ArcelorMittal South Africa Investors’ Day

12 September 2007

1

Agenda

• South Africa at a glance

• ArcelorMittal South Africa’s standing

• ArcelorMittal’s involvement

• Strategy going forward

• Commitment to the economy & community

– Safety, Health & Environment

– Corporate Social Responsibility

• Outlook

2

South Africa at a glance

3

• Current six-year upswing now twice the duration of the last (1993-96) upswing and still going strong (GDP output growth at 4.5%).

• Real fixed investment doubled during 1994-2005.

• Inflation way down its 1986 peak.

• Government spending as a share of GDP increased from 22% in 2002 to an expected 27% in 2007.

The South African Economy

At GDP growth of 3%, steel demand should be 3%; but at 6% steel demand should be 20%

Comparison between Steel Consumption, GDP & GDFI (Q2-Q4=FC)

90

100

110

120

130

140

150

160

170

180

2000 2001 2002 2003 2004 2005 2006 2007In

de

x 1

Q 2

000

= 1

00

GDPGDFISteel Cons

Source: STATSSA & SARB Quarterly Bulletin

4

Manufacturing

• Although manufacturing production fell from 6.2% in Q1 2007 to 4.6% in Q2 2007, the overall trend for growth in this sector is expected to remain on the positive side for the foreseeable future.

• The slowdown, especially in June to 2% was as a result of the weaker competitiveness emanating from currency strength.

• Production of durable goods such as motor vehicles was also heavily affected by the higher interest rates and the introduction of the new credit act.

• The recent weakening of the RAND should improve this short term situation

Building

• Non-residential building plans passed recovered strongly over the last couple of years.

• The relative strength of construction activity and fixed investment drive not only cement sales but that of steel especially rebar.

• Prospects for construction growth remain positive given the infrastructural investment drive which is likely to be undertaken in the run-up to the 2010 Soccer World Cup.

Geographical sales distribution in 2006

Domestic market segmentation in 2006

The South African Market

Building and

construction

36%

Furniture and

applicances

3%

Pipes and

tube (welded)

18%

Machinery &

Equipment

9%

Energy,

mining

9%

Automotive

13%

Other

3%

Packaging

9%

Africa, 9%

Europe, 4%

Americas, 4%

Asia, 11%

,

South Africa,

72%

Manufacturing and Building & Construction make up almost 80% of local steel demand

5

South African Iron & Steel Sector

• Employed 15 060 people (2005 = 16 476 or down 8,6 %).

• Produced 8,6mt of crude steel (2005 = 8.8mt or down 1,1%).

• Produced 7.7mt of finished steel products.

• Sold 5,8mt finished steel products to the domestic market (incl. imports), up 28%.

• Exported 2,4mt of finished steel products, down by 74%.

• Iron & steel products contributed 1,7% to GDP and 7.5% to the total value of sales by the manufacturingindustry.

ArcelorMittal South Africa produced 82% of the country’s liquid steel

6

ArcelorMittal South Africa’s positionin context

ArcelorMittal South Africa produced 82% of the country’s liquid steel output in 2006

Liquid steel production (mt)

Finished steel products to thedomestic market (mt)

Employee reduction (000)

14.5

9.8

2001 2006

6.57.1

2001 2006

2.3

3.6

2001 2006

• Turnover = R25bn (US$3.8bn).

• Produces 7.1 mt of liquid steel per annum (long & flat steel).

• A modern, highly competitive supplier of steel products to the domestic and global markets.

• ArcelorMittal South Africa is amongst the world’s lowest quartile cash cost producers of steel.

• Benefit to the country/community:

• Direct taxes to the state US$660m (R4 469m).

• Remunerate employees US$330m (R2 243m).

• Procurement from affirmative business enterprises US$110m (R732m).

• Pay shareholders with cash dividends US$230m (R1 550m).

7

ArcelorMittal South Africa’s standing

8

Evolution of ArcelorMittal South Africa

Iscor entersinto Strategicpartnership with LNM(LNM 34%share-Holding)Start ofBAA

LNM lifts stake to over 50% and name changes to Ispat IscorLNM and Ispatmerge toformMittal Steel

1928

Iscor privatized and listed on the JSE

Iscorembarks on majorRestruct-uringprogramme

19891997

20012002

2004/52006

Iscor founded

Mittal Steel mergewith Arcelorto form ArcelorMittal

Unbundling of steel & mining intoIscor & Kumba

Company in existence for almost 80 years

9

ArcelorMittal South Africa

Overview of Operations

• Flat Steel Products

• Vanderbijlpark Works – 3.2 Mtpa*

• Saldanha Works – 1.1 Mtpa*

• Long Steel Products

• Newcastle Works – 1.5 Mtpa*

• Vereeniging Works – 0.4 Mtpa*

• Iron ore supply

• 6.25 Mtpa from Sishen

• 2.5 Mtpa from Thabazimbi

• Coke & Chemicals

• Coke - 597 000 tpa*

• Tar - 133 000 tpa*

Vereeniging

Johannesburg

NewcastleSisheniron ore mine

Vanderbijlpark

Thabazimbiiron ore mine

DurbanSouth

Africa

Saldanha

Cape Town

* Based on 2006 actual final product sales

Steel plants in close proximity of key markets

10

Company Structure

Hot rolled Hot rolled coil Rolled profiles Rolled profiles (Vereeniging)

Heavy Plates - thin and ultra thin Special profiles (Pretoria)Cold rolled Forged products (Pretoria & Vereeniging)Coated Seamless tubes (Vereeniging)

- Galvanised Directly reduced iron (Dunswart)

- Painted

- TinplatedCoke batteries

- Pretoria

- Vanderbijlpark

- Newcastle 50%- Vanderbijlpark 50%

Tar plant- Vanderbijlpark Export marketing

Shipping

40% 50%50% 50%

Can Reclamation Wire drawing

Vanderbijlpark Works Saldanha Steel (Pty) Ltd

Flat steel products Long steel products

Newcastle Works Vereeniging Works

ArcelorMittal South Africa Limited

ArcelorMittal

Coke & Chemicals Joint Ventures

Collect a Can (Pty) Ltd

Mr Eric Samson

Anglo American LtdNampak Ltd

Consolidated Wire

Industries (Pty) Ltd

Macsteel International

(Pty) Ltd

Diversified primary steel producer

11

Management

Highly experienced management team with 166 years service amongst them

Rick Reato CEO

Kobus Verster Executive Director, Finance

Juba Mashaba Executive Director, Human Resources

Johan Fourie Chief Operating Officer

Hercu Aucamp General Manager: Sales & Marketing

Tami Didiza General Manager: Corporate Affairs

Heyno Smith General Manager: Vanderbijlpark Works

Heinrich Kriel General Manager: Saldanha Works

Jaco Stapelberg General Manager: Newcastle Works

Jose Gutierrez General Manager: Vereeniging Works

Alph Ngapo General Manager: Coke & Chemicals

12

Operational improvements over time

7.055

7.662

0

1

2

3

4

5

6

7

8

1934 1944 1954 1964 1974 1984 1994 2004

(Mtp

a)

33.1

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

1935 1945 1955 1965 1975 1985 1995 2005

(%)

Liquid steel output since first productionOperating margin since first production

• Increase in operating margin since ArcelorMittal investment

• Steady increase in steel output to 7.1mt. Growth potential to 9.7mt

Data n/a during WW2

Output levels increased since ArcelorMittal investment.Margins were steadily eroded until recent actions established new trading range

13

ArcelorMittal’s involvement

14

Search for International partner

• Iscor searched for international partner that could assist with:

– Business issues:

• Needed international exposure.

• Real benchmarking.

• Knowledge sharing.

– Technical assistance:

• R & D.

• Output/throughput & yield/prime %.

– Procurement:

• Coal/alloys/refractories/electrodes.

– Marketing:

• European auto markets.

• LNM approached and became the preferred partner.

* Through yield: Liquid steel to final product

Stagnation of efficiencies and a decline in through yield prompted the search

15

Technical assistance

• Key technical improvements resulting from the relationship with ArcelorMittal includes:

* Through yield: Liquid steel to final product

Efficiency improvements realised R1 386million savings

7 0556 468Liquid steel production (‘000t)

Prime output (%)

87.2%88.0%• Vanderbijlpark

99.97%

97.0%

99.3%

81.0%

• Newcastle

• Saldanha

91.6%

94.0%

88.4%

94.0%

• Newcastle

• Saldanha

83.8%82.0%• Vanderbijlpark

Through yield* (%)

20062001

16

ArcelorMittal project management assistance

Capital expenditure assistance

Capital expenditure totalled R3.1bn over the last two years

Vanderbijlpark:

BOF control systems.Blast Furnace C – throat armour repair. Blast Furnace D – rebuild. New DRI kilns.Blast Furnace D – Hot blast stoves. New galvanising line.2 new cells on Electro galvanising line.

Coke & chemicals:

Market coke expansion.

Saldanha:

Third roll grinder.

Newcastle:

Pulverised coal injection.New market coke battery.

ArcelorMittal contributed towards project management assistance on large capital projects, including:

17

Strategy going forward

18

• Improve capabilities through a dedicated focus on operational excellence

• Industry leading value creation for our shareholders

• Positive economic value-add over steel price cycle

• Improve market share in Sub-Saharan Africa

• Build and improve performance culture

• Be a responsible corporate citizen

• Increase liquid steel production capacity by 2.6mtpa from 7.1mtpa to 9.7mtpa by 2011 with efficiency improvements contributing 29%

• Increase hot strip mill throughput at Vanderbijlpark from 3mtpa to 3.9mtpa

• Increase through yield from 87.3% to 89.3% together with significant increases in value-added production

• Enhance EBITDA by US$479m by 2011 (2006 cost & price base)

• IRR of all capex projects exceeds 20%

• Capture more than 50% of the target market

Vision & long term objectives

Vision

Vision: To be a key player in the Sub-Saharan Africa steel market while also being oneof the highest operating margin steel producers globally

Qualitative strategic objectives Quantitative strategic objectives

19

Sub-Saharan African

steel market

Africa Map & target market

Focus is to be a key player in the Sub-Saharan Africa steel market

Total Sub-Saharan Africa market estimated at 18.4mt by 2011, of which the target market is 14.9mt.

South Africa plans to capture in excess of 50% of the latter.

Focus on products in demand in this market

Key elements of strategy

20

Operations

SustainableDevelopment &

SocialResponsibility

Cost

Sourcing

Public/Government/

Environment/

Investment community

Iron ore supply

Procurement

All operations

Vanderbijlpark &

Newcastle

Establish presence

in Mozambique

Vanderbijlpark

Securing raw materials for the expansion strategy is a crucial elementValue in Flat products and Volume at long products

� De-bottleneck & improve efficiencies

� Recapture production losses

� Cost leadership

� Increase liquid steel production & add downstream

capacity from 2008 to 2011

� Re-commission existing mill and install new bar/rod mill.

Existing mill 2008 / New mill 2009

� Replace aged coke oven batteries by 2011 - more efficient design

� Secure participation rights in new developments

� Cost leadership (TCO)

� Improve image and relationships

� Address legacies & comply with new legislation

Key elements of strategy

21

Strategy

Strategic goals

• Industry leading value-creation for our shareholders:

– Positive economic value add over the steel cycle.

• Sub-Saharan market leader: – 80% sales into Africa.

• Improve operating capabilities:– Value-creating throughput increases of 2.6mtpa.

• Build on our existing performance culture:– Create an environment that generates true employee

pride and attracts, develops and retains top-performing people.

• Be a responsible corporate citizen.

Strategic drivers for creating value for our shareholders:

• Sales revenue:

– Africa vs Export sales.– Increase production of value added products.

• Cost reduction:– Efficiency improvements & technology upgrade (PCI).– Raw materials initiatives.– Iron ore expansion projects.– Reduce dependence on imported coking coal.– Procurement initiatives.

• Throughput expansion:– Productivity improvements.– Productivities and de-bottlenecking.– Capital investments.

• Corporate Social Responsibility:– Investment in community, environment & human

resources.

To be a key player in the Sub-Saharan Africa steel market

We want to be one of the highest operating margin steel producers globally

To be a key player in the Sub-Saharan Africa steel market while also being oneof the highest operating margin steel producers globally

22

Liquid steel development – 2006 to 2011(Tonnes ‘000)

7 055

9 662

1 887

500

220

2 000

4 000

6 000

8 000

10 000

12 000

2006 New DRI kilns atVdbp

Efficiencies Projects underinvestigation

2011

Efficiency improvements play an important role in our expansion strategy

23

Commitment to the Economy & Community

24

Safety focus

The impact of the overall SHE programme

is evident in our safety performance

indicators. The following was achieved

during the first 6 months:

• H107 performance negatively affected by Blast Furnace rebuild.

• ArcelorMittal South Africa achieved 26 days without LTI (about 3.7m LTI free man hours).

• 172 days without an LTI at Saldanha Works - new record.

• 1m LTI free hours achieved:

– 4x at Vanderbijlpark Works.

– 3x at Newcastle Works.

Blast Furnace D rebuild impacted on our most recent safety record

Lost Time Injury Frequency Rate (Employees and Contractors)

2

3

4

5

6

7

2002 2003 2004 2005 2006 2007

Lo

st

Tim

e I

nju

ry f

req

uen

cy r

ate

(L

TIF

R)

IISI ArcelorMittal South Africa (LTIFR)

25

Implementing an ambitious Corporate Social Responsibility strategy

ISO 14001 Air Pollution

ManagementWater

Management

Waste/By-

product

Management

• All production facilities are certified besides the Dunswart DR Kiln operation

• Target for Dunswartcertification is end 2008.

• Saldanha and Vanderbijlpark have zero effluent status.

• Newcastle to follow in 2008 after completion of crystalliser plant.

• ArcelorMittal South Africa’s consumption is world class at 3.2 m3/ton of LS produced.

• Air pollution biggest environmental risk.

• Planned projects:

- Coke gas cleaning system

- New dust/fume extraction system at both Vereenigingand Vanderbijl plant

- EAFMeltshop at both Vereenigingand Vanderbijl plant

- New sinter off gas cleaning system

• 75% of waste/by-products is recycled or sold within the group.

• Target is to achieve a sale/ recycling rate of above 90% by 2011.

Future focus is on air quality

26

Corporate Social Responsibility

CSR focus is on Education, Housing and Job Creation

• ArcelorMittal South Africa Science Centre

- Partnership between Gauteng Department of Education and ArcelorMittal South Africa

- 1 690 learners & teachers (Sedibeng District) receive maths& science classes from highly trained teachers

- Renovations, upgrading & operations sponsored by ArcelorMittal South Africa (R8,5m in 2006).

- High tech computer centre now completed (2007)

• Enterprise Development Fund to assist SME’s in downstream steel sector (R250m)

• Gas cylinder project in conjunction with Department of Minerals & Energy.

• HIV/AIDS program.

• West Coast Business Development Centre.

• Bophelong Community Project.

Current CSR projects

Corporate social responsibility aligned

with government initiatives.

Invested R220m in Social Projects aimed at empowering historically

disadvantaged communities.

Forming strategic alliances withgovernment departments

Improving education. Enhancing housing

conditions.Addressing

HIV/Aids

Committed towards “making a

sustainable

difference”.

CSR

ArcelorMittal South Africa Investors’ Day

12 September 2007

Thank you