Mines & Money conferenceA growth storyPeter Kukielski, GMB Member, Chief Executive Mining                  21 March 2012  ...
Disclaimer Forward-Looking Statements            This document may contain forward-looking information and statements abou...
Today’s agenda• Overview and strategy• Core strengths• Iron ore growth plan to 100MT and beyond• Baffinland               ...
Relentless focus on safety     ArcelorMittal Group injury frequency rate*                                                 ...
Core strengths of ArcelorMittal                           Quality core assets                           Leader in auto Ste...
Diversified leader in steel & mining   Largest steel producer (2010 crude steel mt)    98                                 ...
Mining reported separately since Q1 2011Segmental EBITDA (US$mn)                                          Significant cont...
Mining business vision Vision:   To create shareholder value through operational excellence   and profitable growth while ...
Mining business portfolio                                                     Canada       Key assets and projects        ...
Extensive iron ore reserve base      Iron ore reserves as at December 31, 2011                                            ...
Comparable margin to peers      Mining EBITDA (US$mn)                                                                   Ir...
Core strengths Able to leverage   Strong leadership team entrepreneurial     spirit of      Significant reserve and resour...
Commercial strategy:Right product for the right marketCommercial approach                        Global sales reach Build...
Growth plan                                        Mont Wright, Canada,              Upgraded railway line linking mine wi...
Industry leading growth pipeline ArcelorMittal iron ore growth plan (MT)                                     ArcelorMittal...
With good project returns           Estimated capital costs of key planned growth                                         ...
Project status                 Liberia railway
Canada developmentArcelorMittal Mines Canada (AMMC)                                                                      P...
Liberia developmentLiberia development                                Liberia commercial development approach             ...
Potential growth beyond current plan Planned and potential iron ore growth targets (million metric tonnes) (Excluding stra...
Baffinland’s Mary River Project feasibility study progressingBackground                                                   ...
Project Location and Arctic Operations  • Arctic mining proven                                                            ...
Baffinland’s Sale ProductsExpected iron ore characteristics of the initial 10 years ofproductionDSP:     •   66% Fe, 2.4-2...
Building a world-class mining business                           Phase 1                                                  ...
Recap• We are Customer Focused: We have a range of competitive iron making raw  material assets in varied geographies and ...
Appendix
Mining volumes are growing         Mining EBITDA (US$mn)                                                                  ...
Coal businessKey assets and projects for coal business                                                                    ...
Reserve definitions Notes on mineral resource and ore reserve estimates          The ore reserve estimates have been prepa...
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Developing a world class mining business to supply the global steel industry - Presented at www.minesandmoney.com

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Developing a world-class mining business to supply the global steel industry

Outlook for global steel and implications for iron ore and coking coal demand
Drivers behind the development of ArcelorMittal’s mining business
Update on ArcelorMittal’s global acquisition and project development strategy
Key success factors for developing a world-class bulk commodities mining business

Peter Kukielski, Head of Mining, Arcelor Mittal

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Developing a world class mining business to supply the global steel industry - Presented at www.minesandmoney.com

  1. 1. Mines & Money conferenceA growth storyPeter Kukielski, GMB Member, Chief Executive Mining 21 March 2012 Mont Wright, Canada Mont Wright, Canada
  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. 1
  3. 3. Today’s agenda• Overview and strategy• Core strengths• Iron ore growth plan to 100MT and beyond• Baffinland 2
  4. 4. Relentless focus on safety ArcelorMittal Group injury frequency rate* ArcelorMittal Mining segment injury frequency rate* 7.0 (Steel and Mining) relative to peers 6.0 3.2 5.0 2.8 Frequency Rate 2.4 4.0 2.0 3.0 1.6 Long term safety targets 3.1 trending towards world class 1.2 2.5 2.0 1.9 1.8 0.8 1.4 1.0 1.0 0.4 0.0 0.0 2007 2008 2009 2010 2011 2013 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 ArcelorMittal Anglo Xstrata Rio Tinto Vale Barrick Newmont – Group Health and safety performance has – Mining Segment Safety performance has improved significantly since 2007 also improved significantly – LTIF rate has more than halved and group is on – Trending towards world class standards track for 2013 objectives Safety remains the No1 priority for ArcelorMittal* IISI-standard: Fr = Lost Time Injuries per 1.000.000 worked hours; based on own personnel and contractors 3
  5. 5. Core strengths of ArcelorMittal Quality core assets Leader in auto Steel Consistent World-class Mining Sustainable Strategy Returns Cost Improvement Stronger Balance Sheet ArcelorMittal in a strong position to respond to evolving markets 4
  6. 6. Diversified leader in steel & mining Largest steel producer (2010 crude steel mt) 98 ArcelorMittal Steel business • World’s No1 steel producer (~ 6% of world crude steel output) • 2011 EBITDA of US$10.1bn; only ~40% generated from steel business in Europe and North American 37 35 35 31 • Balanced portfolio of cost-competitive assets in both 23 23 22 22 developed and developing markets (No1: EU; N Am; Africa, 19 18 18 17 16 16 15 14 14 13 13 LatAm, CIS) • Broad range of high-quality finished and semi-finished carbon steel products; Outstanding distribution networks AM Evraz Riva SAIL Hyundai POSCO JFE Nucor Wuhan US Steel Ansteel Gerdau Severstal Tata Steel Shougang Nippon Steel Baosteel ThyssenKrupp Jiangsu Shagang Sumitomo • Global presence  unrivalled knowledge base and benchmarking 4th Largest iron ore producer (2011 MT) ArcelorMittal Mining business 374 Steel companies • 2011 EBITDA of $3.1bn based on 28Mt iron ore and 4.9Mt of coal shipped at market prices • Represents ~30% of Group EBITDA in 2011 • 4th largest iron ore producer; 192 • Low 2nd-quartile cash cost for iron ore 149 • World-class iron ore reserve and resource • Leverage ArcelorMittal managements entrepreneurial spirit 54 48 46 which has built the No 1 steel company, 36 21 • Operate in difficult political and geographical environments • Developing commercial network AM Evraz Metinvest Vale Anglo BHP Rio Fortescue Diversified steel business (by product and geography) with rapidly expanding mining operationsNote: Iron ore production from latest public information 5
  7. 7. Mining reported separately since Q1 2011Segmental EBITDA (US$mn) Significant contribution to group EBITDA; more stable than steel EBITDA 1000 900 • All raw materials consumed from 800 700 ArcelorMittal mines that could practically be 600 500 sold outside the Group are now transferred 400 internally at market prices 300 200 100 • Production from “captive” mines (limited by 0 -100 logistics or quality) continues to be FCA FCE Long AACIS AMDS Mining transferred at cost-plus to our steel facilities Q410 Q111 Q211 Q311 Q411 • Mining segment reported 2011 EBITDA of Segmental EBITDA 2011 Flat North America $3.1bn based on 28Mt iron ore and 4.9Mt of 17% coal shipped at market prices (internally and Mining externally) 31% • Mining segment represents ~30% of Group Flat Europe EBITDA in 2011 15% • Steel segments are now more comparable on a like-for-like basis  driving performance Long North America 1% improvement Long Europe AACIS 5% 13% Distribution 3% Long South Flat South America America 5% 10% New Mining segmentation promotes improved operating decisions and optimal capital allocation 6
  8. 8. Mining business vision Vision: To create shareholder value through operational excellence and profitable growth while caring for the environment and our people 7
  9. 9. Mining business portfolio Canada Key assets and projects Baffinland 70% Ukraine Iron Ore Bosnia 95% Iron Ore 51% Russian Coal 98.3% Canada Kazakhstan AMMC 100% Iron Ore 4 mines 100% Kazakhstan USA Coal Algeria USA Iron Ore Coal 100% Iron Ore Minorca 100% 8 mines 100% 70% Hibbing 62%* Mauritania Mexico Iron Ore Iron Ore Las Truchas & exploration license Indian Iron Volcan 100%; Ore & Coal Non ferrous mine Pena 50%* exploration Liberia Iron ore mine license Iron Ore 70% Coal mine Coal of Africa Brazil 15.98% Iron Ore Existing mines 100% South Africa Manganese 50% New projects / exploration South Africa Iron Ore** Geographically diversified mining assets* Includes share of production** Includes purchases made under July 2010 interim agreement with Kumba (South Africa) 8
  10. 10. Extensive iron ore reserve base Iron ore reserves as at December 31, 2011 As at December 31, 2011 Total Ore Reserves Millions of Tonnes % Fe Kazakshtan Americas and Africa Bosnia Ukraine 5% Canada (excluding Baffinland) 1,965 28.8 1% 8% Baffinland – Canada 375 64.7 Liberia Minorca – USA 159 23.1 0% Hibbing – USA 387 19 Brazil Mexico (excluding Peña Colorada) 108 31 3% Peña Colorada – Mexico 182 27 Brazil 131 57.8 Mexico Liberia 14 59.5 8% Sub-Total 3,321 32.7 Eastern Europe and Central Asia(1) Millions of Tonnes % Fe USA Bosnia 35 45.8 14% Canada Ukraine Open Pit 268 34 61% Ukraine Underground 25 55 Kazakhstan Open Pit 154 40.1 Kazakhstan Underground 37 42.2 Sub-Total 519 38.2 Total 3,840 33.4 • These reserves constitute the foundation of our life of mine plans including our planned growth strategy • A very significant resource base that will constitute the basis for additional potential growth and ensure the sustainability of our operations Total iron ore reserves of 3.8 billion metric tonnes(1) Iron ore reserve estimates for Eastern Europe (Bosnia) and CIS (Ukraine and Kazakhstan) are reported only as aggregated proven and probable reserves as the methodology used in thesecountries (CIS standards) to estimate the exact degree of assurance and delimitation between the two categories cannot be fully defined. 9
  11. 11. Comparable margin to peers Mining EBITDA (US$mn) Iron Ore EBITDA margin FY2011* 3500 80% 3000 60% 2500 2000 40% 1500 20% 1000 500 0% l* 1 2 3 4 5 tta 0 er er er er er uc uc uc uc uc i rM od od od od od 2008 2009 2010 2011 lo Pr Pr Pr Pr Pr ce Ar ArcelorMittal Mining is competitive on cost and quality* Notes: ArcelorMittal EBITDA margin based on market-priced tonnes (i.e. excludes cost-plus tonnes from Revenue and EBITDA); “Producers” include BHP, Fortescue, Kumba, Rio Tintoand Vale. Competitor data sourced from public information and has been prepared on a comparable periodic basis. 10
  12. 12. Core strengths Able to leverage Strong leadership team entrepreneurial spirit of Significant reserve and resource base with tier 1 bias ArcelorMittal Management Scalable infrastructure Leverage steel knowledge for right products Appetite for Competitive position in terms of cost and product quality challenging opportunities: World class project control and management risk/reward strategy Knowledge from operating in diverse political & geographical environments Core strengths support development of a world class business 11
  13. 13. Commercial strategy:Right product for the right marketCommercial approach Global sales reach Build a globally trusted brand Position as preferred alternative to otherwise concentrated iron ore and coal market supply Luxembourg Building a balanced portfolio of global high quality customers Shanghai, Build customer driven‘ culture in China mining assets Applying a commercial market Belo approach to M&A and greenfield Horizonte, Brazil growth options Right product and right quality to market Sales office Geographical spread Excellent global marketing footprint 12
  14. 14. Growth plan Mont Wright, Canada, Upgraded railway line linking mine with port at Liberia
  15. 15. Industry leading growth pipeline ArcelorMittal iron ore growth plan (MT) ArcelorMittal iron ore production growth plan (KT)100 Liberia Phase 90000 1&2 Cost plus tonnage Marketable tonnage 80000 Canada /80 Brazil 14 70000 97% 11 60000 Growth60 5 50000 84 40000 Marketable production40 30000 5420 20000 Cost-plus production 10000 41% Growth 0 0 2011 Operational Brow nfield Greenfield 2015 plan 2010 2011 2012F 2013F 2014F 2015F effeciency • Target 10% production growth in 2012 for iron ore • Strategic contracts forecast of 16Mt by 2015 • Target iron ore ~100MT by 2015 (incl. strategic contracts) ArcelorMittal 2015 iron ore growth plans on track 14
  16. 16. With good project returns Estimated capital costs of key planned growth Iron ore production and operating unit cost projects* in the iron ore industry (US$/t) (Index base 100=2011) 200 180 160 160 160 150 150 140 140 140 120 130 130 100 120 120 80 110 110 60 100 100 40 90 90 20 80 80 0 70 70 ArcelorMittal Tier 1 Brazil Tier 1 West Africa Tier 1 Australia Tier 1 Australia 2011 2012 2013 2014 2015 Planned growth Iron ore production Operating unit cost • ArcelorMittal’s iron ore growth projects are • Investments in AMMC and Liberia would improve competitively placed in terms of capex intensity the cost position of iron ore (excluding Baffinland) • And are well placed on the cost curve • 2015 iron ore cash costs expected to be ~20% lower • This means that project returns are attractive than 2011 (constant $ basis) even under conservative long-term price assumptionsArcelorMittal’s cost of adding iron ore production capacity is comparable to other major producers* Sources: Arcelormittal estimates and Citi Group estimates based on publicly available information•Excluding planned greenfield projects (such as Baffinland) and investment in expanding the pellet plant at AMMC which has not yet been committed to.Note: Operating unit costs shown are on a FOB basis 15
  17. 17. Project status Liberia railway
  18. 18. Canada developmentArcelorMittal Mines Canada (AMMC) Primary target market Potential new market Domestic Iron ore mine supply Strategic trial in high growth market of Middle East and South East Asian market Canada (AMMC)AMMC pellet and concentrate production (Million MT) Canada commercial approach 25 Concentrate Pellet – 2012 market transition 20 15 15 – Strategic trials in growth markets of Middle East and Asia to meet 10 6 ` 2013 production growth 9 9 5 2011 2013F Canada expansion progressing 17
  19. 19. Liberia developmentLiberia development Liberia commercial development approach Primary target market• Phase 1: 4 mtpa DSO Potential new market – Commercial ramp up H1 2012. Iron ore mine Trials at selected ArcelorMittal Steel European plants and a range of Chinese mills – Build portfolio of long term contracts which can be transitioned into higher grade Phase 2 product supply from 2015 Liberia Strategic trials in – Once base customers established, high growth market of South East Asian develop offshore cape loading market• Phase 2: 15 mtpa concentrate from Liberia greenfield planned expansion (Million MT) 2015 16 – Develop long term supply contracts 12 to sinter plants 8 15 – Studying opportunities to extend ` 4 market reach 4 0 1 2011 2012F 2015F Liberia development on track with additional market opportunities under study 18
  20. 20. Potential growth beyond current plan Planned and potential iron ore growth targets (million metric tonnes) (Excluding strategic contracts) 180 160 Potential brownfield and 140 greenfield projects under 120 study 2015 iron ore target of 84MT (excluding “potential” projects and strategic contracts) 100 80 60 40 20 - 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Base Planned efficiciency gains Planned Brownfield Planned Greenfield Potential efficiency gains Potential Brownfield Potential Greenfield Potential internal growth supported by pipeline of brownfield and greenfield projects 19
  21. 21. Baffinland’s Mary River Project feasibility study progressingBackground Baffin Island overview• In partnership with Nunavut, ArcelorMittal has acquired a controlling interest in Baffinland; ArcelorMittal holding is 70%• Baffinland owns the Mary River project, a tier-1 iron ore Baffin resource in northern Canada Bay Mary River mine site Proposed railwayProduct: Baffin alignment• High Grade: Fe 66%, Phos 0.03, SiO2 2.4%, Al2O3 1.2% Island• Significant and scalable resource Steensby inlet camp• High quality direct shipping iron ore and proposed• Aggressive expansion plan port Foxe Basin• Outstanding chemical, metallurgical and handling characteristics• No washing, concentrating, jigging; crushing & screening only• 75% of output to be DSP: Direct Shipping Pellet and 25% Premium Sinter Fines oreProgress• Feasibility study underway• Ongoing environment discussions Steensby  Rotterdam = 3100 nautical milesCommercial Strategy:• Build customer base in Atlantic and Pacific growth markets• Optimise customer and market mix based on logistics and value in use for stable long term demand• Price products to reflect full value in use premia Acquisition of Baffinland demonstrates ArcelorMittal’s commitment to building a world-class mining business 20
  22. 22. Project Location and Arctic Operations • Arctic mining proven  Julietta   Kubaka  through success of    Kupol   Red Dog Mine  many other operations Fort Knox Mine Ekati Mine • Ice-strengthened bulk Diavik Mine   Lupin Snap Lake Mine       carriers have been George Lake   Ulu   Jericho Arctic Boston   Circle  operated for decades  Cullaton Lake  Cambridge Bay North Meliadine  Meadowbank   Polaris  (e.g. Xstrata’s MV Arctic Pole     Rankin Inlet and Vale’s Umiak 1)  Nanisivik    Oktybar Mary (Norlisk) River  Raglan Mine   Iqaluit  Spitsbergen Coal Mines   Black Angel   Voiseys Bay   Kittila  21
  23. 23. Baffinland’s Sale ProductsExpected iron ore characteristics of the initial 10 years ofproductionDSP: • 66% Fe, 2.4-2.8% SiO2, 1.2% Al2O3, 0.03% P, < 0.1% S • (75% of output) • Excellent physical and metallurgical attributes • Deposit mapped metallurgically to see DSP that is consistent and predictable in blast furnaceFines: • Lump (DSP)/Fines ratio is estimated to be 75%/25% over life of production over life of operations; actual percentage may be greater ~80% however production will ensure stable sales ouput • ~65-66% Fe, ~2.8-3.4% SiO2, 1.2% Al2O3, 0.03% P, < 0.1% S • (25% of output) • Screened analysis (+6.3mm; -6.3mm) on ~350 composite samples thus far indicates lump and fines have ~very similar chemistry; fines average size = 3 to 4 mm • However, lower Fe content seen in bulk sample; so assumption is that fines will be slightly lower grade with somewhat higher silica 22
  24. 24. Building a world-class mining business Phase 1 Phase 2 Commercial: developing product and customer base Commercial: supplier of choice Growth: Brownfield development; leveraging infrastructure Growth: Greenfield construction; brownfield options; M&A ? ? 84Mt 11Mt Iron ore 44Mt Strategy: leverage competencies; potential diversification 6Mt Coking coal 2008 2015 Future not limited by geography or commodity 23
  25. 25. Recap• We are Customer Focused: We have a range of competitive iron making raw material assets in varied geographies and a wide range of products• We are Independent: in an otherwise concentrated Iron making raw materials supply side• We are Strong: Funding a strong maintenance and growth capex program to continue to deliver sustainable production growth• We are Growing: the right products for target markets at the right cost• We are building a World-class mining business: We have abundant, high quality iron ore resources, good project returns and a strong global team to execute our market-driven commercial strategy ArcelorMittal is building a world class mining business and is growing rapidly 24
  26. 26. Appendix
  27. 27. Mining volumes are growing Mining EBITDA (US$mn) ArcelorMittal Mining business 3500 • Create world class mining operations 3000 2500 • Ensure appropriate capital allocation for mining business 2000 for long term sustainability and growth 1500 • Focus on mine safety, mine planning, quality, expansion, 1000 capex and logistic 500 • Ensuring world class project control and management 0 systems 2008 2009 2010 2011 Iron Ore* (million tonnes) Coal** (million tonnes) Shipped at "Market price" Shipped at "Cost-plus" Shipped at "Market price" Shipped at "Cost-plus" 60 10 50 8 40 6 30 4 20 +45% +11% 2 growth 10 growth 0 0 2008 2009 2010 2011 2008 2009 2010 2011 Mining benefited from higher shipments and higher market pricesDefinitions: “Market priced” tonnes represent amounts of iron ore or other raw materials from ArcelorMittal mines that could be sold to third parties on the open market. Market priced tonnes that are not sold to third partiesare transferred from the Mining segment to the Company’s steel producing segments at the prevailing market price. Shipments of raw materials that do not constitute market price tonnes are transferred internally on a cost-plus basis. 26* Excludes strategic contracts; ** Excludes thermal coal
  28. 28. Coal businessKey assets and projects for coal business Coal mine Existing mines Russian Coal USA Coal 100% New projects 100% Kazakhstan Coal 8 mines 100%Coal production expansion 2015 (Mt) 12 Indian Iron Ore & Steam Coal 8 Coal of Africa 11.0 15.98% ` 8.4 interest 4 7.0 0 2010 2011 2015F 10% coal production target increase for 2012 Geographically diversified 27
  29. 29. Reserve definitions Notes on mineral resource and ore reserve estimates The ore reserve estimates have been prepared in compliance with both the SEC and NI43-101 requirements. Ore reserve estimates were prepared by competent professional engineers and geologists based on feasibility studies for greenfield projects and on pre-feasibility study level of engineering for existing operations to demonstrate that they can be economically extracted and sold at commercial rate. A commodity price not higher than the last historical three- year average realized price has been used in any reserve or cash flow analysis used to designate reserves. There is no evidence that the company could not obtain all the required governmental permits and environmental authorizations to conduct the mining operations as currently planned. 28

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