Arcelormittal South Africa Limited · JSE:ACL
Arcelormittal South Africa — Technical Presentation (April 2024)
56 slides from Arcelormittal South Africa's technical presentation, Apr 30, 2024
Slide 1: ArcelorMittal South Africa Media Site visit presentation
ArcelorMittal South Africa Media Site visit presentation 30 April 2024
Slide 2: The South African steel industry – challenges and opportunities
The South African steel industry – a birds eye view and challenges and opportunities facing the SA steel industry. Presenter: Franck Wandji, Executive: Group Marketing, Africa at ArcelorMittal
Slide 3: Chapter 1: Global Steel dynamic
Chapter 1: Global Steel dynamic ▪ How much Steel is produced globally? ▪ How much Steel is consumed globally? ▪ What drives Steel demand & supply globally? Page 3 30/04/2024 Confidential
Slide 4: How much Steel is produced globally?
How much Steel is produced globally? Global crude Steel production stagnant at ca. 1.89 billion tonnes in 2023, with 54% supplied from China Global crude Steel production, Jan’23 - Mar’24, million tonnes • From 1950-2022 global crude Steel outputs grew by ca. 10 times, from 189mt to 1,888mt • In 202
Slide 5: How much Steel is consumed globally?
How much Steel is consumed globally? Apparent Steel consumption at ca. 1.76 billion tonnes in 2023, projected to grow by 3% towards 2025 • Expected demand up by 1.7% in 2024 and 1.2% in 2025 Global Steel demand forecast, 2023-25, million tonnes E2023 F2024 F2025 22/23 (%) 23/24 (%) 24/25 (%) o Deman
Slide 6: What drives Steel demand & supply globally?
What drives Steel demand & supply globally? Economic growth & infrastructure spending, China’s demand, raw material costs and steel prices Global GDP growth 2016 - 2022, % • Slow albeit resilient economy, facing the lingering impacts from Covid-19 & Russia-Ukraine war, high inflation, interest rates
Slide 7: Chapter 2: How is Steel made?
Chapter 2: How is Steel made? ▪ What is Steel? ▪ How is Steel made? ▪ Why is Steel important? ▪ What are the benefits of Steel? Page 7 30/04/2024 Confidential
Slide 8: What is Steel?
What is Steel? An enriched alloy mix of iron and carbon with improved strength and fracture resistance • Originates from the proto-germanic adjective stahliją or stakhlijan “made of steel” or Stahliją “standing firm” • Steel is an alloy of iron and carbon content between 0.002% and 2.14%, with impro
Slide 9: How is Steel made?
How is Steel made? ArcelorMittal South Africa is the only primary Steel producer in SA Two routes for producing Steel (Making steel | ArcelorMittal) • Primary steel making route delivers “prime” or pure Steel, produced from iron with rigorous inspection and compliance to stringent international stan
Slide 10: Why is Steel important?
Why is Steel important? Steel is the “fabric of life” and the most used material in the world. It provenly enables industrialisation, infrastructure, economic expansion and job creation. Average South African uses ca. 25g steel per day O&G Offshore infrastructure Used in the structural, reinforcing
Slide 11: What are the benefits of Steel?
What are the benefits of Steel? Steel eliminates design boundaries and is the infinite most recycled material on earth • Infinitely recyclable material • Quality • Flexibility, push design beyond traditional boundaries • Safety • Effectiveness Controversially, primary Steel production is a contribut
Slide 12: Chapter 3: South African Steel industry
Chapter 3: South African Steel industry ▪ Why is SA called an integrated Steel industry? ▪ Primary steel production mapping ▪ Market demand and supply dynamic ▪ Challenges and opportunities ▪ Some iconic achievements ▪ Case study Page 12 30/04/2024 Confidential
Slide 13: Why is SA called an integrated Steel industry?
Why is SA called an integrated Steel industry? SA’s value span from raw material sourcing to finished products supplies, with world-class standards Strengths and advantages of the industry Steel industry value Chain • 140+ years of existence and experience in the Import/local supply of raw materials
Slide 14: SA primary Steel producers
SA primary Steel producers About 16 sites, with installed crude steel capacity of ca. 10 million tonnes. 2 large re-rollers Page 14 Steel manufacturing in South Africa, CDResearch, 2022 30/04/2024 Confidential
Slide 15: SA Steel demand and supply dynamic
SA Steel demand and supply dynamic Apparent Steel consumption at ca. 4mt in 2023, expected stagnant in 2024. Domestic capacity at 10mt SA key indicators • GDP growth at 0.9% in 2024 and ca 1.5% up to 2027, 2 023 2 024 2 025 2 026 2 027 be driven by auto, appliance, machinery & packaging GDP 0,6 0,9
Slide 16: Challenges and opportunities of the industry
Challenges and opportunities of the industry Industry challenges and opportunities can be categorised into demand, profitability and investment Challenges Opportunities Demand and revenue Demand and revenue • Weaker domestic economic growth & delayed infrastructure roll- • Import replacement; ca 46%
Slide 17: Chapter 4: ArcelorMittal South Africa
Chapter 4: ArcelorMittal South Africa ▪ Our Group ▪ Our strategic focus ▪ Our values ▪ Our value creation model ▪ Our footprint ▪ Our products and industries (Flat & Long products) ▪ Case studies ▪ Iconic projects Page 17 30/04/2024 Confidential
Slide 18: Our Group
Our Group • ArcelorMittal South Africa has 100 years of experience • Largest steel producer in sub-Saharan Africa • 6 production parks and mines across 5 provinces in South Africa • Installed crude steel capacity exceeding 5 million tonnes • Local employment base of about 10 000 people • Produce the
Slide 19: Our strategic focus
Our strategic focus Our strategy is to become the This requires a shift of focus: The focus sectors for local champion of: production for export are: • innovative • towards localisation and import • Automotive • export-driven replacement; and • Renewable energy and gas • steel-based • from local to
Slide 20: Our values
Our values Success starts with training, empowering and keeping all our employees safe Local leadership through visionary thinking and willingness to challenge the status quo and be open to doing things differently Sustainability through our strive and actions to remaining competitive in the world o
Slide 21: Our value creation model
Our value creation model Inputs @ Financial capital 2023 | 2022 (@) Manufactured capital 2023 | 2022 Ce Natural capital 2023 2022 Equity R7 799m | R11675m Non-current assets (PPE} R7 974m R9 570m ron ore consumed 4248 kt 3S74kt Borrowings R6 700m | Rb 200m Current assets (inventories) R12441m | R119
Slide 22: Our footprint
Our footprint Mining activities (excl. ROA) Pretoria Works Vanderbijlpark Works • Small section mill • 2 blast furnaces; 3 basic oxygen • Focus on smaller long steel furnaces profiles for the windows and • Slabs, plates, hot-rolled, cold- fencing industries rolled, electrogalvanized, colour • On car
Slide 23: Our Flat Steel products
Our Flat Steel products Hot rolled plate manufactured in a wide range of Hot rolled Coil is a rolling of steel at high temperature sizes for applications in several industries including where recrystallisation occurs. Pickled & Oil is descaled of manufacturing of heavy engineering equipment, oxide f
Slide 24: Flat Steel core market segments
Flat Steel core market segments Automotive Roofing & Insulated Tubing Fabrication Cladding panels Appliances Large bore Mining Truck & Racking & shelving trailers Solar Wind
Slide 25: Application example: Automotive
Application example: Automotive Roof panel Tail gate • Universal avg. of 900kg Side structure Side structure inner steel product in a car outer o 40% in body Front door structure Hood structure, panels, Bodyside panel structure doors and trunk structure o 23% in the drive train o 12% in suspensions
Slide 26: Our Long Steel products (1/2)
Our Long Steel products (1/2) Structural I & H sections are crucial components Round bars are used for general engineering and rods in the construction industry, particularly for large- for grinding mills, bolt and nut industry, chains, auto etc. scale buildings and heavy infrastructure. Their Forge
Slide 27: Our Long Steel products (2/2)
Our Long Steel products (2/2) Reinforcing bar is is produced for the Wire rod is a long, thin, and cylindrical product with a reinforcement of concrete in two forms: mild steel circular cross-section. Serves as primary raw material for plain and deformed high strength. Typically used wire and wire p
Slide 28: Long Steel core market segments
Long Steel core market segments Agri Auto Engineering Fasteners Bright bars implements components Industrial Light Mine roof Mining Rail lines fabrication fabrication bolts consumables Grid Boiler tubes Smelters Reinforcing Wire Transmission drawing
Slide 29: Application example: Transmission line
Application example: Transmission line ESKOM TDP 2023-32 mix (in interim of IRP) Our estimates basis industry supply history • 14,218kms of targeted transmission lines of which • About 44t of Steel products per km inclusive of 45% 765kV / 54% 400kV / 1% 275kV • 20% of the lines (2,893kms) in 2023-27
Slide 30: ArcelorMittal South Africa operations
ArcelorMittal South Africa operations Presenter: Jacques Kotze, Chief Operations Officer
Slide 31: Overview
Overview Zimbabwe Coal from Grootegeluk Iron ore from Thabazimbi Botswana Vereeniging Works Namibia Vanderbijlpark Works Iron Ore from junior miners Newcastle Works Iron Ore from Beeshoek Republic of South Africa Saldanha Works
Slide 32: ArcelorMittal South Africa's footprint configuration
ArcelorMittal South Africa’s footprint configuration
Slide 33: Flat carbon steel - Vanderbijlpark Works
Flat carbon steel - Vanderbijlpark Works Vanderbijlpark Perimeter 33 km Area 4 652 ha
Slide 34: Page 34 Confidential
Page 34 30/04/2024 Confidential
Slide 35: Flat carbon steel - Vanderbijlpark Works
Flat carbon steel - Vanderbijlpark Works • Capacity Liquid steel per annum 2 950 000 tons • Domestic percentage of total sales ±92% • Export percentage sales (Export / AOL) ± 3% / ± 5% • Manpower (Permanent / Hired / Contractors) 3507 / 233 / 1183 # avg / month • Area of site 4652Ha • Perimeter 33 k
Slide 36: Long products steel - Newcastle Works
Long products steel - Newcastle Works Newcastle Perimeter 47 km Area 5 140 ha
Slide 37: Newcastle Works: Process Configuration
ArcelorMittal South Africa Newcastle Works: Process Configuration ArcelorMittal versfer —_Revareng Sirk Stand? gy Centnousail oes B= et Cop shew Bar Mill ZZ — 8-9-4 — Sow L_} Rouchiall 2x! it Soa ‘Stans ench & Cy a 7 Rod Mill ip cup 10 a ebestn ina ouging rit Intermeciate rarmedite Straghieorg 2d wi
Slide 38: Long Products steel - Newcastle Works
Long Products steel - Newcastle Works • Capacity Liquid steel per annum 1 780 000 tons • Domestic percentage of total sales ±78% • Export percentage sales (Export / AOL) ± 13% / ± 9% • Manpower (Permanent / Hired / Contractors) 1 694 / 185 / 860 # avg / month • Area of site 5410Ha • Perimeter 47 km
Slide 39: Long products steel - Vereeniging Works
Long products steel - Vereeniging Works Vereeniging Perimeter 8 km Area 108 ha
Slide 40: Long products steel - Pretoria Works
Long products steel - Pretoria Works Pretoria Perimeter14 km Area 522 ha
Slide 41: Gauteng Operations: Vereeniging Works Process Configuration
Gauteng Operations ArcelorMittal South Africa oe Vereeniging Works: Process Configuration ArcelorMittal = ArcelorMittal
Slide 42: Tubular Products
Tubular Products Seamless tubes Cold drawn Seamless .. = ES =J = SRS reWeater Shot Blasting Paint Both Aer Drier | 2 === i A all a = } fz sree Cj - = = = = ArcelorMittal
Slide 43: AMRAS – Heavy Section Mill
AMRAS – Heavy Section Mill Pri mary Cooli ng Beds Fi ni shi ng Uni versal Mi ll Roughi ng Mill Mai n Stand No 2&3 Hot Saw’ s Rolled Squares Edger 32” Mi ll No 1 Hot Saw Breakdown Roller Strai ghteni ng Machi ne Mi ll Bi llet Gag Pi lers Reheat Rai l Gag Furnace Rai l Cutti ng & Dri lli ng Machines S
Slide 44: AMRAS – Heavy Structural Mill
AMRAS – AMRAS Heavy Structural Mill • Capacity Liquid steel per annum 167 000 tons • Domestic percentage of total sales 100% • Manpower (Permanent / Hired / Contractors) 293 permanent positions • Area of site leased from HIP 11.4Ha • Product Range: ➢ Columns: 152 x 152; 203 x 203; 254 x 254 & 305 x
Slide 45: Saldanha
Saldanha Saldanha Perimeter 44 km Area 6 309 ha
Slide 46: Saldanha Rolling
Saldanha Rolling Raw materials Iron Making Steel Making Rolling Thin slab caster Fluxes Roller Heath Furnace and Hot Strip Mill Corex Coal Conarc Furnace Iron Ore Temper Mill Direct Pellets Reduction Hot Rolled Coils (DR)/ Midrex
Slide 47: Saldanha
Saldanha • Capacity Liquid steel per annum 1350kt • Domestic percentage of total sales ±46% • Export percentage sales (Export / AOL) ± 54% • Manpower (Permanent / Hired / Contractors) 568 • Perimeter 44 km (5.1km Plant) • Avg Daily electricity consumption 3,8 GW • Avg Fresh water consumption 7,5 meg
Slide 48: Renewable energy and the decarbonisation roadmap
Renewable energy and the decarbonisation roadmap Green energy, green steel, green future, opportunities, and challenges Presenter: Werner Venter, Chief Technology Officer
Slide 49: Steel industry fact sheet
Steel industry fact sheet Key Points • Global steel production today is estimated at 1.9btpa and expected to grow to 2.5btpa by 2050 • Steel is in every market and the most commonly used metal in the world, vital to the construction, transport, manufacturing, motor, medical, aircraft, defence and do
Slide 50: ArcelorMittal South Africa's Decarbonisation Roadmap published in January 2023
ArcelorMittal South Africa’s Decarbonisation Roadmap published in January 2023. Flexibility in the final solution remains key especially considering the challenges in Sub Saharan Africa ArcelorMittal South Africa Decarbonisation Roadmap (January 2023) (2).pdf (arcelormittalsa.com)
Slide 51: Decarbonisation initiatives on a time horizon
All decarbonisation initiatives have been captured on a time horizon indicating when they are expected to be implemented and current status of key technology required. No regret improvement Steel making EAF at NC, transformation Midrex on Established technology EAF at VDB. GH2 at SLD Ramp up Kilns I
Slide 52: Clean energy required to decarbonise steel making
Large amounts of clean energy required to effectively decarbonise steel making processes. Steel remains crucial enabler to the SA’s economy. Decarbonisation success of its existing primary* steelmaking facilities are mission critical ArcelorMittal South Africa decarbonisation roadmap projected inten
Slide 53: Decarbonisation progress: 200MW solar and new arc furnace at Vanderbijlpark
Decarbonisation progress are centered around first 200MW embedded Solar and the new arc furnace facilities at Vanderbijlpark Progress feedback on the 200MW solar at Vanderbijlpark: • Indicative project cost in line with benchmarked investments • Will provide 43% RE penetration of Vanderbijlpark’s ov
Slide 54: Electricity and clean energy in embedded emissions
For primary steel making based on blast furnace technology electricity makes up 15% of total embedded emissions combined. Clean energy as no regret initiative will support electrification within ArcelorMittal South Africa Further increase with additional demand additional demand electrification of f
Slide 55: SA Carbon Tax Act and global carbon policies
SA Carbon Tax act gazetted 12 January 2023, with significant effect on business from 2026 onwards. Hard to abate industry like steel needs protection and support during the transition as decarbonisation tech is not at the required cost point today. Country / Jurisdiction Comments • Market based Emis
Slide 56: Thank you
Thank you
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