
Outside Directors Roundtable Discussion

On June 11, 2024, the Company held a roundtable discussion with Chairman Murayama and five outside directors. The discussion focused on issues related to the sustainable growth of the JX Advanced Metals Group and strengthening the group's governance structure.
- A
- Outside Director
- Itoh Motoshige
Awarded a Ph.D. in economics from the University of Rochester in 1979. After serving as a professor in the Graduate School of Economics at the University of Tokyo, chair of the Nippon Institute for Research Advancement, and professor in the Faculty of International Social Science at Gakushuin University, he assumed his current post as professor emeritus at the University of Tokyo in June 2016. Mr. Itoh served as a member of the Council on Economic and Fiscal Policy for six years beginning in 2013. He has been an outside director of the Company since April 2022.
- B
- Outside Director (Audit & Supervisory Committee Member)
- Futamiya Masaya
Joined Sompo Japan Insurance Inc. in 1974. Named president and chief executive officer of Nippon Koa Insurance Co., Ltd. and chair of Sompo Japan Nipponkoa Insurance Inc. (currently Sompo Holdings, Inc.). Named chair of the Japan Network for Public Interest Activities in 2018 (to present). Named senior advisor, Sompo Holdings, Inc. in 2022 (to present). He has been an outside director of the Company since June 2023.
- C
- Outside Director
- Tokoro Chiharu
Named assistant professor at Waseda University, School of Science and Engineering in 2004. Named professor, Faculty of Science and Engineering, Waseda University, in 2015 (to present). In 2016, she became a project professor at the University of Tokyo, Institute of Industrial Science (to present). In 2021, she was named professor at the University of Tokyo, Graduate School of Engineering (to present). She has been an outside director of the Company since April 2021. In September 2022, she was appointed associate director of the Waseda Institute for Advanced Study and associate director of the Waseda Center for a Carbon Neutral Society (to present).
- D
- Representative Director and Chairman, JX Advanced Metals Corporation
- Murayama Seiichi
- E
- Outside Director (Audit & Supervisory Committee Member)
- Kawaguchi Rika
Registered as an attorney in 1997. Member of the Dai-Ichi Tokyo Bar Association Committee for Labor Laws (to present). Vice president of the Dai-Ichi Tokyo Bar Association, executive director of the Kanto Federation of Bar Associations, and other posts. In 2021, Ms. Kawaguchi became a family mediator of the Tokyo Family Court, acting president of the Dai-Ichi Tokyo Bar Association Promotion for Gender Equality Headquarters, member of the Japan Federation of Bar Associations Promotion for Gender Equality Headquarters, and controller of the Japan Philanthropic Association (to present). She has been an outside director of the Company since June 2023.
- F
- Outside Director (Audit & Supervisory Committee Member)
- Sakuma Soichiro
Joined the predecessor to the current Nippon Steel Corporation in 1978. Served as representative director and executive vice president of Nippon Steel Corporation. In addition to serving currently as an executive advisor of NS Solutions Corporation, Mr. Sakuma also performs other duties as chair of the Public Interest Commission of the Cabinet Office of Japan, president of the Japan International Dispute Resolution Center, president of the Global Industrial and Social Progress Research Institute, and vice-chair of the OECD-BIAC Responsible Business Conduct Comittee. He has been an outside director of the Company since June 2022.
Progress Toward an Initial Public Offering

- Murayama:
- We launched a five-member team exactly one year ago in June 2023. Fiscal 2023 was a turbulent year for our company, beginning with our preparations for an IPO. I am encouraged and gratified to have your advice as outside directors at such a time as this. How do you view the Company's activi-ties over the past year?
- Itoh:
- The past year has been very meaningful in the sense that we were able to reaffirm the source of the Company's compet-itiveness as you prepare to go public.
- Kawaguchi:
- The Company engaged in several fundamental measures, including a review of the business portfolio. Seeing everyone unite and make the utmost effort in their respective positions has been inspiring.
- Sakuma:
- Another major measure was the decision to deconsolidate the Caserones copper mine, which has been a core resources business in terms of profits, even more than revenue. At the same time, we see major structural reforms underway. The Company is charting a course to make advanced metal materials a pillar of earnings.
- Futamiya:
- I think the Company is aware of its role in terms of the issues facing Japan, so-called economic security, and sustainable growth. I see that you are addressing these issues with confidence. In addition, you are very focused on fostering a corporate culture that values new ideas and challenges, creating a space for innovation to occur.
- Tokoro:
- We have held many discussions in the past year about the big IPO event and the ideal vision for the company. I think you are steering the ship based on choices that are as close to optimum as can be, considering the current situation.
Growth Strategy and Risk Management
- Murayama:
- Changes in society and the market are becoming more dramatic. How should the Company identify and respond to the coming risks and opportunities?
- Tokoro:
- In your case, the balance between Base and Focus businesses is very important. I believe you have reached the best balance heading into the IPO, but this balance may not necessarily be optimal in the future. A flexible structure might serve best.
- Itoh:
- As you say, this is an era of uncertain prospects. Technol-ogies could be replaced easily, as many industries themselves. The ability to respond quickly to change will be essential.

- Futamiya:
- Today, society is making strong demands in various forms regarding the value of a company's existence. This is particularly true in Europe, where these demands take the form of regulations. We must all keep a close eye on these regulatory trends and respond preemptively.
- Sakuma:
- In terms of governance, the Company changed to a company with an Audit & Supervisory Committee in fiscal 2023. Since then, you have increased the number of outside directors and established a Nomination and Compensation Advisory Committee. I think JX Advanced Metals has put a system in place that is appropriate and sufficient for a publicly traded company. The test now will be whether the system functions effectively.
- Futamiya:
- From a risk perspective, the question is how to create products that follow on from the mainstay sputtering targets for semiconductors and treated rolled copper foil. There is always a risk that there will be no follow-on product. In this regard, the company must strengthen measures that include investing in startups, M&A, other approaches to gaining access to the technological capabilities of other entities, and open innovation.
- Sakuma:
- I don't know how the world will change in the future, but what I do know is that cost-push factors will increase and competition will intensify. These developments increase the likelihood of a double punch-higher costs and lower selling prices. So, what can the company do? It will do what it must. In other words, the manufacturing floor must reduce costs, the development department must ensure technological advancement, and the sales department must be courageous in imple-menting pricing policies. These areas must be seen through to the end.

- Kawaguchi:
- On a cost-related note, the cap on overtime work in the transportation industry became effective in April 2024. JX Advanced Metals also transports materials and products, so the labor of people involved and the associated costs cannot be ignored. Structural reform in the transportation industry has not progressed well, particularly in Japan. Dealing with risks related to transportation costs in the future will be important.
- Itoh:
- In any case, there is no doubt that the world economy and global trends are undergoing major changes. The perspective of leveraging change as a source of growth is becoming more critical. For example, while a conflict between the U.S. and China is not desirable, such conflict could change the supply chain and enhance the company's value. A company must always be thinking about what it can do when change occurs.
- Tokoro:
- In that sense, the opportunities for the company, with-out a doubt, are carbon neutrality and circular economies. Carbon neutrality is an area JX Advanced Metals can take advan-tage of through technological capabilities in any aspect of electrification, digitalization, consolidation, high functionality, and miniaturization. In the case of circular economies, today's conventional linear economy is a oneway street: materials are processed into advanced materials. The ability to create a recycling cycle, however, should become a major strength of the company.
Green Transformation (GX) Initiatives
- Murayama:
- JX Advanced Metals pursues environmental initiatives based on the three pillars of decarbonization, resource recycling, and nature-positive. How do you view our measures to date?
- Futamiya:
- The company created a framework for communicating the role of copper in society through the Sustainable Copper Vision and the Green Enabling Partnership. This framework is very significant. For example, many companies face difficulties in complying with Scope 3. If more people become aware that JX Advanced Metals technology can make a contribution in this area, I am sure there will be a large influx of people wanting to use the company's products.
- Sakuma:
- Coming from a background in the steel industry, I inevitably compare copper to steel. However, copper is in a very privileged position in an electrified society, where its characteristics allow for both business and GX. This is another area of strength for the company. At the same time, the world's understanding of copper is not as advanced as it should be. Getting this message out will require more effort by the company and the industry as a whole.
- Kawaguchi:
- I think the same as Mr. Sakuma about the three pillars of decarbonization, resource recycling, and nature-positive. In other industries, these three would be considered separate. In the case of copper, I think the company is in a very fortunate position to achieve these three pillars through regular business activities. For this reason, I would like to see the company leverage its IPO as an opportunity to tell the world even more that JX Advanced Metals is on the leading edge of GX.

- Tokoro:
- There is no doubt that the company is becoming a leader among its peers in Japan in terms of environmental initiatives. However, the three areas of decarbonization, resource recycling, and nature-positive are not necessarily reciprocal in the sense that extensive efforts in one will have a positive impact on any other. I think the demands of society for balance change constantly, and the company is entering a phase in which it must determine quantitatively how it will strike a balance among these three factors.
- Itoh:
- In the past, a company's primary purpose was to create jobs, make a profit, and contribute to the wealth of society. In addition, companies must now take a stance on issues as citizens of our communities, including stances on environmental and human rights issues. The level of difficulty may be challenging, but opportunities await those who strive to the end. This is a major point for the company.
Initiatives Related to Human Capital Management
- Murayama:
- We are investing more aggressively than ever in human resources to achieve sustainable growth. What challenges do you see regarding our organizational culture and human resources development?
- Tokoro:
- I work in a university setting, so I understand the difficulty of human resources development in these times of change. Innovation requires new thinking and ideas, including those that are a bit outside the box. The larger and more technologically advanced a company, the more susceptible it is to a kind of homogeneity. Staying inside the box can be a strength as well, so the balance is not easy. It's not always a good idea to think outside the box...
- Kawaguchi:
- My impression of the organizational climate is one of vertical separation by division. This structure might be due to the history of the company. I understand you are working to improve in this area, including exchange personnel across divisions, but stepping up these exchanges to a new level could be an opportunity for innovation, as Ms. Tokoro mentioned.
- Futamiya:
- The company needs people who understand ESG and the SDGs as a matter of course. People who can put these concepts into action as a foundation for business. The company needs talent who can think of new ideas beyond conventional common sense and aspire to new challenges without fear of failure. Of course, that would be a luxury for any company.

- Itoh:
- Japanese society as a whole has been very slow to invest in human capital over the past 20 years. For one, the wage structure has changed little. By so many measures, the use of money for human resources has been very limited. JX Advanced Metals is really no exception to this rule. Conversely, if the people aren't in place to take on new developments in the future, it's all just so many castles in the air. In this sense, the company must think carefully about investments in human capital.
- Sakuma:
- As a manufacturer engaged in advanced manufacturing, the group enjoys many people who think extremely scientifically and rationally. The trick, however, is to embody this thinking as an organization. Since the company is under a parent, it doesn't necessarily work completely independently and proactively. I get the impression that this attitude is mirrored ultimately in each individual. When JX Advanced Metals becomes a publicly traded company and gains more independence, thinking and acting independently will become even more important.
Expectations and Roles of the JX Advanced Metals Group
- Murayama:
- I appreciate your comments and the fact that they represent varied professional standpoints. Last, looking beyond the IPO, what are your expectations for the JX Advanced Metals Group?

- Sakuma:
- For the time being, the main is to go public, but going public is only just a start. In the case of your company, the most important thing is to be technology-based and contribute to society through that technology. I come from a similar metals industry background, so I feel the challenges are common. I hope to offer advice in the future based on my experience.
- Futamiya:
- As a corporate executive myself, I hope to offer ad-vice based on my knowledge and experienceーboth positive and negativeーof compliance, governance, and sustainability. Yours is a very traditional and proud company, so there will be both positive aspects and challenges. As a business person in a different industry, I hope to share some of my observations and questions.
- Tokoro:
- I specialize in the technical aspects of resource recycling, and I also work in a university setting, so I think my role is to provide opinions on the direction of the enterprise from a long-term perspective. In connection with the topic of human resources development I mentioned earlier, I think I can contribute in this area by offering effective access to academia.
- Kawaguchi:
- A company is made up of people, so it cannot survive unless it offers workplaces where people want to work. At the moment, everyone is working toward the single goal of an IPO. Once things settle down, the company needs to focus on encouraging employees to think independently and work under their own initiative. I want to provide feedback in terms of the company's vision, mission, and future challenges.
- Itoh:
- In the world of economists, the expressions bird's eye, bug's eye, and fish's eye come up. A bird's eye view is seeing the movement of the world on a macro scale. The bug's eye view looks closely at the details. The fish's eye view looks at changing trends. As an outside director, speaking from a bird's eye view comes across as if one is writing a book on economics. We must listen to the bug's eye view arguments while speaking from a bird's eye view. The fish's eye view is also important. As you mentioned today, many things are moving rapidly, and I hope to provide solid input about how changes are occurring and how those changes affect corporate management.
- Murayama:
- Thank you today for your many fresh insights from an outside perspective. I know we as management will take these comments seriously and apply them to how we guide the company. I look forward to your continued advice and support.