Arcelormittal’s North and south American iron ore projects


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Ronald Hampton, Vice President and Project Director, from Baffinland Iron Mines Corporation delivered this presentation at the 2012 Americas Iron Ore conference. Americas Iron Ore is one of the most respected annual gatherings for North and South American iron ore markets and its agenda features: iron ore industry and market developments; new project developments and expansions in North and South America; overview of steel demand; iron ore spot market price; infrastructure and transport challenges and investment opportunities. For more information on the annual event, please visit

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Arcelormittal’s North and south American iron ore projects

  1. 1. Baffinland Mary River Project Moving to Development Americas Iron Ore Conference Belo Horizonte, November 2012
  2. 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, 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.
  3. 3. ArcelorMittal Mining The largest steel company in the world, producing nearly 10% of global steel, with operations in 60 countries, including Canada. Baffin Island Iron Ore
  4. 4. Americas Development ArcelorMittal has three active development projects currently in the Americas: • Andrade, Brazil • Mines Canada, Quebec Canada • Baffinland Mary River Project, Arctic Canada
  5. 5. Andrade Expansion Project Total investment: 70,9 MUSD New plant in operation since beginning of September Project to be concluded in Q4 2013 with old plant demolition Scope Remove Andrade old plant from the current location increasing its capacity from 2.0Mtpy to 3.5Mtpy.
  6. 6. AMMC – overview of assets • The Mont-Wright complex is one of North America’s largest iron ore operations • Production of 15Mtpa with expansion to 24Mtpa by 2013 underway; 6 • Port Cartier’s pellet plant has the capacity to produce 9.3Mtpa of iron ore pellets • 2 production lines operating 24/7 • Wholly-owned 420-km railway infrastructure • Infrastructure capacity capable of supporting future expansion scenarios • One of Canada’s largest private ports • Ability to handle cape-size vessels year round and to handle 30Mtpa without significant additional Capex • Additional development deposits at Mont-Reed and Fire Lake • Potential for future expansion given size of resource base and existing infrastructure AMMC is located in the Labrador Trough. It has fully integrated operations including wholly-owned port and rail. 6
  7. 7. AMMC expansion - from 14Mtpa to 24 Mtpa • Expansion of our Mont Wright mine at AMMC and concentrate capacity to 24Mtpa due 2013 (from 16Mtpa post operational improvements) approved • Expansion capitalizing on existing infrastructure, product quality and experienced workforce • Capex C$1.2bn for mine and concentrator plant expansion • Advantageously located with easy access to European and US markets Mining expansion plan (concentrate) Million mt * Total scheme investment of US$2.1 billion includes investment in expanding the pellet plant which has not yet been committed. Strategic advantage from exclusive use of own rail and port facilities. 14 15 1 9 5 10 15 20 25 2011F 2013 Brownfield expansion Canada base `
  8. 8. About Baffinland
  9. 9. Baffinland Investment • Owned 70% by ArcelorMittal and 30% by Iron Ore Holdings LP (private equity firm). • ArcelorMittal assumed majority ownership of Baffinland Iron Mines on March 1, 2011. • Focused exclusively on the exploration and development of our Mary River Iron Ore Project.
  10. 10. Project Location Yukon British Columbia Alberta Saskatchewan Manitoba Ontario Newfoundland and Labrador Québec New Brunswick Nova Scotia Prince Edward Island Northwest Territories Nunavut Arctic Bay Pond Inlet Clyde River Igloolik Hall Beach Iqaluit Steensby Port Mary River Mine Site Milne Port
  11. 11. Property Highlights 11 • High Grade: ~ 65+% iron – lump and fine iron ore • Large Tonnage Multi-generational Project: – Resources Deposit: • Reserve 375 million tonnes grading 65% Fe • Resource 441 million tonnes grading 65% Fe • High Quality Direct Shipping Iron Ore: – No washing; just crushing and screening; low undersize and excellent handling characteristics define it as a natural pellet or Direct Shipping Pellet (DSP) – 75% of output expected to be premium priced DSP ore; and – 25% premium fine ore sinter feed
  12. 12. 1 Deposits Nos. 1, 2 & 3 Deposit No. 3 Deposit No. 2 Deposit No. 1
  13. 13. Mary River Project
  14. 14. Lupin Jericho Boston Snap Lake Mine George Lake Meliadine Diavik Mine Ekati Mine Kubaka Rankin Inlet Fort Knox Mine Oktybar (Norlisk) Nanisivik Meadowbank Cullaton Lake Ulu Cambridge Bay Polaris Iqaluit Black Angel Kittila Kupol Julietta Red Dog Mine Raglan Mine Voisey's Bay Spitsbergen Coal Mines Project Location and Arctic Operations • Arctic mining proven through success of many other operations • Railroads over permafrost have been built • Ice-strengthened bulk carriers have been operated for decades by Fednav (MV Arctic and Umiak 1) North Pole Mary River Arctic Circle
  15. 15. Mary River Project Four year construction Project An open pit mine with mine life of 25 years A 150 km railway from mine to Steensby port Construction of a deep sea port capable of accepting vessels year round Mining Rail Transport Ship Transport
  16. 16. Key Statistics – Material Mined Key Statistic Units Value At Startup Value at 30 Mtpa Mining Rate Mine Life Years 25 Material Mined (Average Annual) Wet Metric Tonnes 62 million 120 million Material Mined (LoM) Wet Metric Tonnes 2,861 million Ore Mined (Average Annual) Wet Metric Tonnes 18 million 30 million Ore Mined (LoM) Wet Metric Tonnes 693 million Stripping Ratio Waste Tonnes / Ore Tonnes 2.4 3.1 Moisture Content % 2.0% 2.0% Average Ore Grade % 65.4% 65.0%
  17. 17. Key Statistics – Equipment/Consumables Key Statistic Units Value At Startup Value at 30 Mtpa Mining Rate Haul Trucks 320 Tonne Capacity 23 30 Annual Explosives Consumed Tonnes 25,000 48,000 Ice Cape Vessels 190,000 Tonne Capacity 8 13 Shipping Ships Loaded at Port 98 159 Rail Rolling Stock 4400 HP loco, 104 tonne capacity wagon 11 locos, 496 wagons 20 locos, 810 wagons Accommodations Capacity Rooms 600 (MR-350/SP-250) 785 (MR-510/SP-275) Installed Power MW 50 (MR-22/SP-28) 50 (MR-22/SP-28) Annual Fuel Consumed Litres 90 million 160 million
  18. 18. Mary River Rail Construction
  19. 19. Ravin River Bridge
  20. 20. 20 Steensby Port Site Schematic
  21. 21. Steensby Port Location 2
  22. 22. Port Construction
  23. 23. Project Shipping
  24. 24. 2 Shipping Route • Ice-strengthened ore carriers have been proven cost effective and reliable for well over 20 years at Arctic mines including Polaris, Nanisivik, Raglan and Voisey’s Bay Steensby – Rotterdam: 3,100 nautical miles Brazil – Rotterdam: 5,000 nautical miles Steensby Inlet Raglan Voisey’s Bay Greenland Quebec Nunavut Nanisivik Rotterdam Mine Site Polaris Mine
  25. 25. Steensby Inlet Shipping Route 2 Northern Foxe Basin Middle of Foxe Basin Photos taken in February 2007
  26. 26. Steensby Inlet Shipping Route 2 Western Hudson Strait Eastern Hudson Strait Photos taken in February 2007
  27. 27. Ship Design Current Design MV Arctic Capacity Length Width Draft Horsepower 185,000 DWT 330m 52m 20m 90,000 28,400 DWT 220m 23m 11.5m 14,500
  28. 28. Umiak 1 – Ice Breaker
  29. 29. Umiak 1 – Ice Breaker
  30. 30. What the Project means Local Population The timely development of the Mary River Project will generate: A comprehensive Inuit Impact and Benefits Agreement securing benefits for Inuit Significant training, employment, and business opportunities for Inuit Potential large scale regional economic development helping to promote social, political and economic growth for Nunavut Royalty and tax revenues Achievement of objectives outlined in the Nunavut Land Claims Agreement
  31. 31. Benefits to Canada: • Mary River is the largest mining project in development in Canada and one of the largest iron ore developments in the world. • The project will: 1) provide substantial long term economic benefits to Canada, particularly to the territory of Nunavut and especially for aboriginal people; 2) generate significant numbers of jobs and benefits to Canadian businesses; and 3) generate revenues to federal, territorial and provincial treasuries, particularly lessening Nunavut’s dependency on Ottawa. • Potential to generate increased infrastructure development in the North and provide significant investment opportunities for stakeholders. • Development of the project will enhance Canada's reputation for practical environmental management of inevitable industrial development in the North. • Provide +100,000 PYs direct, indirect, and induced employment across Canada. • Demonstrate Canadian sovereignty in the Arctic.
  32. 32. 32 Developing New Frontiers • Accomplishments: • Completed Advanced Feasibility Study • Significant Advancement in Permitting Process • Significant Improvement in Aboriginal Relations • Advanced Shipping Solution with Shipyards • Marketing Plan defined • Initiated Project Financing Process • Built World Class Project Team • What Remains: • Build/Develop • Operate • Expand with Opportunities
  33. 33. 33 “This Project represents an unprecedented development for Nunavut and for Canada in many respects—the development of a Railway in arctic conditions, conducting year round shipping with purpose-built ice-breaking ore carriers that are considerably larger than any other ships that have travelled in Nunavut waters, a projected mine life greater than 20 years and the potential for billions of dollars in benefits and revenues to be shared by the federal and territorial governments and the land and mineral owners, the Qikiqtani Inuit Association and Nunavut Tunngavik Inc.” Executive Summary, Nunavut Impact Review Board Report, September 2012
  34. 34. Climate in the Arctic Land of Unique Beauty
  35. 35. …but Challenging Logistics
  36. 36. Thank you