Transcript Second Quarter 2007

UK-Liberia
INVESTMENT FORUM 2012
Joseph Mathews, Head of Government & Community Relations, Mining
14 Sept 2012
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, 2011 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
Company Overview
Liberia railway
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
5.0
Frequency Rate
2.8
2.4
2.0
1.6
3.1
2.5
1.2
1.9
0.8
Long term safety targets
trending towards world class
2.0
1.4
1.0
0.0
1.0
0.0
2007
–
3.0
1.8
0.4
–
4.0
2008
2009
2010
2011
2013
Group Health and safety performance has
improved significantly since 2007
LTIF rate has more than halved and group is on
track for 2013 objectives
2006
–
–
2007
2008
2009
2010
ArcelorMittal
Anglo
Xstrata
2011
2012
Rio Tinto
2013
Vale
2014
Barrick
2015
2016
Newmont
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
3
Diversified leader in steel & mining
Largest steel producer (2010 crude steel mt)
98
35
15
Shougang
14
14
13
13
Hyundai
16
Sumitomo
16
Riva
17
SAIL
18
Evraz
18
ThyssenKrupp
19
Wuhan
22
Nucor
22
Gerdau
23
Ansteel
Jiangsu Shagang
JFE
Nippon Steel
POSCO
Baosteel
AM
23
Severstal
31
US Steel
35
Tata Steel
37
4th Largest iron ore producer (2011 MT)
374
Steel companies
192
149
21
Evraz
36
Metinvest
46
Anglo
48
Fortescue
AM
BHP
Rio
Vale
54
ArcelorMittal Steel business
• World’s No1 steel producer (~ 6% of world crude steel
output)
• 2011 EBITDA of US$10.1bn; only ~40% generated from
steel business in Europe and North American
• Balanced portfolio of cost-competitive assets in both
developed and developing markets (No1: EU; N Am; Africa,
LatAm, CIS)
• Broad range of high-quality finished and semi-finished
carbon steel products; Outstanding distribution networks
• Global presence  unrivalled knowledge base and
benchmarking
ArcelorMittal Mining business
• 2011 EBITDA of $3.1bn based on 28Mt iron ore and 4.9Mt of
coal shipped at market prices
• Represents ~30% of Group EBITDA in 2011
• 4th largest iron ore producer;
• Low 2nd-quartile cash cost for iron ore
• World-class iron ore reserve and resource
• Leverage ArcelorMittal managements entrepreneurial spirit
which has built the No 1 steel company,
• Operate in difficult political and geographical environments
• Developing commercial network
Diversified steel business (by product and geography) with rapidly expanding mining operations
Note: Iron ore production from latest public information
4
Mining business portfolio
Key assets and projects
Canada
Baffinland 70%
Ukraine
Iron Ore
95%
Bosnia
Iron Ore
51%
Russian Coal
98.3%
Kazakhstan
Iron Ore
4 mines 100%
Canada
AMMC 100%
USA Coal
100%
USA Iron Ore
Minorca 100%
Hibbing 62%*
Non ferrous mine
Mexico Iron Ore
Las Truchas &
Volcan 100%;
Pena 50%*
Kazakhstan
Coal
8 mines 100%
Algeria
Iron Ore
70%
Mauritania
Iron Ore
exploration
license
Indian Iron
Ore & Coal
exploration
license
Liberia
Iron Ore 70%
Iron ore mine
Coal of Africa
15.98%
Coal mine
Existing mines
Brazil
Iron Ore
100%
South Africa
Manganese
50%
New projects /
exploration
South Africa
Iron Ore**
Geographically diversified mining assets
* Includes share of production
** Includes purchases made under July 2010 interim agreement with Kumba (South Africa)
5
Mining reported separately since Q1 2011
Segmental EBITDA (US$mn)
1000
900
800
700
600
500
400
300
200
100
0
-100
FCA
Q4'10
FCE
Significant contribution to group EBITDA; more
stable than steel EBITDA
Long
Q1'11
Segmental EBITDA 2011
AACIS
AMDS
Q2'11
Q3'11
Flat Europe
15%
Long North America
1%
Long South
America
10%
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
Mining
Q4'11
Flat North America
17%
Mining
31%
AACIS
13%
•
Long Europe
5%
Distribution
3%
Flat South America
5%
New Mining segmentation promotes improved operating decisions and optimal capital allocation
6
Industry leading growth pipeline
ArcelorMittal iron ore growth plan (MT)
100
ArcelorMittal iron ore production growth plan (KT)
Liberia Phase
1&2
90000
Cost plus tonnage
Marketable tonnage
80000
Canada /
Brazil
80
14
70000
11
60
97%
Growth
60000
5
50000
84
40
40000
Marketable production
30000
54
20
20000
Cost-plus production
41%
Growth
10000
0
2011
Operational
effeciency
Brow nfield
Greenfield
2015 plan
•
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)
0
2010
2011
2012F
2013F
2014F
2015F
ArcelorMittal 2015 iron ore growth plans on track
7
Liberia Update
Liberia railway
Liberia Iron Ore Mines
• Ore deposits at Tokadeh,
Gangra & Yuelliton
• Phase 1 DSO mining from
Tokadeh & Gangra
• Concentrator planned in
Phase 2 at Tokadeh
• Railway link from
Tokadeh to Buchanan
(250 Km)
• Railway workshop and
Port at Buchanan
ArcelorMittal Liberia
9
Commenced mining last year with first
shipment in September 2011
10
Mining 4 million tons of DSO annually.
11
Shipped over 2.2 million tons to date
12
Liberia development
Liberia development
Liberia commercial development approach
Primary target market
•
Phase 1: 4 mtpa DSO
– Commercial ramp up H1 2012.
Trials at selected ArcelorMittal Steel
European plants and a range of
Chinese mills
– Build portfolio of long term
contracts which can be transitioned
into higher grade Phase 2 product
supply from 2015
Potential new market
Iron ore mine
Strategic trials in
high growth market
of South East Asian
market
Liberia
•
Phase 2: 15 mtpa concentrate from
2015
– Develop long term supply contracts
to sinter plants
– Studying opportunities to extend
market reach
Liberia greenfield planned expansion (Million MT)
16
12
8
15
`
4
0
1
2011
4
2012F
2015F
Liberia development on track with additional market opportunities under study
13
130,000 Visitors
3 Proposals
1 Queen
The ArcelorMittal Orbit
becomes one of the
stars of the London
Olympic Games.
This has been one of the most
successful and unforgettable
Olympic and Paralympic Games
ever and for ArcelorMittal to have
been a part of it is something
that we are all extremely proud
of – it has been a great symbol
of what steel can achieve.
- Lakshmi N. Mittal
14