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Corporate Presentation - January 2012
- 1. MMX: CREATING CHOICESIN SEABORNE IRON ORE SUPPLY Rio de Janeiro | January 2012
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- 3. 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 Unique port location and strong balance sheet leverage significant value creation through Sudeste System consolidation of stranded iron ore resources in the Serra Azul Unit Corumbá System Bom Sucesso Unit Southeast of Brazil Strong cash generation Chile System Proven track record delivering value to shareholders Sudeste Superport 3
- 4. MMXM3: SOLID CONTROLLINGSHAREHOLDERS ESTRUTURA SOCIETÁRIA 16% Wisco 42% Controlling Shareholders 14% SK Networks 28% Free Float 70% 100% 100% 99% MMX Corumbá Minera MMX Superporto MMX Sudeste Mineração do Chile Sudeste 30% EBX Serra Bom Azul Sucesso 4
- 5. INGREDIENTS FOR ASUCCESSFUL IRON ORE BUSINESS MMX Uniqueness SRK certification: 3,3 billion tons of mineral resources, and further mineral Resource Base potential of up to 1,8 billion tons. Reserves of 1 billion tons in Serra Azul. Low strip ratio Competitive Competitive scale – New beneficiation plant Production Cost Structure Power supply contract with MPX Integrated infrastructure with the existing MRS railway Sudeste Superport at 50 Mtpy, expandable to 100 Mtpy, provides gateway to Guaranteed seaborne markets Logistics Long Term Railway Contract with MRS Secured Off-take 64% of future production already committed through long-term contracts Operational Track Experience management team with implementation and operational expertise Record Installed Capacity of 10 Mtpy (Serra Azul and Corumbá sites) 5
- 6. DURING THE YEAROF 2011, A LOT HAS BEEN DELIVERED January 2012 MMX signs contract for 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 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 6
- 7. FINANCIAL HIGHLIGHTS EBITDA (R$ million) Sales (million ton) 90 72.8 75.2 2,0 0.7 61.6 0.8 60 0.6 1,0 30 1.5 1.3 1.1 0,0 0 3Q10 2Q11 3Q11 3Q10 2Q11 3Q11* *excluding non recurent itens MI ME Net Profit (R$ million) Debt profile 50 88.5 90.9 100% 54% -50 63% 73% 50% (243.2) -150 46% 37% 27% -250 0% 3Q10 2Q11 3Q11 3Q10 2Q11 3Q11 Short Term Long Term 7
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- 9. UNIQUE INTEGRATED LOGISTICS SinceIron ore is a bulk commodity, an integrated logistic (mine railway port) is the key factor for a successful operation Mine Railway Superport 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%). MMX has a long term contract Sudeste Superport is located in Serra Azul unit is near to the with MRS railway, which connects Itaguaí and will have 50Mtpy iron Long-Term contract (20 years). Wisco will MRS railway - 10 km from the the mine with the CSN’s Itaguaí ore shipping capacity. The Superport off-take at least 50% of MMX Sudeste mine, a distance currently port and to the Sudeste will have a depth of 20 meters, production. traversed by trucks. Superport. enough to handle Capesize vessels. SK and Wisco will together offtake 64% of total production 9
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- 11. Iron ore Quadrangle QUADRILÁTERO FERRÍFERO 11
- 12. RAILWAY Railway access conectingMRS to the Sudeste Superport 12
- 13. SERRA AZUL Growth throughconsolidation while leveraging existing infrastructure 13
- 14. SERRA AZUL Serra AzulUnit Expansion Project Pit New Beneficiation Plant, transmission line and water pipelines, Stockyard and Loading Terminal 14
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- 16. MRS CONTRACT MMX signeda long term contract for railway services Contract signed on December 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. 16
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- 18. Sudeste Superport Location
- 19. Offshore Nautical Access Tunnel Stockyard 06 Stockyard 32 Sudeste Superport Artistic View 19 Railway Access
- 20. SUDESTE SUPERPORT Overview Highlights 50 mtpy capacity, expandable to 100 mtpy Capesizes handling Loading: 2 ship loaders of 25 Mtpy each Fully funded (BNDES) Start-up forecast: 1Q13 100% of equipment already ordered Licensing for 100 Mtpy underway Sudeste Superport - Itaguaí 20
- 21. SUDESTE SUPERPORT Overview Highlights Tunnel: Meeting of the two excavation fronts as of September 2011 EIA-RIMA for 100 Mtpy filed with Inea in September 2011 Licensed to 50 Mtpy Navy Approval to 100 Mtpy Sudeste Superport - Itaguaí 21
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- 24. Sudeste Superport Car DumpersElevation 6 m
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- 27. 11 m 20.5 m Sudeste Superport Tunnel entrance
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- 29. Bridge 450 m Superporto Sudeste Offshore Structure - Bridge
- 30. Superporto Sudeste Offshore Structure Bridgeand Pier Pier 766 m Bridge 250 m
- 31. Superporto Sudeste OffshoreStructure Ilha da Madeira
- 32. SUDESTE SUPERPORT CAPEX andFunding CAPEX Funding: BNDES FINAME - PSI Total Amount: R$ 407.1 mm Actual Forecast Interest Rate per Year: 4.50% Amortization: 8 years 1.276 Grace Period: 2 years Funding: BNDES FINEM Total Amount: R$ 805.1 mm Interest Rate per Year: TJLP + 2.18% Amortization: 10 years 286 649 Grace Period: 2 years 86 40 63 Requested Supplementary Funding : R$ 552 million 2007 2008 2009 2010 2011 to 2013 32
- 33. SUDESTE SUPERPORT Construction schedule 1S09 2S09 1S10 2S10 1S11 2S11 1S12 2S12 1Q13 Preliminary License Construction LIcense Funding BNDES FINAME- PSI ANTAQ License Funding BNDES FINEM Civil Construction: Stockyard 06 Stockyard 32 Tunnel Offshore Road-rail access Equipment sett up: Car dumpers Shiploader Stacker reclaimer Belt conveyor 33 33
- 34. USIMINAS AGREEMENT Pau de Vinho Joint Mining Sudeste Superport Handling SRK resources audit : 810 million tons Handling fee: USD 12.63/ton adjusted plus a potential 75 million tons by US-PPI Pau de Vinho target production: 8 Mtpy Volumes: ■ 2012 = 3 Mtpy Significant synergies with current mining operations at Serra Azul ■ 2013 = 4 Mtpy ■ 2014 = 8 Mtpy 13.5% of production at Pau de Vinho ■ 2015 = 12 Mtpy will be delivered to Usiminas ■ 2016 = 12 Mtpy MMX will be responsible for the licensing, CAPEX and operation for 30 80% Take-or-Pay years Usiminas can renew the contract for 1 to 5 years 34
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- 36. 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 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% 36
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- 38. 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: 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% 38
- 39. CHILE Castilha Port EBXhas 240,000 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 39
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- 41. 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 a potential of an additional 123 million tons 41
- 42. 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