ArcelorMittal South Africa

Overview

Vision & Mission
Vision – To be the preferred supplier of steel solutions for the development of subSaharan Africa Mission statement – We aim to achieve our vision by: - Producing safe, sustainable steel - Pursuing operational excellence in all business processes - Producing innovative steel solutions for our customers - Caring for our environment and the communities in which we operate - Striving to become an employer of choice - Living the brand values of sustainability, quality, leadership Target markets – Sub-Saharan Africa

Strategic goals
Industry leading value-creation for our shareholders

◦ Positive economic value add over the steel price cycle
Improve operating capabilities

◦ Value creating throughput increases ◦ Substantial reduction in hot rolled / coil real costs
Build on existing performance culture

◦ Create an environment that generates true employee pride and attracts, develops and retains top-performing people
Be a responsible corporate citizen

Evolution of ArcelorMittal South Africa • • • • • 1928 1989 1996 2001 2002 Iscor founded Iscor privatized & listed on the JSE Iscor embarks on major restructuring programme Unbundling of steel & mining into Iscor & Kumba Iscor gets into strategic partnership with LNM & BAA start-up LNM lifts stake to 52% and changes name to Ispat Iscor LNM Holdings and Ispat merge to form Mittal Steel Mittal Steel merge with Arcelor to form ArcelorMittal Name change to ArcelorMittal South Africa • 2004/5 • 2005 • 2006 • 2007 - .

1mt flat 1.ArcelorMittal South Africa’s standing • • Largest steel producer on the African continent Produces 5. This relationship facilitates: • • • • world-class R & D. and international market leverage • ArcelorMittal South Africa is amongst the world’s lowest cash cost producers . highly competitive supplier of steel products with turnover of R40bn Global standing is underpinned by being part of the world’s largest steel producer. ArcelorMittal. best practice processes.8 mt of liquid steel per annum • • • • 4. aggressive procurement contracts.7mt long Modern.

3 Mtpa from Thabazimbi Coke & Chemicals shipped* • Coke – 813 542 tpa • Tar – 139 536 tpa *12 months to December 2008 Saldanha Works Newcastle Works Durban South Africa Cape Town 5 .ArcelorMittal South Africa’s Operations Flat Steel Products shipped* • Vanderbijlpark Works – 2.7 Mtpa from Sishen • 2.3 Mtpa • Vereeniging Works – 0.6 Mtpa • Saldanha Works – 0.4 Mtpa Steel plants Iron ore source Johannesburg Vanderbijlpark Works Sishen Vereeniging Works Thabazimbi Iron ore consumed* • 4.8 Mtpa Long Steel Products shipped* • Newcastle Works – 1.

Pretoria .Vanderbijlpark .thin and ultra thin Newcastle Works Rolled profiles Vereeniging Works Rolled profiles (Vereeniging) Special profiles (Pretoria) Forged products (Pretoria & Vereeniging) Seamless tubes (Vereeniging) Directly reduced iron (Dunswart) Coke & Chemicals Coke batteries .Vanderbijlpark Tar plant .Tinplated Saldanha Steel (Pty) Ltd Hot rolled coil .Galvanised .Vanderbijlpark Joint Ventures Mr Eric Samson 50% 50% Macsteel International Holdings BV Export marketing Shipping Nampak Ltd 40% Collect a Can (Pty) Ltd Can Reclamation 60% 50% Anglo American Ltd 50% Consolidated Wire Industries (Pty) Ltd Wire drawing .Painted .Company Structure ArcelorMittal International Minorities 52% 48% ArcelorMittal South Africa Limited Flat steel products Long steel products Vanderbijlpark Works Hot rolled Heavy Plates Cold rolled Coated .Newcastle .

4 39.2 9.9 13.8 7.7 5.6 12.3 8.8 9 100 permanent employees 7% 4% 6% Vanderbijlpark Newcastle Vereeniging Saldanha Coke & Chemicals 10% 52% Corporate 21% 16% Africa’s largest steel company .7 5.8 6.ArcelorMittal SA 2008 key figures 2007 Sales (R billion) EBIDTA (R billion) Operating income (R billion) Headline earnings (R billion) Shipments (million tonnes) Steel production (million tonnes) 2008 29.5 5.1 5.

Products .

ArcelorMittal South Africa’s plant mix Operating unit Electric arc furnaces 3 Vanderbijl 1 Vereeniging Blast furnaces 2 Vanderbijl 1 Newcastle DRI kilns Corex and Midrex process Basic Oxygen furnaces 2 Vanderbijl Saldanha 3 Vanderbijl Plant .

Flat Steel Vanderbijlpark Works Process Flow Raw materials Iron Making Steel Making Rolling Plate Mill Iron Ore Plate Finishing units Basic Oxygen Furnaces (3) Hot Rolled Coil Hot Rolled Pickled and Oiled Coil 2050mm Hot Strip Mill (7 Stand) Dolomite Blast Furnaces (2) Continuous Pickling Line Cold Mill Coal Coke Oven Batteries (7) Continuous Casters (3) Annealing process Cold Rolled Sheet Electrolytic Galvanising Line Slabs Sinter mix Sinter plant EG Sheet Hot-dip Galvanising Line Galv and Colour Sheet Scrap Metal Electric Arc Furnaces (2) Annealing process Electrolytic Tinning and DWI Line Slab exports 10 0 .

28 GWh per day 23 300 tons per day 4 560 tons per day 65 000 kilo liters per day .Vanderbijlpark Works 2008 – Liquid steel production (‘000 tons) – Sales tons – Domestic percentage – Manpower – Area of site – Perimeter – Rail networks – Electricity consumption – Primary raw materials received – Secondary raw materials received – Water consumption 3 227 2 608 91% 4 582 2 300 Ha 20 km 256 km and 38 locomotives 6.

Saldanha Works Process flow Raw materials Iron Making Steel Making Rolling Fluxes Thin slab caster Roller Heath Furnace and Hot Strip Mill Corex Coal Iron Ore Conarc Furnace Temper Mill Pellets Direct Reduction (DR)/ Midrex Hot Rolled Coils 12 .

Saldanha Works 2008 – Liquid steel production (‘000 tons) – Sales tons – Domestic percentage – Manpower – Area of site – Perimeter – Electricity consumption – Primary raw materials received – Water consumption 857 805 59% 556 432 Ha 5.1 km 3.8 GWh per day 9 800 tons per day 7 500 kilo liters per day .

Long Steel Newcastle Works Process Flow • Induction Furnace • 2x Basic Oxygen Furnace • 2x Ladle Furnace • Vacuum degasser unit • 2x6 Strand continuous bloom casters 14 .

97 km 90 km 1 539 MWh per day 9 350t per day 17 000 kilo liters per day .Newcastle Works 2008 – Liquid steel production (‘000 tons) – Sales tons – Domestic percentage – Manpower – Area of site – Perimeter – Rail networks – Electricity consumption – Primary raw materials received – Water consumption 1 345 1 260 95% 1 921 1 697 ha 18.

Automotive & General Engineering industries Window Profiles Fencing Posts Sorted Scrap Metal MEDIUM BAR MILL + Ferro Alloying Elements Electric Arc Furnace SPECIAL PROFILE BUSINESS SMALL SECTION MILL Ladle Furnace Degassing FORGE BUSINESS BILLET MILL Round & Square. PRESSES Billets Continuous Casters SEAMLESS TUBE BUSINESS HOT SEAMLESS TUBE MILL COLD DRAWN SEAMLESS PLANT Hot Rolled Seamless: Line pipe and casings Cold Drawn Seamless for precision tubes drill rods and Hollow drill steel Bottom Poured Ingots Ingot 16 . shafts.Vereeniging Works Process Flow Raw materials Steel Making Business Units ROLLED PROFILE BUSINESS ROD & BAR MILL End products Hex Hollow Drill Steel Round & Flat Spring Steel Round & Square Profiles for the Reforging. rolls etc. Step and Hollow forgings such as barrels.

Vereeniging Works 2008 – Liquid steel production (‘000 tons) – Sales tons – Domestic percentage – Manpower – Area of site – Perimeter – Rail networks – Electricity consumption – Primary raw materials received – Water consumption 345 413 82% 948 100 Ha (5 sites) 15 km 16 km 1 100 MWh per day 1 200 ton per day 894 kilo liters per day .

Coke & Chemicals 2008 – Production (‘000 tons) • Market Coke • Tar – Sales (‘000 tons) • Market Coke • Tar – Manpower – Electricity consumption – Primary raw materials received – Water consumption 859 126 814 140 323 63 MWh per day 3 721 ton per day 1 395 kilo liters per day .

Product sales distribution 2008 Flat Carbon Steel Products Cold Rolled Colour Coated Electro Galvanised Hot Dipped Galvanised Hot Rolled Plate Slabs Tin Plate 10% 3% 2% 13% 56% 6% 1% 8% Long Carbon Steel Products Bars Semis Seamless Tubes Sections Manufatured Long Products Rails Rebar Windows Wire Rod 17% 2% 6% 25% 7% 1% 12% 3% 28% 19 .

1 Domestic Environment: Shipment to Industries GDP Sectors Transport 7.3 2 1.5 15 20 25 30 35 40 45 50 SARB Bulletin 2009Q1 SA Annualised GDP Source: SAISI 2009Q1 Shipments to Industries M anufacturing Construction W holesale 6.4 12.Sector Contribution to RSA Economic Growth vs Steel Sector Shipments 10 1 8.2 Steel Sectors A griculture 3 1.9 Fin Services 0 .5 31.9 11.9 7 Utilities/M ining 5.2 5 4 8.3 G overnm ent 0 0 3.9 21.

Production and Sales .

7% Europe 1.3% Europe 0.0% Africa Asia 3.3% Africa 8% Asia 5% Europe 1% Long carbon steel products Americas 1.7% 2.6% .0% South Africa 83.1% South Africa 86% South Africa 91.3% Asia 6.Geographical Sales Distribution 2008 T otal carbon steel products Flat carbon steel products Africa 10.

1% Service Centers 33.4% Machinery & Equipment 20.7% Construction 13.7% Convertors & Rerollers 13.5% Furnitue & Appliances 2.5% Automotive 7.8% Packaging 10.2% 1.Domestic Market Segmentation 2008 Flat carbon steel products Other 1.7% Equipment 7.7% Automotive 6.6% Machinery & Construction 24.3% Chem & Water 7.4% Pipe & Tube Automotiv e 6.8% .4% Furniture & Energy /Mining/ Appliances 1.5% Long carbon steel products Transportation Pipe & Tube 1.9% 14.2% Construction Energy/Mining/ 44.6% Pipe & Tube 20.4% Convertors/Rerollers 1.0% Packaging 6.6% Total carbon steel products Transportation 0.6% Chem & water 20.8% Serv ice Centers 21.7% Conv ertors/Re-rollers 9.

2008 8000 7000 6000 5000 4000 Flat carbon steel products ktonnes Long carbon steel products 3000 4855 2000 1000 0 5067 4863 4231 4084 2178 2194 2192 2144 7033 7261 7055 6375 5774 1690 2004 2005 2006 2007 2008 2004 2005 2006 2007 2008 2004 2005 2006 2007 2008 Total .Liquid Steel Production .

2008 7000 6000 Flat carbon steel products 5000 2344 2745 1810 1397 714 ktonnes 4000 1601 3000 1881 1311 1033 577 Long carbon steel products 364 3879 137 1540 4400 3485 4422 4375 2000 2728 1000 2402 2969 2887 2835 743 864 499 1151 0 1083 1431 1535 2004 2005 2006 2007 2008 2004 2005 2006 2007 2008 2004 2005 2006 2007 2008 Domestic Exports Total .Shipment Volumes .

taking into account the direction of market movements and exchange rate volatility. This price represents a world average price and sets the basis for ArcelorMittal South Africa’s maximum domestic price list. such as Korea. . China. Russia. to set its domestic (South African) steel prices. Brazil and the US. Germany.The Basket Pricing Model In 2006. ArcelorMittal South Africa switched to a pricing model that uses a “basket of domestic prices” in a number of comparator countries. Taiwan. The switch better aligns ArcelorMittal South Africa’s global domestic pricing structures with global commodity costs.

SHE/CSI .

Enriching our communities Our presence plays an important role in all the communities where we operate. Our future success partly depends on the wider world giving us the freedom and flexibility to succeed. Making steel more sustainable Using our expertise in steel to develop cleaner processes and greener products. ArcelorMittal will transform tomorrow by: Investing in our people Making each and every person working on our behalf feel valued.Corporate Responsibility: How we do what we do Our position in the industry brings unique opportunities and unique responsibilities. We will earn its trust to do so by behaving responsibly. …all this is underpinned by transparent governance The Corporate Responsibility strategy is driven through four focus areas .

Implementing a Corporate Responsibility strategy Human Resources Environment Environmental Communities Communities Commitments Shareholders Corporate Governance and sustainability reporting • Board independence • Equal rights among shareholders • Best in class disclosure and shareholder dialogue Social Commitments Commitments • Health & Safety • Equitable employment practices • World class training and skills development • Waste disposal • Ground water and air quality • Environmental compliance and legacy issues • ISO 180001 • Local economic development • Social investment • Community engagement .

5 0 2004 2005 2006 2007 2008 2009 ArcelorMittal South Africa 30 .5 4 3.5 1 0.Safety Remains our Priority Policy.5 Top management priority Health and Safety policy launched in March 2007 per 1m man hours Injury tracking and reporting database to monitor injuries.5 2 1. lost days and significant events in place Fatality prevention and process standards. initiatives and actions 5 Lost Time Injury Frequency Rate (Employees and Contractors) 4. and ‘golden rules’ introduced ‘Shop Floor’ auditing procedure rolled-out ‘Journey to Zero’ initiative launched (September 2008) 3 2.

water. Continuous improvement of processes. Comply with environmental laws. waste.Environment ArcelorMittal is committed to eliminate or minimize the main environmental impacts caused by its activities: Rational use of water. noise etc) Promote the reduction. All South African plants are ISO 14001 certified with the exception of Dunswart facility and Small Section Mill in Pretoria 31 • • • • . electricity and natural resources. reuse and recycling of waste generated by its processes. • Monitoring of impacts (air.

•Achieve and maintain ambient PM 10 dust levels of 40 μg/Nm3 (annual average). with the year 2005 as the baseline. by 2012. * Material efficiency rate = (Crude steel production – Waste)/Crude steel production *100% .Environmental Objectives The following strategic objectives reflect the company’s ambition to improve environmental performance •Reduce water abstraction per tonne of crude steel produced by 40% by 2010. •Improve material efficiency rate* by 20% by 2011. with the year 2005 being the baseline. measured along the fence line. with the year 2000 being the baseline. •To improve energy efficiency by 15% by 2014. •Reduce CO2 emissions per tonne of crude steel by 7% by 2014.

% shareholder in Collect-a-Can recycling company – R30 million preferential procurement initiative – Noah’s Ark – Care for Aids orphans – Small-scale community projects – Education with special emphasis on mathematics. multi-year programme to build 10 schools – Science centres in Sebokeng and Saldanha – .Enriching our communities • • Active CSI programme – R220m invested over the past decade Priority CSI areas • Key CSI projects – R250 million. science and technology – Job creation and poverty alleviation – Health & Safety – BBBEE & SME development – Volunteer Day: mobilising our employees to do good Our presence plays an important role in all the communities where we operate ..

whether as a result of new information. products and services. future events. statements regarding plans. ArcelorMittal South Africa undertakes no obligation to publicly update its forward-looking statements. Forward-looking statements may be identified by the words “believe. objectives and expectations with respect to future operations.” “target” or similar expressions. the forward-looking information and statements. 34 .Disclaimer This document may contain forward-looking information and statements about ArcelorMittal South Africa and its subsidiaries.” “anticipate. and statements regarding future performance. investors and holders of ArcelorMittal South Africa’s securities are cautioned that forward-looking information and statements are subject to numerous risks and uncertainties. or implied or projected by. many of which are difficult to predict and generally beyond the control of ArcelorMittal South Africa. These statements include financial projections and estimates and their underlying assumptions. or otherwise.” “expect. that could cause actual results and developments to differ materially and adversely from those expressed in. Although ArcelorMittal South Africa’s management believes that the expectations reflected in such forward-looking statements are reasonable.

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