Unveiling a mining giant and expansion in Canada Steve Wood, Vice-President Iron Ore Americas RBC Iron Ore Investor Day April 10, 2012 0
Disclaimer Forward-Looking Statements This document may contain forward-looking information and statements about ArcelorMittal and its subsidiaries. These statements include financial projections and estimates and their underlying assumptions, statements regarding plans, objectives and expectations with respect to future operations, products and services, and statements regarding future performance. Forward-looking statements may be identified by the words believe, expect, anticipate, target or similar expressions. Although ArcelorMittal s management believes that the expectations reflected in such forward-looking statements are reasonable, investors and holders of ArcelorMittal s securities are cautioned that forward-looking information and statements are subject to numerous risks and uncertainties, many of which are difficult to predict and generally beyond the control of ArcelorMittal, that could cause actual results and developments to differ materially and adversely from those expressed in, or implied or projected by, the forward-looking information and statements. These risks and uncertainties include those discussed or identified in the filings with the Luxembourg Stock Market Authority for the Financial Markets (Commission de Surveillance du Secteur Financier) and the United States Securities and Exchange Commission (the SEC ) made or to be made by ArcelorMittal, including ArcelorMittal s Annual Report on Form 20-F for the year ended December 31, 2010 filed with the SEC. ArcelorMittal undertakes no obligation to publicly update its forward-looking statements, whether as a result of new information, future events, or otherwise. 1
Frequency Rate Relentless focus on safety ArcelorMittal Group injury frequency rate* (Steel and Mining) ArcelorMittal Mining segment injury frequency rate* relative to peers 7.0 6.0 3.2 2.8 5.0 2.4 4.0 2.0 1.6 1.2 0.8 0.4 3.1 2.5 1.9 1.8 1.4 1.0 3.0 2.0 1.0 Long term safety targets trending towards world class 0.0 2007 2008 2009 2010 2011 2013 0.0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 ArcelorMittal Anglo Xstrata Rio Tinto Vale Barrick Newmont Group Health and safety performance has improved significantly since 2007 LTIF rate has more than halved and group is on track for 2013 objectives Mining Segment Safety performance has also improved significantly Trending towards world class standards Safety remains the No1 priority for ArcelorMittal * IISI-standard: Fr = Lost Time Injuries per 1.000.000 worked hours; based on own personnel and contractors 2
A leading position in the most attractive markets Market position by region Leader in North America No 1 in Europe Leader in the CIS Emerging markets continue to offer the best organic growth potential for ArcelorMittal Superior demand growth potential We have the platform and experience: Leader in Latin America* Leader in Africa Already the steel market leader in Latin America, CIS and Africa ArcelorMittal Others ArcelorMittal focus areas for growth are Brazil We also have JV projects in the Middle East and China Industrial and commercial network focus on market sustainability and growth opportunity * Latin America includes Mexico. 3
Main markets Automotive Worldwide number #1 supplier Construction Worldwide number #1 supplier Household appliances Rapidly growing market segment The market leader in a number of steel segments 4
Vale Rio BHP AM Fortescue Anglo Metinvest Evraz AM Baosteel POSCO Nippon Steel JFE Jiangsu Shagang Tata Steel US Steel Ansteel Gerdau Nucor Severstal Wuhan ThyssenKrupp Evraz Shougang Riva SAIL Sumitomo Hyundai Diversified leader in steel & mining Largest steel producer (2010 crude steel mt) 98 37 35 35 31 23 23 22 22 19 18 18 17 16 16 15 14 14 13 13 4 th Largest iron ore producer (2011 MT) 374 Steel companies 192 149 54 48 46 36 21 Diversified steel business (by product and geography) with rapidly expanding mining operations Note: Iron ore production from latest public information 5
Core strengths of mining business Able to leverage entrepreneurial spirit of ArcelorMittal Management Strong leadership team Significant reserve and resource base with tier 1 bias Scalable infrastructure Competitive position in terms of cost and product quality Appetite for challenging opportunities: risk/reward strategy World class project control and management Knowledge from operating in diverse political & geographical environments Core strengths support development of a world class business 6
Mining business portfolio Key assets and projects Canada Baffinland 70% Bosnia Iron Ore 51% Ukraine Iron Ore 95% Russian Coal 98.3% USA Iron Ore Minorca 100% Hibbing 62%* Non ferrous mine Iron ore mine Mexico Iron Ore Las Truchas & Volcan 100%; Pena 50%* USA Coal 100% Canada AMMC 100% Mauritania Iron Ore exploration license Liberia Iron Ore 70% Algeria Iron Ore 70% Kazakhstan Coal 8 mines 100% Indian Iron Ore & Coal exploration license Kazakhstan Iron Ore 4 mines 100% Coal mine Existing mines New projects / exploration Brazil Iron Ore 100% South Africa Manganese 50% South Africa Iron Ore** Coal of Africa 15.98% McArthur coal 16.02% interest Geographically diversified mining assets * Includes share of production ** Includes purchases made under July 2010 interim agreement with Kumba (South Africa) 7
Extensive iron ore reserve base Iron ore reserves as at December 31, 2011 Liberia 0% Brazil 3% Mexico 8% Bosnia 1% Ukraine 8% Kazakshtan 5% USA 14% Canada 61% As at December 31, 2011 Total Ore Reserves Millions of Tonnes % Fe Americas and Africa Canada (excluding Baffinland) 1,965 28.8 Baffinland Canada 375 64.7 Minorca USA 159 23.1 Hibbing USA 387 19 Mexico (excluding Peña Colorada) 108 31 Peña Colorada Mexico 182 27 Brazil 131 57.8 Liberia 14 59.5 Sub-Total 3,321 32.7 Eastern Europe and Central Asia (1) Millions of Tonnes % Fe Bosnia 35 45.8 Ukraine Open Pit 268 34 Ukraine Underground 25 55 Kazakhstan Open Pit 154 40.1 Kazakhstan Underground 37 42.2 Sub-Total 519 38.2 Total 3,840 33.4 These reserves constitute the foundation of our life of mine plans including our planned growth strategy A very significant resource base that will constitute the basis for additional potential growth and ensure the sustainability of our operations Total iron ore reserves of 3.8 billion metric tonnes (1) Iron ore reserve estimates for Eastern Europe (Bosnia) and CIS (Ukraine and Kazakhstan) are reported only as aggregated proven and probable reserves as the methodology used in these countries (CIS standards) to estimate the exact degree of assurance and delimitation between the two categories cannot be fully defined. 8
Better resource and reserve management - the example here at ArcelorMittal Mines Canada Inferred resource estimates On-going exploration program and preliminary economic evaluations to support long-term sustainability Ore reserve estimates Support a mine life of 29 years (including planned expansion to 24 Mtpa by 2013) Measured and indicated resource estimates Pre-feasibility studies for additional growth Considerable Mineral Resource inventory to support significant future growth 9
Mining reported separately since Q1 2011 Segmental EBITDA (US$mn) Significant contribution to group EBITDA; more stable than steel EBITDA 1000 900 800 700 600 500 400 300 200 100-100 0 FCA FCE Long AACIS AMDS Mining Q4'10 Q1'11 Q2'11 Q3'11 Q4'11 Segmental EBITDA 2011 Mining 31% AACIS 13% Long South America 10% Flat North America 17% Long North America 1% Long Europe 5% Distribution 3% Flat South America 5% Flat Europe 15% All raw materials consumed from ArcelorMittal mines that could practically be sold outside the Group are now transferred internally at market prices Production from captive mines (limited by logistics or quality) continues to be transferred at cost-plus to our steel facilities Mining segment reported 2011 EBITDA of $3.1bn based on 28Mt iron ore and 4.9Mt of coal shipped at market prices (internally and externally) Mining segment represents ~30% of Group EBITDA in 2011 Steel segments are now more comparable on a like-for-like basis driving performance improvement New Mining segmentation promotes improved operating decisions and optimal capital allocation 10
Comparable margin to peers Mining EBITDA (US$mn) 3500 Iron Ore EBITDA margin FY2011* 80% 3000 2500 60% 2000 40% 1500 1000 20% 500 0% 0 2008 2009 2010 2011 Producer 1 Producer 2 Producer 3 Producer 4 Producer 5 ArcelorMittal* ArcelorMittal Mining is competitive on cost and quality * Notes: ArcelorMittal EBITDA margin based on market-priced tonnes (i.e. excludes cost-plus tonnes from Revenue and EBITDA); Producers include BHP, Fortescue, Kumba, Rio Tinto and Vale. Competitor data sourced from public information and has been prepared on a comparable periodic basis. 11
Growth plan update Upgraded railway line Mont linking Wright, mine with port Canada, at Liberia
Industry leading growth pipeline ArcelorMittal iron ore growth plan (MT) ArcelorMittal iron ore production growth plan (KT) 100 Liberia Phase 1 & 2 90000 Cost plus tonnage Marketable tonnage 80 Canada / Brazil 14 80000 70000 60 5 11 60000 50000 97% Growth 40 84 40000 Marketable production 54 30000 20 0 2011 Operational effeciency Brow nfield Greenfield 2015 plan 20000 10000 Cost-plus production 41% Growth 0 2010 2011 2012F 2013F 2014F 2015F Target 10% production growth in 2012 for iron ore Strategic contracts forecast of 16Mt by 2015 Target iron ore ~100MT by 2015 (incl. strategic contracts) ArcelorMittal 2015 iron ore growth plans on track 13
Iron ore and coal production and opex Iron ore production and operating unit cost (Index base 100=2011) Coal production and operating unit cost (Index base 100=2011) 160 Index 160 130 Index 130 150 140 150 140 120 120 130 130 110 110 120 110 120 110 100 100 100 100 90 90 90 80 90 80 80 80 70 70 70 70 2011F 2012 2013 2014 2015 2011F 2012 2013 2014 2015 Iron ore production Operating unit cost Coal production Operating unit cost Investments in AMMC and Liberia reduce the cost position of iron ore (excluding Baffinland) 2015 iron ore cash costs expected to be ~15% lower than 2011 (constant $ basis) As production increases for iron ore and coal, operating costs are expected to fall Note: Operating unit costs shown are on a FOB basis 14
AMMC Expansion project is under way Upgraded railway line Mont linking Wright, mine with port Canada, at Liberia
Canada will be a big part of it Canadian industrial location Bloom Lake ArcelorMittal Mines Canada overview Expansion of our Mont Wright mine at AMMC and concentrate capacity to 24Mt pa due 2013 (from 16Mtpa post operational improvements) approved Expansion capitalising on existing infrastructure, product quality and experienced workforce Capex C$1.2bn for mine and concentrator plant expansion* Cash cost is circa $35/tonne Advantageously located with easy access to European and US markets Mining expansion plan (concentrate) Million mt 25 20 15 10 5 9 1 14 15 2011F 2013 ` Brownfield expansion Canada base * AMMC 2013 brownfield expansion includes 1mt increase for spirals Strategic advantage from exclusive use of own rail and port facilities * Total scheme investment of US$2.1 billion includes investment in expanding the pellet plant which has not yet been committed to 16
Equipment Shovels 1 X BI 495 HR2 2 X P&H4100 XPC Drills 2 X 49HR 3 X P&H 320 XPC Trucks 13 X Cat 797 (400 t) 15 X Cat 793 (240 t)
Buildings New 8 Mtpa concentrator 6-bay workshop for 400t trucks Welding shop extension New building platforms for drills, trucks and shovels Two additional floors at administration offices
Housing 1000 units housing for temporary workers, and 260 Housing units for permanent employees Housing unit renovations in Fermont
Expansion impact in Port-Cartier Railway : new engines and cars deliveries to be complete in 2012 Railway : deforestation completed for new loop Shipping : new stacker in 2013 New shiploader 2013 20
2015 and beyond Baffinland Upgraded Upgraded railway railway line linking line Liberia linking mine Crushing/Screening mine with port with at port Liberia Baffinland at Liberia Plant
Baffinland project: feasibility study progressing Background In partnership with Iron Ore Holdings LP, ArcelorMittal has acquired a controlling interest in Baffinland; ArcelorMittal share is 70% Baffinland owns the Mary River project, a tier-1 iron ore resource in northern Canada Product: High grade: 66-68% fe iron lump and fine iron ore significant and scalable resource. High quality direct shipping iron ore No washing, concentrating, jigging; crushing and screening only 75% of output to be premium lump ore; and 25% premium fine ore sinter feed Baffin Island overview Proposed railway alignment Steensby inlet camp and proposed port Foxe Basin Mary River mine site Baffin Island Baffin Bay Progress On track to complete the feasibility study update by the end of 2012 prior to a construction decision review by the board In January of 2011, submitted a Draft Environmental Impact Statement (DEIS) to regulators initiating the process of environmental review and permitting Commercial Strategy: Build customer base in Atlantic and Pacific growth markets Optimise customer and market mix based on logistics and value in use for stable long term demand Price products to achieve full value in use premium Steensby Rotterdam = 3100 nautical miles Acquisition of Baffinland demonstrates ArcelorMittal s commitment to building a world-class mining business 22
ArcelorMittal Mining s commercial approach 23
Commercial strategy: Right product for the right market Commercial approach Build a globally trusted brand Position as preferred alternative to otherwise concentrated iron ore and coal market supply Building a balanced portfolio of global high quality customers Build 'customer driven culture in mining assets Applying a commercial market approach to M&A and greenfield growth options Right product and right quality to market Global sales reach Belo Horizonte, Brazil Luxembourg Shanghai, China Sales office Geographical spread Excellent global marketing footprint 24
Commercial segments 2011: Transitioning to commercial independence Commercial approach to mature markets Commercial approach to growth markets Hold market Share and capture incremental share Position product suite to grow Market share with selected customers Work with Customer on cost reduction in price sensitive steel demand market Build Long term supply arrangements based on customers strength MATURE MARKETS Selected strategic deals with customers Customer Relationship - Technical development Develop wide customer base to underpin sales in periods of weaker demand GROWTH MARKETS Improve/ maintain product specification where the Quality of material supply chain is deteriorating Adding growth to strengthen portfolio Mature market: Europe, NAFTA Growth market: China, India, Middle East, Russia and South America 25
Canada commercial development ArcelorMittal Mines Canada Primary target market Potential new market Domestic supply Canada (AMMC) Strategic trial in high growth market of Middle East and South East Asian market Iron ore mine Canada commercial approach 2011F AMMC market split* for external sales only 2011/2012 market transition Strategic trials in growth markets of Middle East and Asia Growth 49% Mature 51% Canada expansion progressing * Mature market: Europe, NAFTA; growth market: China, India, Middle East, Russia and South America 26
Recap We have the management bench strength in place to build a worldclass mining business Our growth is targeted towards global markets, including ArcelorMittal Our reserves and resources are now fully defined and provide outstanding support for our growth plan The AMMC expansion project is on its way We are unveiling a mining giant, and Canada is a big part of it Building a world class mining business 27
From our port to the world 28