Building a world-class mining business

Transcription

1 Building a world-class mining business Peter Kukielski Investor Day September - London and New York

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, 2009 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 Leadership Team Mining Business Coal Strategy Iron Ore Volume Improvements Iron Ore Quality Improvements Key Assets 2

4 Leadership Team

5 Strong Leadership Team Peter Kukielski GMB Head of mining Phil du Toit EVP Projects & Exploration Kleber Silva VP Iron Ore Johann Van Zyl VP Non-Ferrous David Vint GM HSE Ajit Mathew VP Human Resources Ram Saraf GM Finance Dr Olivier Tavchandjian GM Resource Planning Ron Hampton GM Project Controls Dr Peter Carr GM Mining M&A and Exploration Dr Armando Correa CTO Jonathan Heneghan Project Management Flavio Ferreira GM Mine Planning David Vint GM Coal Operations with a track record of project execution GMB Group Management Board; EVP Executive Vice President; VP Vice President; CTO Chief Technical Officer; GM General Manager; 4

6 Mining Business

7 Mining Business Portfolio Key assets and projects USA General Moly 12.6% interest Bosnia Iron Ore 51% Ukraine Iron Ore 95.02% Russian Coal 100% USA Iron Ore Minorca 100% Hibbing 62.3* Non ferrous mine Iron ore mine Coal mine Existing mines New projects Mexico Iron Ore Las Truchas & Volcan 100%; Pena 50%* Brazil Iron Ore 100% Canada Iron Ore 100% USA Coal 100% Mauritania Iron Ore Senegal Iron Ore 90% Algeria Iron Ore 70% Liberia Iron Ore 70%-85% South Africa Manganese 50% South Africa Iron Ore* Coal of Africa 15.98% interest Kazakhstan Coal 8 mines 100% Indian Iron Ore & Steam Coal McArthur coal 16.6% interest Kazakhstan Iron Ore 4 mines 100% Geographically diversified to globally service own steel plants * Includes share of production not controlled by ArcelorMittal. 6

8 Current Operations Iron ore and coal production (Mt) 2010F iron ore production - concentrate and pellet (Mt) 50 Iron Ore Coking Coal Concentrate Pellet Canada Ukraine USA Mexico Brazil Kazakhstan Algeria Bosnia 2010F production of coking and thermal coal (Mt) Coking Thermal F 0 Kazakhstan USA Russia Suite of iron ore and coal assets * Concentrate includes Lump, Fines and Sinter Feed 7

9 Target to be best in Safety Health and safety mining frequency rate* of mining peers Mining department frequency rate* ArcelorMittal Xstrata Rio Tinto Vale Q 08 2Q 08 3Q 08 4Q 08 1Q 09 2Q 09 3Q 09 4Q 09 1Q 10 2Q 10 Improving safety performance, trending towards world class standards * Lost Time injury frequency rate refers to World Steel Association standard: Fr = Lost Time Injuries per worked hours; based on own personnel and contractors 8

10 Coal Strategy

11 Coal Strategy Key coal assets. USA Coal mines Kazakhstan Coal Mines Russia Coal Mines Similar to iron ore we leverage logistical savings at some of our coal mines proximate to our steel plants ArcelorMittal has plans to further develop its coal assets: Growing existing operations Exploring for further opportunities with JV partners and Areas of interest Coal asset Macarthur Coal shareholding Actively reviewing opportunities in new frontiers Coal of Africa Shareholding Coal plans are less developed than iron ore but we intend to grow 10

12 Iron Ore Volume Improvement

13 1.4 Iron Ore Resources Geographical split of iron ore resources* 2009 (Billion Mt) 2009 iron ore resources (Billion Mt) Canada Ukraine Other 1.4 Kazakhstan 1.8 USA 2.5 Brazil Brazil Liberia 3.7 Ukraine Liberia 7.9 Kazakhstan Canada 1 Total estimated resource of 19 Billion Mt * Final resource estimates expected The above preliminary estimates are based on surveys conducted to date and include inferred resources which, as of the date hereof, are still considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves. The potential quantity and grade is conceptual in nature; there has been insufficient exploration to date to define a mineral resource; and it is uncertain if further exploration will result in the above targets being delineated as a mineral resource. There is no certainty that the above preliminary assessments will be realized. 12

14 Better Resource & Reserve Management Resource and reserve compliance Current resource classification standards Full resource and reserve reviews of all assets is ongoing N Canada E.g. Russian resource classification alignment with regulatory requirements Up-date life of mine planning (add business value, finalise resource base for conversion into reserves) Further drilling to bring to international standards for regulatory disclosure SEC GKZ USA Kazakhstan Ukraine Algeria Bosnia Target: One standard Pipeline of exploration and prospecting projects in large landholding and tenement areas NI compliance expected in 2011, good progress in 2010 Jorc eq. Liberia Brazil Senegal Mexico Standardised resource classification underway all resources under one standard by end

15 Better Resource & Reserve Management Drilling Metres F Liberia 19,600 19,300 Senegal 24,500 18,900 Mauritania 1,400 2,500 Canada 7,000 9,600 12,700 45,000 Brazil 6,600 32,000 ( ) Mexico 14,082 25,699 24,180 65,300 Exploration programme to increase resource definition and expand and prolong mine life 14

16 Better Resource & Reserve Management New Final Pit Drilling and mine plan optimisation significantly increased the resource at Mt Wright (AMMC) 15

17 Expanding iron ore production to 100MT 2015 iron ore growth* target (mt) Iron ore development target to 2015* (mt) Target 100mt by Own production Strategic contracts F Efficiency Brow nfield Improvements** expansion Greenfield Cleveland Cliff expansion contract 2015 plan Strategic Contracts Base Production Planned Brow nfield Expansion Planned Greenfield Expansion Potential Brow nfield Projects Potential Greenfield Projects We have plans for growth beyond the 100Mt target in 2015 * 2015 strategic contracts include Kumba supply agreement (currently under arbitration) and the Cliffs-ISG contract which expires 31 Dec 2016; it does not include the Cliffs- Ispat Inland contract which expires 31 Jan ** Includes extended life of mine projects and returning to full capacity 16

18 Planned Growth Project Status Iron ore project timetable Selected scoping study project underway Scoping Study Initial production Ramp up Max production Serra Azul expansion, Brazil Ukraine expansion Pre Feasibility 1,900 8,000 Atasu mass mining and Kentobe open pit, Kazakhstan Bosnia Feasibility Canada Fire Lake 2,000 11,000-15,000 Implementation 500 4, AMMC Mine Equipment Canada Expansion Andrade Phase 2 Atansore Processing Western Range (Liberia) D.S.OWestern Range Concentrate Mexico, Las Truchas Exploration Senegal Karampada, India Approximately $4 billion growth capex over 5 years Structured gating programme used to reduce project execution risk Brownfield projects: AMMC Mine equipment; Canada expansion; Andrade phase 2 and Atansore processing Greenfield projects: Western Range (Liberia) 17

19 Iron Ore Quality Improvement

20 Best in Quality.. Kazakhstan Process study to concentrate the ore from Atasu and Kentobe, reaching a grade of 66% Fe in the concentrate Ukraine Process studies to concentrate the sinter feed from Artyom underground mine and concentrate from the open pit mine, reaching a grade of 62-64% Fe in the SF and 68% in the concentrate Bosnia Process study to reduce the silica content of the concentrate from the Prijedor mine using gravity and magnetic separation methods Algeria Process study to improve the quality of the fines produced by the Algerian mines using dry magnetic separation methods Mexico Process study to improve the silica grade of the Las Truchas concentrate; similar to Volcan Sonora mine Canada Process study to reduce the silica content of the concentrate from Mount Wright aiming a better DR concentrate Quality improvement projects to enhance revenue stream 19

21 Key Assets

22 ArcelorMittal Mines Canada Canadian industrial location Canadian mines overview ArcelorMittal Mines Canada (AMMC) formerly known as Quebec Cartier Mines (QCM) has the largest reserves of the group estimated at 7.9 billion tonnes at 29% Fe A similar enterprise to Rio Tinto s IOCC (Iron Ore Company of Canada) Bloom Lake Opportunity for expansion, capitalising on its existing infrastructure, product quality and experienced workforce. Advantageously located with an easy access to European and US markets. Mining expansion plan (Million mt) 25 Canada expansion Mine Equipment Canada base 8 2 Pre-feasibility stage 10 5 ` F 2015 Strategic advantage from exclusive use of own rail and port facilities * Audited by Pincock, Allen & Holt in

23 Ukraine Open Pit Kriviy Rih industrial location of mine and steel plant Ukraine iron ore plan (mt) Underground mine Kiev Kriviy Rih Open pit mines Pit 2 & Pit 3 Production of 12.4 million tonnes planned for 2011 Good iron ore resource base estimated at 1.8 billion tonnes Quality improvement plan underway - targeting 68% Fe Kriviy Rih Steel plant Iron ore mine Very competitive on cost Good opportunity for brownfield expansion Very close proximity to the steel plant, approx 5km, saving freight cost Ore shipped to China during downturn Customer location a key strategic advantage 22

24 Western Range (Liberia) DSO and Concentrate Project status First ore shipment planned for H Phase 1- DSO to produce 4 mtpa; Phase 2 a new concentrator to be built near Tokadeh Operable rail and port actioned in July 2010 Upgrade of the Buchanan iron ore port and material handling facilities on schedule Mineable resource is estimated at 320 mt at 50% Fe (with additional 2,000 mt resource at 40% Fe) US$ 310 million capex spend to date Iron ore expansion plan (Mt) PFS Project CAPEX DSO phase US$ 0.8 bn Concentrate phase US$ 1.2 bn 1 4 ` Liberia industrial location Atlantic Ocean Guinea Sierra Leone Nimba Buchanan Port upgrade for larger vessels Simandou Liberia Railway link from Yekepa to Buchanan (270km) Proposed concentrator at Tokadeh (30km from Yekepa) Yekepa Ivory Coast Township rehabilitation, roads, diesel power plant required as support infrastructure 15mt of iron ore production planned by

25 Recap