Boliden extends its copper price hedging arrangements

Boliden has extended the scope of its price hedging in respect of its planned copper production. Boliden previously hedged 40 per cent of its production for a period of one year and has now hedged 70 per cent of its production up to and including February 2007. The extended hedging arrangements result from the signing of metal futures contracts at an average contract rate of USD 3,203/tonne (USD 1.45/lb).

“Our extended hedging arrangements should be viewed against the background of the current record levels of copper prices and the fact that Boliden can now lock future cash flows at price levels substantially higher than our anticipated copper prices,” comments Boliden’s CEO Jan Johansson. Overall, Boliden’s annual average prices for 70 per cent of its planned copper production at its mines up to and including February 2007 are USD 2,917/tonne (USD 1.32/lb) for 2005, USD 2,887/tonne (USD 1.31/lb) for 2006 and USD 2,969/tonne (USD 1.35/lb) for 2007. Boliden has already hedged part of its lead, gold and silver production up to and including 2006. Boliden’s zinc production is completely unhedged. Boliden has also used currency options to hedge a corresponding share of its US dollar exposure to match all future metal price hedging agreements entered into by the company.