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Corporate Presentation - February 2012
- 1. MMX: CREATING CHOICESIN SEABORNE IRON ORE SUPPLY Rio de Janeiro | February 2012
- 2. This presentation relatingto 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 DISCLAIMER 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.
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- 4. THE ONLY ONEOF ITS KIND MMX Uniqueness Production committed to important global consumers – China and South Korea – through long- term contracts Brownfield start up Expanding beyond 50 Mtpy in Brazil and Chile, through fully integrated systems: own deep water superports and pipelines Sudeste System Serra Azul Unit Bom Sucesso UnitCorumbá System Sudeste Superport Chile System Unique port location and strong balance sheet leverage significant value creation through consolidation of stranded iron ore resources in the Southeast of Brazil Strong cash generation Proven track record delivering value to shareholders 4
- 5. ESTRUTURA SOCIETÁRIA 42% Controlling Shareholders 42%Controlling Shareholders 16% Wisco16% Wisco 14% SK Networks14% SK Networks 28% Free Float28% Free Float MMXM3: SOLID CONTROLLING SHAREHOLDERS MMX Corumbá Mineração MMX Corumbá Mineração MMX SudesteMMX Sudeste Minera MMX do Chile Minera MMX do Chile Superporto Sudeste Superporto Sudeste Serra Azul Serra Azul Bom Sucesso Bom Sucesso 100% 100% 99%70% 30% EBX 5
- 6. SRK certification: 3,1billion tons of mineral resources, and further mineral potential of up to 1,4 billion tons. Reserves of 1 billion tons in Serra Azul. Low strip ratio Competitive scale – New beneficiation plant Energy supply contract with MPX Integrated infrastructure with the existing MRS railway Resource Base Competitive Production Cost Structure INGREDIENTS FOR A SUCCESSFUL IRON ORE BUSINESS 64% of future production already committed through long-term contracts Experience management team with implementation and operational expertise Installed Capacity of 10 Mtpy (Serra Azul and Corumbá sites) Sudeste Superport at 50 Mtpy, expandable to 100 Mtpy, provides gateway to seaborne markets Long Term Railway Contract with MRS Integrated infrastructure with the existing MRS railway Secured Off-take Operational Track Record Guaranteed Logistics 6
- 7. MMX signs contractfor railway services with MRS through 2026 SRK certified 997,4 million tons of mineral reserves at Serra Azul Unit EIA-RIMA filed for Sudeste Superport expansion to 100 Mtpa Orders for long lead equipment for Serra Azul expansion EPCM contract with CNEC Worley Parsons for Serra Azul expansion January 2012 DURING THE YEAR OF 2011, A LOT HAS BEEN DELIVERED EPCM contract with CNEC Worley Parsons for Serra Azul expansion Contract with MPX for energy supply for expansion of Serra Azul SRK certified 2,5 billion tons of resources at Serra Azul and Pau de Vinho Preliminary license of the Serra Azul expansion MOU with Minerinvest Financial advisory contract with Itaú BBA and WestLB Acquisition of 99,1% of PortX shares at the VTO auction Deal with Usiminas February 2011 7
- 8. FINANCIAL HIGHLIGHTS 72.8 75.2 61.6 0 30 60 90 3Q10 2Q113Q11* EBITDA (R$ million) 88.5 90.9 (243.2) -250 -150 -50 50 3Q10 2Q11 3Q11 Net Profit (R$ million) *excluding non recurent itens 46% 37% 27% 54% 63% 73% 0% 50% 100% 3Q10 2Q11 3Q11 Debt profile Short Term Long Term 1,1 1,3 1,5 0,6 0,8 0,7 0,0 1,0 2,0 3Q10 2Q11 3Q11 Sales (million ton) Domestic Market Seaborne Market 8
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- 10. UNIQUE INTEGRATED LOGISTICS SinceIron ore is a bulk commodity, an integrated logistic (mine railway port) is the key factor for a successful operation Mine SuperportRailway Serra Azul unit is near to the MRS railway - 10 km from the mine, a distance currently traversed by trucks. MMX has a long term contract with MRS railway, which connects the mine with the CSN’s Itaguaí port and to the Sudeste Superport. Sudeste Superport is located in Itaguaí and will have 50Mtpy iron ore shipping capacity. The Superport will have a depth of 20 meters, enough to handle Capesize vessels. Offtakers (Shareholders) Long-Term contract (20 years) to trade iron ore. SK will take-off part of the Sudeste System yearly production equivalent to its participation in MMX Capital (14%). SK and Wisco will together offtake 64% of total production Long-Term contract (20 years). Wisco will off-take at least 50% of MMX Sudeste production. 10
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- 12. QUADRILÁTERO FERRÍFEROIron oreQuadrangle 12
- 13. RAILWAY Railway access conectingMRS to the Sudeste Superport 13
- 14. SERRA AZUL Expansion projectwith integrated logistic and pellet feed iron ore Highlights Production target: 24 Mtpy 64% of production already committed through long-term contracts 997.4 million tons of reserves already secured by SRK Execution Update Preliminary license issued in August, 2011 Acquisiion of gyratory crushers, ball mills, SAG mills and vertical mills for the new beneficiation plant for R$ 475 million Contract with CNEC WorleyParsons amounting R$ 255 million Contract with MPX to supply power for 15 years at a base-price of R$125/MWh Expected Quality – Ouro Preto pilot plant test work Fe: 67.0% P: 0.03% SiO2: 3.5% Mn: 0.5% AL2O3: 0.5% LOI: 0.25% 14
- 15. SERRA AZUL Growth throughconsolidation while leveraging existing infrastructure 15
- 16. SERRA AZUL Serra AzulUnit Expansion Project New Beneficiation Plant, transmission line and water pipelines, Stockyard and Loading Terminal Pit 16
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- 18. Contract signed onDecember 28th 2011. Long term contract through 2026. Provides for a volume of up to 36 million tons of iron ore per year. Tariff: R$ 26.463/ton , net of tax, readjusted annually by a parametric formula the variation in IGP-DI and in diesel oil. MRS CONTRACT MMX signed a long term contract for railway services formula the variation in IGP-DI and in diesel oil. 18
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- 21. Nautical Access Offshore Tunnel Stockyard 32 Stockyard06 Railway Access Sudeste Superport Artistic View 21
- 22. SUDESTE SUPERPORT Overview Highlights 50 mtpycapacity, expandable to 100 mtpy Capesizes handling Loading: 2 ship loaders of 25 Mtpy each Fully funded (BNDES) Start-up forecast: 1Q13 Sudeste Superport - Itaguaí Start-up forecast: 1Q13 100% of equipment already ordered Licensing for 100 Mtpy underway 22
- 23. SUDESTE SUPERPORT Overview Highlights Tunnel: Meetingof the two excavation fronts as of September 2011 EIA-RIMA for 100 Mtpy filed with Inea in September 2011 Licensed to 50 Mtpy Sudeste Superport - Itaguaí Navy Approval to 100 Mtpy 23
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- 26. Sudeste Superport Car DumpersElevation 6 m 26
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- 29. 11 m 20.5 m SudesteSuperport Tunnel entrance 29
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- 31. Bridge 450 m Superporto Sudeste OffshoreStructure - Bridge 31
- 32. Pier 766 m Superporto Sudeste OffshoreStructure Bridge and Pier Bridge 250 m 32
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- 34. Funding: BNDES FINAME- PSI Total Amount: R$ 407.1 mm Interest Rate per Year: 4.50% Amortization: 8 years Grace Period: 2 years1.276 CAPEX Actual Forecast SUDESTE SUPERPORT CAPEX and Funding Funding: BNDES FINEM Total Amount: R$ 805.1 mm Interest Rate per Year: TJLP + 2.18% Amortization: 10 years Grace Period: 2 years Requested Supplementary Funding : R$ 552 million 86 40 63 286 649 2007 2008 2009 2010 2011 to 2013 34
- 35. SUDESTE SUPERPORT Construction schedule PreliminaryLicense Construction LIcense Funding BNDES FINAME- PSI ANTAQ License Funding BNDES FINEM Civil Construction: 1S09 2S09 1S10 2S10 1S11 2S11 1S12 2S12 1Q13 Civil Construction: Stockyard 06 Stockyard 32 Tunnel Offshore Road-rail access Equipment sett up: Car dumpers Shiploader Stacker reclaimer Belt conveyor 35
- 36. USIMINAS AGREEMENT SRK resourcesaudit : 810 million tons plus a potential 75 million tons Pau de Vinho target production: 8 Mtpy Significant synergies with current mining operations at Serra Azul 13.5% of production at Pau de Vinho Handling fee: USD 12.63/ton adjusted by US-PPI Volumes: ■2013 = 4 Mtpy ■ 2014 = 8 Mtpy ■ 2015 = 12 Mtpy Pau de Vinho Joint Mining Sudeste Superport Handling 13.5% of production at Pau de Vinho will be delivered to Usiminas MMX will be responsible for the licensing, CAPEX and operation for 30 years ■ 2016 = 12 Mtpy ■ Additional 3 Mtpy will be allocated from 2013 until 2016 80% Take-or-Pay Usiminas can renew the contract for 1 to 5 years 36
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- 38. BOM SUCESSO High-quality ironore with high magnetite content to supply the seaborne market Highlights Production target: 10 Mtpy 64% of production already committed through long-term contracts Execution Update Conceptual engineering EIA RIMA filed in November 2010EIA RIMA filed in November 2010 SRK resources audit update: 365 million tons plus a potential of 741 million tons Public Hearing: June 2011 Expected Quality – Ouro Preto pilot plant test work Fe: 67.2% P: 0.033% SiO2: 2.5% PPC: 0.6% AL2O3: 0.5% FeO: 8.8% 38
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- 40. CHILE One of thelowest cost additions to seaborne supply Highlights High-quality iron ore with magnetite content to supply the seaborne market Production target: 10 Mtpy 50% of production already committed through long- term contracts 460 Mt of iron ore potential already secured Execution Update Castilla Port fully licensed Drilling performed 2011: approximately 43 thousand meters Water permits Expected Quality – Ouro Preto pilot plant test work Fe: 67.50% SiO2: 2.5% Al2O3: 0.85% P: 0.015% 40
- 41. CHILE Castilha Port EBX has240,000 ha property in the Atacama region Fully Licensed Port Deep water port – 28 meter draft: Chinamax vessels Water availability with permits MPX Thermal Power Plant BERTH N° 1 – COAL BERTH N° 2 – IRON ORE BERTH N° 3 – COPPER 41
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- 43. CORUMBÁ Unique high qualitylump Highlights Current Capacity: 2.1 Mtpy Long-term contracts signed with local and international barge operators 77% of production already committed through long-term contracts SRK audit resources report: 192 million tons plus aSRK audit resources report: 192 million tons plus a potential of an additional 123 million tons 43
- 44. Investor Relations Guilherme Escalhão– CEO and IRO Camila Anker– Manager Rafaela Gunzburger – Analyst Beatriz Yoshinaga - Analyst Tel. + 55 21 2555-6197/ 6338 ri@mmx.com.br