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Americas Iron Ore
Conference Rio de Janeiro, Brazil – November 2014
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, 2011 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.
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About Baffinland
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ArcelorMittal in Canada
• Investing in new Canadian iron ore mining capacity.
• Now the fastest growing Canadian mine operator, and one of
Canada’s leading mining companies.
• Substantial foreign investment in Canada.
• Acquired Dofasco in 2007, including Quebec Cartier Mines.
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Baffinland Investment
• Owned 50% by ArcelorMittal and 50% by Iron Ore Holdings
LP (private equity firm).
• ArcelorMittal assumed ownership of Baffinland Iron Mines
on March 1, 2011.
• Focused exclusively on the exploration and development of
our Mary River Iron Ore Project.
• A Canadian company with Canadian leadership and backed
by its owners.
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Mary River Project
Mary River: Facts
• Discovered in 1962; but for a long time was seen only as a
potential ‘some day’ development.
• Located at Mary River, North Baffin Island, 1,000 km north of
Iqaluit, 160 km south of Pond Inlet.
• Consists of high grade 65+% iron lump and fine iron ore.
• Best undeveloped iron ore deposit currently in the world.
• Drill, blast, crush, stockpile, ship – proven technology.
• No processing – no tailings.
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Visual Reference
Mary River Site
Milne Inlet Port
Nuuk
Toronto
Houston
London
Rotterdam
Baffin Island
Bylot Island
Steensby Inlet Port Site
Iqaluit
Montreal
Air Charter Services Iron Ore Shipments
Cargo/Fuel Sea Lifts
Legend ------ Air Charter Services ------ Cargo/Fuel Sea Lifts ------ Iron Ore Shipments
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Project Location and Arctic Operations
Lupin
Jericho
Boston
Snap Lake Mine
George Lake
Meliadine
Diavik MineEkati Mine
Kubaka
Rankin Inlet
Fort Knox Mine
Oktybar(Norlisk)
Nanisivik
Meadowbank
Cullaton Lake
Ulu
Cambridge Bay
Polaris
Iqaluit
Black Angel
Kittila
Kupol
Julietta
Red Dog Mine
Raglan Mine
Voisey's Bay
Spitsbergen Coal Mines
North
Pole
Mary River
Arctic
Circle
2,500 metre strike length
Open Pit
Height is approximately 500 metres to top of peak
Deposit No. 1 - Looking West
Deposit Nos. 1, 2 & 3
Deposit No. 3
Deposit No. 2
Deposit No. 1
Six additional Deposit Nos. 4 through 9 and additional High Grade (60+% Fe) mineralised occurrences have been identified throughout North Baffin Island
Confidential
Benefits to Canada:
• Mary River is the largest mining project in development in Canada and one
of the largest undeveloped iron ore projects in the world.
• The project will:
1) provide substantial long term economic benefits to Canada, particularly to the territory of Nunavut and especially for aboriginal people;
2) generate significant numbers of jobs and benefits to Canadian businesses; and
3) generate revenues to federal, territorial and provincial treasuries, particularly lessening Nunavut’s dependency on Ottawa.
• Potential to generate increased infrastructure development in the North
and provide significant investment opportunities for stakeholders.
• Development of the project will enhance Canada's reputation for practical
environmental management of inevitable industrial development in the
North.
• Demonstrate Canadian sovereignty in the Arctic.
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What the Project Means…
For Nunavut, the timely development of the Mary River Project will generate:
Significant training, employment, and business opportunities for Inuit;
A comprehensive IIBA – to secure long term benefits for Inuit;
Potential large scale regional economic development helping to promote social, political, and economic growth for Nunavut;
Royalty and tax revenues; and
The benefits of meeting the objectives outlined in the Nunavut Land Claims Agreement.
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The Target Development
• 18-30 Million tonnes per year high grade direct ship ore
• Rail from Mine to Port
• Shiploading facilities to load Cape size vessel
• Fleet of 8-10 Cape sized ice breaking ore carriers
• US$5 Billion capital investment required
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Market Perceived Risk
• Ability to Permit
• Ability to gain social licence to operate
• Ability to execute in Arctic environment
• Logistics
• Construct
• Operational
• Technical
• Ability to ship through ice
• Market response to product (premium direct ship ore)
• Early Revenue Phase Project devised in 2012 to address
these risk elements
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• Brought on by challenging economic times
• Many large global mining projects cancelled, delayed or
scaled back
• Enables an early mining phase that requires less capital
investment
• Will create training, business opportunities, revenue and
long term employment, sooner than the Rail Phase
• Provides a more manageable Project start
Phased Approach – Early Revenue Phase
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Mining
Crushing
Shipping
From Pit to Port
Use mobile equipment to crush to 28mm.
Simple crushing and screening operation. Trucking DSO to Milne port.
Stockpile ore at Milne Inlet and ship during open water season.
Open pit mining from Deposit 1 starting in 2014 and commercial production in 2015.
Trucking
The high quality of the resource allows for a very simple operation
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Phased Development
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Phase 1 capable of producing and transporting at the rate of 3.5 Mt/y and, in particular, shiploading the full 3.5 Mt over the 65-85 day open-water season
Phase 2 designed to optimize Phase 1 infrastructure and increase total capacity through increasing:
Camps, power plants and other basic infrastructure
Mining equipment (loaders, crushers, dozers)
Road haul equipment (road tractor and trailer pairs)
Stockpile size and reclaim/shiploader systems
Open water shipping to increase
Shipments in ice months to be done through use of “Polar Class” 90,000 t ships
Trans-shipment at Nuuk to maximize “Polar Class” vessel ice utilization
Phase 1 Overview – Construction Progress
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Mary River Site – September 5, 2014
Runway – operational with 737 combi-jets
Camps, fuel storage – operational Power plants, waste – operational Warehouse, ER - operational Maintenance – under construction
Haul from mine face - operational
Crusher system - operational
Mine haul road
Phase 1 Overview – Construction Progress
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Milne Inlet Site – September 5, 2014
Milne port site complex
“First” ore on Milne stockpile – September 8, 2014
Dock piles being punched (Sep 8th)
Reclaim system installation (Sep 8th)
Phase 1 Overview – Construction Progress
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Haul Road – September 5, 2014
Road straightening and upgrading - ongoing
Bridges - operational
Grade reduction – ongoing
“First” ore transport on tote road, September 8, 2014
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Construction Area - Milne Inlet
General Arrangement of Site (Sept. 26, 2014) 23
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Shiploader Instllation
Mary River Camp near the base of Deposit #1 (March 2014)
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500,000L Diesel Tank Arriving at the Mine Site
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Placing Cummins Workshop Sea Can - Mine Site
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ERT Building – Mine Site
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Batch Plant Building
Tote Road Upgrades 30
Road: Mine to Port 100 km
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The access to the Mary River site is by ship during open water….
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….and aircraft year round.
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Runway at Mary River, Fall 2013
Market Perceived Risk • Ability to Permit = Permit received (June 2014)
• Ability to gain social licence to operate = Local agreements in
place (September 2013)
• Ability to execute in Arctic environment • Logistics – All equipment and material delivered to Site
• Construct – Phase 1 Construction 95% complete on budget, ahead
of schedule
• Operational – Mining stockpiling started (September 2014)
• Ability to ship through ice – currently in place elsewhere
• Market response to product (premium direct ship ore) – First
ore to market H2-2015
• Early Revenue Phase Project has addressed risk element,
giving confidence for further investment/exposure
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Mary River iron ore is the best undeveloped resource in the world, which ensures a high quality product and low operating cost • The best undeveloped iron ore project in the world
• The highest grade in the world ensures low operating cost
• Phased development strategy critical to prudent, reduced risk
development
• With completion of Early Revenue Phase in next 12 months, sight
set for expansion development
• Partners have contributed large equity upfront – ERP fully financed
• This project is a formative event for high arctic development –
largest in the world – and will establish Canadian presence and
sovereignty in arctic shipping lanes
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Climate in the Arctic
Land of Unique Beauty
…but Challenging
Logistics
Thank you