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Earnings call – 4Q11 and 2011 March 08,2012

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Highlights

Growth in refractory solutions • Refractory volume grew by 6.8% YTD and 3.4% compared to the previous quarter • Strong sales growth in the US, Europe and Asia operations, above the industry, with market share gains • Strong sales growth to the industrial sector in 4Q11 (+44% vs 3Q11 and 25.6% vs 4T10) • 6 new CPP contracts in 2011 (3 in 4Q11); 3 outside South America

Record high operating cash flow generation •Record of R$ 565.4 million YTD operating cash flow •R$ 91.4 million working capital reduction vs. 4Q10 (26-day shorter cash conversion cycle). Compared to the previous quarter, reduction of R$ 46.5 million (11-day shorter cash conversion cycle).

Revenues growth • Net revenues of R$ 2.3 billion in 2011, up 1.9% from 2010, driven by growth sales of refractory solutions • Net revenues of R$ 599.1 million in 4Q11, increasing by 6.7% vs 3Q11 and 1.9% vs 4Q10, driven by sales in US and Europe, sales of minerals (+72.5% vs 3Q11), sales to the industrial sector, besides the impact of exchange depreciation

Vertical integration projects • Brumado expansion - start-up in April/2012 • Graphite – focus on environmental license

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Revenues and volumes by segment

%

4Q11 (a) 3Q11 (b) 4Q10 (c) (a/b) (a/c) 2011 (d) 2010 (e) (d/e)

Refractory Solutions

Volume (t) 271,791 262,891 263,957 3.4% 3.0% 1,106,915 1,036,845 6.8%

Revenues (R$ '000) 516,381 496,708 476,892 4.0% 8.3% 2,035,282 1,959,285 3.9%

Minerals

Volume (t) 226,004 172,235 160,743 31.2% 40.6% 674,350 881,755 -23.5%

Revenues (R$ '000) 48,576 28,157 68,764 72.5% -29.4% 131,052 157,970 -17.0%

Services

Revenues (R$ '000) 34,167 36,604 42,536 -6.7% -19.7% 152,569 159,129 -4.1%

TOTAL

Revenues (R$ '000) 599,125 561,469 588,192 6.7% 1.9% 2,318,902 2,276,384 1.9%

Product LineQuarter % Year

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Refractory solutions by sector

Net revenue by sector R$ million

+5.2%

4Q11

426.6

3Q11

434.3

4Q10

405.4

89.8

3Q11

62.4

4Q10

71.5

4Q11

+25.6%

1,671.2

+4.1%

2011

1,739.0

2010

288.1

+2.8%

2011

296.3

2010

Steel

Industrial

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Region 2011 Total

North America 1 14

Europe 1 8

Asia 1 4

South America 3 36

TOTAL 6 62

New CPP contracts Number of contracts

Refractory solutions - CPP

32.9% of revenues to the steel sector in 2011

33.5% of revenues to the steel sector in 4Q11

24 26 27 31

36 40 42 47

52 56 59 59 59 62

Bef

ore

20

08

20

08

1Q

09

2Q

09

3Q

09

4Q

09

1Q

10

2Q

10

3Q

10

4Q

10

1Q

11

2Q

11

3Q

11

4Q

11

24 2

14

16

3 0 0

3 62

Bef

ore

20

08

20

08

20

09

20

10

1T1

1

2T1

1

3T1

1

4T1

1

Tota

l

New CPP contracts Number of contracts

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Gross margin by segment

Gross margin %

Quarter YTD

4Q11 3Q11 4Q10 2011 2010

Refractory solutions 30.6 32.2 31.0 32.1 35.0

Minerals 44.9 50.6 44.6 45.8 42.1

Services 9.7 10.4 19.1 11.3 16.2

TOTAL 30.5 31.7 31.8 31.5 34.2

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Cash generation and net income (R$ million)

Net income EBITDA and EBITDA Margin (%) Cash flow from Operations

34.4

4Q10

20.5

4Q11

11.6

3Q11 4Q11

104.8

3Q11

188.4

4Q10

220.5

4Q11

111.8

18.7

3Q11

118.7

21.1

4Q10

110.5

18.8

98.6

2010

92.3

+7%

2011

-8%

2011

427.4

18.4

2010

463.3

20.4

1.5 x

2011

565.4

2010

365.2

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Working capital and cash conversion cycle

Cash conversion Days

Working capital

R$ million

741.2

10.8%

4T11 3T11

787.7

2T11

790.6

1T11

805.2

4T10

831.0

26 days shorter cash conversion cycle vs.4Q10

11 days shorter cash conversion cycle vs.3Q10

R$ 91 million reduction vs 4Q10

R$ 46 million reduction vs 3Q11

161 153

145 146 135

48 56

66 76 79

129 129 129 144 138

4T10 1T11 2T11 3T11 4T11

Cash conversion cycle Suppliers Inventories