1. Sale of 15% Interest in LLX Logística S.A.
to Ontario Teachers´ Pension Plan
July 25, 2007
2. Important Notice
This presentation relating to MMX Mineração e Metálicos S.A. (“MMX”) includes “forward-looking statements”, as that term is defined in the Private
Securities Litigation Reform Act of 1995, in Section 27A of the Securities Act of 1933 and Section 21E of the U.S. Securities Exchange Act of 1934. All
statements other than statements of historical facts are statements that could be deemed forward-looking statements and are 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 and specific. The risk
exists that these statements may not be fulfilled or, even if they are fulfilled, the results or developments described in such statements may not be
indicative of results or developments in future periods. We caution participants of this presentation not to place undue reliance on these forward-looking
statements as a number of factors could cause future results to differ materially from these statements.
Forward-looking statements may be influenced in particular by factors such as the ability to obtain all required regulatory approvals on a timely basis or
at all, exploration for mineral resources and reserves, difficulty in converting geological resources into mineral reserves, and changes 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 registered under the U.S. Securities Act of 1933, as
amended, or any applicable state securities laws and may not be offered or sold in the United States 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 part without MMX’s
prior written consent.
Investor Relations
Rodolfo Landim –Investor Relations Officer
Elizabeth Cruz – Manager
Gina Pinto - Analyst
Tel 55 21 2555-5634 / 5558 / 5563
ri@mmx.com.br
http://www.mmx.com.br/ri
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3. Transaction Overview
The Ontario Teachers` Pension Plan Board (“OTPP”) and LLX Logística S.A.
(“LLX”) have entered into a memorandum of understanding pursuant to which
OTPP would subscribe for and purchase 15% of the issued and outstanding
shares of LLX, in preferred stock, for a price of US$185 million.
The Investment is subject to the negotiation of definitive agreements, including of
a shareholders agreement of LLX, conclusion of due diligence and corporate
approvals.
The Investment implies a valuation of MMX’s remaining 85% common share
interest in LLX of approximately US$1.05 billion.
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5. Investment Highlights
Favorable
Industry
Dynamics
Low
Unparalleled
Completion
Port Facilities
Risk
Significant
Attractive
Upside
Location
Potential
Unique
Strategic
Position
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6. LLX Minas-Rio / LLX Açu
6,900ha of adjacent industrial
300ha back area;
complex;
Iron ore handling terminal at Porto
Right to build additional berths;
do Açu;
Connecting bridge; 2 main revenue streams: 1)
handling and services fees and
Access channel;
2) industrial area lease;
Breakwater;
Shared infrastructure agreement
to be established with LLX
Minas-Rio will give LLX Açu
Access to the connecting bridge,
access channel and breakwater.
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7. Unique Strategic Position
New world class logistics corridor increasing the integration of Minas Gerais
New world class logistics corridor increasing the integration of Minas Gerais
and Rio de Janeiro states and boosting their economies;
and Rio de Janeiro states and boosting their economies;
Removal of the actual logistics bottleneck, offering an alternative route for
Removal of the actual logistics bottleneck, offering an alternative route for
the region’s products;
the region’s products;
A logistics solution for the steel plant expansion projects in the railway area
A logistics solution for the steel plant expansion projects in the railway area
of influence;
of influence;
Real and competitive alternative for exports of raw materials and products
Real and competitive alternative for exports of raw materials and products
with high aggregate value.
with high aggregate value.
Açu Port will be the entrance/exit door of the Minas-Rio Logistics System,
contributing to the development of a new and modern export center.
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8. Attractive Location
Norte Fluminense, in the municipality of São
João da Barra - 45 km from Rio de Janeiro´s third
largest city, Campos
15 km north of São Tomé Cape
30 km south of Paraíba do Sul River
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9. Unparalleled Port Facilities
Mixed-use private port facility featuring a deep draft port with minimum need for
dredging
Depth of 15 meters
Draft of 18.5 meters (Phase I);
Able to berth large vessels of over 160,000 tons (cape size);
The facilities have been specifically designed to comply with ISPS (International Ship
and Port Facility Security Code) regulations;
Construction License granted on May 14, 2007;
Permit for construction and operation received from ANTAQ on June 20, 2007.
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10. Unparalleled Port Facilities (Cont’d)
7,200ha(2)
(rental area
= 4,960ha)
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3
2
9 8 1
10 6
5
7 2500 m access bridge
Steel products and
general cargo
Illustrative Facilities: Liquid Bulk
1 Iron Ore storage area(1) 6 Coal storage
Coal
2 Pelletizing Plants(1) 7 Warehouse
3 Power Plants 8 Yards for general cargo
4 Steel Plants 9 Mechanical Industry Shops
Iron Ore
5 Liquid Bulk storage 10 Oil Processing Plant
(1) Part of LLX Minas Rio.
(2) Out of the total area, 300ha corresponds to LLX Minas-Rio and the rest to LLX Açu. 10
Rental
11. Favorable Legal Environment
As a privately owned port, Porto do Açu features a series of structural
advantages over its competitors;
Porto do Açu is exempt from regulator fees;
Porto do Açu will use non-unionized labor, which is more efficient and less
prone to interruptions;
As a private port, Porto do Açu acts as its own Port Authority, effectively
performing maintenance or dredging when required and without delay.
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12. Products
Steel
Global demand for steel continues to rise, largely as a result of the massive
demand from rapidly developing economies such as China and India
Chinese steel consumption will continue to grow at very high levels
China currently consumes approximately 35% of the world’s steel
production, with that figure expected to rise to 52% in 2016 (1);
Porto do Açu’s industrial back area and adjacent port facilities provide perfect
backdrop for a steel plant.
Coke
Coke is one of the main ingredients in the iron smelting process;
Given that steel (an alloy consisting mostly of iron) figures to be one of the
most important sectors of Porto do Açu’s industrial complex, coke will also be
very important to the industrial complex’s day-to-day operations.
(1) Global Insight.
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13. Products (Cont’d)
Coal
Demand for coal through Porto do Açu will come from 4 different sources:
On site coke plant
On site thermal plant
On site coal gasification plant (production of syngas)
Other coal importers;
A 1,400 MW on site coal-fired thermal plant to be built by a third-party will power the
industrial complex’s operations in addition to supplying power to the surrounding
areas.
Liquid Bulk
Liquid bulk will be handled at Porto do Açu in 4 forms:
Oil
Liquefied Natural Gas (LNG)
Ethanol
Oil Derivatives;
Strategic location: close to Campos basin, home to some of Brazil’s largest oilfields.
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14. Products (Cont’d)
Dimension Stone
Competing ports such as Vitória operating at capacity, with significant delays;
opportunity to gain market share
Industrial Area
LLX Açu will lease 4,960ha of the 7,200ha of land in the adjacent industrial complex
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15. OTPP
The Ontario Teachers` Pension Plan is the largest single-profession pension plan
in Canada;
Net assets are of $Can 106 billion under management – of which $Can 49 billion
are invested in corporate shares or partnerships;
Solid Corporate Governance practices.
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