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Corporate presentation – march 2008


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Corporate presentation – march 2008

  2. 2. DISCLAIMER 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 – Director Elizabeth Cruz – Manager Gina Pinto - Analyst Tel. 55 21 2555-5634 / 5558/ 5563
  3. 3. MMX & Anglo American Transaction Corporate Structure before Restructuring and Anglo’s proposal 70% 70% 51% 100% 85% 100% MMX Corumbá MMX Amapá MMX Minas-Rio AVX Mineração LLX Logistica MMX Metálicos 30% Centennial 30% Cleveland 49% Anglo 15% OTPP Asset Corumbá Cliffs American 51% 70% LLX Minas-Rio LLX Açu Minas-Rio Project 49% Anglo American 30% Centennial Asset Participações Logística 1
  4. 4. MMX & Anglo American Transaction Corporate Structure after Restructuring and the approval of Anglo’s proposal MMX current Controlling Current Minority shareholders Shareholders & Shareholders of MMX of MMX 100% 100% 57% 43% Newco MMX Metálicos 70% 51% 70% 51% 70% 100% MMX ( 1 ) MMX ( 2 ) MMX ( 3 ) AVX LLX LLX Amapá Minas-Rio Corumbá Mineração Minas-Rio Açu 30% 49% 30% 49% 30% Cleveland Cliffs Centennial Asset Centennial Asset Corumbá Participações Logística( 1 ) Includes 100% of Metallics Amapá; ( 2 ) Includes MMX´s option in 50% of future Pelletizing Plant; (3) Includes 100% of Metallics Corumbá 2
  5. 5. MMX & Anglo American Transaction Transaction Timeline Announcement of the Transaction: January 17, 2008 Execution of Share Purchase Agreement signing between Anglo and Controller: March, 2008 MMX’s Board meeting to approve restructuring and call of Shareholders’ Meeting: immediately after Share Purchase Agreement is executed Restructuring approval at MMX’s shareholders’ meeting: approximately 30 days after Board Meeting Controller stake sale financial closing: immediately after Shareholders Meeting Newco and LLX listing on Bovespa: immediately after restructuring (note that this process can be initiated before the Board Meeting, in order to expedite the process and respect timeliness) Newco’s remaining shareholders’ tag along offer: after public listing of Newco and consequent CVM public offering registrationFurther annoucements will be made in due course upon execution of the definitive transaction documents 3
  6. 6. NEW MMXMMX is the exclusive vehiclefor mining projects Amapá System Royalties • Açu Pellet Plant Option • Minas-Rio Royalties MMX Corumbá System Iron Ore: 4.9 Mtpy Pig Iron: 0.4 Mtpy AVX Mineração Semi-Finished: 0.5 Mtpy Iron Ore: 10 Mtpy Engineer Eliezer Batista Natural Reserve New MMX includes marketable Securities + Cash + Royalties 4
  7. 7. MMX CORUMBÁ SYSTEM - TIMELINE 3.5 4.9 4.9 1.5 2.9 0.7 0.1 0.4 0.4 0.2 0.4 0.5 0.4 0.5 2003 2004 2005 2006 2007 2008 2009 2010 2011 Engineering; Start-up Start-up Mini Asset acquisitions begin Pig Iron Mill Corumbá drilling Corumbá Start-up Start-up Corumbá second iron Mine ore plant Iron ore (Mt) Pig iron (Mt) Semi-finished (Mt) MMX Corumbá System Iron Ore: 4.9 Mtpy Pig Iron: 0.4 Mtpy Semi-Finished: 0.5 Mtpy 5
  8. 8. AVX AVG and Minerminas acquisitionAVX AVG acquisition - concluded in December, 2007 for US$224 million in 5 annual installments Minerminas acquisition – concluded in March, 2008 for US$ 115,6 million in 7 semi-annual installments AVX current iron ore production capacity: 2.9 Mtpy of fines and lump Production capacity to increase up to 8 Mtpy – total estimated capex of US$40 million for 2008-2009 approved Port Açu Current sales – around 75% to the domestic market Current logistics: MRS railway and Sepetiba Port Capacity expansion to 10-12 Mtpy under analysis Future logistics: MRS railway system connecting to Port Sudeste Port Sudeste 6
  9. 9. AVX MINERAÇÃO - TIMELINE AVX Mineração Total estimated capex of US$40 million for 2008+ 2009 approved High quality products – sinter feed (63%) + lump (21%)+ pellet feed (16%) AVG + Minerminas Capacity expantion to 10-12 Mtpy under analysis New acquisitons New acquisitions to be concluded UNDER UNDER 10 ANALYSIS ANALYSIS 6.6 6.1 2007 2008 2009 2010 2011 2012 Asset Studies to acquisitions increase capacity Engineering studies are being carried to define the capex for expansion from 2009. 7
  10. 10. LLX LOGÍSTICA S.A. – Highlights LLX was created in march 2007, aimed at explore the significant growth potential in infrastructure and logistics services through the development of major port systems in the Southeast region of Brazil. Its main strengths are: Strategic locations and large back-areas; Low-cost operational model; Long Term contracts with diversified sectors and synergies generated within the EBX Group; Experienced management team; Social and Environmental Responsibility. 8
  11. 11. LLX – PROJECTS LLX will build 3 major port systems in the Southeast region of Brazil Port Açu - “Super Port” Mixed-use terminal sized to berth carriers up to 200,000 tons Back-area covering 7,800 ha Draft of 18.5 m Main Products: Iron Ore from MMX Minas-Rio Pipelines; steel, coal, granite, ethanol/ oil derivatives, LNG and containers. Port Sudeste Port terminal located in the Itaguaí Industrial Area Accessed by MRS railway Best poised to capture transportation of Minas Gerais main Iron Ore producers Draft of 18.5 m Area covers 52.1 ha Port Brasil - “Super Port” Mixed-use port terminal Total Area of 1,950 ha Draft of 18.5 m Main Products: Containers, iron ore, agricultural bulk, liquid bulk and fertilizers. 70 km from its main competitor, with huge competitive advantage: major expansion area and 2x current container capacity Every Port facilitiy has been designed to comply with ISPS (International Ship and Port Facility Security Code) regulations 9
  12. 12. LLX – TIMELINE Carve Out LLX is carved out of MMX and begins operations as an independent company Anglo American buys 49% stake in LLX Minas-Rio OTPP acquired 15% of LLX Logistica 2006 2007 2008 2009 2010 2011 2012 Development Development Operations Minas - Rio Detailing of the Construction Start up project License Environmental ANTAQ License authorization Construction Construction begins Development Development Construction Operations Detailing of the Construction Start up project Begins Açu ANTAQ authorization Environmental License Construction License Development Development Development Construction Operations Project begin to Environmental Construction Completion Start up be developed License License Brasil ANTAQ authorization Construction Construction begins Development Development Development Operations Project begin to Environmental Construction Start up Sudeste be developed License License ANTAQ authorization Construction Construction begins 10
  13. 13. LLX LOGÍSTICA S.A. – MANAGEMENT Management Team Management Team Experience Experience Engineer Degree from PUC-RJ and Master´s degree from the Imperial College in London. Ricardo Antunes 23 years of experience at CVRD Former CEO of Rio Doce International CEO Co-founder of MMX Masters degree in Economics from PUC-RJ and PhD in Finance. Held Yale Universitiy´s certificate in Corporate Governance. Government experience at BNDES, Ministry of Finance and as Director of Brazil´s Eliane Aleixo Lustosa Antitrust Agency. Former VP and CFO of Grupo Abril, Globex and Petrobras Pension Fund (Petros). Chief Financial Officer Current board member of the Brazilian Institute of Corporate Governance (IBGC). Former board member of several public companies (Perdigão, CPFL, Coteminas, Telet, Americel and Tele Norte Celular). Mechanical Engineer (UFES) and MBA in COPPEAD/UFRJ José Salomão 23 years of experience in the design, implementation and operation of port terminals (iron ore, coal, pig iron, fertilizers, agricultural baul, containers and general cargo). Chief Development Officer Held executive positions in Porto de Tubarão, Porto de Praia Mole, TVV, Pasha Terminal – Los Angeles, Docenave and Brasil Ferrovias. Civil Engineer (UGF/RJ) and MBA from FGV/RJ. Project Management (PMI) certificate from FIA/USP. Luis Alfredo Osório de Castro 30 years experience in implementing infrastructure projects (urban projects and port Chief Implementation Officer terminals); power plants and industrial facilities at Pronil, OAS and Brascan. 11
  14. 14. LLX Corporate Structure after Restructuring Controlling Current Minority (1) & Shareholders of MMX Shareholders of MMX 57% 43% 51% 70% 70% 70% LLX Minas-Rio LLX Açu LLX Brasil LLX Sudeste 30% 30% 30% (2) 49% Centennial Logística 1. Eike Batista and Management 2. LLX Minas-Rio: iron ore handling at Port Açu 12
  15. 15. LLX – PORT AÇUPort Infrastructure – General Overview 13
  16. 16. LLX – PORT AÇUMain Activities: Iron Ore: Coal: Liquid Bulk: Steel Products: Up to 63.2 mtpy Up to 15.3 mtpy Up to 4.0 M m 3 py Up to 11.2 mtpy Granite: Containers: Supply Boats: Real Estate: Up to 1.5 mtpy Up to 330,000 TEUs py Up to 80,000 tons of cargo py Up to 3,300 hectares for rental 14
  17. 17. LLX – PORT BRASILInfrastructure Storage and Handling 15
  18. 18. LLX – PORT BRASIL – Logistics Connections 1800 km of railway track will connect Port Brasil to Corumbá. 16
  19. 19. LLX – PORT BRASILMain Activities: Containers Iron Ore Liquid Bulk (Ethanol) Up to 3.2 M TEUs py Up to 15.0 mtpy Up to 7.5 M m3 py Agricultural Bulk Fertilizers Real Estate Up to 28.9 mtpy Up to 10.0 mtpy Up to 600 hectares for rental 17
  20. 20. LLX – PORT SUDESTE AVX iron ore logistics to Port Sudeste: Port Sudeste Overview Igarapé MRS AVX Port Açu Port Sudeste Currently Transportation contract secured with MRS and port access with CSN Sepetiba Terminal until 2011, when Port Sudeste starts up. 18
  21. 21. LLX – PORT SUDESTE – Overview Port Sudeste Overview 19
  22. 22. LLX – PORT SUDESTEMain Activities: The port is located in the State of Rio de Janeiro, adjacent to Itaguai Port at Sepetiba Bay. The whole area of 512,000 m2 is dedicated to iron ore operation. Draft of 18.5 m. The region is served by railway (MRS) and road (Coastal Highway BR-101); the federal government has just approved investment in a road connecting the port area to the Rio-São Paulo highway; The area is already available. Licensing and construction can be done in relatively short time; operation of the iron ore terminal (storage and shipping) could start in the first half of 2011. Iron Ore Up to 25.0 mtpy 20
  23. 23. ANNEX
  24. 24. MMX & Anglo American Transaction - OVERVIEW – Anglo American plc and its subsidiaries (“Anglo”) have entered into an agreement with MMX’s controlling shareholder Eike Batista (the “Controller”) which triggered 45 days of exclusive negotiations amongst the parties in order to finalize documentation related to Anglo’s acquisition of the shares owned by the Controller in Newco, which will be incorporated as a result of MMX’s spin off (“Newco”). The Newco will have the following assets: • 51% of MMX Minas-Rio Mineração S.A. and respective subsidiaries (“MMX Minas-Rio”). Note that the remaining 49% already belong to Anglo • 70% of MMX Amapá Mineração Ltda. and subsidiaries (“MMX Amapá”) • 100% of MMX Metálicos Amapá Ltda. (“MMX Metálicos Amapá”, in conjunction with MMX Amapá, the “Amapá System”) – The transaction will take place in the following 3 stages: • Stage 1: MMX Restructuring: – Newco: MMX Minas-Rio System and Amapá System – LLX: 85% of LLX Logística S.A. and subsidiaries, including the 51% ownership of LLX Minas-Rio (“LLX”) – MMX: The remaining assets, including MMX Corumbá Mineração Ltda., MMX Metálicos Corumbá Ltda (“Corumbá System”), AVG, Minerminas, MMX cash and marketable securities, 50% of the pellet plant that will be built at Port Açu and Royalties that will be paid by the Newco to the New MMX – Current MMX shareholders will receive new Newco and LLX shares (proportionally to its holdings in MMX). – Both Newco and LLX will be listed on Bovespa (Novo Mercado) , the same way as current MMX • Stage 2: Controller will sell its Newco shares to Anglo • Stage 3: Anglo makes mandatory tag along offer (100%) to buy remaining/minority shareholder stock in the Newco, for the same price as the Controller stake sale (i.e., US$361.12) – This deal is contingent on certain conditions such as: final documentation approval; MMX restructuring approval by MMX shareholders, CVM (Brazilian Securities Commission) approval 21
  25. 25. MMX & Anglo American Transaction Summary – Payment to Newco shareholders (including tag along) totaling US$5,500,000,063.00 Establishment of royalties agreement, where Newco pays 5% royalties to New MMX, on 51% to 70% of EBITDA, minus maintenance capex for MMX Minas-Rio and MMX Amapá, respectively. This will begin on 2025 (Minas-Rio) and 2023 (Amapá), and will be capped at US$ 64 million per year (“Royalties Agreement”) – Current MMX shareholders will receive equivalent LLX public shares and integral maintenance of participation in the Company: Conditions Completion of MMX S.A. restructuring terms in addition to Newco shares buy-sell agreement between Controller and Anglo MMX restructuring approval by MMX Board of Directors at Board Meeting and by the shareholders at the Shareholders’ Meeting Final transaction documentation and terms approval by Anglo’s Board of Directors 22
  26. 26. MMX CORUMBÁ SYSTEM – MARKETING STRATEGY Our Marketing strategy contemplates the sale of the production through Long Term Supply Agreements. Long Term Supply Agreements already signed with traditional steel companies. Iron Ore Customer Term 64% of iron ore production Siderar 2007-2012 in 2008 Eregli 2007-2012 already commited Lucchini 2008-2011 under existing LT Supply Pig Iron Plant *** Agreements. Voest-Alpine testing Arcelor-Mittal testing Cargill´s take represents Pig Iron 75% of total Customer Term pig iron production. Cargill - USA 2007-2012 Acindar 2008 23
  27. 27. CORUMBÁ CAPEX CAPEX Consumption timeline (US$ MM) 234 135 65 34 Total YTD 2008 2009 24
  28. 28. MMX IN THE STOCK MARKETS – BOVESPA AND TSX Capital Stock – 15,230,492 common shares FreeFloat - Geographic Distribution 2% 3% Controlling 8% Shareholder and Management 15% Brazil 34% FreeFloat United States Canada 24% 66% EU GDRs 33% Asia Other 15% BOVESPA (MMXM3) TSX (XMM) MMXM3 is included in the Differentiated GDRs commenced trading on June 27, 2007 Corporate Governance Stock Index GDR per share ratio of 20:1 Ordinary shares, 100% tag along Depositary Bank: The Bank of New York Successful IPO on July 24, 2006: US$ 509 million, 25
  29. 29. MMXM3 IN NOVO MERCADO - BOVESPA Price(US$) MMXM3 X IBOVESPA US$ 546 600 550 MMXM3 499.5% 500 IBOVESPA 127.3% 450 MMXM3 400 350 300 250 IBOV 200 150 100 50 (US$MM) 35,0 136 160 30,0 129 140 25,0 29 120 95 100 20,0 77 84 65 21 80 15,0 13 13 9 41 11 16 60 10,0 3 6 16 5 6 4 4 10 59 40 5,0 2 1 1 12 44 0,2 0,2 27 20 22 20 21 0,0 19 0 Nov/06 Nov/07 Jul/06 Jan/07 Jun/07 Jul/07 Jan/08 Aug/06 Sept/06 Oct/06 Dec/06 Feb/07 Mar/07 Apr/07 May/07 Aug/07 Sept/07 Oct/07 Dec/07 Feb/08 Volume Traded * (US$MM) Number of Trades**daily average 26
  31. 31. LLX – PORT AÇU LLX Minas-Rio (Ore) / LLX Açu (non-Ore) 300ha back area; 7,500 ha of adjacent industrial complex Connecting bridge; with: power plants, steel complex, oil Access channel; industries, assembly plants among Breakwater; others; Dredging; Right to build additional berths; Iron ore handling terminal at Port Açu 2 main revenue streams: 1) handling and (economics supported by MMX Iron Ore services fees and 2) industrial area lease; throughput, under a pre-established IRR Shared infrastructure agreement to be target – 15% true-up clause). established with LLX Minas-Rio will give LLX Açu access to the connecting bridge, access channel and breakwater. 28
  32. 32. LLX – PORT AÇU Logistics Connections 45 km of railway track will be built to connect Port Açu to the Brazilian railway system. 29
  33. 33. LLX – PORT AÇUUnparalleled 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 Able to berth large vessels of up to 200,000 tons (Cape Size) 7,800 hectares of land holdings for adjacent industrial complex The thermal plant within the industrial complex will guarantee “inside-the-fence” energy availability 10 hectares Has already been granted both environmental and construction licenses. Construction began in September/07 id ge br k m 2.5 30
  34. 34. LLX – PORT BRASIL – Overview Port Brasil is a private port located in São Paulo State, the country’s primary economy engine Mixed-use port terminal designed for operating containers, iron ore, agricultural bulk, liquid bulk andfertilizers . A major container player with a capacity of over 4 million TEUs to be reached modularly by 2032; Deepest draft : 18.5 m, longest uninterrupted quay and largest yard among its competitors in Port of Santos,designed to serve Super Containerships (> 11,000 TEUs) and Capesize vessels; Direct link to rail (ALL) and a four-lane highway (Padre Manoel da Nobrega); Located outside public port area, strong competitive advantage due to reduced costs.One single operator, vis-à-vis Santos where shipping companies have to negotiate with several differentterminals;One single back-area (Santos has several, in different sites of the port) thus avoiding the need of expensivecontainer repositioning;Opportunity to consolidate operations in a single terminal with a contiguous industrial park which will houseseveral high value added industries such as electro-electronics ,metal mechanics and assemblers. 31
  35. 35. LLX LOGÍSTICA S.A. Favorable Industry Dinamics Significant Unparalleled Upside Port Facilities Potential Strategic Locations Investor Relations Ricardo Antunes – Director Antonio Castello Branco – Manager Tel. 55 21 2555-5232 / 5530WWW.LLX.COM.BR