936	145	791	949	143	806
Norway	295	48	247	297	46	251
Ireland	678	31	647	718	35	683
Other	18	3	15	17	7	10
Total in subsidiaries/Group	4,815	824	3,991	4,795	813	3,982

1) Refers to full-time employees.

Percentage of women at Board and Group management level	2013	2012
Board of Directors	27 %	27 %
Group management	20 %	17 %

		2013		2012
Salaries, other remuneration and social security expenses	Salaries and remuneration	Social security expenses	Salaries and remuneration	Social security expenses
Subsidiaries	2,451	623	2,437	872
of which, pension expenses		–255		–518
Group, total	2,451	623	2,437	872
of which, pension expenses		–255		–518

		2013		2012
Salaries and other remuneration broken down by country and between Board Members etc. and other employees	Board of Directors, President & other senior executives	Other employees	Board of Directors, President & other senior executives	Other employees
Subsidiaries in Sweden	23	1,382	24	1,308
Subsidiaries abroad
Finland	4	400	3	403
Norway	3	169	2	172
Ireland	4	456	4	510
Other	1	9	1	10
Group, total	35	2,416	34	2,403

Profi t sharing system

A profi t-sharing system was introduced for all employees of the Boliden Group in 2007. A profi t share is payable when the return on capital employed reaches 10 per cent, and the maximum profi t share (SEK 25,000/full-time employee) is payable when the return on capital employed reaches 20 per cent. The annual maximum allocation must never, however, exceed one third of the dividend paid to shareholders. The funds cannot be disbursed to employees for 3 years. An allocation of SEK 0 (SEK 8,575) per full-time employee has been made for 2013 as the return on capital employed was 5 per cent (13%). The allocation for each year is invested in liquid interestbearing assets and shares in Boliden.

Remuneration paid to the Board Members and senior executives Principles

Fees as approved by the Annual General Meeting are payable to the Chairman of the Board and to Members of the Board. The President and Employee representatives receive no Directors' fees.

Remuneration paid to the President and other senior executives comprises the basic salary, variable remuneration, other benefi ts and pensions. The term "senior executives" refers to those persons who have comprised the Group management during the year. The Group management comprised fi ve persons, including the President, at the end of the year. All members of the Group management are employed in Sweden.

The breakdown between basic salary and variable remuneration shall be in proportion to the executive's responsibilities and authority. The variable remuneration is maximised to 60 per cent of the basic salary for the President, while for other senior executives, it is maximised to 40–50 per cent of the basic salary. 10 percentage points of this is conditional on the purchase of Boliden shares for the gross sum before tax.

Pension benefi ts and other benefi ts payable to the President and other senior executives are taken into account when determining fi xed and variable remuneration.

Remuneration and other benefi ts paid during the year

Specifi cation of remuneration paid to the Board Members and senior executives.

SEK	Directors' fees/Basic salary			Variable remuneration		Other benefi ts		Pension benefi ts
	2013	2012	2013	2012	2013	2012	2013	2012
Board of Directors
Anders Ullberg, Chairman	1,200,000	1,160,000
Marie Berglund	430,000	415,000
Staffan Bohman1)	480,000	465,000
Ulla Litzén1)	580,000	565,000
Michael G:son Löw	430,000	415,000
Leif Rönnbäck	505,000	490,000
Matti Sundberg		415,000
Tom Erixon	430,000	–
Group management
Lennart Evrell, President	6,690,057	6,486,572	646,2723)	1,170,4324)	178,309	191,848	2,102,250	2,158,989
Other members of the Group management2)	9,404,715	9,005,544	620,2933)	1,887,9094)	426,212	318,331	3,371,356	3,504,688

1) These Directors invoice their fees, either wholly or in part, through their own companies, at which point social security contributions are payable.

This is cost-neutral for Boliden.

2) A total of 4 people in 2013 and 5 people in 2012.

3) The amounts are attributable to 2013 but will be disbursed in 2014.

4) The amounts are attributable to 2012 but were disbursed in 2013.

The Directors' fees shown above also include remuneration for work on the Remuneration and Audit Committees.

Variable remuneration

The variable remuneration paid to the President in 2013 was based on the Group's return on shareholders' equity and the Group's cost trend.

For other members of the Group management, 20 – 60 per cent of the variable remuneration for 2013 was based on the Group's fi nancial goals and 40 – 80 per cent on their personal spheres of responsibility and individual targets. Other benefi ts refer primarily to company cars.

Pensions

The President has a defi ned contribution pension plan to which the company allocates 35 per cent of the fi xed monthly salary on a rolling basis. The President decides for himself the level of survivor annuity, indemnity for medical treatment or disability, etc. component of his insurance solution. The President's retirement age is 65.

All of the other members of the Group management have defi ned contribution pension plans to which the company allocates 25-50 per cent of the fi xed monthly salary. Extra allocations comprising 20 per cent of the fi xed basic salary at 2009 level are made for one of the members of the Group management up to and including 2015. The retirement age is 65.

Severance pay

The President and the company shall give six and twelve months' notice of the termination of the President's position, respectively. If notice is given by the company, severance pay corresponding to twelve months' salary is payable, over and above the notice period pay. Other income shall be offset against the severance pay. No severance pay is payable in the event of notice being given by the President.

Other members of the Group management have notice periods of between three and six months if they give notice themselves. If notice of termination is given by the company, the period of notice is between six and twelve months. In addition, severance pay corresponding to a maximum of twelve months' salary shall be payable. Other income shall be offset against the severance pay. No severance pay is payable in the event of notice being given by the member of the Group management.

Preparation and decision-making process

See pages 102 –107 of the 2013 Corporate Governance Report for information.

	2013	2012
Ernst & Young AB
Audit engagements	5	5
Auditing assignments over and above audit engagements	1	1
Tax consultancy	–	0
Other services	1	1
	7	7

Note 05 Key expense items

	2013	2012
Raw material costs, incl. inventory changes	19,557	22,950
Personnel costs	3,207	3,422
Energy costs	2,348	2,269
Other external costs	4,749	4,707
Depreciation and amortisation according to plan	2,829	2,560
	32,689	35,908

The specifi cation of key expense items relates to the following Income Statement items: "Cost of goods sold", "Selling expenses", "Administrative expenses" and "Research and development costs".

Depreciation and amortisation are reported under the following
Income Statement items	2013	2012
Cost of goods sold	2,812	2,549
Selling expenses	1	1
Administrative expenses	14	8
Research and development costs	2	2
	2,829	2,560

Note 06 Other operating income
	2013	2012
Payment for sludge deliveries	19	15
Rental income, industrial properties	19	17
Insurance payments	20	–
Other	44	48
	102	80

Note 07 Interest income and other similar items

	2013	2012
Interest income on liquid assets	5	4
Interest on currency futures	25	82
Other	1	2
	31	87

Note 08 Interest expenses and other similar items

	2013	2012
Interest on loans at accrued acqui sition value	105	160
Interest on pension provisions	47	15
Ineffectiveness of hedging of net investments	-–	–4
Ineffectiveness of cash fl ow hedging	–1	–
Interest on reclamation reserve	29	19
Other fi nancial items	72	76
	253	265

Deductions have been made from interest payments on loans at the accrued acquisition value for interest capitalisation attributable to the Garpenberg expansion in the sum of SEK 51 million (SEK 30 m) for 2013. Interest expenses on loans, before deductions for interest capitalisation, have been positively affected by lower interest rates in 2013 but this was counteracted by increased loans. Boliden's average interest rate in 2013 totalled 2.04 per cent (3.28%), weighted against rolling debt.

Note 09 Government subsidies

Government subsidies totalling SEK 20 million (SEK 5 m) were received in 2013 and SEK 16 million (SEK 4 m) was reported in the Income Statement. The majority of the subsidies were received in Norway under a CO2 compensation scheme.

Note 10 Supplementary information to the Statements of Cash Flow

The Statements of Cash Flow are drawn up in accordance with the indirect method.

	2013	2012
Interest received
Interest on currency futures	121	200
Other interest received	0	0
	121	200
Interest paid
Interest on external loans	–214	–176
	–214	–176
Liquid assets, as per 31 Dec.
The following items are included in liquid assets
Cash and bank balances	611	1,011
Short-term investments	0	0
	611	1,011

There is, with regard to the cash fl ow for the 2012 comparison year, an unadjusted reclassifi cation of SEK 383 million from the operating activities and the cash fl ow from investing activities.

The short-term investments included in liquid assets comprise investments with a term of three months or less at the point of acquisition and which can be easily converted into liquid assets. Liquid assets are only exposed to an insignifi cant risk of value fl uctuation.

Note 11 Intangible fi xed assets
	Capitalised develop ment expenses	Patents, licences and similar rights	Emission rights	Goodwill	Total intangible fi xed assets
Acquisition values
Closing balance on Balance sheet, 31 December 2011
Beginning of the year	18	143	0	3,075	3,236
Investments	16	8	–	–	24
Sales and retirements	–	0	–	–	0
Reclassifi cations	–	–4	–	–	–4
Year's translation differences	–	–6	–	–31	–38
Closing balance on Balance Sheet, 31 December 2012	34	141	0	3,044	3,219
Beginning of the year	34	141	0	3,044	3,219
Investments	9	7	–	–	16
Sales and retirements	–	–3	–	–	–3
Reclassifi cations	–	4	–	–	4
Year's translation differences	–	6	–	–36	–30
Closing balance on Balance Sheet, 31 December 2013	43	155	0	3,008	3,206
Amortisation
Closing balance on Balance Sheet, 31 December 2011
Beginning of the year	0	–53	0	–	–53
Year's amortisation	0	–12	–	–	–12
Reclassifi cations	–	3	–	–	3
Year's translation differences	–	3	–	–	3
Closing balance on Balance Sheet, 31 December 2012	0	–59	0	–	–59
Beginning of the year	0	–59	0	–	–59
Year's amortisation	–6	–10	–	–	–16
Sales and retirements	–	3	–	–	3
Year's translation differences	–	–3	–	–	–3
Closing balance on Balance sheet, 31 December 2013	–6	–70	0	–	–76
Closing balance, 2012	34	82	0	3,044	3,160
Closing balance, 2013	37	85	0	3,008	3,130
Amortisation according to plan, included in the operating profi t
2012	0	–12	–	–	–12
2013	–6	–10	–	–	–16

The Group's goodwill item arose primarily in conjunction with the acquisition of the operations from Outokumpu at the end of December 2003. The goodwill from the 2003 acquisition has been allocated in its entirety to the Group's Smelter segment.

Impairment tests have been carried out in the value of goodwill in the manner described in Note 12 under Impairment tests – Intangible and tangible fi xed assets.

Emission rights

The Boliden Group reported a surplus of emission rights in 2013 and there was consequently no effect on the Group's fi nancial reports. See Note 1 Signifi cant accounting and valuation principles on page 76 for details of emission rights reporting.

83

	Buildings and land	Deferred mining costs	Machinery and other technical facilities	Equipment, tools, fi xtures and fi ttings	New construction & advances on fi xed assets	Total tangible fi xed assets
Acquisition values
Closing balance on Balance Sheet,
31 December 2011	7,021	6,029	29,280	1,457	621	44,409
Revaluation in line with IFRIC 20	–	459	–	–	–	459
Opening balance on Balance sheet,
1 January 2012, restated	7,021	6,488	29,280	1,457	621	44,868
Investments	221	968	3,143	17	192	4,542
Capitalised reclamation costs	–	–	538	–	–	538
Sales and retirements	–11	–	–448	–3	–	–461
Reclassifi cations	673	412	–699	1	–384	4
Year's translation differences	–58	–46	–276	18	–6	–368
Closing balance on Balance Sheet, 31 December 2012	7,846	7,823	31,539	1,490	424	49,122
Opening balance on Balance sheet,
1 January 2013	7,846	7,823	31,539	1,490	424	49,122
Investments	131	1,244	3,183	22	374	4,954
Capitalised reclamation costs	–	–	23	–	–	23
Sales and retirements	–50	–	–619	–10	–	–679
Reclassifi cations	444	17	–295	–2	–168	–5
Year's translation differences	–12	48	140	–125	9	59
Closing balance on Balance sheet, 31 December 2013	8,359	9,132	33,970	1,375	638	53,474
Depreciation
Closing balance on Balance sheet, 31 December 2011	–3,310	–1,935	–15,017	–1,220	–	–21,483
Revaluation in line with IFRIC 20		–641				–641
Opening balance on Balance sheet,
1 January 2012, restated	–3,310	–2,576	–15,017	–1,220	–	–22,123
Year's depreciation	–259	–633	–1,528	–41	–	–2,462
Sales and retirements	6	–	365	3	–	374
Reclassifi cations	–	–	–3	–	–	–3
Year's translation differences	34	14	196	–16	–	229
Closing balance on Balance Sheet,
31 December 2012	–3,529	–3,195	–15,988	–1,273	–	–23,984
Opening balance on Balance Sheet,
1 January 2013	–3,529	–3,195	–15,988	–1,273	–	–23,984
Year's depreciation	–263	–778	–1,726	–40	–	–2,809
Sales and retirements	50	–	612	10	–	671
Reclassifi cations	–	–	–1	1	–	0
Year's translation differences	10	–26	–98	111	–	–4
Closing balance on Balance Sheet, 31 December 2013	–3,733	–3,999	–17,202	–1,192	–	–26,126
Closing balance, 2012	4,317	4,629	15,552	217	424	25,138
Closing balance, 2013	4,626	5,132	16,768	183	638	27,348
Depreciation according to plan, included in the operating profi t
2012	–259	–633	–1,528	–41	–	–2,462
2013	–263	–778	–1,726	–40	–	–2,809

The fi gures for 2012 attributable to deferred mining costs have been adjusted (see also Note 1 Signifi cant accounting and valuation principles, and Note 29 Restatement of fi nancial reports) in response to the new accounting standard, IFRIC 20, in which the cost of waste rock removal in open-pit mines – which was previously calculated using an average value for the entire open-pit mine – is now calculated per individual push-back.

Capitalised reclamation costs include expenses in relation to the dismantling and removal of assets and the restoration of the sites where the assets are located. Accumulated capitalised reclamation costs total SEK 787 million (SEK 765 m). Accumulated depreciation totals SEK –139 million (SEK –33 m). The year's capitalised reclamation costs total SEK 23 million (SEK 538 m), which is a consequence of the fact that subsequent activities in relation to the Swedish mines currently in operation are expected to exceed previous estimates. The change is reported in accordance with IFRIC 1, Changes in Existing Decommissioning, Restoration and Similar Liabilities. The year's reclamation costs are not included in the consolidated key ratios for the year's investments, and have no liquid effect on the Group's cash fl ow.

Investments in tangible fi xed assets include fi nancial leasing in the sum of SEK 0 million (SEK 8 m), see also Note 13 where fi nancial leasing assets are rolled forward. The same principle applies to fi nancial leasing as to the year's capitalised reclamation costs with regard to key ratios and cash fl ow.

The Group's remaining contractual undertakings to acquire tangible fi xed assets totalled SEK 564 million at the year-end. Boliden expects to regulate these undertakings in 2014.

Interest expenses carried forward included in the residual value according to plan

		31-12 - 2013		31-12 - 2012
	Reported value, SEK m	Interest rate, %	Reported value, SEK m	Interest rate, %
Rönnskär's expansion, completed 2000	40	6.8	43	6.8
Odda's expansion, completed 2004	8	4	10	4
Aitik's expansion, completed 2011	208	2.5	221	2.5
Rönnskär, electronic scrap recycling, completed 2012	13	3.15	14	3.15
Garpenberg's expansion, ongoing project	87	2.07	36	3.32

Impairment tests – Intangible and tangible fi xed assets

Impairment tests are carried out yearly, or throughout the year if an event occurs that may result in an impairment requirement, and are based on the Group's annual budget and strategic planning work. The planning horizon is the estimated lifespan of each mine and 10 years for smelters. Boliden's operations are characterised by longterm production plans in which every mine has set production plans for the entire estimated lifespan of the mine in question, while a substantial part of the smelters' concentrate supply is regulated by means of long-term delivery agreements. This long-term production planning also enables the use of long-term cash fl ow forecasts. Additional growth assumptions are not included in extrapolated cash fl ow forecasts beyond the planning horizon. Any residual value of fi xed assets at the end of a mine's lifespan is not taken into account in the discounted cash fl ow.

The value of discounted cash fl ows is highly sensitive to metal prices, treatment and refi ning charges (TC/RC), and exchange rates (see

sensitivity table on page 51 of the Risk management section of the Directors' Report). The present value of estimated future cash fl ows is based on the budget and planning prices adopted by the Board of Directors. Planning prices for the fi rst year comprise the relevant futures prices on metals and currency markets. The long-term planning prices used in year two and thereafter consist of an anticipated average price over a single business cycle, generally ten years. The long-term planning prices are based on internal and external analyses, primarily with regard to anticipated demand for metals and margin costs for metal producers. The long-term planning prices are compared with average long-term prices from different market players, such as industry analysts and other mining and smelting companies. The Group does not believe that futures prices from base metals markets are good indicators of long-term price trends, in that they are heavily dependent on spot prices.

The long-term real planning prices are currently as listed in the table below.

		2013		2012
		Metal prices Treatment/refi ning charges	Exchange rates		Metal prices Treatment/refi ning charges	Exchange rates
Copper	USD/t 6,600	USD 70/tonne Usc 7.0/lb.	USD/SEK 6.70	USD 6,300/t	USD 65/tonne Usc 6.5/lb.	USD/SEK 7.00
Zinc	USD/t 2,300	USD 250 base USD 2,300	USD/NOK 5.98	USD 2,300/t	USD 235 base USD 2,300	USD/NOK 6.12
Lead	USD/t 2,300	USD 225	EUR/USD 1.27	USD 2,300/t	USD 225	EUR/USD 1.27
Gold	USD 1,200/tr.oz			USD 1,200/tr.oz
Silver	USD 20.0/tr.oz			USD 20.0/tr.oz

Individual mines or mining areas with centralised concentrating facilities, copper smelters, zinc smelters, Boliden Bergsöe AB and Boliden Commercial AB are classifi ed as cash-generating units. The discounted real cash fl ows before tax for the respective cashgenerating units are compared with the book value of capital employed. The cash fl ows are discounted with a real discount rate before tax of 10 per cent (10%), which corresponds to the weighted capital cost. The Group's goodwill is allocated to Segment Smelters. The value in use of the Group's assets is held to exceed the reported values and no impairment requirement is consequently deemed to exist.

An increase in the discount rate of one percentage point would not give rise to any write-downs. A lowering of all long-term planning prices for metals by 10 per cent would not result in a write-down

requirement for Segment Smelters. For Segment Mines, however, a fall of this kind would mean that the book values exceed the discounted cash fl ows. If the long-term planning prices for metals remain unchanged, a 10 per cent weakening of the US dollar against all other currencies would not occasion a write-down require ment for Segment Smelters. Here too, however, the book value for Segment Mines would exceed the discounted cash fl ow. This pre supposes, however, no compensatory movements in metal prices, TC/RC, or the prices of by-products or input goods, which has historically often been the case. A 10 per cent fall in TC/RC for all metals would not result in a write-down requirement in Segment Smelters. For Segment Mines, the same fall would have a positive effect.

Note 13 Leasing charges

	2013	2012
The Group
Assets held via operational leasing agreements
Leasing charges paid during the fi nancial year	22	32
Contracted future leasing charges
Maturity within one year	12	21
Maturity later than one year, but within fi ve years	13	20
Maturity later than fi ve years	1	1
Assets held via fi nancial leasing agreements	2013	2012
Machinery and other equipment
Acquisition value	15	15
Accumulated depreciation	–10	–5
Value, as per Balance Sheet on 31st December	5	10

KIP Service Oy has two rental contracts that are reported as fi nancial leasing. One of these is a contract to rent and renovate a water treatment plant's automation system. The lessor is Fortum Power and Heat Oy and the contract has a remaining term of two years. The lessee can redeem the automation system once the contract term has expired. The other is a rental contract in respect of usufruct for active carbon fi lters for ionized water replacement systems and domestic water supply. The lessor is Freeport Cobalt Oy and the contract has a remaining term of two years. Freeport Cobalt Oy has invested in the water treatment plant owned by KIP Service Oy and when the rental term expires, the assets transfer to the lessee for EUR 1.

Note 14 Participations in Group companies

Specifi cation of the Parent Company's and the Group's holdings of participations in Group companies

		31-12-2013
Subsidiary/Co. reg. no./Registered offi ce	Shares/participations	Percentage share	Book value
Boliden Limited, 3977366, Toronto, Canada	85,811,638	100	–
Boliden Power Ltd, 700245, Toronto, Canada			–
Ontario Inc, 1393512, Toronto, Canada			–
Boliden BV, 18048775, Drunen, Netherlands			–
Boliden Apirsa S.L under liquidation, ESB-41518028, Aznalcóllar (Seville), Spain
Boliden Mineral AB, 556231-6850, Skellefteå	1,650,000	100	3,911
Mineral Holding Sweden AB, 556610-2918, Skellefteå			–
Boliden Harjavalta Oy, 1591739-9, Harjavalta, Finland			–
Boliden Kokkola Oy, 0772004-3, Kokkola, Finland			–
KIP Service Oy, 2240650-3, Kokkola, Finland			–
Kokkolan Teollisuusvesi Oy, 2558533-2, Kokkola, Finland			–
Boliden Commercial AB, 556158-2205, Stockholm			–
Boliden Commercial UK Ltd, 5723781, Warwickshire, UK			–
Boliden Commercial Deutschland GmbH, 165903, Neuss, Germany			–
Tara Mines Holding Ltd, 60135, Navan, Ireland			–
Boliden Tara Mines Ltd, 33148, Navan, Ireland			–
APC Properties Ltd, 361022, Navan, Ireland			–
Irish Mine Development Ltd, 174811, Navan, Ireland			–
Tara Prospecting Ltd, 34434, Navan, Ireland			–
Tara Exploration and Development Company Ltd, E1292, Navan, Ireland			–
Dowth Investment Holdings Ltd, 338698, Toronto, Canada			–
Motet Investments Ltd, E3093, Navan, Ireland			–
Mineral Holding Norway A/S, 986009183, Odda, Norway			–
Boliden Odda AS, 911177870, Odda, Norway			–
Boliden Bergsöe AB, 556041-8823, Landskrona			–
Boliden Bergsoe AS, A/S244629, Glostrup, Denmark			–
Boliden International AB, 556040-1399, Skellefteå			–
Boliden France Sarl, B 612 050 13800082, Boutervilliers, France			–
Other subsidiaries, dormant or of lesser signifi cance			–

A new service-driven collaboration company by the name of Kokkolan Teollisuusvesi Oy was formed on 31st December 2013 in which Boliden Kokkola holds a 65% proprietary share. Boliden Kokkola will, during the course of 2014, transfer balance sheet values to this new company from KIP Oy and thereby reduce its holding in KIP Oy. The formation of Kokkolan Teollisuusvesi has no effect on the Income Statement or Balance Sheet in 2013. The Parent Company, Boliden AB, has received a dividend totalling SEK 2,442 million (SEK 2,607 m) from Boliden Mineral AB during the year.

Note 15 Participations in associated companies

				31-12-2013	31-12-2012
Book value at beginning of year				8	7
Share in associated companies' profi ts for the year				2	1
Book value at year-end				9	8
	Co. reg. no.	Registered offi ce	Number of participations	Percentage share	Value of equity share in the Group
Indirectly owned
Aitik EcoBallast AB	556726-2299	Gällivare	500	50	4
KB Aitik EcoBallast	969731-9748	Gällivare	1,000	50	–
Industrikraft i Sverige AB	556761-5371	Stockholm	20,000	20	5

Note 16 Taxes
Current tax expenses	2013	2012
Tax expenses for the period	–170	–826
Adjustment of tax attributable to previous years	22	1
	–148	–825
Deferred tax expenses (–) /tax income (+)
Deferred tax income/tax expenses in respect of temporary differences	–166	159
Deferred tax revenue in capitalised loss carrying forwards for tax purposes during the year	26	14
	–140	173
Total reported tax expenses (–)/tax income (+)	–287	–651
Reconciliation of effective tax
Reported profi t before tax	1,581	3,992
Tax according to current taxation rate	–359	–1,038
Fiscal effect of non-deductible expenses	–6	–22
Fiscal effect of non-taxable income	10	1
Market valuation of deferred tax receivables	1	0
Amended tax rate in Finland	48	–
Amended tax rate in Norway	1	–

Total reported tax expenses –288 –651 Tax expenses comprise 18.2 per cent (15.9%) of the Group's pre-tax profi t. The anticipated tax expense for 2013 of 22.7 per cent (26.0%) has been calculated given the current Group structure and applicable taxation rates in the respective countries.

Amended tax rate in Sweden – 407 Adjustment of tax attributable to previous years 17 0

Deferred tax receivable/tax liability

The receivable reported in the Balance Sheet and the provision for deferred tax come from the following assets and liabilities.

		31-12-2013			31-12-2012
The Group	Deferred tax receivable	Deferred tax liability	Net	Deferred tax receivable	Deferred tax liability	Net
Intangible assets	1	–4	–3	1	–4	–3
Buildings and land	32	–106	–74	67	–114	–47
Machinery and fi xtures and fi ttings	–	–2,413	–2,413	1	–2,246	–2,245
Deferred mining costs	–	–173	–173	–	–172	–172
Other tangible fi xed assets	–	–5	–5	–	–6	–6
Inventories	–	–356	–356	–	–463	–463
Long-term liabilities	235	–	235	326	–3	323
Current liabilities	–	–76	–76	41	–1	40
Tax losses carried forward	81	–	81	60	–	60
Total	349	–3,133	–2,784	496	–3,009	–2,513
Offset within companies	–281	281	–	–249	249	–
Total deferred tax receivable/tax liability	68	–2,852	–2,784	247	–2,760	–2,513

Change in deferred tax in respect of temporary differences and tax losses carried forward

The Group, 2013	Amount at the beginning of the year	Reported in the Income Statement	Reported under Other comprehensive income	Translation difference	Amount at year-end
Intangible assets	–3	–	–	–	–3
Buildings and land	–47	–24	–	–3	–74
Machinery and fi xtures and fi ttings	–2,245	–166	–	–2	–2,413
Deferred mining costs	–172	5	–	–6	–173
Other tangible fi xed assets	–6	1	–	–	–5
Inventories	–463	107	–	–	–356
Long-term liabilities	323	–90	1	1	235
Current liabilities	40	–	–116	–	–76
Tax losses carried forward	60	27	–	–6	81
Total	–2,513	–140	–115	–16	–2,784

Note 16 Taxes, cont.

Change in deferred tax in respect of temporary differences and tax losses carried forward

The Group, 2012	Amount at the beginning of the year	Reported in the Income Statement	Reported under Other comprehensive income	Translation difference	Amount at year-end
Intangible assets	–3	–	–	–	–3
Buildings and land	–71	23	–	1	–47
Machinery and fi xtures and fi ttings	–2,332	75	–	12	–2,245
Deferred mining costs	–180	–1	–	9	–172
Other tangible fi xed assets	–7	1	–	–	–6
Inventories	–465	2	–	–	–463
Long-term liabilities	299	60	–33	–3	323
Current liabilities	–44	–	84	–	40
Tax losses carried forward	46	13	–	1	60
Total	–2,757	173	51	20	–2,513

Tax losses carried forward

Deferred tax receivables in respect of tax losses carried forward in Norway have been taken into account in full as the company is of the opinion that Boliden will be able to generate suffi cient taxable income in the future to exploit these tax losses carried forward. Unutilised tax losses carried forward for which a deferred tax receivable has

not been reported totalled SEK 91 million (SEK 91 m) in Canada on 31st December 2013, of which SEK 13 million matures in 2014, SEK 1 million in 2015, and the remaining SEK 77 million between 2026 and 2033.

Note 17 Inventories
	31-12-2013	31-12-2012
Raw materials and consumables	3,480	3,548
Goods under manufacture	3,039	3,367
Finished goods and tradable goods	1,512	1,330
	8,031	8,244

Note 19 Other current receivables

	31-12-2013	31-12-2012
Other prepaid expenses and
accrued income	136	172
VAT recoverable	435	480
Other current receivables	306	139
	877	791

Note 18 Accounts receivable

On 31st December 2013, accounts receivable to a total value of SEK 45 million (SEK 27 m) were due for payment after more than 30 days, corresponding to 4.3 per cent (2.7%) of the total accounts receivable. The maturity structure is shown in the following table:

	31-12-2013	31-12-2012
Accounts receivable, not due	733	797
Due: 0-30 days	270	192
Due: 31-60 days	28	14
Due: 61-90 days	1	1
Due: >90 days	16	12
	1,048	1,016

The majority of the Group's accounts receivable relate to European customers. Accounts receivable in foreign currencies have been valued at the closing day rate. Note 2 Information per business segment and geographical market on page 80 shows the breakdown of revenues by geographical area.

Accounts receivable are only written down to a minor extent and doubtful receivables total only small amounts. Confi rmed bad debt losses are insignifi cant.

Only a small percentage of Boliden's customers, 2.0 per cent (1.0%), are located in Greece, Italy, Spain and Portugal. The risk management of these customers is handled by means of a requirement for payment in advance.

For information on the management of credit risks, see the section entitled Credit risks in accounts receivable that forms part of the Risk management section of the Directors' Report on page 53.

Note 20 Affi liates

Relationships

The Parent Company's directly owned subsidiaries are reported in Note 14 on page 86, Participations in Group companies, while its participations in associated companies are reported in Note 15 Participations in Associated companies on page 86. Information regarding the Members of the Board and Group management, and the remuneration paid to the same, is presented in Note 3 Employees and personnel costs on pages 80 – 81, and in the Corporate Governance Report on pages 102 –107.

Transactions

No Member of the Board or senior executive in the Group participates or has participated, directly or indirectly, in any business transactions during the current or previous fi nancial year between themselves and the Group which are or were unusual in nature with regard to their terms. Nor has the Group granted loans, issued guarantees or provided sureties to any of the Members of the Board or senior executives of the company.

Note 21 Shareholders' equity
	31-12-2013		31-12-2012
Share capital		Number of shares Nominal value, SEK		Number of shares Nominal value, SEK
Opening balance	273,511,169	578,914,338	273,511,169	578,914,338
Share cancellation	–	–	–	–
Bonus issue	–	–	–	–
Closing balance	273,511,169	578,914,338	273,511,169	578,914,338

The Articles of Association for Boliden AB state that the share capital shall comprise a minimum of SEK 150,000,000 and a maximum of SEK 600,000,000. The nominal value is SEK 2.12 per share. The share capital comprises a single class of share.

The Annual General Meeting of the Company's shareholders held on 3rd May 2013 resolved to pay a dividend of SEK 4 (SEK 4) per share, equivalent to a total payment of SEK 1,094,044,676.

Shareholders' equity, SEK m	31-12-2013	31-12-2012
Share capital	579	579
Other reserves	6,139	5,719
Profi t carried forward, including profi t for the year	16,342	16,042
Minority holdings	16	14
Total shareholders' equity	23,075	22,354
Shareholders' equity per share, SEK	84.31	81.68

Boliden's Board of Directors will propose to the Annual General Meeting that a dividend of SEK 1.75 (SEK 4.00) per share be paid, equivalent to a total of SEK 478,644,546. Boliden's dividend policy stipulates that approximately one third of the net profi t after tax shall be disbursed in the form of dividends.

Earnings per share 2013 2012 Profi t for the year, SEK m 1,294 3,341 There are no potential shares and hence no dilution effect

Number of shares

Earnings per share, SEK	4.72	12.21
Closing number of own shares held	–	–
Cancellation of own shares	–	–
Opening number of own shares held	–	–
Number of own shares held
Average number of shares, basic and diluted	273,511,169 273,511,169
Closing number of shares	273,511,169 273,511,169
Buy-back of own shares	–	–
Opening number of shares	273,511,169 273,511,169

Earnings per share are calculated by dividing the profi t for the period by the average number of shares.

No instruments exist that could give rise to a dilution effect, and the calculation is, therefore, the same for basic and diluted earnings per share.

Boliden monitors its capital structure with the aid of the net debt/ equity ratio, among other things. The net debt/equity ratio is calculated as the net of interest-bearing provisions and liabilities minus fi nancial assets including liquid assets divided by shareholders' equity.

Note 22 Provisions for pensions and similar undertakings

Boliden has established pension plans in the countries in which the company operates. The pension plans include both defi ned benefi t and defi ned contribution plans. The defi ned benefi t plans provide the employee with a fi xed amount of their fi nal salary in conjunction with retirement. Boliden's defi ned benefi t plans are mainly operated in Sweden and Ireland, with a very small number also operated in Norway. The defi ned contribution plans comply with local regulations in the respective countries. Boliden has defi ned contribution plans in Sweden, Ireland, Finland and Norway.

Sweden

Boliden's pension undertakings in Sweden are not invested in funds. The pension undertakings are secured through the Swedish PRI/ FPG system and through insurance companies. The majority of the pension undertakings for salaried employees are secured through insurances with Alecta and are lifelong retirement pensions. The benefi ts offered by the lifelong pensions are determined using different percentages for different salary intervals. Alecta has not provided suffi cient information for 2013 for the ITP plan (supplementary pensions for salaried employees) to be reported as a defi ned benefi t plan, and it is consequently reported in accordance with UFR 6 as a defi ned contribution plan. A surplus in Alecta can be allocated to the policyholders and/or those insured. At the end of the year, Alecta's collective consolidation level was 148 per cent (130%). The collective consolidation level comprises the market value of Alecta's assets as a percentage of the insurance undertakings calculated in accordance with Alecta's actuarial calculation assumptions, which do not correspond with those of IAS 19. Boliden's pension undertakings account for only a very small percentage of Alecta's insurance undertakings. There are, in addition to the ITP plan, a few previously earned temporary retirement pensions within Boliden.

"Gruvplanen" (GP) is a pension agreement for underground workers. The plan grants underground workers entitlement to receive a pension between the ages of 60 and 65 and between 65 and 70 under certain preconditions based on an average income. The "Gruvplanen" plan was closed to new earners in 2011 and replaced by a

defi ned premium pension plan (GLP). The commitments change from vesting to non-vesting in conjunction with retirement.

Ireland

The pension undertaking is secured by the transfer of funds to four defi ned benefi t plans and one defi ned contribution plan. The defi ned benefi t plans are closed to new employees. The pension plans are controlled by the Irish Pensions Board and Irish Pensions Legislation. All defi ned benefi t plans are invested in funds. The biggest defi ned benefi t plan and the defi ned contribution pension plan have Board Members from both the company and the members. Boliden has appointed the Irish Pension Trust to manage the other defi ned benefi t plans.

The fi nancial position of the pension plans is reviewed every three years by an actuary in order to determine the requisite fi nancing level. When a pension plan is deemed to be in defi cit, which is currently the case for the four defi ned benefi t plans, a fi nancing proposal must be submitted to the Irish Pension Board in order to demonstrate how the defi cit will be cleared. The actuary also ensures that Boliden receives annual reports on the fi nancial position in accordance with accounting requirements. Payments are made to all fi ve plans through a combination of contributions from both Boliden and employees in accordance with employment contracts. No other deposits are made.

The Board of the pension undertakings is responsible for investments in plan assets. The majority of the shares are invested in companies operating in the health care, fi nancial services and raw materials sectors that are based in North America and Europe, and which are measured against sector indices. Some of the shares are invested in index funds. All interest-bearing securities entail investments in government bonds and investments of this kind were made in 2013 in order to reduce the risk and secure the pension liability. Liquid assets are held in order to facilitate pension disbursements. Investments in real estate are no longer part of the investment strategy and are in the process of being wound up.

Note 22 Provisions for pensions and similar undertakings, cont.

Norway

The pension undertaking is primarily secured by means of defi ned contribution pension plans in that Boliden wound up the majority of the defi ned benefi t plans in 2012. In 2013, the defi ned benefi t plan only comprised the operations manager. Other employees in Norway are covered by a defi ned contribution plan that covers all employees and a contractual early retirement pension (AFP) with supplementary benefi ts from the ages of 62 to 67.

Events during the year

Boliden has implemented the change in IAS 19 for the reporting of defi ned benefi t pension plans. The change removes the option of applying the corridor approach and periodisation of actuarial gains and losses for defi ned benefi t pension plans. The standard also prescribes that the fi nancing cost for the net pension liability shall be calculated with the aid of the discount rate for the pension liability. Revaluations of pension undertakings and assets are reported under Other comprehensive income. The fi gures for 2012 have also been restated.

The present value of Boliden's pension undertakings is close to the level last year (restated) while the market value of the Group's plan assets has increased by 21 per cent. The pension undertaking in Ireland reported on 31st December 2013 comprises pension undertakings after the implementation of one of the three reductions in the pension undertaking in Ireland agreed between the employer, the Board of Directors and members, which saw the pensionable age increase from 62 to 65.

The Group's reported pension liability totals SEK 1,047 million (SEK 1,382 m), which sum includes endowment insurance and similar undertakings totalling SEK 66 million (SEK 64 m) in respect of defi ned premium pension plans in Sweden.

Assumptions during the year

Costs, undertakings and other factors in pension plans are calculated by means of the Projected Unit Credit Method, using the assumptions shown in the table below.

The discount rate is established for every geographical market with reference to the market return on company bonds on the closing day. In Sweden, where there is no functioning market for such bonds, the market return on housing bonds has been used and a premium for a longer term added, based on the duration of the pension undertakings.

The fi nancing cost of the net pension liability is calculated with the aid of the discount rate and is reported under Boliden's net fi nancial items.

	Sweden		Ireland		Other
Actuarial assumptions (weighted averages)	2013	2012	2013	2012	2013	2012
Discount rate, %	3.75	3.50	3.75	3.70	3.90	3.80
Future pay increases, %	3.00	3.00	0.00	0.00	3.50	3.50
Future pension increases, %	1.75	1.80	0.00	0.00	0.00	0.00
Life expectancy
women	90	90	88	88
men	88	88	90	90

		Sweden		Ireland	Other		Total
Specifi cation of provisions for pensions	2013	2012	2013	2012	2013	2012	2013	2012
Pension undertaking at the beginning of the year	638	362	668	230	10	–10	1,317	581
Restatement, IAS 19	–	217	–	338	–	68	–	622
Pension undertaking at the beginning of the year, restated	638	580	668	568	10	57	1,317	1,203
Defi ned benefi t plan costs	35	44	–154	54	9	1	–110	99
Revaluations for Other comprehensive income	–8	46	–135	127	–	–47	–143	126
Payments and disbursements	–35	–30	–59	–57	–8	–	–103	–87
Translation differences	–	–	18	–23	0	–1	18	–24
Pension undertaking at the end of the year1)	631	638	339	668	11	10	981	1,317
Endowment insurance and similar undertakings	66	64	–	–	–	–	66	64
Net debt, as per Balance Sheet2)	697	703	339	668	11	10	1,047	1,382
Specifi cation of provisions for pensions, as per 31st December
Pension undertakings invested in funds	–	–	1,900	1,953	1	1	1,901	1,954
Pension undertakings not invested in funds	631	638	–	–	11	9	642	647
of which, special payroll tax	67	72	–	–	–	–	67	72
Fair value of plan assets	–	–	–1,561	–1,285	0	0	–1,561	–1,285
Pension undertakings	631	638	339	668	11	10	981	1,317
Endowment insurance and similar undertakings	66	64	–	–	–	–	66	64
Net debt, as per Balance Sheet	697	703	339	668	11	10	1,047	1,382
Specifi cation of costs
Cost of defi ned benefi t plans
Costs in respect of service during the period	19	29	34	27	9	1	62	57
Interest expense on undertaking	19	19	73	83	–	–	93	103
Interest income from plan assets	–	–	–48	–75	–	–	–48	–75
Special payroll tax and other taxes	–5	5	–	–	–	–	–5	5
Administrative costs and premiums paid	–	–	3	0	–	–	3	0
Settlements/reductions of pension plans	1	–9	–217	19	0	–	–216	10
Total cost of defi ned benefi t plans	35	44	–154	54	9	1	–110	99
Cost of defi ned contribution plans	310	324	2	10	99	105	410	439
Total pension costs	345	368	–153	64	108	106	300	537

1) Undertakings in Sweden include undertakings in accordance with PRI/FGI totalling SEK 281 million (SEK 260 m), undertakings for underground workers totalling SEK 284 million (SEK 307 m), and other undertakings totalling SEK 3 million (SEK 3 m).

2) The pension liability reported in the Balance Sheet includes not only the defi ned benefi t pension undertaking and endowment insurance but also special payroll tax in Sweden.

	Sweden		Ireland		Other		Total
Reconciliation of pension undertaking	2013	2012	2013	2012	2013	2012	2013	2012
Present value of undertakings at the beginning
of the year	638	580	1,953	1,703	10	375	2,602	2,657
Cost in respect of service during the current period	19	29	34	27	9	1	62	56
Interest expense on undertaking	19	19	73	83	–	–	93	103
Special payroll tax	–5	5	–	–	–	–	–5	5
Fees from plan participants	–	–	16	16	–	–	16	16
Revaluation of defi ned benefi t pension liability	–8	46	26	256	–	–47	18	255
of which profi t/loss as a result of fi nancial assumptions	–18	9	–7	279	–	–47	–25	241
of which profi t/loss as a result of
experience-based assumptions	10	37	33	–23	–	–	43	14
Disbursements made	–35	–30	–58	–61	–8	–312	–103	–403
Disbursements in conjunction with terminations
Reductions and settlements	1	–9	–217	–5	–	–7	–216	–21
Translation differences	–	–	73	–67	0	–1	72	–67
Present value of undertakings
at the end of the year Endowment insurance and similar undertakings	631 66	638 64	1,900 –	1,953 –	11 –	10 –	2,541 66	2,601 64
of which amounts attributable to active
employees	348	355	1,027	1,318	4	3	1,378	1,676
of which amounts attributable to holders of paid up policies	138	153	120	125	–	–	258	278
of which amounts attributable to retired employees	211	195	752	511	7	7	970	713
Reconciliation of plan assets
Fair value of plan assets at the beginning of the year	–	–	1,285	1,135	0	262	1,285	1,398
Interest income on plan assets	–	–	48	75	–	–	48	75
Return on plan assets excluding amounts included in net interest items	–	–	163	132	–	–	163	132
Fees from the employer excluding disburse
ments in conjunction with terminations	–	–	61	57	–	–	61	57
Fees from plan participants	–	–	16	16	–	–	16	16
Disbursements made	–	–	–60	–61	–	–262	–60	–323
Administrative costs, taxes and premiums paid	–	–	–3	–24	–	–	–5	–24
Exchange rate fl uctuations	–	–	50	–46	–	–	53	–46
Fair value of plan assets at the end of the year	–	–	1,561	1,285	0	0	1,561	1,285
Net debt, as per Balance Sheet							1,047	1,382
Specifi cation of plan assets
Listed shares and participations	–	–	833	725	0	0	833	725
Interest-bearing securities	–	–	690	314	–	–	690	314
Liquid assets	–	–	35	242	–	–	35	242
Real estate	–	–	3	3	–	–	3	3
Other	–	–	–	1	–	–	–	1
	–	–	1,561	1,285	0	0	1,561	1,285

Note 22 Provisions for pensions and similar undertakings, cont.

Sensitivity analysis of the effect on the defi ned pension liability (+increase/-decrease in pension liability)			Sweden	Ireland	Total
Signifi cant actuarial assumptions			2013	2013	2013
Discount rate, %		+0.5	–32	–131	–163
		–0.5	36	137	173
Pay increases, %		+0.5	15	29	44
		–0.5	–14	–	–14
Increased life expectancy, years	Man	+ 1	10	41	51
	Woman	+ 1	9	3	12

The sensitivity analysis has been conducted on the basis of the above-mentioned actuarial changes as Boliden is of the opinion that they can have a substantial impact on the pension liability. It is also likely that changes to these assumptions will be made. The calculations have been performed by means of the analysis of each change individually and the calculations have not taken into account any interdependence between the assumptions. No sensitivity analysis has been conducted for Norway as the amounts in question are insignifi cant. Other countries do not have any defi ned benefi t pension liabilities.

Defi ned benefi t pension liability terms	Sweden	Ireland	Other	Total
Benefi ts scheduled for disbursement within 12 months	46	54	0	100
Benefi ts scheduled for disbursement within 1–5 years	183	216	2	401
Benefi ts scheduled for disbursement after 5 years or more	401	69	9	479

The maturity of plan assets in Ireland have reduced anticipated payments after 5 years or more. The weighted average duration of the defi ned benefi t pension liability is 17 years for Sweden and 15 years for Ireland.

Note 23 Other provisions

	31-12-2013	31-12-2012
Reclamation costs	1,651	1,618
Other	30	32
	1,681	1,650
Of which:
Long-term	1,512	1,511
Short-term	169	139
	1,681	1,650

Reclamation costs

Provisions for reclamation costs are made on the basis of an assessment of future costs based on current technology and other conditions. Provision has been made for the current value of estimated undertakings in accordance with IAS 37 and IFRIC 1. Gradual reclamation is preferable, although most of the reclamation work is carried out after a decision to decommission. In historical terms, Boliden has succeeded in extending the useful life of its mining assets compared with the original plans. Reclamation provisions are reviewed on an ongoing basis.

		2013		2012
The Group, 2013	Reclamation costs	Other	Total	Reclamation costs	Other	Total
Book value at beginning of year	1,618	32	1,650	1,110	54	1,164
Additions to existing provisions	68	6	74	548	8	556
Reversal of existing provisions	–7	–7	–14	–6	–30	–36
Payments	–70	–1	–71	–45	0	–45
Discount effect for the period	29	–	29	19	0	19
Translation difference	13	0	13	–8	0	–8
Book value at year-end	1,651	30	1,681	1,618	32	1,650
Anticipated date of outfl ow of resources:
Within one year	164	5	169	130	9	139
Between one and two years	156	1	157	151	3	154
Between three and fi ve years	182	0	182	155	0	155
More than fi ve years	1,148	24	1,172	1,182	20	1,202
	1,651	30	1,681	1,618	32	1,650

Note 24 Risk information

See the section entitled "Risk management" in the Directors' Report on pages 51– 53 for a description of Boliden's fi nancial risks. The amounts reported refer to the Group.

Note 25 Financial liabilities and maturity structure

31-12-2013		Financial liabilities			Maturity structure 2)
SEK m	Currency	Interest1), %	Nominal amounts	2014	2015	2016	2017	2018	2019+
Syndicated credit facility	EUR	1.31	1,431	19	1,440
Syndicated credit facility	SEK	2.10	222	5	225
Credit facility	EUR	1.67	760	97	96	94	93	92	352
Debenture loan	EUR	1.91	2,010	259	256	695	123	655	157
Debenture loan	SEK	2.16	230	5	5	231
Commercial papers 3)	SEK	1.80	3,641	3,657
Leasing, other			13	5	8	2
Accounts payable			3,636	3,636
Total			11,943	7,683	2,030	1,022	216	747	509

31-12-2012		Financial liabilities				Maturity structure 2)
SEK m	Currency	Interest1), %	Nominal amounts	2013	2014	2015	2016	2017	2018+
Syndicated credit facility	EUR	3.42	603	21	21	613
Syndicated credit facility	SEK	3.47	808	29	29	854
Credit facility	EUR	1.68	732	12	94	92	91	90	427
Debenture loan	EUR	3.40	1,937	66	281	272	686	126	789
Debenture loan	SEK	3.72	630	417	9	9	232
Commercial papers 3)	SEK	2.79	1,266	1,301
Other		4.00	5	5
Accounts payable			4,192	4,192
Total			10,173	6,043	434	1,840	1,009	216	1,216

1) Weighted interest including interest swaps.

2) The duration analysis includes gross fl ows of loans and interest, including fl ows from interest swaps.

3) Outstanding commercial papers are reported, by law, under the Group's Parent Company, Boliden AB.

Loan portfolio

Boliden has syndicated credit facilities totalling SEK 5,800 million and EUR 400 million. The SEK 5,800 million facility matures in 2015, while the EUR 400 million facility expires in 2017. In addition, Boliden has an EUR 85 million credit facility from the European Investment Bank (EIB) which will be amortised between 2014 and 2022. Boliden also has unutilised Swedish Export Credits Guarantee Board (EKN) credit facilities totalling SEK 2,000 million, which expire in 2017. The utilised component of the credit facilities totalled SEK 2,431 million (SEK 2,175 m) on 31st December 2013. Boliden also has a number of directed bonds issued to Swedish and Nordic institutions which, on 31st December 2013, totalled SEK 2,240 million (SEK 2,567 m) and which fall due for payment between 2014 and 2018. The framework amount for Boliden's commercial papers programme was increased to SEK 4,000 million (SEK 2,500 m) during the year and on 31st December 2013, SEK 3,641 million (SEK 1,266 m)

remained outstanding. The average term of the loan facilities on 31st December 2013 was 2.6 years (3.5 yrs.) and the debt portfolio's average interest rate was 1.76 per cent (3.12%). The fi xed interest term of outstanding loans, including interest swaps entered into, totalled 0.7 years (0.9 yrs.) on 31st December 2013. The above maturity analysis includes interest fl ows from interest swaps.

Boliden's current liquidity in the form of liquid assets and unutilised credit facilities with a term in excess of one year, less credit utilised and which shall be amortised within one year, totalled SEK 6,356 million (SEK 9,150 m) on 31st December 2013.

The above maturity structure for the fi nancial liabilities, including interest payments, includes the undiscounted cash fl ows that derive from the Group's liabilities, based on the contracted remaining durations. Interest maturity, including interest swaps, has been calculated on the basis of the applicable closing interest rates.

Note 26 Financial derivative instruments

Boliden uses fi nancial derivative instruments to manage currency rate risks, raw material price risks, and interest rate risks arising within its operations.

	31-12-2013		31-12-2012
Outstanding fi nancial derivative instruments, SEK m	Nominal amount	Fair value	Nominal amount	Fair value
Transaction exposure (binding undertakings)
Currency futures	–5,295	34	–4,818	29
Raw material derivatives	121	93	1,109	66
Transaction exposure (forecast cash fl ows)
Currency futures	–1,533	52	–2,978	100
Raw material derivatives	–1,277	292	–4,462	–262
Interest derivatives	–5,380	–2	–6,247	–22
Translation exposure
Currency futures	–1,657	–5	–2,925	17
Total		464		–72

93

Note 26 Financial derivative instruments, cont.

Nominal amounts comprise the net volume of the derivatives bought and sold. Derivatives for forecast cash fl ows exclusively comprise derivatives sold. Nominal amounts for interest swaps also include contracted derivatives commencing in 2013.

		31-12-2013			31-12-2012
Maturity structure, derivative instru ments, nominal amounts, SEK m	2014	2015	2016	2013	2014	2015
Currency futures	–7,267	–1,218		–9,149	–362	–1,209
Raw materials derivatives	–537	–619		–1,576	–455	–1,323
Interest derivatives	–3,038	–1,358	–984	–3,492	–2,755
Hedge accounting, SEK m				2013			2012
Hedging of fair value
– Changes in value of hedging instruments in respect of binding undertakings				–564			–1,186
– Change in value of hedged item				564			1,186
Ineffectiveness of fair value hedging				0			0
Ineffectiveness of cash fl ow hedging				1			–
Ineffectiveness of hedging of net investments in overseas operations				–			4
Total ineffectiveness				1			4

The effect of effective cash fl ow hedging with regard to Transaction exposure on the result for 2013 totals SEK 200 million (SEK 201 m), of which SEK 227 million (SEK 242 m) refers to exchange rate and metal price hedging and SEK –27 million (SEK –41 m) to interest swaps.

Currency derivatives in respect of forecast exposure – Cash fl ow hedging

A summary of Boliden's outstanding currency hedging for currency exposure in USD/SEK on 31st December 2013 is shown below. Hedges that refer to forecast exposure between 2016 and 2017

mature in 2015, but the intention is to extend them. Boliden's other currency risks in respect of forecast exposure are, in every signifi cant respect, unhedged. For further information about the Group's transaction exposure, see Risk management on page 51.

Currencies	2014	2015	2016	2017
USD/SEK
Hedged volume (USD m)	56	72	70	43
Forward rate, USD/SEK	6.83	6.78	6.77	6.77
Market value, SEK m	16	14	13	8
Total market value, SEK m					52

Raw materials derivatives in respect of forecast exposure – Cash fl ow hedging

The table below provides a summary of Boliden's outstanding price hedges for gold on 31st December 2013. The hedges that refer to forecast exposure between 2016 and 2017 mature in 2015, but the intention is to extend them. Boliden's other metal price risks in respect of forecast exposure are, in every signifi cant respect, unhedged. For further information about the Group's transaction exposure, see Risk management on page 51.

Metals	2014	2015	2016	2017
Gold
Hedged volume (tr. oz.)	38,400	48,600	47,000	29,000
Forward rate, USD/tr. oz.	1,455	1,491	1,487	1,490
Market value, SEK m	63	90	86	53
Total market value, SEK m					292

Offsetting of fi nancial assets and liabilities

	31-12-2013	31-12-2012		31-12-2013	31-12-2012
Gross amount for fi nancial assets	526	361	Gross amount for fi nancial liabilities	62	432
Amount offset in Balance Sheet	–26	–39	Amount offset in Balance Sheet	–26	–39
Net asset reported in Balance Sheet	500	322	Net liability reported in Balance Sheet	36	394
Amount comprised by offsetting			Amount comprised by offsetting in
in conjunction with insolvency, etc.	–33	–85	conjunction with insolvency, etc.	–33	–85
Net asset	466	237	Net liability	2	309

Note 27 Financial assets and liabilities by valuation category

31-12-2013	Valuation classifi cation	Holdings valued at fair value	Loan receiv ables and accounts receivable	Financial assets avail able for sale	Derivatives used in hedge accounting	Financial liabili ties valued at accrued acquisi tion value	Total reported value	Total fair value
ASSETS
Financial fi xed assets
Other shares and participations	3			24			24	24
Current assets
Current receivables
Accounts receivable			1,048				1,048	1,048
Interest-bearing receivables			3				3	3
Derivative instruments	2	49			451		500	500
Liquid assets			611				611	611
Total fi nancial assets		49	1,662	24	451	–	2,186	2,186
LIABILITIES
Long-term liabilities
Liabilities to credit institutions	2					4,346	4,346	4,364
Other interest-bearing liabilities	2					4	4	4
Current liabilities
Liabilities to credit institutions	2					3,948	3,948	3,948
Other interest-bearing liabilities	2					9	9	9
Accounts payable						3,636	3,636	3,636
Derivative instruments	2	8			28		36	36
Total fi nancial liabilities		8	–	–	28	11,943	11,979	11,997

Boliden's entire holding of fi nancial instruments reported at fair value in the Balance Sheet is classifi ed as level two in the Fair value hierarchy (see Accounting principles), with the exception of a small amount in other shares and participations that is classifi ed as level three. The fair value of liabilities to credit institutions is calculated as discounted contractually agreed amortisations and interest payments at estimated market interest rates. The interest covenants of existing loan

agreements were, on 31st December 2013, adjudged to be on a par with credit market interest rates, and the fair value therefore corresponds, in every signifi cant respect, with the reported value.

The reported value of accounts receivable and accounts payable is held to be the same as the fair value due to the short term to maturity, to the fact that provision has been made for bad debts, and to the fact that any penalty interest will be debited.

31-12-2012	Valuation classifi cation	Holdings valued at fair value	Loan receiv ables and accounts receivable	Financial assets avail able for sale	Derivatives used in hedge accounting	Financial liabili ties valued at accrued acquisi tion value	Total reported value	Total fair value
ASSETS
Financial fi xed assets
Other shares and participations				24			24	24
Current assets
Current receivables
Accounts receivable			1,016				1,016	1,016
Interest-bearing receivables			3				3	3
Derivative instruments	2	36			286		322	322
Liquid assets			1,011				1,011	1,011
Total fi nancial assets		36	2,030	24	286	–	2,376	2,376
LIABILITIES
Long-term liabilities
Liabilities to credit institutions						4,310	4,310	4,310
						5	5	5
Current liabilities
Liabilities to credit institutions						1,666	1,666	1,666
Accounts payable						4,192	4,192	4,192
Derivative instruments	2	4			390		394	394
Total fi nancial liabilities		4	–	–	390	10,173	10,567	10,567

Note 28 Other current liabilities

		31-12 - 2013 31-12 - 2012
Accrued salaries and social security expenses	333	323
Accrued interest expenses	22	95
Other accrued costs and prepaid income	608	669
Other operating liabilities	231	175
	1,194	1,263

Note 29 Pledged assets and contingent liabilities

	The Group			Parent Company
	2013	2012	2013	2012
Pledged assets
For own liabilities and provisions	None	None	None	None
Contingent liabilities
Parent Company sureties	–	–	8,608	6,971
Other sureties and guarantees	1,579	632	158	154
Pension liabilities	3	3	–	–
Agreed residual values according to leasing
contracts	26	47	–	–
	1,608	682	8,767	7,125

The Parent Company sureties refer to guarantees issued for subsidiary companies. SEK 8,767 million (SEK 7,125 m) refer to Parent Company sureties for external fi nancial borrowing. Parent Company sureties in the above table have been booked in the amount utilised. Guarantees in respect of unutilised credits total SEK 9,706 million (SEK 11,039 m).

The possibility exists, in addition to the above specifi cations under the heading of contingent liabilities and the items included in the fi nancial information, that the Group may incur environmentally-related contingent liabilities or contingent liabilities attributable to legal proceedings and claims which cannot be currently calculated but which may, in future, entail costs or investments.

Legal proceedings

Overview

Boliden conducts extensive domestic and international operations and is occasionally involved in disputes and legal proceedings arising in the course of these operations. These disputes and legal proceedings are not expected, either individually or collectively, to have any signifi cant negative impact on Boliden's operating profi ts, profi tability or fi nancial position, over and above that detailed below.

Disputes

Disputes arising from the dam breach accident in Spain In April 1998, a dam breach occurred in a tailings pond at the Los Frailes mine in Spain, which was then owned by Boliden's subsidiary, Boliden Apirsa S.L. ("Apirsa").

Following the dam breach, criminal proceedings were initiated against Apirsa and its representatives. In December 2000, the prosecutor withdrew the proceedings. The ruling was appealed but fi nally ratifi ed in November 2001. The criminal proceedings determined that the accident was caused by design and construction errors in the dam, not by Apirsa's operations at the mine.

The outcome of the criminal proceedings notwithstanding, the Spanish Ministry of the Environment declared Apirsa liable to pay an amount corresponding to approximately EUR 45 million in clean-up costs, damages and fi nes. This resulted, in January 2005, in Apirsa initiating so-called insolvency proceedings in order to ensure a coordinated and orderly closure of the company. The receivers in bankruptcy have, within the framework of the insolvency proceedings, requested that Apirsa's parent company, Boliden BV, together with Boliden Mineral AB and Boliden AB, be held liable for Apirsa's shortfall in an amount which, according to the receivers in bankruptcy, totals approximately EUR 141 million, including a claim of approximately EUR 89 million which the local government (Junta de Andalucía) believes it is owed, as described in greater detail below.

As a result of the dam breach, the local government sued Apirsa, Boliden BV and Boliden AB in a civil court for damages totalling approximately EUR 89 million. The suit was dismissed on formal legal grounds. The ruling was appealed, but the appeal was rejected by a higher court in the

autumn of 2003. Since the dismissal of the suit in the civil court, the local government in Andalucía has initiated administrative proceedings against Apirsa, Boliden BV and Boliden AB in respect of the same claim. In these proceedings, the local government has itself enjoined the three companies to pay the amount claimed. Apirsa, Boliden BV and Boliden AB appealed the decision to the Administrative Court and in late 2011, the Supreme Administrative Court ruled that the local government's rulings against and claims against all three of the Boliden companies affected were invalid on formal grounds. The rulings are fi nal and cannot be appealed. In light of the fact that the local government's claims have hence been ruled inadmissible in both civil and administrative courts, the local government has requested a ruling by the Supreme Administrative Court on the correct body in which the matter may be heard. The Supreme Administrative Court has, in accordance with this request, ruled that the matter can be heard in a civil court of law. The local government's suit against the above-mentioned companies will, therefore, be reopened in the court of the fi rst instance in Seville.

The companies that were responsible for the design and construction of the dams and against which Apirsa had previously brought suit and lost have now submitted claims against Apirsa, seeking compensation for their legal costs. Final rulings on these compensation claims will be made by the respective courts of instance. It is currently not possible to assess with any reasonable degree of certainty whether the legal cost claims can be brought against any Boliden company other than Apirsa.

Based on the legal advice and opinions given by the company's Spanish legal counsel, Boliden's overall view is that the company will not suffer any substantial fi nancial damage as a result of the legal proceedings described. The company has made no provision, pending a fi nal ruling.

Legal dispute arising from the earlier copper tubing cartel In June 2012, Boliden was served with claims in the UK courts by a number of companies in the Travis Perkins corporate Group. Travis Perkins claims to have sustained losses as a consequence of the copper tubing cartel in which Boliden and seven other companies were involved during the period from June 1988 to March 2001, and for which the companies concerned were fi ned by the European Commission in 2004. Boliden paid the fi ne and interest on the same, a sum totalling SEK 367 million, in 2010. Boliden has contested the demand from Travis Perkins and has, to ensure that all parties involved are included, also brought claims against the other cartel members. One of these companies has now also submitted a claim against Boliden's former subsidiary company, Boliden Fabrication AB, which was also found to have participated in the cartel. This company was transferred to Outokumpu in 2004 in conjunction with which Boliden undertook to indemnify Outokumpu in respect of claims that may arise and which relate to the period prior to the transfer of the company. The indemnity undertaking is not expected to increase Boliden's total potential exposure in that the European Commission found Boliden to be jointly and severally liable with its former subsidiary company.

It is currently not possible to evaluate the fi nancial effect that the cases may have on Boliden with any degree of certainty and no provision for any obligations that may arise has hence been made.

Summons arising from the export of metallic residues to Chile in the 1980s

In October 2013, suit was brought against Boliden, claiming damages of just over SEK 90 million and interest. The claim refers to the arsenic poisoning suffered by just over 700 people in the Chilean town of Arica to which Boliden exported metallic residues from the Rönnskär smelter between 1984 and 1985 for processing by a Chilean company, Promel. The suit was brought by a Swedish limited partnership, Arica Victims KB. Boliden has contested the claim in its statement of defence submitted to the Skellefteå District Court. Boliden's general opinion is that the company will not suffer any substantial fi nancial loss as a result of the legal process described. The company has made no provision, pending a ruling by the court.

Diesel tax at Aitik

During the period from April 2009 to October 2012, dyed diesel was incorrectly used at Aitik instead of undyed diesel. The two versions carry different tax rates. When the mistake was discovered in October 2012, Boliden immediately contacted both the supplier, in order to switch to undyed diesel, and the Swedish Tax Agency, in order to inform them of what had happened. Boliden has, throughout the period, paid the tax that would have been applicable if the correct diesel had been used and the company has not benefi tted fi nancially from the mistake. In May 2013, the Swedish Tax Agency decided to impose an energy tax liability totalling SEK 212 million, plus interest, on Boliden. After a review of the company's income tax liability, the amount, excluding interest, totals SEK 156 million and has been paid. Boliden has appealed the Swedish Tax Agency's ruling to the Administrative Court in Falun and no provision has consequently been made in the 2013 accounts.

Note 30 Restatement of fi nancial reports

Below are the amendments to the fi nancial reports for 2012 attributable to the revisions to the IAS 19 and IFRIC 20 accounting standards that came into force on 1st January 2013. The presentation

in the table below is at primary consolidation level and is hence not a comprehensive account of all items in the fi nancial reports.

Consolidated Income Statements, SEK m	2012	IAS 19	IFRIC 20	2012, restated
Revenues	40,001			40,001
Signifi cant cost types	–36,008	60	40	–35,908
of which, raw material costs, incl. inventory changes	–22,950	–	–	–22,950
of which, personnel costs	–3,482	60	–	–3,422
of which, energy costs	–2,269	–	–	–2,269
of which, other external costs	–5,089	–	383	–4,707
of which, depreciation according to plan	–2,218	–	–343	–2,560
Other profi t/loss items	78	–	–	78
Operating profi t	4,071	60	40	4,171
Financial items	–179			–179
Taxes	–618	–23	–11	–651
Net profi t for the year	3,274	37	29	3,341
Earnings per share	11.96			12.21
Consolidated Statements of Comprehensive Income, SEK m	2012	IAS 19	IFRIC 20	2012, restated
Net profi t for the year	3,274	37	29	3,341
Items that will be reclassifi ed under the profi t/loss
Hedging reserve, incl. tax	–265	0	–	–265
Translation difference on overseas operations	–169	10	–	–159
Hedging of net investments in overseas operations, incl. tax	171	–	–	171
Items that will not be reclassifi ed under the profi t/loss
Revaluation of defi ned benefi t pension plans	0	–126	–	–126
Tax attributable to defi ned benefi t pension plans	0	29	–	29
Total comprehensive income	3,011	–51	29	2,990
Consolidated Balance Sheets, SEK m	31-12-2012	IAS 19	IFRIC 20	31-12-2012, restated
Tangible fi xed assets, total	25,279		–141	25,138
of which, deferred mining costs	4,770		–141	4,629
Deferred tax receivables	61	187		247
Total assets	40,035	187	–141	40,080
Total shareholders' equity	22,949	–492	–103	22,354
Pension provisions	735	647		1,382
Deferred tax liability	2,766	31	–37	2,760
Total shareholders' equity and liabilities	40,035	187	–140	40,080
Consolidated Balance Sheets, SEK m	31-12-2011	IAS 19	IFRIC 20	01-01-2012, restated
Tangible fi xed assets, total	22,927		–182	22,745
of which, deferred mining costs	4,094		–182	3,913
Deferred tax receivables	46	174		220
Other long-term receivables	120	–10		109
Total assets	37,615	164	–182	37,597
Total shareholders' equity	21,032	–440	–134	20,458
Pension provisions	653	613		1,266
Other provisions	1,041	–30		1,011
Deferred tax liability	3,004	21	–48	2,977
Total shareholders' equity and liabilities	37,615	164	–182	37,597

Note 31 Events after 31st December 2013

Statement of defence submitted in the dispute arising from the export of metallic residues between 1984 and 1985 As previously announced, suit was brought against Boliden in October 2013 for damages totalling just over SEK 90 million plus interest. The claim relates to the arsenic poisoning suffered by just over 700 victims in Arica, Chile – a town to which Boliden exported metallic residues from the Rönnskär smelter between 1984 and 1985 for processing by a Chilean company, Promel. Boliden has, in its statement of defence, of 20th January 2014, contested the claim and developed its grounds for so doing. For further information, please see the Group's website, www.boliden.com.

Proposed allocation of profi ts

The Board's proposed allocation of profi ts for 2013 and statement in accordance with the Swedish Companies Act, 18:4

Boliden has a dividend policy whereby approximately one third of the profi t after tax is to be distributed. Th e Board of Directors proposes that the Annual General Meeting approve payment of a dividend of SEK 1.75 (SEK 4) per share, or a total of SEK 479 million (SEK 1,094 m), corresponding to 37.0 per cent of the profi t after tax for 2013. Th e Parent Company's non-restricted shareholders' equity totals SEK 6,451 million and the Group's total shareholders' equity is SEK 23,075 million. Th e non-restricted shareholders' equity in the Parent Company and the Group will total SEK 5,972 million and SEK 22,596 million, respectively, after payment of the proposed dividend to the shareholders. Th e Board has taken the cyclic nature

of the industry and the risks associated with the operations into account in its dividend proposal.

Th e Annual Accounts have been prepared in accordance with generally accepted accounting principles in Sweden and the Consolidated Accounts have been prepared in accordance with EU-approved International Financial Reporting Standards, IFRS.

Th e Annual Accounts and the Consolidated Accounts give a true and fair view of the Parent Company's and the Group's fi nancial position and results of operations.

Th e Directors' Report for the Group and the Parent Company give a true and fair overview of the Group's and the Parent Company's operations, position and results and describes the material risks and uncertainties faced by the Parent Company and the companies that make up the Group.

Stockholm, 12th February 2014

Anders Ullberg Chairman

Marie Berglund Staff an Bohman Lennart Evrell Member of the Board Member of the Board President and CEO

Michael G:son Löw Ulla Litzén Leif Rönnbäck Member of the Board Member of the Board Member of the Board

Tom Erixon Roland Antonsson Marie Holmberg

Member of the Board Employee Representative Employee Representative

Hans-Göran Ölvebo Employee Representative

Our Audit Report was submitted on 12th February 2014

Ernst & Young AB

Lars Träff Authorised Public Accountant

Auditor's report

To the Annual General Meeting of the shareholders of Boliden AB (publ.), corporate identity number: 556051-4142

Report on the annual accounts and consolidated accounts

We have audited the annual accounts and consolidated accounts of Boliden AB (publ.) for 2013. Th e annual accounts and consolidated accounts of the company are included in the printed version of this document on pages 8–20, 22–53 and 66–98.

Responsibilities of the Board of Directors and the Managing Director for the annual accounts and consolidated accounts

Th e Board of Directors and the Managing Director are responsible for the preparation and fair presentation of the annual accounts in accordance with the Annual Accounts Act and of the consolidated accounts in accordance with International Financial Reporting Standards, as adopted by the EU, and the Annual Accounts Act, and for such internal control as the Board of Directors and the Managing Director determine is necessary to enable the preparation of the annual accounts and consolidated accounts that are free from material misstatement, whether due to fraud or error.

Auditor's responsibility

Our responsibility is to express an opinion on the annual accounts and consolidated accounts based on our audit. We conducted our audit in accordance with the International Standards on Auditing and generally accepted auditing standards in Sweden. Th ese standards require that we comply with professional ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the annual accounts and consolidated accounts are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the annual accounts and consolidated accounts. Th e procedures selected depend on the auditor's judgement, including the assessment of the risks of material misstatement of the annual accounts and consolidated accounts, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the company's preparation and fair presentation of the annual accounts and consolidated accounts in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the eff ectiveness of the company's internal control. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of accounting estimates made by the Board of Directors and the Managing Director, as well as evaluating the overall presentation of the annual accounts and consolidated accounts.

We believe that the audit evidence we have obtained is suffi cient and appropriate to provide a basis for our audit opinion.

Opinions

In our opinion, the annual accounts have been prepared in accordance with the Annual Accounts Act and present fairly, in all material respects, the fi nancial position of the parent company as of 31st December 2013

and of its fi nancial performance and its cash fl ows for the year then ended in accordance with the Annual Accounts Act. Th e consolidated accounts have been prepared in accordance with the Annual Accounts Act and present fairly, in all material respects, the fi nancial position of the Group as of 31st December 2013 and of their fi nancial performance and cash fl ows for the year then ended in accordance with International Financial Reporting Standards, as adopted by the EU, and the Annual Accounts Act. Th e statutory administration report is consistent with the other parts of the annual accounts and consolidated accounts.

We therefore recommend that the annual meeting of the shareholders adopt the income statement and balance sheet for the parent company and the group.

Report on other legal and regulatory requirements

In addition to our audit of the annual accounts and consolidated accounts, we have examined the proposed appropriations of the company's profi t or loss and the administration of the Board of Directors and the Managing Director of Boliden AB (publ.) for 2013.

Responsibilities of the Board of Directors and the Managing Director

Th e Board of Directors is responsible for the proposal for appropriations of the company's profi t or loss, and the Board of Directors and the Managing Director are responsible for administration under the Companies Act.

Auditor's responsibility

Our responsibility is to express an opinion with reasonable assurance on the proposed appropriations of the company's profi t or loss and on the administration, based on our audit. We conducted the audit in accordance with generally accepted auditing standards in Sweden.

As a basis for our opinion on the Board of Directors' proposed appropriations of the company's profi t or loss, we examined the Board of Directors' reasoned statement and a selection of supporting evidence in order to be able to assess whether the proposal is in accordance with the Companies Act.

As a basis for our opinion concerning discharge from liability, in addition to our audit of the annual accounts and consolidated accounts, we examined signifi cant decisions, actions taken and circumstances of the company in order to determine whether any member of the Board of Directors or the Managing Director is liable to the company. We also examined whether any member of the Board of Directors or the Managing Director has, in any other way, acted in contravention of the Companies Act, the Annual Accounts Act, or the Articles of Association.

We believe that the audit evidence we have obtained is suffi cient and appropriate to provide a basis for our opinions.

Opinions

We recommend to the annual meeting of the shareholders that the profi t be appropriated in accordance with the proposal in the statutory administration report and that the members of the Board of Directors and the Managing Director be discharged from liability for the fi nancial year.

Stockholm, 12th February 2014

Ernst & Young AB

Lars Träff Authorised Public Accountant

Boliden's corporate governance ensures that the company is run in line with the owners' best interests. Internally, responsibilities and authority are exercised within clearly defi ned frameworks. The Group's organisational and operational philosophy, the New Boliden Way, is also an important management instrument. Sustainability issues are a central component of the operations and reporting is conducted in accordance with the GRI B+ application level.

Contents
	Corporate Governance Report	102
	Board of Directors	108
	Group management	110
	Mineral reserves and Mineral resources	111
	Ten-year overview – the Group, including sustainability-related key ratios	115
	Ten-year overview – Boliden Mines	117
	Ten-year overview – Boliden Smelters	119
	GRI Index	121
	Defi nitions	123
	Industry concepts and explanations	124
	2014 Annual General Meeting and locations	125

Boliden's mines are among the most productive in the world. One of the main reasons why this is the case is Boliden's ongoing development of technology and methods that enable continuous improvements in the way resources are utilised.

One example of this is provided by the expansion of the Aitik copper mine, which came on line in August 2010. The expansion takes the form of a modern concentrator with new infrastructure and a logistics solution that further reinforces Aitik's market position as one of the world's most effi cient mines. Aitik's operations are run and monitored from ultra-modern control rooms and with the aid of smart phones via the mine's wireless network.

"There are 17 of us working here on each shift, one of whom works in the control room from where the entire process is steered. Production takes place 24/7 and we work in fi ve-week cycles during which we rotate between different duties. Shift work has its benefi ts, in my opinion, including the fact that you get longer uninterrupted periods of time off. I have a son who'll soon be 3 years old and my job allows me to combine family and work activities in a way that suits me. The best thing at work so far was being involved in the start-up of the new concentrator. That felt massive."

Per Grein, Operator, the Aitik mine

Corporate Governance Report

Effi cient corporate governance is a prerequisite for generating added value for our shareholders and maintaining confi dence among our stakeholders at large.

A group, essentially comprising Swedish institutional investors, have held their shareholding and been longterm owners in Boliden since we were relisted in Sweden almost 15 years ago, but there is no clear principal owner. This places special demands on the Board as the owners' ambitions must be "interpreted".

We work in an industry that is characterised by high volatility, i.e. rapid and vigorous fl uctuations – both up and down – in profi ts, and this is something that our shareholders must understand. This is why, in our Annual Report, we have placed great emphasis on presenting our operations and their sensitivity to changes. The volatility also makes signifi cant demands on the company's management and Board in terms of their ability to handle these rapid changes without suffering either from hubris when the trend is upwards or dejection when the trend is downwards.

One of the prerequisites for value-generating work by the Board is that the Board has a fi rm grasp on the operations and on events in the outside world. We achieve this by, among other things, monthly reports and a well-structured body of material for the Board. We also usually visit two of Boliden's operating facilities each year in order to learn about those operations in real depth and to meet with the local management and employees.

In addition, in order to ensure that we spend suffi cient time on the more forward-looking issues, we agree every year on a number of themes that we incorporate into our Board agenda. The Corporate Governance Report details the themes we have addressed during the past year. Some of them are recurring themes, e.g. CSR issues, which we address specifi cally at our October meeting, and leadership development, which is the focus of our December meeting.

The evaluation of the Board's work that we carried out in 2013 shows that the Board is functioning effi ciently. This evaluation forms the basis for the work of the Nomination Committee and for the Board, it is an important tool in our efforts to ensure continuous improvement in our work.

Anders Ullberg Chairman of the Board

Governance of the Boliden Group

Boliden is a Swedish limited company listed on the NASDAQ OMX Nordic Stockholm Stock Exchange (NASDAQ OMX). Th e Boliden Group has approximately 4,800 employees and runs mines and smelters in Sweden, Finland, Norway and Ireland. Boliden's sales offi ces in Sweden, Denmark, the UK and Germany handle sales and purchases of raw materials, metals and by-products. Boliden's corporate governance is based on the Swedish Annual Accounts Act, the Swedish Companies Act, the NASDAQ OMX Stockholm Stock Exchange's regulations for issuing parties, the Swedish Code of Corporate Governance, and other applicable legislation and regulations.

Over and above its compliance with various legislative and regulatory provisions, Boliden applies internal governance instruments, such as the Group's organisational and operational philosophy, the New Boliden Way, and Boliden's internal control tool, BICS, together with policies in a number of areas such as Boliden's Code of Conduct with which all employees must be familiar and in accordance with which they must conduct themselves. Th e Group's units also work in accordance with health & safety, environmental, energy, and quality management systems.

Some events in 2013

• Tom Erixon was elected as a new Member of the Board.
• Delisting from the Toronto Stock Exchange, TSX.
• Decision to conduct a Limited Assurance Engagement of Boliden's GRI Index, together with associated information in the Annual Report and GRI Report.
• Establishment of a Health & Safety Director at Group level in order to improve the accident frequency trend.

Shareholders

Boliden's shareholders exercise their right of decision at the Annual General Meeting, which is held during the fi rst half of the year, and at any Extraordinary General Meetings. Th ere were a total of 90,963 shareholders at the end of 2013 and the biggest single shareholders were Norges Bank Investment Management, Blackrock Inc, SEB fonder, SHB fonder and AMF Försäkring och fonder. Approximately 41 per cent were held by foreign owners. For further information on the shareholder structure within Boliden, see pages 8–9 of the Annual Report.

Annual General Meeting

Th e Annual General Meeting is the company's supreme decision-making body. Th e duties of the Annual General Meeting include the election of Members of the Board and the Chairman of the Board and the Nomination Committee, the adoption of the Income Statement and Balance Sheet, resolutions on the appropriation of profi ts and discharge from liability for the Members of the Board and the President of the company, the determination of fees payable to the Members of the Board and to the auditors and the principles governing conditions of employment and remuneration for the President and senior executives, and, where relevant, the amending of Articles of Association and the election of auditors.

Th e 2013 Annual General Meeting was held on 3rd May in Stockholm. 96,630,630 shares were represented at the Meeting by 781 shareholders, either in person or through their proxies. Th e shares represented comprised approximately 35 per cent of the total number of shares. Th e Meeting resolved, among other things, to re-elect Board Members Marie Berglund, Staff an Bohman, Lennart Evrell, Michael G:son Löw, Ulla Litzén, Leif Rönnbäck and Anders Ullberg, and to elect Tom Erixon as a new Member of the Board. Anders Ullberg was re-elected as the Chairman of the Board.

Th e Meeting further resolved:

• to pay a dividend of SEK 4 per share, in accordance with the proposal by the Board of Directors;
• that the following persons shall be appointed as members of the Nomination Committee: Jan Andersson (Swedbank Robur fonder), Th omas Ehlin (Nordea Fonder), Lars-Erik Forsgårdh, Anders Oscarsson (AMF) and Anders Ullberg (Chairman of the Board);
• that Directors' fees payable shall comprise payments of SEK 1,075,000 to the Chairman of the Board, and of SEK 430,000 to Members who are not Boliden employees, that the fees payable to the Chairman of the Audit Committee and to each of the two members of the Audit Committee shall be SEK 150,000 and SEK 75,000, respectively, and that the fees payable to each of the Remuneration Committee's two members shall be SEK 50,000;
• to re-elect Ernst & Young AB as the company's auditors for the period up to and including the next Annual General Meeting;
• that auditor's fees shall be payable in accordance with the approved invoices received;
• that remuneration payable to the members of the Group management shall comprise a fi xed salary, any variable remuneration, other benefi ts and pensions. Th e variable remuneration shall be maximised at 60 per cent of the fi xed salary for the President and maximised at 50 per cent of the fi xed salary for other senior executives and shall be based on results in relation to targets set.

Th e variable remuneration shall not comprise pensionable income. Th e Minutes of the 2013 Annual General Meeting have been published on Boliden's website.

Nomination Committee

Th e Annual General Meeting passes resolutions on the principles governing the appointment and duties of the Nomination Committee. Th e Nomination Committee shall, in accordance with the Instructions for the Nomination Committee, comprise a minimum of fi ve and a maximum of seven members. Five members shall be elected at the Annual General Meeting, of whom three shall represent the biggest shareholders and one the smaller shareholders, and one of whom shall be the Chairman of the Board. Th e Nomination Committee appoints its own Chairman and works in the best interests of all shareholders. Th e Nomination Committee may, in order better to refl ect the shareholder structure in the event of changes in ownership, off er places on the Committee to other larger shareholders.

Composition of the Nomination Committee

Since Th omas Ehlin announced, after the Annual General Meeting, that he intended to resign his seat on the Committee, the Nomination Committee has accordingly exercised its mandate to invite two new members on to the Committee in order better to refl ect Boliden's shareholder structure, namely Hans Ek (SEB fonder) and Frank Larsson (SHB fonder). In November, the Chairman of the Board convened the members of the Committee, at which time Jan Andersson (Swedbank Robur fonder) was appointed Chairman of the Nomination Committee.

Duties of the Nomination Committee

Th e Nomination Committee is tasked with drafting proposals for resolution by Boliden's Annual General Meeting. Th e proposals relate to, among other things, the number and the election of Members of the Board, the Chairman of the Board, fees payable to the Board and its committees, election of and fees payable to the company's auditors and

Boliden's Corporate Governance Structure

to the process and the criteria that shall govern the appointment of the members of the Nomination Committee ahead of the next Annual General Meeting.

Th e Nomination Committee has met a total of four times and has also had telephone contact and held a meeting with two Members of the Board. Information on the way in which shareholders can submit proposals to the Nomination Committee have been published on Boliden's website.

Th e focus of the Nomination Committee's work is on ensuring that the company's Board of Directors comprises Members who, collectively, possess the knowledge and experience that corresponds to the requirements made of the company's most senior governing body by the shareholders. Th e Chairman of the Board accordingly presents the Nomination Committee with the evaluation conducted of the work of the Board and the individual Members during the past year as part of the process of drafting proposals for Board Members. Th e Company President also presents Boliden's operations and future orientation. Th e Nomination Committee is also aff orded the opportunity to meet the Members of the Board. Th e Nomination Committee also drafts proposals for the election of auditors.

The Board of Directors

Boliden's Board of Directors shall, under the provisions of the Articles of Association, comprise a minimum of three and a maximum of ten Members, without Deputy Members, elected by the Annual General Meeting. Th e company's employees have a statutory entitlement to appoint three Members and three Deputy Members to the Board.

The composition of the Board

Th e Board of Directors has comprised eight Members elected by the Annual General Meeting and three Members appointed by the trade union organisations since the 2013 Annual General Meeting. Th e Board Meetings are attended both by the ordinary Members and by the union's three Deputy Members. Th e Senior Vice President of Legal Aff airs is the Board's Secretary.

Boliden's Chief Financial Offi cer (CFO) also usually attends the Meetings on behalf of the Group management. Other members of the Group management and other executives also attend and present reports on individual issues as required.

Th e Board Members elected by the Annual General Meeting are all to be regarded as independent in relation to major shareholders and all, with the exception of the President, are to be regarded as independent in relation to the company and the Group management.

Th e Members of the Board are presented on pages 108–109 and on Boliden's website. For more detailed information on attendance at Meetings and independence, among other things, see the table below.

The responsibilities of the Board of Directors and the Chairman of the Board

Th e Board of Directors is appointed by Boliden's owners to bear ultimate responsibility for the company's organisation and the management of the company's aff airs. Th e Board adopts a Formal Work Plan every year at the Board Meeting following election, held after the Annual General Meeting. Th e Formal Work Plan regulates the work and responsibilities of the Board in greater detail, together with the special duties with which the Chairman of the Board is tasked. Th e Chairman of the Board guides the work of the Board and monitors Boliden's operations through an ongoing dialogue with the President. Th e Board receives information on Boliden's commercial and fi nancial position, together with details of Boliden's compliance with sustainability goals, through monthly reports and at Board Meetings. Prior to every Board Meeting, the Chairman and the President review the issues to be discussed at the Meeting. Th e source data for the Board's discussion of the issues is sent to the Members approximately one week before each Board Meeting. Th e division of labour between the Board of Directors and the President is clarifi ed in the written "Instructions to the President" adopted by the Board at the Board Meeting following election.

In 2013, the Board has, as in previous years, established an Audit Committee and a Remuneration Committee.

Board of Directors, as of the 2013 Annual General Meeting	Elected	Atten dance, 2013	Committee work	Attendance, committee meetings 2013	Director's fee, SEK	Fee, Audit Committee, SEK	Fee, Remu neration Committee, SEK	Independent of the company and the company managem.	Independent of major shareholders
Anders Ullberg, Chairman	2005	6 of 6	Audit Comm. 5 of 5		1,075,000	75,000	50,000	Yes	Yes
			Remunera tion Comm.	2 of 2
Marie Berglund	2003	6 of 6			430,000			Yes	Yes
Staffan Bohman	2007	6 of 6	Remunera tion Comm.	2 of 2	430,000		50,000	Yes	Yes
Tom Erixon	2013	4 of 4			430,000			Yes	Yes
Lennart Evrell, President	2008	6 of 6						No	Yes
Ulla Litzén	2005	6 of 6	Audit Comm. 5 of 5		430,000	150,000		Yes	Yes
Michael G:son Löw	2010	6 of 6			430,000			Yes	Yes
Leif Rönnbäck	2005	6 of 6	Audit Comm. 5 of 5		430,000	75,000		Yes	Yes
Roland Antonsson (ER)	2009	6 of 6
Marie Holmberg (ER)	2008	6 of 6
Hans-Göran Ölvebo (ER)	2001	3 of 6
Ola Holmström (ER) Deputy 2012		6 of 6
Ditte Kilsgaard Möller (ER) Deputy	2012	5 of 6
Einar Mikkelsen (ER) Deputy 2012		3 of 6

Board of Directors, 2013

The Board of Directors' work in 2013

Th e Board of Directors held six Meetings in 2013, including the Meeting following election. A number of the Board Meetings are regularly held at the company's operating units in order to give the Members an increased insight into the operations. In 2013, the Board visited the ongoing expansion of the Garpenberg mine and concentrator, and the Harjavalta smelter.

At the beginning of every year, the Board sets a number of themes that it particularly wishes to address during the year. Some of the issues addressed during the year, in addition to the review of operational and safety issues conducted at every Board Meeting, were:

• February Year-end Report and Annual Report, Audit Report, matters to be discussed at the Annual General Meeting, and replacement- and capacity increase-related investments. Boliden's auditors presented reports detailing their observations from the audit of the company at the Board Meeting in February. Th e Board had, at this time, the opportunity to meet the auditors without the presence of the Group management.
• May Q1 Interim Report, work environment and safety issues, market trends with the emphasis on China, cost-cutting programmes within purchasing and the Group as a whole, etc., licence reviews, reviews of recent years' structural transactions in the mining industry, and Boliden's position.
• July Q2 Interim Report, Audit Report, review of action programme to combat accidents at work, strategic orientation, the visit to Garpenberg and a review of the ongoing expansion there, a review of the ongoing investment in silver extraction from concentrate at Kokkola, a pilot study for increasing Aitik's output from 36 to 45 million tonnes of ore/year, a concept study for Laver, electricity price hedging, and a general review of acquisition opportunities.
• October Q3 Interim Report, the issue of potential investments in energy production, the market and trends in electronic materials, the New Boliden Way follow-up work, Corporate Responsibility (CR), new sustainability goals, and a review of major disputes.
• December Strategy, budget and business plan, leadership development, trading companies and purchases, dam safety issues, developments at Tara, review of certain risks and risk factors, and ongoing replacement and bottleneck elimination investments.

Boliden's vision is of operations that are accident-free, but after a number of years with a positive trend in this respect, the accident frequency deteriorated in 2013. Th e Board takes this negative trend very seriously and has tasked the management with implementing additional measures to turn the trend around. Th ese measures include the B-Safe project that has now been launched and which entails one-on-one discussions and follow-up discussions with all employees in order to raise awareness of the importance of safety and to build a safety culture. Another example is a closer partnership and dialogue with the contractors who carry out work within Boliden's operations. Th is work also forms part of the ongoing work within the framework of Boliden's organisational and operational philosophy, the New Boliden Way.

Th e Board has also discussed Boliden's position within the industry, the global trends in the metals market, and demand for Boliden's products on an ongoing basis throughout the year, together with Boliden's readiness for harsher market conditions and measures to counter cost increases.

Th e Board paid particular attention to ethical and moral considerations in response, in part, to the suit brought against the company in the autumn with reference to Boliden's deliveries of metallic smelter residues to Chile in the 1980s (see Note 29 on page 96 for further details), and to the attention to which the mining industry in general has been subjected in the mass media during the year.

Licensing processes that are effi cient and fi t for purpose is another area of considerable importance to Boliden's operations, and these issues too have been discussed on several occasions by the Board.

Evaluation of the Board's work

Th e Chairman ensures that the Board and its work are evaluated annually and that the results of the evaluation are conveyed to the Nomination Committee. Th e evaluation is carried out by the Board itself under the guidance of the Chairman or, occasionally, with the help of an independent consultant. Th e 2013 evaluation was a self-assessment during which the Members answered a number of questions in writing on a range of diff erent subjects and held one-on-one discussions with the Chairman of the Board, followed by a joint discussion, during which the Board discussed the conclusions drawn from the evaluation.

Audit Committee

Th e Audit Committee meets before the publication of every fi nancial report, and as necessary. Th e Committee prepares a number of issues for consideration by the Board and thereby supports the Board in its endeavours to fulfi l its responsibilities within the areas of auditing and internal control and with assuring the quality of Boliden's fi nancial reporting. Th is requires, among other things, that the company has a satisfactory organisation and appropriate processes to this end. Boliden has an internal control function whose work involves mapping risk areas and following up on work in identifi ed areas, among other things. Th e Committee also works with the procurement of services from the company's auditors over and above the actual auditing services and, when so tasked by the Nomination Committee, with the procurement of auditing services.

Th e Audit Committee works on the basis of a set of "Instructions for the Audit Committee" adopted every year by the Board of Directors and reports back to the Board on the results of its work. Special attention was paid in 2013 to industry-related accounting issues and changes to IFRS and following up on internal controls. Th e decision was also taken during the year to allow Boliden's GRI Index, together with the associated information in the Annual Report and the GRI Report, to undergo a Limited Assurance Engagement, which was carried out by Boliden's auditors, Ernst & Young AB. Th e Audit Committee comprises Ulla Litzén (Chairwoman), Leif Rönnbäck and Anders Ullberg. Th e Committee members have specialist competence, experience of and interest in fi nancial and accounting issues – see Directorships and previous positions, pages 108–109. Th e Committee's meetings are also attended by Boliden's CFO and the Director of Internal Controls and Risk Management.

Th e Committee met fi ve times in 2013.

Remuneration Committee

Th e Remuneration Committee submits proposals for resolution by the Board regarding salary and other terms of employment for the President, and follows up on and evaluates programmes for variable remuneration for the management. Th e Committee also approves proposals regarding salaries and other terms of employment for the Group management, as proposed by the President. Th e Remuneration Committee is, furthermore, tasked with submitting proposals regarding remuneration principles for the President and Group management – proposals which are then submitted by the Board to the Annual General Meeting for resolution. Th e application of the guidelines and relevant remuneration structures and levels within the company is also followed up by the Committee and the results of this evaluation are published on the company's website.

Th e Remuneration Committee works on the basis of a set of "Instructions for the Remuneration Committee" adopted every year by the Board of Directors and reports back to the Board on the results of its work. Th e Committee has held two meetings during the year and had telephone contact on a number of occasions. Th e Remuneration Committee comprises Anders Ullberg (Chairman), and Staff an Bohman. See Note 3 on pages 80–81 for an account of the remuneration paid to the Group management.

The President and Group management

Th e President has ultimate responsibility for Boliden's strategic orientation and for ensuring the implementation and monitoring of the Board of Directors' other decisions, and for ensuring that risk management, steering, systems, organisation and processes are all of a satisfactory standard. Th e President is supported in his work by the Group's management group which, in addition to the President, comprises the SVPs for Boliden's two Business Areas, Mines and Smelters, the CFO, and the SVP Corporate Responsibility. Th e Group management meets regularly once a month to follow up on operations and to discuss Groupwide issues, and to draw up proposals for strategic plans, business plans, and budgets that the President submits to the Board of Directors for their consideration. Th e areas addressed by the Board have largely refl ected the work of the Group management during the year. Th e Group management also holds two meetings every year, lasting at least two full days, in order to focus on strategy. Th e Group management, together with the management of the respective Business Areas, also meet six times a year to review Business Area-specifi c issues including a review of budgets and business transactions. For large scale projects, such as the Garpenberg expansion, relevant parts of the Group management form special steering groups, together with project managers and other stakeholders, and meet regularly. Th e Group management also meets with the company's employee representative Board Members and their deputies ahead of every Board Meeting, at which time the Board Meeting agenda is discussed.

Th e company's 150 or so senior managers and specialists meet at management meetings every year for discussions intended to build consensus and achieve widespread support on important issues.

See page 110 for a presentation of the Group management team.

Business management

Management by the Board goes through a chain of command from the President and the Group management to the operating units. Boliden has an organisation in which responsibilities and authority are delegated within clear frameworks. Th ese frameworks are defi ned by an annual budget which is broken down by unit, a strategic plan, and Boliden's steering documents. Th e steering documents, which are available on the intranet and which comprise the internal framework required for eff ective management, include the Financial Policy, the Code of Conduct, the Anti-Corruption Policy, the Communications Policy, the Environmental Policy, and the Health & Safety Policy.

Sustainability governance in Boliden

Sustainability issues are an integral part of Boliden's operations and the work is conducted from the starting point of the most operationally critical issues. Sustainability issues are discussed at every management group and Board meeting, as is the case at the local management group meetings. Th e Board also dedicates one meeting every year to current Corporate Responsibility (CR) issues. One member of the Group management works exclusively, furthermore, with CR issues. Th e day-to-day responsibility is decentralised to the respective units. Central sustainability, environmental, energy and HR functions follow up on the units' work and are responsible for creating a structure and orientation for the work. Networks have been established within the respective functions in order to promote knowledge exchange and development.

Th e sustainability issues identifi ed by Boliden as being of the greatest signifi cance and most highly prioritised are closely linked to Boliden's operations, strategy and vision. Factors that form the basis for the prioritisation include Boliden's own operations and their impact on people and the environment, the way in which work on these issues can support the operations, expectations of Boliden from internal and external stakeholders, risks and opportunities, external factors, and applicable regulations. Th e challenges that will be prioritised change over time and are, therefore, regularly reviewed – usually once every year. It is the responsibility of the various controlling parties within the Group to set local goals with regard to the overall issues. Boliden has set new goals in the sustainability sphere that will apply until 2018, inclusive, with regard to emissions and discharges to air and water, and carbon dioxide emissions – see page 64 of the Annual Report.

Action programmes have been drawn up with the aim of reversing the worrying accident frequency trend that both the Board of Directors and the Group management take extremely seriously. Th ese measures include the appointment of a Health & Safety Offi cer at Group level, tasked with coordinating and further improving the company's health & safety work.

Matters of business ethics and anti-corruption are constantly topical and an area with which the company actively works. Boliden has continued to focus on anti-corruption issues in 2013 and has both provided training in these matters for the company's almost 150 senior managers and specialists, and online courses aimed at all clerical and administrative personnel. Boliden has previously established a whistle blower function that can be used to report suspected cases of impropriety.

Boliden decided, during the year, to allow the company's GRI Index, together with the associated information in the Annual Report and the GRI Report, to undergo a Limited Assurance Engagement. Th e Limited Assurance Engagement is designed to underline the importance of the sustainability work to Boliden and to further reinforce the market's confi dence in the work conducted by the company in this respect.

Auditors

Th e auditor reports to the shareholders at the Annual General Meeting. During the year, the auditor has been in contact with the Group management in conjunction with audits or issues arising, and with the Board of Directors in conjunction with the submission of feedback reports and with assistance in the work of the Audit Committee.

Th e accounting fi rm of Ernst & Young AB was elected at the 2013 Annual General Meeting to serve as the company's auditors until the conclusion of the 2014 Annual General Meeting. Authorised Public Accountant, Lars Träff , is the senior auditor. Lars Träff 's audit engagements, in addition to Boliden, include Scania, Billerud/Korsnäs, ÅF and Intrum Justitia. Th e Audit Committee also decided, during the year, that Lars Träff , together with Håkan Ulrichs, a partner at

Control activity	Responsible	Follow-up work
Compliance with Boliden's accounting manual	Group accounting/Controller department	Group management
Control of consolidated results	Group accounting/Controller department	Group management
Analysis and follow-up work	Business Areas/Controller department	Group management
Budget and forecasts	Business Areas/Controller department	Group management
Correct fi nancial reporting controls	Operating units	Group accounting/internal control
Tax control	Operating units	Group Tax Director

EY Climate Change Sustainability Services, would review and sign RevR 6 "Certifi cation of the Sustainability Report".

Remuneration is paid to the company's auditors in accordance with invoices received as agreed for the period up to the end of the 2014 Annual General Meeting. See Note 4 on page 82 for information on remuneration disbursed in 2013.

Internal control report by the Board of Directors

Th e purpose of internal control with regard to fi nancing reporting is to provide reasonable assurance with regard to the reliability of the external fi nancial reporting and to ensure that the reports are produced in accordance with generally accepted accounting principles, applicable legislation and statutes, and with other requirements imposed on listed companies.

Th e Board of Directors has overall responsibility for ensuring that an effi cient internal control system exists within the Boliden Group. Th e President is responsible for the existence of a process and organisation that ensure internal control and the quality of the internal and external fi nancial reporting.

Internal control function

Boliden has an internal control function responsible for implementing processes and frameworks that secure internal control and ensure the quality of the fi nancial reporting.

Th e internal control function reports to the CFO and presents reports on issues relating to internal control at the Audit Committee's meetings.

Control environment

Th e control environment within Boliden is characterised by the fact that the Group has relatively few but large operating units that have carried out their operations for many years, using well-established processes and control activities.

A structure of steering documents in the form of binding policies and guidelines for the organisation's delegated responsibilities has been established to ensure a collective attitude and methodology within the Group. Th e starting point is COSO, together with associated steering documents which include the Code of Conduct, decision-making and authorisation instructions, and a fi nancial manual covering fi nancial policy, accounting and reporting instructions. Local management systems with more detailed instructions and descriptions of important processes have also been set up.

Work continued at both Business Area and Group level in 2013 on mapping fi nancial transaction fl ows, identifying risks, and documenting control activities in a uniform and standardised way within a Group-wide internal control framework known as the Boliden Internal Control System (BICS).

Boliden's internal control organisation

Risk analysis

Th e operating units conduct ongoing risk analyses with regard to fi nancial reporting. Th e risks inherent in the various accounting and reporting processes shall be identifi ed, analysed and documented in BICS.

Control activities

Various types of control activities are carried out within the Group and within every diff erent aspect of the accounting and reporting process on an ongoing basis (see example below). Th e control activities are carried out in order to manage known risks and to detect and rectify any errors and discrepancies in the fi nancial reporting.

Documentation of signifi cant control activities within the accounting and reporting process continued in BICS in 2013. For every risk identifi ed, the controls that manage the risk – either preventatively or for purposes of detection, or both – are documented.

Information and communication

Information on policies, guidelines and manuals is available on Boliden's intranet. Information on updates and changes to reporting and accounting principles is issued via email and at the regular treasury and controller meetings.

External information is provided and communication conducted in accordance with the Group's Communications Policy. All information must be communicated in a discerning, open and transparent manner.

Group-wide steering documents are updated and communicated on a continuous basis.

Follow-ups

Work on follow-ups of, improvements to and development of systems, processes and controls within the Group is ongoing. Annual testing of documented controls within the framework of BICS has been conducted since 2009. Areas where scope for improvement is identifi ed in conjunction with audits are documented, analysed and actioned.

Auditor's Report on the Corporate Governance Statement

To the Annual General Meeting of the shareholders of Boliden AB (publ.), corporate identity no: 556051-4142

Th e Board of Directors is responsible for the Corporate Governance Report for 2013 on pages 102–107 and for ensuring that it has been prepared in accordance with the provisions of the Swedish Annual Accounts Act.

We have read the Corporate Governance Report and, based on that reading and our knowledge of the company and the Group, believe that we have suffi cient basis for our conclusions. Th is means that our statutory examination of the Corporate Governance Report has a diff erent focus and is substantially less in scope than that of an audit conducted in accordance with International Standards on Auditing and generally accepted auditing standards in Sweden.

In our opinion, the Corporate Governance Report has been prepared in accordance with and its statutory content complies with the provisions of the Swedish Annual Accounts Act and is consistent with the consolidated accounts.

Stockholm, 12 February 2014

Ernst & Young AB

Lars Träff Authorised Public Accountant

Board of Directors

Au

Anders Ullberg

Chairman of the Board since 2005 M.Sc. Economics.

Born: 1946

Directorships: Chairman of the Boards of BE Group, Diamorph, Eneqvist Consulting, Natur&Kultur and Studsvik. Member of the Boards of Atlas Copco, Beijer Alma, Valedo Partners and Åkers. Chairman of the Swedish Financial Reporting Board.

Previous positions: CFO of Svenska Varv. CFO, Vice President and President and CEO of SSAB. Shareholding1): 45,000

Mb Marie Berglund

Member of the Board since 2003. M. Sc. Biology.

Vice President Raw Materials and Environment, NCC Roads. Born: 1958

Directorships: Member of the Boards of Baltic Sea 2020, Eurocon Consulting, the Water Delegation of the Gulf of Bothnia's Water District, and the Advisory Council of the County Administrative Board of Västernorrland.

Previous positions: Group Ecologist in the former MoDo Group, Environmental Manager within Botniabanan, President of Bio-Endev (consultant). Shareholding1): 1,000

Sb

Staffan Bohman

Member of the Board since 2007. M.Sc. Economics.

Born: 1949

Directorships: Chairman of the Boards of Höganäs, Cibes Lift-Group and Ersta diakoni. Deputy Chairman of the Board of Rezidor Hotel Group and of SNS – Centre for Business and Policy Studies Board of Trustees. Member of the Boards of Atlas Copco, Inter-IKEA Holding, Ratos, Rolling Optics and the Swedish Corporate Governance Board.

Previous positions: CFO at Alfa Laval, CEO of DeLaval, Gränges and Sapa. Shareholding1): 40,000

Te

Tom Erixon Member of the Board since 2013. LL.B. MBA. President and CEO of Ovako. Born: 1960

Directorships: Member of the Boards of Jernkontoret, Stål & Metall and Chinsay.

Previous positions: Managing partner, Boston Consulting Group, and a variety of senior positions within Sandvik.

Shareholding1): 2,400

Le

Lennart Evrell

Member of the Board since 2008. M.Sc. Engineering, Economics. President and CEO of Boliden. Born: 1954

Directorships: Chairman of the Board of SveMin. Member of the Board of the Confederation of Swedish Enterprise.

Previous positions:

President and CEO of Sapa and Munters, a variety of senior positions within ASEA, Atlas Copco and Sphinx Gustavsberg.

Shareholding1): 39,100

Mg Michael G:son Löw

Member of the Board since 2010. M.Sc. Economics.

Born: 1951

Directorships: Member of the Boards of Concordia Maritime, Norstel, Preem and the Confederation of Swedish Enterprise. Deputy Chairman of IKEM, the Swedish Chamber of Commerce for Russia & CIS, and the Swedish Association for Energy Economics. Member of the Chalmers Advisory Committee and the Royal Swedish Academy of Engineering Sciences.

Previous positions: A variety of senior positions within Conoco in Copenhagen, Bangkok, London and Prague. President and CEO of Preem (Stockholm). Shareholding1): 100

Ul

Ulla Litzén Member of the Board since 2005. M.Sc. Economics, MBA.

Born: 1956 Directorships: Member of

the Boards of Alfa Laval, Atlas Copco, Husqvarna, NCC and SKF.

Previous positions:

President of W Capital Management AB, wholly owned by the Wallenberg Foundations, and Managing Director and member of the Management Group of Investor AB. Responsible for Core Holdings and CEO of Investor Scandinavia. Shareholding1): 8,400

Lr

Leif Rönnbäck Member of the Board since 2005.

B.Sc. Natural Sciences, Geology. Born: 1945

Previous positions: HR Director, Production Director, and Business Develop-

ment Director within LKAB.

Shareholding1): 1,000

Ra Roland Antonsson

Employee Representative. Member of the Board since 2012. Deputy Member of the Board: 2009–2012.

Representative of IF Metall (the Swedish Metalworkers' Union). Chairman of the IF Metall Rönnskär branch. Born: 1957

Shareholding1): 0

Mh

Marie Holmberg

Employee Representative. Member of the Board since 2008. Deputy Member of the Board: 2005–2008.

Representative of the Swedish Association of Graduate Engineers. Born: 1963 Shareholding1): 248

Hg

Hans-Göran Ölvebo Employee Representative. Member of the Board since 2009. Member of the Board: 2001-2005. Deputy Member of the Board: 2005–2009.

Representative of IF Metall (the Swedish Metalworkers' Union). Production worker, Aitik.

Born: 1955 Shareholding1): 50

Oh

Ola Holmström

Employee Representative. Deputy Member of the Board since 2012.

Representative of IF Metall (the Swedish Metalworkers' Union). Chairman of the IF Metall Kristineberg branch. Deputy Chairman of Boliden's Group Council and Boliden Works Council. Born: 1965

Shareholding1): 170

Dk Ditte Kilsgaard

Möller Employee Representative. Deputy Member of the Board since 2012. Geologist working with fi eld exploration. Representative of the Swedish Association of Graduate Engineers. Chairman of the local trade union at Boliden Mines. Born: 1979 Shareholding1): 0

Em

Einar Mikkelsen

Employee Representative. Deputy Member of the Board since 2012.

Representative of the Industry Energy trade union in Norway and the Unionen salaried employees' trade union in Sweden. Member of the Board of Boliden Odda. Born: 1964

Shareholding1): 0

1) Own holdings and/or those of related legal or natural persons, on 31st December 2013.

Group management

Le

Lennart Evrell

M.Sc. Engineering, Economics. President & CEO of Boliden.

Born: 1954 Employed: 2007

Directorships: Chairman of the Board of SveMin. Member of the Board of the Confederation of Swedish Enterprise.

Previous positions: President and CEO of Sapa and Munters, a variety of senior positions within ASEA, Atlas Copco and Sphinx Gustavsberg.

Shareholding1): 39,100

Kk

Kerstin Konradsson M.Sc. Engineering. Senior Vice President – Business Area Smelters. Born:1967

Employed: 2012

Directorships: Member of the Board of Swerea Mefos. Previous positions:

Business Area President and CEO within the Åkers

Group and a variety of senior positions within SSAB. Shareholding1): 80

Jm

Jan Moström B.Sc. Engineering. Senior Vice President – Business Area Mines. Born:1959 Employed: 1979 –1998, 2000. Directorships: Member of

the Board of SveMin. Member of the SGU (Geological Survey of Sweden) Advisory Council and Mining Industry Council.

Previous positions: A variety of senior positions within Boliden. Administrative Director of Skellefteå Municipality. Shareholding1): 18,500

Ms

Mikael Staffas M.Sc. Engineering, MBA. CFO. Born:1965 Employed: 2011 Directorships: Member of the Board of SJ. Previous positions: CFO of Södra Skogsägarna, Partner McKinsey&Co. Shareholding1): 5,300

Hö

Henrik Östberg M.A. in languages and pedagogics. Senior Vice President – Corporate Responsibility. Born:1960 Employed: 2008 Directorships: – Previous positions: HR & Sustainability Director, Sapa Group, Management Consultant at McKinsey&Co and Booz Allen Hamilton. Shareholding1): 3,690

1) Own holdings and/or those of related legal or natural persons, on 31st December 2013.

Mineral reserves and resources

Mineral reserves and mineral resources are the basis on which a mining company's operations are built and require successful exploration results. Mineral resources and reserves are aff ected not only by exploration, but also by important factors such as mining costs and assumed metal prices. Exploration work is carried out both in the vicinity of existing mines and in new areas.

Boliden's investments in exploration over the last 10 years have resulted in substantial increases in both mineral resources and reserves, particularly at Garpenberg and Aitik, which were followed by substantial investments in boosting production and extending production plans. Th e Boliden Area has also seen positive development in recent years, as has Tara, which has only seen a slight reduction in mineral reserves over the past 10 years despite having mined over 20 million tonnes of ore during that period.

Mineral resources and mineral reserves 2013

Boliden, in common with other mining companies, produces an annual summary of their mineral resources and mineral reserves. Boliden's calculations and compilations are carried out in accordance with the recommendations of the Swedish industry organisation for mining and metal companies, SveMin.

Aitik An extensive assessment of the potential for increased production at Aitik (Aitik 45) was carried out during the year and the results are now being evaluated and may be incorporated into the mine's plans in 2014. Both mineral reserves and resources have fallen slightly.

The Boliden Area A number of studies of the potential for upgrading mineral resources to reserves were carried out in the Boliden Area during the year, and resulted in the Area's mineral reserve increasing by 3.2 Mtonnes (25 per cent). Th is upgrade, coupled with

Proven/Probable mineral reserve Measured/Indicated mineral resource Inferred mineral resource Production x 10 Aitik 0 500,000 1,000,000 1,500,000 2,000,000 2,500,000 Ktonnes 04 05 06 07 08 09 10 11 1312

Mineral reserves have decreased and mineral resources have increased slightly during the year.

The Boliden Area

3.2 Mtonnes upgraded from mineral resources to mineral reserves.

more stringent economic requirements for mineral resources, has resulted in a reduction in mineral resources of 4.7 Mtonnes.

Garpenberg Mineral reserves at Garpenberg increased by almost 11 Mtonnes as a result of the upgrading of the Kvarnberget mineral resource. New mineral resources were identifi ed during drilling at Kvarnberget and the mineral resources' grades were shown to have been overestimated. Exploration has, at the same time, yielded an extra 6 Mtonnes of mineral resources, but the upgrading of 11 Mtonnes to mineral reserves means a reduction in mineral resources.

Tara Exploration in and around the mine enabled mineral resources to be added and existing resources to be upgraded to mineral reserves. Th e addition to the reserve was, however, unable to compensate in full for the 2.5 Mtonnes mined during the year, and the reserve shrank by 0.9 Mtonnes. Mineral resources increased by 1.9 Mtonnes and the lifespan of the production plan has been extended.

About the classifi cation

Mineral resources and mineral reserves are calculated separately and broken down into diff erent categories. Th e mineral reserves are not subsidiary amounts of the mineral resources, and when a mineral resource is upgraded to a mineral reserve, the quantity is eliminated from the mineral resource.

A mineral resource is a concentration of minerals in the bedrock that is present in a form, quality and quantity that means there is a reasonable possibility of it becoming commercially extractable. Mineral reserves are calculated on those parts of a measured or indicated mineral resource that can be mined and processed in accordance with the company's profi tability requirements, taking into account factors such as waste rock dilution, ore losses, pillar off set and process recovery.

Mineral resources at Kvarnberget were upgraded to mineral reserves thereby by increasing mineral reserves by 11 Mtonnes.

Mineral resources fell slightly, as did mineral reserves, despite the addition from mineral resources. This addition was, however, unable to compensate in full for the quantities extracted.

Inferred mineral resource

An inferred mineral resource is a mineral resource that has been identifi ed through drilling, sampling and geoscientifi c interpretations, but where the information is so sparse that the geology and grade continuity of the deposit cannot be confi rmed and where the basic technical data consists of reasonable assumptions. Th is means that continued investigations will not, with any degree of certainty, enable the entire inferred mineral resource, or parts of it, to be moved to a higher category.

Indicated mineral resource

An indicated mineral resource is a mineral resource that has been identifi ed through drilling and sampling with an information density that is too sparse to confi rm continuity but which, together with geoscientifi c interpretations, nevertheless provides a reasonable idea of the deposit's geology and grade continuity. Collectively, the information and interpretations are suffi cient to enable the technical and economic calculations to be performed to assess the project's profi tability.

Measured mineral resource

A measured mineral resource is a mineral resource where the information obtained from drilling and sampling confi rms the deposit's geology and/or grade continuity. Th e basic technical data is such that mining plans can be drawn up.

Probable mineral reserve

A probable mineral reserve is calculated from those parts of an indicated or, under certain circumstances, measured mineral resource where mining-engineering and profi tability studies show that it is technically and economically feasible to mine and process the deposit in line with the company's profi tability requirements.

Proven mineral reserve

A proven mineral reserve is calculated from those parts of a measured mineral resource where mining-engineering and profi tability studies show that it is technically and economically feasible to mine and process the deposit in line with the company's profi tability requirements.

Basis for the calculations

Boliden holds the required environmental permits and exploitation concessions for all of the mines currently in operation. Th e mineral resources are protected by exploitation concessions or exploration permits. Th e calculations are based on the following underlying factors:

Cut-off grades

Th e lowest grade to be mined is calculated separately for each deposit on the basis of its characteristics, that is to say the direct costs for mining, ore haulage, milling, concentrate haulage, and administration.

Metal prices

Mineral resources and mineral reserves are the basis for the company's long-term planning and will be mined for many years to come. Planning prices, which are an expression of the anticipated average prices for metals and currencies over the forthcoming business cycle are, therefore, primarily utilised in the calculations. Shorter term prices are, however, used in some exceptional cases. Boliden's current planning prices are shown in the table below:

Planning prices	Prices/Exchange rates, 2013	Change 13 vs.12
Copper	6,600 USD/tonne	+300
Zinc	2,300 USD/tonne	–
Lead	2,300 USD/tonne	–
Gold	1,200 USD/tr. oz.	–
Silver	20 USD/tr. oz.	–
Molybdenum	15 USD/lb.	–
Tellurium	150 USD/kg	–130
USD/SEK	6.70	–0.30
EUR/SEK	8.51	–0.39

Density

A formula based on head grades is utilised for large polymetallic ores, which make up the majority of Boliden's mineral resources and mineral reserves. Th e formula is verifi ed using density measurements. In other cases, measurements are carried out for the diff erent ores or rock types that aff ect the density.

Waste rock dilution

Mining usually incurs some waste rock dilution that varies, depending on the mining method used, the ore's geometry, and other geological factors. Boliden systematically monitors the waste rock dilution of the ore extracted and the experience gained thereby enables waste rock dilution to be included in all mineral reserve calculations.

Ore losses

Some ore, known as pillar off set, may have to be left unextracted, depending on the mining method used, the ore's geometry and other technical factors. Th e mineral reserve calculations take these factors into account, based on the mining method and the information available when the calculations were made.

Minimum ore width

Th e minimum horizontal ore width is determined by the mining method and equipment. Ore zones that are narrower than the minimum ore width are recalculated using the average for the full width.

Regulations, codes and recommendations

Boliden's mineral reserves and mineral resources have been calculated and compiled in accordance with recommendations by the Swedish industry organisation for mining and metal companies, SveMin, known as the FRB standard. Th is is an independent set of regulations but based on "Th e International Template for the public reporting of exploration results, mineral resources and mineral reserves, July 2006", produced by the Committee for Mineral Reserves International Reporting Standards (CRIRSCO) in a bid to achieve a harmonised international practice. Th e FRB standard is, therefore, consistent with international regulations such as the Australasian Institute of Mining and Metallurgy's JORC code and the "CIM Standards on Mineral Resources and Mineral Reserves, Defi nitions and Guidelines", which constitute that part of the Ontario Securities Commission (OSC) rules and regulations, National Instrument 43–101, that regulate how mineral reserves and mineral resources should be reported.

Th e mineral resources and mineral reserves have been compiled under the supervision of Gunnar Agmalm, who is registered as a "Qualifi ed Person" by SveMin. Gunnar Agmalm is a member of AUSIMM and has more than 25 years' experience in the mining and minerals industry.

February 2014

Gunnar Agmalm Qualifi ed Person SveMin

Exploration costs and number of metres drilled

The year saw a continued high level of exploration activities with SEK 298 million invested and 158,957 metres drilled.

Mineral reserves

31st December 2013

		Quantity, Ktonnes		2013
		2013	2012	Au (g/t)	Ag (g/t)	Cu (%)	Zn (%)	Pb (%)	Mo (g/t)	Te (g/t)
The Boliden Area
Polymetallic mineralisations
Kristineberg	Proven	840	1,000	1.1	24	1.3	1.7	0.1
	Probable	6,800	3,600	0.6	43	0.5	6.7	0.4
Renström	Proven	150	140	2.8	127	0.9	13.1	1.3
	Probable	3,360	2,840	1.8	149	0.8	6.4	1.0
Maurliden	Proven	1,400	1,300	1.5	56	0.3	3.9	0.4
	Probable
Maurliden Östra	Proven
	Probable	200	190	0.3	7	1.0	0.0
Total	Proven	2,360	2,430	1.4	49	0.7	3.7	0.3
Polymetallic mineralisations	Probable	10,320	6,680	1.0	77	0.6	6.5	0.6
Gold mineralisations
Kankberg	Proven	880	1,050	2.4	10					172
	Probable	2,390	2,530	4.3	16					185
Aitik	Proven	499,000	476,000	0.15	1.7	0.24			27
	Probable	134,000	226,000	0.11	1.7	0.25			37
Garpenberg	Proven	14,900	15,400	0.3	116	0.06	5.5	2.2
	Probable	21,400	10,200	0.3	143	0.04	3.9	1.7
Tara	Proven	3,400	2,300				7.3	1.7
	Probable	9,700	11,700				6.9	1.5

Figures may be rounded up or down.

Mineral resources (excl. mineral reserves)

31st December 2013
		Quantity, Ktonnes		2013
		2013	2012	Au (g/t)	Ag (g/t)	Cu (%)	Zn (%)	Pb (%)	Mo (g/t)	Te (g/t)
The Boliden Area
Polymetallic mineralisations
Kristineberg	Measured	50	50	0.7	45	1.3	4.2	0.2
	Indicated	480	3,760	1.0	22	1.1	2.8	0.2
	Inferred	4,440	5,530	0.7	36	0.8	3.7	0.2
Petiknäs N	Measured	310	310	8.1	73	1.8	3.1	0.3
	Indicated	1,200	1,200	2.7	52	0.6	1.8	0.3
	Inferred	720	720	3.3	33	0.5	1.2	0.2
Renström	Measured
	Indicated	1,220	1,450	1.9	85	0.4	4.6	0.8
	Inferred	2,950	3,960	3.2	160	0.3	8.5	1.7
Maurliden	Measured	1,050	1,050	1.3	40	0.4	3.3	0.2
	Indicated	360	360	0.9	45	0.7	2.9	0.2
	Inferred
Maurliden Östra	Measured
	Indicated Inferred	360	360	0.4	11	0.4	0.2
Total	Measured	1,410	1,410	2.8	47	0.7	3.3	0.2
Polymetallic
mineralisations	Indicated	3,600	7,100	1.8	54	0.6	2.8	0.4
	Inferred	8,100	10,200	1.8	81	0.6	5.2	0.7
Gold mineralisations
Kankberg	Measured	110	140	3.0	12					149
	Indicated	150	180	3.9	11					205
	Inferred	1,890	340	7.4	13					232
Älgträsk	Measured
	Indicated	1,080	2,930	2.7	4
	Inferred	2,500	1,270	1.9	3
Total	Measured	110	140	3.0	12
Gold mineralisations	Indicated	1,200	3,100	2.8	5
	Inferred	4,400	1,600	4.3	7
Aitik	Measured	508,000	960,000	0.11	1.2	0.17			19
	Indicated	1,666,000	1,393,000	0.10	0.9	0.17			25
	Inferred	225,000	404,000	0.11	0.4	0.13			22
Garpenberg	Measured	2,800	5,100	0.3	98	0.06	3.8	1.7
	Indicated	15,800	18,500	0.4	131	0.05	3.4	1.7
	Inferred	19,500	20,900	0.5	113	0.07	3.2	1.6
Tara	Measured	600	500				6.3	2.2
	Indicated	7,300	5,300				6.5	2.0
	Inferred	5,400	5,600				6.6	1.9
Laver	Measured	1,100		0.11	4.4	0.2			18
	Indicated	512,400		0.13	3.1	0.22			36
	Inferred	550,600	690,000	0.1	3.1	0.2			33
Rockliden	Measured
	Indicated	800	1,040	0.08	102	2.1	4.4	0.9
	Inferred	9,200	3,530	0.06	48	1.8	4.0	0.4

Figures may be rounded up or down.

Ten-year overview – the Group

	20041)	2005	2006	2007	2008	2009	2010	2011	20122)	2013
Consolidated income and result, SEK m
Revenues	17,928	20,441	35,213	33,204	30,987	27,635	36,716	40,323	40,001	34,409
Operating profi t before depreciation	2,977	4,303	9,831	6,805	2,426	5,186	7,445	6,674	6,731	4,632
Operating profi t	1,831	3,069	8,522	5,428	1,004	3,623	5,643	4,748	4,171	1,803
Operating profi t excluding
revaluation of process inventory Profi t after fi nancial items	1,776 1,365	2,631 2,812	7,891 8,313	5,620 5,196	1,793 723	2,350 3,377	4,830 5,331	5,008 4,560	4,042 3,992	2,271 1,581
Taxes	–145	–766	–2,045	–1,409	212	–876	–1,375	–1,171	–651	–288
Net profi t for the year	1,220	2,046	6,268	3,787	935	2,501	3,957	3,389	3,341	1,294
Income and profi t
per Business Area, SEK m
Revenues – Mines	4,568	4,642	7,261	7,567	5,178	6,509	9,580	10,279	9,509	8,303
Revenues – Smelters	16,600	20,826	37,514	34,704	31,256	26,765	34,390	38,471	38,753	33,410
Revenues – Other and eliminations	–3,240	–5,027	–9,562	–9,067	–5,447	–5,639	–7,254	–8,427	–8,261	–7,305
Operating profi t – Mines	1,395	1,117	3,010	3,135	734	2,159	4,113	3,913	2,974	1,598
Operating profi t – Smelters	751	2,210	5,652	2,297	372	1,724	1,946	790	1,224	210
Operating profi t – Other and eliminations	–315	–258	–141	–4	–102	–260	–416	45	–27	–5
Consolidated cash fl ow, SEK m
Cash fl ow from operating activities Cash fl ow from investment	1,552	2,540	8,010	3,730	5,470	3,974	6,197	4,021	5,518	3,505
activities	–1,508	–982	–1,739	–2,518	–4,633	–4,922	–2,995	–4,024	–4,129	–4,971
Free cash fl ow	44	1,558	6,271	1,212	837	–948	3,202	–3	1,389	–1,466
Cash fl ow from fi nancing activities	–549	–912	–4,593	–3,532	–514	571	–3,199	–464	–730	1,060
Cash fl ow for the year	–505	646	1,678	–2,320	323	–377	3	–467	659	–406
Consolidated fi nancial position, SEK m
Balance Sheet total	20,176	22,918	26,929	27,231	30,252	33,258	35,128	37,615	40,080	41,841
Capital employed	15,393	15,822	17,667	20,145	24,733	26,229	27,151	30,473	31,236	34,451
Return on capital employed, %	12	20	52	29	5	14	21	17	14	5
Shareholders' equity	9,118	10,289	16,089	12,932	16,131	16,257	18,846	20,032	22,354	23,075
Return on shareholders' equity, %	16	22	51	26	7	16	23	17	16	6
Equity/assets ratio, %	45	45	60	47	53	49	54	56	56	55
Net debt	6,468	5,526	–195	5,524	6,305	7,402	4,584	6,063	6,276	8,673
Net debt/equity ratio, %	71	54	–1	43	39	46	24	29	28	38
Data per share, SEK
Earnings for the period
Basic	4.98	7.07	21.66	13.37	3.42	9.14	14.47	12.39	12.21	4.72
Diluted	4.97	7.06	21.66	13.37	3.42	9.14	14.47	12.39	12.21	4.72
Cash fl ow from operating activities
Basic Diluted	6.34 6.32	8.77 8.76	27.67 27.67	13.17 13.17	20.00 20.00	14.53 14.53	22.66 22.66	14.70 14.70	20.17 20.17	12.82 12.82
Shareholders' equity
Basic	31.51	35.55	55.58	47.28	58.98	59.44	68.90	76.90	81.68	84.31
Diluted	31.46	35.50	55.59	47.28	58.98	59.44	68.90	76.90	81.68	84.31
Proposed dividend	–	2.00	4.00	4.00	1.00	3.00	5.00	4.00	4.00	1.75
Share price, 31/12	26.21	59.98	162.41	81.25	17.80	92.1	136.7	100.5	122.1	98.45
Highest price paid	38.94	59.98	163.80	165.00	86.00	95.3	137.7	143.5	125.6	126.7
Lowest price paid	22.70	24.64	57.91	79.00	14.60	16.1	79.5	65.35	87.8	80.2
P/E ratio	5.70	8.48	7.50	6.07	5.20	10.07	9.45	8.11	10.0	20.9
Change in share price
during the year, %	–26	129	171	–50	–78	417	48	–26	21	–19
Dividend yield, %	–	3.3	2.5	4.9	5.6	3.3	3.7	4.0	3.3	1.8
Total yield, %	–26	129	174	–48	–73	423	52	–23	25	–16
Number of shares, million
Number of shares, 31/12	289	289	289	274	274	274	274	274	274	274
Average number of shares	245	289	289	283	274	274	274	274	274	274
No. own shares held, 31/12	–	–	–	16	–	–	–	–	–	–

Ten-year overview – the Group, cont.

Sustainability-related key ratios	2004	2005	2006	2007	2008	2009	2010	2011	2012	2013
Employees
Number of Group employees, total 3)	4,479	4,530	4,519	4,524	4,608	4,379	4,412	4,597	4,795	4,815
Number of female employees 3)	536	563	587	604	650	598	669	736	813	824
Percentage of women on the Board/in Group management, %		25/12.5 25/12.5	25/20	25/33	25/29	27/17	27/0	27/0	27/17	27/20
Accidents per one million hours worked, own personnel, frequency	11.1	11.9	11.2	9.9	9.1	5.5	8.2	4.9	6.6	7.0
Accidents per one million hours worked incl. contractors, frequency									9.1	8.9
Sick leave rate, %	5.3	5.5	5.1	4.7	4.7	4.2	4	3.7	3.7	3.9
Energy consumption
Total energy consumption, TJ	14,930	14,866	15,183	16,303	15,257	14,664	16,147	15,579	16,140	16,415
Water withdrawal, total, km³	0.137	0.143	0.145	0.125	0.134	0.135	0.140	0.153	0.160	0.155
Emissions & Discharges
Direct emissions of greenhouse gases (incl. sources added since 2007), Ktonnes	413	402	384	413	450	486	510	499	574	578
Indirect emissions of greenhouse gases, electricity purchased, Ktonnes	386	384	395	384	357	356	398	408	416	402
Indirect emissions of greenhouse gases, heating and steam purchased, Ktonnes	19	12	13	24	0	5	6	17	18	20
Carbon dioxide emissions, total, Ktonnes	817	798	791	822	807	848	913	924	1,008	1,000
Emissions of metals to air, tonnes	39	35	35	35	23	21	23	23	20	19
Sulphur dioxide emissions to air, tonnes	6,580	6,910	7,890	8,070	8,260	6,930	6,850	7,410	8,140	6,290
Discharges of metals to water, tonnes	18	19	25	28	29	14	18	14	13	12
Discharges of nitrogen to water, tonnes	364	354	295	294	283	225	199	205	253	219

1) 2004 was not reported in accordance with IFRS. The 2005 AR was produced in accordance with IFRS and the comparison fi gures were, therefore, also corrected. These fi gures are not, therefore, presented in the 2004 AR.

3) Refers to full-time employees from 2008 onwards. The period from 2004–2007 refers to average number of employees.

2) The 2012 comparison year has been restated due to the changes to the IFRIC 20 and IAS 19 accounting principles in 2013.

Ten-year overview – Mines

	2004	2005	2006	2007	2008	2009	2010	2011	2012	2013
AITIK1
Milled ore, Ktonnes Head grades	17,663	16,674	18,481	18,178	17,813	18,791	27,596	31,541	34,321	37,070
Cu, %	0.41	0.44	0.40	0.32	0.30	0.27	0.27	0.24	0.22	0.21
Au, g/tonne	0.22	0.22	0.25	0.14	0.14	0.13	0.16	0.14	0.11	0.10
Ag, g/tonne	3.77	3.61	2.72	3.67	2.81	1.99	2.07	2.15	2.50	2.28
Concentrate production
Cu, Ktonnes	231	237	240	185	174	171	263	267	270	292
Concentrate grade
Cu, %	27.98	27.67	27.55	27.25	27.20	26.94	25.58	25.00	24.85	24.29
Metal production
Cu, Ktonnes Au, kg	64 1,985	66 1,840	66 2,342	50 1,178	47 1,218	46 1,348	67 2,208	67 2,447	67 1,959	71 1,765
Au, tr. oz.	63,824	59,157	75,286	37,865	39,172	43,338	70,987	78,657	62,996	56,731
Ag, kg	44,946	41,297	35,730	42,301	32,087	24,701	36,468	45,040	51,698	53,612
Ag, '000 tr. oz.	1,445	1,328	1,149	1,360	1,032	794	1,172	1,448	1,662	1,724
Financial performance, SEK m
Revenues	1,292	1,653	2,995	2,305	1,949	1,997	3,996	4,549	4,170	3,593
Operating profi t before depreciation	619	900	2,207	1,388	1,049	1,134	2,442	2,583	2,651	1,902
Operating profi t	522	793	2,073	1,217	876	949	2,008	2,046	1,732	882
Investments	242	325	420	760	2,994	3,674	1,210	1,178	1,207 1)	1,143
Cash cost USc/lb. Cu C1, Normal Proven and probable mineral reserves	64	76	85	129	124	86	105	120	83	131
Mtonnes	232	219	625	610	633	747	733	710	702	633
Cu, %	0.33	0.31	0.28	0.29	0.27	0.25	0.25	0.25	0.25	0.25
Au, g/tonne	0.20	0.20	0.20	0.20	0.20	0.10	0.10	0.10	0.10	0.14
THE BOLIDEN AREA Milled ore, Ktonnes	1,774	1,782	1,679	1,848	1,355	1,192	1,375	1,677	1,862	1,809
of which, slag	153	166	222	187	293	242	157	134	241	301
Head grades
Zn, %	5.69	6.08	5.56	4.81	4.01	3.69	3.69	2.87	2.15	2.61
Cu, %	1.26	1.49	1.56	0.81	1.00	0.95	0.79	1.03	0.84	0.61
Pb, %	0.60	0.56	0.47	0.50	0.43	0.46	0.37	0.27	0.23	0.28
Au, g/tonne	2.7	2.1	1.8	1.6	1.5	2.0	1.6	1.2	1.3	1.6
Ag, g/tonne	80	78	66	66	61	65	55	41	35	42
Concentrate production
Zn, Ktonnes Cu, Ktonnes	150 64	162 76	131 72	131 42	70 32	58 28	74 31	69 60	56 47	63 31
Pb, Ktonnes	12	11	7	11	5	4	4	3	3	3
Precious metals, tonnes	358	347	354	385	289	399	529	568	541	415
Gold doré bullion, kg	3,960	2,480	3,246	1,466	171	280	0	0	1,619	2,810
Concentrate grade
Zn, %	53.7	54.0	54.5	54.0	54.7	54.7	54.7	55.7	54.6	55.9
Cu, %	27.0	27.5	27.9	27.8	29.0	28.4	26.4	23.3	25.5	25.4
Pb, %	30.1	28.9	31.1	31.6	41.7	42.7	41.5	41.7	44.5	45.26
Metal production
Zn, Ktonnes Cu, Ktonnes	80 17	87 21	72 20	71 12	38 9	31 8	40 8	38 14	30 12	35 8
Pb, Ktonnes	4	3	2	3	2	2	2	1	1	1
Au, kg	3,026	2,428	1,900	1,412	1,141	1,568	1,285	989	1,434	1,808
Au, tr. oz.	97,289	78,065	61,071	45,405	36,679	50,414	41,318	31,781	46,102	58,117
Ag, kg	77,091	87,212	67,828	79,753	47,671	48,186	52,806	45,318	41,405	45,212
Ag, '000 tr. oz.	2,478	2,804	2,181	2,564	1,533	1,549	1,698	1,457	1,331	1,454
Financial performance, SEK m
Revenues	949	1,359	2,262	1,928	1,013	1,109	1,448	1,587	1,552	1,317
Operating profi t before depreciation	309	476	1,129	976	222	405	588	659	554	250
Operating profi t	180	350	981	849	115	303	481	530	369	19
Investments Cash cost USc/lb. Zn C1, Pro-rata	95	98	107	144	237	264	298	565	623	364 72
Cash cost USc/lb. Zn C1, Normal	18	22	31	30	29	–6	–18	–58	–54	26
Proven and probable mineral reserves
Polymetallic ores, Ktonnes	2,860	2,920	4,450	7,020	7,350	6,950	8,220	8,980	9,110	12,680
Zn, %	6.8	6.7	5.0	3.6	4.3	4.3	5.3	5.2	5.4	6.0
Cu, %	0.8	0.9	1.0	0.9	0.8	0.8	0.6	0.6	0.6	0.6
Gold ores, Ktonnes	180	400	530	0	0	1,610	2,780	3,100	3,584	3,274
Au, g/tonne	7.3	4	3.2	0	0	4.9	4.1	3.6	3.8	3.8
Te, g/tonne	1.2	1.5	1.4	0	0	0	186	165	177	181

Ten-year overview – Mines, cont.

	2004	2005	2006	2007	2008	2009	2010	2011	2012	2013
GARPENBERG
Milled ore, Ktonnes Head grades	1,074	1,102	1,182	1,255	1,365	1,394	1,443	1,456	1,484	1,495
Zn, %	5.6	5.8	5.7	6.3	6.9	7.3	6.6	6.2	5.6	5.2
Cu, %	0.1	0.1	0.1	0.1	0.1	0.1	0.1	0.1	0.1	0.1
Pb, %	2.2	2.3	2.2	2.5	2.6	2.8	2.5	2.4	2.1	2.1
Au, g/tonne	0.3	0.3	0.4	0.3	0.3	0.2	0.3	0.3	0.3	0.3
Ag, g/tonne	124	117	123	125	130	139	133	133	129	153
Concentrate production
Zn, Ktonnes	100	106	113	132	158	167	160	148	136	127
Cu, Ktonnes	3	3	3	3	3	3	3	2	2	3
Pb, Ktonnes	26	28	29	36	41	44	41	39	35	36
Concentrate grade
Zn, %	55.0	55.0	54.2	54.1	53.1	53.8	53.7	55.0	54.8	55.4
Cu, %	21.1	21.9	23.1	22.1	20.4	18.3	18.3	19.1	17.7	18.0
Pb, %	72.6	74.2	71.5	70.1	69.0	71.3	72.0	72.4	70.7	70.3
Metal production
Zn, Ktonnes	55	58	61	71	84	90	86	81	75	70
Cu, Ktonnes	0.6	0.6	0.6	0.7	0.6	0.5	0.5	0.4	0.4	0.5
Pb, Ktonnes	19	21	21	25	29	31	29	28	25	25
Au, kg	217	203	269	244	243	214	234	246	250	277
Au, tr. oz.	6,977	6,517	8,648	7,851	7,821	6,870	7,534	7,895	8,051	8,911
Ag, tonnes	106	98	108	118	130	139	140	140	135	162
Ag, '000 tr. oz.	3,393	3,138	3,475	3,787	4,189	4,473	4,505	4,505	4,341	5,201
Financial performance, SEK m
Revenues	505	637	1,311	1,710	1,163	1,490	1,902	2,155	1,876	1,675
Operating profi t before depreciation	167	257	927	1,195	598	945	1,293	1,506	1,262	1,025
Operating profi t	113	194	850	1,095	466	793	1,124	1,314	1,033	776
Investments	135	230	273	323	344	157	281	660	1,459	328
Cash cost USc/lb. Zn C1, Pro-rata										46
Cash cost USc/lb. Zn C1, Normal	25	31	37	6	19	3	–16	–56	–44	–32
Proven and probable mineral reserves
Ktonnes	3,640	10,600	17,200	20,800	26,000	25,800	25,100	23,600	25,600	36,300
Zn, %	5.5	5.7	5.7	5.2	5.1	5.4	5.3	5.1	5.1	4.6
Ag, g/tonne	100	121	123	116	134	142	145	144	131	132
TARA
Milled ore, Ktonnes	2,522	2,551	2,751	2,658	2,411	2,508	2,593	2,486	2,502	2,493
Head grades
Zn, %	9.2	8.4	7.7	7.7	7.8	7.9	7.0	7.0	7.0	7.1
Pb, %	1.8	1.6	1.4	1.5	1.5	1.5	1.4	1.4	1.4	1.5
Concentrate production
Zn, Ktonnes	381	359	356	351	320	344	316	307	305	298
Pb, Ktonnes	52	45	44	42	40	41	34	34	41	39
Concentrate grade
Zn, %	55.9	54.6	54.8	54.5	54.7	53.9	53.0	53.3	54.4	55.9
Pb, %	60.4	57.6	58.8	60.9	56.7	57.5	53.7	58.8	55.2	56.1
Metal production
Zn, Ktonnes	213	196	195	191	175	186	167	164	166	166
Pb, Ktonnes	32	26	26	26	23	24	19	20	23	22
Ag, kg	4,390	1,959	1,775	1,850	1,638	2,092	1,344	909	1,673	1,197
Ag, '000 tr. oz.	141	63	57	59	53	67	43	29	54	39
Financial performance, SEK m
Revenues	1,120	1,306	2,950	3,129	1,357	1,671	1,831	1,757	1,727	1,542
Operating profi t before depreciation	498	453	1,887	1,989	154	303	619	503	421	595
Operating profi t	343	294	1,722	1,796	–40	76	383	268	100	195
Investments	186	278	265	277	305	338	285	372	268	201
Cash cost USc/lb. Zn C1, Normal	38	48	76	65	79	64	69	72	69	68
Proven and probable mineral reserves
Ktonnes	16,300	15,900	16,700	17,800	17,100	17,000	16,000	15,700	14,000	13,100
Zn, %	8.7	8.5	8.4	7.7	7.4	7.2	7.1	7.1	7.1	7.0
Pb, %	1.9	1.8	1.8	1.7	1.8	1.8	1.8	1.8	1.7	1.6

1) Comparison fi gures for 2012 have been restated due to changes in accounting regulations. Investments at Aitik increased by SEK 383 million.

Ten-year overview – Smelters

	2004	2005	2006	2007	2008	2009	2010	2011	2012	2013
RÖNNSKÄR
Smelting material
Copper, Ktonnes
Copper concentrate	598	606	587	598	611	565	544	651	624	605
Secondary raw materials	147	137	159	160	173	154	155	175	221	209
of which, electronics1)							37	64	108	109
Copper, total	745	744	746	758	784	719	699	826	844	814
Lead, Ktonnes
Lead concentrate	41	40	36	38	18	14	16	11	27	38
Secondary raw materials	4	4	4	2	5	7	6	5	2	1
Lead, total	45	44	39	40	22	21	23	17	29	39
Production
Cathode copper, Ktonnes	236	223	229	214	228	206	190	219	214	206
Lead, Ktonnes	28	27	26	26	14	13	17	11	19	24
Zinc clinker, Ktonnes	35	35	33	36	41	39	37	36	36	36
Gold, tonnes	15	17	16	12	13	13	12	11	13	12
Gold, '000 tr. oz.	484	546	506	389	432	427	400	341	403	402
Silver, tonnes	439	434	374	347	430	481	386	415	448	437
Silver, '000 tr. oz.	14,112	13,947	12,023	11,142	13,813	15,472	12,340	13,344	14,395	14,051
Sulphuric acid, Ktonnes	569	580	551	544	557	515	502	571	553	536
Liquid sulphur dioxide, Ktonnes	39	35	37	50	53	36	43	42	38	39
Palladium concentrate, tonnes	2	3	3	3	3	3	2	2	3	2
Financial performance, SEK m
Revenues	1,289	3,204	2,322	2,131	1,882	1,669	1,799	2,226	2,398	2,029
Operating profi t before depreciation	415	564	1,075	846	637	338	441	715	832	374
Operating profi t	214	364	861	615	395	83	187	470	535	53
Investments	85	153	318	228	192	199	270	1,074	481	345
BERGSÖE
Smelting material, Ktonnes
Secondary raw materials	66	65	59	61	65	57	56	57	62	63
Production, Ktonnes
Lead alloys	46	46	45	44	43	39	42	41	43	45
Financial performance, SEK m
Revenues	237	530	787	918	142	632	793	787	698	715
Operating profi t before depreciation	119	104	149	344	142	106	99	95	52	57
Operating profi t	110	94	138	330	127	91	82	75	34	39
Investments	16	25	55	10	12	12	14	24	10	12
HARJAVALTA
Smelting material, Ktonnes
Copper concentrate	540	521	538	451	529	400	434	456	516	471
Secondary raw materials	16	19	16	12	7	11	22	14	16	26
Copper, total	540	540	554	462	536	411	456	471	532	497
Nickel concentrate	205	156	205	262	273	211	262	259	248	251
Production
Cathode copper, Ktonnes	124	124	127	101	122	97	113	116	125	119
Gold, tonnes	5	4	4	3	2	2	2	2	4	4
Gold, '000 tr. oz.	156	111	128	90	66	56	57	72	117	119
Silver, tonnes	36	35	40	33	59	58	65	73	128	101
Silver, '000 tr. oz.	1,151	1,119	1,300	1,067	1,886	1,876	2,077	2,350	4,122	3,244
Sulphuric acid, Ktonnes	618	566	632	557	659	501	573	600	639	590
Liquid sulphur dioxide, Ktonnes	48	41	43	42	37	33	27	35	37	37
Palladium concentrate, tonnes	0.71	0.92	0.71	0.46	0.21	0.27	0.72	0.84	0.54	1.47

Ten-year overview – Smelters, cont.

	2004	2005	2006	2007	2008	2009	2010	2011	2012	2013
HARJAVALTA, cont.
Financial performance, SEK m
Revenues	1,231	4,000	1,915	1,267	1,432	1,261	1,468	1,552	1,666	1,631
Operating profi t before depreciation	390	511	976	289	212	203	318	373	479	496
Operating profi t before deprecia tion excl. PIR 2)	390	511	976	289	339	62	318	373	479	496
Operating profi t	239	357	820	149	64	24	154	222	324	316
Operating profi t excl. PIR 2)	239	357	820	149	191	–117	154	222	324	316
Investments	67	91	211	366	225	148	122	229	215	246
KOKKOLA
Smelting material, Ktonnes
Zinc concentrate	548	547	548	581	576	571	587	600	589	602
Production, Ktonnes
Zinc	285	282	282	306	298	295	307	307	315	312
Sulphuric acid 3)							199	302	313	319
Financial performance, SEK m
Revenues	1,009	1,319	2,713	2,523	1,848	1,979	2,062	1,818	1,778	1,795
Operating profi t before depreciation	127	409	1,722	1,434	632	558	685	417	432	398
Operating profi t	–33	246	1,563	1,273	469	362	505	246	261	248
Investments	75	53	95	236	162	99	248	237	210	318
ODDA
Smelting material, Ktonnes
Zinc concentrate (incl. zinc clinker)	264	276	291	292	270	245	277	283	279	263
Production, Ktonnes
Zinc	141	151	161	157	145	139	149	153	153	143
Aluminium fl uoride	30	30	29	35	35	33	22	35	36	34
Sulphuric acid	193	193	158	130	113	108	123	125	128	119
Financial performance, SEK m
Revenues	675	858	1,636	1,441	1,200	1,123	1,128	1,212	1,184	1,070
Operating profi t before depreciation	36	160	783	576	360	161	184	123	184	116
Operating profi t	–53	22	652	439	210	6	39	–25	31	–26
Investments	592	80	103	168	146	22	75	44	61	269

The operating profi t per smelter excludes the revaluation of process inventory, with the exception of Harjavalta, 2008–2009.

1) Electronic scrap recycling was not reported separately between 2004 and 2009.

2) Process Inventory Revaluation.

3) Investment in sulphuric acid plant, 2010.

GRI index

Boliden's sustainability reporting comprises the sustainability information contained in Boliden's 2013 Annual Report and in Boliden's 2013 GRI Report. Th e information presented in the Annual Report is based on the areas that Boliden deems to be its highest priorities in this respect. Th e GRI Report has been drawn up in accordance with GRI guidelines. Boliden applies the GRI sector-specifi c guidelines for the mining and extraction

industry (MM). Boliden considers that the account complies with the information requirement mandated in version 3.0 of the GRI guidelines for level B+, which has been attested by a third party, Ernst & Young AB.

See below for a GRI Index designed to enable navigation in Boliden's 2013 sustainability report. Boliden's GRI Report for 2013 is also available on the company website, www.boliden.se.

= Fully reported	= Partially reported	GRI Rep. = 2013 GRI Report AR = 2013 Annual Report
Profi le disclosure		Reference
	Strategy and analysis
1.1	CEO statement	AR 6–7, GRI Rep. 4–5
1.2	Key impacts, risks and opportunities	AR 49–50, 56–57, 59–61, 63–64,
		GRI Rep. 4–5, 9
	Organisational profi le
2.1	Name of the organisation	AR 102
2.2	Primary brands, products and services	AR 16, 26–27
2.3	Operational structure of the organisation	AR 26–27, 86
2.4	Location of the organisation's head offi ce	AR 127
2.5	Number and name of countries where the organisation operates	AR Inside of front and back cover
2.6	Nature of ownership and legal form	AR 8–9
2.7	Market served	AR Inside of front and back cover, 4–5
2.8	Scale of reporting organisation	AR 2, 79–80
2.9	Signifi cant changes during the reporting period regarding size, structure, or ownership	No signifi cant changes
2.10	Awards received in the reporting period	AR 1
Report parameters
3.1	Reporting period	Calendar year
3.2	Date of most recent previous report	Annual Report including sustainability report
3.3	Reporting cycle	2012, published in March 2013 Annually
3.4	Contact point for questions regarding the report or its contents	AR Inside of front and back cover,
		GRI Rep. 8
3.5	Process for defi ning report content	GRI Rep. 9
3.6	Boundary of the report	GRI Rep. 8–9
3.7	Specifi c limitations on the scope or boundary of the report	GRI Rep. 9
3.8	Basis of reporting on entities that can signifi cantly affect comparability from period to period, and/or between organisations	GRI Rep. 9
3.9	Data measurement techniques and the bases of calculation	GRI Rep. 8
3.10	Explanation of the effect of any re-statements of information provided in earlier reports	Not applicable
3.11	Signifi cant changes from previous reporting periods in the scope, boundary, or measurement methods applied in the report	AR 97
3.12	Table identifying the location of the Standard Disclosures in the report	GRI Rep. 6–8
3.13	Policy and current practice with regard to seeking external assurance for the report	AR Inside of front cover, 65
	Governance and CSR management
4.1	Governance structure of the organisation	AR 102–106, GRI Rep. 9
4.2	Indicate whether the Chair of the highest governance body is also an executive offi cer	AR 104
4.3	Number of members of the highest governance body that are independent and/or nonexecutive members	AR 104
4.4	Mechanism for shareholders and employees to provide recommendations or direction to the highest governance body	AR 102, 109, GRI Rep. 23
4.5	Linkage between compensation and the organisation's performance	AR 35
4.6	Process in place for the highest governance body to ensure confl icts of interest are avoided	AR 102–106
4.7	Process for determining the composition, qualifi cations, and expertise of the members of the highest governance body	AR 103–104
4.8	Internally developed statements of mission or values, codes of conduct and other principles	AR 18–19, 63, GRI Rep. 4–5, 9
4.9	Procedures of the highest governance body for overseeing the organisation's identifi ca tion and management of economic, environmental, and social performance	AR 104–105
4.10	Process for evaluating the highest governance body's own performance	AR 105
4.11–13	Commitments to external initiatives	AR 7, 63, GRI Rep. 4–5, 9
4.14	Stakeholder engagement	AR 4, 63, GRI Rep. 9
4.15	Basis for identifi cation and selection of stakeholders with whom to engage	GRI Rep. 9
4.16	Approaches to stakeholder engagement	AR 56, 63, GRI Rep. 9, 28–30, 32
4.17	Key topics and concerns that have been raised through stakeholder engagement	AR 64, GRI Rep. 9

Indicator			Reference
Environmental		Performance, targets, risk management and policies	AR 49, 59, 64,
performance (EN)			GRI Rep. 4–5, 9–10
EN1		Materials used by weight	GRI Rep. 11
EN2		Recycling and materials used that are waste	AR 62, GRI Rep. 11
EN3–5		Energy use and energy effi ciency	AR 61, GRI Rep. 12
EN7		Initiatives to cut indirect energy use	AR 61, GRI Rep. 13
EN8, 10 EN11–14		Water use Biodiversity	AR 116, GRI Rep. 13 GRI Rep. 13–14
MM1		Amount of land disturbed or rehabilitated	AR 61–62, GRI Rep. 13–14
MM2		Number and percentage of total sites identifi ed as requiring biodiversity management plans and the number (percentage) of those sites with plans in place	GRI Rep. 13–14
EN16–18		Greenhouse gas emissions	AR 59–61, 116, GRI Rep. 15
EN20		Other signifi cant air emissions	AR 61, 116, GRI Rep. 16
EN21		Water discharge	AR 60, GRI Rep. 17
EN22		Waste types and disposal methods	AR 62, GRI Rep. 17–18
MM3		Total amounts of overburden, rock, tailings, and sludges and their associated risks	GRI Rep. 17–18
EN23		Signifi cant spills	AR 59, GRI Rep. 18
EN28		Signifi cant fi nes	GRI Rep. 18
EN29		Signifi cant environmental impacts from transport and travel	AR 61, GRI Rep. 19
Social indicators		Performance, targets, risk management and policies	AR 49–50, 56–58, 63, 116, GRI Rep. 4–5, 9, 20
decent work (LA)	Labour practices and
LA1		Workforce	AR 116, GRI Rep. 21
LA2		Employee turnover	GRI Rep. 21
LA3		Benefi ts	GRI Rep. 22
LA4		Collective bargaining agreements	GRI Rep. 23
LA5		Notice regarding operational changes	GRI Rep. 23
LA6		Representation in health and safety committees	GRI Rep. 24
MM4		Number of strikes and lock-outs exceeding one week's duration, by country	GRI Rep. 23
LA7		Injuries and occupational diseases	AR 56–57, 116, GRI Rep. 24
LA8		Assistance regarding serious diseases	GRI Rep. 25
LA9		Health and safety topics covered in formal agreements with trade unions	GRI Rep. 25
LA10		Training, skills management and lifelong learning	AR 57, GRI Rep. 25
LA12		Performance and career development reviews	GRI Rep. 26
LA13		Composition of employees and governance bodies	AR 108–110, 116, GRI Rep. 26
LA14		Equality in remuneration	GRI Rep. 27
Human rights (HR)
HR1		Investment agreements that include human rights clauses or have been screened	AR 63, GRI Rep. 28
HR2		Suppliers and contractors screened on human rights and actions taken	AR 63, GRI Rep. 28
HR3		Employees trained on human rights	GRI Rep. 28
HR4		Incidents of discriminations and actions taken	GRI Rep. 28
HR5		Freedom of association and collective bargaining	GRI Rep. 28
HR 6-7 MM5		Child labour, forced and compulsory labour Number of operations taking place in or adjacent to Indigenous Peoples' territories, and	GRI Rep. 29 GRI Rep. 29
		number and percentage of operations or sites where there are formal agreements
Society (SO)
SO1 MM6		Local community engagement Number and description of signifi cant disputes relating to land use, customary rights	AR 4, GRI Rep. 30 GRI Rep. 30
MM7		of local communities and Indigenous Peoples The extent to which grievance mechanisms were used to resolve disputes relating to land use, customary rights of local communities and Indigenous Peoples, and	GRI Rep. 30
MM8		the outcomes Number of company operating sites where artisanal and small-scale mining takes	GRI Rep. 30
MM9		place on, or adjacent to, the site; the associated risks and the actions taken Sites where resettlements took place, the number of households resettled in each,	GRI Rep. 30
MM10		and how their livelihoods were affected in the process Number and percentage of operations with closure plans	GRI Rep. 30
SO3		Training in anti-corruption policies and procedures	GRI Rep. 31
SO4		Incidents of corruption	GRI Rep. 31
SO5		Public policy development and lobbying	GRI Rep. 31
SO7–8		Anti-competitive behaviour and compliance	GRI Rep. 31
	Product responsibility
(PR)
MM11 PR1		Programmes and progress relating to materials stewardship Customer health and safety	AR 61–62, GRI Rep. 32 GRI Rep. 32

Indicator		Reference
Economic performance (EC)	Performance, targets, risk management and policies	GRI Rep. 33–34
EC1	Economic value generated and distributed	GRI Rep. 34
EC2	Climate change implications, risks and opportunities	AR 49, 60–62, GRI Rep. 34
EC3	Benefi t plan coverage	AR 81, 89–90, GRI Rep. 34
EC4	Signifi cant fi nancial support received from government	GRI Rep. 34
EC5	Entry and minimum wage	GRI Rep. 34
EC8	Development and impact of infrastructure investments and services provided primarily for public benefi t through commercial, in-kind, or pro bono engagement	GRI Rep. 34
EC9	Understanding and describing signifi cant indirect economic impacts, including the extent of impacts.	AR 4, GRI Rep. 34

GRI Rep. = 2013 GRI Report AR = 2013 Annual Report = Fully reported = Partially reported

Defi nitions

Average number of employees The average number of employees during the year converted to full-time positions.

Balance Sheet total The sum of the assets side or the sum of the shareholders' equity and liabilities side of the Balance Sheet.

Capital employed The Balance Sheet total less interest-bearing investments, tax receivables and non-interest-bearing provisions and liabilities.

Cash fl ow per share The cash fl ow for the period divided by the average number of outstanding shares.

Dividend yield Dividend per share as a percentage of the share price.

Earnings per share Net result for the period divided by the average number of outstanding shares.

Equity/assets ratio Shareholders' equity as a percentage of the Balance Sheet total.

Equity per share Shareholders' equity divided by the number of outstanding shares.

Free cash fl ow Cash fl ow from operating activities including cash fl ow from investment activities.

Net debt Interest-bearing current and longterm liabilities (including pension liabilities excluding special payroll tax) less fi nancial assets (including liquid assets).

Net debt/equity ratio Net debt divided by shareholders' equity.

Operating profi t (EBIT) Revenues less all costs attributable to the operations but excluding net fi nancial items and taxes.

Operating profi t (EBIT) excluding revalua-

tion of process inventory Revenues minus all costs attributable to the operations but excluding the effects of the revaluation of process inventory, net fi nancial items and taxes.

P/E ratio Share price divided by earnings per share.

Return on capital employed Operating profi t divided by the average capital employed. The average capital employed for each year consists of an average of the closing capital employed in the last 13 months. Measured before tax.

Return on shareholders' equity Profi t for the year as a percentage of average shareholders' equity in the last 13 months. Measured after tax.

Total return The sum of the share's performance during the year plus dividend paid divided by the share price at the beginning of the year.

Defi nition of Cash cost

Boliden uses the Wood Mackenzie's cash cost metrics, C1 Normal costing and C1 Pro rata costing, to measure the mines' cost position in relation to other mines worldwide. The lower a mine's cash cost, the better its cost position.

Normal costing

In normal costing calculations, the costs are allocated in their entirety to one main metal and then reduced by the net revenue1) of other metals, known as subsidiary metals.

• + Mining operations, concentration and administration costs2)
• + Costs of freighting concentrate to smelters
• + Treatment and refi ning charges (TC/RC)
• – Deductions for net revenue of subsidiary metals
• = Cash cost C1 Normal costing

Pro rata costing

In pro rata cash costing, the costs are divided up between the various metals on the basis of the individual metal's share of the total net revenue.

Composite costing

In composite costing, mines are included using either normal costing or pro rata costing on the basis of criteria based on the metals' net revenue. If a metal accounts for 65 per cent or more of the total net revenue, the cash cost is calculated using normal costing, while if a metal accounts for less than 65 per cent of the total net revenue, the cash cost is calculated using pro rata costing.

• 1) Calculating the net revenue of mines' metals The net revenue is the payable income from the metal, less freight costs and treatment and refi ning charges.
• + Income from payable metal
• – The metal's freight cost
• – The metal's treatment and refi ning charges
• = The net revenue of the metal

2) Administrative costs attributable to the mine.

Defi nition of Cash margin

Boliden uses Wood Mackenzie's cash margin compilations to measure the smelter's cost position in relation to other smelters. The cash margin is the difference between income and cash cost, expressed in USc/lb. of metal. The income comprises treatment and refi ning charges, free metals and income from byproducts.

The income for zinc smelters includes income generated by sales of surplus energy, while for copper smelters, the income generated by the sales of sulphuric acid and surplus energy is added as a credit when calculating the cash cost.

The calculations for copper smelters are expressed as unit of metal produced from concentrate, while for zinc smelters, it is expressed as unit of fi nished metal produced. Income is normally included if it is regarded as having been derived from the main process during the production of metal and the product is saleable.

Industry-specifi c concepts and defi nitions

Alloy Substance with metallic properties which is composed of two or more chemical elements, at least one of which is a metal.

Base metals The most common metals, e.g. zinc, copper, lead, nickel and aluminium.

Cash cost Common measurement used to show the costs affecting a mine's cash fl ow, converted into US dollars (average rate for the measurement period). Used to compare the mine's cost position in relation to other mines. See pages 17 and 123.

Complex ore Ore that contains several metals, e.g. zinc, copper, lead, gold and silver.

Concentrator A plant in which ore is processed mechanically and/or chemically to extract and produce a concentrate of the valuable minerals.

Copper cathode An end product from copper smelters in the form of 99.99 per cent pure copper plates.

Feed The smelter's raw material consumption, i.e. the amount of metal concentrate or secondary material processed and refi ned.

Field exploration Exploration in new areas. Associated with higher costs than with minesite exploration.

Free metals The percentage of metal concentrates bought in that an individual smelter can process over and above the payable metal content. This percentage generates income without incurring a raw material cost.

Galvanising An electrochemical process whereby a metal is coated with a thin layer of another metal, such as zinc. Galvanising is commonly used to protect against corrosion (rust).

Gold doré An impure gold/silver alloy cast as a bullion in the refi nery. Further processed to pure gold and silver at a smelter.

ISO International Organization for Standardization. Standards include environmental management (ISO 14001) and quality (ISO 9001), etc.

Kaldo furnace Rotating and tippable furnace for the smelting and process treatment of copper, lead and precious metals, etc., including the recycling of metals from electronic scrap. The plastic present in the scrap is used to smelt the metals, thereby reducing the process' energy requirement.

LBMA London Bullion Market Association. International market responsible for the daily pricing of precious metals.

LME London Metal Exchange. International market where non-ferrous metals are bought and sold. Trading on the LME is used as the basis for the daily pricing of metals worldwide. The LME also maintains warehouse stocks of the metals traded.

Metal concentrate Also known as dressed ore or mined concentrate. Metal concentrate is the result of the concentration processes that separate out the fi nancially valuable minerals present in ore from those with no fi nancial value.

Metal content The quantities of, for example, zinc, copper, lead, gold and silver contained in concentrates. Zinc concentrates generally contain approximately 50 per cent zinc metal, while copper concentrates generally contain approximately 30 per cent copper. The lead content of mined concentrate is usually around 65 per cent.

Metal premium The price agreed in advance, over and above the LME price, and paid by customers for specifi cally adapted metal that is supplied to them.

Mineralisation A concentration of minerals in the bedrock.

Mineral reserves Those parts of a mineral resource that can be mined and processed in accordance with the company's profi tability requirements and taking into account factors such as waste rock dilution and the percentage of metal in an ore that can be extracted in the concentration process. Mineral reserves are divided into two categories: proven mineral resources and probable mineral resources.

Mineral resource A concentration of minerals in the bedrock that may become commercially extractable. Mineral resources are divided into three categories: assumed mineral resources, inferred mineral resources, and measured mineral resources.

Mine-site exploration Exploration in the vicinity of existing mines. New deposits located close to existing mines mean a shorter time from discovery to production because the infrastructure is already in place.

Open pit A method of mining mineral deposits located near the surface. The waste rock is stripped and the ore mined directly at the surface.

Ore Economic term for minerals, rock types or other bedrock components that can be profi tably mined to extract metals or other valuable substances.

Ore grade The average quantities of valuable metals in a tonne of ore, expressed in grams per tonne for precious metals and as a percentage for other metals.

Payable metal content The percentage of the metal content of the concentrate for which the smelters pay when purchasing concentrate.

Precious metals Metals that are less commonly present in the earth's crust than base metals and which are regarded, to a greater extent, as a type of investment asset by fi nancial sector players. The most common precious metals are gold, silver, platinum and palladium.

Price escalators (PP) Also known as pricesharing clauses. The clauses in the agreements for zinc smelting charges that distribute changes in metal prices between mines and smelters. There have been no price escalator clauses in copper treatment and refi ning charges for many years now.

Recovery The percentage portion of the quantity of a given metal in an ore extracted during the concentration process.

Secondary materials Various types of recycling materials from which metals can be recovered, e.g. electronic and metal scrap, metal ashes, slag, dust and scrap lead batteries.

Smelter A plant in which metal raw materials, metal concentrates or secondary materials are processed to separate metals from impurities by means of high temperature reactions.

Treatment and refi ning charges

(TC/RC) The remuneration received by a smelter for processing smelting material (concentrate and secondary materials) and extracting metals. Copper smelters' processes can be broken down into a treatment phase and a refi ning phase, while zinc smelters' processes only involve a treatment phase, and hence zinc smelters' remuneration only comprises a treatment charge (TC).

Underground mine Mine where the ore is mined using underground tunnels. The mining methods used in Boliden's underground mines include the cut-and-fi ll method and sub-level stoping.

Waste rock Economic term for rock which, unlike ore, contains no valuable material.

Zinc ingot An end product from zinc smelters with detailed specifi cations with regard to degree of purity, weight and size.

Abbreviations

• Lb. = pound = 0.4536 kg
• Troy ounce = 31.104 gram
• USD = US dollars
• USc = US cents
• SEK = Swedish kronor
• NOK = Norwegian kroner
• EUR = euro
• Ag = silver
• Au = gold
• Cu = copper
• Pb = lead
• Zn = zinc

2014 Annual General Meeting

Boliden's Annual General Meeting will be held on Tuesday, 6th May 2014 in Boliden.

Participation

Shareholders wishing to participate in the Annual General Meeting must both be registered in the shareholders' register kept by Euroclear Sweden AB on Tuesday, 29th April 2014 (for details of the re-registration process for nominee shareholders, please see below) and have notifi ed the company of their intention to participate, either via Boliden's website, www.boliden.com, by calling the company on tel. +46 (0)8 32 94 29, or by writing to the company at the following address: Boliden AB, Legal Aff airs, Box 44, SE-101 20 Stockholm, Sweden. All such notifi cations must be received by the company no later than Tuesday, 29th April 2014.

Shareholders' notifi cations of their intention to attend the Annual General Meeting shall include the shareholder's name, Civic ID no. or corporate ID no., address and telephone number, and the number of assistants who will accompany them. Th e information provided will be computerised and used exclusively in connection with the Annual General Meeting.

Nominee shareholders

In order to be entitled to participate in the Annual General Meeting, nominee shareholders must, no later than Tuesday, 29th April 2014, have their shares temporarily re-registered in their own names with Euroclear Sweden AB. All such requests for registration in the shareholder's own name must be submitted to the relevant trustee well ahead of this date.

Complete convening notice

A complete notice convening the Annual General Meeting, as well as fi nancial and other information, can be found on Boliden's website at www.boliden.com. Printed fi nancial information may also be ordered via the website or from Boliden AB, Box 44, SE-101 20 Stockholm, Sweden.

Financial information

6th May Interim Report, January–March 2014

18th July Interim Report, January–June 2014

22nd October Interim Report, January–September 2014

11th February 2015 Year-end Report, January-December 2014

Questions

Any questions concerning the content of Boliden's fi nancial information can be submitted to: Boliden's Investor Relations Tel. +46 8 610 15 00 or e-mail: investorrelations@boliden.com

Addresses

Group

Boliden Group

Box 44 SE-101 20 Stockholm, Sweden Street address: Klarabergsviadukten 90 Tel. +46 8 610 15 00 Fax +46 8 31 55 45 Fax +46 8 30 95 36 (Legal Aff airs staff function)

Boliden Mines

SE-936 81 Boliden Sweden Tel. +46 910 77 40 00 Fax +46 910 77 42 34

Th e Boliden Area

SE-936 81 Boliden Sweden Tel. +46 910 77 40 00 Fax +46 910 77 42 25

Boliden Aitik Box 85 SE-982 21 Gällivare

Sweden Tel. +46 970 72 90 00 Fax +46 970 72 90 01

Boliden Garpenberg

SE-776 98 Garpenberg Street address: Kapplavägen 5 Sweden Tel. +46 225 360 00 Fax +46 225 360 01

Boliden Tara

Knockumber Navan Co. Meath Ireland Tel. +353 46 908 2000 Fax +353 46 908 2581

Boliden Smelters

Staff Box 750 SE-101 35 Stockholm Sweden Street address: Klarabergsviadukten 90 Tel. +46 8 610 15 00 Fax +46 8 610 15 51

Boliden Kokkola Box 26 FI-67101 Kokkola Finland Tel. +358 6 828 6111

Boliden Odda Eitrheimsneset 1 NO-5750 Odda Norway Tel. +47 53 64 91 00

Fax +47 53 64 33 77 Boliden Harjavalta

Teollisuuskatu 1 FI-29200 Harjavalta Finland Tel. +358 2 535 8111 Fax +358 2 535 8239

Boliden Rönnskär SE-932 81 Skelleftehamn Sweden Tel. +46 910 77 30 00 Fax +46 910 77 32 15

Boliden Bergsöe

Box 132 SE-261 22 Landskrona Sweden Tel. +46 418 572 00 Fax +46 418 572 05

Boliden Sales Offi ce UK

No 7 Clarendon Place Royal Leamington Spa Warwickshire CV32 5QL UK Tel. +44 1926 833 010 Fax +44 1926 450 084

Boliden Sales Offi ce Germany

Stresemannallee 4c D-414 60 Neuss Germany Tel. +49 2131 750 46 55 Fax +49 2131 750 46 54

www.boliden.com

Production: Boliden in cooperation with Hallvarsson & Halvarsson. Photos: Stefan Berg, Neil Crighton (p. 10, 11, 29, 41) Lars de Wall (p. 39). Illustrations: Elina Anttila. Translation: Copy Right AB. Print: Larsson Off settryck AB.