EXPLOSIVES MARKET

The Company's business is primarily affected by the activity levels of the Latin American region's major mining companies, which directly and indirectly represent approximately 80% of copper production sales and approximately 5% of iron production sales. The remainder of the Company's sales are tied to production of other minerals by small and medium-scale mining operations, civil works and chemical sales.

In the global explosives market, there was evidence of a worldwide over-supply of ammonium nitrate, which has driven prices down in the last three years. Rather flat growth in local and regional market demand is expected in the short- and medium-term. This is primarily attributable to efficiency and production efforts by the larger mining companies. The Company seeks to consolidate its presence in the regional market, continuing to develop business in its Argentine, Brazilian, Colombian and Peruvian subsidiaries. Furthermore, the Company has entered new markets such as Asia Pacific, Oceania and North America, enabling it to diversify its sales and expand its global presence to around 40 countries.