AN OveRALL view OF the JX GROuP Opening story becoming a World-leading integrated energy, resources, and materials business Group the long-term vision of the JX Group by 2020 is to become a world-leading integrated energy, resources, and materials business group, with operations in Petroleum Ref ining and Marketing, Oil and Natural Gas exploration and Production, and Metals, as well as new energy. In all of our business f ields, we will endeavor to develop operations that are resistant to market fluctuations and highly evaluated by global standards. Although we face signif icant challenges, we will focus our comprehensive strengths and strive to make steady progress toward our goals. 4 About JX Group 6 Delivering on Our Potential Petroleum Ref ining and Marketing Business 8 exploring Our Potential Oil and Natural Gas exploration and Production (e&p) Business 10 Developing Our Potential Metals Business 12 Realizing Our Potential for Further Growth Management Message JX Holdings, Inc. Annual Report 2012 3
about JX Group The business structure of The JX Group The JX Group was established in 2010 through the management integration of Nippon Oil Corporation and Nippon Mining Holdings, Inc. Both of our predecessor companies had been in business for more than 100 years. Under the leadership of the holding company, JX Holdings, Inc., the Group is aiming to become a world-leading integrated energy, resources, and materials business group with three core business f ields Petroleum Ref ining and Marketing, Oil and Natural Gas Exploration and Production, and Metals. Petroleum Ref ining and Marketing Oil and Natural Gas exploration and Production (e&p) Metals Listed subsidiaries NIPPO CORPORAtION, toho titanium Co., Ltd., and others Common function subsidiaries Independent business subsidiaries Well-balanced portfolio among Three core business fields We are engaging in a wide range of businesses extending from upstream to downstream, centered on petroleum and copper, and will work to construct an optimal portfolio by allocating management resources to highly prof itable and high-growth business f ields. Ordinary Income excluding Inventory valuation Factors (FY2011) 291.3 billion (FY2011) Oil and Natural Gas E&P Business 97.5 billion 33.5% Metals Business 63.2 billion 21.7% Petroleum Ref ining and Marketing Business 112.8 billion 38.7% Listed subsidiaries and others 17.8 billion 6.1% 4 JX Holdings, Inc. Annual Report 2012
maximizing corporate value WiTh a GroupWide GroWTh strategy The JX Group, based on sound, transparent corporate governance, is implementing a Groupwide growth strategy and flexible operational activities in response to changes in its business environment. In this way, the Group is aiming to maximize corporate value and become a worldleading integrated energy, resources, and materials business group. AN OveRALL view OF the JX GROuP Becoming a world-leading integrated energy, resources, and materials business group maximizing corporate value Formulation of medium- to long-term Group strategy Strategically allocating management resources Sound, transparent Corporate Governance Implementing a Groupwide growth strategy Implementing flexible operational activities in response to changes in the business environment JX Holdings, as a holding company, formulates medium- to longterm Group strategies and allocates management resources to implement the strategies. The core operating subsidiaries conduct flexible operations in their respective businesses in line with the Group strategies and management resources allocated by JX Holdings. JX Holdings, Inc. Annual Report 2012 5
Delivering on our potential petroleum refining and marketing business JX nippon oil & energy Group 6 JX Holdings, Inc. Annual Report 2012
The strengths of The JX Group We have a dominant share in the petroleum ref ining and marketing business in the domestic market. We are working to establish a stronger business foundation through bolstering our competitiveness. AN OveRALL view OF the JX GROuP no.1 share of domestic fuel sales We have a dominant position with sales of about 70 million kiloliters of fuel oils a year, a 36% share of fuel oils in the domestic market. With this position, we provide a stable supply of the energy that is indispensable for daily activities in Japan. no.1 share of the domestic market in the number of service stations There are about 12,000* ENEOS service stations nationwide, giving us a dominant share of the domestic market, at about 32% of the number of service stations. *As of March 31, 2012 no.1 share in asia in paraxylene supply capacity We do more than supply the energy needed for consumers and industry. We produce a wide range of chemicals used to make indispensable goods for daily life, from cars and planes to PCs and clothing. Demand for polyester is increasing around the world, and we have the No. 1 supply capacity in Asia for paraxylene, the raw material for polyester. For further information, please refer to page 28. JX Holdings, Inc. Annual Report 2012 7
Exploring our potential oil and natural Gas exploration and production (e&p) business JX nippon oil & Gas exploration Group 8 JX Holdings, Inc. Annual Report 2012
The strengths of The JX Group aiming to increase production volume through the use of technologies, experience, and know-how, we are active in regions around the world. AN OveRALL view OF the JX GROuP bases in14 countries We are engaged in exploration, development, and production in 14 countries around the world. Our production of oil and natural gas amounts to 130 thousand barrels of oil equivalent per day. making full use of Technical capabilities, experience, and Know-how We have a number of successful overseas projects in such locations as Vietnam, Malaysia, and the U.K. North Sea, including projects in which we act as operator. The technologies, experience, and know-how acquired through these activities provide credibility and become the driving force behind the acquisition of new projects. promotion of new Technologies At the Rang Dong Oil Field in Vietnam, associated gas of crude oil production, such as methane, ethane, and propane, had previously been disposed of by burning them at the production site. Now, however, they are recovered and supplied through an undersea pipeline as fuel for electric power generation in Vietnam. Through this technology, it has become possible to reduce the volume of CO 2 emissions from the site by about 800 thousand tons per year. Moreover, in locations around the world, we are accelerating our initiatives in new technologies, such as CO 2 injection enhanced oil recovery and the successful demonstration of natural gas flow in an ultra-deep prospect. JX Holdings, Inc. Annual Report 2012 9
Developing our potential metals business JX nippon mining & metals Group 10 JX Holdings, Inc. Annual Report 2012
The strengths of The JX Group We have stakes in the world s leading copper mines and are engaged in the development of our own mines. With operations in smelting and ref ining, recycling and environmental services, and electronic materials, we have built an integrated non-ferrous metals business structure with world-leading quantity and quality. AN OveRALL view OF the JX GROuP copper concentrate production:100 Thousand Tons per year* We have mining concessions in superior copper mines that rank among the world s top 10. Moreover, we are engaged in the development of our own mines and are currently moving ahead with the Caserones Copper Mine Development Project, in Chile. In this project, we plan to produce 3.55 million tons of copper over the 28 years from 2013 to 2040. For further information, please refer to page 30. * Equity entitled copper concentrate production volume in 2011 (copper content in copper concentrate) ref ined copper production capacity:1.17 million Tons per year We have smelting and ref ining facilities with advanced expertise and world-class production capacities. Gold production Through recycling:7tons per year* On the basis of technologies cultivated in copper smelting and ref ining operations, we recover non-ferrous metals from recycled materials including used electronic appliances. By effectively developing urban mines, we are committed to establishing a recycling-oriented society. * Results in the f iscal year ended March 31, 2012 a family of products with no.1 Global market share Leveraging advanced expertise and know-how in non-ferrous metals processing, we produce electronic materials that are indispensable to advanced electronic products, such as mobile phones and PCs. We have top global market shares in a large number of products. JX Holdings, Inc. Annual Report 2012 11