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
Roger Downey – CEO & IRO
Camila Anker– IR Manager
Rafaela Gunzburger – Analyst
Tel. + 55 21 2555-6197/ 6338 2
ri@mmx.com.br
4. 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
5. Chinese local iron ore production has been replaced by
imports. China imported 45.7 million tons in Oct/2010.
Source: Credit Suisse
5
6. China represented 54% of Brazil´s iron ore exports in sep/2010
Brazil´s Iron Ore exported volume
40 (million tons)
China World
35
30
25
20
15
10
5
0
Source: Credit Suisse
6
7. Iron ore prices are expected to remain
above US$ 100/ton through 2012
7
8. 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
11. Since IPO (July’06), a lot has
been delivered…
November • Non-binding preliminary agreement between MMX, LLX and Usiminas;
2010
• SK Networks’ investment in MMX and Iron Ore offtake from MMX Sudeste and
MMX Chile;
• Wisco’s Investment in MMX and Iron Ore offtake from MMX Sudeste;
• 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;
July • MMX Corumbá iron ore mine: operational in 8 months;
2006
• MMX Amapá System, mine, railroad and port: operational in a 14-month
record time;. 11
12. MMX structure
Controlling Shareholders
42.62%
Free Float
21.52%
35.86%
30% EBX
Brasil S/A
Bom Sucesso under basic
engineering studies
Corumbá System started-up
in 2005 (Mining)
Assets acquired by MMX (AVG:
dec-07; Minerminas: jan-08) 12
13. 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 Sudeste
Superport;
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
17. Serra Azul
8.7 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.
• Long-term agreements with
domestic and international
customers;
• Wisco will off-take at least
50% of MMX Sudeste
production;
• SK Networks will off-take
around 12% of MMX Sudeste
production.
Magnetic Concentration Plant – Start-up Oct./2008 17
18. Serra Azul Complex:
Growth and proximity to existing infrastructure
MMX is the natural consolidator in the region 18
19. 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: • Environmental Impact Study filed in Nov/2010;
Fe: 67.2% P: 0.033%
• Rail capacity secured through long-term agreement with MRS up to
SiO2: 2.5% PPC: 0.6%
15 Mtpy.
AL2O3: 0.5% FeO: 8.8%
19
20. MMX Sudeste System: competitive high-grade
iron ore producer with efficient logistics
Sudeste Superport:
Fully licensed to 50 mtpy
Fully funded;
Can be expanded to 100
mtpy;
Shipments to start 1Q12.
20
21. Sudeste Superport
General view: onshore site
Administrativ Iron Ore Yard El. 32
e Buildings Iron Ore Yard El. 06
Railcar
Dumper
Rail Loop
Last available location for a Bulk Terminal in Sepetiba region 21
22. Sudeste Superport
Milestones
Sudeste Superport will start its operation in 1H 2012
2H06 1H07 2H07 1H08 2H08 1H09 2H09 1H10 2H10 1H11 2H11 1H12
Sudeste Superport
Pedreira
Development Environmental EIA EIA RIMA Environmental Construction
Sepetiba Start up
start-up Studies RIMA Completed License License
Acquisition
Navy ANTAQ
Approval Authorization
Construction
Under Construction
begins
Development
Construction
Operations
22
23. Sudeste Superport
Volume and Capex
Sudeste Superport Total CAPEX: R$ 1.8 billion
CAPEX (R$ Million) Volume Ramp up (mtpy)
1200
50,0 50,0 50,0 50,0 50,0 50
50,0
1000
40,0
40,0
800
30,0
600
1093
400 20,0
14,5
200 10,0
360
86 40 63 115
0 -
2007 2008 2009 2010 2011 2012 2012 2013 2014 2015 2016 2017 2018... ...2032
Actual
Source : Verax Feasibility Study as of March 2010 23
25. 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
26. 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
28. 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
29. Iron ore volumes estimates by System
35
40 Sude ste
Chile Cor umbá 1.3*
35
30
25 33.7
20
15 10
8.7
10 2.1
5 2.1
0
0 2 01 6E
2009
* GVA acquisition – 1,3 Mtpy until 2017
29
31. Transaction Highlights
Capital increase in MMX of up to US$2.2 billion
Capital increase of common shares at R$13.963
The Controlling Shareholder converted part of the perpetual debentures issued
by MMX and held by the Controlling Shareholder into MMX equity at R$13.963
per share
Acquisition of Sudeste Superport, valued at US$ 2.2 billion in (i) MMX shares or cash (ii)
and royalties
MMX’s strategy to consolidate iron ore assets may accelerate the second phase of
Sudeste Superport
Long-term iron ore off-take agreement granting SK Networks entitlement to:
50% of the production of MMX Chile’s mines
Part of MMX Sudeste’s production equal to at least the percentage of SK's
shareholding in MMX immediately following the consummation of the
Transaction(1)
(1) Applicable from 2013 and beyond. In 2011, SK will receive two capesize ships from MMX’s Serra Azul mines and in 2012 one million tons, subject to availability, from MMX’s Serra Azul mines 31
33. Port Services Agreement Highlights
Usiminas signed an agreement to ship iron ore through Sudeste Superport
Handling fee: USD 12.63/ton adjusted by US-PPI
Volumes:
- 2012 = 3 Mtpy
- 2013 = 4 Mtpy
- 2014 = 8 Mtpy
- 2015 = 12 Mtpy
- 2016 = 12 Mtpy
80% Take-or-Pay
Sudeste Superport start-up is expected for 1Q12
In 2015, Sudeste Superport will reach 46 Mtpy (34 Mtpy from MMX and 12
Mtpy from Usiminas)
Usiminas can renew the agreement with a 24 month notice
33
35. Joint Mining Agreement Highlights
MMX and Usiminas signed an agreement to jointly mine the Pau de
Vinho resource
Pau de Vinho estimated resources: above 800 M tons
13.5% of production at Pau de Vinho will be delivered to Usiminas
MMX will be responsible for the licensing, CAPEX and operation
Pau de Vinho target production: 8 Mtpy
MMX owns the surface rights on the area to be mined at Pau de Vinho
MMX expects to obtain significant synergies with its current mining
operations
35
36. MMX Sudeste: Connected to Sudeste
Super Port by MRS
MMX also has rights to use the Açu Superport 36
37. MMX Sudeste System: competitive high-grade
iron ore producer with efficient logistics
Sudeste Superport:
Fully licensed to 50 mtpy
Fully funded;
Can be expanded to 100
mtpy;
Shipments to start 1Q12.
37
38. Long term sales contracts
All of MMX´s operations and projects are substantially committed in long
term sales contracts, reducing our market risk over the long term and
providing greater backing to the funding of our growth.
Sudeste Chile Corumbá
50%
62% 77%
Production already committed
38
40. MMX – SK Networks Transaction
Overview
Main steps Final transaction structure
MMX S.A. (“MMX”), LLX Sudeste Operações Portuárias Ltda. (“LLX A 100% of free float of PortX receiving Títulos / Royalty Securities + shares(2)
Sudeste”, Centennial Asset Participações Sudeste S.A. (“Centennial”)) and
Controlling (2)
Eike Batista (their “Controlling Shareholder”) entered into an agreement Free float
Shareholder
(“Agreement”) with SK Networks Co. Ltd. (“SK Networks” ) which set forth the
main terms and conditions of a transaction (“Transaction”) currently in 40.0%(1) 15.5% 13.0% 31.5%(1)
progress
The capital stock of MMX may be increased by up to US$2.2 billion, at a price 70.0% 100.0% 100.0% 100.0%
per share of R$13.963 (“Subscription Price”)
Minera MMX de
LLX Sudeste was spun off from LLX Logistica S.A. and contributed to MMX Corumbá MMX Sudeste PortX
Chile
Centennial. As a result of the partial spin-off, the shareholders of LLX
Logistica S.A. received new shares issued by Centennial – equivalent to 70%
of its capital stock. Centennial changed its corporate name to PortX
Operações Portuárias S.A. (“PortX”) and became the owner of 100% of LLX Sudeste
Sudeste
B 100% of free float of PortX receiving Títulos / Royalty Securities + cash(2)
MMX will acquire up to 100% of PortX through a voluntary exchange tender Controlling (2)
Free float
offer (“VTO”) for approximately US$2.2 billion Shareholder
US$1,796 million in Títulos de Remuneração Variável Baseada em
41.1%(1) 15.9% 13.3% 29.7%(1)
Royalties (“Títulos”) or Royalty Securities
US$441 million in new common shares issued by MMX at the
70.0% 100.0% 100.0% 100.0%
Subscription Price or in cash
Minera MMX de
MMX Corumbá MMX Sudeste PortX
Chile
Sudeste
(1) As of November 29, 2010. Does not consider possible subscription of additional US$1,110.8 million in shares.
(2) Assumes 100% subscription in VTO. Controlling Shareholder will be paid in a combination of Royalties and shares of MMX.
41. MMX Títulos / Royalty Securities
Overview
Voluntary Exchange Tender Offer (“VTO”) Security key features
The Títulos / Royalty Securities will grant their holders beginning on (i) the first
Controlling
Free float date of full operation of the Sudeste Port, or (ii) January 1st, 2013, whichever
Shareholder
first occurs, a remuneration (“Royalties”)
37.5%(1) 16.9% 14.1% 31.5%(1) Trading: MMX will list the Títulos at the main floor of BM&FBOVESPA. The
Royalty Securities will be traded at OTC market outside of Brazil
Use of proceeds: The Títulos and Royalty Securities will be distributed solely to
PortX’s shareholders in connection with the VTO in exchange for LLX Sudeste
shares. The subscription and payment of the Títulos will not entail inflow of
financial resources into MMX
Face value: The face value per Título / Royalty Security will be equivalent to the
Voluntary
percentage of PortX’s book value that is delivered against the Títulos (80.28%)
Exchange
Tender Offer Guarantees: The Títulos / Royalty Securities will be unsecured unsubordinated
“VTO” securities, ranking at least pari passu with other unsecured and unsubordinated
indebtedness of MMX
Free float
Term: The Títulos / Royalty Securities will be perpetual, to be repaid exclusively
Controlling Shareholders(2) (Former LLX Logistica
shareholders) in the events of maturity provided in the indentures
67.7% 32.3% Maturity: On the occurrence of an event of maturity, MMX will pay the holders of
Títulos or Royalty Securities a price equivalent to the economic value of the
securities, which will be determined based on reports to be prepared by
independent experts(1)
PortX
Sudeste
(1) As of November 29, 2010. Does not consider possible subscription of additional US$1,110.8 million in shares.
(2) Includes EBX and Centennial’s stakes in LLX Sudeste.
(3) The maturity events include: (i) petition in bankruptcy not discharged within the legal period, bankrupt, adjudication, judicial or extrajudicial recovery or any other similar proceedings created by the law, involving
MMX; (ii) failure by MMX to comply with its obligation to pay Royalties owed on the respective due date thereof which remains uncured a one-year period after the respective Royalties payment date; (iii) winding
up, dissolution or termination of the Company; (iv) transformation of MMX into a limited liability company, pursuant to Articles 220-222 of the Brazilian Corporations Law and; (v) the delisting of MMX.
42. Royalties
Overview
Royalties payment Calculation of payment
The Títulos / Royalty Securities will grant their holders beginning on (i) the Royalties will be measured at year end, to pay the higher of the actual tons
first date of full operation of the Sudeste Port, or (ii) January 1st, 2013, of shipments carried out in LLX Sudeste Port or the MMX Iron ore off-take
whichever first occurs, a remuneration (“Royalties”) which will consist of agreements. The formula below provides for this effect:
quarterly payments made from MMX’s gross profits (lucro bruto) as
1st, 2nd and 3rd quarters Royalties:
reported in its quarterly financial statements
R = TM x VpT
Royalties are cumulative, that is, if in a given quarter MMX’s gross income
is insufficient to pay the Royalties, the amounts will be carried forward to where:
the immediately subsequent quarter R = Royalties in the 1st, 2nd, and 3rd quarters
The Royalties will be calculated based on: TM = Measured Tonnage in the 1st, 2nd, and 3rd quarters
(i) For iron ore loads: US$5.00, escalated annually by the variation of VpT = Iron Ore Per-Ton Amount or Other Cargo Per-Ton Amount, as
the U.S. Producer Price Index, per ton of iron ore loaded at the LLX applicable
Sudeste Port (“Iron Ore Per-Ton Amount”)
4th quarter Royalties:
(ii) For other loads: the Royalties will be calculated based on the Load
Margin(1), up to US$ 5.00, (which amount will be restated annually to R = [TM4Q + (TToP – TM)] x VpT
the U.S. Producer Price Index) (“Other Cargo Per-Ton Amount”) Provided that (TToP – TM) > 0, where:
R = Royalties in the 4th quarter
TM4Q = Average Tonnage in the 4th quarter
TToP = annual Take-or-Pay Tonnage(2)
TM = annual Measured Tonnage
VpT = Iron Ore Per-Ton Amount or Other Cargo Per-Ton Amount, as
applicable
(1) “Load Margin” means, in relation to any load other than iron ore, the difference between the per-ton “cash cost” of transportation and the per-ton amount effectively charged by Sudeste port for the shipment.
(2) The Take-or-Pay Tonnage of MMX contracted with Sudeste Port as of this date is as follows: for 2013, 10.4 million tons; for 2014, 25.5 million tons; and from 2015 to and including 2033, 27.2 million tons annually.
