Mining Strategic Progress - Exploiting our potential ArcelorMittal Mining Canada, June 29, 2015 Bill Scotting, Executive Vice President and CEO

Transcription

1 Mining Strategic Progress - Exploiting our potential ArcelorMittal Mining Canada, June 29, 2015 Bill Scotting, Executive Vice President and CEO Mining

2 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, 2014 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

3 Agenda Day 1: Monday 29th June 2015 Montreal Attendees Mining Presentation and Dinner Bill Scotting Kleber Silva Simon Wandke Pierre Lapointe Daniel Fairclough IR Team Day 2: Tuesday 30th June 2015 Mont-Wright Mines expansion in Mont-Wright Pierre Lapointe Martin Plante IR Team Day 3: Wednesday 1 st July 2015 Port-Cartier Rail and port visit at Port-Cartier Pierre Lapointe Pellet plant IR Team 2

4 Introductions Bill Scotting EVP and CEO Mining Kleber Silva EVP, Iron Ore Operations Simon Wandke VP, CMO Mining Pierre Lapointe VP, CEO AMEM-AMIC Martin Plante GM, AMEM Mt Wright 3

5 Key themes H&S performance Strategic continuity, adapted to the evolving external environment: Low capital intensity growth Operational excellence and costs Targeted marketing strategy Delivering on our commitments: Maximising potential Significant cost reductions Product/market flexibility supporting top-line Core strengths support development of a world class mining business 4

6 Ongoing focus on safety ArcelorMittal Mining injury frequency rate* On-going focus To continue targeting of zero fatalities and serious injuries Trending towards world class performance Q 15 To manage occupational health exposures To demonstrate environmental stewardship Safety remains the No1 priority for ArcelorMittal * World steel association -standard: LTIF = Lost Time Injuries per worked hours; based on own personnel and contractors 5

7 Mining remains a key part of ArcelorMittal portfolio Key pillar of ArcelorMittal Mining strategy with 2 distinct points: Vertical integration for cost plus business - Leverages local source, close proximity to steel assets. Required cost structure to maintain asset Market facing tonnes - Run as commercial operation, focused on value, products and costs Mining business focussed on cost reduction Biggest pillar is in Canada with 2/3 of market facing tonnes Even in low iron ore environment cost reduction efforts exceed expectation and assets remain competitive Mining provide cross cycle hedge and maintains flexibility and optionality to create value A differentiated Mining business within ArcelorMittal 6

8 Strategic pathway to deliver mining value Strategic pathway Growth create future options Exploration & development Deliver on project pipeline Customer strategic alliances M&A License to Operate Current Assets Developing people Expansion of resource base Market driven products Improving health and safety performance Optimization Market development Customer relations and solutions Supply chain excellence Quality improvement and operational efficiencies Knowledge networks Production to planned levels at planned cost Meaningful stakeholder engagement contributing to business goals Corporate responsibility supporting sustainability Exploiting our potential 7

9 A global mining portfolio addressing Group steel needs and external market Key assets and projects Canada Baffinland 50% (1) Bosnia Iron Ore 51% Ukraine Iron Ore 95.13% USA Iron Ore Minorca 100% Hibbing 62.31%* USA Coal 100% Canada AMMC 85% (2) Kazakhstan Coal 8 mines 100% Kazakhstan Iron Ore 4 mines 100% Iron ore mine Mexico Iron Ore Las Truchas & Volcan 100%; Pena 50%* Liberia Iron Ore 85% Coal mine Existing mines Brazil Iron Ore 100% South Africa Iron Ore** Geographically diversified mining assets * Includes share of production ** Includes purchases made under July 2010 interim agreement with Kumba (South Africa) 1) Following an agreement signed off in December 2012, on February 20th, 2013, Nunavut Iron Ore subscribed for new shares in Baffinland Iron Mines Corporation which diluted AM s stake to 50% 2) January 2nd, 2013 AM entered into an agreement to sell 15% of its stake in AM Mines Canada to a consortium lead POSCO and China Steel Corporation (CSC). 3) New exploration projects, Indian Iron Ore & Coal exploration, Coal of Africa (9.71%) and South Africa Manganese (50% ) are excluded in the above. 4) On January 19, 2015, ArcelorMittal announced the sale of its interest in the Kuzbass Coal mines in the Kemerovo region of Siberia, Russia, to Russia s National Fuel Company (NTK). This transaction closed on December 31, ) Algerian state owned companies Sider and Ferphos Group signed an agreement whereby the company s interest in Tebessa mines in Quenza and Boukharda is diluted from 70% to 49%. The transaction was completed in January 10,

10 AMMC is our flagship iron ore asset Expansion to 24mt delivered Significant resource base Daily records show potential in system Now targeting 30Mtpa capability by chasing the shifting bottleneck Incremental investments for debottlenecking as required: Mt Wright mine optimization, Fire Lake expansion (richer ore) and crusher debottlenecking Rail winter reclaim capability, long train capability, additional sidings Additional conveyor capacity at port Significant cost benefits from scale Potential to expand beyond 30Mtpa at low capital intensity Stretching existing assets with limited capex to maximize potential value 9

11 Strategic continuity, but reflecting the new market reality Liberia: Phase 1 production & shipments of ~5Mt expected in 2015 Group marketable iron ore shipments (Mmt) +58% Phase 2 expansion is delayed following contractors declaration of force majeure on August 8, 2014 due to the Ebola outbreak With the ensuing rapid deterioration of iron ore prices, the Company is assessing its options to progress with this phase Baffinland JV ERP progressing: Production commenced with stockpiling at port First shipment due July 2015 in open water season Marketable iron ore shipments growth expected of ~5% in 2015 v 2014 Value driving growth 10

12 Relentless focus on costs is producing real savings Cost per tonne F (Base 100=2012) Iron ore cost savings of 15% targeted in 2015 v 2014 Mines Canada Concentrate Liberia DSO Kazakhstan Coal 2012 Liberia ramp up started -40% -46% Ebola outbreak -14% F F F Mining to remain FCF positive at <$50/t iron ore Cost is on the basis of cost of sales 11

13 Supported by global procurement Hydrocarbons Tyres Add picture 40% reduction 20% reduction Contract linked to underlying market indices ~40% reduction in input cost indices flowing through Tyres - a key global procurement category Contracts re-negotiation link base prices to global indices for key input drivers Declining market indices for these key drivers coming through in purchase price Benefiting from global commodity trends * Hydrocarbons reduction 2014 average to 2015; Tyres reduction from Q to 1Q

14 Marketing strategy targets future volumes and customer needs Developing the right products and mix by aligning ore and coal grades to long run demand expectations Developing the right customers through strategic trials, considering logistics requirements and potential blend optimisation Leveraging Group knowhow to achieve the right price (value in use) for our products Optimizing logistics to market for margin expansion Targeted niche marketing strategy Focus on AMMC and ArcelorMittal Liberia as our largest marketable tonnes assets 13

15 Coal business restructured for the new environment Key coal assets USA Coal 100% Kazakhstan Coal 8 mines 100% Coal shipments (Mmt) Kuzbass coal mines disposal Coal business restructured for the new environment: Kuzbass disposal in 2014 US asset focused on domestic market rather then export orientated F A restructured coal business * On January 19, 2015, ArcelorMittal announced the sale of its interest in the Kuzbass Coal mines in the Kemerovo region of Siberia, Russia, to Russia s National Fuel Company (NTK).This transaction closed on December 31, ** Indian Coal exploration and Coal of Africa (9.71%) are excluded from the above illustration. 14

16 Recap Continued improvement in H&S performance Strategic continuity, but adapted to the evolving external environment: Focus on value, with incremental, low capital intensity growth Operational excellence and cost reduction Targeted niche marketing strategy and product development Delivering on our commitments: Maximising potential from existing assets AMMC ahead of plan and expectations Significant cost reductions coming through Product/market flexibility in today s environment supporting top-line Exploiting our potential 15