Corporate presentation – may 2010
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Corporate presentation – may 2010 Corporate presentation – may 2010 Presentation Transcript

  • May, 2010
  • DisclaimerThis presentation relating to MMX Mineração e Metálicos S.A. (“MMX”) includes “forward-looking statements”, as that term is defined in thePrivate Securities Litigation Reform Act of 1995, in Section 27A of the Securities Act of 1933 and Section 21E of the U.S. Securities ExchangeAct of 1934. All statements other than statements of historical facts are statements that could be deemed forward-looking statements andare often characterized by the use of words such as “projects”, “expects”, “anticipates”, “intends”, “plans”, “believes”, “estimates”, “may”,“will”, or “intends”, or by discussions or comments about our objectives, strategy, plans or intentions and results of operations. Forward-looking statements include projections regarding our operating capacity, operating expenditures, capital expenditures and start-up dates.By their nature, these forward-looking statements involve numerous assumptions, uncertainties and opportunities, both general andspecific. The risk exists that these statements may not be fulfilled or, even if they are fulfilled, the results or developments described in suchstatements may not be indicative of results or developments in future periods. We caution participants of this presentation not to placeundue reliance on these forward-looking statements as a number of factors could cause future results to differ materially from thesestatements.Forward-looking statements may be influenced in particular by factors such as the ability to obtain all required regulatory approvals on atimely basis or at all, exploration for mineral resources and reserves, difficulty in converting geological resources into mineral reserves, andchanges in economic, political and regulatory conditions. We caution that the foregoing list is not exhaustive. When relying on forward-looking statements to make decisions, investors should carefully consider these factors as well as other uncertainties and events.MMX does not undertake to update our forward-looking statements unless required by law. This presentation is neither an offer to sell(which can only be made pursuant to definitive offering documents) nor a solicitation of an offer to buy any securities in the United States,or any other jurisdiction. The securities referred to herein have not been registered in any jurisdiction, and in particular, will not be registeredunder the U.S. Securities Act of 1933, as amended, or any applicable state securities laws and may not be offered or sold in the UnitedStates absent registration or an applicable exemption from such registration requirements.This presentation and its contents are proprietary information and may not be reproduced or otherwise disseminated in whole or in partwithout MMX’s prior written consent. Investor Relations Roger Downey – CEO & IRO Matheus Rosa – IR Manager Rafaela Gunzburger – Analyst Tel. + 55 21 2555-6197/ 6338 2 ri@mmx.com.br
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  • Seaborne Iron Ore Supply/Demand DEMAND SUPPLY Source: Credit Suisse Estimates • Seaborne market already at record levels. September is now very near the peak levels of June 2008. • Iron Ore Markets are tight and should be even tighter in 2010 and 2011. • Shipments-to-capacity could reach ~ 98%. 4
  • Chinese local iron ore production has been replaced byimports. It represented 75% of the total importedvolume in Nov/2009. Source: Credit Suisse 5
  • Brazil´s iron ore exports in march 2010 grew 24%on a year-over-year basis.China represented 50% of iron ore exports. Brazil´s Iron Ore exported volume ( million tons) 40 China World 35 30 25 20 15 10 5 0 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Source: Credit Suisse 6
  • Iron ore prices are expected to remainabove US$ 100/ton through 2012 7
  • Crude Steel Production Crude Steel Production (million tons) 2000 1600 1200 800 400 CAGR China 6.0%aa 0 China Others World • Chinese crude steel production has rebounded and is forecast to grow at least 6.0 (CAGR). • The world crude steel output is expected to recover back to pre-crisis levels by 2010. 8
  • Miners drastically pushed back investments Investments (US$ billion) 110 100 Planned 90 80 70 Approximately 60 US$ 200bn in capex 50 reduction 40 30 Estimated 20 10 0 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010e 2012e 2014e Source: Credit Suisse 9
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  • Since IPO (July’06), a lot has been delivered…May • Wisco’s Investment in MMX and Iron Ore offtake from MMX Sudeste;2010 • Sale of Corumba’s pig iron facility to Vetorial; • MoU with Wuhan: supply of iron ore and sale of stake in MMX; • Minera MMX de Chile: acquisition of mining rights and logistics already identified; • Development of MMX Sudeste System: acquisition of assets, logistics secured and expansion plans to 33.7 million tons per year of iron ore; • Sale of assets to Anglo American: MMX Minas-Rio and MMX Amapá; • Spin off of LLX; • Partnership with Anglo American and Cleveland Cliffs; • MMX Corumbá pig iron furnaces: implemented in 12 months; • MMX Corumbá iron ore mine: operational in 8 months; • MMX Amapá System, mine, railroad and port: operational in a 14-monthJuly record time;.2006 11
  • MMX structure Controlling Shareholders 43.55% Free Float 21.52% 34.93% 30% EBX Brasil S/ABom Sucesso under basicengineering studiesCorumbá System started-upin 2005 (Mining)Assets acquired by MMX (AVG:dec-07; Minerminas: jan-08) 12
  • The only one of its kind MMX uniqueness: High quality iron ore; Low cash cost, due to the high in situ ore content and high productivity; Secured logistics, through long-term agreements with rail, barges and port services providers, including LLX Sudeste Port, its sister company; The unique independent operating Brazilian junior mining company; Experienced Management in selecting high value mining assets, implementing and operating mining projects; Proven ability in delivering value to shareholders. 13
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  • MMX Sudeste System: competitive high-gradeiron ore producer with efficient logistics Bom Sucesso Tenement: A promissing world class resource 15
  • MMX Sudeste System: competitive high-gradeiron ore producer with efficient logistics MRS has potential for ~ 300 million tons/year 16
  • MMX Sudeste System: competitive high-gradeiron ore producer with efficient logistics Environmental and Construction Licenses obtained; Long term financing under negotiation; 50 million ton/year of iron ore Can be expanded to 100 million ton; Start-up second half 2011. 17
  • Serra AzulOverview 18
  • Serra Azul8.7 Mtpy of capacity reached in Oct’08 OPERATIONS SALES & LOGISTICS• Assets acquisition concluded in Jan./2008; • Railway capacity secured• Construction of Magnetic Concentration through long-term Plant and operational enhancements: 8.7 agreement with MRS up to 15 million tons as annual installed production Mtpy; capacity in Oct./2008. • Port capacity from mid-2011 untill 2032 secured through long-term agreement with LLX Sudeste Port; • Long-term agreements with domestic and international customers; • Wysco will off-take at least 50% of MMX Sudeste production. Magnetic Concentration Plant – Start-up Oct./2008 19
  • MMX Sudeste System:Growth and proximity to existing infrastructure MMX is the natural consolidator in the region 20
  • Bom Sucesso: Outstanding magnetite content and logistics • Acquisition of mining rights concluded in July/2008; • Unique magnetite content (close to 30%); • The closest iron ore asset to Sepetiba Bay – 240km;Expected Quality: • Greenfield basic engineering studies and environmental licensingFe: 67.2% P: 0.033% under development;SiO2: 2.5% PPC: 0.6% • Rail capacity under negotiation with MRS to extend current contractAL2O3: 0.5% FeO: 8.8% for additional 17 mt up to 2032. 21
  • MMX Sudeste: Connected to SudesteSuper Port by MRS MMX also has rights to use the Açu Super Port 22
  • MMX SudesteExport target of 32 million tons per year through Sudeste Super Port Sudeste Super Port can be expanded to 100 million tons per year 23
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  • Iron Ore in Chile:Quality, logistics and competitiveness • 4 mining rights (2 purchase and options agreements); • USD 44.5 million; • 50km from the Chilean coast, approx. 1,760 hectares; • Pellet feed with high magnetite content; • Existing railroad (FERRONOR). Preliminary tests in Ouro Preto pilot plant: Fe: 67.50% SiO2: 2.5% Al2O3: 0.85% P: 0.015% 25
  • Logistics: Puerto Punta Cachos • EBX has 240,000 ha property in the Atacama region; • Permits to develop the urban, industrial and port zones; • Water availability with permits; • Guaranteed site contract for: • 89 ha of premium area (port); • 782 ha of retro-area; • Unlimited scalability for a long- term development; • Located close to mining players; • Opportunities for industrial businesses: • Port / Thermo. 26
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  • MMX Corumbá Mineração• Unique high quality lump yield;• Current Capacity: 2.1 Mtpy.• MMX has Long Term Supply Agreement with traditional steel makers in South America and Europe;• Transport barges down the Paraguay River to Rosario Port;• MMX has long-term contracts with local and international barge operators;• Rosario Port in Argentina: Handymax vessels to Europe; 28
  • Iro n o re volumes estimates by System 29
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  • Closing of the deal with Wisco Equity investment in Iron Ore offtake Steel Plant at Açu MMX by Wisco Super Port Wisco acquired newly issued Offtake by WISCO of at least Cooperation Agreement common shares of MMX; 50% of the iron ore from Serra between EBX and WISCO for the Azul Mines; construction of an integrated Total subscription of US$ 400 million; steel plant at LLX’s Açu Super Possibility to extend the offtake Port; Equity participation in MMX of to at least 50% from Bom 21.52%; Sucesso Mines; WISCO will hold 70% and EBX (directly or through affiliates) will Proceeds will be fully directed to Combined exports of at least 16 hold 30% of the joint venture; the development of Sudeste millions tons per year of iron ore System; from MMX Sudeste System, once The minimum annual capacity of it is fully ramped-up; the steel plant will not be less than MMX shares issued at a per-share 5 million tons, with the possibility of price in reais1 equivalent to The Iron Ore Purchase and Sale increasing significantly; US$3.93; Contract shall be valid for 20 years as from April 1st, 2010. Funding can be raised from MMX issued 167,849,906 common China Development Bank, shares and minority shareholders Brazilian National Development were granted preemptive rights in Bank (BNDES) and through the share issue at a rate of 0.55. capital markets transactions MMX raised US$650M. EBX and WISCO will seek to obtain all necessary approvals for construction before May 31, 2010.1 - at the date of the Meeting of the Board of Directors that will approve the new issue of shares 31
  • WiscoWuhan Iron and Steel• The Chinese Wuhan Iron and Steel Corporation (WISCO) was created in 1955;• WISCO is the first giant iron and steel complex established after the founding of the People’s Republic of China;• WISCO has an annual production capacity of 31 million tons, ranking the third in China and the 7th largest steel producer in the world;• WISCO plans to expand its steel production capacity to 50 million tons per year, what would require a supply of approximately 80 million tons per year of iron ore;• The CEO of Wuhan happens to be also the President of CISA (China Iron and Steel Association);• WISCO is making great efforts to enter into the rank of the 500 top enterprises in the world and become an important automobile sheets producer in China by 2010. 32
  • THANK YOU 33