Post on 27-Jun-2015
description
24, November, 2014
ArcelorMittal Mines
Americas Iron Ore Conference Kleber Silva – Head of Iron Ore
Disclaimer Forward-Looking Statements
This document may contain forward-looking information and statements about ArcelorMittal and
its subsidiaries. These statements include financial projections and estimates and their underlying
assumptions, statements regarding plans, objectives and expectations with respect to future
operations, products and services, and statements regarding future performance. Forward-
looking statements may be identified by the words “believe,” “expect,” “anticipate,” “target” or
similar expressions. Although ArcelorMittal’s management believes that the expectations reflected
in such forward-looking statements are reasonable, investors and holders of ArcelorMittal’s
securities are cautioned that forward-looking information and statements are subject to numerous
risks and uncertainties, many of which are difficult to predict and generally beyond the control of
ArcelorMittal, that could cause actual results and developments to differ materially and adversely
from those expressed in, or implied or projected by, the forward-looking information and
statements. These risks and uncertainties include those discussed or identified in the filings with
the Luxembourg Stock Market Authority for the Financial Markets (Commission de Surveillance
du Secteur Financier) and the United States Securities and Exchange Commission (the “SEC”)
made or to be made by ArcelorMittal, including ArcelorMittal’s Annual Report on Form 20-F for the
year ended December 31, 2013 filed with the SEC. ArcelorMittal undertakes no obligation to
publicly update its forward-looking statements, whether as a result of new information, future
events, or otherwise.
1
2
HSE and sustainability
* World steel association -standard: LTIFR = Lost Time Injuries per 1.000.000 worked hours; based on own personnel and contractors
ArcelorMittal Iron Ore operations segment injury
frequency rate*
6.1
4.03.3
2.4
1.20.7 0.5
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
5.5
6.0
6.5
2006 2007 2012 2008
1.6
2009 2010 2011 2013
world class performance
Safety remains the No1 priority for ArcelorMittal
• Continued aim of achieving zero
fatalities and serious injuries:
– Increasing safety awareness with
focus on hazard identification and
risk awareness for
areas/equipment and tasks
– Further y-o-y improvement in LTIF*
and greater focus on total injury
frequency rate reduction
• Manage occupational exposures
through control plans to address key
exposures from our health risk
assessments
• Demonstrate environmental
stewardship by managing and
minimizing our impact on the
environment
On-going focus
* Includes share of production
(1) Following an agreement signed off in December 2012, on February 20th, 2013, Nunavut Iron Ore subscribed for new shares in Baffinland Iron Mines Corporation which diluted AM’s stake to 50%
(2) January 2nd, 2013 AM entered into an agreement to sell 15% of its stake in AM Mines Canada to a consortium lead POSCO and China Steel Corporation (CSC).
Mining business portfolio
Key assets and projects
USA Iron Ore
Minorca
Hibbing
Mexico Iron Ore
Las Truchas
Volcan
Pena 50% Liberia
Iron Ore
Algeria
Iron Ore
Brazil
Iron Ore
New projects /
exploration
Existing mines
Canada
AMMC(2)
Bosnia
Iron Ore
Ukraine
Iron Ore
Kazakhstan
Iron Ore
4 mines
Iron ore mine
Canada
Baffinland (1)
3
Geographically diversified mining assets
Iron Ore production/capacity*
(million Mt)
Improvement
4
Market priced iron ore shipment growth
2010 – 2014F (million Mt)
352928
25
2013 2012
+15%
2014F 2010 2011
On track to achieve 15% market priced iron ore shipment growth in 2014
Record iron ore volumes
58565449
70
2013 2014F 2010 2012 2011
* Capacity for ArcelorMittal Mines Canada, Algeria and Liberia on 100% basis
CA
PA
CIT
Y
Liberia Phase 1 - Complete
• 4Mtpa Direct Shipped Ore (DSO) capacity
- Achieved 5.2Mt shipments in 2013
AMMC – Expansion to 24Mt complete
• Spirals upgrade, new concentrator, mine
and rail upgrade
• 24Mt production and shipment rate
achieved in Dec 2013
• Unit costs benefiting from higher volumes
Savings from multiple cost reduction
levers
Relentless focus on costs
• Gaining economies of scale from debottlenecking
• Share and apply best practice leveraging internal and external benchmarks
• Zero based analysis of organization and overhead
• Delayering the organization
• Optimize mine plans with focus on grade control and recoveries
• Improving maintenance planning and reliability
• Operational excellence, rigour and discipline underway across assets
• OEE improvements
• Procurement focus on key category management, shared services and centres of excellence
5
1st
AMMC ArcelorMittal
Liberia
Post capex FOB cash cost
Positioning key assets low on the cost curve
Illustrative cash cost curve (marketable tonnes) post expansion
2nd 3rd 4th
Quartile
Focus on value
and OEE
initiatives
Focus on
quality
AM Mines Canada Iron ore production/ capacity (Mt)
1
8 2
2 2
Stretch
potential
30
2014F
24
2013 2013 2012
15
Concentrator and
spirals expansion
complete
Incremental debottlenecking
Potential 6MT expansion - low capex intensity
Potential further debottleneck
Production
Daily records show potential in system
Incremental investments for debottlenecking as required:
• Mt Wright mine optimization, Fire Lake expansion (richer ore) and
crusher debottlenecking
• Rail winter reclaim capability, long train capability, additional sidings
• Additional conveyor capacity at port
• Significant cost benefits from scale
• Potential to expand beyond 30Mt at low capital intensity
6 * subject to final approvals
AMMC expanded to 24Mt with potential
to stretch to 30Mt
Incremental steps to maximize the demonstrated potential of the system
7
Revised phase 2 project:
• Product analysis and additional mine planning have identified potential to
supply 15Mtpa high quality sinter feed at significantly lower cost than
concentrate for first 8-10yrs
• Investment capex estimate of circa $1.7 billion
Stretch opportunity:
• Better definition of ore body and mine plan confirmed potential to continue
DSO phase for additional 6 years
• Expansion to 20Mtpa capacity*
• Incremental investments enable benefits of scale on rail, port and SGA
Ebola:
• Preventive measures in place (temperature checks, hygiene, awareness)
• Supporting the Government and engagement with the Community
• Since outbreak 5000 people and families are working in our concessions
without any case
• Number of cases declining in the counties that we operate
Liberia iron ore capacity forecast (MMt)
* subject to final approvals
15
5
15
5
Stretch
20
Phase 2 -
Sinter feed 2014 DSO
DSO (Stretch)
2014 DSO
Phase 2 Sinter feed
Liberia growing to 15Mt with further
stretch potential
Stretching existing assets with limited capex to maximize potential value
Mexico - Peña Colorada
• ArcelorMittal holds 50% of Peña Colorada
Ltd., and Ternium S.A. owns the other 50%
of the company. Peña Colorada operates
an open pit mine as well as a concentrating
facility and a two line pelletizing facility.
• Total pellet production of 4.07mt and
0.43mt of concentrate (of which 50% is
ArcelorMittal share)
• Project ongoing to sustain production:
– Investment in mine equipment to
develop the mine
– Upgrade of the concentrator to deal with
the decline in grades (from 35% Fe to
23% Fe)
– Extension of mine life by 20 years
– Improve quality
8 4mt of Iron Ore Production in 2013*
*100% basis
• Highlights of 2013: – Reserves additions exceeded mining depletion to provide a net increase of ~278Mt in iron ore reserves
– The average Fe grade increased by 0.8% due to the addition of higher grade iron ore reserves from the Fire Lake deposit in Canada.
• Reserve estimates are supported by internal technical reports
• Updated life of mine plans with discounted cash flows to support demonstration of economic viability for all ore reserve estimates
• In addition, a large resource base with potential for economic extraction supports reserves additions and replacement and future potential growth.
2013 vs 2012 Iron ore reserves (million metric tonnes)
2013 Iron ore reserves of 4.6 bn metric tonnes
Iron ore reserve and resource estimates Strong reserve basis to support sustainable growth
9
Region
As of December 31, 2013 As of December 31, 2012
Proven Ore Reserves Probable Ore Reserves Total Ore Reserves Total Ore Reserves
Millions of
Tonnes % Fe
Millions of
Tonnes % Fe
Millions of
Tonnes % Fe
Millions of
Tonnes % Fe
Canada (AMMC) 2,112 30.3 85 28.8 2,197 30.2 1,952 28.4
Canada (Baffinland) 108 65.4 272 66.0 380 65.8 375 64.7
USA 421 20.5 26 19.6 446 20.5 473 20.4
Central America 99 25.2 153 24.8 377 25.0 395 25.7
South America 100 58.9 20 53.2 120 57.9 121 58.2
West Africa - - 505 48.5 505 48.5 526 48.4
Eastern Europe 222 33.0 29 45.8 276 36.3 301 34.5
Central Asia 55 44.9 249 39.7 309 39.9 188 40.0
Total 4609.4 35.5 4331.1 34.7
10
Recap
• Mining is a strategic franchise business within ArcelorMittal
• We are exploiting our potential:
– World Class Safety outcomes
– Assessing and optimizing our global asset base
– Delivering year-on-year cost reductions in key assets
– Delivering quality to our customers
– Delivering competitive bottom line performance
• We are delivering on our growth plans, delivering Value
ArcelorMittal is building a world class mining business
focussing on cost, quality, growth - VALUE