COMPETITIVE MINES AND SMELTERS

ANNUAL REPORT 2015

Introduction	Boliden in brief	1
	Boliden 2015	2
	President's Statement	4
	Value creation	6
	Target fulfilment	8
	Strategy	10
Market	Market and metal prices	14
	Market position	16
	Competitiveness	17
	Income model	18
	Market trends	19
Operations	Business model	24
	Boliden's mines and smelters	26
	How to interpret Boliden's figures	28
	The Group's performance during the year	29
	Business Area Mines	32
	Business Area Smelters	38
	Employees	44
	Environment	47
	Boliden in society	50
	Purchasing and suppliers	52
	The Boliden share	54
	Risk management	56
Corporate	Corporate Governance Report	62
Governance	The Board of Directors	68
Report	The Group management	70
	Internal Control Report	71
	Auditor's Report	71
Financial	The Group	73
reports	The Parent Company	77
	Notes to the accounts	78
	Proposed allocation of profits	103
	Audit report	104
	Auditor's Limited Assurance Report
	on Boliden AB's Sustainability Report	105
	Mineral reserves and mineral resources	106
	Ten-year overviews	111
	Definitions	117
	Industry concepts and explanations Annual General Meeting	118 119

Boliden's 2015 Annual Report

Boliden's 2015 Annual Report is published in Swedish and in an English translation. It describes Boliden's financial performance and its work on sustainability issues, which is an integral part of Boliden's operations. The sections of the Annual Report that have been audited in full by the Group's auditors are the Directors' Report on pages 29–46 and 56–59, and the financial reports and notes to the accounts on pages 72–103. The auditors have also read and issued a report on the Corporate Governance Report. Information on sustainability

issues are presented on pages 4−9 and 44−53 of the Annual Report.

The GRI Report, together with the complete GRI index:

Boliden has reported its sustainability work in accordance with the updated guidelines, G4, of the Global Reporting Initiatives (GRI) since 2014. The GRI Report, together with the complete GRI index, has been the subject of a limited assurance review by the company's auditors. The GRI Report is available on www.boliden.com both in a complete online version and as a pdf.

Boliden is a leading metals company with a commitment to sustainable development. Our roots are Nordic, but our business is global. The company's core competence is within the fields of exploration, mining, smelting and metals recycling. Boliden operates five mining areas and five smelters in Sweden, Norway, Finland and Ireland. Its share is listed on NASDAQ OMX Stockholm, segment Large Cap.

Boliden Annual Report 2015 Boliden in brief 1

2015 revenues, SEK m

40,242 40,242 Garpenberg ● Aitik ● Rönnskär ● Kylylahti ● Odda ● Bergsöe ● ● Kokkola ● Tara Leamington Spa ● Stockholm ● Neuss ● Glostrup ● ● Harjavalta ● MINING AREAS ● SMELTERS ● OFFICES The Boliden Area ●●

BOLIDEN – PART OF A CIRCULAR ECONOMY

4,010

2015 operating profit excl. revaluation of process inventory, SEK m

4,878

Number of employees (FTE) in 2015

Boliden enjoys a strategic position in today's challenging market, thanks to our consistent investments in both mines and smelters producing zinc, copper and precious metals. Our primary focus is on creating competitive mines and smelters with stable production, good cost control, and high-quality safety and environmental performance. We are also continuing to invest in organic growth through a further expansion of the Aitik mine and the Odda zinc smelter."

LENNART EVRELL

SIGNIFICANT EVENTS DURING THE YEAR

• Mined production at Garpenberg has increased according to plan after the expansion investment that increased capacity to 2.5 Mtonnes. The Garpenberg mine now has the highest productivity levels of the world's zinc mines.

• The Odda smelter has substantially improved its cost position as a result of previous efficiency enhancing programmes and the ongoing expansion project to 200 ktonnes of zinc per annum.

• Aitik has continued with the expansion work aimed at increasing annual production to 45 Mtonnes but has, at

the same time, struggled with disruptions to production that have limited production during the year.

The improvement programme at the Tara zinc mine has, to date, resulted in an intensification of development work and has started to yield results.
Production and recovery of silver at the Kokkola smelter's new facility steadily improved.
The Harjavalta smelter changed its business model for nickel during the year and production no longer occurs on a so-called tolling basis. The

nickel operations' incoming deliveries of concentrate and its sales of mattes have developed well.

Boliden has decided to invest in a new and more efficient sulphuric acid plant at Harjavalta. The investment will run between 2016 and 2019 and comprises two tranches: the first tranche has now been approved and totals EUR 65 m and the entire investment is expected to total EUR 90 m.
Around 80 of Boliden's biggest and most important suppliers attended a Supplier Summit on the theme of "Passion for improvements",

organised by Boliden with a view to strengthening relationships as part of the ongoing partnership.

Two mine fires occurred during the year, one at Garpenberg and one at Kristineberg. No personal injuries resulted from the fires and production could, in both cases, be restarted the same day.
Boliden is included in the FTS4Good Global Index which requires the company to comply, as part of an independent review, with stringent demands on environmental performance, social responsibility, and corporate governance.

Boliden Annual Report 2015 Boliden 2015 3

9%

The increase in revenues was primarily due to improvements in market terms and the change in the business model for nickel

54%

The increase in the operating profit, excl. revaluation of process inventory, was due to improved market terms and increased mined production

2,6

SEK b, 2015 The increase in the free cash flow was due to improved profits and lower levels of investment

2%

The number of female employees continued to increase, despite the total number of employees remaining largely unchanged

COMMENTS	KEY PERFORMANCE INDICATORS
----------	----------------------------

Key data	2015	2014
Revenues, SEK m	40,242	36,891
Operating profit before depreciation	7,112	6,035
Operating profit, excl. revaluation
of process inventory, SEK m	4,010	2,605
Operating profit, SEK m	3,590	2,759
Earnings per share, SEK	9.65	6.94
Free cash flow, SEK m	2,565	1,583
Investments, SEK m	3,650	4,222
Capital employed, SEK m	35,131	35,087
Return on capital employed, %	10	8
Return on shareholders' equity, %	11	8
Number of employees, FTE	4,878	4,881
Net debt/equity ratio, %	23	35
Dividend per share, SEK	3.25	2.25
Accidents (LTI frequency)	8.9	7.9
Sick leave, %	4.6	4.3
Female employees, %	17.8	17.5
Metals to water, tonnes Me-eq	18	21
Metals to air, tonnes Me-eq	88	126
Carbon dioxide intensity, tonne/tonne 0.65		0.74
Sulphur dioxide emissions, ktonnes	7.2	7.3
Number of environmental accidents	14	13

AWARDS

• Boliden was declared Innovator of the Year in the employer branding category at an awards ceremony at Universum Awards. The prize goes to the company that pushes through new innovative ideas in a new way in the field of employer branding.

• Boliden was declared the Best large company in Sweden in the Large Cap Index category for financial communication in the Nordic region's biggest IR study (IR Nordic Markets).

• Boliden won the Best information graphics of the year prize in Kanton's and the Swedish Shareholders' Association's "Best Listed Company of the Year" competition. The prize was for the graphics in Boliden's 2014 Annual Report and the citation read: "For a series of well-executed illustrations showing how ore is turned into metals and where they are used in modern life. The illustrations are uniformly designed and interact in an exemplary way with the other content of the Annual Report."

President's Statement

2015 was a challenging year for the world's raw material companies. The slow-down in the global economy, after a period of substantial investments in capacity, brought considerable price pressure. Against that background, Boliden's strategy of operating mines and smelters that produce both base and precious metals yielded real advantages.

Boliden's operating profit, excluding revaluation of process inventory, improved by just over 50 %, lower metal prices notwithstanding. There are three main reasons for this: firstly, Boliden's strategical position with both mines and smelters stabilises earnings. Secondly, we have made profitable investments, not least the Garpenberg zinc-silver mine expansion which has now ramped up to full production; and thirdly, in common with the majority of other mining companies, we have benefited from the trend in exchange rates and a strengthening of the US dollar. These factors, coupled with lower investment levels, have resulted in a positive cash flow trend and a strong balance sheet, and afforded us freedom of action to act in a weak economic climate.

Societal development needs metals

Boliden operates in a cyclic industry and the market downturn we are now seeing is a pattern we have seen before. The growth in the global economy slowed after a period of substantial investments in expansions, and in its wake brought heavy pressure on metal prices. Demand for base metals is not expected to grow at the same rate, because the tempo of China's urbanisation and industrialisation will slow down, although almost half the world's population lives in countries where economic development has not yet reached the stage where industrialisation and infrastructural expansion increase the need for base metals. On the other hand, the development of renewable energy systems and digital technology demands more metals than those required by traditional solutions and we believe, therefore, that the long-term demand for metals will continue to grow in both rapidly developing countries and in mature economies.

Boliden's mines

Low metal prices have a greater impact on mines than on smelters. Business Area Mines' operating profit nonetheless increased to just under SEK 1.5 billion in 2015, thanks to higher production levels, amongst other things. Operating profits did, however, weaken as the year progressed due to deterioration in the market climate. The most important milestone achieved

this year was the ramping up of the investment at Garpenberg. After years of hard work and investments totalling SEK 4 billion, Garpenberg became Boliden's most profitable unit in 2015 and is now the most productive underground zinc mine in the world. Furthermore, the investments not only resulted in increases in production, they also improved the mine's environmental performance.

Boliden's exploration work had one of its best years to date: ore reserves increased at several units and two new deposits were successfully defined as mineral resources – namely Nautanen, just north of Aitik, and Rävliden, in the vicinity of Kristineberg. Aitik posted a rise in the mineral reserve's copper grade and an increase in the overall mineral reserve tonnage. At Garpenberg, increased production rates made identifying additional ore deposits crucial, and 2015 saw the addition of new reserves which, their lower grades notwithstanding, is extremely gratifying. We are, however, disappointed to report less success at Kylylahti, the mine we acquired in October 2014. Our geological expectations remain high and we will, therefore, be intensifying our exploration work in this area in 2016.

Mine automation boosts productivity

Automation in underground mines offers very real potential. Production levels are low for many hours of the day during blasting; all personnel are evacuated and the explosive gases ventilated before work can recommence. Boliden has been working to increase its automation levels in recent years, and this will continue to be one of our most important issues in the years ahead. We are, for example, introducing positioning systems underground that offer similar potential to GPS. This investment will enable remote-controlled vehicles and better logistics, and pave the way for improved personnel safety. Boliden is also one of the first mining companies in the world to introduce 5G systems for wireless data transfer and we have made considerable progress on control systems that use mobile phone technology. The ability to share detailed information amongst many individuals improves cooperation and creativity that, in turn, boosts productivity and competitiveness.

Boliden Annual Report 2015 President's Statement 5

The very real commitment and hard work by our employees and partners have ensured Boliden is well-positioned, even in a tougher market climate.

Boliden's smelters

Business Area Smelters posted strong profits in 2015 due to favourable market terms and stable processes. The operating profit, excluding revaluation of process inventory, increased by nearly 80 % to almost SEK 2.7 billion. Increased flexibility has improved our ability to handle complex raw materials, paving the way for more profitable raw materials plus the increased recycling of electronic scrap and other secondary raw materials. I would like, in this context, to pay particular tribute to the Harjavalta coppernickel smelter, which had an extremely successful year, more than doubling its operating profit. The ability to handle both copper and nickel has opened up interesting market opportunities and the smelter has a well-developed business model. In Rönnskär, work with measures to enhance process stability continued and we are now in the midst of a period of substantial investments aimed at increasing process recovery and improving environmental performance. Odda's ongoing expansion project, which will increase production to 200 ktonnes of zinc per annum, is proceeding according to plan. Here too, the goal is to improve competitiveness.

Boliden – part of the community

The base industries have an important part to play in the development of Sweden's economy, not least when it comes to providing job opportunities in less densely populated parts of the country. In addition to our own personnel, our operations create on the order of 25,000 direct and indirect job opportunities amongst subcontractors and societal services. At the same time, Boliden is reliant on competitive energy, a well-educated workforce, access to land and infrastructure, and acceptance of our operations amongst a wide range of stakeholders. To this end, we are working to promote the interests of local communities and to forge good relationships with local residents and the authorities. I would like to see a greater understanding on the part of our politicians for the role that base industries play in society. Boliden and other companies, both large and small, are not only responsible for very significant job creation, we are often the industries testing the new technology that, in many cases, lays the foundations for major export successes.

Safety and the environment top the agenda

Safety and health are fundamental to Boliden. Our accident frequency and sick leave rates have, however, very regrettably deteriorated over the past year. In an effort to reverse these trends, we will be intensifying our work, amongst employees and contractors alike, with the aim of building a culture in which the desire to work safely is firmly rooted in every individual. Boliden's ambition is to be one of the sector leaders when it comes to environmental performance. To this end, we work continuously with technological developments that will increase our energy efficiency, reduce emissions and discharges, and minimise the risk of environmental accidents. A few years ago, and in addition to the detailed targets we have set in a number of different spheres, we established key performance indicators for our combined environmental impact. These indicators will enable us to measure the environmental benefit per krona invested, and thereby improve our ability to assess and prioritise the measures that yield real environmental improvements.

Operational strength through diversity

The fact that our operations are highly competitive is largely due to the fact that we have managed to attract and retain employees with different skillsets and different backgrounds. But it is vital that we, in common with many other companies in our sector, continue to develop our initiatives to promote diversity. Our efforts in this sphere include actively working to ensure that the percentage of female workers is at least 20 % by the end of 2018.

Well-positioned for the future

If the current market climate continues, 2016 will be another challenging year. We will continue to focus on increased efficiency and cost-cutting measures, and on improving safety, quality and environmental performance. The very real commitment and hard work by our employees and partners have ensured Boliden is well-positioned, even in a tough market climate.

Stockholm February 2016

Lennart Evrell President & CEO

How we create value

FINANCING

Capital employed: SEK 35,131 m (35,087)
Net debt/equity ratio: 23% (35)

MANUFACTURING

5 mining areas
5 smelters

INTELLECTUAL CAPITAL

Patents, e.g. for electronic recycling, exploration techniques, automation
Exploration rights
Environmental permits
Reclamation expertise
The New Boliden Way philosophy
R&D partnerships with universities, colleges of further education, and suppliers

HUMAN CAPITAL

Number of employees (FTE): 4,878 (4,881)
Contractors
Partners

SOCIAL/RELATIONSHIP CAPITAL

Cooperation and dialogues with prioritised stakeholder groups
Long-term development partnerships with business partners
Involvement in industry organisations

NATURAL RESOURCES AND INPUT GOODS

Mineral resources1):
2,177 Mtonnes (2,229)
Mineral reserves1):
1,312 Mtonnes (1,209)
Forests and land: 20,900 ha (21,900)
Energy: 5.6 TWh (5.6)
Water: 150 Mm3 (173)
Chemicals: 172 ktonnes (132)
Explosives: 31 ktonnes (32)
Recycled materials (secondary materials): 297 ktonnes (304)
Mined concentrate feed: 2,357 ktonnes (2,335)

INPUT BUSINESS MODEL

Boliden creates stable and long-term value for its shareholders, employees, customers, suppliers and local communities. By providing resources and the efficient refining of the base and precious metals that society needs, and which are recycled after use, Boliden is an important component of the circular economy.

Waste rock: 32 Mtonnes (40)
Tailings: 42 Mtonnes (44)
Emissions to air:
NOx: 191 tonnes (153)
CO2: 227 tonnes (337)
Discharges to water:
Metals: 2.5 tonnes Me-eq (4.4)
Nitrogen: 216 tonnes (173)
Waste:
Non-hazardous: 11 ktonnes (11)
Hazardous: 4 ktonnes (3)
Noise and diffuse dust
Reclamation of active and
decommissioned mining areas
Negative impact on the landscape
Transport

Introduction	Strategy

Boliden Annual Report 2015 Value creation 7

• Negative impact on the landscape • Transport

The model is based on the framework issued by the International Integrated Reporting Council (IIRC). The primary purpose of the model is to explain how the Group creates long-term value.

1) Refers to metals in concentrate.

2) Included as of 1st July 2015.

– Nitrogen: 45 tonnes (51)

3) For further information and explanations, see the separate GRI Report (Note EC1).

BUSINESS MODEL OUTPUT

PRODUCTS

Production, Mines, 20151)

Zinc: 299 ktonnes (294)
Copper: 85 ktonnes (78)
Lead: 62 ktonnes (61)
Gold: 4,922 kg (4,379)
Silver: 418,489 kg (323,325)
Tellurium: 33,000 kg (30,917)

Production, Smelters, 2015

Zinc: 469 ktonnes (468)
Copper: 332 ktonnes (347)
Lead: 26 ktonnes (25)
Lead alloys: 45 ktonnes (44)
Nickel in matte2): 17 ktonnes (-)
Gold: 17,608 kg (17,368)
Silver: 664,521 kg (626,767)
Aluminium fluoride: 31 ktonnes (35)
Sulphuric acid: 1,665 ktonnes (1,659)

ECONOMIC EFFECTS3) (SEK M)

Partners

• Purchases: 33,304 (31,552)

Employees

• Salaries and remuneration: 3,480 (3,442)

Financiers

Dividends to shareholders: 889 (615)
Interest to lenders: 238 (291)

Society

• Taxes and charges: 715 (572)

Boliden

• Retained within the company: 1,677 (967)

SOCIAL EFFECTS

Direct and indirect job opportunities in Sweden, Finland, Norway and Ireland: 28,000
Involvement and value creation in local communities
Functioning social structure
Preventive health care programmes for employees
Programmes to increase diversity and equal opportunities in working life
Occupational and professional training activities
Geographic barriers in society, disruptions to reindeer herding
Increased traffic in the local area • Frequency of occupational accidents leading to absence from work, LTI: 8.9 (7.9)
Sick leave from work: 4.6% (4.3)

Target fulfilment

RETURNS

The return on investments shall be a minimum of 10% (NPV)

The return on capital employed totalled 10% (8). The average per annum return during the period from 2011 to 2015 has been 11%. Any investments made shall demonstrate a high return and shall be made in line with both Boliden's strategy and available resources. The projects' internal interest rates shall be higher than Boliden's weighted average cost of capital (WACC), adjusted for a risk premium. The WACC before tax is currently nominally set at 12%, which corresponds to 10% in real terms. Calculations for major and long-term projects are normally conducted in real terms. They are based on forecast interest rates, metal prices, exchange rates, inflation and other relevant assumptions drawn from internal analyses and external assessments.

ACCIDENTS

Boliden shall have zero accidents resulting in absence from work (LTI) every month at all units

The number of accidents leading to absence from work (LTI) increased in 2015 from 7.9 per million hours worked to 8.9. The accident frequency has increased more amongst Boliden's contractors than amongst Boliden's employees. Work on improving the safety culture has intensified during the year.

FINANCIAL TARGET

NET DEBT/EQUITY RATIO

The net debt/equity ratio in an economic upturn shall be no higher than 20%

The net debt/equity ratio at the end of 2015 was 23% (35). The reduction from 2014 was due to improved profits and lower levels of investment.

DIVIDEND

The dividend shall correspond to one third of the net profit

The proposed dividend is SEK 3.25 per share (2.25), corresponding to 33.7% (32.4) of the net profit for the year. The dividend share during the period from 2011 to 2015 was 33.8% of the aggregate net profit for the period.

SOCIAL TARGETS

SICK LEAVE

The sick leave rate shall not exceed 3.0% by 2018

The sick leave rate increased for the third year in succession in 2015, reaching 4.6% (4.3). The increasing number of people reporting sick is a worrying trend and one that is also apparent in society as a whole. Boliden is actively working with rehabilitation programmes and offering alternative work in order to reduce both shortand long-term sick leave.

GENDER EQUALITY

Women shall comprise at least 20% of the workforce by 2018

The percentage of female employees in Boliden's workforce increased to 17.8% (17.5). Women accounted for 22% of new recruits during the year, but this figure will need to exceed 35% to achieve the target formulated by Boliden.

Boliden operates in a cyclic and capital-intensive industry in which long-term value creation is achieved through high productivity, cost control, technical innovation, and profitable investments. Boliden's goal is to create value for its shareholders and, at the same time, to take responsibility for people and the environment.

ENVIRONMENTAL TARGETS

METAL DISCHARGES TO WATER Discharges (environmental impact) of metals to water shall decrease by 25% by 2018

The environmental impact resulting from discharges of metals to water has declined by 16% since the base year of 2012. The decrease from last year is due to the mines had lower metal emissions, and that the smelters' had lower discharges of mercury and arsenic. Boliden changes the method of calculating metal emissions, The new method is applicable from the base year 2012 onwards.

CARBON DIOXIDE EMISSIONS

The carbon dioxide intensity shall not exceed 0.77 tonne of carbon dioxide per tonne of metal produced by 2018

The carbon dioxide intensity has declined from 0.74 to 0.65 due to increased efficiency, changes to the product mix, and changes to emission factors for indirect emissions. Boliden now reports indirect emissions using the "location based" method in accordance with the updated guidelines of the GHG Protocol – see the EN15 and EN16 indicators in the GRI Report for further information.

METAL EMISSIONS TO AIR Emissions (environmental impact) of metals to air shall decrease by 10% by 2018

The environmental impact resulting from emissions of metals (metal equivalents) to air has declined by 5% since the base year of 2012. Last year's disruptions to the smelters' off-gas treatment systems have now been rectified. Boliden has changed the way it calculates metals emissions and the graph shows the trend using both the old and the new calculation methods. The new method is applicable from the base year of 2012 onwards.

SULPHUR DIOXIDE EMISSIONS

Emissions of sulphur dioxide to air shall be reduced by 10% in comparison with the base year of 2012

Emissions of sulphur dioxide to air have declined by 12% in comparison with the base year of 2012. Boliden's investments in a new sulphuric acid plant at Harjavalta are expected to contribute to a further reduction in sulphur dioxide emissions in the years ahead.

METAL IMPACT

In order to improve the measuring of its environmental impact Boliden has, effective as of 2015, changed the way it reports metal discharges to water and metal emissions to air to a method in which different substances are assigned an impact factor depending on how toxic they are to the aquatic environment (metals to water) or in terms of human exposures (metal to air). The new metric, metal equivalents (Me-eq), is a better metric for tracking the discharges and emissions over time in that the mass concept does not, for example, reflect the fact that metals such as arsenic and mercury have a greater environmental impact than copper and zinc. Boliden's targets and ambition to reduce discharges and emissions remain unchanged. What the new metric does is to strengthen the focus on measures that will achieve the greatest benefits for the environment.

ENVIRONMENTAL ACCIDENTS

Boliden shall have zero environmental accidents every month by 2018

Carbon dioxide intensity Target Emissions of sulphur dioxide to air Target Environmental accidents per month Target

The number of environmental accidents has increased to 1.2 (1.1) per month. Boliden's definition of an environmental accident includes both breaches of licensing terms and serious incidents, irrespective of whether any environmental harm was actually caused. None of the events in 2015 are adjudged to have been of a severity that has resulted in lasting harm or a significant environmental effect.

See pages 47–49 and the GRI Report for additional comments on this year's results and the measures that Boliden is implementing in order to reduce its local and global environmental impact.

Strategy

Boliden's strategic orientation remains fixed. The world needs base metals to ensure a continued growth in global prosperity. Boliden's mines shall, wherever possible, be expanded in order to meet this demand and to create profitable growth, while its smelters shall be adapted to handle the market trend towards more complex raw materials that yield greater margins. Our ambitious programme of exploration work shall also continue and potential acquisitions shall be evaluated.

VISION

Metals are vital to the development of modern society. Boliden's vision is to be one of the leading companies in the industry in terms of development, productivity and responsibility.

STRATEGY

Boliden produces base and precious metals through exploration, mining operations, smelting operations and recycling. We shall work at every stage of the value chain to ensure optimal resource and materials handling, and shall endeavour to bring about a sustainable development in terms of safety, environmental performance and business ethics while simultaneously developing our employees and the local communities in which we operate. The strategy can be summarised in 3 points:

Boliden Annual Report 2015

Strategy 11

AREA DESCRIPTION ACTIVITIES

Develop stable and efficient operations based on strong responsibility

Increased stability and productivity in existing plants helps cut costs, increase production and reduce the risk of accidents, without the need for major investments. Eliminating bottlenecks can help free up spare capacity throughout the value chain and normally results in high levels of value creation.

Odda P200 is one example of a major bottleneck project where minor investments in a decommissioned electrolytic refinery enable excess capacity in other sections of the plant to be utilised. Odda P200 was approved in December 2014 and is described in greater detail on page 39.

Invest in competitiveness and organic 2

Boliden has, in addition to its efforts to enhance operational efficiency, invested substantial resources over the years in a range of growth projects. These investments have taken the form both of several expansion-related investments in existing mines and facilities and of an increased focus on exploration.

The expansion of the Garpenberg mine to an annual ore production level of 2.5 Mtonnes was completed in 2015 and the expansion of the Aitik mine to produce 45 Mtonnes of ore per annum continued. Boliden also decided to invest in a new and more efficient sulphuric acid plant.

Acquire projects and producing operations

growth

Boliden is constantly evaluating potential acquisition opportunities. This involves both operational mines and new mine projects. Any potential acquisition must enable Boliden to generate additional value through its knowledge and expertise within the sphere of exploration, mining operations, concentration techniques and metallurgy.

The integration of the Finnish copper mine, Kylylahti, which was acquired in 2014, continued in 2015.

Boliden has participated in a number of acquisition discussions during the year.

MAIN USAGE

of all copper is used to conduct and produce electricity

BOLIDEN'S COPPER PRODUCTION

COPPER IN SOCIETY

Copper is a very good conductor of electricity and heat, for example, making it a critical raw material for modern economies and developing societies. Around 65% of all copper produced is used to generate and conduct electricity.

According to the International Energy Agency, global energy consumption will increase by 60% by 2030 – an increase that will make major demands on the choice of energy sources and on energy efficiency. Alternative energy sources, such as solar power, wind power, and hydroelectric power, all rely on large quantities of copper in order, initially to generate the electricity, and then, in the next phase, to transfer the energy over long distances with low loss rates.

Studies show that when copper is used to improve energy efficiency, it is capable of delivering 250 times greater reductions in carbon dioxide than the emissions arising from the manufacture of the metal. Access to copper is, therefore, one of the most important factors in achieving a transition to efficient energy supplies.

Large volumes of copper are also used within the construction, manufacturing and process industries. The automotive industry primarily uses copper for electronics and, increasingly, for hybrid and electric vehicles. Global copper consumption in 2015 totalled just over 21 Mtonnes, approximately one third of which demand can be met through recycling.

COPPER FROM BOLIDEN

Boliden has a strong position as a copper supplier in Europe, but a lesser one as a mine operator. In 2015, Boliden extracted a total of 85 ktonnes of copper in concentrate from the Aitik, Kylylahti, Kristineberg, Renström and Maurliden

Boliden's Rönnskär and Harjavalta copper smelters buy mined concentrate from internal and external mines, and also take in secondary raw materials. The smelters produced 332 ktonnes of copper metal in 2015, approximately 20% of which came from recycling.

The majority of the metal produced by the smelters is sold to industrial customers in Europe – primarily manufacturers of wire rod, copper rod, and copper alloys. Boliden has an 11% share of the European market.

Market and metal prices

The demand for metals grows most rapidly in countries where the GDP per capita rises in the interval from USD 5,000 to USD 15,000 as societies develop from agricultural to industrial economies. A large proportion of the world's population still have per capita GDPs of less than USD 5,000 and hence offer potential for high levels of metal demand in future. Demand for metals in mature economies is relatively constant, but still account for a significant percentage of global metal demand.

DEVELOPMENT IN SUBSIDIARY MARKETS, 2015

Demand for Boliden's main metals is primarily driven by global trends in infrastructure, the construction industry, and the automotive market.

SUBSIDIARY MARKET	GLOBAL	CH CHINA	US USA	EUR EUROPE
Industrial activity levels	Declining growth rate	High but slowing growth rate	Slowing growth rate	Increasing activity levels
The construction sector's invest ments	Declining growth rate	High but slowing growth rate	Increasing growth rate	Increasing activity level from low level
Automotive production	Declining growth rate	Increasing, but slowing growth rate	Increasing, but slowing growth rate	Increasing activity level

GDP PER CAPITA, 2015

SOURCE: THE INTERNATIONAL MONETARY FUND, JAN. 2016.

All values have been rounded off in USD (PPP). SOURCE: OXFORD ECONOMICS.

Boliden Annual Report 2015 Market 15

Base metal prices in USD were lower than last year – prices rose during the spring and were relatively high for the first six months of the year, but fell as economic indicators signalled lower growth rates in China. Precious metal prices were, on average, lower, reflecting a stronger USD and low rates of inflation – two parameters of importance in determining the price of gold. Contracted treatment charges rose for copper and zinc in 2015 as a consequence of the increased availability of concentrate. Several new copper mines opened and a number of existing ones expanded. There was an increase in the percentage of complex copper concentrate that few smelters are equipped to handle.

PRICING

ECONOMIC TRENDS

Metals

Copper, zinc and lead prices are set daily on the London Metal Exchange (LME). Premiums, which comprise surcharges whose levels are determined by the local balance between metal demand and smelter capacity, are normally added to the price, along with shipping costs and payment terms. Gold and silver prices are similarly set by the London Bullion Market Association (LBMA).

Concentrates

The balance between the supply of concentrates from the world's mines and the smelters' demand for mined concentrates determines the prices and terms between mines and smelters. The price is normally defined as the metal price for payable metal (the smelters do not pay for all of the metal content as it is impossible to extract all of the metal) less a so called treatment charge. The smelters sell metals at the LME price at the payable level less the treatment charge. The smelters' gross profit consequently comprises the treatment and refining charges together with the metals that can be extracted over and above the payable level and certain other products that can be extracted. Treatment charges normally rise when the supply of concentrates exceeds demand.

Metal market trends

Global mined production has, for many years, constituted the limitation on the availability of metals, but the past two years have seen the opening of several new copper mines and the expansion of a number of others. A large number of smelters have been built, primarily in China, and the smelting industry has been suffering from overcapacity for several years now. Treatment charges were, as a result, low, but rose in 2014 and 2015. Mines have a limited lifespan and supply will consequently decline if new mines are not opened. An increase in mine capacity requires assumptions that future prices will be sufficiently high to motivate investments in new mines, and when metal prices are low, mines' incentives to develop new mines decline and a number of mines with high cash costs are closed or mothballed. This leads, in time, to limitations on mined production that halt the fall in the price of metals. Treatment charges fall as a result of the growing scarcity of concentrates, and smelters' profitability weakens, resulting, eventually, in production cutbacks or smelter closures. This, in turn, results in an improvement in treatment charges. A fall or stagnation in metal supply results, eventually, in rising metal prices.

Metal prices rise when metal demand increases in an economic upturn. After a period of higher metal prices and growing profitability for mines, new decisions are taken on expanding mine capacity. Treatment charges for zinc track the price of the metal over time due to the price sharing clauses applied between mines and smelters.

There is no price sharing clause for copper.

The economic climate at the end of 2015

Metal demand has increased rapidly for a number of years now, but the growth rate tapered off in 2015 as a result of a slow-down in economic growth and a lower industrial production growth rate in China.

New mine capacity has become available, particularly for copper, after a long period of strong growth in demand for metals and high prices for the majority of metals. Smelter capacity in China has, at the same time, been rapidly expanded for both copper and zinc, and the smelter industry has been suffering from overcapacity for a number of years now. The slowdown in the growth in demand for metals and the increased supply has resulted in falls in the price of metals in 2015, coupled with a rise in treatment charges as the supply of concentrates increased.

Metal prices at the end of 2015 were relatively close to cost levels for high-cost mines, which, historically, has often proved to be the low point for prices in a weaker economic climate.

MARKET POSITION

Boliden is one of the world's biggest zinc mining and smelting companies, and a smaller player in copper, albeit one with a strong position in Europe. Boliden also enjoys an international, market-leading position in the field of electronic scrap recycling and is a prominent player in the European sector for recycling lead from batteries.

Mining companies – zinc

Boliden is the sixth largest zinc mining company in the world. Tara and Garpenberg are both large zinc mines by international standards. The Boliden Area and Garpenberg mines in Sweden receive revenues from a number of other metals, such as silver, gold, lead and copper, while Tara in Ireland receives limited revenues from by-product metals.

Mining companies – copper

Boliden is a minor operator in the global copper mining industry, but a significant one in Europe. The Aitik mine is a large mine with low grades, but high productivity levels and additional revenues from gold and silver. The Kylylahti mine is a small mine with high grades.

Smelting companies – zinc

Boliden is the sixth largest zinc smelting company in the world. The Kokkola and Odda smelters are major and medium-sized zinc producers, respectively.

THE TEN LARGEST COPPER MINING OPERATORS

THE TEN LARGEST ZINC SMELTING OPERATORS

Smelting companies – copper

The Rönnskär smelter is a major copper producer and a world leader in electronic scrap recycling. The Harjavalta smelter is a minor copper smelter by western European standards, but is the largest nickel smelter in the region.

THE TEN LARGEST COPPER SMELTING OPERATORS

Mining companies – lead

Boliden is the thirteenth largest lead mining company in the world and a medium-sized smelting company for primary lead. It is also a significant player in the European lead recycling sector.

THE TEN LARGEST LEAD MINING OPERATORS

Boliden Annual Report 2015 Market 17

COMPETITIVENESS

Boliden's metals are traded and priced on global exchanges. The products are traded in their pure forms and the majority of the production from the world's smelters comprises pure metals without distinguishing properties. Competitive costs are critical to long-term success.

Mine concentrates are not traded on exchanges, but are priced by leading operators who announce their terms in the form of annual contracts. These contracts are used as benchmarks for the contracts agreed in the market. Mines' competitiveness – cost per tonne of metal – is transparent and can be measured

using the cash cost metric.

Smelters' competitiveness is compared by means of the cash margin metric, which takes the extraction of several metals and by-products into account.

Strongly competitive mines often have high grades, substantial revenues from by-product metals, and low costs for

energy and personnel. Smelters' competitiveness depends on personnel and energy costs, stable processes, and the capacity to extract several metals from raw materials, together with strong relationships with their suppliers and customers.

CASH COST IN THE MINING INDUSTRY CASH MARGIN FOR SMELTERS

The graphs are based on the estimates and assumptions of the research company, Wood Mackenzie, and may differ from Boliden's own cash cost per mine data due to differences in the basic input data. There are several definitions of cash cost, see page 117 for a description of the concept.

The graphs show global cash margin curves for zinc and copper smelters, with Boliden's smelters indicated. The curves are based on the estimates and assumptions of the research company, Wood Mackenzie. See page 117 for a description of the cash margin concept.

Zinc – cash cost C1 composite costing

Percentage of the industry's production of zinc metal in concentrate.

The cash costs for Garpenberg and the Boliden Area, which have substantial revenues from by-products, are calculated using pro rata costing, while the figures for Tara are calculated using normal costing, in accordance with Wood Mackenzie's recommendations.

Copper – cash cost C1 composite costing

Percentage of the industry's production of copper metal in concentrate.

Aitik has a low cash cost as a result of its productivity level, which is the highest in the world for an open pit copper mine with a concentrator. Kylylahti's cash cost, as shown in the graph, is based on Boliden's own calculations.

Zinc – cash margin for smelters

Kokkola are Odda are in the better half of the curve for the world's zinc smelters.

Copper – cash margin for smelters

Percentage of the industry's production of copper metal.

Harjavalta and Rönnskär have, a substantial supply of recycled material and the ability to use complex materials. Harjavalta also has revenues from nickel.

SOURCE: WOOD MACKENZIE, JAN. 2016

BOLIDEN'S INCOME MODEL

The metals market comprises two subsidiary markets, namely the market for raw materials, where mines and smelters are the market players, and the market for finished metals, where smelters and metal buyers are the market players. Boliden operates in both of these markets.

The mines' gross profit

Mines produce metal concentrates. The price is an effect of the global market price of the pure metal, the payable metal content (the quantity of metal in the concentrates for which the mines can take payment) and deduction for treatment charges. The mines' gross profit comprises revenues from the metal concentrates, less treatment and refining charges (TC/RC) and metal impurities in the concentrates (penalty). The levels of TC/RC and penalty charges are determined in negotiations between mines and smelters that are guided by the global supply and demand.

The smelters' gross profit

The smelters' gross profit comprises the income from treatment and refining charges (from concentrates and secondary raw materials), remuneration for impurities and income from free metals. Free metals arise when the quantity of metal extracted exceeds the payable metal content of the concentrates purchased by the smelter. The smelters' gross profits are also affected by the sale of by-products extracted during the processing, e.g. sulphuric acid. A metal premium is usually also included in conjunction with the sale of metals and is determined by regional supply and demand and includes such factors as transportation, customised alloys and payment terms. Boliden sells most of its metals directly to industrial contract customers in northern Europe. These customer relationships are important to Boliden because they ensure both more reliable demand and low transport costs.

Synergies

All sales of metal concentrates between Boliden's mines and smelters are made on market terms, but Boliden's mines and smelters do benefit from a number of synergies. Boliden's basic supply of well-known, high quality concentrates increases our ability to buy complex materials at advantageous prices. The knowledge transfer between technology departments contributes to Boliden's high level of technical expertise. In-depth mapping of current and future concentrate deliveries from mines enables better planning and investments in mines and smelters and also offers advantages in the form of more reliable deliveries and revenues, and a reduced need for stockpiling. Purchases of raw materials, energy and consumables are centralised within Boliden in order to achieve maximum economies of scale.

The metal market's income components Abbreviation
Global market price set on LME and LBMA	Price
The concentrates' payable metal content	Payable
Treatment charges	TC
Refining charges	RC
Penalty for impurities in the metal	Penalty
Metal extracted as a percentage of the metal content	Recovery
Income from by-products	By-products
Metal premium in addition to the LME price	Premium
Mines' gross profit
Value of metal concentrates	Price×Payable
Deductions for treatment and refining charges and penalty	−(TC + RC + Penalty)
Smelters' gross profit
Treatment and refining charges and penalty	TC + RC + Penalty
Free metals	(Recovery − Payable)×Price
Income from by-products	By-products

Value of metal premiums Recovery× Premium

Value of metal concentrates less deduction for treatment and refining charges and penalty

Value of metal premiums Income from by-products Free metals Treatment and refining charges

and penalty

Mines' gross profit Smelters' gross profit

Metals in concentrates

THE ZINC MARKET, 2015

SPOT PRICE IN EUROPE

MINIMUM PRICE AVERAGE PRICE MAXIMUM PRICE

GLOBAL DEMAND

MTONNES (+0.6%) 13.5

Demand increased in China by 3% to 6.3 Mtonnes, corresponding to approximately 47% (46) of global consumption. Demand fell in the rest of the world by just over 1%.

GLOBAL MINED PRODUCTION

12.4

MTONNES (+0.4%) Mined production of zinc in concentrate

increased slightly from 2014 levels. Production fell in China by just under 2%, but rose in Europe and South America and fell slightly in North America. Production rose steeply in Asia, excluding China, largely due to substantially higher production levels in India.

GLOBAL SMELTER PRODUCTION

MTONNES (+4%) 13.8 247

The increase was due to an increase in production of 7% in China and 2% in the rest of the world. China's share of global production increased to 44% (43) and production in India recovered, rising by just over 12%. Concentrate supplies in India improved after mined production returned to normal levels following the dramatic fall in 2014.

CASH COST, ZINC

In weaker economic markets, metal prices have often reached a low point when they equate to the cash cost level for high-cost mines. The price of zinc has, in isolated instances, fallen towards the 60th percentile, where 40% of production has a negative cash flow, but as a yearly average, zinc prices in a weak AVERAGE PRICE

USD/TONNE (–11%) 1,928

The price of zinc rose during the spring, up until early May, when it reached a peak of just over USD 2,400/tonne, before falling again. By the end of the year, the price had fallen to USD 1,600/tonne (2,167), corresponding to a year on year drop in the price of 26%.

SPOT METAL PREMIUMS IN EUROPE

142

USD/TONNE (–9%)

European metal premiums fell slightly during the year. According to the research company, CRU, European zinc metal premiums fell by an average of 8% year on year.

REALISED CONTRACT TREATMENT CHARGE (TC)

USD/TONNE OF CONCENTRATE (+4%)

Contract treatment charges increased, year on year, and treatment charges including price sharing of metal price changes were, on average, slightly higher than last year. Spot treatment charges fell towards the end of the year in tandem with the falling price of the metal.

economic climate have been close to the 90th percentile. The USD strengthened against several other currencies in 2015, resulting in local costs measured in USD falling, and the cash cost in the 90th percentile is estimated to have fallen to USD 1,670 (1,770) per tonne.

THE COPPER MARKET, 2015

TREATMENT CHARGE (TC)

CASH COST AND PRICE

SOURCE: WOOD MACKENZIE, REUTERS JAN 2016

GLOBAL DEMAND

21.6

MTONNES (+0.5%) Demand in China increased by just over 2%, but fell elsewhere in the world by just over 1%. Demand decreased in several important, mature economies, falling by 3% in Europe, by 5% in Japan,

GLOBAL MINED PRODUCTION (CONCENTRATE)

15.1 MTONNES (+4%)

and by 1% in the USA.

Global mined production increased by 4%. Production in South America increased, albeit to a lesser extent than anticipated. Production also increased in the rest of the world with the exception of Australia, where production fell by just over 7%.

GLOBAL SMELTER PRODUCTION

MTONNES (+1.8%)

Global smelter production increased by just under 2%. Production in China increased by 5%, but remained unchanged elsewhere in the world.

AVERAGE PRICE

5 ,495

USD/TONNE (–20%) The price fell in the early part of the year, but recovered between February and early May, only to fall again, and by the end of the year, the price was USD 4,702 (6,359)/tonne, corresponding to a year on year fall in the price of 26%.

SPOT METAL PREMIUMS IN EUROPE

43

USD/TONNE (–56%) Supply of the metal gradually increased throughout the year in Europe and metal premiums in the European spot market fell steeply.

CONTRACT TREATMENT CHARGES (TC)

107 USD/TONNE OF CONCENTRATE (+16%)

Expectations ahead of 2015 were that the year would see new and expanded mine capacity brought on line and that concentrate supplies would increase sharply. This resulted in a rise of 16% in treatment charges from the 2014 contract level. Spot treatment charges fell, however, when it became clear that the mining sector was experiencing substantial disruptions.

CASH COST, COPPER

IIn weaker economic markets, metal prices have often reached a low point when they equate to the cash cost level for high-cost mines. The price of copper has, in isolated instances, fallen towards the 80th percentile, where 20% of production has a negative cash flow, but as a yearly average, copper prices in a

weak economic climate have been above the 90th percentile. The USD strengthened against several other currencies in 2015, resulting in local costs measured in USD falling, and the cash cost in the 90th percentile is estimated to have fallen to USD 4,490 (5,060) per tonne.

THE MARKETS FOR LEAD, NICKEL, PRECIOUS METALS AND SULPHURIC ACID IN 2015

SULPHURIC ACID CFR NW EUROPE, 6-MONTH CONTRACTS 06 07 08 09 10 11 12 13 14 15

AVERAGE PRICE

LEAD USD/TONNE (–15%) 1,784

NICKEL USD/TONNE (–30%) 11 ,807

AVERAGE PRICE

USD/TROY OZ. (–8%)

USD/TROY OZ. (–18%)

EUR/TONNE (+2%)

GOLD

1,160

SILVER

15.7

LEAD AND NICKEL

Global demand for lead totalled 11.1 Mtonnes, corresponding to an increase during the year of just under 1%. There was a modest increase in demand for batteries, both for new vehicles and for the replacement market. Lead demand in China remained virtually unchanged, year on year.

Global demand for nickel totalled 1.9 Mtonnes and was unchanged, year on year. Demand increased in China by 1%, but fell by 2% in the rest of the world. There was an excess supply of metal in the market for a fourth consecutive year.

GOLD AND SILVER

Gold and silver prices are controlled by expectations with regard to the global economic climate and they have often been sought-after metals in situations of widespread uncertainty and economic weakness. The last ten years have seen the metals become an increasingly popular component of financial investors' portfolios. The prices of gold and silver were negatively affected during the year by a stronger USD and by expectations of continued low global rates of inflation. The prices were, on average, lower than last year, but have not proved as volatile as base metal prices.

AVERAGE PRICE SULPHURIC ACID

Demand for sulphuric acid has matched supply in northern Europe and contract prices have been stable. Spot market prices for export volumes were characterised by an excess supply towards the end of the year, and spot prices for exports to South America and the Middle East consequently fell.

EX-CHANGE RATES, 2015

The USD strengthened considerably against the majority of the world's currencies in 2015, largely due to the relatively stronger performance by the US economy and expectations of US interest rate rises. The average USD/SEK exchange rate was 8.44 (6.87) and was 8.35 (7.81) at the end of the year. The SEK was slightly weaker against the EUR with an average exchange rate of 9.36 (9.10). The EUR/SEK exchange rate at the end of the year was 9.14 (9.47). The exchange rate trends during the year provided positive support to Boliden's performance, and this was the case for many of our competitors as well, whose raw material-dependent economies also saw weak currencies.

GLOBAL PRODUCTION OF ZINC

MTONNES 2015

MAIN USAGE

of the zinc is used for galvanisation

22 Marknad Boliden Annual Report 2015

BOLIDEN'S ZINC PRODUCTION

ZINC IN SOCIETY

Approximately 13 Mtonnes of zinc metal were consumed globally in 2015. Over 60% of all zinc produced is used for galvanisation, which dramatically extends the lifespan of steel. A thin layer of zinc on steel is sufficient to combat rust for between 50 and 100 years and extends the lifespan of steel constructions by a factor of between 3 and 5. This enables iron ore and energy corresponding to substantial quantities of carbon dioxide to be saved at the same time as society's infrastructural investments are made more lasting.

45% of all zinc produced is used in the construction and infrastructure industry, with the automotive and transport industry accounting for a further 25%. An almost equally large amount is used in the manufacture of consumer goods, such as electrical and electronic applications. China currently accounts for around half of global zinc consumption.

Zinc also forms part of many alloys and is also a component of brass and bronze.

Zinc is highly recyclable, irrespective of whether it has been used as a construction material or as a coating on other materials.

ZINC FROM BOLIDEN

Boliden produced 469 ktonnes of zinc metal at its Kokkola and Odda smelters in 2015. Zinc ore is extracted at the Tara mine in Ireland, the Garpenberg mine in Dalarna and the mines in the Boliden Area. A total of 299 ktonnes of zinc concentrate was extracted in Boliden's mines in 2015, the majority of which was supplied to the Group's own smelters.

Boliden's zinc smelters also use recycled raw material, including zinc clinker, which is produced at Rönnskär and used at Odda. The secondary zinc raw materials market is of long-term interest to Boliden.

Boliden has a strong position as a supplier to producers of galvanised thin sheet in Europe and enjoys a particularly strong position in the Nordic region due to the locational advantage. Boliden differentiates itself from competing metal producers through the development of alloys that improve the properties of the end product and through efficient logistics and delivery reliability.

Boliden has a European market share of just over 21%.

A circular economy − from deposit to customer

Boliden's business model takes responsibility for the entire value chain – from exploration and mining to production and recycling of metals.

BOLIDEN'S MINES

Exploration

Exploration – the search for mineral deposits – is conducted both in the vicinity of existing mines and in new areas. Boliden's exploration focuses on deposits that contain zinc, copper and precious metals. This is how we ensure long-term access to metals and is vital in terms of Boliden's long-term growth."

Johan Magnusson, Geologist, the Boliden Area

Mining

Boliden mines ores in both openpit and underground mines. The work involves drilling, blasting, loading, and crushing the ore. Our in-house expertise in mine design, mining technology, and extraction methods coupled with a high degree of technology development, means that several of Boliden's mines have achieved world class productivity."

Erika Fagerlönn, Team Leader, Aitik

Concentration

The crushed ore is transported to concentrators in the mining area in question, where it is processed into mineral concentrates. The majority of the mines' zinc and copper concentrates are sent to Boliden's own smelters, although a certain volume of concentrates is sold to external customers."

Tobias Altörn, Process Operator, Garpenberg

BOLIDEN'S SMELTERS

Raw materials feed

The smelters are supplied with concentrates from Boliden's own mines and with concentrates and recycled secondary raw materials from external suppliers. The secondary raw materials comprise recycled metals from circuit boards, mobile phones, automotive batteries, etc."

Therese Hedström, Project Manager, Rönnskär

Metal production

The smelters primarily produce zinc ingots, copper cathodes, lead ingots, and gold and silver granules, along with a number of by-products such as sulphuric acid, zinc clinker, aluminium fluoride, liquid sulphur dioxide, and palladium concentrate. Technical expertise and flexible processes enable Boliden to produce high quality metals from complex raw materials."

Marko Pajala, Process Operator, Kokkola

Sales

The majority of Boliden's metals and other products are sold to industrial customers in Europe. Zinc is supplied to steel companies, amongst others, while copper is supplied to manufacturers of wire rod, copper rods and copper alloys. The automotive and construction industries are important end-consumers of base metals."

Daniel Asplund, Manager Zinc Sales, Stockholm

Boliden's mines and smelters

Boliden's nine mines in five mining areas contain sulphide and gold ores from which zinc, copper, gold, silver, lead and tellurium are extracted. Several of the mines employ world-leading technologies and most of them are highly competitive. Boliden's five smelters enjoy strong market positions, thanks to their high level of process technology expertise, flexible smelting processes and the ability to produce high-quality metals from complex mined concentrates and recycled raw materials.

MINES

AITIK

The most productive copper open-pit mine in the world

Aitik in Norrbotten is a large copper mine that also contains gold and some silver. Large-scale operations, efficient logistics, and a high degree of automation, coupled with easily accessible ore (high ore tonnage in relation to the amount of waste rock that has to be moved) all contribute to the high productivity levels. Gold is also an important metal for Aitik and helps ensure Aitik's favourable cost position, despite the low copper grade. All of the copper concentrate produced at Aitik is delivered to the Rönnskär smelter. Aitik is the most productive copper open-pit mine in the world, calculated in terms of tonnes of ore produced per employee.

Milled tonnage: 36,361 ktonnes (39,090) Operating profit: SEK 183 m (558) Average number of employees: 647 (679) FTE

THE BOLIDEN AREA

Five mines in a mineral-rich geological field with a shared concentrator

Boliden has extracted ore from about 30 mines in the Skellefte district in Västerbotten since 1925. Today's area comprises the Renström, Kristineberg and Kankberg underground mines and the Maurliden open-pit mines. All of the mines, with the exception of Kankberg, produce complex sulphide ores that contain zinc, copper, lead, gold and silver. The Kankberg mine produces gold ore with the by-product tellurium.

Milled tonnage: 1,879 ktonnes (1,862) Operating profit: SEK 108 m (188) Average number of employees: 580 (533) FTE

KYLYLAHTI Acquired in 2014

Boliden acquired the Finnish copper mine, Kylylahti, in October 2014. The mine, which is located in the Outokumpu area in Finland, opened in 2012 and produces copper, gold, zinc and silver. The acquisition also included exploration rights in the surrounding Outokumpu district, which has been home to several mines in the past. The geological conditions are similar to those in the Boliden Area, which offers synergies in the fields of exploration, mining and metallurgy. The metal concentrates are delivered to Boliden's own smelters.

Milled tonnage: 733 ktonnes (172*) Operating profit: SEK 74 m (7*) Average number of employees: 114 (109) FTE

TARA

Europe's largest zinc mine

The Tara mine in Ireland is a large zinc mine with lead as a by-product. Tara's cost position is high, due to high staff overheads and the absence of by-metal cerdits, with the exception of lead. Tara has focused on cutting costs in recent years through measures designed to boost productivity. Zinc from Tara is primarily delivered to Boliden's own smelters, while the lead concentrate is delivered to European lead smelters. Tara is Europe's biggest zinc mine and the tenth largest zinc mine in the world.

Milled tonnage: 2,197 ktonnes (2,287) Operating profit: SEK 95 m (56) Average number of employees: 586 (607) FTE

GARPENBERG

The most productive underground zinc mine in the world

The Garpenberg mine is located in central Sweden. Mining of the deposits already began back in the 13th century, making Garpenberg one of the world's oldest mines still operational. Garpenberg's concentrator is located directly above a large deposit that was identified just over 10 years ago. The facilities were completed in 2014 and the ore is transported directly into the plant via an automated mine shaft elevator. Garpenberg produces complex sulphide ores that contain zinc, silver and lead, along with small quantities of copper and gold. The mine's high productivity levels, coupled with the relatively high silver grades, have resulted in an advantageous cost position for the mine. The metal concentrates are delivered to Boliden's smelters and to European lead smelters. Garpenberg is the most productive underground zinc mine in the world, calculated in terms of tonnes of ore produced per employee.

Milled tonnage: 2,367 ktonnes (2,224) Operating profit: SEK 1,452 m (919) Average number of employees: 420 (404) FT

*Q4 2014

Boliden Annual Report 2015

Operations

Mines and smelters 27

SMELTERS

RÖNNSKÄR

World leader in electronic scrap recycling

The main products of the copper and lead smelter in Skellefteå are copper, gold, silver and lead, along with by-products such as sulphuric acid and zinc clinker. The raw materials comprise copper concentrate from Boliden and external concentrates. Rönnskär is the world's biggest plant for recycling electronic scrap, with a recycling capacity of 120 ktonnes per year. Rönnskär also uses a number of other recycled materials.

Copper production: 206 ktonnes (217) Operating profit: SEK 727 m (405) Average number of employees: 800 (829) FTE

KOKKOLA

Europe's second biggest zinc smelter complemented with silver

Kokkola in western Finland produces zinc and zinc alloys, sulphuric acid and, since 2014, silver in concentrate. Kokkola has high productivity level and the new silver extraction facility has increased Kokkola's flexibility and competitiveness in a time when the world's zinc mines are tending towards higher silver content. Kokkola uses both an in-house developed direct leaching method and conventional roasting techniques, and has consequently a high flexibility in handling different raw materials. The majority of the zinc concentrate comes from Boliden's mines. Kokkola is the eighth largest zinc smelter in the world and the second largest in Europe.

Zinc production: 306 ktonnes (302) Silver in concentrate, production: 16 tonnes (6) Operating profit: SEK 739 m (459)

Average number of employees: 534 (546) FTE

HARJAVALTA

Copper, nickel and precious metals

Harjavalta in south western Finland produces copper, nickel matte, gold and silver, along with by-products such as sulphuric acid and numerous metals in concentrate. The raw materials are mainly purchased from external suppliers. The business model for nickel was changed at the end of June and purchases of nickel concentrate and sales of nickel matte are now handled in-house rather than on a tolling basis with a single business partner, as was previously the case. Harjavalta is western Europe's largest nickel smelter.

Copper production: 126 ktonnes (130) Nickel in matte production: 17 ktonnes (-) Operating profit: SEK 736 m (279) Average number of employees: 387 (399) FTE

ODDA

Zinc for Europe's steel industry

The Odda smelter by the Hardanger fjord in Norway produces zinc and zinc alloys, as well as aluminium fluoride and sulphuric acid. Odda uses direct leaching and conventional roasting techniques. The raw materials are supplied by Boliden's mines and external European mines. In 2015, Odda launched a project designed to increase capacity by eliminating bottlenecks and which will end in 2016. The majority of the zinc production is exported to the European steel industry, while the aluminium fluoride is mainly sold in the Nordic region.

Zinc production: 163 ktonnes (166) Operating profit: SEK 390 m (209) Average number of employees: 289 (282) FTE

BERGSÖE

Four million automotive batteries turned back into lead

Bergsöe in southern Sweden is one of Europe's biggest recycling facilities for lead batteries. The main products are lead and lead alloys, and the majority of the lead production is sold to the battery industry in Europe, enabling the lead to be reused, with a smaller percentage used for lead sheet, amongst other things. By recycling approximately 70 ktonnes of lead batteries per year from Europe – the equivalent of approximately four million scrap car batteries − Bergsöe contributes to an ecocycle for lead metal.

Lead alloy production: 45 ktonnes (44) Operating profit: SEK 18 m (45) Average number of employees: 71 (69) FTE

How to interpret Boliden's figures

Boliden's result are reported under two Business Areas, namely Mines and Smelters. Transactions between the Business Areas are made on market terms. This presentation provides a brief summary of Boliden's result at Group and Business Area level.

MINES

Revenues and the gross profit are affected by ore tonnage, metal grades, the recovery during the concentration process, and the price of concentrates. Concentrate prices are determined by metal prices, exchange rates, treatment and refining charges (TC/RC), and the quality of the concentrates, and by any metal price and currency hedging. The gross profit and revenues are normally the same in that Mines has no input raw materials. 1
The operating profit is affected not only by the above parameters, by operating expenses. The most important cost components for Mines are personnel, consumables and spare parts, and external services. High levels of safety and environmental performance, coupled with high production stability, result in high income and low costs. 2

SMELTERS

Revenues are determined by production volumes, metal prices and metal premiums. The smelters' sales of by-products are also an important part of the revenues. 3
The gross profit is the difference between the price of the raw material and the sales revenue, and comprises metal premiums, treatment charge, and income from free metals and by-products. 4
The operating profit comprises the gross profit minus the operating costs. The most important operating costs for the smelters are those in connection with energy, personnel and external services. The operating profit is reported excluding the revaluation of the smelters' process inventories. Excluding the effect of process inventory revaluation provides a better picture of the underlying trend. High levels of safety and environmental performance, coupled with high production stability, result in high income and low costs. 5

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 profits in stocks on intra-Group sales. 6

See page 73 for complete Income Statements.

	The Group, SEK m	2015	2014
	Revenues	40,242	36,891
	Operating profit, excl. revaluation of process inventory	4,010	2,605
	Operating profit	3,590	2,759

	Business Area
	Mines, SEK m	2015	2014
1	Revenues	9,808	9,318
2	Operating profit	1,429	1,299

	Business Area Smelters, SEK m	2015	2014
3	Revenues	38,948	35,894
4	Gross profit excl. revaluation of process inventory	9,167	7,869
5	Operating profit excl. revaluation of process inventory	2,692	1,518
5	Operating profit	2,272	1,672

Other and eliminations, SEK m	2015	2014
Revenues	–8,514	–8,321
Operating profit, internal profit eliminations	38	–65
Operating profit, other	–148	–147

Group performance during the year

Revenues and operating profit

Boliden's revenues totalled SEK 40,242 m (36,891). The increase was primarily due to improvements in market terms and the change in the business model for nickel.

The operating profit totalled SEK 3,590 m (2,759) and the operating profit excluding revaluation of process inventory was SEK 4,010 m (2,605).

The operating profit for Mines totalled SEK 1,429 m (1,299), while for Smelters, the operating profit excluding revaluation of process inventory was SEK 2,692 m (1,518).

The operating profit was positively affected by increases in production, principally in conjunction with the ramping up of Garpenberg and the acquisition of Kylylahti, which took place on 1st October 2014. Planned maintenance shutdowns for Smelters impacted the operating profit to the tune of SEK –290 m (–205) in the form of decreases in production and increases in costs.

Improvements in market terms had a positive impact on the profit of SEK 1,183 m. A stronger US dollar compensated for lower metal prices. Improvements in TC/RC terms and metal premiums also had a positive effect on the operating profit.

The Group's operating costs before depreciation totalled SEK 11,581 m (10,933), corresponding in local currencies to an increase of 5%. The increase was mainly due to the acquisition of Kylylahti and the start-up of the new facility at Garpenberg. Adjusted for Kylylahti, costs increased by 3% in local currencies. The purchase prices for the year fell slightly.

Depreciation increased, primarily as a result of increases in production due to the acquisition of Kylylahti, and to the fact that production at Aitik took place in more capital intensive areas and Garpenberg's production during the entire year took place at the new facilities.

The Group's operating profit includes items affecting comparability totalling a net of SEK –45 m, with costs in respect of the energy tax imposed for the use of incorrectly dyed diesel at Aitik during the period from April 2009 to October 2012 accounting

for SEK –212 m of this, changes to pension terms at Tara accounting for SEK 227 m, and a change to the model for internal profit elimination between the smelters accounting for SEK –60 m.

The net financial items for the year totalled SEK –234 m (–288) and the profit after financial items was SEK 3,356 m (2,471).

The reported tax for the year totalled SEK –715 m (–572), corresponding to an average tax rate of 21% (23).

The net profit for the year was SEK 2,641 m (1,899), corresponding to earnings per share of SEK 9.65 (6.94).

Operating profit, SEK m	2015	2014
Revenues	40,242	36,891
Operating costs before depreciation	11,581	10,933
Depreciation	3,522	3,277
Operating profit excl. revaluation of
process inventory	4,010	2,605
Operating profit	3,590	2,759

Profit analysis, SEK m	2015	2014
Operating profit	3,590	2,759
Revaluation of process inventory	–420	154
Operating profit excl. revaluation of process inventory	4,010	2,605
Change		1,406
Analysis of change
Volume effect		989
Prices and terms		1,183
Metal prices and terms		–2,229
By-products, prices and terms		–23
Realised metal price and currency
hedging		–32
TC/RC terms		272
Metal premiums		105
Exchange rate effects		3,089
Costs (local currencies)		–573
Depreciation (local currencies)		–228
Items affecting comparability		–45
Other		79
Change		1,406

Investments

Cash flow

by SEK –728 m (488).

the business model for nickel.

Investments for the year totalled SEK 3,650 m (4,222) and primarily comprised maintenance investments. Work also began on a deep storage facility at Rönnskär and the expansion of Odda to 200 ktonnes per annum.

Investments, SEK m	2015	2014
Investments, Mines	2,394	3,450
Investments, Smelters	1,248	768
Investments, Other	8	4
Total investments	3,650	4,222

The cash flow from operating activities before changes in working capital totalled SEK 6,963 m (5,301) in 2015. Tax paid for the year totalled SEK 272 m (242). The increase in working capital reduced the cash flow

The free cash flow totalled SEK 2,565 m (1,583). The improvement was due to a higher profit and lower investment levels, but was counteracted by increases in working capital tied up as a result of the change in

Cash flow, SEK m	2015	2014
Cash flow from operating activities before changes in working capital	6,963	5,301
Changes in working capital	–728	488
Cash flow from operating activities	6,235	5,789
Cash flow from investment activities	–3,670	–4,206
Free cash flow (before financing)	2,565	1,583

Financial position

On 31st December 2015, Boliden's net debt totalled SEK 5,827 m (8,283). Shareholders' equity totalled SEK 25,807 m (23,974), including net market valuation of currency, interest, and raw materials derivatives totalling SEK 68 m (63) after fiscal effects. The positive cash flow for the year resulted in a fall in the net debt/equity ratio to 23% (35) by the end of 2015. The average term of Boliden's total granted loan facilities was 2.4 years (3.4) at the end of the year. The average interest level in the debt portfolio on 31st December 2015 was 1.3% (1.7) and the fixed interest term was 0.5 years (0.8).

At the end of the year, Boliden's current liquidity totalled SEK 6,514 m (5,847), comprising of liquid assets and unutilised binding credit facilities with terms of over one year. For further information on Boliden's debt portfolio, see Note 26 on page 99.

● Personnel, 24% (25) ● Energy, 16% (17) ● Consumables & spare parts, 19% (18) ● Transport costs, 4% (4) ● External services, 17% (18) ● Depreciation & other, 20% (17) REVENUES AND OPERATING PROFIT BREAKDOWN OF OPERATING COSTS EARNINGS PER SHARE AND DIVIDEND SHARE ● Revenues Operating profit Operating profit excl. revaluation of process inventory ● Earnings per share Dividend share SEK m SEK m 11 12 13 14 15 0 10,000 20,000 30,000 40,000 50,000 0 1,000 2,000 3,000 4,000 5,000 SEK % 11 12 13 14 15 0 5 10 15 20 0 10 20 30 40

The operating profit excluding revaluation of process inventory increased by 54% due to improvements in market terms and production increases, primarily within Business Area Mines.

Operating costs, including depreciation, increased in local currencies by 5%. Adjusted for Kylylahti, operating costs increased by 3%.

Earnings per share totalled SEK 9.65 (6.94) and a dividend of SEK 3.25 (2.25) is proposed, corresponding to a dividend share of 33.7% (32.4).

The Group 31 Boliden Annual Report 2015
--------------------------------------------	--	--	--

Capital structure and return	2015	2014
Balance Sheet total, SEK m	43,022	43,865
Capital employed, SEK m	35,131	35,087
Shareholders' equity, SEK m	25,807	23,974
Net debt, SEK m	5,827	8,283
Return on capital employed, %	10	8
Return on shareholders' equity, %	11	8
Equity/assets ratio, %	60	55
Net debt/equity ratio, %	23	35

The Parent Company

The Parent Company conducts limited operations and is, for fiscal purposes, commission with Boliden Mineral AB and has no employees. The Income Statements, Balance Sheets and Statements of Cash Flow for the Parent Company are shown on page 77.

Principles for remuneration to the President and other senior executives

The remuneration paid by Boliden to senior executives shall comprise a fixed salary, variable remuneration, pension benefits and other benefits. Remuneration to senior executives is described in Note 3 on pages 85–86.

The variable remuneration component shall be linked to the Group's profitability and to the individual in question's sphere of responsibility and shall primarily comprise one or more financial parameters. The maximum variable remuneration shall be 60% of the fixed annual salary for the President and 40−50% of the same for other senior executives. A certain percentage 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, also part of a profit-sharing system. Senior executives have a defined contribution pension solution and a retirement age of 65. The Board does not intend to propose any changes to these guidelines to the Annual General Meeting to be held in May 2016.

INVESTMENTS AND CASH FLOW FROM OPERATING ACTIVITIES

Cash flow from operating activities

FREE CASH FLOW COMMENTS

Cash flow from operating activities respectively investments. The cash flow from operating activities before investments increased due to increased profits.

Free cash flow. The increase in the free cash flow of SEK 982 m was due to increased profits and lower levels of investment.

Rationalisation and production optimisation

Boliden Mines has increased its production of metals in concentrate during the year, mainly due to the successful ramping up of the new Garpenberg facilities, which has now reached the goal of an annual ore production rate of 2.5 Mtonnes. Boliden Mines will continue to invest in and focus on automated processes, shorter lead times, and increased competitiveness.

MTONNES

2.4 (2.2) Mtonnes of ore were processed by Garpenberg's concentrator in 2015.

TONNES

The bucket of Aitik's new digging machine can hold twice the load of a normal, fully loaded truck (to be precise, 80 tonnes).

KTONNES

Approximately 100,000 tonnes per day is processed through Aitik's concentrator.

Introduction

Boliden Annual Report 2015 Business Area Mines 33

GARPENBERG

World class productivity

Boliden Garpenberg is the most productive underground zinc mine in the world, thanks to its leading technical solutions.

A comprehensive investment project – the second largest in Boliden's history – has resulted in new underground facilities, new infrastructure, and a highly efficient concentrator. The facilities came on line in 2014, since when production has gradually been increased from an annual rate of 1.4 Mtonnes to 2.5 Mtonnes by the end of the year.

The entire production process, from crushing the ore to filtering the milled concentrate, has been automated, which is one of the reasons for the increased efficiency.

The degree of automation in the newly constructed concentrator has helped enable production to almost the double while retaining virtually the same number of employees. Despite the increase in production, the total discharges to water and emissions of carbon dioxide to air have decreased. A shared control system and wireless data transfer throughout the mine mean that production flows, samplings, and any alarms can be monitored and corrected remotely via a mobile phone or tablet. The zinc recovery at the concentrator increased in 2015 from 87% to 92%.

Advanced positioning technology is used underground and drill rigs and loading machines are remotely controlled. This results in both a better and safer work environment and increased productivity, because the machines can work in conjunction with blasting.

All of the facilities share a common control system and an advanced maintenance system for preventative maintenance. Taken as a whole, these factors increase safety, better control and increased production stability.

Revenues and operating profit

The majority of Mines' sales are made to Boliden's smelters, and a smaller share is sold externally. Internal sales are made on market terms. Revenues increased by 5% to SEK 9,808 m (9,318), of which external sales totalled SEK 1,208 m (920).

Mines' operating profit increased to SEK 1,429 m (1,299) due to increased production resulting from the ramping up of Garpenberg and the acquisition of Kylylahti. The increase in production also resulted in increases in both costs and depreciation. Lower metal prices and higher TC/RC were compensated for, in part, by positive exchange rates from a stronger US dollar.

Aitik's operating profit decreased due to a deterioration in market terms and the costs in respect of energy tax due to the use of incorrectly dyed diesel during the period from April 2009 to October 2012, which gave rise to an item affecting comparability totalling SEK –212 m. The fall in the operating profit of the Boliden Area was due to higher costs in conjunction with the provision made for the reclamation of a decommissioned tailings pond, and to increased depreciation relating to higher volumes and increased investments.

The marked improvement in Garpenberg's operating profit was primarily due to the higher milled tonnage volume, improved recovery levels and higher silver grades. Kylylahti was consolidated on 1st October 2014 and achieved a full year effect in 2015. Tara's operating profit increased as a result of changes to pension terms that resulted in a non-recurrent effect totalling SEK 227 m. Tara's operating profit was, however, negatively affected by production disruptions during the year.

Mines' operating costs before depreciation totalled SEK 5,842 m (5,417), corresponding to an increase in local currencies of 7%. Adjusted for Kylylahti, costs increased by 2% in local currencies. The increase was primarily attributable to increased production at Garpenberg and expanded exploration work.

Depreciation increased, year on year, to

	2015	2014
Revenues, SEK m	9,808	9,318
Operating costs excl. depreciation, SEK m	5,842	5,417
Depreciation, SEK m	2,520	2,264
Operating profit, SEK m	1,429	1,299
Investments, SEK m	2,394	3,450
Capital employed, SEK m	19,275	19,615
Return on capital employed, %	7	7
Number of employees, FTE	2,603	2,559

SEK m	2015	2014
Operating profit	1,429	1,299
Change		129
Analysis of change
Volume effect		977
Prices and terms		-271
Exchange rate effects		1,646
Costs (local currencies)		-395
Depreciation (local currencies)		-243
Items affecting compa rability		15
Other		46
Change		129

KEY DATA PROFIT ANALYSIS OPERATING PROFIT

SEK m	2015	2014
Aitik	183	558
The Boliden Area	108	188
Garpenberg	1,452	919
Kylylahti	74	7*
Tara	95	56
*Q4 2014.

REVENUES AND OPERATING PROFIT

BREAKDOWN OF REVENUE BY METAL

Revenues and operating

COMMENTS

profit. The increase of 10% in the operating profit was due to production increases due to the ramping up of Garpenberg and the acquisition of Kylylahti.

Breakdown of revenue by metal. The percentage of revenues attributable to precious metals increased, but decreased for copper and zinc.

Breakdown of operating

costs. Operating costs excluding depreciation increased in local currencies by 7%. Adjusted for Kylylahti the increase was 2%.

Boliden Annual Report 2015 Business Area Mines 35

SEK 2,520 m (2,264). The increase was primarily due to production increases and that production at Aitik occurred in more capital intensive areas.

Production

The milled tonnage volume fell while the metal content increased for all metals.

The milled tonnage volume at Aitik fell to 36 Mtonnes (39) due to unfavourable ore quality in the second quarter and the low availability of crushers in the autumn. Higher grades were unable to compensate for the downturn in milled tonnage and the production of copper in concentrate consequently fell. The production plan for 2016 will see production continue in areas where the grades are slightly below the average grades for the mineral reserve.

The milled tonnage volume in the Boliden Area was 1,879 ktonnes (1,862). Higher grades and recovery resulted in an increase in the production of zinc, lead and silver in concentrate. Production of copper and gold in concentrate fell, however, due to lower grades and recovery.

The ramping up of Garpenberg's new facilities continued in 2015, resulting in the milled tonnage volume increasing to 2,367 ktonnes (2,224). Production of zinc and silver in concentrate increased by 8%

and 32%, respectively, due to increases in milled tonnage volumes and better recovery. The silver grade also improved.

Kylylahti, which was acquired on 1st October 2014, has reported strong production and a high milled tonnage volume in 2015.

The milled tonnage volume at Tara was 2,197 ktonnes (2,287). Production was negatively affected by the changeover to deeper parts of the mine and delays in preparation work. A lower milled tonnage volume, coupled with lower grades, resulted in a fall in the production of zinc and lead in concentrate.

COMMENTS COPPER PRODUCTION

Copper production. The acquisition of Kylylahti resulted in an increase in the production of copper in concentrate, despite falls in production at Aitik and in the Boliden Area.

Zinc production. Production of zinc in concentrate increased slightly due to increases in milled tonnage volumes and recovery at Garpenberg and to higher grades and recovery in the Boliden Area.

Gold production. Production of gold in concentrate increased at Aitik, Kylylahti and Garpenberg.

Silver production. Higher milled tonnage volumes and improvements in grades and recovery at Garpenberg are the main reasons for the increase in the production of silver in concentrate.

Lead production. Production of lead in concentrate increased slightly, mainly due to higher milled tonnage volumes and improved recovery at Garpenberg.

ZINC PRODUCTION

GOLD PRODUCTION

SILVER PRODUCTION

LEAD PRODUCTION

Investments

Boliden has a long-term investment focus in order to ensure both existing and future operations. 2015 was, in many respects, a year of consolidation when the focus was on increasing profitability by means of improvements to both productivity and metal recovery in order, thereby, to extend the life of mines. The expansion investments made in 2015 were, therefore, modest in comparison with previous years, and the investments made in Boliden's mines totalled SEK 2,394 m (3,450). Examples of the investments made in 2015 include:

The extension of the Tara mine in Ireland in a south westerly direction, where two ventilation shafts were drilled from the surface down to a depth of just over 800 m, resulting in increased productivity.
Ramps were built towards new ore positions in the Boliden Area's Renström mine in order to enable an increase in production.
The investment in Aitik's ground-based GPS system enables better positioning of mining machines than was previously possible, thereby enhancing the efficiency of the mine's operations.
A new pumping station and improvements to the electrical supply at Aitik in order to enable the continued expansion of the mine and to reduce environmental risks in conjunction with extreme precipitation.
Ongoing investments in waste rock extraction in order to permit access to new ore positions in all mines.

Investments in organic growth

Boliden conducts an ongoing and extensive programme of project development work in order to increase the capacity and lifespan of existing mines and to expand into new geographical areas. In 2015, Boliden has conducted conceptual studies in both Nautanen to the north of Aitik and in Rävliden, which is located near the Kristineberg mine in the Boliden Area. The application for an exploitation concession for the copper deposit in Laver submitted in 2014 has been appealed and Boliden is continuing to work towards approval of the concession.

Ongoing projects Aitik's expansion

Boliden has continued to work on the expansion of Aitik's capacity in 2015. To this end, investments were made in improved water pumping facilities and a new electrical substation for the electricity supply during the year, in order to enable increased capacity. The environmental permit granted by the Land and Environment Court in 2014 for an increase in production was appealed by the Swedish Environmental Protection Agency. The Land and Environment Court of Appeal rejected the appeal in every significant respect in January 2016. Any appeal against this ruling by the Land and Environment Court of Appeal must be submitted by 19th February 2016.

Focus areas

A good working environment and zero tolerance for accidents are top priority issues in Boliden's mines. Accident rates are on a par with those in other industries, but the level is higher compared with the best mining and smelting companies. Work on strengthening the safety culture continues, with activities such as training programmes, daily meetings, health & safety inspections, technological development, and improved safety equipment. Continuous operational improvements are being made within the framework of the New Boliden Way by means of the development of productivity, stability and quality. Systematic improvement work and minor investments enabled the concentrator in the Boliden Area to achieve an increased throughput during the year.

New technology yields increased recovery

Boliden focuses on the in-house development of new metallurgy technology in order to ensure the ability to extract more of the metal present in the ores.

Increased automation boosts productivity

The technological trend is increases towards autonomous machines where the processes are controlled using wireless data transfer from advanced control rooms and with the help of tablets and smart phones. This makes better use of time, cuts lead

times, increases productivity, and improves safety. Boliden is currently unique in its focus on wireless networks in underground mines, such as the Kristineberg mine, which now has a fully developed wireless network with positioning of both people and machines. The infrastructural expansion has continued during the year with the installation of a wireless network at Garpenberg. The use of remote controlled loading machines will enable production at times when personnel cannot work in the mine due to the blasting work that is carried out on a daily basis. Pilot projects are also being conducted into remote controlled loading machines at Tara and at the Kankberg mine a 5G test network is being built, enabling mining operations to be planned on the basis of positioned machines underground and with real-time monitoring.

Electricity instead of diesel

Boliden is working in partnership with a number of companies, investigating automation development for operating trucks on public roads via electrical networks. Boliden is also investigating the potential for running trucks on electricity, rather than diesel, in both underground and open-pit mines, in order to reduce fuel consumption and increase productivity. Switching from diesel to electricity will not only improve safety, it will also reduce carbon dioxide emissions.

Developing environmental technology creates value

Boliden is on the cutting edge when it comes to investments in environmental technology. It is largely a matter of constantly developing and making reclamation work both safer and more cost effective. Boliden is, for example, working in partnership with the forestry industry and trialling green liquor sludge, which is a by-product of pulp manufacturing, for use as a covering material for mine waste. Development projects are also taking place involving the use of geological bentonite clay as a moisture absorbent sealant material for the cost-effective sealing of decommissioned mines.

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. Once extracted, the ore is transported to the concentrator where it is ground to a fine sand. Metal-bearing elements are then separated out from waste rock using a variety of different concentration methods. These are followed by dewatering and filtration, and the concentrates are then shipped to the smelters.

CONCENTRATOR

Crushed ore Crushed ore arrives from the mine.
Primary and secondary mills Mills grind the crushed ore. The milling is carried out in two stages to produce sand

with a grain size of 0–250 micrometres.

Flotation The sand is carried to tanks where chemicals are added and air is injected, causing different types of mineral to rise to the surface, forming a froth. Non-mineral-bearing particles (tailings sand) deposit on the bottom of the tank and are transported to tailings ponds.
Dewatering and filtering The mineral froth is gathered up, dewatered and filtered to produce a dry concentrate.
Metal concentrate The end result is zinc concentrate that contains approx. 55% zinc, or copper concentrate that contains approx. 25% copper. The metal concentrates are sent to the smelters.

Coordination, synergies and more products

Increasing process efficiency and stability has helped enable Boliden Smelters to improve its operating profit, excluding revaluation of process inventory, by 77% during the year. Increased flexibility has also enabled the smelters to handle more complex raw materials and extract more products, which has had a positive effect on profitability. The change in the business model for nickel, as of the third quarter, whereby production is no longer conducted on a tolling basis is one example of this approach.

16 tonnes of silver in concentrate were extracted by the Kokkola zinc smelter during the year.

Nickel concentrate feeds increased by 18% in 2015.

An operating profit excluding revaluation of process inventory of SEK 1.5 b from the copper smelters in 2015.

Introduction	Strategy	Market	Operations	Corporate Governance	Financial reports

Boliden Annual Report 2015 Business Area Smelters 39

ODDA

Cutting costs boosted capacity

Five years ago, Boliden Odda in Norway was a high-cost smelter that was finding it increasingly difficult to compete in the international competition. In 2011, Boliden launched a comprehensive action programme with the purpose of cutting costs by NOK 100 m and improve process stability, in an effort to reverse this negative trend.

And the investments yielded results. Increasing process and organisational efficiency and reducing staffing levels enabled the smelter to cut its annual costs by NOK 110 m

in just three years, and thereby substantially improve its competitiveness. One of the measures involved shortening the distance between the electrodes in one of the cell houses, enabling production in the other cell house to be cut and allowing the smelter to achieve the same production levels at a considerably reduced cost.

In order to further strengthen the smelter's position, Boliden decided in 2014 to implement a number of measures designed to maximise the smelter's capacity. This primarily

involved elimination of bottlenecks and exploiting the opportunities that arose from the successful improvement programme. The smelter will, amongst other things, be equipped with new direct leaching reactors, and in 2015 continued the work on upgrading other process equipment.

The goal is to increase capacity from 170 to 200 ktonnes of zinc per year. Boliden anticipates achieving this goal in 2017, based on an investment of NOK 350 m.

Revenues and operating profit

Revenues totalled SEK 38,948 m (35,894). The gross profit, excluding revaluation of process inventory, increased to SEK 9,167 m (7,869), primarily as a result of improvements in market terms and higher feeds, particularly for nickel.

The operating profit, excluding revaluation of process inventory, increased to SEK 2,692 m (1,518). If the process inventory revaluation effect of SEK –420 m (154) is included in the calculations, the operating profit was SEK 2,272 m (1,672). The operating profit was affected to the tune of SEK –290 m (–205) by maintenance

shutdowns that resulted in lower production levels and increased operating costs. A correction to the internal profit elimination within Business Area Smelters had a non-recurrent effect on the operating profit of SEK –60 m.

The operating profit, excluding revaluation of process inventory, improved substantially year on year for the copper and zinc smelters. The improvement in Rönnskär's operating profit was due to better market terms and a higher volume of free metals that resulted from the measures designed to improve process stability. Nickel concentrate feeds improved at

Harjavalta and this, coupled with improved market terms, helped bring about an improvement in the smelter's operating profit. The improvements in Kokkola's and Odda's operating profits were primarily due to improvements in market terms. Bergsöe's operating profit fell due to a fall in the price of lead in SEK and in spite of higher feed levels and higher premiums.

The smelters' operating costs, excluding depreciation, totalled SEK 5,536 m (5,370). Costs increased in local currencies by 2% due, in the main, to more extensive maintenance work. The action programme at Rönnskär continued during

	2015	2014
Revenues, SEK m	38,948	35,894
Gross profit excl. revaluation of process inventory, SEK m	9,167	7,869
Operating costs excl. depreciation, SEK m	5,536	5,370
Depreciation, SEK m	1,002	1,012
Operating profit excl. revaluation of process inventory, SEK m	2,692	1,518
Operating profit, SEK m	2,272	1,672
Investments, SEK m	1,248	768
Capital employed, SEK m	15,878	15,592
Return on capital em ployed, %	14	11
Number of employees, FTE	2,146	2,194

KEY DATA OPERATING PROFIT ANALYSIS OPERATING PROFIT

SEK m	2015	2014
Operating profit	2,272	1,672

Revaluation of process inventory	–420	154
Operating profit excl. revaluation of process
inventory	2,692	1,518
Change		1,174
Analysis of change
Volume effect		126
Prices and terms		1,185
Exchange rate effects		1,392
Costs (local currencies)		–124
Depreciation (local currencies)		15
Items affecting compa rability		–60
Other		32
Change		1,174

SEK m	2015	2014
Rönnskär	727	405
Harjavalta	736	279
Kokkola	739	459
Odda	390	209
Bergsöe	18	45

REVENUES AND OPERATING PROFIT EXCL. REVALUATION OF PROCESS INVENTORY

BREAKDOWN OF GROSS PROFIT EXCL. REVALUATION OF PROCESS INVENTORY

BREAKDOWN OF OPERATING COSTS

● Depreciation & other, 17% (17)

COMMENTS

Revenues and operating profit excl. revaluation of process inventory. The increase of 77% in the operating profit was due to

improvements in market terms and higher feeds. Breakdown of the gross profit. TC/RC's share of the gross profit increased, year on year.

Breakdown of operating

costs. Operating costs excluding depreciation increased in local currencies by 2%.

Boliden Annual Report 2015 Business Area Smelters 41

the year and activities were implemented to improve the process balance.

Production

The smelters' precious metal production increased, while copper production fell, and production of zinc, lead and lead alloys increased slightly. The maintenance shutdowns in 2015 were more comprehensive than in the previous year and proceeded according to plan.

Rönnskär's processes continued to stabilise as a result of the action programme, but copper production fell due to a more

extensive programme of maintenance shutdowns than in the previous year. A high content of precious metals in the raw materials and an efficient precious metals process resulted in an increase in the production of precious metals, while improvements in control enabled a slight increase in electronic scrap feeds.

Harjavalta's copper and nickel processes were stable and feeds were high, but more comprehensive maintenance shutdowns resulted in a fall in copper production from the record high levels achieved last year. The new business model for nickel

yielded increased flexibility and enabled an increase in nickel concentrate feeds.

Kokkola's zinc production increased and process stability improved during the year as the adjustments made yielded the desired effect.

Zinc production at Odda continued to be high, despite a more comprehensive maintenance shutdown than in the previous year.

Bergsöe's production of lead alloys increased slightly due to improved process stability.

COMMENTS

Zinc production. Concentrate feed increased at both Kokkola and Odda, year on year. Zinc production increased at Kokkola but fell at Odda.

Copper production. Concentrate feed and copper production fell at both Rönnskär and Harjavalta. Secondary materials feed rose, however, at Harjavalta.

Gold production. Gold production increased at both Rönnskär and Harjavalta.

Silver production. Silver production increased at Rönnskär but fell at Harjavalta. Lead production. Rönnskär's lead production and Bergsöe's production of lead alloys both increased slightly.

COPPER PRODUCTION ZINC PRODUCTION

SILVER PRODUCTION1) GOLD PRODUCTION LEAD PRODUCTION

1) Silver in concentrate at Kokkola is included in the production figure shown as of 2014.

Investments

Business Area Smelters makes ongoing investments in the modernisation and upgrading of processes and equipment. A number of environment-related investments were made during the year in order to improve and ensure the smelters' environmental performance. Boliden's ambition is for all environmental investments to add other values, such as increasing production capacity, in addition to the environmental benefits. The Business Area's investments during the year totalled SEK 1,248 m (768).

Expansion of zinc production at Odda

A comprehensive action programme has enabled the Odda zinc smelter to cut costs and improve process stability substantially in recent years. A project that will increase annual capacity from 170 ktonnes to 200 ktonnes of zinc was launched during the year and involves restarting an old cell house and upgrading process equipment. For further information, see page 39.

Environmental investments at Rönnskär

2015 saw the start of the investments resulting from the terms of the environmental permit granted in 2014 and which will entail a total investment on the order of SEK 1 billion between 2015 and 2018. One of the most extensive activities will be the construction of a deep storage facility for, amongst other things, mercury-bearing materials, enabling waste to be stored in a sustainable manner. The construction of a treatment plant for the granulation water has also been approved in order to reduce discharges of metals.

Investments in sulphuric acid plant and converter

Sulphuric acid is an important by-product for the smelters. In December, Boliden decided to replace the existing sulphuric acid plant at Harjavalta in order to improve reliability and enable lower emissions and discharges and, in the longer term, increase production. Boliden has also carried out preparatory work in 2015 for the replacement of the 40 year old converter at Kokkola's sulphuric acid plant in 2016. The investment constitutes a modernisation that will secure future production and a strong environmental performance.

Focus areas

Efforts to boost efficiency and growth are based on a sustainable and responsible attitude to safety, the environment and health. Boliden has a zero tolerance vision for both work-related personal injuries and environmental accidents, and Boliden's business partners shall, in common with Boliden, implement a structured programme of sustainability work and sound commercial ethics. It is this belief that forms the basis for Smelters' work in the following strategic focus areas:

Improved productivity

The work on improving productivity is intended to result in increased stability, higher recovery rates and lower costs. Efficient maintenance work, coupled with fewer and shorter maintenance shutdowns, are all examples of ways in which productivity can be improved. The long-term strategy presupposes the development of technology and processes by Boliden, and to this end, the focus on technological development has increased and a central R&D group has been formed during the year.

Increased flexibility

Boliden is well equipped to handle complex raw materials that contain impurities, which is a significant advantage in today's market. The ability to handle waste in an environmentally safe and cost-effective way is also becoming increasingly important. Increased flexibility enhances our ability to handle impurities in the raw materials and ensures better longterm handling of waste products such as by-products and waste. The action programme that is being implemented at Rönnskär is designed to introduce greater flexibility into the way in which the smelter handles changes in the raw materials market and meets new demands for waste management.

Maximised production of metals and by-products

Maximising the production of metals and by-products enables a broader product portfolio and diversification in certain key areas. Examples of this kind of expansion of the product portfolio include Harjavalta's development of its business model for nickel, which was changed during the year, and Kokkola's new silver extraction facility.

Secured demand through good customer relationships

The majority of Boliden's metals are sold to industrial customers in northern Europe via contracts that are negotiated on a yearly basis.

Boliden can charge a premium for high levels of delivery reliability and product quality, which are based on adequate supplies of raw materials and stable production processes. These customer relationships are important to Boliden because they not only secure demand, they also contribute to a stable cash flow.

Key projects in 2015 New nickel business model increases profitability

The nickel smelting business model was changed at the end of June 2015 and now more closely resembles the model used for copper and zinc. Existing equipment was retained but the flexibility of purchasing and sales increase. Nickel concentrate is purchased from external suppliers and nickel matte is sold to customers worldwide. Boliden has previously smelted nickel concentrate on a tolling basis, which entailed an exclusive agreement with a single business partner. The operations have developed as planned and helped boost operating profits during the year.

Action programme at Rönnskär proceeding according to plan

Work on the action programme launched in 2014 and designed to improve process stability and cut costs continued at Rönnskär. Production process efficiency was improved during the year and the capacity to handle impurities increased.

Silver extraction at the Kokkola zinc smelter

The ramping up of production at Kokkola's facility for extracting silver from zinc concentrate continued in 2015. The new facility, which came on line in 2014, produces silver concentrate – an intermediate product that is sold on for refining, and just over 16 ktonnes of silver in concentrate was produced in 2015. This new facility is an important component of Boliden's strategy of maximising the production of metals and by-products from raw materials.

Boliden Annual Report 2015 Business Area Smelters 43

HOW SMELTERS WORK

Boliden's smelters refine mined concentrates and secondary materials into pure metals. The metals are separated out with the aid of high temperature reactions or by means of leaching. Smelter processes are extremely energy-intensive.

Boliden's employees

To generate value for the employees, Boliden must offer safe work environments and the preconditions for good health, a secure future talent pool and opportunities for career development, and help promote diversity and a better balance between the genders.

A safe work environment

Boliden shall have safe workplaces. Safety is a top priority issue and Boliden has a clear zero tolerance vision for accidents. Achieving this goal demands the combination of a strong safety culture and proactive work with risks.

The number of serious accidents has more than halved in the mining industry over the past decade, and the most common types of incidents and accidents nowadays involve people stumbling, falling, or injuring their fingers when working with hand tools. In most cases, the injured worker returns to work within a few days. The accident frequency (LTI) in 2015 was 8.9 (7.9) for Boliden's employees, including contractors, corresponding to a year on year deterioration of 13%.

Boliden aims to reduce this frequency to zero by 2018 and the efforts to improve the safety culture were consequently intensified in 2015 in the form of numerous activities and training courses. Examples include behaviour-based safety training, increased involvement by management in the health and safety work, additional risk analyses, and expanded health & safety inspections. Boliden also began developing proactive operational control and follow-up metrics in 2015, including the number of risk evaluations, safety surveys, and participation by the management in health & safety inspections. The overall aim is for Boliden to act before an incident or accident occurs by putting preventative measures in place.

Clear leadership and good role models are important in creating and maintaining the type of safety

WORK SAFELY

A safety culture survey was conducted at all of Boliden's units in 2015 as a complement to the regular employee satisfaction survey. Over 3,364 Boliden employees identified both strengths and areas with scope for improvement. The survey showed, amongst other things, that the message that safety takes precedence over production must be made even clearer if it is to become fully established throughout the Group.

BSafe is a concept developed as part of Boliden's work with visual, clear and standardised information on safety measures, correct behaviour and correct equipment in

all workplaces. Work on BSafe continued in 2015 with the aim of increasing safety awareness in the work environment for employees and contractors alike. This takes the form of daily start-up meetings across the operations, for example. During these meetings, risks and results are visualised on boards so that they are clearly visible to all.

culture we seek to establish, coupled with a high level of awareness. The past year has seen several substantial investments in safety culture throughout the Group and internal training courses with safety as a theme were provided during the year.

Increasing the safety of the contractors who work in Boliden's facilities is a high priority issue, and in 2016, Boliden will be inviting the contractors to engage in dialogues, organising seminars and training courses, and working to bring about better integration and control, but will also be making even clearer demands on the contractors working in our facilities.

Healthy employees

Being healthy is not just good for the individual in question, it also promotes Boliden's success. The sick leave rate increased in 2015, however, for the third year in succession, rising to 4.6% (4.3), and Boliden is consequently prioritising its work with ill health issues in a wider sense and conducting a proactive form of health work that is based on continuous change and development. This includes offering a wide range of health-promoting activities, such as recurring spinal training, exercise tips, free 24/7 access to the company gym, staff canteens that specialise in health food, and our recurring smoking cessation campaigns. Good health is also about effective rehabilitation measures designed to reduce long-term sick leave.

Securing tomorrow's talent pool

Boliden's ability to attract, develop and retain employees with the right skill sets and commitment levels is vital for our competitiveness and is consequently a top priority.

TRAINING COURSES

A selection of the training courses provided in 2015

Young Professionals programme Target group: young graduates. 23 participants

Management Development Programme Training for Boliden's senior management. This year's theme: Developing Safety Culture. 65 participants

Women at Work

For women within the Group who want to explore different career paths. 21 participants.

Middle Management Programme

Designed to enhance middle managers' leadership skills when it comes to developing the safety culture. 23 participants.

Recruitment

Our skill development and recruitment work is based on both Boliden's needs and the Group's strategic goals, the need to promote diversity amongst our employees, to increase the percentage of female employees, and to manage the generation shift. The fact that this is a male-dominated industry that operates in regions with a limited recruitment base, coupled with the stiff competition for engineers with specialist training, are just some of the factors that make stringent demands on our recruitment work. Boliden's operational bases all have their own strategic recruitment plans and are responsible for ensuring their respective talent pools are filled.

Tomorrow's talents

In order to help grow the recruitment base efforts to improve awareness of Boliden amongst students at universities and colleges of further education continued during the year.

In 2015, Boliden was declared "Innovator of the Year" by the employer branding company, Universum. Boliden's efforts to clarify its EVP, Employer Value Proposition, continued during the year and largely entailed highlighting and clarifying Boliden's offering in important areas that are particularly valued by students and Young Professionals, such as sustainable development, a work-life balance, an equal opportunities workplace, and personal development.

Employee development

Boliden's staff turnover rate during the year was 4.3% (5.5), which is a relatively low figure in comparison with other industrial companies. This helps ensure stability but, at the same time, demands that we offer internal career development and skill development opportunities in order to ensure that employees will stay with Boliden and enjoy job satisfaction. Boliden offers real opportunities for individuals to grow within the Group and has a number of skill development programmes designed to create the preconditions for career and skill development planning. Encouraging mobility within the Group and prioritising internal recruitment for the talent and managerial pool also

generates career opportunities for existing employees. Meetings with management, known as Talent Forums – designed to identify talents, structure career paths, and offer skill development – are held every year.

Diversity and equal opportunities

Diversity leads to dynamism, creativity and, ultimately, to greater profitability. Boliden endeavours to ensure its workforce is made up of people with different backgrounds, of different ages, and with different experiences. Topical issues in 2015 included identifying solutions for refugees from war-torn countries such as Syria, and who have academic backgrounds. Boliden and other members of the sector are working with employment agencies on a number of different initiatives designed to fast-track individuals with the relevant training and qualifications. Attracting female employees continues to be a challenge for Boliden and our goal is for at least 20% of the workforce to be made up of women by the end of 2018. By the end of 2015, 17.8% (17.5) of the workforce was made up of women, and if we are to achieve our goal, one in every three replacement recruits must be female. Other

activities in this area include equal opportunities plans at all units, recurrent training days, and female networks within the Group.

Work-life balance

Boliden regards offering a work environment that ensures a work-life balance as a prerequisite for successfully attracting and retaining talented employees. This is an important component of ensuring our employees' well-being and their ability to perform. The Swedish Association of Industrial Employers industry organisation, working in partnership with the white collar unions, has conducted a joint survey of worklife balance that achieved a good response frequency of just over 40%. The survey results clearly show that salaried employees in the mining and steel industry enjoy a good balance between working hours, flexibility and availability. Some of the countries in which Boliden conducts operations offer 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.

MINES SMELTERS THE GROUP 82% 84% 82% 18% 16% 18%

NUMBER OF MALE AND FEMALE EMPLOYEES

EMPLOYEES BOLIDEN'S VALUES

Boliden's core values are amongst the Group's most valuable assets and are the basis for our day-to-day work. Everyone is responsible for ensuring that we comply with and develop these values and thereby help strengthen Boliden's operations and brand. The shared values are, together with continuous improvement, the starting point for Boliden's management system, the New Boliden Way.

PASSION FOR IMPROVEMENTS

Improvements involve systematic efforts to continuously improve our ability to develop products, processes and relationships. The formulation of this value underlines the importance of being able to offer something extra when performing a task – something that is often critical in terms of the result.

VALUE CHAIN RESPONSIBILITY

Every employee is an expert in their own link in the value chain. Everyone is responsible for handing over without errors, for informing one another, for acting quickly to correct mistakes, and for learning from them. Employees are responsible for continuously identifying and standardising processes and methodologies and for laying the foundations for further improvement work.

PERSONAL COMMITMENT

Problems should be solved where they arise, which makes all of our employees problem-solvers. Employees who have been entrusted with carrying out and taking responsibility for their work shall strive to develop their full potential and should always seek to exceed the requirements and expectations of customers and other stakeholders.

Working in accordance with Boliden's values demands an ongoing dialogue between colleagues and between managers and employees, because at the core, it is all about knowledge, attitudes and behaviour. Boliden's HR function has a key role in realising and formalising this partnership and there are numerous different programmes and training courses in which the participants work with their personal values in relation to Boliden's shared values, and link them to concrete actions.

Boliden Annual Report 2015

Environment 47

Environment

Boliden's operations make use of land, consume large amounts of energy, and can result in the emission and discharge of pollutants into the surrounding areas. Boliden consequently has a far-reaching duty to limit its environmental impact at every stage of its operations, from exploration to product delivery. The company fulfils this duty through technological development, continuous improvement work, and investments in water and off-gas treatment, or restoring nature that has been impacted by Boliden's operations.

ENVIRONMENTAL STRATEGY

Boliden's environmental strategy comprises three core components:

Environmental impact
Resource
efficiency
Credibility

• Impact along the value chain, pages 6-7 • Environmental targets, page 9 • Material environmental aspects and full GRI Index, see GRI report on Boliden's web

Boliden's environmental impact

Exploration does not entail any significant environmental impact, while mining affects the surrounding area through noise and vibration, and creates enclosures and other changes in the landscape. Mines and smelters also give rise to waste, dust and emissions and discharges of metals. The effects are most pronounced in the immediate vicinity of the operations, but some effects are felt across wider regions in the form of, for example, acidification and increased eutrophication. The operations require energy and this gives rise to direct or indirect carbon dioxide emissions. These carbon dioxide emissions do not have a direct local or regional effect, but they do contribute to global climate change which feeds back into the local environment. Boliden's environmental work is methodical and new engagements are selected as part of a well-developed process.

The considerable potential environmental impact of its operations means that Boliden must constantly minimise any negative effects and go beyond what the law requires. Boliden also aims to use the best available technology and methodologies for ensuring stable and eco-friendly processes. Efficient resource utilisation means that waste and spillage must be minimised and Boliden consequently places considerable emphasis on issues such as energy conservation, waste management, and recycling issues. Boliden's environmental performance is followed up on a monthly basis and is also presented in the public quarterly reports.

Boliden shall have zero environmental accidents

Boliden has a vision of zero environmental accidents. Achieving our goal demands efficient systems and stable processes at every stage of the value chain, but also requires a focused work with risk assessments, action plans, routines and advanced technology.

14 (13) environmental accidents occurred in 2015. Environmental accidents are defined by Boliden as breaches of licensing or permit terms and serious

incidents, irrespective of whether any environmental damage was caused. Nine of the events involved discharges to water, either in conjunction with substantial amounts of precipitation, or caused by unforeseen leakages from processes or vehicles. Two incidents involved prohibited air pollution. Two of the incidents when limit values were exceeded involved limits on internal waste flows and consequently had no direct impact outside of the industrial park. One breach involved moraine extraction potentially occurring too close to the groundwater level. None of these incidents are adjudged to have been of a severity that caused lasting damage or significant environmental impact.

Forestry and land management

Access to land is fundamental in terms of Boliden's ability to carry out exploration and conduct mining operations. Boliden's forestry is FSC (Forest Stewardship Council) certified in order to ensure that economic, environmental and social responsibility is applied to all aspects of its 20,000 hectares forestry operations.

Boliden aims in conjunction with all forestry-related activities, transportation and other activities in conjunction with it, to use input goods and consumables that are environmentally friendly and recyclable. Boliden has, on its own initiative, designated about10% of its productive forested land as nature conservation areas, which is more than required for certification.

Impact on the physical environment

Boliden's operations utilise large areas of land for exploration activities, mining operations, industrial parks, and tailings and clarification ponds. Soil conservation and reclamation of mining areas that are reaching the end of their productive lives are, therefore, an integral part of Boliden's operations and responsibilities. The reclamation work that will be carried out in order to restore the area is part of the process right from the start, when a mine is still at the planning stage. Recla-

1,943

(2,057) SEKm allocated for reclamation

mation and soil conservation work are conducted in parallel with operations. Boliden's goal is to use the best technology and to combine this with continuous monitoring of the work carried out. Identifying and planning for environmental consequences before a mine even becomes operational ensures that a good environmental performance can be achieved throughout the lifespan of the mine and that reclamation work is more effective.

Boliden has a direct reclamation responsibility for some 30 active and closed down mines and conducts systematic monitoring and risk assesments for every object. Reclamation work has been carried out in areas including Laver and the Skellefteå field during the year, and at the end of 2015, a total of SEK 1,943 m (2,057) had been allocated for the reclamation of mining areas and smelters.

Discharges to water

The primary environmental impact of discharges to water lies in the risk that the aquatic ecosystems area contaminated by 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. 86% (79) of the environmental impact from metal discharges are estimated to come from the smelters' water treatment plants. Boliden's mines account for the remaining 14% (21) in the form of discharges from tailings ponds at the mines' concentrators and water treatment plants.

The mining operations account for 83% (77) of Boliden's nitrogen discharges, which result mainly from the use of explosives. The other 17% (23) come from the smelters, mainly from the sedimentation tank at the Kokkola zinc smelter. Discharges of thiosalts and metals to water in the Garpenberg area were substantially reduced in 2015 through the introduction of new water treatment technology. Water management is critical in maintaining the quality in the water that is discharged, and Boliden is consequently working on modelling water use in

Total energy acquired: 5.6 TWh (5.6), gross consumption Total energy used: 4.7 TWh (4.8), net consumption

(e.g. to district heating) has been deducted.

order to achieve better control and reduce the risk of unplanned discharges.

Emissions to air

Boliden's most significant 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 metallurgical processes and transportation. Some diffuse emissions of dust arising from open materials handling are generated over and above the emissions released into the atmosphere via smokestacks. Investments in order to reduce emissions of metals to the air were made in 2015 at Rönnskär.

The carbon dioxide intensity has been significantly reduced at Garpenberg in 2015 as a result of a new more efficient mine and concentrator coming on line. The indirect carbon dioxide emissions from electricity purchased by Boliden account for just under 40% of total carbon dioxide emissions. In order to reduce emissions, Boliden exploits the surplus heat generated by the smelters. Approximately 588 GWh (570) was used internally in 2015 and 898 GWh (799) was supplied externally.

The mode of transport used also affects Boliden's carbon dioxide emissions. Most of the transportation within the mine areas uses diesel vehicles, but increased transportation on conveyor belts are resulting in a reduced need for fossil fuels. Approximately 70% of the transportation of metal concentrates and other smelting materials is done by ship or rail. The transport of finished metals from the smelters is primarily by ship or rail within Europe, and often involves reloading on to trucks for the final journey to the customer.

All of Boliden's smelters are subject to the EU's system for trading in carbon dioxide emissions rights, ETS. The smelters have been allocated free emission rights for the period from 2013 to 2020, corresponding to 3.87 Mtonnes of carbon dioxide, which corresponds to the forecasted emissions.

Boliden promote global systems for the reduction of carbon dioxide and other environmental requirements. Regional restrictions, e.g. those limited to the EU, risk penalising efficient producers.

ENERGY CONSUMPTION, 2015 CO2 EMISSIONS, 2015

total emissions (direct + indirect).

Boliden Annual Report 2015

Environment 49

Carbon dioxide intensity

The carbon dioxide intensity (carbon dioxide in relation to the metal produced) at Boliden's operations is decreasing thanks to the use of more efficient processes and increased electrification, but is being countered by falling grades in ores and concentrates. Process optimisation and the more efficient recycling of surplus heat are the most cost-effective means of reducing carbon dioxide emissions, but considerable potential also lies in the replacement of fossil fuels with biofuels and the use of electric drive systems. Boliden intends, as a first step, to stabilise its carbon dioxide intensity at 2012 levels, and to then achieve reductions.

Waste management

Boliden's mines and smelters generate waste comprising waste rock, tailings sand, slag, sludge and dust. Boliden's production philosophy involves productising as many waste products as possible in order to create saleable products and to minimise the amount of waste sent to landfills. Boliden prioritises internal recycling or landfill solutions for its waste products, and in 2015, construction work began on a deep storage facility for hazardous waste under Rönnskär. In cases where the best a waste product is exported to another country, the process is subject to the legislation governing the export of waste to landfill sites or for recycling, see page 52.

REUSE OF INTERMEDIATE AND WASTE PRODUCTS
	Metal-bearing slag	THE BOLIDEN CONCENTRATOR	The metal content is re-extracted and sent back to Rönnskär as concentrate for metal production
RÖNNSKÄR COPPER AND LEAD SMELTER	Zinc clinker	ODDA	Cast zinc production
	Antimony slag	BERGSÖE	Used as alloys at Bergsöe. Outlet for antimony from Rönnskär
ODDA ZINC SMELTER	Copper-bearing waste products	HARJAVALTA	Copper production
	Lead-bearing filter dust (duff), bismuth bearing lead ingots	RÖNNSKÄR	Lead production
BERGSÖE LEAD SMELTER	Matte	ODDA	Final storage in mountain caverns
KOKKOLA	Copper-bearing waste products	HARJAVALTA	Copper production
ZINC SMELTER	Lead ashes	RÖNNSKÄR	Lead production
HARJAVALTA	Zinc-bearing filter dust, low-quality sulphuric acid, mercury sulphate	KOKKOLA	Zinc production
COPPER AND NICKEL SMELTER	Blister copper	RÖNNSKÄR	Used as cooling scrap in copper production
SOCIETY'S LEAD BATTERY USERS	Lead scrap and plastic from car batteries, etc.	BERGSÖE	The metal content is recycled and new lead products produced
	Electronic scrap from mobile
SOCIETY'S ELECTRONICS USERS	phones, computers, electronic goods, etc.	RÖNNSKÄR	The metal content is recycled and new metal products produced

WASTE PRODUCTS FROM OTHER INDUSTRIES	Metal scrap, ashes, filters, dust	RÖNNSKÄR	The metal content is recycled and new metal products produced

Boliden in society

Boliden is very important to the communities and regions in which the Group's mines and smelters are located. Good relationships and mutual understanding are important components of our ability to conduct and develop our operations.

Boliden's job creation

Boliden is the biggest employer in many of the communities in which we operate, and the company consequently has a considerable impact on local employment levels and local trade and industry by generating increased purchasing power and providing a critical basis for important social services. Boliden contributes to the creation of a total of 28,000 job opportunities in Sweden, Finland, Norway and Ireland, either directly or indirectly, through its subcontractors, suppliers or the effect of its employees' expenditure. This means that for every one Boliden employee, almost five other jobs are created as a direct result of our operations. For additional details of job creation and other indirect economic impact, see Boliden's GRI Report.

Promoting the interests of local communities and maintaining good relationships with employees, neighbours, authorities and business partners is an important part of what it means to be a responsible

company and also facilitates our efforts to attract a skilled workforce and to develop our operations.

Boliden's stakeholders

Boliden identifies and prioritises significant issues in order to develop its CSR work, and because Boliden's operations affect a great many people in a number of different ways, we have stakeholders with a wide range of views and expectations of Boliden. Boliden has, in order to enhance our insight into and understanding of these stakeholders, and vice versa, identified a number of stakeholders and categorised them on the basis of a combination of theoretical models and evaluations of different levels of importance, legitimacy and the balance of power between the stakeholders and Boliden. The stakeholders' views are gathered by means of stakeholder dialogues.

The dialogues with some of our stakeholder groups are conducted as part of the ongoing commercial contacts, which are sometimes complemented with

BOLIDEN'S STAKEHOLDERS BOLIDEN'S JOB CREATION

Jobs in the local community

surveys and interviews. Feedback is important in order to develop our communication, day-to-day operations, and work processes. Other stakeholders are invited to special consultations and information meetings, or are contacted individually.

In 2015, Boliden has contacted stakeholders who were invited to comment, via interviews, on Boliden's role as a supplier of metals, on the role of metals in society, on Boliden's ongoing sustainability work and priorities, on future risks and opportunities, and on how they would like to communicate with Boliden. The stakeholders' responses show confidence in Boliden as a metals producer and that the company performs very well in international comparisons due to its comprehensive CSR work. Many of the stakeholders mentioned safety and the environment as the areas of greatest importance to them and expressed a desire to see an additional focus on these areas by Boliden. The stakeholders generally expressed substantial interest in our recycling business and regard Boliden's development of this area as important. Employees and suppliers felt that Boliden could benefit from more knowledge transfer and integration of CSR into every aspect of the organisation.

The suppliers are proud to be part of Boliden's value chain, but think that the relationship between price and quality and sustainability is sometimes unclear and should be stated more clearly. Authorities feel that Boliden's planning is now more long-term, but stress the substantial responsibility that comes from the nature of our operations. Investors monitor Boliden continuously on the basis of their requirements and believe that Boliden meets these requirements. They want to see CSR information integrated into commercial results, signalling integration into business decisions and monitoring.

Dialogues in conjunction with licensing processes

Several of Boliden's operations have been subject to environmental review processes in 2015, and it is particularly important at such times that we exchange views with local stakeholder groups via consultations and other forms of information exchange.

Local sponsorships and partnerships

Local involvement in the form of support for and partnerships with voluntary organisations and associations are other ways in which Boliden can make a positive contribution in the areas in which the company operates. Boliden's support focuses primarily on local sporting and cultural events, schools and hospitals, often with links to children and young people. In 2015, Boliden's units sponsored local activities to the tune of approximately SEK 6 million.

BCAUSE

Boliden's newly established charitable fund, Bcause, enables employees and the company to work together to help build a better world. The fund is based on voluntary monthly donations by Boliden's employees. Boliden then makes a donation that is double that contributed by employees, so the amount

contributed is multiplied by three. The fund makes annual financial awards to one or more charitable projects in the following areas:

Children and young people's health and development
A healthy and safe work environment
Environmental and nature conservation

The fund's Board of Directors decided that the money raised in 2015 should go to support a school project in Nepal, via the Childspace Foundation. The project works in areas that were hard hit by the powerful earthquake and where the children are in real need of help and assistance.

Business partners

Boliden's ambition is to be a world class business partner and new, customised products and services are continuously developed in close cooperation with our market. Boliden has a process for evaluating business partners with regard to their approach to CSR – Evaluation of Business Partners (EBP).

Evaluation of business partners

Boliden's business partners are evaluated with regard to commercial and sustainability aspects based on the 10 principles of the UN's Global Compact and on ILO and ISO standards. Every departmental manager is responsible for ensuring that the department's business partners are evaluated in this way.

In 2015, just over 100 business partners have completed the self-assessment process, which is a tool designed to evaluate the work in areas that Boliden has identified as being of particular importance. The aim is to develop and improve the sustainability work by all parties.

On-site visits and audits are carried out in special cases and any deviations and measures implemented are followed up. 19 such visits were carried out during the year, 3 of which were audits.

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 a strict internal policy regarding such transactions whereby payment is not made until the waste processing operator produces documentation demonstrating that the material has been processed.

Conflict minerals

Boliden's policy is that no concentrate or secondary raw materials shall be acquired from areas of armed conflict. The secondary raw materials are, however, more difficult to control, as metals may have been recycled multiple times and may have been passed through several links in the supply chain before reaching Boliden's smelters.

Boliden's smelters are included in the "The London Good Delivery list of Acceptable Refiners". Boliden must, in order to ensure its continued inclusion in the London Bullion Market Association's (LBMA) list of recommended gold producers, ensure that the raw materials chain complies with a number of ethical criteria, and must comply with stringent transparency requirements. Boliden's reporting to the LBMA is verified by KPMG.

ACTIVITY	RESULT, 2015	RESULT, 2014	COMMENTS
Self-assessments – Sent out	146	149	Evaluations take place before contracts are concluded, with follow-ups after 2−5 years.
Self-assessments − Responses	115	99	Self-assessments constitute the basis for an initial risk assessment.
Dialogues	72	42	In-depth risk assessment and the opportunity to discuss improvements.
Visits	19	23	Following up on any deviations and measures

concluded, with follow-ups after 2−5 years. 115 99 Self-assessments constitute the basis for an initial risk assessment. discuss improvements.

implemented. It is part of Boliden's strategy to assist in the development of individual suppliers.

Boliden Annual Report 2015 Purchasing and suppliers 53

Purchases

Boliden has almost 6,000 suppliers, 200 of which account for 80% of the purchasing volume (excluding concentrate purchases). The annual purchasing spend excluding concentrate purchases totals SEK 11.3 billion, of which investments in machinery and equipment comprised just over SEK 1.7 billion in 2015. Business Area Mines represents 55% of the purchasing volume, while Business Area Smelters accounts for 45%. The rate of inflation for the Group's purchases in 2015 was slightly below zero.

The focus for 2015 was on increasing the purchasing volume addressed every year, on improving the quality of the procurement processes, and on reducing the number of suppliers. Accidents suffered by Boliden's suppliers increased in 2015 and in order to reverse this trend, Boliden will be intensifying its training activities, regulatory work, follow-up work and refining its purchasing agreements. In November, Boliden invited around 80 of its largest suppliers to a conference at which the main themes were safety, reductions, supplier-driven innovation, and productivity. Lead times, delivery accuracy, and warehousing strategies have also been the subject of our focus work in 2015 and this work will continue in both 2016 and 2017. Boliden's purchasing spend is divided into strategic categories which, depending on their nature, are managed at site level, Business Area level, or Group level:

CATEGORY	DESCRIPTION AND MARKET TRENDS	BOLIDEN'S PRICE TREND
Services	The market development for services follows the inflation in the countries in question. Supplier availability currently exceeds de mand, which has resulted in continued price pressure on certain contractor services.	Consolidation of the supplier base has resulted in savings and established the preconditions for increased supplier safety. Individual suppliers who have failed to meet Boliden's requirements for work environment safety and CSR have been phased out during the year.
Electricity	The price of electricity in the Nordic region is driven by electricity consumption, availability of hydroelectric and nuclear power, transfer capacity between countries, and taxes and political decisions.	Higher network tariffs and taxes have contributed to a negative cost trend, but at the same time, some types of electricity production have been subsidised. Overall, the price of electricity has fallen. A number of electricity contracts were renegotiated in 2015.
Bulk goods & chemicals	The prices of chemicals and certain other input goods have fallen during the year.	A combination of increased freight costs, unfavourable exchange rates, and price falls resulted in a small reduction in total costs. Good competition in individual procurement processes resulted in price reductions.
Fixed equipment	A sharp decline in orders from the global mining industry has resulted in consolidations and cutbacks brought price pressure.	A reduction in the number of suppliers awarded long term contracts results in lower costs and ensures high availability for critical installations. Equipment from low-cost countries has been tested during the year.
Mobile equipment	Declining order books amongst suppliers have resulted in increased competition and falling prices.	Spare parts and consumables saw a slightly downward price trend that was driven by market conditions and falling raw material prices.
Logistics	The price of transport services has generally fallen due to lower fuel prices and excess capacity. Cost increases driven by the SECA Directive have been partly offset by lower fuel prices.	Road and maritime transport costs have fallen as a result of lower fuel prices. A number of major transport contracts were signed in 2015.
IT & Telecom	Costs are driven by technological development, the competitive climate, and labour cost trends in relation to IT resources.	Costs have been affected by Boliden's technology decisions and the consolidation of IT systems. 2015 saw a slight downward price trend.
Indirect materials & services	Manpower, travel, cleaning/decontamination, and consultancy services were affected by wage trends in the respective countries. Market prices increased slightly.	Cost increases were counteracted by consolidation of volumes, harmonisation of specifications, and competition. 2015 saw a slight downward price trend.
Tools & consumables	Regional supplier base with insufficient competition.	Pricing picture unchanged.
Electrical installation & equipment	Long-term supplier relationships with installed base. The market is balanced.	Pricing picture unchanged.

The Boliden share

The Boliden share is listed on the NASDAQ Stockholm Exchange in the Large Cap segment. The share price rose by 14% during the year and consequently outperformed both the Stockholm Stock Exchange and the sector index.

Trading in the Boliden share

A total of 1.5 b Boliden shares with a total value of SEK 238 b were traded in all marketplaces in 2015.

NASDAQ Stockholm accounted for 46% of the trading in the Boliden share. A total of 690 m (657) Boliden shares at a value of SEK 107 b (70) were traded here during the year. An average of 2.7 m (2.6) shares were traded per trading day on NASDAQ Stockholm. The Boliden share accounted for 2.5% (2.1) of the total volume of shares traded on NASDAQ Stockholm.

The largest marketplace after NASDAQ Stockholm was BATS Chi-X Europe, which accounted for 35% of the trading in the share.

Price trend and dividend

The price of the Boliden share rose by 14%, in contrast to the Euromoney Global Mining Index in SEK and the OMX Stockholm 30 index, which fell by 38% and 1%, respectively. Boliden's positioning, with a combination of mines and smelters, coupled with a metals mix, healthy production and cost trends and a favourable exchange rate trend, has contributed to the share's performance in 2015.

At the end of 2015, the Boliden share was quoted at SEK 142.90 (125.50) on NASDAQ Stockholm, corresponding to a market capitalisation of SEK 39.1 b (34.3). In common with other raw materials companies, the variation in the value of the Boliden share is, on average, greater than for the broad stock market indices. The beta value of the Boliden share over the last five years against OMXSPI is 1.53.

The Board of Directors proposes to the Annual General Meeting that a dividend of SEK 3.25 (2.25) per share be paid for 2015, which is in line with Boliden's dividend policy. The proposed dividend corresponds to 33.7% (32.4) of the net earnings per share and a dividend yield of 2.3% (1.8), calculated on the basis of the share price at the end of the year.

The Boliden share's total return (the sum of the dividend paid and the price trend) over the most recent 10-year period was, on average, 12% per annum.

Share capital

There 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. The 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 2015.

Boliden is unaware of any agreement

SHARE PRICE, SECTOR INDEX AND OMX

Boliden

Boliden Annual Report 2015 The Boliden share 55

between shareholders that may entail restrictions on the right to transfer shares in the company. Boliden is not party to any significant agreement affected by any public buyout offer. Boliden has no shareholders who have declared that they, either directly or indirectly, represent at least one tenth of the total number of votes for all shares.

Ownership structure

Boliden had 71,337 (77,965) shareholders on 31st December 2015.

Approximately 70% (59) of the shares were owned by foreign shareholders. The ten biggest single shareholders represent 22.5% of the share capital.

Boliden's employees hold shares, via profit sharing foundations, for which voting rights cannot be directly exercised. The foundations held 376,062 (338,613) shares at the end of the year.

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, financial reports, a list of the analysts who monitor Boliden, and 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 2015
Shareholding	Number of shareholders	Number of shares	Holding, %	Votes, %
1–100	33,323	1,412,528	0.5	0.5
101–500	23,172	6,984,575	2.5	2.5
501–1,000	7,676	6,539,185	2.4	2.4
1,001–10,000	6,343	17,432,080	6.4	6.4
10,001–50,000	493	10,644,801	3.9	3.9
50,001–	330	230,498,000	84.3	84.3
Total		71,337 273,511,169	100.0	100.0

SOURCE: HOLDINGS

Boliden's biggest owners on 31st December 2015
		NASDAQ Stockholm
		BOL
6.1		SE 0000869646
5.0		1700
2.4		SEK 201.10
1.7		SEK 112.10
1.7		SEK 142.90
1.6
1.3	31st December 2015	SEK 39.1 b
1.0	Turnover rate, 2015	247%
0.9	Number of shares	273,511,169
0.8	Beta value (5 years)	1.53
		The share in brief Marketplace Short name ISIN code ICB code Highest price paid, 2015 Lowest price paid, 2015 Closing price, 2015 Market capitalisation,

Total 22.5 SOURCE: HOLDINGS

Annual total shareholder return on 31st December 2015	1 year	3 years		5 years 10 years
Boliden	15%	8%	4%	12%
OMX Stockholm 30	2%	13%	8%	8%
Euromoney Global Mining, SEK	–36%	–21%	–19%	–3%

The average total shareholder return on the Boliden share over the past 10 years was 12% per annum and 220% for the period as a whole. Boliden's annual total shareholder return has outperformed the international mining index in all of the one-, three-, five-, and ten-year periods. The annual total shareholder return has, furthermore, outperformed the OMX Stockholm 30 index during the one- and ten-year periods, but was outperformed by that index during the three- and five-year periods.

SOURCE: THOMSON REUTERS DATASTREAM

SOURCE: NASDAQ OMX

Risk management

Boliden's operations are cyclically sensitive and are exposed to fluctuations in 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 scenario planning based on a range of different market fluctuations.

OPERATIONAL RISKS

Operational risks are managed by the operating units in accordance with the guidelines and instructions established for each Business Area and unit.

Risk	Description of risk	Management and comments for the year
Health and safety	Boliden handles large material flows, both below and above ground. Employees and contractors are periodically ex posed to heavy machinery and lifting, to high temperatures, and to substances that are hazardous to health. Deviations from established routines or inadequate maintenance can give rise to dangerous situations and the risk of personal injury. The risk of serious accidents that can result in per sonal injury and, in a worst case scenario, fatalities, must be respected and ongoing efforts to minimise it are vital. It is also noted that the sick leave rate is rising which can re sult in a deterioration in the risk situation that can, in turn, result in an increase in ill health and accidents in future.	Boliden has well-established health and safety routines, with a clear zero tolerance vision. The number of accidents resulting in lost time (LTI), including those suffered by contractors, rose, year on year, and totalled 8.9 (7.9). Work on developing a clearer work environment strategy for the period up until 2018 has been intensified during the year and one of the important focus areas has been the augmentation of routines relating to preventative health and safety work. A number of training activities designed to increase awareness of ill health have been conducted. A new Swedish Work Environment Authority AFS provision on the organisational and social work environment will result in additional training activities.
Environmental impact	Environmental impact Boliden's operations affect the air, water, land and biological diversity in the vicinity of those operations. The extraction of metals also gives rise to waste products that must be processed safely. The risk lies in the operations resulting in lasting environmental damage. Carbon dioxide emissions Boliden's operations are energy-intensive and result in car bon dioxide emissions that can impact climate change. The EU's ETS emissions trading scheme also has an economic effect, the importance of which may grow, both in the form of direct emission costs and also, to a considerable degree, in the form of indirect emission costs that may result in increases in electricity prices.	Boliden sets emission reduction goals and monitors them closely. Efforts to manage the risk of emissions and discharges are based on risk analyses, ongoing monitoring and maintenance. Boliden also invests in new technology and efficiency enhancing measures for its processes and waste management, in order to ensure optimum resource utilisation. Boliden also endeavours, in order to reduce the amount of waste produced, to maximise the generation of by-products from its metal producing operations. Boliden's goal is to ensure its carbon dioxide intensity does not increase in comparison with 2012. Carbon dioxide intensity fell in both 2014 and 2015 as new and more efficient production methods came on line. Bo liden carries out analyses of future emissions costs and seeks, through its industry organisations, to promote transparency and predictability in the Emissions Trading Scheme and to ensure that competitive industries are compensated for indirect emission costs.
	Water management and dam safety Tailings ponds account for one of the largest scale risk scenarios for the mining industry in general. The risks com prise both the environmental impact of dam construction and the risk of a dam failure resulting in the discharge of contaminated water. Extreme weather conditions increase this risk.	Boliden develops water balance models to ensure better resource utilisa tion and to create a wider safety margin in relation to overflows and emergency water discharge. 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.
Unplanned stoppages	Boliden's production essentially comprises continuous processes and unplanned stoppages can affect production, emissions and discharges to air and water, and financial 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 production facilities. Major maintenance shutdowns are carried out every year with in the smelting operations, while maintenance work is an integral part of the day-to-day operations for the mines. The smelting and mines op erations have been working with a range of internal benchmark projects 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 large number of Boliden's employees will retire over the next few years. Competition for skilled employees with some experience increases the difficulty of replacement recruitment.	Boliden has an established method of working with succession planning for key positions and has also drawn up plans for skill development and knowledge transfer. Talent Forums are held at all units to ensure that the right expertise is available in the right key positions at the right time. Middle management programmes have been conducted in order to promote the development of leadership skills. Boliden has an established programme of employer branding work and over the past year, the company has increased the number of visits it makes to universities and trade fairs. Equal opportunities work has resulted in Boliden attracting considerable attention and this, in turn, has enabled us to demonstrate our talent pool work. One example of this is Women at Work – the network for women who are interested in career development.

Introduction	Strategy	Corporate Governance	Financial reports
Boliden Annual Report 2015			Risk management 57
MARKET AND COMMERCIAL RISKS	Boliden's market and commercial risks are primarily managed within the individual Business Areas and at Group level.
Risk	Description of risk	Management and comments for the year
Metal prices	Changes to metal prices have a significant impact on Boliden's profits and cash flow.	Boliden's policy is not to hedge metal prices, but rather to allow changes to be reflected in the result. There are some exceptions to this, e.g. when mining ore bodies with short residual lifespans or 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 refining charges	Treatment and refining charges make up a large part of the smelters' gross profit and are determined by the supply/ demand of metal concentrates.	The terms are negotiated annually by the major players in the mining and smelting industries. Boliden generally applies these terms.
Customers	Boliden has a 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. Boliden has an extensive and diversified customer portfolio and a few new customers have also been added during the year. Boliden also has plans in place that would enable the production to be reorganised to produce LME-quality products in order to reduce its reliance on end-customers.
Raw materials supply	A stable and reliable raw materials supply is important in enabling the smelters to produce at high levels of capacity utilisation and consistent quality.	Boliden endeavours to conclude long-term agreements with reliable external metal concentrate and recycling materials suppliers.
Energy prices	Energy accounts for approximately 16% of operating costs and changes in energy prices can have a significant effect on profitability.	Boliden has long-term electricity contracts with slow-moving price clauses in Sweden and Norway. In Finland and Ireland, the contract portfolio is shorter term and Boliden is more exposed to market prices. As a con sequence, changes in energy prices impact the operating profit. Boliden monitors opportunities to enter into longer term agreements if and when such opportunities arise. Boliden continues to participate in collaborative

FINANCIAL RISKS

Boliden has a centralised treasury function that is responsible for managing financial risks with the exception of credit risks in accounts receivable. The treasury function is tasked with supporting the management and operating units at Parent Company and Group level. This structure ensures good internal risk monitoring and offers both financial and administrative economies of scale. The treasury function is responsible for identifying and efficiently limiting the Group's financial risks in line with the financial policy adopted by the Board of Directors.

Risk	Description of risk	Management and comments for the year
Exchange rate and metal price risks	The pricing terms for Boliden's products are primarily de termined on raw materials exchanges such as the London Metal Exchange (LME) for base metals, the London Bullion Market Association (LBMA) for precious metals, and the currency and money market. Boliden's products are largely priced in USD and fluctua tions in the USD/SEK/EUR exchange rates hence have a significant impact on Boliden's profits and cash flow. The	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 production, exchange rates and interest. The effects of different market scenarios can be quantified on the basis of the information on sensitivity to market changes, and can then act as source data for the management of financial risks and be reported to the Board of Directors, management, and the market.
	Group's exchange rate and metal price exposure covers transaction exposure and translation exposure:	Transaction exposure in conjunction with binding undertakings is hedged with the exception of the smelters' process inventory. Exposure in conjunction with forecast cash flows is normally not hedged in line
	Transaction exposure:	with Boliden's policy. See also the "Market and commercial risks" section
	Boliden's transaction exposure comprises both binding undertakings and forecast cash flows.	above. Boliden's policy stipulates that risks from exposure in conjunction with binding undertakings shall be hedged in full, with the exception of the
	Exposure in connection with binding undertakings This exposure arises when Boliden undertakes to par ticipate in a transaction at a fixed value and which is not	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
	compensated for by a simultaneous opposite transaction of a corresponding size and nature. The Group buys metals in the form of raw materials which it processes into refined metals, and where the acquisition value of the raw	with the purchase of the raw material in question or with the signing of a sales agreement at a fixed price. Hedge accounting is applied to the fu tures contracts, thereby hedging the fair value in the Income Statement. Boliden continuously calculates the way in which changes in metal and
	materials as well as the exchange rates may differ from the final sales value. Such differences arise as a result of variations in size, purchasing date, processing and selling.	exchange rate markets will affect the Group's future financial position. See the sensitivity analysis of the operating profit table below. Boliden's policy is not to hedge metal prices and exchange rates in relation to the
	Furthermore, some customers receive fixed prices in different currencies that are sometimes set well in advance of delivery.	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 flows. There may be special justification in conjunction with, for example, major investments or investments in mines with a
	Exposure in conjunction with forecast cash flows	short lifespan for limiting the financial risks. The Group can use futures
	This exposure arises due to the fact that a substantial percentage of the Group's future income – primarily that	and options contracts to hedge metal prices and/or exchange rates for the cash flows from forecast metal sales. The derivatives are hedge

flow hedging).

percentage of the Group's future income – primarily that relating to extracted metals and to treatment and refining charges – is affected by fluctuations in metal prices and exchange rates.

projects designed to ensure long-term competitive power generation.

accounted as cash flow hedging under Other comprehensive income. See page 58 for a sensitivity analysis of how the Other comprehensive income result is affected by a change in the value of financial derivatives (cash

FINANCIAL RISKS, CONT.

Risk	Description of risk	Management and comments for the year
Exchange rate risk	Translation exposure A translation difference arises when converting net investments in overseas operations into Swedish kronor, in conjunction with exchange rate fluctuations, which affects Other comprehensive income within the Group.	The effect of translation exposure is, in accordance with Boliden's financial policy, not eliminated ("equity hedging"). If external borrowing requirements within the Group exceed internal loans, the excess share of the borrowing currency is steered such that the currencies in the assets match. The main borrowing currencies are EUR, SEK and NOK.
Interest rate risk	Changes in market interest rates affect the Group's profits and cash flows. The rapidity with which a change in interest rate levels affects the Group's net financial items depends on the fixed interest term of the loans.	Boliden's financial policy provides the scope for an average fixed interest term of up to 3 years. The Group's loan portfolio had, on 31st December 2015, an average fixed interest term of 0.5 years (0.8). Interest swaps are used to extend the fixed interest term.

SENSITIVITY ANALYSIS

Operating profit, excluding outstanding derivatives

The table below contains an estimation of the effect on the operating profit of changes in market terms for the following year. The effect is calculated on the basis of closing day prices on 31st December 2015 and is based on forecast metal sales. The sensitivity analysis does not take into account the effects of metal price and exchange rate hedging over and above the transaction hedging for binding undertakings, nor does it take into account the effect of the smelter' process inventory revaluation. The analysis does not include assumptions regarding such factors as cost inflation, 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 2015. 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 refining charges is based on changes in relation to the average level during the fourth quarter.

SENSITIVITY ANALYSIS

SEK m	2015				2014
Change in metal prices, +10%1)	Operating profit	Net financial items	Taxes	Share holders' equity	Operating profit	Net financial items	Taxes	Share holders' equity
Copper	410	5	–91	324	480	8	–107	381
Zinc	500	7	–111	395	620	10	–139	492
Lead	105	1	–23	83	100	2	–22	79
Gold	210	3	–47	166	200	3	–45	159
Silver	160	2	–36	126	155	3	–35	123
Change in exchange rates, +10%
USD/SEK	1,035	13	–231	818	1,160	19	–259	920
EUR/USD	520	7	–116	411	560	9	–125	444
USD/NOK	115	1	–26	91	115	2	–26	91
TC/RC,+10%
TC/RC copper	120	2	–27	95	100	2	–22	79
TC zinc	55	1	–12	43	40	1	–9	32
TC lead	–15	0	3	–12	–15	0	3	–12
Change in market rate, +1%2)		–57	12	–44		–77	17	–60
Translation exposure, net investments in overseas operations, exchange rate +10%3)
NOK/SEK				156				157
EUR/SEK				572				501
Effect of interest +1%, gold +10%, USD/SEK +10%)4)
Interest derivatives, interest swaps				15				40
Metal derivatives, gold futures				–67				–116
Currency derivatives, USD/SEK				–55				–131

1) Based on forecast sales for the coming twelve months.

2) Based on closing day debt portfolio excluding interest swaps (31/12).

3) Based on closing day balances (31/12).

4) Based on outstanding derivatives (31/12).

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 reclassification adjustments not reported under the profit), before tax, of changes in the value of outstanding derivatives based on the closing day prices on 31st December 2015.

Changes in the value of financial derivatives in respect of binding undertakings and translation exposure have a very limited or no effect net on the profit 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.

Introduction	Strategy	Market	Operations	Corporate Governance	Financial reports

Boliden Annual Report 2015 Risk management 59

FINANCIAL RISKS, CONT.

Risk	Description of risk	Management and comments for the year
Refinancing and liquidity risk	The risk that Boliden will be unable to obtain the requisite financing or to meet its payment undertakings due to insufficient liquidity.	Boliden limits the refinancing risk by ensuring that its loan liability has a good spread in terms of coun terparties, financing 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 refinancing requirement is reviewed regularly by Boliden's treasury function. The refinancing requirement is dependent, first and foremost, on market trends and investment plans. The loan agreements carry loan covenants which oblige Boliden to comply with certain defined key ratio conditions in order to avoid early repayment. A deterioration in the global economic climate may entail increased risks in respect of profit performance and financial position, and the risk of Boliden coming into conflict with loan terms and conditions. Boliden has complied with all loan covenants in 2015. The average term of total loan facilities was 2.4 years (3.4) at the end of the year, which is in accordance with established Group policy. On 31st December 2015, Boliden's payment capacity totalled SEK 6,514 m (5,847) in liquid assets and unutilised binding credit facilities with a term in excess of one year. Boliden has a cash pool structure that enables it to maintain a central overview of liquidity flows and ensures efficient management of the Group's liquidity.
Credit and counterparty risk	Credit risks in financial operations The term, credit and counterparty risk, refers to the risk that a counterparty in a transaction may fail to fulfil their obli gation, thus causing the Group to incur a loss. Boliden's financial exposure to counterparty risk mainly occurs when trading in derivative instruments. Credit risks in accounts receivable The risk of the Group's customers fail ing to fulfil their obligations constitutes a credit risk.	Boliden's financial policy mandates a Standard & Poor's credit rating of A when entering into a transaction, and a maximum investment of liquid assets per counterparty. The credit quality and counterparty spread for derivatives is adjudged to have been good in 2015. Two of Boliden's finan cial counterparties had A− and BBB+ credit ratings and hence failed to comply with the financial policy's limit guidelines, but were approved by the Board. On 31st December 2015, the credit risk in derivative instruments corresponded to a market value of SEK 264 m (406), which relates to Boliden's receivables from external counterparties. Offsetting of financial assets and liabilities is regulated under ISDA agreements (International Swaps and Derivatives Association) which handle both offsetting between contracted counter parties 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 obligations covered by ISDA agreements are terminated. The outstanding sum in the majority of ISDA agreements is paid by the counterparty with the biggest liability. 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 concentration 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 outstanding accounts receivable on 31st December 2015 have only been effected in very limited amounts and have also, historically speaking, been insignificant. See also Note 19 on page 94, Accounts receivable. Credit insurance is also used from time to time.
Risk management and insurance	The risk of damage or injuries that give rise to financial 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 financial and operational reporting.	Boliden has an efficient internal control structure. Control functions exist both locally, in individual units, and within Business Areas and at the Head Office. All of the functions work within a Group-wide internal control framework for financial reporting that is based on COSO. The frame work's controls are tested annually, both internally and by external auditors. The internal tests have also resulted in the transfer 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 and comments for the year
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, furthermore, widely subject to licensing requirements and to wide-ranging envi ronmental and other regulations. The continuation of Boliden's operations 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 implements, follows up on and ensures compliance with laws and regulations. Boliden is active in the environmental law sphere, amongst 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 30 on page 102.
Political risks	Political decisions can have an effect in Sweden and the countries in which Bo liden 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 impending political decisions that impact Boliden's operations.
Risks to confidence	Boliden may suffer incidents that adversely affect confidence in the company, when, for example, suppliers, customers and/or employees 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 CR work before entering into any partnership. This is done by means, inter alia, of what is known as an EBP (Evaluation of Business Partners) checklist. Customer and supplier audits are also conducted, when necessary, to ensure that the standards maintained by these par ties are as high as those within Boliden. Discrepancies can result in termination of the partnership. Boliden has a crisis management group which has routines to handle crises. These include internal and external communication and legal assistance.

KTONNES

2015 is used by the jewellery industry 2015

GLOBAL GOLD PRODUCTION MAIN USAGE BOLIDEN'S GOLD PRODUCTION

GOLD IN SOCIETY

3 ktonnes of gold were produced by the world's mines in 2015. The majority of the gold is now mined in China, with Australia and Russia competing for second place. If recycled gold is included in the calculations, the annual production rises to 4 ktonnes.

The jewellery industry continues to be the biggest user of gold, but gold's unique properties – its high durability, good conductivity, resistance to corrosion, and high temperature tolerance – make the metal attractive in a number of industrial applications. Gold is, for example, used in dental care and electronic goods, such as mobile phones and computers, and in the space and pharmaceutical industries.

Gold is also attractive as an investment object in the form of coins and gold bars, and over one third of the combined global production of gold is held by the central banks, with an even larger share held in private hands.

The precious metals markets are, very largely, driven by demand from these financial operators and also periodically, when it comes to gold, by the actions of the central banks.

GOLD FROM BOLIDEN

Boliden has mined gold for over 90 years now. It all started on 10th December 1924 when gold fever broke out in what is now the town of Boliden, where the richest deposit in Europe was discov-

Gold is mined nowadays in the Kankberg mine, but is also extracted from the ores in the Boliden Area's other mines, and from Aitik, Kylylahti and Garpenberg. Boliden's mines extracted a total of 4,922 kg of gold in 2015 and the Group's Rönnskär and Harjavalta smelters produced 17,608 kg of pure gold metal.

Gold's durability and high price makes the extraction of gold from scrap products such as circuit boards from computers and mobile phones, a profitable enterprise, and approximately 30% of all of the gold produced by Boliden comes from recycling.

In-depth experience, in-house developed technology, and high capacity have resulted in Boliden Rönnskär becoming a world leader in this industry. The smelter has the capacity to handle many different raw materials, with recycling materials becoming an increasingly important component of this mix. The majority of the suppliers of this material are located in mainland Europe.

Corporate Governance Report

Efficient corporate governance is a prerequisite for generating added value for our shareholders and maintaining confidence amongst our stakeholders at large.

A group, essentially comprising Swedish institutional investors, have held their shareholding and been long-term owners in Boliden since we were relisted in Sweden almost 15 years ago and the last few years have seen their ranks joined by several large, foreign, institutional owners. There is no clear principal owner, however, and 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 fluctuations – both up and down – in profits, and this is something that our shareholders must understand. The volatility also makes significant demands on the company's management and Board in terms of their ability to provide high quality, transparent information and to handle these rapid changes without suffering either from hubris when the trend is upwards or dejection when the trend is downwards.

The Board of Directors and the management must, at the same time, successfully handle large and long-term investment projects, such as the upscaling of our Garpenberg operations. The decision to invest almost SEK 4 b in this project was taken by the Board in January 2011 and the new facilities came on line in 2014, running at full capacity by the end of 2015. This type of project naturally also entails a large number of risks, which are discussed over a relatively long period of time by the Board before any decision is taken, and is vital in terms of value generation within the company.

One of the prerequisites for value-generating work by the Board is that the Board has a firm grasp on the operations and on events in the outside world. We achieve this by, amongst 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 sufficient time on the more long-term and strategic 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 specifically 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 2015 shows that the Board is functioning efficiently. This evaluation forms the basis for the work of the Nomination Committee and it is an important tool for the Board's efforts to ensure continuous improvement in our work.

February 2016

Anders Ullberg Chairman of the Board

Governance of the Boliden Group

Boliden is a Swedish limited company listed on the NASDAQ Stockholm Stock Exchange (NASDAQ Stockholm). The Boliden Group has approximately 4,900 employees and runs mines and smelters in Sweden, Finland, Norway and Ireland. Boliden's corporate governance is based on the Swedish Annual Accounts Act, the Swedish Companies Act, NASDAQ Stockholm's regulations for issuers, the Swedish Code of Corporate Governance, and other applicable legislation and regulations.

In addition to compliance with rules and regulations, Boliden applies internal governance instruments, such as the Group's organisational and operational philosophy, the New Boliden Way, and Boliden's internal control tool, the Boliden Internal Control System (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. The Group's units also work in accordance with health & safety, environmental, energy, and quality management systems.

Highlights and events during 2015 The ramping up of the Garpenberg

expansion to the planned capacity of 2.5 Mtonnes of ore per year continued in 2015. Work on the integration of the Kylylahti mine in Finland that was acquired in 2014 continued, and exploration activities in the surrounding areas were intensified. The new business model for the in-house nickel smelting operations at Harjavalta was also implemented successfully during the year. The twophase investment of a total of EUR 90 m in a new and more efficient sulphuric acid plant at Harjavalta was approved and is expected to result in important improvements in efficiency and environmental performance in several areas.

Boliden Annual Report 2015 Corporate Governance Report 63

Shareholders and Annual General Meeting

Boliden's biggest shareholders are Swedish and foreign investment funds and institutions. There were a total of 71,337 (77,965) shareholders at the end of 2014 and the single largest shareholders were Norges Bank Investment Management, Blackrock Inc, Swedbank Robur fonder and Handelsbanken Fonder. The percentage of foreign ownership continued to increase during the year, reaching approximately 70% (59) by the end of the year. For further information on the shareholder structure within Boliden, see pages 54−55 of the Annual Report and Boliden's website.

Boliden's shareholders exercise their right of decision by submitting proposals to and participating in and voting on the proposals submitted to the Annual General Meeting and any Extraordinary General Meetings. Shareholders may request that a matter be discussed at the Annual General Meeting by submitting a written request to the Board of Directors at the designated time that is sufficiently in advance of the meeting that the matter can be included in the notice convening the meeting. Shareholders are also welcome to submit enquiries to the Board and the President, the Auditor or Committee Chairmen during the General Meeting.

The Annual General Meeting is the company's supreme decision-making body. The duties of the Annual General Meeting include the election of Members of the Board, the Chairman of the Board, the Nomination Committee, the adoption of the Income Statement and Balance Sheet, resolutions on the appropriation of profits 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.

The 2015 Annual General Meeting

The Annual General Meetings are regularly held at one of Boliden's facilities in Sweden in order to give the shareholders an insight into the operations. Shareholders are offered the chance of a guided tour of Boliden's mines, concentrators or smelters in conjunction with these meetings in order to deepen their knowledge of the operations and to give them an opportunity to meet with Boliden's employees. The 2015 Annual General Meeting was held on 5th May at Garpenberg. 109,400,442 shares were represented at the Meeting by 933 shareholders, either in person or through their proxies. The shares represented comprised 40% of the total number of shares. The Meeting was attended by all Members of the Board and members of the Group management, and the auditor.

The Meeting resolved, amongst other things, to re-elect all of the Members

of the Board with the exception of Leif Rönnbäck, who had declined re-election. Elisabeth Nilsson, the County Governor of the County of Östergötland, was elected as a new Member of the Board. Anders Ullberg was re-elected as the Chairman of the Board. The Meeting further resolved:

To pay a dividend of SEK 2.25 per share, totalling SEK 615 m, 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), Ulrika Danielsson (Andra AP-fonden), Lars Erik Forsgårdh, Elisabet Jamal Bergström (Handelsbanken Fonder) and Anders Ullberg (Chairman of the Board).
That Directors' fees payable and fees payable to the Committees shall, in accordance with the proposal by the Nomination Committee, comprise a Director's fee of SEK 1,300,000 to the Chairman of the Board and SEK 480,000 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 elect Deloitte AB as the company's new auditors for the period up to and including the next Annual General Meeting, in accordance with the proposal by the Nomination Committee,

Boliden's governance structure

Shareholders

Approximately 71,000 owners. Exercises governance via the Annual General Meeting and, where relevant, any Extraordinary General Meetings.

Auditors

Elected by the Annual General Meeting. Audits the accounts, bookkeeping and the management by the Board of Directors and the President.

The Board of Directors

Comprises 8 members elected by the Annual General Meeting and 3 members and 3 deputies appointed by the trade union organisations.

President/CEO and Group

management The President runs the operations with the support of the other four members of the Group management.

Nomination Committee Comprises 5 to 7 members. Sumits proposals on such matters as Members of the Board to the Annual General Meeting.

Remuneration Committee

2 members

Audit Committee 3 members

Internal control function

Reports to the CFO and presents reports on issues relating to internal control at the Audit Committee's meetings.

and that auditors' fees shall be payable in accordance with the approved invoices received.

The Annual General Meeting also resolved to approve the proposed principles for remuneration to the Group management whereby the remuneration shall comprise a fixed salary, any variable remuneration, other benefits and pensions. The variable remuneration shall be maximised at 60% of the fixed salary for the President and maximised at 40−50% of the fixed salary for other senior executives and shall be based on results in relation to targets set. The variable remuneration shall not entitle to pensionable income.

The resolutions passed by the 2015 Annual General Meeting are included in the Minutes of the Meeting published on Boliden's website, where the minutes of previous Annual General Meetings are also published.

The 2016 Annual General Meeting will be held on 3rd May at Rönnskär, Skellefteå.

Nomination Committee

The Nomination Committee represents Boliden's shareholders and is tasked with preparing and presenting proposals for resolutions that Boliden's shareholders vote on at the Annual General Meeting. The proposals relate to the number of Board Members and their election, the Chairman of the Board, fees payable to the Board and its committees, election of and fees payable to the company's auditors, and 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.

The 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 standards that Boliden's shareholders require of the company's most senior governing body. The 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. The Company President also presents Boliden's operations and future orientation. The Nomination Committee is also afforded the opportunity to meet the Members of the Board. The Nomination Committee also drafts proposals for the election of auditors. Shareholders can submit proposals to the Nomination Committee in accordance with the instructions presented on Boliden's website.

The Annual General Meeting passes resolutions on the principles governing the appointment and duties of the Nomination Committee. The Nomination Committee shall, in accordance with the Instructions for the Nomination Committee, comprise a minimum of five 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. The Nomination Committee may, in order better to reflect the shareholder structure in the event of changes in ownership, offer places on the Committee to other larger shareholders. The Nomination Committee appoints its own Chairman and works in the best interests of all shareholders. The members of the Nomination Committee receive no remuneration for their work.

The work of the Nomination Committee in 2015

Jan Andersson (Swedbank Robur fonder), Ulrika Danielsson (Andra AP-fonden), Lars Erik Forsgårdh, Elisabet Jamal Bergström (Handelsbanken Fonder) and Anders Ullberg (Chairman of the Board) were elected to the Nomination Committee at the 2015 Annual General Meeting. In November, the Chairman of the Board convened the members of the Committee, at which time, Jan Andersson was appointed Chairman of the Nomination Committee. The current composition of the Nomination Committee is also shown on Boliden's website. The Nomination Committee has met a total of three times impending the 2016 Annual General Meeting and has also had telephone contacts with and held meetings with both Members of the Board and the President. These contacts afford the Nomination Committee an excellent opportunity to form an opinion of the way in which the Chairman of the Board and the individual

Members of the Board view the work of the Board, of the executive management, and of the way in which they view Boliden's operations and the challenges faced by the company in the next few years.

The Nomination Committee endeavours to ensure an even gender distribution amongst the Board Members and the Nomination Committee also prioritises, in parallel with its efforts to achieve this goal, to ensure a multifaceted and broad composition that covers relevant areas with regard to expertise, experience and background. Boliden's operations, developmental phase and future orientation are important criteria in evaluating skill requirements and analyses aimed at determining the optimum composition of the Board.

The Nomination Committee's proposals for submission to the 2016 Annual General Meeting will be published in the impending notice convening the Annual General Meeting and on Boliden's website.

The Board of Directors

The 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 affairs in the best interests of both Boliden and the shareholders. This shall be done in a sustainable way that entails carefully balanced risk-taking, in order to ensure that the company's long-term developmental trend is a positive one. 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. The company's employees have a statutory entitlement to appoint three Members and three Deputy Members to the Board. The Board of Directors, which is elected for one year at a time, has comprised eight Members elected by the Annual General Meeting and three Members appointed by the trade union organisations. The Board Meetings are attended both by the ordinary Members and by the union's three Deputy Members. The General Counsel Group Legal Affairs is the Board's Secretary. Boliden's Chief Financial Officer (CFO) also usually attends the Meetings as part of the Group management. Other

Boliden Annual Report 2015 Corporate Governance Report 65

THE BOARD OF DIRECTORS' WORK IN 2015

Recurring business: Sustainability and health & safety issues, operational review, investments, costing, and theme items. The main matters on the agenda at Board Meetings in 2015 are shown below:

February: Review of the Year-End Report, the Annual Report, the Audit Report, and matters for submission to the Annual General Meeting. Deposit and reserves development, comparisons with competitors and energy supply.

May: Q1 Interim Report. Review of procurement issues, cost trends, and the Laver exploitation concession, and a

meeting between the Board of Directors and the auditors in the absence of the management. Annual General Meeting and the Statutory Board Meeting.

July: Q2 Interim Report. Review of the Audit Report, strategic orientation and comparisons with Smelters' competitors, synergy effects between Smelters and Mines, the Rönnskär remedial action programme, e-materials and the market for nickel.

October: Q3 Interim Report. Review of China's development and of other emerging markets. Review of acquisition opportunities, the Boliden Area and slag management at Rönnskär, the strategic orientation of Mines, cost-cutting in purchasing, operational risks, the status of disputes, and a follow up on the New Boliden Way and Corporate Responsibility (CR).

December: Review of strategy, budget and the business plan. Management development, managerial and Board Member evaluation, the market for gold, and investment in the Harjavalta sulphuric acid plant.

members of the Group management and other executives also attend and present reports on individual issues as required.

The 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. The Board consequently complies with the requirements of the Code with regard to independent Members. The Members of the Board are presented on pages 68-69 and on Boliden's website.

The Board sets the company's financial goals and strategy, appoints and evaluates the President and CEO, and ensures that efficient systems are put in place for following up on and monitoring operations, that the company complies with statutory and regulatory requirements, and that information is published in a correct and transparent manner. The Board adopts a Formal Work Plan every year at the Statutory Board Meeting, held after the Annual General Meeting. The 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.

The Chairman of the Board guides the work of the Board and the Board Meetings and establishes an open and constructive dialogue. The Chairman's duties also include monitoring and evaluating the expertise and work of the Board Members and the contribution they make to the Board as a whole. Another important component of the Chairman's work is monitoring the operations through an ongoing dialogue with the President. The Chairman of the Board acts as a discussion party and source of support for the President and ensures implementation of and compliance with the Board's decisions, instructions and directives. Prior to every Board Meeting, the Chairman and the President review the issues to be discussed at the meeting. The supporting documents for the Board's discussion of the issues are sent to the Members approximately one week before each Board Meeting. The division of labour between the Board of Directors and the President is clarified in the written "Instructions to the President" adopted by the Board at the Statutory Board Meeting.

The Board of Directors' work in 2015

The Board of Directors held six meetings in 2015, including the Statutory Board Meeting. 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 2015, the Board visited Garpenberg in May and Aitik in December.

The Board receives ongoing information on Boliden's commercial and financial performance and updates on Boliden's fulfilment of its sustainability goals in the

form of monthly reports and at Board Meetings. Every Board Meeting consequently begins with a review of the operations, of the current health & safety position, and of sustainability issues.

The Board also, at the beginning of the year and in addition to these and other customary operations-related issues, sets a number of themes that it particularly wishes to address during the year in order to create an increased understanding of Boliden's opportunities and challenges from a broader perspective. The Board has accordingly discussed such issues during the year as Boliden's competitive position, the global trends in the metals market, readiness to handle harsher market conditions, measures to counter cost increases, exploration, acquisitions and CSR issues in the mining industry. The focus has been on the change in the business model for nickel smelting at Boliden Harjavalta in Finland, coupled with the future expansion of Aitik from an annual ore production rate of 36 Mtonnes to one of 45 Mtonnes. Previously approved expansion projects implemented in 2015, such as Garpenberg, silver extraction at Kokkola, and the construction of deep storage facilities at Rönnskär, have been the subject of ongoing monitoring and follow up work, as has the ongoing action plan designed to ensure process stability and cost-effectiveness at the Rönnskär smelter.

Work on improving and coordinating health & safety issues have been subject to continuous monitoring and follow-up work by the Board in response to the negative shift in the accident frequency rate in 2013.

Efficient and appropriate environmental permit processes and reasonable operating conditions are, in light of the nature of Boliden's business, important issues for the company and its Board, and are the subject of recurring discussions. The Board has also addressed a related area, namely CSR, business ethics and moral considerations.

The Chairman ensures that the Board and its work are evaluated annually and that the results of the evaluation are conveyed to the Nomination Committee. The evaluation is carried out by the Board itself under the guidance of the Chairman or with the help of an independent consultant. The 2015 evaluation was a self-assessment during which the Members answered a number of questions in writing on a range of different 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.

The Board's Committees

The overall responsibility of the Board of Directors cannot be delegated but the Board may, within itself, set up committees which prepare issues within their respective spheres. The Board has, accordingly and as in previous years, set up an Audit Committee and a Remuneration Committee in 2015. The Committees' members are appointed at the Board Meeting following election held after the Annual General Meeting and their work is governed by the Committees' formal work plans and instructions.

Audit Committee

The Audit Committee prepares a number of issues for consideration by the Board and thereby supports the Board in its endeavours to fulfil its responsibilities within the areas of auditing and internal control and with assuring the quality of Boliden's financial reporting. Boliden has an internal control function whose work involves mapping risk areas and following up on work in identified areas, amongst

other things. The Committee also works with the procurement of services from the company's auditors in addition to the actual auditing services and, when so tasked by the Nomination Committee, with the procurement of auditing services. The Audit Committee meets before the publication of every financial report, and as necessary. The Audit Committee comprises Ulla Litzén (Chairwoman), Tom Erixon and Anders Ullberg. The Committee members have specialist competence, experience of and interest in financial and accounting issues – see Directorships and previous positions, pages 68-69. The Committee's meetings are also attended by Boliden's CFO and the Director of Internal Control. The Committee met five times in 2015. Special attention was paid in 2015 to internal controls and IT security, and to the proposed election of new auditors. The 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.

Remuneration Committee

The 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. The Committee also approves proposals regarding salaries and other terms of employment for the Group management, as proposed by the President. The 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. The 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. See Note 3 on pages 85-86 for an account of the remuneration paid to the Group management.

The 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. The Remuneration Committee

comprises Anders Ullberg (Committee Chairman), and Staffan Bohman. The Committee has held two meetings during the year and had telephone contact on a number of occasions.

The President and Group management

The President has ultimate responsibility for Boliden's strategic orientation and for ensuring the compliance with and implementation of the Board of Directors' decisions, and for ensuring that risk management, steering, systems, organisation and processes are all of a satisfactory standard. The President is supported in his work by the Group's management team 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 (CR). The Group management meets regularly once a month to follow up on operations and to discuss Group-wide 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. The areas addressed by the Board have largely reflected the work of the Group management during the year. The Group management also holds two meetings every year, lasting at least two full days, in order to focus on strategy. The Group management, together with the management of the respective Business Areas, also meet six times a year to review Business Area-specific issues including a review of budgets and operations. For large scale projects, relevant parts of the Group management form special steering groups, together with project managers and other stakeholders, and meet regularly. The 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 and other topical issues are discussed. The company's senior managers and specialists meet at a management conference every year for discussions intended to build consensus and achieve widespread support on important issues. See page 70 for a presentation of the Group management team.

Business management

Management by the Board goes through a chain of command from the President and

Introduction Operations

Boliden Annual Report 2015 Corporate Governance Report 67

the Group management to the operating units. Boliden has an organisation in which responsibilities and authority are delegated within clear frameworks. These frameworks are defined by Boliden's steering documents, budget and strategic plan. The steering documents, which are available on Boliden's internal web site and which comprise the internal framework required for effective management, include the Financial Policy, the Code of Conduct, the Anti-Corruption Policy, the Communications Policy, the Environmental Policy, the Health & Safety Policy, and documentation on delegation and decision-making.

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. One member of the Group management works exclusively, furthermore, with CR issues. The 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.

The sustainability issues identified by Boliden as being of the greatest significance and most highly prioritised are linked to Boliden's budget and strategy. 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. The 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. In 2013, Boliden set new goals in the sustainability sphere that will apply until 2018, inclusive – see pages 8-9 of the Annual Report.

Boliden's long-term health & safety work has yielded noteworthy results for a number of years, showing a steadily declining accident frequency. The trend has, however, been negative in recent years and a high priority has, therefore, been placed on measures that will, in the long-term, enable Boliden's vision of accident-free operations to be realised. Having analysed the situation and the root causes of the break in the trend, along with appropriate remedial measures, work continued in 2015 on a number of new initiatives. A Health & Safety Officer with special coordination responsibility has been appointed at Group level and has drawn up concrete, well-defined and timetabled health & safety goals, along with the measures needed to achieve these goals. One of the tools is the "B-Safe" project, which includes one-on-one discussions and follow-up discussions with all employees in order to raise awareness of the importance of health & safety and to strengthen the company's safety culture. Work on rolling out B-Safe throughout the Group continued in 2015. The aim of the project is to bring about an attitude change when it comes to safety-mindedness in the course of day-to-day work. Deviations from health & safety regulations in order to achieve a short-term gain in terms of time, production or other assumed benefits or advantages are never acceptable. Accidents are analysed and followed up in order to avoid any repetition. Investments in further strengthening the focus on health & safety are also targeting Boliden's suppliers, contractors and others who carry out work within the framework of Boliden's operations. Stringent demands are made on these business partners when it comes to respect for and compliance with applicable health & safety regulations and instructions. Business partners are reviewed, selected and evaluated in line with these factors, amongst other things.

Efficient and suitable licensing processes and reasonable operating conditions are, in the light of the nature of Boliden's operations, important issues for the company. Boliden works actively with industry organisations to monitor and promote the interests of the mining industry.

Boliden's GRI-index, and the associated information in the Annual Report and separate GRI Report have, since 2013, been subject to an external review by auditors, with the aim of, amongst other things, underlining the importance of the sustainability work to Boliden and to further reinforce the confidence of the market and other stakeholders in the work conducted by the company in this respect.

Matters of business ethics and anti-corruption are constantly topical and an area with which the company actively works. Boliden focused specifically on anti-corruption issues during the year and has implemented new policies and guidelines in this area. Training courses have been provided, partly in an online format, in January 2016 and will be followed up by a seminar for employees affected. Boliden has a whistle blower function that can be used to report suspected cases of impropriety.

Auditors

The external auditor conducts independent audits of Boliden's accounts in order to ensure that they provide a correct, fair and comprehensive picture of the company's position and results. The auditor also reviews the management by the Board of Directors and the President and presents his/her observations to the Board in the absence of the management. The auditor has been in contact with the Group management in 2015 in conjunction with audits or issues arising. The auditor is a regular attendee at the Audit Committee's meetings and has met with the Board on two occasions in 2015. The auditor also reports to the shareholders at the Annual General Meeting.

The accounting firm of Deloitte AB was elected at the 2015 Annual General Meeting to serve as the company's auditors until the conclusion of the 2016 Annual General Meeting. Authorised Public Accountant, Jan Berntsson, is the auditor in charge. He is a partner in and CEO of Deloitte Sweden and his other audit engagements include Atlas Copco and Kinnevik. Remuneration to the company's auditors is payable in accordance with the approved invoices received for the period up to the end of the 2016 Annual General Meeting. See Note 4 on page 87 for information on remuneration disbursed in 2015.

THE BOARD OF DIRECTORS

Name	Anders Ullberg Chairman of the Board		Marie Berglund Member of the Board	Staffan Bohman Member of the Board	Tom Erixon Member of the Board
Position	–		Vice President, Raw Materials and Environment, NCC Industry	–	President and CEO of Alfa Laval
Education	M.Sc. Economics		M.Sc. Biology	M.Sc. Economics	LL.B., MBA
Elected	2005		2003	2007	2013
Born	1946		1958	1949	1960
Directorships	Chairman of the Boards of Alma and Valedo Partners. Chairman of the Swedish Advisory Group.	Eneqvist Consulting, Natur&Kul tur and Studsvik. Member of the Boards of Atlas Copco, Beijer Financial Reporting Board and Member of the Board of the European Financial Reporting	Chairwoman of the Board of Eurocon Consulting. Member of the Boards of Baltic Sea 2020, the Water Delegation of the Gulf of Bothnia's Water District and the Advisory Council of the County Administrative Board of Västernorrland.	Chairman of the Boards of Höganäs, and Cibes LiftGroup. Deputy Chairman of the Boards of Rezidor Hotel Group and of the SNS − Centre for Business and Policy Studies Board of Trustees. Member of the Boards of Atlas Copco, Ratos, Upplands Motor Holding and the Swedish Corporate Governance Board.	Member of the Boards of Jernkontoret, Stål & Metall and Chinsay.
Previous positions	CEO of SSAB.	CFO of Svenska Varv. CFO, Vice President and President and	Group Ecologist in the former MoDo Group, Environmental Ma nager of Botniabanan AB, Presi dent of BioEndev (consultant).	CFO at Alfa Laval, CEO of DeLaval, Gränges and Sapa.	Managing partner Boston Consulting Group, a variety of se nior positions within Sandvik and President and CEO of Ovako.
Number of shares1)	45,000		1,000	40,000	6,900
Meetings attended	6 of 6		6 of 6	6 of 6	6 of 6
Committee work (present)	Audit Committee 5 of 5	Remuneration Committee 2 of 2	–	Remuneration Committee 2 of 2	Audit Committee 2 of 5
Director's fees, SEK	1,300,000		480,000	480,000	480,000
Committee fees, SEK	75,000	50,000	–	50,000	75,000
Combined fees, SEK1,425,000			480,000	530,000	555,000
Independence from the company and the company management	Yes		Yes	Yes	Yes
Independence from major shareholders	Yes		Yes	Yes	Yes

Boliden Annual Report 2015

Name

Corporate Governance Report 69

Name	Lennart Evrell Member of the Board	Michael G:son Löw Member of the Board	Ulla Litzén Member of the Board	Elisabeth Nilsson Member of the Board
Position	President and CEO of Boliden	–	–	The County Governor of the County of Östergötland
Education	M.Sc. Engineering, Economics	M.Sc. Economics	B.Sc. Economics and Business administration, MBA	M.Sc. Engineering
Elected	2008	2010	2005	2015
Born	1954	1951	1956	1953
Directorships	Chairman of the Boards of SveMin and Umeå University. Member of the Board of the Confederation of Swedish Enterprise.	Chairman of the Board of Re condoil. Member of the Boards of Concordia Maritime, Preem, Norstel, the Confederation of Swedish Enterprise and Stena Bulk. Deputy Chairman of the Boards 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.	Member of the Boards of Alfa Laval, Atlas Copco, Husqvarna and NCC.	Member of the Board of Outokumpu and Member of Skandia's Council.
Previous positions	President and CEO of Sapa and Munters, and a variety of senior positions within ASEA, Atlas Copco and Sphinx Gustavsberg.	A variety of senior positions within Conoco Inc (1976–2002) in Stockholm, Houston, Copenhagen, Bangkok, Prague and London. President and CEO of Preem (2003–2012).	President of W Capital Management, wholly owned by the Wallenberg Foundations. Managing Director and member of the Management Group of Investor AB. Responsible for Core Holdings and CEO of Investor Scandinavia.	CEO of Jernkontoret and has worked for the SSAB corporate group in such roles as Head of Metallurgy in Oxelösund and as CEO of SSAB Merox.
Number of shares1)	40,235	100	8,400	0
Meetings attended	6 of 6	6 of 6	6 of 6	4 of 4
Committee work (present)	–	–	Audit Committee 5 of 5
Director's fees, SEK –		480,000	480,000	480,000
Committee fees, SEK –		–	150,000
Combined fees, SEK –		480,000	630,000	480,000
Independence from the company and the company management	No	Yes	Yes	Yes
Independence from major shareholders	Yes	Yes	Yes	Yes

since 2015. Representative of the Unionen trade union. Deputy Chairman of the Unionen Boliden Office branch. Member of BoliDeputy 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 the Boliden Works Council.

		den's Council for Negotiation and Co-operation as well as Boliden's Group Council.	man of Boliden's Group Council and the Boliden Works Council.
Elected	2014	2015	2012
Born	1953	1966	1965
Number of shares1) 1,424		174	170
Meetings attended	6 of 6	3 of 3	6 of 6

since 2014. Representative of Boliden's Group Council and the Profit Sharing Foundation.

1) Own holdings and those of related legal or natural persons, on 31st December 2015.

GROUP MANAGEMENT

Name	Lennart Evrell	Kerstin Konradsson	Mikael Staffas
Position	President and CEO of Boliden	President Boliden Smelters	CFO up to and including March 2016, President Boliden Mines as of November 2015
Education	M.Sc. Engineering, Economics	M.Sc. Engineering	M.Sc. Engineering, MBA
Employed	2007	2012	2011
Born	1954	1967	1965
Directorships	Chairman of the Boards of SveMin and Umeå University. Member of the Boards of the Confederation of Swedish Enterprise and The Swedish Association of Industrial Employers.	Member of the Board of Swerea Mefos.	Member of the Board of SJ.
Previous positions	President and CEO of Sapa and Mun ters, and a variety of senior positions within ASEA, Atlas Copco and Sphinx Gustavsberg.	Business Area President and CEO within the Åkers Group and a variety of senior positions within SSAB.	CFO of Södra Skogsägarna, Partner at McKinsey & Co.
Number of shares1)	40,235	2,000	4,700

Name	Thomas Söderqvist	Håkan Gabrielsson
Position	Senior Vice President Corporate Responsibility	CFO as of April 2016
Education	Bergsskolan – The Swedish School of Mining and Metallurgy	M.Sc. Economics
Employed	2012	2009–2011, April 2016
Born	1957	1967
Directorships	–	–
Previous positions	Area Manager for the Boliden Area and a variety of senior positions within Sandvik.	CFO of Fagerhult, Director Group Controlling at Boliden and a variety of positions within Sapa, Ericsson and Electrolux.
Number of shares1)	0	0

Strategy Market Operations Financial reports Introduction Corporate Governance

Boliden Annual Report 2015 Corporate Governance Report 71

of Directors

The purpose of internal control over financial reporting is to provide reasonable assurance with regard to the reliability of the external financial 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.

The Board of Directors has overall responsibility for ensuring that an efficient internal control system exists within the Boliden Group. The President is responsible for the existence of a process and organisation that ensure internal control and the quality of the internal and external financial 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 financial reporting. The internal control function reports to the CFO and presents reports on issues relating to internal control at the Audit Committee's meetings.

Control environment

The 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.

The starting point is the New Boliden Way, which includes the Code of Conduct, decision-making and authorisation instructions, and a financial manual covering financial policy, accounting and reporting instructions. Local management systems with more detailed instructions and descriptions of important processes have also been set up.

Internal control report by the Board Boliden's internal control matrix Boliden has a uniform and standardised internal control framework known as the Boliden Internal Control System (BICS).

Risk analysis

The operating units conduct ongoing risk analyses with regard to financial reporting. The risks inherent in the various accounting and reporting processes shall be identified, analysed and documented in BICS.

Control activities

Various types of control activities are carried out within the Group and within every different aspect of the accounting and reporting process on an ongoing basis. The control activities are carried out in order to manage known risks and to detect and rectify any errors and discrepancies in the financial reporting.

Documentation of significant control activities within the accounting and reporting process continued in BICS in 2015. For every risk identified, the controls that manage the risk 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.

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, both by internal resources and external auditors. Areas where scope for improvement is identified 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

The Board of Directors is responsible for the Corporate Governance Report for 2015 on pages 62–71 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 sufficient basis for our conclusions. This means that our statutory examination of the Corporate Governance Report has a different 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 and its statutory content is consistent with the annual accounts and the consolidated accounts.

Stockholm, 11th February 2016

Deloitte AB

Jan Berntsson Authorised Public Accountant

Control activity	Responsible	Follow-up
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 financial reporting controls	Operating units	Group accounting/internal control
Tax control	Operating units	Group Tax Director

Financial reporting

The Group	Consolidated Income Statement The Consolidated Statement of Comprehensive	73
	Income	73
	Balance Sheet, the Group Changes in shareholders' equity, the Group	74 75
	Consolidated Statements of Cash Flow	76
	The Parent Company Income Statements, the Parent Company	77
	Balance Sheets, the Parent Company Changes in shareholders' equity, the	77
	Parent Company Statements of Cash Flow, the Parent Company	77 77
Notes	Note 01: Significant accounting and valuation principles	78
	Note 02: Information per segment and geographical market	84
	Note 03: Employees and personnel costs	85
	Note 04: Auditors' fees and reimbursement of expenses	87
	Note 05: Key expense items	87
	Note 06: Other operating income	87
	Note 07: Financial income	87
	Note 08: Financial expenses	87
	Note 09: Government subsidies	87
	Note 10: Supplementary information to the Statements of Cash Flow	87
	Note 11: Operational acquisitions	88
	Note 12: Intangible fixed assets	89
	Note 13: Tangible fixed assets	90
	Note 14: Leasing charges	91
	Note 15: Participations in Group companies	92
	Note 16: Participations in associated companies 92
	Note 17: Taxes	93
	Note 18: Inventories	94
	Note 19: Accounts receivable	94
	Note 20: Other current receivables	94
	Note 21: Related Party Disclosures	94
	Note 22: Shareholders' equity	94
	Note 23: Provisions for pensions and similar undertakings	95
	Note 24: Other provisions	98
	Note 25: Risk information	98
	Note 26: Financial liabilities and maturity structure	99
	Note 27: Financial derivative instruments	100
	Note 28: Other current liabilities	100
	Note 29: Financial assets and liabilities by
	valuation category	101
	Note 30: Pledged assets and contingent liabilities	102
	Note 31: Events after 31st December 2015	102
Other	Proposed allocation of profits	103
	Auditor's Report	104
	Auditor's Limited Assurance Report on Boliden AB's Sustainability Report	105

Introduction	Strategy	Market	Operations	Corporate Governance	Financial reports

Boliden Annual Report 2015

Consolidated Income Statement

Amounts in SEK million	Note	2015	2014
Revenues	2	40,242	36,891
Cost of goods sold	5	–35,353	–32,905
Gross profit		4,890	3,986

Selling expenses	5	–361	–341
Administrative expenses	4, 5	–569	–539
Research and development costs	5	–496	–395
Other operating income	6	162	102
Other operating expenses		–41	–58
Results from participations in associated companies	16	5	3
Operating profit	2–6, 9, 11–14	3,590	2,759
Financial income	7	4	3
Financial expenses	8	–238	–291
Profit after financial items		3,356	2,471
Taxes	17	–715	–572
Net profit for the year		2,641	1,899
Net profit for the year attributable to:
The Parent Company's shareholders		2,640	1,898
Non-controlling interests		1	2
Earnings per share, SEK	22	9.65	6.94
There are no potential shares and hence no dilution effect
Average number of shares, basic and diluted		273,511,169	273,511,169

The Consolidated Statement of Comprehensive Income

Amounts in SEK million	2015	2014
Net profit for the year	2,641	1,899
Other comprehensive income
Items that will be reclassified to the profit/loss
Cash flow hedging
Change in market value of derivative instruments	0	–229
Fiscal effect on derivative instruments	1	50
Transfers to the Income Statement	6	–33
Tax on transfers to the Income Statement	–1	7
	6	–204
Year's translation difference when converting overseas operations	–378	277
Result of hedging of net investments in overseas operations	48	–362
Tax on the net profit for the year from hedging instruments	–11	80
	–340	–4
Total items that will be reclassified to the profit/loss	–335	–208
Items that will not be reclassified to the profit/loss
Revaluation of defined benefit pension plans	189	–399
Tax attributable to items not reversed to the profit/loss for the period	–47	96
Total items that will not be reclassified to the profit/loss	143	–303
Total other comprehensive income	–192	–510
Comprehensive income for the year	2,449	1,389
Comprehensive income for the year attributable to:
The Parent Company's shareholders	2,448	1,387
Non-controlling interests	1	2

Balance Sheet, the Group

Amounts in SEK million	Note	31-12-2015	31-12-2014
ASSETS
Fixed assets
Intangible fixed assets	12	3,366	3,516
Tangible fixed assets	13
Buildings and land		4,539	4,677
Deferred mining costs		5,998	6,160

Machinery and other technical facilities		15,923	17,021
Equipment, tools, fixtures and fittings		229	288
New construction work in progress		1,684	476
		28,372	28,623
Other fixed assets
Participations in associated companies	16	22	19
Other shares and participations	29	26	26
Deferred tax receivables	17	23	17
Long-term receivables		111	94
		182	156
Total fixed assets		31,920	32,295

Current assets
Inventories	18	7,748	7,885
Accounts receivables	19, 29	1,236	1,344
Tax receivables		58	92
Interest-bearing receivables	29	2	3
Derivative instruments	27, 29	264	406
Other current receivables	20	871	976
Liquid assets	10, 29	923	865

Total current assets		11,102	11,570
TOTAL ASSETS		43,022	43,865
SHAREHOLDERS' EQUITY AND LIABILITIES
Shareholders' equity	22
Share capital		579	579
Other capital provided		5,940	5,940
Translation reserve		–418	–78
Hedging reserve		68	63
Defined benefit pension plans		–602	–745
Retained earnings		20,234	18,209
Shareholders' equity attributable to the Parent Company's shareholders		25,801	23,968

Non-controlling interests		6	7
Total shareholders' equity		25,807	23,974

Long-term liabilities
Provisions for pensions	23	1,075	1,468
Other provisions	24	1,784	1,875
Deferred tax liabilities	17	2,965	2,862
Liabilities to credit institutions	26, 29	2,484	4,819
Derivative instruments	26, 27, 29	20	24
Other interest-bearing liabilities	26, 27, 29	11	19
Total long-term liabilities		8,339	11,067

Current liabilities
Liabilities to credit institutions	26, 29	3,178	2,845
Other interest-bearing liabilities	26, 29	4	0
Accounts payables	26, 29	3,142	3,764
Other provisions	24	197	244
Current tax liabilities		613	77
Derivative instruments	26, 27, 29	302	401
Other current liabilities	28	1,439	1,493
Total current liabilities		8,875	8,823
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES		43,022	43,865

Pledged assets	30
Contingent liabilities	30

Boliden Annual Report 2015

Changes in shareholders' equity, the Group

		Shareholders' equity attributable to the Parent Company's shareholders
Amounts in SEK million	Note	Share capital	Other capital provided	Transla tion reserve	Hedging reserve	Defined benefit pension plans	Retained earnings	Total – Boliden's share holders	Non controlling interests	Total share holders' equity
	22
Opening shareholders' equity 01-01-2014		579	5,941	–74	267	–442	16,788	23,059	16	23,075
Net profit for the year		–	–	–	–		1,898	1,898	2	1,899
Other comprehensive income		–	–	–4	–204	–303	–	–510	–	–510
Comprehensive income for the year		–	–	–4	–204	–303	1,898	1,387	2	1,389
Change in non-controlling interests		–	–1	–	–	–	–	–	–10	–10
Dividend to Boliden AB's shareholders		–	–	–	–	–	–479	–479	–	–479
Dividend to non-control ling interests		–	–	–	–	–	–	–	–1	–1
Closing shareholders' equity 31-12-2014		579	5,940	–78	63	–745	18,209	23,968	7	23,974
Opening shareholders' equity 01-01-2015		579	5,940	–78	63	–745	18,209	23,968	7	23,974
Net profit for the year		–	–	–			2,640	2,640	1	2,641
Other comprehensive income		–	–	–340	6	143	–	–192	–	–192
Comprehensive income for the year		–	–	–340	6	143	2,640	2,448	1	2,449
Dividend to Boliden AB's shareholders		–	–	–	–		–615	–615	–	–615
Dividend to non-control ling interests		–	–	–	–		–	–	–1	–1
Closing shareholders' equity 31-12-2015		579	5,940	–418	68	–602	20,234	25,801	6	25,807

Other capital provided

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 provided.

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 form of loans in the relevant foreign currency. The exchange rate difference on loans raised is, after the fiscal effect, reported under Other comprehensive income.

Net debt, SEK m	31-12-2015	31-12-2014
Liabilities to credit institutions	5,662	7,664
Other interest-bearing liabilities	15	19
Pension liabilities	1,075	1,468
Short-term interest-bearing assets	–2	–3
Short-term investments	0	0
Liquid assets	–923	–865
	5,827	8,283

Hedging reserve

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

Defined benefit pension plans

Revaluations of pension undertakings have been reported under Other comprehensive income.

Retained earnings

Refers to profit earned.

Capital employed, SEK m	31-12-2015	31-12-2014
Intangible assets	3,366	3,516
Tangible assets	28,372	28,623
Participations in associated companies	22	19
Other shares and participations	26	26
Inventories	7,748	7,885
Accounts receivables	1,236	1,344
Other receivables	1,246	1,476
Provisions, other than for pensions and tax	–1,981	–2,119
Accounts payables	–3,142	–3,764
Other non-interest-bearing liabilities	–1,761	–1,918
	35,131	35,087

Consolidated Statements of Cash Flow

Amounts in SEK million	Note	2015	2014
	10
Operating activities
Profit after financial items		3,356	2,471
Adjustment for items not included in the cash flow:
Depreciation, amortisation and write-down of assets	12, 13	3,522	3,277
Provisions		–185	–12
Revaluation of process inventory		420	–154
Translation differences and Other		122	–39
Tax paid		–272	–242
Cash flow from operating activities
before changes in working capital		6,963	5,301
Cash flow from changes in working capital
Increase (–)/Decrease (+) in inventories		–342	381
Increase (–)/Decrease (+) in operating receivables		179	–425
Increase (+)/Decrease (–) in operating liabilities		–572	533
Other		7	–
Cash flow from changes in working capital		–728	488
Cash flow from operating activities		6,235	5,789
Investment activities
Acquisition of operations	11	–	–718
Acquisition of intangible fixed assets	12	–19	–9
Acquisition of tangible fixed assets	13	-3,628	–3,482
Sale of tangible fixed assets		0	3
Acquisition of financial fixed assets		–23	–1
Cash flow from investment activities		–3,670	–4,206
Free cash flow		2,565	1,583
Financing activities
Dividend		–615	–479
Loans raised		5,412	11,969
Amortisation of loans		–7,300	–12,844
Cash flow from financing activities		–2,503	–1,355
Cash flow for the year		63	228
Opening liquid assets		865	611
Liquid assets acquired		–	23
Exchange rate difference on liquid assets		–5	3
Closing liquid assets	10	923	865

Boliden Annual Report 2015

Income Statements, the Parent Company

Amounts in SEK million	Note	2015	2014
Dividends from subsidiaries	15	–	464
Impairment of participations in Group companies		–	–12
Profit after financial items		–	451
Taxes		–	–
Net profit for the year		–	451

The operations of Boliden AB are limited in scale and are conducted on its behalf by Boliden Mineral AB, which means that the profit is reported as part of Boliden Mineral AB. Boliden AB has no amounts to report under Other comprehensive income.

Balance Sheets, the Parent Company

Amounts in SEK million	Note	31-12-2015	31-12-2014
ASSETS
Fixed assets
Financial fixed assets
Participations in Group
companies	15	3,911	3,911
Participations in other companies		5	5
Long-term receivables
from Group companies		8,223	8,838
Total fixed assets		12,139	12,754
Current receivables
Current receivables from
Group companies		2,154	2,514
Total current assets		2,154	2,514
TOTAL ASSETS		14,294	15,269
SHAREHOLDERS' EQUITY AND LIABILITIES
Shareholders' equity	22
Restricted equity
Share capital		579	579
Statutory reserve		5,252	5,252
		5,831	5,831
Non-restricted equity
Retained earnings		5,809	5,973
Net profit for the year		–	451
		5,809	6,424
Total shareholders' equity		11,640	12,255
Liabilities
Long-term liabilities to credit institutions	26	500	500
Short-term liabilities to credit institutions	26	2,154	2,514
Total liabilities		2,654	3,014
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES		14,294	15,269
Pledged assets		None	None
Contingent liabilities	30	5,810	8,084

Changes in shareholders' equity, the Parent Company

Amounts in SEK million	Share capital	Statu tory reserve	Non-res tricted share holders' equity	Total share holders' equity
Opening shareholders' equity 01-01-2014	579	5,252	6,451	12,282
Dividend	–	–	–479	–479
Net profit for the year	–	–	451	451
Closing shareholders' equity 31-12-2014	579	5,252	6,424	12,255
Opening shareholders' equity 01-01-2015	579	5,252	6,424	12,255
Dividend	–	–	–615	–615
Net profit for the year	–	–	–	–
Closing shareholders' equity 31-12-2015	579	5,252	5,809	11,640

The statutory reserve includes amounts which, prior to 1st January 2006, were transferred to the share premium reserve. The retained earnings comprises, together with the net profit 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 Flow, the Parent Company

Amounts in SEK million	2015	2014
Operating activities
Profit after financial items	–	451
Adjustments for items not included in the cash flow:
Write-down of participations in Group companies	–	12
Cash flow from operating activities	–	464

Financing activities
Loans raised	3,939	10,214
Amortisation of loans	–4,300	–10,840
Dividend	–615	–479
Loans raised from Group companies	976	641
Cash flow from financing activities	–	–464

Cash flow 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.

2 3

Note 01 Significant accounting and valuation principles

General accounting principles 4

Boliden AB (publ.) Swedish corporate ID no. 556051-4142, is a limited liability company registered in Sweden. The Company's registered office is in Stockholm at the address: Klarabergsviadukten 90,

SE-101 20 Stockholm. The Boliden share is listed on NASDAQ Stockholm's Large Cap list. The Company is the Boliden Group's Parent Company, whose prin-6
cipal operations involve the mining and production of metals and operations compatible therewith.
The Consolidated Statements have been compiled in accordance with the EU-approved International Financial Reporting Standards (IFRS) and interpretations of the International Financial Reporting 8
Interpretations Committee (IFRIC). In addition, the Group applies the Swedish Financial Reporting Board's recommendation RFR 1 "Sup-9
plementary accounting regulations for corporate conglomerates" specifying the supplements to IFRS required pursuant to the stipulations of the Swedish Annual Accounts Act. 10
The 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. 11
Items have been valued at their historical cost in the consolidated accounts, with the exception of certain financial assets and liabilities 12
(derivative instruments), which have been valued at their fair value, and inventories in those cases where they are hedged at fair value. 13
The 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 14
"Accounting for legal entities". The Parent Company's accounting principles are specified under the heading, "The Parent Company's accounting principles". 15
The most important accounting principles that have been applied are described below. These principles have been applied consistently for all years presented, unless otherwise specified. 16 17
The Annual Report was approved for publication by the Board of Directors on 11th February 2016. The Balance Sheets and Income 18
Statements are subject to approval by the Annual General Meeting on 3rd May 2016. 19

New or amended standards and interpretations from IASB and IFRIC pronouncements that came into force in the 2015 calendar year

IFRIC 21, Levies: Guidance on when to recognise a liability for levies such as taxes or charges accounted for in accordance with IAS 37 (with the exception of income taxes, fines, and other penalties). The clarification means that a liability shall be recognised when an under-21 22

taking exists to pay a levy of this kind as a result of a certain event. If the event is ongoing, the liability shall be recognised progressively. It only affects the accounting if an event of the kind described above would not have been recognised as a liability under current regula-23
tions, which is only adjudged to be the case in exceptional cases. 24

New standards and interpretations that come into force in the 2016 calendar year or thereafter 25

IFRS 9, Financial instruments: The standard comes into force for financial years beginning in 2018 or thereafter and replaces IAS 39. It is divided into three sections: classification, hedge accounting and impairment. The standard requires the classification of financial 26
assets in accordance with three valuation categories, namely amortised cost, fair value through other comprehensive income, or fair 27
value through the Income Statement. The classification is determined when the asset is first accounted for on the basis of the characteristics of the financial asset and the Company's business model. 28
No major changes apply with regard to financial liabilities. IFRS 9 also includes augmented regulations regarding disclosures 29
in relation to risk management and the effects of hedge accounting. The standard has been complemented with regulations governing the impairment of financial assets, where the model is based on 30

anticipated losses. An overall assessment of the effects on Boliden's accounting will be made at a later date.

IFRS 15, Revenue from Contracts with Customers: The standard comes into force on 1st January 2018 and replaces existing standards and interpretations regarding revenues. The standard introduces a new revenue recognition model for contracts with customers and shall be applied to all contracts with customers with the exception of insurance contracts, financial instruments and leasing contracts in that separate standards exist in these areas. The new standard also entails new starting points for when revenue shall be recognised and requires new evaluations by the Company management that differ from those currently applied.

The principal areas in which existing regulations differ from the new ones are:

− Control-based model for determining when revenue shall be recognised (transfer of risks and benefits is only retained to indicate that control may have been transferred).

− The valuation of the revenue shall be based on what the vendor expects to receive, rather than on fair value.

− New rules governing the way in which a contract's goods and services shall be distinguished in the financial reporting.

− Revised criteria governing how revenue shall be recognised over time.
− Expenditure for the acquisition and fulfilment of contracts.
− Significantly augmented disclosure requirements.

IFRS 15 is not currently expected to affect Boliden to any substantial degree.

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

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. The estimates and assessments of the Board of Directors and the Company's management are based on historical experience and forecast future trends. The actual outcome may differ from these assessments.

Valuation of inventories

It is not easy, in the smelters' process inventories and stocks of finished metals, to differentiate between externally purchased material and mined concentrate from the Group's own operations. Calculating the internal profit of inventories consequently entails evaluating the internal share of process inventory and stocks of finished metals with the aid of historic breakdowns of raw material feeds.

Pension undertakings

Pension provisions are dependent on the assumptions made in conjunction with the calculations of the amounts. The assumptions refer to discount interest rates, rate of salary increases, future increases in pensions, the number of remaining working years for employees, life expectancy, inflation and other factors, and are reviewed annually. The assumptions are made for every country in which Boliden has defined benefit pension plans. The most significant assumptions, in Boliden's opinion, are with regard to the discount rate, the rate of salary increases, and life expectancy, and Boliden has elected to present sensitivity analyses for these factors. Boliden's assumptions and sensitivity analyses are presented in Note 23 on pages 95–98.

Legal disputes

Boliden regularly analyses and evaluates outstanding legal disputes using internal company legal counsels and, when necessary, with the help of external advisors, in order to assess the need for provisions to be made. See Note 30, Pledged assets and contingent liabilities, on page 102.

Boliden Annual Report 2015 Notes 79

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 13, Tangible fixed assets, on pages 90−91 and Note 24, Other provisions, on page 98.

Valuation of fixed 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 refining charges, and exchange rates, amongst other things. Changes in market prices of metals, treatment and refining charges and currencies have a substantial effect on the Company's future cash flows and hence on the estimated write-down requirement. Assumptions with regard to price trends for metals, treatment and refining charges and currencies are made by the Company management with the help of external experts. The assumptions are reviewed on an annual basis and adjusted when necessary. For further information, see Note 13, Tangible fixed assets, on pages 90−91.

The depreciation period for deferred mining costs, installations and equipment in mines depend on future ore extraction and the lifespan of the mine. The assessment of these aspects is, in turn, heavily dependent on mineral reserves and, consequently, on factors such as 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.

Mineral reserves

Boliden's mineral reserves are divided into two categories, namely probable and proven. The assessment is based on geological measurements and assumptions that are explained in greater detail on pages 106−109. Boliden's assessment of the size of the mineral reserves affects annual depreciation costs and impairment tests.

Consolidated Statements

The Consolidated Statements cover the Parent Company and all companies over which the Parent Company through ownership, directly or indirectly, exercises a controlling influence. The term "controlling influence" refers to companies in which Boliden exerts influence, is exposed to, or is entitled to a variable return from its involvement and in which it can use its influence over the company to influence its return. This is generally achieved by ensuring that its ownership share, and the share of votes, exceeds 50 per cent. The existence and effect 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 influence over another company. Subsidiaries are included in the Consolidated Statements as of the point in time at which a controlling influence has been 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 influence ceased to be exercised.

The Consolidated Statements have been compiled in accordance with the acquisition accounting method, which means that the historical cost of a company comprises the fair value of the payment made (including the fair value of any assets, liabilities and own equity instruments issued). The identifiable 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 influence 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.

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 significant influence over operational and financial 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 and any residual value from the consolidated surplus values. Shares in associated companies' profits/losses are reported in the Consolidated Income Statement as part of the operating profit and comprise the Group's share in the associated companies' net profits/losses. Shares in profits 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

The currency in the primary economic environments in which the subsidiary companies operate is the functional currency. The 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 differences arising and accumulated translation differences 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) in the relevant foreign currency. Exchange rate differences on hedging measures are reported as Other comprehensive income.

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

Financial instruments

The following financial instruments, i.e. financial 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 fulfilled or if significant aspects of the loan terms are renegotiated.

Financial instruments are reported at the fair value or amortised cost, 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 financial asset or group of assets.

Valuation principles

Fair value

The fair value of derivatives is based on listed bid and ask prices on the closing day and on a discounting of estimated cash flows, 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 financial 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. The fair value of accounts receivables and accounts payables 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 financial assets or liabilities reported at fair value, they are reported at the historical costs of the instruments at their time of acquisition, which corresponds to the fair value at the time of acquisition plus transaction costs. 27 30

25 26

Boliden provides information on all financial assets and liabilities reported at fair value in the Balance Sheet on the basis of a threelevel 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.

The assessments have been conducted on the basis of the circumstances and factors obtaining with regard to the various instruments. Metal futures are classified as level two, in that the dis-

counted prices are based on listed daily prices from the exchanges. Currency futures and interest swaps have also been classified as level two, with reference to the fact that the valuation is based on observable market data. The fair value of liabilities to credit institu-6 7

tions has been classified as level two. Shares and participations that are not listed have been classified as level three. Exceptions to classification 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 8

Amortised cost 10

value.

Amortised cost is calculated using the effective interest rate method. This 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 effective interest rate. The effective interest rate is the rate that yields the instrument's historical cost as a result in conjunction with 11 12

current value calculation of future cash flows. 13

Valuation category

Boliden divides financial instruments into the following valuation categories. See also Note 29 on page 101. 14

Holdings valued at fair value 15

Derivatives valued at fair value and for which changes in value are reported under net financial items. The derivatives comprise 16

currency futures and are not included in hedge accounting. 17

Loans and accounts receivables

This category includes financial investments, receivables not listed on an active market, and liquid assets. Liquid assets are defined 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 insignificant risk of fluctuations in value and are reported according 18 19

to the amortised cost method. Receivables are defined as accounts receivable and interest-bearing short-term holdings of securities or 20

other investments which are not classified as fixed assets and which are not attributable to liquid assets. Receivables are reported in the anticipated recoverable amount, i.e. after deductions for bad debts, 21 22

which are assessed on an individual basis. The anticipated term of accounts receivables and other current receivables is short and the value is, therefore, reported at the nominal amount without discounting in accordance with the amortised cost method. 23

Financial assets available for sale 24

Assets in this category comprises 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 historical cost, taking into account accumulated 25 26

write-downs.

Derivatives used in hedge accounting 27

This category comprises derivatives valued at fair value and which form part of fair value hedging, cash flow hedging or the hedging of net investments in overseas operations. The derivatives comprise metals futures, currency futures, and interest derivatives. See Note 28

27 on page 100 for details of derivatives used for hedging purposes. 29
30

Other financial liabilities

Financial liabilities primarily comprise liabilities to credit institutions and accounts payables. The anticipated term of accounts payables is short and the value is, consequently, reported at a nominal amount in accordance with the amortised cost method. Liabilities to credit institutions are initially valued at amounts received, less any set-up fees, and are then valued at the amortised cost method. Interest expenses are reported on a rolling basis in the Income Statement with the exception of the part included in the historical cost for tangible fixed 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 recognised in the Income Statement under Other financial 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 allocated over the remaining contractual term of the loans.

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 differences on operating receivables and operating liabilities are included in the operating profit, while exchange rate differences on financial assets and liabilities, including any profit/loss, are reported under financial items. Exchange rate effects on financial instruments used in cash flow hedging and the hedging of net investments in overseas operations, are reported under Other comprehensive income with the exception of any exchange rate differences on currency swaps in foreign currencies reported under net financial items.

Classification and reporting of derivatives used for hedging purposes

See also "Risk management" in the Directors' Report on pages 56–59.

Fair value hedging (binding undertaking)

Changes in the value of financial derivatives used to hedge a binding undertaking are reported under the operating profit together with changes in the value of the asset or liability that the hedging is designed to counter. The 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 effectively match the changes in value from hedged items in the Income Statement and Balance Sheet.

Cash flow hedging (forecasted cash flows)

Hedge accounting is applied to financial derivatives that refer to the hedging of forecast flows, which means that the effective 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 profits/ losses attributable to metal and currency derivatives are reported under net sales, while the profit/loss on interest derivatives is reported under net financial items. Individual interest swaps and multiple interest swaps – known as portfolio hedging – are both used to hedge future interest payments. Any ineffective part of cash flow hedging is reported under net financial items.

Hedging of net investments

Hedge accounting is applied to the profit/loss on hedging in respect of net investments in overseas operations and to cash flow hedging under Other comprehensive income. Any ineffective component of these hedges is reported under net financial items. Associated hedging results are, in conjunction with the sale of oversea operations, reported in the Income Statement, together with the translation effect of the net investment.

Boliden Annual Report 2015	Notes 81
----------------------------	----------

Offsetting of financial assets and liabilities

The offsetting of financial assets and liabilities is regulated by ISDA (International Swaps and Derivatives Association) agreements, which regulate both offsetting 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 offsets payments on undertakings with the same maturity date, which are in the same currency, which have the same counterparty, and which are for the same type of instrument. Surplus amounts per instrument and currency only 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, offset in a sum that is paid by the party with the biggest outstanding liability.

Government contributions and support

Government support refers to subsidies, grants or premiums designed to provide an economic benefit, or Government support in the form of transfers of resources to the company that may be applied to an undertaking. Government 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 significant rights and obligations associated with the title transfer to the purchaser. These sales are reported net after VAT, discounts and exchange rate differences when sales are made in foreign currencies.

Preliminary invoices are issued for the Group's metal concentrates at the time of delivery. Definitive 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.

The Group's metals are invoiced to the customers at the time of delivery. The 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. The smelters' income comprises treatment and refining 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 financial potential for the exploitation of a mine deposit has been confirmed, 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 fixed assets heading. Exploration rights acquired in conjunction with operational acquisitions have been capitalised as intangible assets.

Intangible fixed assets

Intangible fixed assets include patents, licenses, similar rights, emission rights, exploration rights acquired in conjunction with operational acquisitions and goodwill, which are booked at their historical cost less amortisation and any write-downs. Goodwill comprises the amount by which the historical cost exceeds the fair value of the Group's share of the identifiable 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 profit 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 indefinite useful life. Goodwill is allocated to the smallest possible unit or group of units that generate cash where separate cash flows can be identified, 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 fixed assets, with the exception of emission and exploration rights, are amortised over their anticipated useful lives.

Emission rights

The 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 classified as an intangible asset. Emission rights allocated are valued at the historical cost 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. The asset is amortised over the remaining months of the year, thereby distributing the cost in parallel with production. The intangible fixed 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 fixed assets

Land, plants and equipment, and capitalised costs associated therewith for development, pre-production measures and future reclamation costs, are booked at the historical cost less depreciations and any write-downs. Interest expenses attributable to financing development and completion of significant tangible fixed 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. Effects of subsequent events that result in costs that exceed the provision are discounted, capitalised as a fixed 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.

Depreciation principles for tangible fixed assets

Depreciation according to plan is based on the original capitalised values and the estimated economic lifespan. Depreciation of an asset begins when an asset becomes operational, i.e. when it is on site and in the condition required for use in the manner intended by the company management.

Fixed assets and capitalised values attributable to waste rock are depreciated per push-back and in conjunction with ore extraction in relation to the anticipated ore extraction for the entire push-back. Fixed assets and capitalised values included in deferred mining costs are depreciated in accordance with a production-based depreciation method that is based on the proven and probable mineral reserves in the respective ore bodies. Depreciation is effected to the estimated residual value. Estimated residual values and production capacity are subject to ongoing review. Fixed assets not directly linked to production capacity are depreciated on the basis of their anticipated useful lives.

Smelters and production plants are depreciated linearly over their anticipated useful lives.

30

The following depreciation periods are applied to tangible fixed assets including future reclamation costs:

2	Buildings Land improvements Deferred mining costs and	20–50 years 20 years
3	waste rock capitalisation	Concurrently with ore depletion
4	Capitalised restoration costs	Linearly over the antici pated lifespan
	Processing facilities	10–25 years
5	Machinery	3–10 years
	Equipment, tools, fixtures and fittings	3–10 years

Boliden applies component depreciation, which means that larger processing facilities are broken down into component parts with different useful lives and thus different depreciation periods. 6

Impairment

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 8
calculation is performed of the recoverable amount of the asset in 9
question. Goodwill is, together with any intangible assets with an indefinable useful life, subject to annual impairment tests even if there are no indications of a reduction in its value. Impairment tests 10
are, however, performed more frequently if indications exist of a decline in value. The recoverable amount comprises whichever is the 11
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. The value in use comprises the present 12
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 13
the estimated recoverable amount is lower than the book value, the latter is written down to the former. 14
Impairment are reported in the Income Statement. Any impairment are reversed if changes in the assumptions leading to the original impairment mean that the impairment is no longer warranted. 15
Impairment that have been performed are not reversed in such a way that the reported value exceeds the amount that would, following 16
deductions for depreciation according to plan, have been reported if no impairment had been performed. Reversals of impairment performed are reported in the Income Statement. Goodwill impairment are not reversed. See also the section on Valuation of fixed assets. 17 18

Leasing 19

A financial leasing agreement is an agreement whereby the financial risks and benefits associated with a title are, in all significant

respects, transferred from the lessor to the lessee. Leasing agreements that are not classified as financial leasing agreements are 20
classified as operational leasing agreements. Assets held in accordance with financial leasing agreements are 21
reported initially as fixed 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. The Group's liability in relation to the lessor is reported in the Balance Sheet under the heading of 22 23
Liabilities to credit institutions, broken down into short- and longterm components. 24
Lease payments are broken down into interest and amortisation of the liability. The interest is distributed over the leasing period so
that an amount corresponding to the fixed interest amount payable on the liability reported in each period is charged to each reporting period. The leased asset is depreciated according to the same prin-25 26
ciples as those that apply to other assets of the same type. The leasing charges for operational leasing agreements are
booked as costs on a linear basis over the leasing period. 27

Inventories 28

The Group's inventories primarily comprise mined concentrates, materials tied up in the smelters' production processes, and finished metals. Inventories are valued at whichever is the lower of the historical cost in accordance with the first-in-first-out principle and the net sale value, taking into account the risk of obsolescence. The historical cost of inventories of metals from the company's mines and 29 30

semi-finished and finished 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 historical cost and the replacement value. When mined concentrates are bought in from external sources and definitive pricing has not yet occurred, the acquisition value is estimated at the closing day price. Fair value hedging is effected in conjunction with the definitive pricing of mined concentrates. The change in the value of hedged items in the inventory value is also reported in conjunction with fair value hedging of mined concentrates.

Taxes

The tax expense(income) for the period comprises current tax and deferred tax. Taxes are reported in the Income Statement under Other comprehensive income or Shareholders' equity, depending on where the underlying transaction has been reported.

Current tax is the tax calculated on the taxable profit/loss for each period. The year's taxable profit/loss differs from the year's reported profit/loss before tax in that it has been adjusted for non-taxable and non-deductible items and temporary differences. The 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 differences between reported and fiscal values of assets and liabilities. Deferred tax receivables are reported in the Balance Sheet in respect of loss carry-forwards and all deductible temporary differences to the extent that it is likely that these amounts can be used to offset future taxable surpluses. The 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 sufficient 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 offset 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 fulfil this obligation. A further prerequisite is that it should be possible to make a reliable estimate of the amount to be paid.

When a significant effect 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 fulfill the obligation. A discount interest rate before tax that reflects current market evaluations of the time value of money and the risks associated with the provision is applied in conjunction herewith. The 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. Provisions are also made for any purchases of emission rights and for any remuneration payable in conjunction with the termination of employment that may be payable to employees to whom a commitment of termination has been given or to employees who accept voluntary redundancy. The 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 confirmed 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 outflow of resources will be required or because the size of the undertaking cannot be calculated. See Note 30 on page 102.

Boliden Annual Report 2015 Notes 83

Employee benefits

Pension undertakings

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

For pension systems where the employer is committed to defined 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.

The undertaking does not cease for pension systems where a defined benefit pension has been contractually agreed, until the agreed pensions have been paid out. Boliden commissions independent actuaries to calculate pension undertakings relating to the defined benefit pension plan arrangements in each country. For information on calculation parameters, see the section entitled "Estimates and assessments − pension undertakings" and Note 23 on pages 95−98.

Revaluations of the defined benefit net pension liability, such as actuarial profits and/or losses and the difference between the return on plan assets and the discount rate, are reported under Other comprehensive income. The financing cost of the net pension liability is calculated using the discount rate for the pension liability. The financing cost, the 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 classified 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. The 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 financial results in relation to financial goals are evaluated, 3) financial 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, the Tara mine in Ireland and, as of the fourth quarter of 2014, the Kylylahti mine in Finland. Aitik produces copper concentrate with some gold and silver content. The other Swedish mines produce zinc, copper and lead concentrates with variable gold and silver content. Tara produces zinc and lead concentrates and Kylylahti produces concentrate that contains copper, gold, zinc and silver. Business Area Mines is also responsible for sales of mined concentrates.

Business Area Smelters includes the Kokkola and Odda zinc smelters in Finland and Norway, respectively, the Rönnskär and Harjavalta copper smelters in Sweden and Finland, respectively, and the Bergsöe lead smelter in Sweden.

The Business Area is responsible for all sales of the smelters' products and handles all raw material flows between the Group's mines, smelters and customers. This includes responsibility for purchases of metal concentrates and recycling materials from external suppliers. The zinc smelters' production primarily comprises zinc metal, but also includes silver concentrate, aluminium fluoride and sulphuric acid. The copper smelters' production primarily comprises copper, gold, silver, lead and sulphuric acid. The copper smelters also recycle metal and electronic scrap and smelt nickel. The 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 differs between the Business Areas and the Group are reported under the heading Accounting principles. The market valuation of financial 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 flows are reflected 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

The 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. The recommendation specifies the exceptions and additions to be made in relation to IFRS. The differences between the Group's and the Parent Company's accounting principles are described below.

Reporting of 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. The valuation is conducted on the basis of the historical cost (see the Group's accounting principles).

Subsidiaries

Participations in subsidiary companies are reported in the Parent Company in accordance with the historical cost 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 historical cost.

Determination of the value of subsidiary companies is effected 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 82-83.

Segment – Business Areas

31-12-2015	Mines	Smelters	Other	Accounting principles2)	Eliminations	The Group
External revenues	1,208	39,019	0	–	–	40,228
Effect on profit of metal price and currency hedging	15	–	–	–	–	15
Internal revenues	8,585	–71	52	–	–8,567	0
Revenues	9,808	38,948	52	–	–8,567	40,242
Results from participations in associated companies	3	1	2	–	–	5
Operating profit	1,429	2,272	–148	–	38	3,590
Net financial items						–234
Profit after financial items						3,356
Taxes						–715
Net profit for the year						2,641
Intangible fixed assets	378	2,988	0	–	–	3,366
Tangible fixed assets	19,961	8,318	94	–	–	28,372
Equity shares and other financial fixed assets	10	10	29	–	–	48
Inventories	649	7,229	–	–	–130	7,748
Other receivables	1,168	1,836	504	89	–1,114	2,484
Assets in capital employed	22,166	20,381	626	89	–1,244	42,018
Provisions, other than for pensions and tax	1,468	507	7	–	–	1,981
Other liabilities	1,422	3,995	600	–	–1,114	4,903
Liabilities in capital employed	2,890	4,502	607	–	–1,114	6,885
Total capital employed	19,275	15,878	19	89	–130	35,131
Depreciation	2,520	1,002	–	–	–	3,522
Investments1)	2,394	1,248	8	–	–	3,650

31-12-2014	Mines	Smelters	Other	Accounting principles2)	Eliminations	The Group
External revenues	920	35,924	0	–	–	36,844
Effect on profit of metal price and currency hedging	47	–	–	–	–	47
Internal revenues	8,351	–30	84	–	–8,405	0
Revenues	9,318	35,894	84	–	–8,405	36,891
Results from participations in associated companies	2	1	–	–	–	3
Operating profit	1,299	1,672	–147	–	–65	2,759
Net financial items						–287
Profit after financial items						2,471
Taxes						–572
Net profit for the year						1,899
Intangible fixed assets	408	3,107	0	–	–	3,516
Tangible fixed assets	20,259	8,273	91	–	–	28,623
Equity shares and other financial fixed assets	7	10	29	–	–	45
Inventories	766	7,286	–	–	–167	7,885
Other receivables	1,081	1,872	404	291	–829	2,820
Assets in capital employed	22,521	20,548	524	291	–996	42,888
Provisions, other than for pensions and tax	1,559	502	58	–	–	2,119
Other liabilities	1,347	4,454	724	–	–843	5,682
Liabilities in capital employed	2,906	4,956	782	–	–843	7,801
Total capital employed	19,615	15,592	–258	291	–153	35,087
Depreciation	2,264	1,012	0	–	–	3,277
Investments1)	3,450	768	4	–	–	4,222

²⁸

1) Excluding capitalised reclamation costs and financial leasing.

2) Comprises unrealised market values attributable to cash flow hedging and minor adjustments for other accounting principles only followed up at Group level. The market values of the cash flow hedges are, when realised, reported in the respective segments. 29

Introduction	Strategy	Market	Operations	Corporate Governance	Financial reports

Boliden Annual Report 2015 Notes 85

Boliden has three customers within Segment Smelters who account for 15% (15), 8% (9) and 7% (10), respectively, of Boliden's external income. Other customers each represent less than 4% (4) 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 figures are based on the country in which the customer is located. Assets and investments are reported in the location of the asset.

Revenues	2015	2014
Sweden	6,755	5,633
Nordic region, other	5,164	4,360
Germany	13,577	13,386
UK	7,836	6,602
Europe, other	6,683	6,661
North America	0	0
Other markets	227	249
	40,242	36,891

Assets in capital employed	31-12-2015	31-12-2014
Sweden	34,803	35,658
Finland	3,822	3,669
Norway	1,473	1,450
Ireland	1,901	2,094
Other countries	18	18
	42,018	42,889

0	0
274	313
283	166
700	974
2,393	2,769
31-12-2015	31-12-2014

1) Excluding capitalised restoration costs and financial leasing.

Boliden's total revenues of SEK 40,242 m (36,891) comprised SEK 34,162 m (32,582) from sales of metals, SEK 3,435 m (1,678 m) from sales of concentrates, and SEK 2,645 m (2,631) from other sales.

Note 03 Employees and personnel costs

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

		of whom,	of whom,		of whom,	of whom,
Average number of employees1)	2015	women	men	2014	women	men
Subsidiaries
Sweden	2,937	620	2,317	2,902	613	2,289
Finland	1,035	167	868	1,059	160	899
Norway	289	43	246	282	43	239
Ireland	598	30	568	618	29	589
Other	20	7	13	20	7	13
Total in subsidiaries/Group	4,878	867	4,012	4,881	852	4,029
1) Refers to full-time employees.
Percentage of women at Board and
Group management level	2015	2014
Board of Directors	36%	27%
Group management	20%	20%
		2015			2014

Salaries, other remuneration
and social security expenses	Salaries and remuneration	Social security expenses	Salaries and remuneration	Social security expenses
Subsidiaries	2,723	757	2,557	885
of which, pension expenses		(50) 1)		(506)
Group, total	2,723	757	2,557	885

1) The pension cost for the year includes the effects of changes to pension terms in Tara's defined benefit pension plans totalling SEK +227 m, which have reduced the pension cost. For further information, see Note 23 Provisions for pensions and similar undertakings.

	2015		2014
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	26	1,509	24	1,415
Subsidiaries abroad
Finland	6	511	4	449
Norway	3	170	2	163
Ireland	5	478	5	483
Other	2	13	1	10
Group, total	42	2,681	37	2,520

Profit-sharing system

A profit-sharing system was introduced for all employees of the Boliden Group in 2007. A profit share is payable when the return on capital employed exceeds 8%, and the maximum profit share (SEK 30,000/full-time employee) is payable when the return on capital employed reaches 18%. 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 6,390 (0) per full-time employee is proposed for 2015 as the return on capital employed was 10% (8). This is, however, conditional upon the dividend resolution by the Annual General Meeting. The allocation for each year is invested in liquid interest-bearing 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 benefits and pensions. The term "senior executives" refers to those persons who have comprised the Group management during the year. The Group management comprised five 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% of the basic salary for the President, while for other senior executives, it is maximised to 40–50% of the basic salary. 10 percentage points of this is conditional on the purchase of Boliden shares for the gross sum before tax.

Pension benefits and other benefits payable to the President and other senior executives are taken into account when determining fixed and variable remuneration.

Remuneration and other benefits paid during the year 10

Specification of remuneration paid to the Board Members and senior executives.

	Directors' fees/Basic salary		Variable remuneration		Other benefits		Pension cost
SEKk	2015	2014	2015	2014	2015	2014	2015	2014
Board of Directors
Anders Ullberg, Chairman	1,425	1,325
Marie Berglund	480	460
Staffan Bohman1)	530	510
Ulla Litzén1)	630	610
Michael G:son Löw	480	460
Elisabeth Nilsson	480	–
Leif Rönnbäck	–	535
Tom Erixon	555	460
Group management
Lennart Evrell, President	7,002	7,028	1,5643)	04)	183	191	2,237	2,516
Other members of the Group management2)	12,5155)	9,483	1,3183)	1,1534)	481	417	2,819	3,204

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 2014 and 2015.
3) The amounts are attributable to 2015 but will be disbursed in 2016. 20
4) The amounts are attributable to 2014 but were disbursed in 2015.
5) Includes a non-recurring cost due to changes in the Group management. 21

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 2015 was based on the Group's return on shareholders' equity, and a combination of production volumes at Garpenberg and the accident trend within the Group. 23 24
For other members of the Group management, 25−80% of the variable remuneration for 2015 was based on the Group's financial goals and 20−75% on their personal spheres of responsibility and 25
individual targets. Other benefits refer primarily to company cars. 26

Pensions

The President has a defined contribution pension plan to which the company allocates 35% of the fixed monthly salary on a rolling basis. The President decides for himself the level of survivor annuity, indem-27 28
nity for medical treatment or disability, etc. component of his insurance solution. The President's retirement age is 65.
All other members of the Group management have defined contribution pension plans to which the company allocates 30−50% of the fixed monthly salary. The pension solution of one of the members of 29 30
the Group management has, until the termination by this member of his employment on his own initiative in September, entailed extra allo-31

cations being made, comprising 20% of the fixed basic salary at 2009 level. 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 the 2015 Corporate Governance Report for information.

Note 04 Auditors' fees and reimbursement of expenses

	2015	2014
Deloitte AB
Audit engagements	5	–
Auditing assignments over and above audit engagements	0	–
Tax consultancy	0	–
Other services	0	–
	5	–
Ernst & Young AB
Audit engagements	–	5
Auditing assignments over and above audit engagements	–	1
Tax consultancy	–	–
Other services	–	1
	–	7

Note 05 Key expense items

5,357 3,522	4,896 3,277


2,602	2,480
	3,557
	19,970
2015	2014
	21,675 3,623

The specification 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	2015	2014
Cost of goods sold	3,501	3,257
Selling expenses	0	0
Administrative expenses	16	16
Research and development costs	4	3
	3,522	3,277

Note 06 Other operating income

	2015	2014
Payment for sludge deliveries	22	20
Rental income, industrial properties	20	21
Insurance payments	4	–
Profit on the sale of fixed assets	11	–
Other	105	61
	162	102

Note 07 Financial income

	2015	2014
Interest income on liquid assets	1	2
Other	3	1
	4	3

Note 08 Financial expenses

	2015	2014
Interest on loans at amortised cost	101	128
Interest on currency futures	19	9
Interest on pension provisions	32	35
Interest on reclamation reserve	37	37
Other financial items	47	82
	238	291

Deductions have been made from interest payments on loans at the amortised cost of interest capitalisation attributable to the Garpenberg expansion in the sum of SEK 0 m (20). Boliden's average interest rate totalled 1.47% (1.72), weighted against rolling debt.

Note 09 Government subsidies

Government subsidies totalling SEK 30 m (32) were received in 2015 and SEK 29 m (32) was reported in the Income Statement. The majority of the subsidies were received in Norway under a carbon dioxide compensation scheme and for energy efficiency improvement measures.

Note 10 Supplementary information to the Statements of Cash Flow

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

	2015	2014
Interest received
Interest on currency futures	–	–
Bank interest	1	1
	1	1
Interest paid
Interest on currency futures	–20	–5
Interest on external loans	–118	–148
	–138	–153
Liquid assets, as per 31 Dec.
The following items are included in liquid assets:
Cash and bank balances	923	865
Short-term investments	0	0
	923	865

The interest paid in the Statement of Cash Flow does not include interest capitalisation of expansion projects and accrued interest expenses, unlike in the Income Statement. Interest paid for interest capitalisation is reported as part of the investment operations.

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 insignificant risk of value fluctuation.

Note 11 Business combinations

Acquisitions, 2014

On 1st October 2014, Boliden Mineral AB acquired 100% of the shares in Kuhmo Nickel Ltd and its subsidiary companies, including the copper mine in Kylylahti. The purchase price paid comprises a cash payment totalling SEK 718 m.

The acquisition includes not only the mining operations, but also exploration rights for copper and nickel deposits. The conditions in the exploration areas are similar to those in Sweden and there are a number of synergies with Boliden's mining, metallurgical and exploration activities.

The fair value of the exploration rights at the time of acquisition was SEK 177 m after deferred tax. The exploration rights refer to a number of assets classified as measured mineral resources and a number of other assets classified as indicated or inferred mineral resources. The acquisition also includes tangible assets comprising existing mining operation assets.

The Group already owned smelting operations in Finland and the acquisition of the Kylylahti mine will see Boliden establish mining operations in the country, too.

The acquired units' revenues have positively impacted the Group's revenues for the 2014 financial year to the tune of SEK 75 m. If the acquisition had occurred on 1st January 2014, the Group's revenues would have been affected to the tune of SEK 493 m. 10

The Boliden Group's pre-tax profit since the acquisition on 1st October 2014 was virtually unaffected by the acquired units' results. If the acquisition had occurred on 1st January 2014, the Group's revenues would have been positively affected to the tune of SEK 83 m.

The Boliden Group's administrative costs include transaction costs of SEK 5 m in respect of the operations acquired.

Business combinations, 1st October 2014
Cash purchase price paid	718
Total purchase price	718

Identifiable assets acquired and liabilities assumed	Fair value
Intangible and tangible fixed assets	505
Other fixed assets	14
Deferred tax receivables	18
Inventories	29
Accounts receivables and other current receivables	63
Liquid assets	23
Other provisions	–30
Financial leasing liabilities	–18
Other current liabilities	–63
Total identifiable net assets acquired	541

Surplus value, exploration rights	221
Deferred tax on surplus value	–44
Surplus value, net	177
Purchase price paid	–718
Liquid assets in the company acquired	23
Transaction costs	–5
Change in the Group's liquid assets	–700

Introduction

Boliden Annual Report 2015 Notes 89

Note 12 Intangible fixed assets

	Capitalised deve lopment expenses	Patents, licences, and similar rights	Exploration rights	Emission rights	Goodwill	Total intangible fixed assets
Historical costs
Opening balance 01-01-2014	43	155	–	–	3,008	3,206
Investments	4	5	–	–	–	9
Acquisitions	82	1	221	–	–	303
Reclassifications	–	5	–	–	–	5
Translation differences	4	12	11	–	71	98
Closing balance 31-12-2014	132	178	232	–	3,079	3,621
Opening balance 01-01-2015	132	178	232	–	3,079	3,621
Investments	11	8	–	–	–	19
Sales and retirements	–	–2	–	–	–	–2
Reclassifications	–	5	–	–	–	5
Translation differences	–3	–8	–9	–	–120	–141
Closing balance 31-12-2015	140	181	223	–	2,958	3,502
Amortisation
Opening balance 01-01-2014	–6	–70	–	–	–	–76
Amortisation for the year	–11	–12	–	–	–	–23
Translation differences	0	–6	–	–	–	–7
Closing balance 31-12-2014	–17	–88	–	–	–	–106
Opening balance 01-01-2015	–17	–88	–	–	–	–106
Amortisation for the year	–24	–14	–	–	–	–39
Sales and retirements		2	–	–	–	2
Translation differences	1	5	–	–	–	5
Closing balance 31-12-2015	–41	–96	–	–	–	–137
Reported value, as per Balance Sheet, 2014	116	90	232	–	3,078	3,516
Reported value, as per Balance Sheet, 2015	100	85	223	–	2,958	3,366
Amortisation according to plan, included in the operating profit
2014	–11	–12	–	–	–	–23
2015	–24	–14	–	–	–	–39

Goodwill

The Group's goodwill item arose primarily in conjunction with the acquisition of the operations from Outokumpu at the end of December 2003. Goodwill from the 2003 acquisition has principally been allocated to the Group's Smelters segment. Impairment tests have been carried out on the goodwill value in the manner described in Note 13 under Impairment tests – Intangible and tangible fixed assets.

Emission rights

The Boliden Group had a surplus of emission rights in 2015 and there was consequently no impact on the Group's financial reports. Emission rights reporting is described in Note 1 Significant accounting and valuation principles, on page 78.

Exploration rights

In 2014, Boliden acquired the exploration rights and mining operations of the Kylylahti copper mine in Finland. The acquisition yielded intangible fixed assets totalling SEK 221 m in respect of exploration rights. No depreciation of these assets has been effected. Acquired exploration rights are adjudged to have an indefinite useful life and that there is no predictable limit on the time period during which the asset is expected to generate net payments to Boliden. Impairment testing in respect of exploration rights is carried out in accordance with IFRS 6 Exploration for and Evaluation of Mineral Resources, and impairment testing is, therefore, only carried out in the presence of an indication that the need to write down an asset exists.

Note 13 Tangible fixed assets

	Buildings and land	Deferred mining costs	Machinery and other technical facilities	Equipment, tools, fixtures and fittings	New construction and advances in fixed assets	Total tangible fixed assets
Historical costs
Opening balance 01-01-2014	8,359	9,132	33,970	1,375	638	53,474
Investments	115	1,230	1,806	64	267	3,482
Acquisitions	91	151	150	–	34	425
Capitalised reclamation costs	–	–	358	–	–	358
Sales and retirements	–69	–327	–578	–11	–3	–988
Reclassifications	91	291	–1	90	–477	–6
Translation differences	133	112	562	–10	17	813
Closing balance 31-12-2014	8,720	10,588	36,267	1,508	476	57,558
Opening balance 01-01-2015	8,720	10,588	36,267	1,508	476	57,558
Investments	206	923	1,026	4	1,468	3,628
Capitalised reclamation costs	27	–	–106	–	–	–80
Sales and retirements	–9	–1	–523	–4	–	–537
Reclassifications	17	–	206	–1	–228	–6
Translation differences	–178	–82	–567	–126	–32	–986
Closing balance 31-12-2015	8,784	11,428	36,302	1,380	1,684	59,577
Depreciation
Opening balance 01-01-2014	–3,733	–3,999	–17,202	–1,192	–	–26,126
Depreciation for the year	–293	–819	–2,096	–46	–	–3,254
Sales and retirements	63	327	571	11	–	972
Reclassifications	–	113	–113	–	–	–
Translation differences	–80	–50	–407	6	–	–531
Closing balance 31-12-2014	–4,042	–4,428	–19,246	–1,220	–	–28,935
Opening balance 01-01-2015	–4,042	–4,428	–19,246	–1,220	–	–28,935
Depreciation for the year	–326	–1,045	–2,069	–43	–	–3,483
Sales and retirements	8	1	523	4	–	536
Reclassifications	–	–	–1	1	–	–
Translation differences	114	42	414	107	–	677
Closing balance 31-12-2015	–4,245	–5,430	–20,379	–1,151	–	–31,205

Reported value, as per Balance Sheet, 31-12-2014	4,677	6,160	17,021	288	476	28,623
Reported value, as per Balance Sheet, 31-12-2015	4,539	5,998	15,923	229	1,684	28,372
Depreciation according to plan included in the operating profit
	–293	–819	–2,096	–46	–	–3,254
2014

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 1,065 m (1,145). Accumulated depreciation totals SEK –240 m (–188). The year's capitalised reclamation costs total SEK −80 m (358) and are primarily attributable to amended evaluations. Last year's capitalisation was attributable to the expansion of the Aitik mine to 45 Mtonnes of ore per annum and the associated extension of mining operations until 2040. The change is reported in accordance with IFRIC 1, Changes in Existing Decommissioning, 27 28 25 26

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 flow.

Investments in tangible fixed assets include financial leasing in the sum of SEK 0 m (0), see also Note 14 Leasing charges. The same principle applies to financial leasing as to the year's capitalised reclamation costs with regard to key ratios and cash flow.

At the end of the year, there were no material, contractual undertakings to acquire tangible fixed assets to report.

29 30
31

Introduction	Strategy	Market	Operations	Corporate Governance	Financial reports

Boliden Annual Report 2015 Notes 91

	31-12-2015		31-12-2014
Interest expenses carried forward included in the residual value according to plan	Reported value, SEK m	Interest rate, %	Reported value, SEK m	Interest rate, %
Rönnskär's expansion, completed 2000	34	6.8	37	6.8
Odda's expansion, completed 2004	6	4.0	7	4.0
Aitik's expansion, completed 2011	181	2.5	195	2.5
Rönnskär, electronic scrap recycling, completed 2012	11	3.2	12	3.2
Garpenberg's expansion, completed 2014	97	1.7	103	1.7

Impairment tests – Intangible and tangible fixed 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 – typically between 5 and 30 years − and 10 years for smelters. Boliden's operations are characterised by long-term 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 flow forecasts. Additional growth assumptions are not included in extrapolated cash flow forecasts beyond the planning horizon, and smelters' cash flows from year eleven onwards are, therefore, extrapolated using year ten as a base, after which no growth is taken into account. Any residual value of fixed assets at the end of a mine's lifespan is not taken into account in the discounted cash flow.

The value of discounted cash flows is highly sensitive to metal prices, treatment and refining charges (TC/RC), and exchange rates (see sensitivity table on page 58 of the Risk management section of the Directors' Report). The present value of estimated future cash flows is based on the budget and planning prices adopted by the Board of Directors. Planning prices for the first year comprise 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 10 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.

		2015			2014
	Metal prices	Treatment/refining charges	Exchange rates	Metal prices	Treatment/refining charges	Exchange rates
Copper	USD 6,600/t	USD 80/tonne/USc 8.0/lb	USD/SEK 7.00	USD 6,600/t	USD 70/tonne/USc 7.0/lb	USD/SEK 6.50
Zinc	USD 2,300/t	USD 220 base USD 2,300 USD/NOK 6.30		USD 2,300/t	USD 250 base USD 2,300 USD/NOK 5.90
Lead	USD 2,300/t	USD 225	EUR/USD 1.25	USD 2,300/t		USD 225 EUR/USD 1.30
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 classified as cash-generating units. The discounted real cash flows before tax for the respective cash-generating units are compared with the book value of capital employed. The cash flows are discounted with a real discount rate before tax of 10% (10), which corresponds to the weighted capital cost. The Group's goodwill is allocated to Segment Smelters, rather than to cash-generating units, in accordance with monitoring of goodwill. 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 impairments. A lowering of all long-term planning prices for metals by 10% would not result in any impairment requirements for Segment Smelters, while for Segment Mines, a corresponding lowering would result in the book values exceeding the discounted cash flows in respect of two cash-generating units. Nor, if the long-term planning prices for metals remain unchanged, would a 10% weakening of the US dollar against all other currencies occasion an impairment requirement for Segment Smelters or Mines. This presupposes, 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% fall in TC/RC for all metals would not result in any impairment requirement in Segment Smelters. For Segment Mines, the same fall would have a positive effect.

Note 14 Leasing charges

Assets held via operational leasing agreements	2015	2014
Leasing charges paid during the financial year	21	18
Contracted future leasing charges
Maturity within one year	16	18
Maturity later than one year, but within five
years	20	24
Maturity later than five years	0	1
Assets held via financial leasing agreements	2015	2014
Machinery and other equipment
Historical cost	45	40
Accumulated depreciation	-25	–21
Closing value, as per Balance Sheet, on 31st December	20	19

The companies with financial leasing agreements are Kylylahti Copper OY and Kokkolan Teollisuusvesi OY. Kylylahti's leasing agreements refer to mining machinery. Kokkolan has an agreement in respect of the rent of and renewal of a water purification plant's automation system and another in respect of usufruct for active carbon filters for ionized water replacement systems and domestic water supply.

Note 15 Participations in Group companies

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

			Book
Subsidiary/Co. Reg. no./Registered office	Shares/ participations	Percentage share	Book value	value 2014
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	3,911
Mineral Holding Sweden AB, 556610-2918, Skellefteå
Boliden Harjavalta Oy, 1591739-9, Harjavalta, Finland
Boliden Kokkola Oy, 0772004-3, 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
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
Kuhmo Nickel Ltd, 05311516, London, UK
Kylylahti Copper Oy, 1925412-3, Polvijärvi, Finland
Vulcan Exploration BV, 821652345, Amsterdam Zuidoost, Netherlands
Kuhmo Metals Oy, 1925450-2, Polvijärvi, Finland
Other subsidiaries, dormant or of lesser significance
			3,911	3,911

The Parent Company, Boliden AB, has received a dividend totalling SEK 0 m (464) from Boliden Mineral AB during the year. On 1st October 2014, Boliden Mineral AB acquired 100% of the shares in Kuhmo Nickel Ltd and its subsidiary companies, together with the Kylylahti copper mine. For additional information, see Note 11.

Note 16 Participations in associated companies

	31-12-2015	31-12-2014
Book value at beginning of year	19	9
Participations in associated companies acquired	–	7
Exchange rate differences	–1	–
Share in associated companies' profits for the year	5	3
Book value at year-end	22	19

	Co. reg. no.	Registered office	Number of participations	Percentage share	Value of equity share in the Group
Indirectly owned
KIP Service OY	2240650-3	Kokkola	3,280	46	8
Aitik EcoBallast AB	556726-2299	Gällivare	500	50	8
KB Aitik EcoBallast	969731-9748	Gällivare	1,000	50	–
Industrikraft i Sverige AB	556761-5371	Stockholm	20,000	20	5
					22

Introduction	Strategy	Market	Operations	Corporate Governance	Financial reports

Boliden Annual Report 2015 Notes 93

Note 17 Taxes

Current tax expenses	2015	2014
Tax expenses for the period	–656	–311
Adjustment of tax attributable to previous years	2	–15
	–654	–326
Deferred tax expenses (–) /tax income (+)
Deferred tax income/tax expenses in respect of temporary differences	–38	–186
Deferred tax expense resulting from the utilisation of previously capitalised fiscal value in loss carry
forward deductions	–23	–60
	–61	–246
Total reported tax expenses (–) /tax income (+)	–715	–572
Reconciliation of effective tax
Reported profit before tax	3,356	2,471
Tax according to current taxation rate	–726	–542
Fiscal effect of non-deductible expenses	–4	–17
Fiscal effect of non-taxable income	7	1
Market valuation of deferred tax receivables	6	1
Adjustment of tax attributable to previous years	2	–15
Total reported tax expenses	–715	–572

Tax expenses comprise 21.3% (23.1) of the Group's pre-tax profit. The anticipated tax expense for 2015 of 21.6% (21.9) has been calculated given the current Group structure and applicable taxation rates in the respective countries.

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.

		31-12-2015		31-12-2014
The Group	Deferred tax receivable	Deferred tax liability	Net	Deferred tax receivable	Deferred tax liability	Net
Intangible assets	1	–1	–	–	–	–
Buildings and land	116	–107	9	88	–106	–18
Machinery and fixtures and fittings	–	–2,714	–2,714	13	–2,588	–2,575
Deferred mining costs	–	–189	–189	–	–219	–219
Other tangible fixed assets	–	–3	–3	–	–5	–5
Inventories	13	–292	–279	–	–374	–374
Long-term liabilities	253	–1	252	341	–	341
Current liabilities	1	–19	–18	–	–18	–18
Tax losses carried forward	–	–	–	–	23	23
Total	384	–3,326	–2,942	442	–3,287	–2,845
Offset within companies	–361	361	–	–426	426	–
Total deferred tax receivable/ tax liability	23	–2,965	–2,942	17	–2,862	–2,845

Change in deferred tax in respect of temporary differences and tax losses carried forward

The Group, 2015	Amount at the beginning of the year	Reported in the Income Statement	Reported under Other compre hensive income	Translation difference	Amount at year-end
Intangible assets	–	–	–	–	–
Buildings and land	–18	36	–	–9	9
Machinery and fixtures and fittings	–2,575	–167	–	28	–2,714
Deferred mining costs	–219	21	–	9	–189
Other tangible fixed assets	–5	2	–	–	–3
Inventories	–374	95	–	–	–279
Long-term liabilities	341	–26	–57	–6	252
Current liabilities	–18	1	–1	–	–18
Tax losses carried forward	23	–23	–	–	–
Total	–2,845	–61	–58	22	–2,942

Change in deferred tax in respect of temporary differences and tax losses carried forward

The Group, 2014	Amount at the beginning of the year	Reported in the Income Statement	Reported under Other compre hensive income	Translation difference	Amount at year-end
Intangible assets	–3	3	–	–	–
Buildings and land	–74	58	–	–2	–18
Machinery and fixtures and fittings	–2,413	–147	–	–15	–2,575
Deferred mining costs	–173	–34	–	–12	–219
Other tangible fixed assets	–5	–	–	–	–5
Inventories	–356	–18	–	–	–374
Long-term liabilities	235	–48	144	10	341
Current liabilities	–76	–	58	–	–18
Tax losses carried forward	81	–60	–	2	23
Total	–2,784	–246	202	–17	–2,845

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 sufficient taxable income in the future to exploit these tax losses carried forward. Unutilised

Note 18 Inventories

	31-12-2015	31-12-2014
Raw materials and consumables	4,177	3,527
Goods under manufacture	2,562	3,044
Finished goods and tradable goods	1,005	1,314
Advances to suppliers	4	–
	7,748	7,885

Note 19 Accounts receivables

On 31st December 2015, accounts receivable falling due for payment in more than 30 days totalled SEK 13 m (7), corresponding to 1.0% (0.5) of the total accounts receivable. The maturity structure is shown in the following table:

	31-12-2015	31-12-2014
Accounts receivable, not due	1,114	1,018
Due: 0−30 days	110	319
Due: 31−60 days	6	4
Due: 61−90 days	0	2
Due: >90 days	7	1
	1,236	1,344

The majority of the Group's accounts receivables relate to European customers. Accounts receivables in foreign currencies have been valued at the closing day rate. Note 2, Information per business segment and geographical market, on page 84 shows the breakdown of revenues by geographical area.

Accounts receivables are only written down to a minor extent and doubtful receivables total only small amounts. Confirmed bad debt losses are insignificant.

For information on the management of credit risks, see the section entitled Credit risks in accounts receivables on page 59 that forms part of the Risk management section of the Directors' Report.

Note 20 Other current receivables

31-12-2015	31-12-2014

372	190
413	515
86	271
871	976

tax losses carried forward for which a deferred tax receivable has not been reported totalled SEK 111 m (93) in Canada on 31st December 2015, of which SEK 1 m matures in 2016, and the remaining SEK 110 m between 2026 and 2035.

Note 21 Related Party Disclosures

Relationships

The Parent Company's directly owned subsidiaries are reported in Note 15 on page 92, Participations in Group companies, while its participations in associated companies are reported in Note 16, Participations in Associated companies, on page 92. 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 85−86, and in the Corporate Governance Report on pages 62−71.

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 financial 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 22 Shareholders' equity

Share capital	31-12-2015	31-12-2014
Opening number of shares	273,511,169	273,511,169
Change during the year	–	–
Closing number of shares	273,511,169	273,511,169
Nominal value, SEK	578,914,338	578,914,338
Nominal value per share	2.12	2.12
Shareholders' equity, SEK m	31-12-2015	31-12-2014
Share capital	579	579
Total shareholders' equity	25,807	23,974
Shareholders' equity attributable to the Parent Company's share holders	25,801	23,968
Shareholders' equity per share, SEK	94.33	87.63
Earnings per share	2015	2014
Net profit for the year attributable to the Parent Company's share holders, SEK m	2,640	1,898
Average number of shares, basic and diluted	273,511,169	273,511,169
Number of own shares held	–	–
Earnings per share, SEK	9.65	6.94

Boliden Annual Report 2015 Notes 95

Shareholders' equity

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 share capital comprises a single class of share.

There are no potential shares and hence no dilution effect.

The Annual General Meeting of the Company's shareholders held on 5th May 2015 resolved to pay a dividend of SEK 2.25 (1.75) per share, equivalent to a total payment of SEK 615,400,130.

Boliden's Board of Directors will propose to the Annual General Meeting that a dividend of SEK 3.25 (2.25) per share be paid, equivalent to a total of SEK 888,911,299. Boliden's dividend policy stipulates that approximately one third of the net profit after tax shall be disbursed in the form of dividends.

Earnings per share

Earnings per share are calculated by dividing the profit for the period attributable to the Parent Company's shareholders by the average number of shares.

Asset management

Boliden's managed assets comprise shareholders' equity. There are no other external capital requirements than those mandated in the Swedish Companies Act.

Boliden monitors its capital structure with the aid of the net debt/ equity ratio, amongst other things. The net debt/equity ratio is calculated as the net of interest-bearing provisions and liabilities minus financial assets including liquid assets divided by shareholders' equity.

See page 8 for details of Boliden's dividend policy and net debt goal.

Note 23 Provisions for pensions and similar undertakings

Boliden has established pension plans in the countries in which the company operates. The pension plans include both defined benefit and defined contribution plans. The defined benefit plans provide the employee with a fixed amount of their final salary in conjunction with retirement. Boliden's defined benefit plans are mainly operated in Sweden and Ireland, with a very small number also operated in Norway. The defined contribution plans comply with local regulations in the respective countries. Boliden has defined 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 benefits offered by the lifelong pensions are determined using different percentages for different salary intervals. Alecta has not provided sufficient information for 2015 for the ITP plan (supplementary pensions for salaried employees) to be reported as a defined benefit plan, and it is consequently reported in accordance with UFR 10 as a defined 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 153% (144). 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 defined contribution 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 defined benefit plans and one defined contribution plan. The defined benefit plans are closed to new employees. The pension plans are controlled by the Irish Pensions Board and Irish Pensions Legislation. All defined benefit plans are invested in funds. The biggest defined benefit plan and the defined contribution pension plan have Board Members from both the company and the members. Boliden has appointed the Irish Pension Trust to manage the other defined benefit plans.

The financial position of the pension plans is reviewed every three years by an actuary in order to determine the requisite financing level. When a pension plan is deemed to be in deficit, which is currently the case for the four defined benefit plans, a financing proposal must be submitted to the Irish Pension Board in order to demonstrate how the deficit will be cleared. The actuary also ensures that Boliden receives annual reports on the financial position in accordance with accounting requirements. Payments are made to all five plans through a combination of contributions from both Boliden and employees in accordance with employment contracts. No other deposits are made.

In 2015, Boliden presented a proposal for managing the deficit in the pension plans to the Irish Pension Board. The proposal entailed, amongst other things, a reduction in pension benefits of 10% for all plan members with the exception of those members with pensions of less than EUR 12 k per annum. The proposal has been approved by the Irish Pension Board and has resulted in a reduction of SEK 227 m in the pension undertaking. The change is reported in the Income Statement as a reduced cost and is itemised on the Past service cost line in the table below.

The Board of the pension plans is responsible for investments in plan assets. The majority of the shares are invested in companies operating in the health care, financial services and raw materials sectors that are based in North America (29%) and Europe (19%), and which are measured against sector indices and other benchmarks. Some of the shares are invested in index funds. A significant share of the assets − 49% − is invested in European government bonds in order to reduce the risk. Liquid assets are held in order to facilitate pension disbursements.

Norway

The pension undertaking is primarily secured by means of defined contribution pension plans in that Boliden wound up the majority of the defined benefit plans in 2012. The defined benefit plan only comprises the operations manager. Other employees in Norway are covered by a defined contribution plan that covers all employees and a contractual early retirement pension (AFP) with supplementary benefits from the ages of 62 to 67.

Events during the year

The current value of Boliden's pension undertaking is lower than last year's level (recalculated) and is largely due to the effect of the changed pension terms for the Irish pension plans as described above. The market value of the plan assets remains largely unchanged from the previous year.

The Group's reported pension liability totals SEK 1,075 m (1,468), which sum includes endowment insurance and similar undertakings totalling SEK 91 m (67) in respect of defined contribution 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 financing cost of the net pension liability is calculated with the aid of the discount rate and is reported under Boliden's net financial items.

28 29

	Sweden		Ireland		Other
Actuarial assumptions (weighted averages)	2015	2014	2015	2014	2015	2014
Discount rate, %	3.00	2.75	2.4	2.1	2.30	4.00
Future pay increases, %	3.00	3.00	0.00	0.00	2.75	3.75
Future pension increases, %	1.50	1.50	0.00	0.00	0.10	0.60
Life expectancy
Women	90	90	90	90
Men	88	88	90	88
	Sweden		Ireland		Other		Total
Specification of provisions for pensions	2015	2014	2015	2014	2015	2014	2015	2014
Pension undertaking at the beginning of the year	744	631	648	339	9	11	1,401	981
Defined benefit plan costs	51	45	–156	42	8	4	–98	91
Revaluations recognised in Other comprehensive
income	–19	108	–169	291	–	–	–189	399
Payments and disbursements	–40	–40	–68	–59	–6	–6	–114	–105
Translation differences	–	–	–17	34	0	0	–16	34
Pension undertaking at the end of the year1)	737	744	237	648	11	9	985	1,401
Endowment insurance and similar undertakings	91	67	–	–	–	–	91	67
Net debt, as per Balance Sheet2)	827	810	237	648	11	9	1,075	1,468
Specification of provisions for pensions, as per 31st December Pension undertakings, funded	–	–	2,197	2,599	1	1	2,198	2,600
Pension undertakings, unfunded	737	744	–	–	10	8	747	752
Fair value of plan assets	–	–	–1,960	–1,951	–	–	–1,960	–1,951
Pension undertakings	737	744	237	648	11	9	985	1,401
Endowment insurance and similar undertakings	91	67	–	–	–	–	91	67
Net debt, as per Balance Sheet	827	810	237	648	11	9	1,075	1,468
Specification of costs
Cost of defined benefit plans
Current service cost	36	28	49	31	8	4	93	63
Past service cost	–	–	–227	–	–	–	–227	–
Interest expense on undertaking	18	22	54	73	–	–	72	95
Interest income from plan assets	–	–	–40	–60	–	–	–40	–60
Special payroll tax and other taxes	–3	–5	–	–	–	–	–3	–5
Administrative costs and premiums paid	–	–	7	6	–	–	7	6
Settlements/curtailments of pension plans	–	–	–	–8	–	–	–	–8
Total cost of defined benefit plans	51	45	–156	42	8	4	–98	91
Cost of defined contribution plans	63	328	–	–6	117	113	180	435

1) Undertakings in Sweden include undertakings in accordance with PRI/FGI totalling SEK 395 m (375), undertakings for underground workers totalling SEK 262 m (287), and other undertakings totalling SEK 3 m (3). 23

2) The pension liability reported in the Balance Sheet includes not only the defined benefit pension undertaking and endowment insurance but also special payroll tax in Sweden.

24
25 26

Introduction	Strategy	Market	Operations	Corporate Governance	Financial reports

Boliden Annual Report 2015 Notes 97

	Sweden		Ireland		Other		Total
Reconciliation of pension undertaking	2015	2014	2015	2014	2015	2014	2015	2014
Present value of undertakings at the beginning
of the year	744	631	2,599	1,900	9	11	3,352	2,541
Current service cost	36	28	49	31	8	4	93	63
Past service cost	–	–	–227	–	–	–	–227	–
Interest expense on undertaking	18	22	54	73	–	–	72	95
Special payroll tax	–3	–5	–	–	–	–	–3	–5
Fees from plan participants	–	–	17	18	–	–	17	18
Revaluation of defined benefit pension liability reco gnised in Other comprehensive income	–18	108	–133	498	–	–	–151	606
of which profit/loss as a result of financial assumptions	–24	90	–117	600	–	–	–141	690
of which profit/loss as a result of experience
based assumptions	6	18	–16	–102	–	–	–10	–84
Disbursements made	–40	–40	–66	–59	–6	–6	–111	–105
Disbursements in conjunction with terminations
Curtailments and settlements	–	1	–	–8	–	–	–	–7
Translation differences	–	–	–95	147	0	0	–95	147
Present value of undertakings at the end of the year	737	744	2,197	2,599	11	9	2,945	3,352
Endowment insurance and similar undertakings	91	67					91	67
of which amounts attributable to active employees	534	426	1,123	1,515	4	4	1,661	1,945
of which amounts attributable to holders of paid up policies	56	167	190	173	–	–	246	340
of which amounts attributable to retired employees	237	218	884	911	6	5	1,127	1,134
Reconciliation of plan assets
Fair value of plan assets at the beginning of
the year	–	–	1,951	1,561	0	0	1,951	1,561
Interest income on plan assets	–	–	40	60	–	–	40	60
Return on plan assets excluding amounts included in net interest items recognised in Other
comprehensive income	–	–	37	209	–	–	37	209
Fees from the employer excluding disbursements in conjunction with terminations	–	–	69	59	–	–	69	59
Fees from plan participants	–	–	17	18	–	–	17	18
Disbursements made	–	–	–66	–59	–	–	–66	–59
Administrative costs, taxes and premiums paid	–	–	–9	–8	–	–	–9	–8
Translation differences	–	–	–80	112	–	–	–80	112
Fair value of plan assets at the end of the year	–	–	1,960	1,951	0	0	1,960	1,951

Net debt, as per Balance Sheet1)							1,075	1,468
1) Including endowment insurance and similar undertakings totalling SEK 91 m (67).
Specification of plan assets
Listed shares and participations	–	–	949	805	0	0	949	805
Interest-bearing securities	–	–	957	1,113	–	–	957	1,113
Liquid assets	–	–	50	29	–	–	50	29
Real estate	–	–	4	3	–	–	4	3
	–	–	1,960	1,951	0	0	1,960	1,951

1	Sensitivity analysis of the effect on the defined benefit pension liability (+increase/−decrease in pension liability)			Sweden	Ireland	Total
	Significant actuarial assumptions			2015	2015	2015
2	Discounts rate, %		+0.5	–52	–182	–234
			–0.5	59	194	253
3	Pay increases, %		+0.5	51	45	96
			–0.5	–44	–	–44
4	Increased life expectancy, years	Men	+ 1	10	61	71
		Women	+ 1	–10	5	–5

The sensitivity analysis has been conducted on the basis of the abovementioned 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 insignificant. Other countries do not have any defined benefit pension liabilities.

8	Defined benefit pension liability terms	Sweden	Ireland	Other	Total
	Benefits scheduled for disbursement within 12 months	44	63	1	108
9	Benefits scheduled for disbursement within 1−5 years	174	265	3	442
	Benefits scheduled for disbursement after 5 years or more	609	445	8	1,062

The maturity of plan assets in Ireland have reduced anticipated payments after 5 years or more. The weighted average duration of the defined benefit pension liability is 16 years for Sweden and 15 years for Ireland. 11 10

Note 24 Other provisions

	31-12-2015	31-12-2014
Reclamation costs	1,943	2,057
Other	38	62
	1,981	2,119
Of which:
Long-term	1,784	1,875
Short-term	197	244
	1,981	2,119

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. The previous year's addition to existing provisions is primarily attributable to the expansion of the Aitik mine to 45 Mtonnes of ore per year and the associated extension of the mine's operational lifespan to 2040.

	2015			2014
The Group	Reclamation costs	Other	Total	Reclamation costs	Other	Total
Book value at beginning of year	2,057	62	2,119	1,651	30	1,681
Additions to existing provisions	162	6	168	433	34	467
Acquisitions	–	–	–	23	3	26
Reversal of existing provisions	–188	–22	–210	–5	–	–5
Payments	–105	–1	–106	–100	–5	–105
Discount effect for the period	37	–	37	37	–	37
Translation difference	–20	–7	–27	18	0	18
Book value at year-end	1,943	38	1,981	2,057	62	2,119
Anticipated date of outflow of resources:
Within one year	194	3	197	220	24	244
Between one and two years	91	22	113	230	10	240
Between three and five years	206	1	207	130	1	131
More than five years	1,452	12	1,464	1,477	26	1,503
	1,943	38	1,981	2,057	62	2,119

Note 25 Risk information

See the section entitled "Risk management" in the Directors' Report on pages 56–59 for a description of Boliden's financial risks. The amounts reported refer to the Group.

Note 26 Financial liabilities and maturity structure

	Financial liabilities			Maturity structure2)
31-12-2015, SEK m	Currency	Interest1),%	Reported amount	2016	2017	2018	2019	2020	2021+
Bilateral loans	EUR	1.62	2,202	806	214	759	199	144	176
Bilateral loans	SEK	1.82	807	267	13	13	13	13	559
Debenture loans3)	SEK	1.90	500	10	10	10	10	502
Commercial papers3)	SEK	0.68	2,154	2,169
Leasing, other			15	4	4	4	3
Accounts payable			3,142	3,142
Derivative instruments			322	302	20
Total			9,141	6,700	260	785	224	659	735

		Financial liabilities		Maturity structure2)
31-12-2014, SEK m	Currency	Interest1),%	Reported amount	2015	2016	2017	2018	2019	2020+
Syndicated credit facility	EUR	0.80	1,226	10	10	1,230
Bilateral loans	EUR	1.73	2,621	370	363	705	792	206	328
Bilateral loans	SEK	2.00	800	9	236	6	6	6	576
Debenture loans	SEK	2.97	500	15	15	15	15	15	505
Commercial papers3)	SEK	1.54	2,518	2,518
Leasing, other			19		13	4	2	1
Accounts payable			3,764	3,764
Derivative instruments			425	401	15	9
Total			11,872	7,106	624	1,956	813	227	1,409

1)Weighted interest including interest swaps.

2)The duration analysis includes gross flows of loans and interest, including flows from interest swaps.

3)Outstanding commercial papers and debenture loans are officially reported under the Group's Parent Company, Boliden AB.

Loan portfolio

Boliden has a number of utilised long-term loans from Swedish, Nordic and European institutions which, on 31st December 2015, totalled SEK 3,009 m (3,421) and which mature between 2016 and 2022. Boliden also has syndicated credit facilities totalling EUR 400 m and EUR 450 m that mature in 2017 and 2019, respectively. The utilised component of the syndicated credit facilities totalled SEK 0 m (1,226) on 31st December 2015. Boliden also has an unutilised credit facility of SEK 1,000 m which matures in 2017. A commercial paper for SEK 500 m was also issued in the Swedish capital market in 2014 and matures in 2020. SEK 2,154 m (2,518) of Boliden's commercial papers programme, with a framework of SEK 4,000 m, remained outstanding on 31st December 2015. The average term of the loan facilities on 31st December 2015 was 2.4 years (3.4) and the debt portfolio's average interest rate was 1.30% (1.65).

The fixed interest term of outstanding loans, including interest swaps entered into, totalled 0.5 years (0.8) on 31st December 2015. The above maturity analysis includes interest flows 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 totalled SEK 6,514 m (5,847) on 31st December 2015.

The above maturity structure for the financial liabilities, including interest payments and accrued interest on derivatives, includes the undiscounted cash flows 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 27 Financial derivative instruments

Boliden uses financial derivative instruments to manage currency rate risks, raw material price risks, and interest rate risks arising within its operations. 2

Outstanding financial derivative instruments,	31-12-2015		31-12-2014
SEK m	Nominal amount	Fair value	Nominal amount	Fair value
Transaction exposure (binding undertakings)
Currency futures	–4,595	73	–3,763	–12
Raw material derivatives	733	–204	1,887	–65
Transaction exposure (forecasted cash flows)
Currency futures	–644	5	–1,313	–182
Raw material derivatives	–759	81	–1,168	281
Interest derivatives	–2,075	–13	–3,497	–19
Translation exposure
Currency futures	–	–	–4,896	–22
Total		–58		–19

Hedge accounting, SEK m	2015	2014
Hedging of fair value
– Changes in value of hedging instruments in respect of binding undertakings	–1,076	–879
– Change in value of hedged item	1,076	879
Ineffectiveness of fair value hedging	–	–
Ineffectiveness of cash flow hedging	–	–
Ineffectiveness of hedging net investments in overseas operations	–	–
Total ineffectiveness	0	0

The effect of effective cash flow hedging with regard to Transaction exposure on the result for 2015 totals SEK −6 m (33), of which SEK 15 m (47) refers to exchange rate and metal price hedging and SEK –21 m (–14) to interest swaps. 14 15

Currency derivatives in respect of

forecasted exposure – Cash flow hedging 16

A summary of Boliden's outstanding currency hedging for currency exposure in USD/SEK on 31st December 2015 is shown in the table below. Hedging related to forecasted exposure between 2016 and 17

2017 matured but was extended in 2015. The effect on the profit of premature maturity of hedging related to 2016−2017 has been reported in shareholders' equity during the year but will be recognised through the Income Statement on a rolling basis in 2016 and 2017. Boliden's other currency risks in respect of forecast exposure are, in every significant respect, unhedged. For further information about 18 19

the Group's transaction exposure, see Risk management on page 57. 20

Currencies	2016	2017	Total
USD/SEK
Hedged volume (USD m)	70	43
Forward rate, USD/SEK	6.66	6.59
Market value, SEK m1)	–114	–70	–184

1)Of which SEK −112 m and SEK −75 m for 2016 and 2017, respectively, have been cash settled in June 2015 and will be recognised in the income statement in respective years. 24

Raw materials derivatives in respect of forecasted exposure – Cash flow hedging

The table below provides a summary of Boliden's outstanding price hedges for gold on 31st December 2015. Hedging related to forecasted exposure between 2016 and 2017 matured but was extended in 2015. The effect on the profit of premature maturity of hedging related to 2016−2017 has been reported in shareholders' equity during the year but will be recognised through the Income Statement on a rolling basis in 2016 and 2017. Boliden's other metal price risks in respect of forecast exposure are, in every significant respect, unhedged. For further information about the Group's transaction exposure, see Risk management on page 57.

Metals	2016	2017	Total
Gold
Hedged volume (troy oz.)	47,000	29,000
Forward rate, USD/troy oz.	1,492	1,507
Market value, SEK m1)	166	104	271

1) Of which SEK 110 m and SEK 79 m for 2016 and 2017, respectively, have been cash settled in June 2015 and will be recognised in the income statement in respective years.

Offsetting of financial assets and liabilities

	31-12-2015	31-12-2014
Gross amount for financial assets	272	486
Amount offset in Balance Sheet	–8	–81
Net asset reported in Balance Sheet	264	406
Amount comprised by offsetting in conjunction with insolvency etc.	–90	–215
Net asset	174	190

	31-12-2015	31-12-2014
Gross amount for financial liabilities	330	505
Amount offset in Balance Sheet	–8	–81
Net liability reported in Balance Sheet	322	425
Amount comprised by offsetting in conjunction with insolvency, etc.	–90	–215
Net liability	232	209

Note 28 Other current liabilities

	31-12-2015	31-12-2014
Accrued salaries and social security expenses	591	589
Accrued interest expenses	15	23
Other accrued costs and prepaid income	491	537
Other operating liabilities	341	344
	1,439	1,493

Introduction

Boliden Annual Report 2015 Notes 101

Note 29 Financial assets and liabilities by valuation category

31-12-2015	Valuation classification	Holdings valued at fair value	Loan recei vables and accounts receivable	Financial assets avai lable for sale	Derivatives used in hedge accounting	Financial liabili ties valued at amortised cost	Total reported value	Total fair value
ASSETS
Financial fixed assets
Other shares and participations	3			26			26	26
Current assets
Current receivables
Accounts receivables			1,236				1,236	1,236
Interest-bearing receivables			2				2	2
Derivative instruments	2	58			206		264	264
Liquid assets			923				923	923
Total financial assets		58	2,160	26	206	–	2,451	2,451
LIABILITIES
Long-term liabilities
Liabilities to credit institutions	2					2,484	2,484	2,489
Other interest-bearing liabilities	2					11	11	11
Derivative instruments	2				20		20	20
Current liabilities
Liabilities to credit institutions	2					3,178	3,178	3,178
Other interest-bearing liabilities	2					4	4	4
Accounts payable						3,142	3,142	3,142
Derivative instruments	2	20			282		302	302
Total financial liabilities		20	–	–	302	8,804	9,141	9,145

Boliden's entire holding of financial instruments reported at fair value in the Balance Sheet is classified 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 classified 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 2015, adjudged to be on a par with credit market interest rates, and the fair value therefore corresponds, in every significant respect, to the reported value.

The reported value of accounts receivables and accounts payables 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.

31-12-2014	Valuation classification	Holdings valued at fair value	Loan recei vables and accounts receivable	Financial assets avail able for sale	Derivatives used in hedge accounting	Financial liabil ities valued at amortised cost	Total reported value	Total fair value
ASSETS
Financial fixed assets
Other shares and participations	3			26			26	26
Current assets
Current receivables
Accounts receivable			1,344				1,344	1,344
Interest-bearing receivables			3				3	3
Derivative instruments	2	26			380		406	406
Liquid assets			865				865	865
Total financial assets		26	2,212	26	380	–	2,644	2,644
LIABILITIES
Long-term liabilities
Liabilities to credit institutions	2					4,819	4,819	4,830
Other interest-bearing liabilities	2					19	19	19
Current liabilities
Liabilities to credit institutions	2					2,845	2,845	2,845
Accounts payable						3,764	3,764	3,764
Derivative instruments	2	89			336		425	425
Total financial liabilities		89	–	–	336	11,447	11,872	11,883

Note 30 Pledged assets and contingent liabilities

	The Group		Parent Company
	2015	2014	2015	2014
Pledged assets
For own liabilities and provisions	None	None	None	None
Contingent liabilities
Parent Company sureties	–	–	5,683	7,951
Other sureties and guarantees	3,405	2,235	127	133
Pension liabilities	5	3	–	–
Agreed residual values accor ding to leasing contracts	11	43	–	–
	3,421	2,281	5,810	8,084

The Parent Company sureties refer to guarantees issued for subsidiary companies. SEK 5,810 m (8,084) refer to Parent Company sureties for external financial borrowing. Parent Company sureties in the above 8 9

table have been booked in the utilised amount. Guarantees in respect of unutilised credits total SEK 8,765 m (7,851).

The possibility exists, in addition to the above specifications under the heading of contingent liabilities and the items included in the financial information, that the Group may incur environmentally-related contin-11 10

gent liabilities or contingent liabilities attributable to legal proceedings and claims which cannot be currently calculated but which may, in future, entail costs or investments. 12

Legal proceedings – Overview

Boliden conducts extensive domestic and international operations and is occasionally involved in disputes and legal proceedings arising in the 13

course of these operations. These disputes and legal proceedings are not expected, either individually or collectively, to have any significant 14

negative impact on Boliden's operating profits, profitability or financial position, over and above that detailed below. 15

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, preliminary investigations in a criminal case were initiated against Apirsa and its representatives. In December 2000, the investigations were closed. The ruling was appealed but finally ratified 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 16 17 18 19 20

Ministry of the Environment declared Apirsa liable to pay an amount corresponding to approximately EUR 45 m in clean-up costs, damages and fines. This resulted, in January 2005, in Apirsa initiating insolvency pro-21

ceedings 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, 22

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 m, including a yet untested claim of approximately EUR 89 m which the local government (Junta de 23

Andalucía) believes it is owed, as described in greater detail below. As a result of the dam breach, the local government sued Apirsa in its capacity as the owner and operator of the mine at the time of accident, 24 25

Boliden BV and Boliden AB in their capacity as the direct and indirect owners of Apirsa, in a civil court, demanding joint and several liability for damages to cover expenses totalling approximately EUR 89 m. 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 final 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 govern-27 28 29 30 31 26

ment 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 abovementioned companies was, therefore, reopened in the court of the first instance in Seville in 2015. The suit is the same as that brought back in 2002 and the local government is demanding compensation for the costs that it claims to have incurred in conjunction with the clean-up after the dam breach accident. All three defendants have contested the plaintiff's suit.

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 financial loss as a result of the legal proceedings described. The company has made no provision, pending a final ruling.

Summons arising due to exports to Chile in the 1980s

In October 2013, suit was brought against Boliden claiming damages for the arsenic exposure suffered by claimants from 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. The claim comprises approximately 800 people and is for a combined total of just over SEK 105 m plus interest. Boliden has contested the claim and is of the opinion, overall, that the company will not suffer any substantial financial loss as a result of the legal process described. The company has made no provision, pending a final ruling.

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 types 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. The Swedish Tax Agency imposed an energy tax liability totalling SEK 212 m, plus interest, on Boliden, which ruling has now been confirmed by the Administrative Court and the Administrative Court of Appeal. In January 2016, the Supreme Administrative Court refused leave to appeal and confirmed the ruling by the Administrative Court of Appeal. Boliden has previously paid the energy tax imposed in the net sum of SEK 156 m (after review of the company's income tax) and booked the amount as a cost in 2015. Boliden intends to request a reduction in or remission of the tax from the Government.

Note 31 Events after 31st December 2015

Bergsöe – The Skåne County Council, in a ruling issued on 19th January 2016, has, on penalty of a fine, banned Boliden Bergsöe from storing and handling larger quantities of certain substances. Boliden Bergsöe has appealed the ruling to the Land & Environment Court and requested that it be overturned. On 27th January 2016, the Court ruled that the ban may not, until further notice, be implemented (inhibition). The County Council ruling will now be tried by the Land & Environmental Court.

Aitik's environmental permit – Boliden was previously granted a permit both to increase production at Aitik to 45 Mtonnes of ore per year, and to make certain extensions and expansions to the tailings pond. The permit, which has already been utilised, was appealed by the Swedish Environmental Protection Agency. In a ruling dated 22nd January 2016, the Land & Environment Court of Appeal rejected the Swedish Environmental Protection Agency's suit that the permit be revoked. The ruling can be appealed up to and including 19th February 2016.

Change to defined contribution pension plan in Ireland – Boliden has presented a proposal entailing a conversion of the defined benefit pension plan in Ireland to a defined contribution pension plan. The active members of the pension plan have voted on the proposal and the results, obtained on 9 February 2016, showed a vote by the active members in favour of a switch to a defined contribution pension plan. Boliden will inject approximately EUR 10 m in compensation into the new pension plan in conjunction with the changeover to the defined contribution plan and the settlement of the defined benefit pension plan. The overall effect of the settlement, including the compensation, is, however, expected to result in a positive effect on the profit of approximately EUR 10 m. Boliden anticipates reporting this effect during the first quarter of 2016.

Boliden Annual Report 2015 Proposed allocation of profits 103

Proposed allocation of profits

The Board's proposed allocation of profits for 2015 and statement in accordance with the Swedish Companies Act, 18:4

Boliden has a dividend policy whereby approximately one third of the profit after tax is to be distributed. The Board of Directors proposes that the Annual General Meeting approve payment of a dividend of SEK 3.25 (2.25) per share or a total of SEK 889 m (615), corresponding to 33.7% of the profit after tax for 2015. The Parent Company's non-restricted shareholders' equity totals SEK 5,809 m and the Group's total shareholders' equity is SEK 25,801 m. The non-restricted shareholders' equity in the Parent Company and the Group will total SEK 4,920 m and SEK 24,912 m, respectively, after payment of the proposed dividend to the shareholders. The Board has taken the cyclic nature of the industry and the risks associated with the

operations into account in its dividend proposal.

The 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.

The Annual Accounts and the Consolidated Accounts give a true and fair view of the Parent Company's and the Group's financial position and results of operations.

The 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, 11th February 2016

Anders Ullberg Chairman

Marie Berglund Staffan Bohman Tom Erixon Member of the Board Member of the Board Member of the Board

Lennart Evrell Michael G:son Löw Ulla Litzén President & CEO Member of the Board Member of the Board

Elisabeth Nilsson Roland Antonsson Marie Holmberg

Member of the Board Employee Representative Employee Representative

Kenneth Ståhl Employee Representative

Our Audit Report was submitted on 11th February 2016 Deloitte AB

Jan Berntsson 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 the financial year 2015. The annual accounts and consolidated accounts of the company are included in the printed version of this document on pages 29–46, 56–59 and 72–103.

Responsibilities of the Board of Directors and the Managing

Director for the annual accounts and consolidated accounts The Board of Directors and the Managing Director are responsible for the preparation and fair presentation of these 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 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 these 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. Those standards require that we comply with 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. The 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 effectiveness of the company's internal control. An audit also includes evaluating the appropriateness of 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 sufficient 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 financial position of the parent company as of 31 December 2015 and of its financial performance and its cash flows for the year then ended in accordance with the Annual Accounts Act. The consolidated accounts have been prepared in accordance with the Annual Accounts Act and present fairly, in all material respects, the financial position of the Group as of 31 December 2015 and of its financial performance and cash flows for the year then ended in accordance with International Financial Reporting Standards, as adopted by the EU, and the Annual Accounts Act. The 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.

Other matters

The audit of the annual accounts and consolidated accounts for the financial year 2014 was performed by another auditor who submitted an audit report dated 19 March 2015 with unmodified opinions in the Report on the annual accounts and consolidated accounts.

Report on other legal and regulatory requirements

In addition to our audit of the annual accounts and consolidated accounts, we have also audited the proposed appropriations of the company's profit or loss and the administration of the Board of Directors and the Managing Director of Boliden AB (publ.) for the financial year 2015.

Responsibilities of the Board of Directors and the Managing Director

The Board of Directors is responsible for the proposal for appropriations of the company's profit 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 profit 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 profit 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 significant 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 sufficient and appropriate to provide a basis for our opinions.

Opinions

We recommend to the annual meeting of shareholders that the profit 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 financial year.

Stockholm, 11th February 2016

Deloitte AB

Jan Berntsson Authorised Public Accountant

Boliden Annual Report 2015 Auditor's Limited Assurance Report on Sustainability Report 105

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

To Boliden AB

Introduction

We have been engaged by Boliden AB to undertake a limited assurance engagement of the Boliden AB's Sustainability Report for the year 2015. The Company has defined the scope of the Sustainability Report in the GRI index on pages 4−7 in Boliden's GRI Report.

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

The Board of Directors and the Executive Management are responsible for the preparation of the Sustainability Report in accordance with the applicable criteria, as explained on page 8 in Boliden's GRI Report, and are the parts of the Sustainability Reporting Guidelines, published by The Global Reporting Initiative (GRI), which are applicable to the Sustainability Report, as well as the accounting and calculation principles that the Company has developed. This responsibility also includes the internal controls deemed necessary to prepare a sustainability report that is free from material misstatement, whether due to fraud or to error.

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. The procedures performed in a limited assurance engagement vary in nature from, and are substantially less in extent than those performed 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. Our audit firm applies ISQC 1 (International Standard on Quality Control) and hence has an all-round system of quality control that comprises documented guidelines and routines in respect of

compliance with professional ethics requirements, professional practice standards, and applicable legislative requirements and other statutory provisions. The procedures performed in conjunction with a limited assurance engagement do not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. The conclusion expressed, based on a limited assurance engagement, hence lacks the certainty that an opinion based on an audit would have.

Our limited assurance engagement is based on criteria chosen by the Board of Directors and the company management, as defined above. We consider these criteria suitable for the preparation of the Sustainability Report. We believe that the evidence we have obtained is sufficient 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 criteria as selected by the Board of Directors and the company management and stated above.

Stockholm, 11th February 2016

Deloitte AB

Jan Berntsson Authorised Public Accountant

Didrik Roos Authorised Public Accountant

Mineral reserves and resources

Mineral reserves and mineral resources are an important basis for a mining company's operations and require successful exploration results. Exploration work is carried out both in the vicinity of existing mines and in new areas. Mineral resources and reserves are affected not only by exploration, but also by important factors such as mining costs and metal prices. Boliden has been able to report annual increases in its mineral reserves and resources for many years now.

Boliden can report two new deposits as part of this summary; Nautanen in the Aitik area and Rävliden in Kristineberg. The responsible management of our assets in the form of mineral resources and reserves is an important component of Boliden's sustainability goals and we consequently follow up on our mineral resources and reserves carefully and produce an annual summary. The calculations of mineral resources and reserves are always associated with a degree of uncertainty as to the geological basis and due to sensitivity to the pricing and cost conditions used.

Mineral resources and reserves, 2015

Boliden, in common with other mining companies, produces an annual summary of its 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, Swedish Association of Mines, Minerals and Metal Producers, (SveMin).

Aitik

Extensive work on such issues as a new grade model, open-pit optimisation, and push-back design has been carried out at Aitik during the year. The reserves increased, grades increased slightly, and more waste rock will have to be extracted.

Investigations of the Nautanen deposit, located approximately 15 km north west of Aitik, have continued during the year. Since 2011, Boliden has drilled 75 core drill holes with a total length of 47,300 m in the Nautanen area, and the data these

drill holes have yielded mean that an inferred and indicated mineral resource totalling 16 Mtonnes with 1.4% Cu and 0.65 g/tonne Au can now be reported. All of the grades and the breakdown into categories are shown in the mineral resources table.

The Boliden Area

In Kristineberg, Boliden has explored in the direction of Rävliden, approximately 2.5 km to the west of the Kristineberg ore deposit. This work has now resulted in the addition of an inferred mineral resource of 5.9 Mtonnes with 0.3 g/tonne Au, 92 g/ tonne Ag, 1.1% Cu, 4.6% Zn, and 0.6% Pb to Kristineberg's resources.

Mineral resources have also, in addition to Rävliden, increased in Renström and Kankberg. Most of the tonnage mined (1.6 Mtonnes) from the reserve has been replaced with new reserves.

Garpenberg

Mineral reserves and resources both increased at Garpenberg. The resources were boosted by new additions to the Dammsjön and Kvarnberget ore deposits, while the reserve grew due to a substantial addition to the Kvarnberget ore of 4.3 Mtonnes. The grades of the new Kvarnberget quantities are, however, lower, and the reserves' total grade has, therefore, fallen.

Kylylahti

Boliden acquired Kylylahti in 2014 and production at the mine is proceeding according to plan. Surveys in the vicinity of the mineralisation have increased our knowledge of the geology surrounding the deposit but have not resulted in the

Mineral resources increased in the form of Rävliden, etc., while reserves fell slightly.

Additions to both mineral reserves and resources.

areas were scheduled for extraction.

Probable/proven mineral reserve
Measured/indicated mineral resource
Inferred mineral resource
Production ×10

All values are shown in ktonnes.

Boliden Annual Report 2015

Indicated mineral resource

An indicated mineral resource is a mineral resource for which tonnage, shape, grades and mineral content can be estimated with reasonable certainty. It is indicated by geology, sampling and anticipated but unverified geological and/or grade continuity. It is based on information obtained through exploration, sampling and testing carried out in accordance with appropriate techniques. The information points are, however, too sparse or inappropriately distributed to ensure the deposit's geological and/or grade continuity.

Measured mineral resource

A measured mineral resource is a mineral resource for which tonnage, shape, grades and mineral content can be estimated with a high degree of certainty. It is based on information gained through detailed and reliable exploration, sampling and testing carried out in accordance with appropriate techniques. The information points are sufficiently dense to demonstrate the deposit's geological and/or grade continuity.

Probable mineral reserve

A probable mineral reserve meets the requirements for an indicated or, under certain circumstances, measured mineral resource where mining-engineering and profitability studies show that it is technically and economically feasible to mine and process the deposit in line with the company's profitability requirements.

Proven mineral reserve

A proven mineral reserve meets the requirements for a measured mineral resource where mining-engineering and profitability studies show that it is technically and economically feasible to mine and process the deposit in line with the company's profitability requirements.

Basis for the calculations

Boliden is 100% owner of all properties and holds the required exploitation concessions and environmental permits for all of the mines currently in operation. The environmental permits have limited durations and are, therefore, subject to an ongoing process of renewal. The mineral

resources are protected by exploitation concessions or exploration permits. The calculations are based on the following underlying factors:

Mineral reserves and resources 107

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. Boliden's current planning prices are shown in the following table:

Planning prices	Long-term prices, 2015	Change since 2014
Copper	USD 6,600/tonne	–
Zinc	USD 2,300/tonne	–
Lead	USD 2,300/tonne	–
Gold	USD 1,200/tr. oz.	–
Silver	USD 20/tr. oz.	–
Molybdenum	USD 15/lb	–
Nickel	USD 18,000/ tonne
Cobalt	USD 16/lb
Tellurium	USD 150/kg	–
USD/SEK	7.00	+0.50
EUR/SEK	8.75	+0.30
EUR/USD	1.25	– 0.04

Density

A formula based on head grades is utilised for massive sulphide ores, which make up the majority of Boliden's mineral resources and mineral reserves. The formula is verified using density measurements. In other cases, measurements are carried out for the different ores or rock types that affect 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.

addition of any new resources or reserves. Reserves fell by 300 ktonnes over and above the amount extracted and resources have increased by approximately the same amount, although grades are lower.

Tara

Tara's mineral reserve increased by 1.7 Mtonnes (11%) due to the upgrading of mineral resources. The additional quantities have slightly lower grades, resulting in a lowering of the mineral reserve's overall grade. Tara's ore has a relatively low ore value and is consequently particularly sensitive to metal price fluctuations. The mineral resources fell by 2.3 Mtonnes, primarily due to tonnage being upgraded to reserves.

About the classification

Mineral resources and mineral reserves are calculated separately and broken down into different categories. Boliden's 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.

Mineral resources and reserves comprise concentrations of minerals in the bedrock. To be classified as a mineral resource, the minerals must be present in a form, quality and quantity that mean there is a reasonable possibility of it becoming commercially extractable. Mineral reserves must be shown to be mined and processed in accordance with the company's profitability requirements, taking into account factors such as waste rock dilution, ore losses, pillar offset and process recovery.

Inferred mineral resource

An inferred mineral resource is a mineral resource for which tonnage, shape, grades and mineral content can be estimated with only a low degree of certainty. It is indicated by geology, sampling and anticipated but unverified geological and/or grade continuity. It is based on information obtained through exploration, sampling and testing carried out in accordance with appropriate techniques. The information is limited or of uncertain quality and reliability.

Ore losses

Some ore may have to be left unextracted (e.g. in the form of pillar offset), depending on the mining method used, the ore's geometry and other technical factors. The mineral reserve calculations take these factors into account, based on assumptions regarding mining method and the information available when the calculations were made.

Minimum ore width

The minimum horizontal ore width is based on assumptions regarding 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 for application in their respective countries by the Swedish, Finnish and Norwegian industry organisations for mining and metal companies – SveMin, FinnMin and Norsk Bergindustri, respectively – known as the FRB standard. This is an independent set of regulations but based on "The International Template for the public reporting of exploration results, mineral resources and mineral reserves, November 2013", produced by the Committee for Mineral Reserves International Reporting Standards (CRIRSCO) in a bid to achieve a harmonised international practice. The 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, Definitions 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. Reporting at Tara complies with the JORC standard.

The mineral resources and mineral reserves that have been compiled and presented in this report have been reviewed and approved by Gunnar Agmalm, Boliden's Mineral Reserves and Project Evaluation Manager, who is registered as a "Qualified Person" by SveMin and as a "Competent Person" in accordance with JORC.

February 2016

Gunnar Agmalm Qualified Person SveMin

Recent years' exploration work has proved successful. Boliden focuses primarily on identifying deposits that contain zinc and copper, and precious metals such as gold and silver. Exploration work intensified during the year, and a total of 182,000 meters (122,000) of test drilling was carried out in 2015. Exploration activity costs increased to SEK 370 m (280).

Introduction	Strategy	Market	Operations	Corporate Governance	Financial reports

Boliden Annual Report 2015

Mineral reserves and resources 109

Mineral reserves, 31st December 2015

		Quantity, ktonnes						2015
		2015	2014	Au g/t	Ag g/t	Cu %	Zn %	Pb %	Mo g/t	Te g/t	Ni %	Co %
Aitik	Proven Probable	850,000 377,000	756,000 370,000	0.15 0.14	1.3 1.2	0.23 0.23			23 31
The Boliden Area Sulphide mineralisations
Kristineberg	Proven	100	340	1.0	32	1.5	2.9	0.1
	Probable	5,500	5,500	0.6	43	0.5	6.9	0.4
Renström	Proven	240	190	3.3	95	0.6	7.5	1.4
	Probable	3,640	3,670	1.9	105	0.7	4.5	0.9
Maurliden	Proven Probable	910	1,700	1.6	62	0.3	4.3	0.4
Maurliden Östra	Proven
	Probable	190	190	0.3	7	1.0	0.04
Total	Proven	1,250	2,200	1.9	65	0.4	4.8	0.6
Sulphide mineralisations Probable		9,300	9,380	1.1	66	0.6	5.8	0.5
Gold mineralisations
Kankberg	Proven	2,280	1,430	3.1	8					175
	Probable	2,020	2,070	3.5	12					202
Garpenberg	Proven	12,500	13,900	0.3	109	0.06	5.3	2.1
	Probable	27,300	23,700	0.3	115	0.04	3.2	1.4
Kylylahti	Proven	700	400	0.8		1.6	0.7				0.14	0.25
	Probable	2,200	3,500	1.0		1.3	0.5				0.20	0.25
Tara	Proven	4,500	3,000				6.5	1.5
	Probable	12,500	12,300				6.2	1.5

At Kylylahti, Ni and Co can only be extracted from the AuCu/AuNi ore type which comprises approximately 20% of the reserve. Figures may be rounded up or down.

Mineral resources, 31st December 2015

		Quantity, ktonnes						2015
		2015	2014	Au g/t	Ag g/t	Cu %	Zn %	Pb %	Mo g/t	Te g/t	Ni %	Co %
The Aitik area
Aitik	Measured	252,000	222,000	0.09	0.8	0.15			18
	Indicated	1,313,0001,421,000		0.09	0.8	0.16			23
	Inferred	281,000	226,000	0.09	0.6	0.14			20
Nautanen	Measured
	Indicated	9,600		0.8	5.5	1.7			73
	Inferred	6,400		0.4	4.6	1.0			41
The Boliden Area
Sulphide mineralisa tions
Kristineberg	Measured	50	50	0.7	45	1.3	4.2	0.2
	Indicated	1,930	1,930	0.7	25	0.8	4.2	0.2
	Inferred	9,710	3,680	0.4	71	0.9	4.1	0.5
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	1,290	800	2.1	153	0.5	6.7	1.6
	Inferred	2,670	2,630	2.6	140	0.3	9.3	1.6

Maurliden	Measured	670	670	1.0	30	0.5	2.2	0.2
	Indicated	260	260	0.7	18	0.3	1.6	0.1
	Inferred
Maurliden Östra	Measured
	Indicated	360	360	0.4	11	0.4	0.2
	Inferred
Total	Measured	1,000	1,000	3.1	44	0.9	2.6	0.2
Sulphide mineralisa	Indicated	5,000	4,500	1.5	63	0.6	3.8	0.5
tions	Inferred	13,100	7,000	1.0	83	0.7	5.0	0.7
Gold mineralisations
Kankberg	Measured	260	220	2.9	8					127
	Indicated	950	550	3.3	8					153
	Inferred	3,250	3,050	3.9	8					181
Älgträsk	Measured
	Indicated	1,070	1,020	2.8	5
	Inferred	3,520	2,230	2.0	4

Total Gold mineralisations	Measured	260	220	2.9	8
	Indicated	2,000	1,600	3.0	6
	Inferred	6,800	5,300	2.9	6
Garpenberg	Measured	16,800	10,500	0.3	110	0.05	3.2	1.5
	Indicated	54,200	43,400	0.3	100	0.05	2.4	1.1
	Inferred	11,700	19,400	0.5	65	0.08	3.7	1.9

Kylylahti	Measured	1,700	1,200	0.3		0.75	0.4				0.2	0.2
	Indicated Inferred	3,000 100	2,800 500	0.6 1.6		0.47 0.71	0.3 0.2				0.3 0.3	0.2 0.1

Tara	Measured	600	800				6.1	2.0
	Indicated	3,400	5,500				6.5	2.2
	Inferred	4,700	4,700				6.2	1.9
Laver	Measured	1,100	1,100	0.11	4.4	0.20			18
	Indicated	512,400	512,400	0.13	3.1	0.22			36
	Inferred	550,600	550,600	0.10	3.1	0.21			33
Rockliden	Measured
	Indicated	800	800	0.08	102	2.1	4.4	0.9
	Inferred	9,200	9,200	0.06	48	1.8	4.0	0.4

Figures may be rounded up or down.

Ten-year overviews 111

Ten-year overview – the Group

Result, SEK m Revenues 35,213 33,204 30,987 27,635 36,716 40,323 40,001 34,409 36,891 40,242 Operating profit before depreciation 9,831 6,805 2,426 5,186 7,445 6,674 6,731 4,632 6,035 7,112 Operating profit excluding revaluation of process inventory 7,891 5,620 1,793 2,350 4,830 5,008 4,042 2,271 2,605 4,010 Operating profit 8,522 5,428 1,004 3,623 5,643 4,748 4,171 1,803 2,759 3,590 Profit after financial items 8,313 5,196 723 3,377 5,331 4,560 3,992 1,581 2,471 3,356 Taxes –2,045 –1,409 212 –876 –1,375 –1,171 –651 –288 –572 –715 Net profit for the year 6,268 3,787 935 2,501 3,957 3,389 3,341 1,294 1,899 2,641 Cash flow, SEK m Cash flow from operating activities 8,010 3,730 5,470 3,974 6,197 4,021 5,518 3,505 5,789 6,235 Cash flow from investment activities –1,739 –2,518 –4,633 –4,922 –2,995 –4,024 –4,129 –4,971 –4,206 –3,670 Free cash flow 6,271 1,212 837 –948 3,202 –3 1,389 –1,466 1,583 2,565 Cash flow from financing activities –4,593 –3,532 –514 571 –3,199 –464 –730 1,060 –1,355 –2,503 Cash flow for the year 1,678 –2,320 323 –377 3 –467 659 –406 228 63 Capital structure and return, SEK m Balance Sheet total 26,929 27,231 30,252 33,258 35,128 37,615 40,080 41,841 43,865 43,022 Capital employed 17,667 20,145 24,733 26,229 27,151 30,473 31,236 34,451 35,087 35,131 Return on capital employed, % 52 29 5 14 21 17 14 5 8 10 Shareholders' equity 16,089 12,932 16,131 16,257 18,846 21,032 22,354 23,075 23,974 25,807 Return on shareholders' equity, % 51 26 7 16 23 17 16 6 8 11 Equity/assets ratio, % 60 47 53 49 54 56 56 55 55 60 Net debt –195 5,524 6,305 7,402 4,584 6,063 6,276 8,673 8,283 5,827 Net debt/equity ratio, % –1 43 39 46 24 29 28 38 35 23 Data per share, SEK Earnings for the period Basic 21.66 13.37 3.42 9.14 14.47 12.39 12.21 4.72 6.94 9.65 Diluted 21.66 13.37 3.42 9.14 14.47 12.39 12.21 4.72 6.94 9.65 Cash flow from operating activities Basic 27.67 13.17 20.00 14.53 22.66 14.70 20.17 12.82 21.17 22.80 Diluted 27.67 13.17 20.00 14.53 22.66 14.70 20.17 12.82 21.17 22.80 Shareholders' equity Basic 55.58 47.28 58.98 59.44 68.90 76.90 81.68 84.31 87.63 94.33 Diluted 55.59 47.28 58.98 59.44 68.90 76.90 81.68 84.31 87.63 94.33 Proposed dividend 4.00 4.00 1.00 3.00 5.00 4.00 4.00 1.75 2.25 3.25 Share price, 31/12 162.41 81.25 17.80 92.1 136.7 100.5 122.1 98.45 125.5 142.9 Highest price paid 163.80 165.00 86.00 95.3 137.7 143.5 125.6 126.7 129.9 201.1 Lowest price paid 57.91 79.00 14.60 16.1 79.5 65.35 87.8 80.2 90.7 112.1 P/E ratio 7.50 6.07 5.20 10.07 9.45 8.11 10.0 20.9 18.09 14.8 Change in share price during the year, % 171 –50 –78 417 48 –26 21 –19 27 14 Dividend yield, % 2.5 4.9 5.6 3.3 3.7 4.0 3.3 1.8 1.8 2.3 Total yield, % 174 –48 –73 423 52 –23 25 –16 30 15 Number of shares, million Number of shares, 31/12 289 274 274 274 274 274 274 274 274 274 Average number of shares 289 283 274 274 274 274 274 274 274 274 No. own shares held, 31/12 – 16 – – – – – – – – Employees Number of Group employees, total2) 4,519 4,524 4,608 4,379 4,412 4,597 4,795 4,815 4,881 4,878 Number of female employees2) 587 604 650 598 669 736 813 824 852 867 Percentage of women on the Board/in Group management, % 25/20 25/33 25/29 27/17 27/0 27/0 27/17 27/20 27/20 36/20 Accidents per one million hours worked, own personnel, frequency 11.2 9.9 9.1 5.5 8.2 4.9 6.6 7.0 5.8 6.6 Accidents per one million hours worked incl. contractors, frequency 9.1 8.9 7.9 8.9 Sick leave rate, % 5.1 4.7 4.7 4.2 4.0 3.7 3.7 3.9 4.3 4.6	2006	2007	2008	2009	2010	2011	20121)	2013	2014	2015

Ten-year overview – the Group, cont.	2006	2007	2008	2009	2010	2011	20121)	2013	2014	2015
Energy consumption
Total energy consumption, TJ	15,183	16,303	15,257	14,664	16,147	15,579	16,140	16,415	17,231	16,813
Water withdrawal, total, km³	0.145	0.125	0.134	0.135	0.140	0.153	0.160	0.155	0.173	0.150
Emissions & Discharges
Direct emissions of greenhouse gases, ktonnes	384	413	450	486	510	499	574	578	554	559
Indirect emissions of greenhouse gases, electricity purchased, ktonnes	395	384	357	356	398	408	416	402	425	313
Indirect emissions of greenhouse gases, heating and steam purchased, ktonnes	13	24	0	5	6	17	18	20	22	17
Carbon dioxide emissions, total, ktonnes	791	822	807	848	913	924	1,008	1,000	1,001	889
Emissions of metals to air, tonnes3)	35	35	23	21	23	23	92	75	126	88
Sulphur dioxide emissions to air, tonnes	7,890	8,070	8,260	6,930	6,850	7,410	8,240	6,410	7,320	7,210
Discharges of metals to water, tonnes3)	25	28	29	14	18	14	21	23	21	18
Discharges of nitrogen to water, tonnes	295	294	283	225	199	205	253	219	225	261

1) The 2012 comparison year has been restated due to the changes to the IFRIC 20 and IAS 19 accounting principles in 2013.

2)Refers to full-time employees from 2008 onwards. The period from 2006–2007 refers to average number of employees.

3)Refers to metal equivalents (tonnes), as of 2012. The period from 2006–2011 refers to the metal's mass (tonnes).

Ten-year overview – Mines

	2006	2007	2008	2009	2010	2011	20121)	2013	2014	2015
Metal concentrate production
Zinc, ktonnes
Copper, ktonnes
Lead, ktonnes
Gold, kg
Gold, troy oz.
Silver, kg
Silver, '000 troy oz.
Tellurium, kg2)
Financial data
Revenues
Operating expenses
Depreciation


Capital employed







Cu, ktonnes

Cu, %
Metal production
Cu, ktonnes
Au, kg
Au, troy oz.
Ag, kg







Proven and probable mineral reserves3)
Mtonnes
Cu, %
Au, g/tonne	0.20	0.20	0.20	0.10	0.10	0.10	0.10	0.14	0.14	0.14

Introduction	Strategy	Market	Operations	Corporate Governance	Financial reports

Boliden Annual Report 2015

Ten-year overviews 113

Ten-year overview – Mines, cont.	2006	2007	2008	2009	2010	2011	20121)	2013	2014	2015
THE BOLIDEN AREA
Milled ore, ktonnes	1,679	1,848	1,355	1,192	1,375	1,677	1,862	1,809	1,862	1,879
of which, slag	222	187	293	242	157	134	241	301	245	301
Head grades
Zn, % Cu, %	5.56 1.56	4.81 0.81	4.01 1.00	3.69 0.95	3.69 0.79	2.87 1.03	2.15 0.84	2.61 0.61	3.00 0.60	3.82 0.41
Pb, %	0.47	0.50	0.43	0.46	0.37	0.27	0.23	0.28	0.30	0.44
Te, g/tonne2)	–	–	–	–	–	–	8.94	28.78	33.8	37.6
Au, g/tonne	1.8	1.6	1.5	2.0	1.6	1.2	1.3	1.6	1.8	1.7
Ag, g/tonne	66	66	61	65	55	41	35	42	42.6	59.6
Concentrate production
Zn, ktonnes	131	131	70	58	74	69	56	63	82	103
Cu, ktonnes	72	42	32	28	31	60	47	31	32	20
Pb, ktonnes	7	11	5	4	4	3	3	3	5	9
Concentrate grade
Zn, %	54.5	54.0	54.7	54.7	54.7	55.7	54.6	55.9	54.9	54.2
Cu, %	27.9	27.8	29.0	28.4	26.4	23.3	25.5	25.4	24.5	25.7
Pb, %	31.1	31.6	41.7	42.7	41.5	41.7	44.5	45.26	32.9	34.0
Metal production
Zn, ktonnes Cu, ktonnes	72 20	71 12	38 9	31 8	40 8	38 14	30 12	35 8	45 8	56 5
Pb, ktonnes	2	3	2	2	2	1	1	1	2	3
Te, kg2)	–	–	–	–	–	–	6,791	24,457	30,917	33,000
Au, kg	1,900	1,412	1,141	1,568	1,285	989	1,434	1,808	2,062	1,899
Au, troy oz.	61,071	45,405	36,679	50,414	41,318	31,781	46,102	58,117	66,293	61,058
Ag, kg	67,828	79,753	47,671	48,186	52,806	45,318	41,405	45,212	47,421	64,846
Ag, '000 troy oz.	2,181	2,564	1,533	1,549	1,698	1,457	1,331	1,454	1,525	2,085
Financial data, SEK m
Revenues	2,262	1,928	1,013	1,109	1,448	1,587	1,552	1,317	1,712	1,602
Operating profit before depreciation	1,129	976	222	405	588	659	554	250	474	437
Operating profit	981	849	115	303	481	530	369	19	188	108
Investments	107	144	237	264	298	565	623	364	261	413
Cash cost USc/lb Zn C1, Pro-rata								72	78	68
Cash cost USc/lb Cu C1, Pro-rata								264	216	167
Cash cost USD/tr.oz. Au C1, Pro-rata								1,098	921	818
Proven and probable mineral reserves Sulphide ores, ktonnes	4,450	7,020	7,350	6,950	8,220	8,980	9,110	12,680	11,580	10,550
Zn, %	5.0	3.6	4.3	4.3	5.3	5.2	5.4	6.0	5.5	5.7
Cu, %	1.0	0.9	0.8	0.8	0.6	0.6	0.6	0.6	0.5	0.6
Gold ores, ktonnes	530	0	0	1,610	2,780	3,100	3,584	3,274	3,500	4,300
Au, g/tonne	3.2	0	0	4.9	4.1	3.6	3.8	3.8	3.5	3.3
Te, g/tonne	1.4	0	0	0	186	165	177	181	200	187

KYLYLAHTI4)
Milled ore, ktonnes Head grades									172	733
Cu, %	–	–	–	–	–	–	–	–	1.58	1.72
Zn, %	–	–	–	–	–	–	–	–	0.50	0.70
Au, g/tonne	–	–	–	–	–	–	–	–	0.67	0.75
Concentrate production
Cu, ktonnes	–	–	–	–	–	–	–	–	13,275	62,144
Zn, tonnes	–	–	–	–	–	–	–	–	756	5,177
Concentrate grade
Cu, %	–	–	–	–	–	–	–	–	19.2	19.0
Zn, %	–	–	–	–	–	–	–	–	44.3	42.3
Metal production
Cu, tonnes	–	–	–	–	–	–	–	–	2,546	11,835
Zn, tonnes	–	–	–	–	–	–	–	–	335	2,189
Au, kg	–	–	–	–	–	–	–	–	82	421
Au, troy oz.	–	–	–	–	–	–	–	–	2,624	13,542
Financial data, SEK m
Revenues	–	–	–	–	–	–	–	–	117	560
Operating profit before depreciation Operating profit	– –	– –	– –	– –	– –	– –	– –	– –	31 7	192 74
Investments	–	–	–	–	–	–	–	–	754	137
Cash cost USc/lb Cu C1, Normal	–	–	–	–	–	–	–	–	190	150
Proven and probable mineral reserves
ktonnes	–	–	–	–	–	–	–	–	3,900	2,900
Cu, %	–	–	–	–	–	–	–	–	1.6	1.4
Zn, %	–	–	–	–	–	–	–	–	0.6	0.6
Au, g/tonne	–	–	–	–	–	–	–	–	0.9	1.0

Ten-year overview – Mines, cont.	2006	2007	2008	2009	2010	2011	20121)	2013	2014	2015
GARPENBERG
Milled ore, ktonnes	1,182	1,255	1,365	1,394	1,443	1,456	1,484	1,495	2,224	2,367
Head grades
Zn, %	5.7	6.3	6.9	7.3	6.6	6.2	5.6	5.2	5.1	5.0

Cu, %	0.1	0.1	0.1	0.1	0.1	0.1	0.1	0.1	0.1	0.1
Pb, %	2.2	2.5	2.6	2.8	2.5	2.4	2.1	2.1	2.1	2.1
Au, g/tonne	0.4	0.3	0.3	0.2	0.3	0.3	0.3	0.3	0.3	0.3
Ag, g/tonne	123	125	130	139	133	133	129	153	136	156
Concentrate production
Zn, ktonnes	113	132	158	167	160	148	136	127	182	196
Cu, ktonnes	3	3	3	3	3	2	2	3	3	5
Pb, ktonnes	29	36	41	44	41	39	35	36	58	60
Concentrate grade
Zn, %	54.2	54.1	53.1	53.8	53.7	55.0	54.8	55.4	54.6	55.0
Cu, %	23.1	22.1	20.4	18.3	18.3	19.1	17.7	18.0	14.8	16.3
Pb, %	71.5	70.1	69.0	71.3	72.0	72.4	70.7	70.3	63.1	70.7
Metal production
Zn, ktonnes	61	71	84	90	86	81	75	70	99	108
Cu, ktonnes	0.6	0.7	0.6	0.5	0.5	0.4	0.4	0.5	0.4	0.8
Pb, ktonnes	21	25	29	31	29	28	25	25	37	42
Au, kg	269	244	243	214	234	246	250	277	468	559
Au, troy oz.	8,648	7,851	7,821	6,870	7,534	7,895	8,051	8,911	15,049	17,962
Ag, tonnes	108	118	130	139	140	140	135	162	218	288
Ag, '000 troy oz.	3,475	3,787	4,189	4,473	4,505	4,505	4,341	5,201	7,014	9,270
Financial data, SEK m
Revenues	1,311	1,710	1,163	1,490	1,902	2,155	1,876	1,675	2,318	2,862

Operating profit before depreciation	927	1,195	598	945	1,293	1,506	1,262	1,025	1,319	1,896
Operating profit	850	1,095	466	793	1,124	1,314	1,033	776	919	1,452
Investments	273	323	344	157	281	660	1,459	2,045	916	336
Cash cost USc/lb Zn C1, Pro-rata								46	56	45
Proven and probable mineral reserves
ktonnes	17,200	20,800	26,000	25,800	25,100	23,600	25,600	36,300	37,600	39,800
Zn, %	5.7	5.2	5.1	5.4	5.3	5.1	5.1	4.6	4.3	3.9
Ag, g/tonne	123	116	134	142	145	144	131	132	120	113
TARA
Milled ore, ktonnes	2,751	2,658	2,411	2,508	2,593	2,486	2,502	2,493	2,287	2,197
Head grades

Zn, %	7.7	7.7	7.8	7.9	7.0	7.0	7.0	7.1	6.9	6.4
Pb, %	1.4	1.5	1.5	1.5	1.4	1.4	1.4	1.5	1.6	1.3
Concentrate production
Zn, ktonnes	356	351	320	344	316	307	305	298	267	243
Pb, ktonnes	44	42	40	41	34	34	41	39	42	34
Concentrate grade
Zn, %	54.8	54.5	54.7	53.9	53.0	53.3	54.4	55.9	56.0	54.8
Pb, %	58.8	60.9	56.7	57.5	53.7	58.8	55.2	56.1	53.1	49.9
Metal production
Zn, ktonnes	195	191	175	186	167	164	166	166	150	133
Pb, ktonnes	26	26	23	24	19	20	23	22	22	17
Ag, kg	1,775	1,850	1,638	2,092	1,344	909	1,673	1,197	2,433	1,273
Ag, '000 troy oz.	57	59	53	67	43	29	54	38	78	41
Financial data, SEK m
Revenues	2,950	3,129	1,357	1,671	1,831	1,757	1,727	1,542	1,743	1,492
Operating profit before depreciation	1,887	1,989	154	303	619	503	421	595	479	470
Operating profit	1,722	1,796	–40	76	383	268	100	195	56	95
Investments	265	277	305	338	285	372	268	201	313	274
Cash cost USc/lb Zn C1, Normal	76	65	79	64	69	72	69	68	75	76
Proven and probable mineral reserves
ktonnes	16,700	17,800	17,100	17,000	16,000	15,700	14,000	13,100	15,300	17,000
Zn, %	8.4	7.7	7.4	7.2	7.1	7.1	7.1	7.0	6.6	6.3
Pb, %	1.8	1.7	1.8	1.8	1.8	1.8	1.7	1.6	1.5	1.5

1) Comparison figures for 2012 have been restated due to changes in accounting regulations. Investments at Aitik increased by SEK 383 million.

2)Tellurium production started in 2012.

3)Aitik's figures for 2013 are updated in accordance with the press release published on 6th May 2014.

4)The acquisition of Kylylahti was completed in October 2014.

Boliden Annual Report 2015

Ten-year overview – Smelters

	2006	2007	2008	2009	2010	2011	2012	2013	2014	2015
Metal production
Zinc, ktonnes	443	463	443	434	456	461	467	455	468	469
Copper, ktonnes	356	315	350	302	303	336	339	325	347	332
Lead, ktonnes	26	26	14	13	17	11	19	24	25	26
Lead alloys, ktonnes (Bergsöe)	45	44	43	39	42	41	43	45	44	45
Nickel in matte, ktonnes1)										17
Gold, kg	19,693	14,876	15,489	15,028	14,220	12,848	16,175	16,177	17,368	17,608
Gold, troy oz.						633,144 478,274 497,972 483,157 457,168 413,052 520,011 520,094 558,382 566,102
Silver, kg2)						414,402 379,749 488,285 539,564 450,280 488,147 575,959 537,941 626,767 680,600
Silver, '000 troy oz.2)	13,323	12,209	15,699	17,346	14,476	15,964	18,517	17,294	20,151	21,364
Aluminium fluoride, ktonnes	29	35	35	33	22	35	36	34	35	31
Sulphuric acid, ktonnes	1,341	1,231	1,329	1,123	1,372	1,597	1,634	1,564	1,659	1,665
Financial data
Revenues	37,514	34,704	31,256	26,765	34,390	38,471	38,753	33,410	35,894	38,948
Gross profit excl. revaluation of
process inventory3)	10,202	7,802	6,942	6,560	7,158	7,160	7,288	6,908	7,869	9,167
Operating expenses	4,471	4,618	5,076	5,281	5,247	5,358	5,330	5,346	5,370	5,536
Depreciation	765	771	807	888	848	823	891	913	1,012	1,002
Operating profit excl. revaluation
of process inventory3)	5,021	2,489	1,161	451	1,134	1,051	1,095	679	1,518	2,692
Operating profit	5,652	2,297	372	1,724	1,946	790	1,224	210	1,672	2,272
Investments	782	1,008	737	473	804	1,627	993	1,200	768	1,248
Capital employed	14,474	16,738	13,656	13,712	14,225	16,213	15,569	15,791	15,592	15,878
RÖNNSKÄR
Smelting material
Copper, ktonnes
Copper concentrate	587	598	611	565	544	651	624	605	661	642
Secondary raw materials	159	160	173	154	155	175	221	209	184	172
of which, electronics4)					37	64	108	109	82	86
Copper, total	746	758	784	719	699	826	844	814	845	814
Lead, ktonnes
Lead concentrate	36	38	18	14	16	11	27	38	40	38
Secondary raw materials	4	2	5	7	6	5	2	1	1	1
Lead, total	39	40	22	21	23	17	29	39	41	39
Production
Cathode copper, ktonnes	229	214	228	206	190	219	214	206	217	206
Lead, ktonnes	26	26	14	13	17	11	19	24	25	26
Zinc clinker, ktonnes	33	36	41	39	37	36	36	36	39	36
Gold, tonnes	16	12	13	13	12	11	13	12	13	13
Gold, '000 troy oz.	506	389	432	427	400	341	403	402	419	425

Silver, tonnes	374	347	430	481	386	415	448	437	479	539
Silver, '000 troy oz.	12,023	11,142	13,813	15,472	12,340	13,344	14,395	14,051	15,392	17,322
Sulphuric acid, ktonnes	551	544	557	515	502	571	553	536	564	533
Liquid sulphur dioxide, ktonnes	37	50	53	36	43	42	38	39	42	37
Palladium concentrate, tonnes	3	3	3	3	2	2	3	2	2	2
Financial data, SEK m
Revenues	2,322	2,131	1,882	1,669	1,799	2,226	2,398	2,029	2,417	2,678
Operating profit before depreciation	1,075	846	637	338	441	715	832	374	748	1,038
Operating profit	861	615	395	83	187	470	535	53	405	727
Investments	318	228	192	199	270	1,074	481	345	147	383
BERGSÖE
Smelting material, ktonnes
Secondary raw materials	59	61	65	57	56	57	62	63	63	64
Production, ktonnes
Lead alloys	45	44	43	39	42	41	43	45	44	45
Financial data, SEK m
Revenues	787	918	760	632	793	787	698	715	783	817
Operating profit before depreciation	149	344	142	106	99	95	52	57	64	37
Operating profit	138	330	127	91	82	75	34	39	45	18
Investments	55	10	12	12	14	24	10	12	10	11

Ten-year overview – Smelters, cont.	2006	2007	2008	2009	2010	2011	2012	2013	2014	2015
HARJAVALTA
Smelting material, ktonnes
Copper concentrate	538	451	529	400	434	456	516	471	551	528
Secondary raw materials	16	12	7	11	22	14	16	26	21	23
Copper, total	554	462	536	411	456	471	532	497	572	551
Nickel concentrate	205	262	273	211	262	259	248	251	239	282
Production
Cathode copper, ktonnes	127	101	122	97	113	116	125	119	130	126
Nickel in matte, ktonnes1)										17
Gold, tonnes	4	3	2	2	2	2	4	4	4	4
Gold, '000 troy oz.	128	90	66	56	57	72	117	119	139	141
Silver, tonnes	40	33	59	58	65	73	128	101	142	126
Silver, '000 troy oz.	1,300	1,067	1,886	1,876	2,077	2,350	4,122	3,244	4,577	4,042
Sulphuric acid, ktonnes	632	557	659	501	573	600	639	590	658	667
Liquid sulphur dioxide, ktonnes	43	42	37	33	27	35	37	37	37	37
Palladium concentrate, tonnes	0.71	0.46	0.21	0.27	0.72	0.84	0.54	1.47	1.91	2.15
Financial data, SEK m
Revenues	1,915	1,267	1,432	1,261	1,468	1,552	1,666	1,631	1,746	2,214
Operating profit before depreciation	976	289	212	203	318	373	479	496	485	943
Operating profit before depreciation,
excl. PIR3)	976	289	339	62	318	373	479	496	485	943
Operating profit	820	149	64	24	154	222	324	316	279	736
Operating profit excl. PIR3)	820	149	191	–117	154	222	324	316	279	736
Investments	211	366	225	148	122	229	215	246	225	396
KOKKOLA
Smelting material, ktonnes
Zinc concentrate	548	581	576	571	587	600	589	602	577	584
Production, ktonnes
Zinc	282	306	298	295	307	307	315	312	302	306
Silver in concentrate, kg									5,651	16,079
Silver concentrate, '000 troy oz.									182	517
Sulphuric acid5)					199	302	313	319	314	343
Financial data, SEK m
Revenues	2,713	2,523	1,848	1,979	2,062	1,818	1,778	1,795	2,004	2,350
Operating profit before depreciation	1,722	1,434	632	558	685	417	432	398	639	943
Operating profit	1,563	1,273	469	362	505	246	261	248	459	739
Investments	95	236	162	99	248	237	210	318	216	166

ODDA
Smelting material, ktonnes
Zinc concentrate
(incl. zinc clinker)	291	292	270	245	277	283	279	263	302	310
Production, ktonnes
Zinc	161	157	145	139	149	153	153	143	166	163
Aluminium fluoride	29	35	35	33	22	35	36	34	35	31
Sulphuric acid	158	130	113	108	123	125	128	119	123	123
Financial data, SEK m
Revenues	1,636	1,441	1,200	1,123	1,128	1,212	1,184	1,070	1,395	1,554
Operating profit before depreciation	783	576	360	161	184	123	184	116	355	522
Operating profit	652	439	210	6	39	–25	31	–26	209	390
Investments	103	168	146	22	75	44	61	269	166	283

The operating profit per smelter excludes the revaluation of process inventory, with the exception of Harjavalta, 2008–2009.

1) Included as of 1st July 2015.

2)Silver in concentrate at Kokkola is included in the production figure shown as of 2014.

3)Process Inventory Revaluation.

4) Electronic scrap recycling was not reported separately between 2005 and 2009.

5) Investment in sulphuric acid plant, 2010.

Boliden Annual Report 2015

Definitions

Financial definitions

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 flow from operating activities Cash flow generated via the operating profit, adjusted for items not affecting cash flow, tax paid and change in working capital.

Cash flow per share The cash flow 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 flow Cash flow from operating activities including cash flow from investment activities.

Net debt Interest-bearing current and longterm liabilities (including pension liabilities) less financial assets (including liquid assets).

Net debt/equity ratio Net debt divided by shareholders' equity.

Operating profit (EBIT) Revenues less all costs attributable to the operations but excluding net financial items and taxes.

Definition 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. Cash cost is expressed in USc/lb. of metal and can be multiplied by 22.0462 (rounded off) to obtain the price in USD per tonne of metal.

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 refining charges (TC/RC)
Deductions for net revenue of subsidiary
metals = Cash cost C1 Normal 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 refining charges.

2)Administrative costs attributable to the mine.

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.

Income from payable metal
The metal's freight cost
The metal's treatment and refining charges

= The net revenue of the metal

Operating profit (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 financial items and taxes.

P/E ratio Share price divided by earnings per share.

Return on capital employed Operating profit 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 Profit 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.

Definition 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 and can be multiplied by 22.0462 (rounded off) to obtain the price in USD per tonne of metal. The income comprises treatment and refining charges, free metals and income from by-products.

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 finished 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-specific concepts and definitions

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 flow, converted into US dollars (average rate for the measurement period). Usually shown in cents per ounce. To show the cash cost in USD/ tonne, multiply by 22. Used to compare the mine's cost position in relation to other mines. See Definitions.

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.

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 A gold/silver alloy cast as a bullion in the refinery. Further processed to pure gold and silver at a smelter.

Jarosite A mineral primarily comprising iron sulphate that is a common waste product of zinc production.

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 financially valuable minerals present in ore from those with no financial 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 25 per cent copper. The lead content of mined concentrate is usually around 65 per cent.

Metal equivalents Used to describe the environmental impact of emissions and discharges to air and water. The metal equivalent takes into account the toxicity of each metal (relative to Cu) and provides a better metric of the environmental impact than the combined weight of the metals.

Metal premium The price agreed in advance, over and above the LME price, and paid by customers for specifically adapted metal that is free delivered.

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 profitability 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 are transferred to mineral reserves and hence eliminated from the mineral resources. Mineral reserves are divided into two categories: probable mineral reserves and proven mineral reserves.

Mineral resource A concentration of minerals in the bedrock that may become commercially extractable. Mineral resources are divided into three categories: inferred mineral resources, indicated mineral resources, and measured mineral resources.

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 profitably mined to extract metals or other valuable substances.

Ore grade The average quantity of valuable metals in a tonne of ore, expressed as 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 financial sector players. The most common precious metals are gold, silver, platinum and palladium.

Price escalators (PP) Also known as price-sharing 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 refining charges for many years now.

Raw materials feed A smelter's raw material input, i.e. the amount of metal concentrate or secondary materials processed and refined.

Recovery The percentage portion of the quantity of a given metal in an ore extracted during the concentration process.

Secondary material 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.

Treatment and refining charges (TC/RC) The price of concentrate is defined as the LME price less treatment and refining charges, which comprise the remuneration received by the smelter for refining the smelting material (concentrate and secondary materials) and extracting metals. Copper smelters' processes can be broken down into a treatment phase and a refining 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-fill 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 specifications with regard to degree of purity, weight and size.

ABBREVIATIONS

Lb = pound = 0.4536 kg Troy ounce = 31.1035 gram USD = US dollars USc = US cents c/Lb = cent per pound = 1/22 USD/ tonne SEK = Swedish kronor NOK = Norwegian kronor EUR = euro Ag = silver Au = gold Cu = copper Pb = lead Zn = zinc

Boliden Annual Report 2015

Annual General Meeting 119

Annual General Meeting

Boliden's Annual General Meeting will be held on Tuesday, 3rd May 2016 at Rönnskär in Skellefteå.

Participation

Shareholders wishing to participate in the Annual General Meeting must both be registered in the shareholders' register kept by Euroclear Sweden AB on Wednesday, 27th April 2016 (for details of the re-registration process for nominee shareholders, please see below) and have notified 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 Affairs, Box 44, SE-101 20 Stockholm, Sweden. All such notifications must be received by the company no later than Wednesday, 27th April 2016.

Shareholders' notifications 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. The 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 Wednesday, 27th April 2016, 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 financial and other information, can be found on Boliden's website at www.boliden.com. Printed financial information may also be ordered via the website or from Boliden AB, Box 44, SE-101 20 Stockholm, Sweden.

Financial information

3rd May	Interim Report for the first quarter 2016
19th July	Interim Report for the second quarter 2016
20th October	Interim Report for the third quarter 2016
10th February 2017	Fourth quarter Interim and Year-end Report 2016

Questions

Any questions concerning the content of Boliden's financial information can be submitted to: Boliden's Investor Relations Tel. +46 8 610 15 00 or e-mail: [email protected]

Addresses

Group

Boliden Group Box 44 SE-101 20 Stockholm Street address: Klarabergsviadukten 90 Tel. +46 8 610 15 00 Fax +46 8 30 95 36 (Legal Affairs staff function)

Boliden Mines

SE-936 81 Boliden Tel. +46 910 77 40 00 Fax +46 910 77 42 34

The Boliden Area

SE-936 81 Boliden Tel. +46 910 77 40 00 Fax +46 910 77 42 25

Boliden Aitik

Sakajärvi 1 SE-982 92 Gällivare Tel. +46 970 72 90 00 Fax +46 970 72 90 01 Boliden Garpenberg SE-776 98 Garpenberg

Kapplavägen 5 Tel. +46 225 360 00 Fax +46 225 360 01

Boliden Kylylahti

Kaivostie 9 FI-83700 Polvijärvi Finland Tel. +358 10 271 0090

Boliden Tara

Knockumber Navan Co. Meath Ireland Tel. +353 46 908 2000 Fax +353 46 908 2581

Boliden Smelters

Boliden Commercial AB Box 750 SE-101 35 Stockholm Street address: Klarabergsviadukten 90 Tel. +46 8 610 15 00 Fax +46 8 610 16 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 Tel. +46 910 77 30 00 Fax +46 910 77 32 15

Boliden Bergsöe

Box 132 SE-261 22 Landskrona Tel. +46 418 572 00 Fax +46 418 572 05

Boliden Marketing

Office UK No 7 Clarendon Place Royal Leamington Spa Warwickshire CV32 5QL UK Tel. +44 1926 833 010 Fax +44 1926 450 084

Boliden Marketing

Office Germany Stresemannallee 4c D-41460 Neuss Germany Tel. +49 2131 750 46 55 Fax +49 2131 750 46 54

Boliden Marketing Office Denmark

Hvissinge vej 16 DK-1600 Glostrup Denmark Tel. +45 4326 8300

www.boliden.com

Production: Boliden in cooperation with Narva.

Photos: Stefan Berg (p. 1, 2, 3, 24, 39, 45, 72), Jeanette Hägglund (p. 5, 15, 25, 68, 69, 79, 119), Daniel Olausson (p. 11, 24), Paulina Holmgren (p. 25), Thomas Westermark (p. 0, 24, 44), Päivi Karjalainen (p. 25), Tim Durham (p. 108), Gracemill (p. 12, 13, 22, 23, 60, 61), Childspace (p. 51) Illustrations: Narva Translation: Copy Right AB Print: Göteborgstryckeriet, Mölndal, 2016

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Boliden — Annual Report 2015

2895_10-k_2016-03-09_d8e33ce9-1a5a-4f17-8cee-4847639f4e65.pdf

COMPETITIVE MINES AND SMELTERS

CONTENTS

Boliden's 2015 Annual Report

The GRI Report, together with the complete GRI index:

Boliden Annual Report 2015 Boliden in brief 1

40,242 40,242 Garpenberg ● Aitik ● Rönnskär ● Kylylahti ● Odda ● Bergsöe ● ● Kokkola ● Tara Leamington Spa ● Stockholm ● Neuss ● Glostrup ● ● Harjavalta ● MINING AREAS ● SMELTERS ● OFFICES The Boliden Area ●●

BOLIDEN – PART OF A CIRCULAR ECONOMY

SIGNIFICANT EVENTS DURING THE YEAR

9%

54%

2,6

2%

AWARDS

President's Statement

Societal development needs metals

Boliden's mines

Mine automation boosts productivity

Boliden Annual Report 2015 President's Statement 5

Boliden's smelters

Boliden – part of the community

Safety and the environment top the agenda

Operational strength through diversity

Well-positioned for the future

How we create value

FINANCING

MANUFACTURING

INTELLECTUAL CAPITAL

HUMAN CAPITAL

SOCIAL/RELATIONSHIP CAPITAL

NATURAL RESOURCES AND INPUT GOODS

INPUT BUSINESS MODEL

Boliden Annual Report 2015 Value creation 7

BUSINESS MODEL OUTPUT

PRODUCTS

Production, Mines, 20151)

Production, Smelters, 2015

ECONOMIC EFFECTS3) (SEK M)

Partners

Employees

Financiers

Society

Boliden

SOCIAL EFFECTS

Target fulfilment

RETURNS

ACCIDENTS

FINANCIAL TARGET

NET DEBT/EQUITY RATIO

DIVIDEND

SOCIAL TARGETS

SICK LEAVE

GENDER EQUALITY

ENVIRONMENTAL TARGETS

CARBON DIOXIDE EMISSIONS

METAL EMISSIONS TO AIR Emissions (environmental impact) of metals to air shall decrease by 10% by 2018

SULPHUR DIOXIDE EMISSIONS

METAL IMPACT

ENVIRONMENTAL ACCIDENTS

Strategy

VISION

STRATEGY

Strategy 11

MAIN USAGE

COPPER IN SOCIETY

COPPER FROM BOLIDEN

Market and metal prices

DEVELOPMENT IN SUBSIDIARY MARKETS, 2015

GDP PER CAPITA, 2015

PRICING

ECONOMIC TRENDS

Metals

Concentrates

Metal market trends

The economic climate at the end of 2015

MARKET POSITION

Mining companies – zinc

Mining companies – copper

Boliden Annual Report 2015