Sterlite Industries (India) Limited - Sterlite Industries India Ltd.

Principal Raw Materials
Overview
The principal inputs of our copper business are copper concentrate, rock phosphate and power. We have in the past been able to secure an
adequate supply of the principal inputs for our copper production.
Copper Concentrate
Copper concentrate is the principal raw material of our copper smelter. In fiscal 2009, we sourced 92.0% of our copper concentrate
requirements from third party suppliers, either through long-term contracts or on spot markets. We purchase copper concentrate at the LME
price less a TcRc that we negotiate with our suppliers but which is influenced by the prevailing market rate for the TcRc. In fiscal 2009, we
sourced only 8.0% of our copper concentrate requirements from our own mines in Australia. We expect the percentage we purchase from third
party suppliers to increase in future periods as the reserves of our Mt. Lyell copper mine are expected to be exhausted by fiscal 2013. We
expect the percentage we purchase from third party suppliers to also increase in future periods to the extent we seek to increase our copper
smelting and refining capacity.
In general, our long-term agreements run for a period of three to five years, and are renewable at the end of the period. The quantity of
supply for each contract year is fixed at the beginning of the year and terms like TcRc and freight differential are negotiated each year
depending upon market conditions. In fiscal 2009, we sourced approximately 62.0% of our copper concentrate requirements through long-term
agreements.
We also purchase copper concentrate on a spot basis to fill any gaps in our requirements based on production needs for quantity and quality.
These deals are struck on the best possible TcRc during the period and are specific for short-term supply. In fiscal 2009, we sourced
approximately 38.0% of our copper concentrate requirements through spot purchases.
Rock Phosphate
Our rock phosphate is currently sourced primarily from Jordan pursuant to contracts renewed on an annual basis, with pricing fixed for the
year. These contracts provide for minimum supply quantities with an option to increase if required. We utilize other sources in Egypt, Israel
and Algeria to procure additional rock phosphate as required.
Power
The electricity requirements of our copper smelter and refinery at Tuticorin are primarily met by the on-site captive power plants. Our
captive power plants at Tuticorin operate on furnace oil that is procured through long-term contracts with various oil companies. We have
outsourced the day-to-day operation and maintenance of our captive power plants at Tuticorin. Our Silvassa facility relies on the state power
grid for its power requirements.
Distribution, Logistics and Transport
Copper concentrate from the Mt. Lyell processing facility is transported by road to a rail head and then transported by rail to the port of
Burnie, Tasmania, from which it is shipped to the port of Tuticorin in India. Copper concentrate sourced from both our Mt. Lyell processing
facility and from third parties is received at the port of Tuticorin and then transported by road to the Tuticorin facility.
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