To enhance enterprise value based on efficient management throughout the Nippon Mining Holdings Group, and ensure the optimal allocation of management resources, Company Group management is structured around basic management agreements between Nippon Mining Holdings (the Company), as a pure holding company, and its core operating companies while the Company Group respects the operating autonomy of each Group company. The Company's basic policy with regard to corporate governance is to maintain effective control over Group operations and ensure management transparency essentially by keeping operations separate from Group management through the holding-company system.

In line with this basic policy, the Company ensures due respect for all its stakeholders-shareholders, employees, business partners and local communities-by managing its affairs with propriety and efficiency through enhanced management structures and internal control systems. By ensuring harmonious relationships with stakeholders, the Company Group continues to increase corporate value and ensure sound corporate management.

(1) Basic approach
Under the supervision by the Internal Control Promotion Office, the Company reinforces and promotes its internal control system and internal control-related measures. The Group Internal Control Committee discusses and deliberates on policies in such areas as planning, documentation and evaluation of internal control on a Company Group-wide basis.

(2) Progress
Basic approach to building an internal control system With regard to the development of its internal control system, the Company formulated an overall system to ensure that Company operations are carried out correctly in accordance with Article 362, Paragraph 4-6 of the Corporation Law and Article 100 of the Corporation Law Enforcement Regulations at a meeting of the Board of Directors held on May 10, 2006. This system is subject to ongoing reviews and any necessary amendments to ensure that Company operations remain in accordance with the enactment, revision or abolition of relevant laws and regulations and reflect changes in social conditions.

Compliance
In May 2006, we formulated the Group Compliance Basic Regulations, and set up a whistleblower system at the Company, having previously taken this measure at each of the core operating companies. As part of efforts to further expand and strengthen our compliance commitment, we also set up in October 2006 the Nippon Mining Holdings Group Compliance Committee, which holds compliance meetings jointly with major Group companies, including core operating companies.

Risk Management
Under the holding company system, each Group company implements risk management measures tailored to the characteristics of its own business activities. Overall responsibility for risk management rests with the Company, as part of its Group management activities.

→For more details please see the PDF file which was included in Annual Report 2008