Presentation to InvestorsSecond Quarter, 2010

Industry Overview

2

Refractories are heat-resistant materials manufactured in a wide variety of compositions and shapes according to their application.

Raw Material Products Application

Main Consumers Worldwide

Steel70%

Cement7%

Ceramic5%

Non-ferrous5%

Glass4%

Chemical4% Others

5%

Steel industry: represents 85% of Magnesita’s revenues

Industry Overview

BLAST FURNACE• Refractories: Alumina and Alumina-silicon• Refractory Volume: 900 tonnes• Life Expectancy: 15 years

CONVERTER• Refractories: Magnesia-carbon and Magnesia• Volume: 800 tonnes• Life Expectancy: 6 months

CONTINUOUS CASTING• Refractories: Alumina graphite tubesand Magnesia• Volume: 25 tonnes• Life Expectancy: 10 hours

ELETRIC ARC FURNACE• Refractories: Magnesia and Dolomitic• Volume: 120 tonnes• Life Expectancy: 1 month

TORPEDO CAR• Refractories: Alumina-carbide-carbon• Volume: 200 tonnes• Life Expectancy: 2 years

STEEL LADLES• Refractories: Dolomitic, Magnesia-carbonand Magnesia• Volume: 70 tonnes• Life Expectancy: 1 month

4

Cement industry: represents 10% of Magnesita’s revenues

Industry Overview

Rotary Kiln

Clinker Cooler

Preheater Tower

ROTARY KILN• Refractories: Magnesia-sipnel, Alumina and Alumina-silicon• Volume: 250 tonnes• Life Expectancy: 10 months

PREHEATER TOWER• Refractories: Alumina andAlumina-silicon• Volume: 1,000 tonnes• Life Expectancy: 5 - 10 years

CLINKER COOLER• Refractories: Alumina andAlumina-silicon• Volume: 500 tonnes• Life Expectancy: 1 - 3 years

Industry Overview – Consumer Market

5Source: Magnesita’s Marketing Intelligence and World Steel Association

Steel Production

Cement Production

• World Refractories Market: 23 MM tpy

• Refractories for Steel Market: US$ 15.7 billion

• Refractories for Cement Market: US$ 2.2 billion

• 1 tonne of Steel = 12 kg of Refractories

• 1 tonne of Cement = 0.6 kg of Refractories

Global Production

Total

China

World (Ex-China)

Crude Steel & Cement Production (million tonnes)

365 344267

372 350 324

2007 2008 2009

Europe + CIS

761 771 776

2,047 2,119 2,207

2007 2008 2009

Asia

490 500 568861 829

652

1,351 1,329 1,220

2007 2008 2009

Global Steel Production

Company Overview

Company’s Highlights

• Largest and purest magnesite reserves in the world;

• High level of self-suficiency in raw materials;

• One of the lowest cost producer in the world;

• 3rd largest player in the refractory sector worldwide with a 5.4% market share;

• Exclusive and innovative cost per performance business model (CPP);

• International state of the art technology;

• Strong management team and corporategovernance practices.

EBITDA Margin 18.9%

2009 Financial Highlights

EBITDA R$ 365.0 million

Net Revenues

Net Debt R$ 1,414.8 million

R$ 1,926.6 million

Shareholding Structure as of June 30, 2010

GP38.5%

RHONE8.1%

GAVEA3.6%

FOREIGNERS18.5%

INDIVIDUALS13.1%

INVESTMENTS FUNDS AND

CLUBS11.9%

BROKERS/BANKS/DISTRIBUTORS

4.6%

OTHERS1.7%

Controlling Group = 50.2%

TOTAL SHARES = 258,211,934

Others = 49.8%

Market Cap. R$ 3.7 billion (as of Dec 31th, 2009)

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Company Overview

Management Team Strong Corporate Governance Practices

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Board of Directors Recent Management Achievements• Fersen Lamas Lambranho - President

• Marcio Tabatchnik Trigueiro – Director

• Octavio Pereira Lopes – Director

• Robert Frank Agostinelli - Director

• Thiago Emanuel Rodrigues - Director

• Nelson Rozental - Director

• Fabio Alperowitch - Independent Director

• Bernardo Guimarães Rodarte - Independent Director

• Reduction in workforce;

• Aggressive reduction in fixed costs;

• Accelaration of synergy processes;

• Reduction in working capital;

• Adoption of a meritocratic remuneration model.

Listed at Bovespa’s Novo Mercado

Two independent board members

Independent board of auditors

High Disclosure Standards

Arbitration Panel for Corporate Conflicts

VP FinanceFlávio Barbosa

VP CommercialMauricio Pinho

VP OperationsDavid Gregory

Global Director –People & Target

ManagementOtto Levy

VP FinanceFlavio Barbosa

VP CommercialMauricio Pinho

VP OperationsDavid Gregory

COOSouth America

Wagner Sampaio

COONorth America

Jim Piraino

COOEurope

Peter Estermann

COOAsia

Deilson Tibo

Global DirectorPeople & Target

Management

Otto Levy

Global DirectorR & D

Luis Rodolfo

CEORonaldo Iabrudi

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Company Overview

Magnesita has a global presence, with plants in four continents and a strong presence in high-growth markets such as China and Latin America.

Magnesita International Footprint

• 28 industrial facilities;

• 8,093 employees and contributors worldwide;

• It owns one of the largest reserves of magnesite anddolomite with the highest grade worldwide.

Production Capacity (‘000 tonnes per year)

MagnesiteSinter

DolomiteSinter Refractories

Brazil 320 30 550

Argentina - - 40

USA - 200 256

Belgium - 180 -

France - - 127

Germany - - 337

China - 65 108

Taiwan (**) - - 16

TOTAL 320 475 1,434

** considering JV with Envoy

Company History

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Over 70 years of experience in the refractories business* Note: “Novo Mercado” is a listing segment of the São Paulo Stock Exchange designed for companies that voluntarily undertake to abide by corporate governance and disclosure practices in addition to those already required by Brazilian Law and the CVM.

1939Foundation: Magnesita Ltda. was established after the discovery of a large amount of magnesite in Brumado(Bahia State)

1944The beginning of industrial operations

1969Listing: Company IPO on the São Paulo Stock Exchange (BOVESPA)

1990CPP: following the collapse of import tarriffs for refractories in Brazil, Magnesita created a revolutionary business model, CPP – “Cost per Performance”

2007Control Change: GP and Gavea acquired control of Magnesita S.A., held two tender offers and purchased shares in the market

2008April: Novo Mercado* listing

September: LWB acquisition at a value of € 657 MM

2009Capital Increase: In October, the controlling shareholdres approved a R$ 350 million-capital increase, of which BNDES took part

2010March: bond issue of US$ 400 MM denominated notes with semiannually payble fixed interest of 7.875% per annum and maturity date in 2020

Company’s Strategy

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Leverage solution-based model

Maximize economic value of mineral reserves

Seek to further cost reduction

Pursue global growth opportunities

Maximize Economic Value of Mineral Reserves

11

BRUMADO MAGNESITE MINE

Magnesite Reserves

Dolomite Reserves

YORK DOLOMITE MINE • 25 million tonnes of reserves;

• Expected life: 50 years

SINTERCO DOLOMITE JV • 31 million tonnes of reserves;

• Expected life: 50 years

QINGYANG DOLOMITE MINE• 18 million tonnes of reserves;

• Expected life: 50 years.

Port of Aratu

RAW MATERIALS HIGHLIGHTS

• High quality reserves;

• Geographically diversifiedlocations, with presence in 3 continents;

• High level of self-suficiency in raw materials;

• Efficient infrastructure for export to U.S. and Europeanmarkets;

• Low raw material cash costs.

560 km

920 km

• 830 million tonnes of reserves;

• Brumado’s mine is the only one in the world that allows the economical production of 98.3%-grade DBM;

• Expected life: 200 years;

• The mine is connected to the port of Aratu by the FCA railway.

Leverage Solution Based Model (CPP)

The concept of the solution based model is that customers are not charged per tonne of refractory consumed but by tonne of output in each equipment, aligning Magnesita’s and customers interests.

Initial Issues CPP Activities Customers’ Results• Low equipment productivity due to frequent stoppage for refractory replacement;

• High energy consumption;

• High refractory costs.

Process monitoring, process engineering,chemical and thermodynamics analysis

“Post mortem” analysis in the lab, technicalresearch, experiments, simulations, productdevelopment

Projects, inventorymanagement, instalation, refractory recycling

• Improvement in the equipment productivity:

ü Increase refractory life ü Increase asset availability and therefore the final output

• Reduce energy loss:

ü Less equipment stoppagesfor cooling and reheating

• Reduce CapEx by reducing the need to invest in new equipment and inventory;

Magnesita’s Benefits

• Revenue growth: (i) revenues linked to customers’ productivity. (ii) full product portfolio; • High EBITDA margin: (i) longer refractory life. (ii) less refractory use;• Stronger barrier to competitors: ties with key customers.

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Leverage Solution Based Model (CPP)

13

6

USA/Canada

Ecuador

China

1

2

1UK

2

Germany

2

Brazil

Chile

Peru

14

1

4Mexico

• New contracts in 2Q10:

1.ELG Haniel Metals, UK

2.ThyssenKrupp Beeckerwerth, Germany

3.Customer´s name under confidentiality, Germany

4.TISCO, China

5.Jiaxing Eastern Special Steel, China

• In 3Q10, the Company was chosen by four North American steel mills as a refractory supplier

under the CPP model.

• 23 new CPP contracts have been originated until June 2010 under the current Management.

CPP Contracts since 2008

• Fragmented market;

• High value creation in raw material synergies in consolidation opportunity;

• Leverage its mineral reserves;

• Replicate its unique and innovate solutions based model into new markets;

• Diversification into other industrials segments: glass, non-ferrous, petrochemical, paper, etc.

Pursue Global Growth Opportunities

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Magnesita’s Market Share by Region (based on revenues)

Refractory Market Share (based on 2009 revenues)

Source: Magnesita Estimates.

Growing Organically Consolidation Opportunities

• Expose to high growth markets (China and Brazil);

• Gain market share in mature markets (North America and Europe):

ü Compete with a different business model ü Leverage its low raw material costü Joint ventures with strategic players

67%

13%7%

0.3%

56%

19%6%

0.5%

South America North America Europe + Middle East

Asia

Steel Cement

Source: Magnesita Estimates

RHI9.5%

Vesuvius9.4%

Magnesita5.4%

Shinagawa5.0%

Krosaki3.7%

Saint-Gobain3.4%

Others63.6%

Seek to Further Cost Reduction

Reduce SG&A Costs

• Achieve 90% of self-sufficiency in rawmaterials (alumina andgraphite);

• Management model withhigh cost discipline;

• Variable remunerationslinked to the goals of costreduction.

Reduce Manufacture Costs Peers’ Revenues and EBITDA Margin

• Reduction in workforce;

• Streamline corporatestructure;

• Agressive reduction in fixedcosts;

2009 REVENUES USD MM

2009 EBITDA Margin %

MARKET CAP. (as of 12/31/09)

USD BI

RHI 1,717 9.3 0.9

Vesuvius 1,687 8.7 1.9

Magnesita 966 18.9 2.1

Krosaki 664 7.6 0.4

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* The size of the balls indicate Market Cap. as of Dec 31, 2009

0

500

1000

1500

2000

2500

3000

0% 5% 10% 15% 20% 25%

2009

Rev

enue

s -U

SD m

illio

n

2009 EBITDA Margin %

RHI

Vesuvius

Magnesita

Krosaki

71.6

110.1

138.8123.1 119.5

15.8

22.825.8

21.8 21.7

10

15

20

25

30

35

40

0

20

40

60

80

100

120

140

160

2Q09 3Q09 4Q09 1Q10 2Q10

EBITDA - R$ million EBITDA Margin %

Financial Performance

Gross Profit and Gross MarginRevenues – R$ million

EBITDA and EBITDA Margin

39.7% 45.8% 41.3% 45.9% 47.6%

60.3% 54.2% 58.7% 54.1% 52.4%

2Q09 3Q09 4Q09 1Q10 2Q10

Domestic Market Export Market

454.2 483.6537.7 565.9 551.7

144.2169.7

183.6 196.2 199.2

31.8

35.134.1 34.7

36.1

30

32

34

36

38

40

42

44

0

50

100

150

200

250

2Q09 3Q09 4Q09 1Q10 2Q10

Gross Profit - R$ million Gross Margin %

16

110.5

108.4

19.5

19.7

19,2

19,7

20,2

90

95

100

105

110

115

1Q10 2Q10

Adjusted EBITDA – R$ million EBITDA Margin %

Adjusted EBITDA and Adjusted EBITDA Margin

Indebtedness

Net Debt – R$ millionDebt Profile – R$ million

Debt Amortization Schedule – R$ million Financial Indicators

ST 15.3% ST 11.8%

LT 84.7%LT 88.5%

1,491.0

459.8

Gross Debt 06-30-2009

Gross Debt 06-30-2010

Cash Net Debt

2,174.51,950.8 1,919

1,434 1,415 1,4131,491

6/30/2009 9/30/2009 12/31/2009 3/31/2010 06/30/10

223.8

20.9 29.2

331.0 323.1 321.5

701.3

2010 2011 2012 2013 2014 2015 2020

5.6 5.5

3.93.2 3.0

4.3

2.61.8

1.41.8

2Q09 3Q09 4Q09 1Q10 2Q10

Net debt/EBITDA

EBITDA/Finacial expenses + Monetary/Exchange Variations/Forex Liabilities

* EBITDA in the last 12 months

17

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Investments in Brumado

• Investments of R$ 220 million are planned to increase capacity in the Brumado mines over the

next 3 years, aimed at securing the Company's future demand for magnesite sinter.

• This project is part of a multi-annual investment

plan designed to increase the magnesite sinter

(M30) production capacity in two phases of 60,000

metric tons/year, totaling 120,000 metric

tons/year in 3 years.

• Our current M30 sinter production capacity is 180,000 metric tons per year.

• This investment will allow the Company to grow along with the Brazilian market, while keeping high service levels.

Capital Expenditures

Stock Performance

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Coverage of major banks: Itau, Credit Suisse, BTG Pactual, Merrill Lynch, Santander, Barclays, Deutsche Bank and Safra.

Share Performance (Last 12 months)

31%

18%

95

115

135

155

175

195

Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Mar-10 Apr-10 May-10 Jun-10

June

30t

h,20

09 =

100

MAGG3 IBOVESPA

Strategic Highlights

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Strong management team and corporate

governance practices

Fast global growth platform

Low cost producer -High level of self-sufficiency in raw

materials

High margin integrated business model

Unique innovate solution based model

Flávio Rezende BarbosaChief Financial and Investor Relations Officer

Adriana Fernandes LanaInvestor Relations Manager Phone: (+55 31) 3368-1069

Lucas Lima FerreiraInvestor Relations Analyst Phone: (+55 31) 3368-1068

ri@magnesita.com www.magnesita.com/ri

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Appendix A: Production Process

Production Process

Production Process

RAW MATERIAL’SSILO

WEIGHING

MIXER

PRESS

PILE IN

BURN CARS

HOT AIR DRYER

TUNNER KILN

UNLOAD PILE

TO PLATE

CUT AND MILLING MACHINE

SELECTION AND PACKING

MILL

SINTER’SBAY

CRUSHER