ArcelorMittal Annual Report 2008

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Monthly Highlights 2008JanuaryArcelorMittal signs a Memorandumof Understanding with Société NationaleIndustrielle et Minière in Mauritania.The agreement provides for thedevelopment of a large iron ore miningproject in Mauritania.ArcelorMittal acquires Unicon,the leading manufacturer of welded steelpipes in Venezuela. Unicon suppliesthe oil and gas and industrial andconstruction sectors both domesticallyand overseas. The transaction wascompleted in April 2008.ArcelorMittal inaugurates Arceo,its industrial prototype line for vacuumplasma steel coating in Liège, Belgium.With this process, steel can be a sensor,a reflector, a source of light, moreaesthetically pleasing or endowed withbetter anti-corrosive properties.ArcelorMittal Steel Service Centre Sverigeand BE Group create a 50/50 processedflat carbon steel joint venture in Sweden.This combination creates a new numberthree in the Swedish market, with a 20%market share.FebruaryArcelorMittal acquires the remaining50% interest in Laminadora Costarricenseand Trefileria Colima, the only majorlong carbon steel company in Costa Rica.ArcelorMittal and the federaland regional governments of Belgiumagree on carbon dioxide (‘CO 2’)emission allowances. As a consequence,the relaunch of ArcelorMittalLiège, Belgium, Blast FurnaceNumber 6 is initiated.AprilArcelorMittal enters the BrazilianSteel Service Centre market withthe acquisition of 50% of Gonvarri Brasil.The aim is to establish a strong presencein the Brazilian flat steel downstreamsegment, building on the product leadershipof ArcelorMittal’s Tubarão, Vitória,and Vega do Sul plants.ArcelorMittal acquires three coal minesand associated assets in Russia fora total consideration of $720 million.ArcelorMittal agrees to build a third linein its joint venture partnership withNippon Steel by building a new continuousgalvanizing line at the I/N Kote facilityin New Carlisle, Indiana, at a cost of$240 million. On December 4, 2008,Nippon Steel announced that the projectwould be delayed until demand in theUS automobile industry market strengthens.ArcelorMittal concludes a coal off-takeagreement with Coal of Africa Limited,the South African coal developmentcompany, relating to the Baobab andThuli coal mines.MayThe Court appointed trustee completesthe sale of ArcelorMittal’s SparrowsPoint steel mill to OAO Severstal for$810 million, net of debt.JuneArcelorMittal and its unions signa groundbreaking global agreementon occupational Health and Safety.It sets out minimum standardsin every site in order to achieveworld class performance.ArcelorMittal holds an inauguralglobal interactive individual shareholderevent with Second Life. Through thisvirtual reality website, individual shareholderscan meet and interact with Mr Mittal.ArcelorMittal signs an agreementto acquire Bayou Steel, a producerof structural steel with facilitiesin LaPlace, Louisiana, and Harriman,Tennessee, for $509 million. Thetransaction closed in July 2008.ArcelorMittal signs an agreementto acquire the Mid Vol Coal Group.This partnership will increase theCompany’s upstream self-sufficiencyin raw materials.ArcelorMittal, Hunan Valin Groupand Hunan Valin Steel Co. launch ValinArcelorMittal Automotive Steel, an industrialand commercial automotive joint venturethat will have an annual productioncapacity of 1.2 million tonnes of flat carbonsteel, mainly for automotive applications.ArcelorMittal enhances its distributionactivities in the United Arab Emirates.The Company intends to acquire 60%of Dubai Steel Trading Company LLC(‘DSTC LLC’), a newly incorporatedcompany located in the Dubai free zone.The acquisition is finalized in January 2009.ArcelorMittal increases its stake inMacarthur Coal of Australia, from 14.9%to 19.9%.10
JulyArcelorMittal and AREVA sign an industrialpartnership agreement for a €70 million($110 million) investment aimed at increasingproduction of steel products for the nuclearindustry at the Group’s Industeel plant.ArcelorMittal launches a new cleantechnology venture capital fund, with aninitial clean technology investment of$20 million in MiaSolé, and a new carbonfund, as part of its commitment to findingsolutions for environmental challenges,including climate change.ArcelorMittal’s Stainless Internationalsegment acquires the 35% stake in UginoxSanayi ve Ticaret Limited Sirketi (‘Uginox’)owned by Primex. Uginox operatesa coil processing and service centrein Turkey dedicated to servicing theautomotive and white goods markets.ArcelorMittal signs an agreementto acquire Concept Group (‘Concept’),located in southern West Virginia, USA.Concept’s proximity to Mid Vol’s operationswill allow the Group to draw on thecomplementary strengths of both companiesto increase their combined productioncapacity. The transaction is completedin August 2008.ArcelorMittal announces a €76 million($118 million) investment to expandelectrical steel production capacity at itsSaint Chély d’Apcher plant, France.ArcelorMittal reinforces its Steel ServiceCentre network in Brazil by acquiringa 70% share of Manchester Tubose Perfilados, the Brazilian steel processorand distributor located in Contagem,Minas Gerais.AugustArcelorMittal projects new investmentsof $1.6 billion in its carbon steel operationsin Brazil. The timing and scope of thisinvestment are currently under review.ArcelorMittal acquires the Koppers’Monessen coke plant for $170 million.The acquisition is an important steptowards increasing upstreamself-sufficiency in metallurgical cokeproduction. The transaction was completedin October 2008.Hunan Valin Iron & Steel Group Co.Ltd and ArcelorMittal sign a 50/50 jointventure agreement for the production andsale of electrical (silicon) steel, one moremilestone following the automotive sheetJV agreement signed in June. The new JV,named Valin ArcelorMittal Electrical Steel,will build cold rolling and processing facilitiesfor the production of electrical steels.ArcelorMittal acquires Brazilian iron oreminer London Mining South America Limitedand reaches an agreement with AdrianaResources Inc. for the development ofan iron ore port facility in the Stateof Rio de Janeiro, Brazil. Together withan investment in Mineração PirâmideParticipações Ltda, the acquisition furtherdiversifies ArcelorMittal’s iron ore basein the face of tighter raw material supply.SeptemberArcelorMittal and Kalagadi Manganeseagree a 50/50 joint venture to developKalagadi’s South African manganese deposits.Project implementation has not yet begunand its scope and timing are under review.ArcelorMittal Warsaw inaugurates a newbar rolling mill, one of the most advancedrolling lines in Europe, following an investmentof €80 million.ArcelorMittal announces a new‘Management Gains’ plan that will target$4 billion of cost savings over the next fiveyears. The plan focuses on increasingemployee productivity, reducing energyconsumption and reducing input coststo achieve a higher yield and improvedproduct quality.ArcelorMittal organizes its LeadershipConference in New Delhi, India. The 650most senior managers have the opportunityto present their strategies, discuss criticalissues and plan the future. Mr Mittal launchesthe new operating philosophy of SafeSustainable Steel.NovemberArcelorMittal meets with its EuropeanWorks Council to present voluntary separationprograms to be launched across the Group.This is to help achieve the Company’sstated aim of reducing SG&A expenditureby an additional $1 billion in response to thecurrent economic situation.ArcelorMittal announces measuresin response to the downturn in the globalsteel industry. These include: postponingtarget completion dates for the realizationof previously announced shipment growthobjectives entailing substantial capitalexpenditure, increasing targeted cost savingsunder the ‘Management Gains’ programover the next five years to $5 billion throughadditional savings in SG&A costs, increasingtemporary cuts in steel production to upto 35% (later increased to approximately40-45%) globally in order to acceleratesteel inventory reduction, and targeting a$10 billion reduction in net debt by the endof 2009. In addition, ArcelorMittal suspendsthe share buy-back program until thedebt reduction targets are achieved.DecemberArcelorMittal enters into bindingagreements to reduce its voting interestin Dillinger Hütte Saarstahl AG (‘DHS’)from 51.25% to 33.4% (correspondingto an economic interest of 30.08% sinceDHS holds 10% of its shares in treasury),in line with existing governance rights.ArcelorMittal plans to remain a key industrialpartner to DHS.RecentDevelopmentsArcelorMittal contributes its 76.9% stakein Saar Ferngas AG to Luxembourg-basedutility Soteg, in which it holds a minorityownership stake. Upon completionof all steps related to this transaction,ArcelorMittal’s stake in Soteg will ultimatelyincrease from 20% to 25.3%.In connection with its 2008 resultsannouncement on February 11, 2009,ArcelorMittal provides an update on itsinitiatives in response to the difficult marketenvironment. It will continue temporaryproduction cuts of up to 45% in the firstquarter of 2009 until the inventoryreduction process is complete, reduceits base dividend for 2009 to $0.75 per share,refocus its $5 billion ‘Management Gains’plan, target savings of $2 billion in 2009,reduce its planned capital expendituresto $3 billion in 2009, and target a reductionof working capital rotation days by15-25 days during 2009.Monthly Highlights 2008ArcelorMittal Annual Report 200811
Page 1 and 2: ArcelorMittal Annual Report 2008
Page 3 and 4: ContentsManagement Report01 Our Phi
Page 5 and 6: Our PhilosophyOur PhilosophyArcelor
Page 7 and 8: Whilst we must accept that real dem
Page 9 and 10: To this end, I must thank allour em
Page 11 and 12: Given the prime importanceof Health
Page 13: What is the outlook for the year ah
Page 18 and 19: Health and Safety: The Number 1 Pri
Page 20 and 21: Health and Safety: The Number 1 Pri
Page 22 and 23: In 2008, ArcelorMittal andtrade uni
Page 24 and 25: Board of DirectorsArcelorMittal’s
Page 26 and 27: Board of Directors continuedVanisha
Page 28 and 29: Senior Management - Group Managemen
Page 30: “When people hear the word sustai
Page 33 and 34: ArcelorMittal is the largest produc
Page 35 and 36: ArcelorMittal’s brand promiseis
Page 37 and 38: International mobilityInternational
Page 39 and 40: Corporate Responsibility - Making S
Page 41: ArcelorMittal FoundationThe Arcelor
Page 44 and 45: Global PresenceArcelorMittal is the
Page 46: EuropeTallinnBrussels; Charleroi; C
Page 49 and 50: Mergers and acquisitions havehistor
Page 51 and 52: The following table provides a summ
Page 53 and 54: Operational Review - Operating inco
Page 55 and 56: Operating income for the year ended
Page 57 and 58: Customers and InnovationCustomers a
Page 59 and 60: • In Russia, ArcelorMittal was in
Page 61 and 62: Market InformationAnalysts and Inve
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Corporate GovernanceOne of the elem
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Corporate Governance continuedGroup
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Corporate Governance continuedCompe
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Corporate Governance continuedThe t
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Share Capital and Voting RightsArce
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By 2012, Spain is expectedto have t
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Underpinning all our operations is
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Consolidated Balance SheetsArcelorM
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Consolidated Statements of Changes
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Notes to the Consolidated Financial
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Auditors’ Report on the Consolida
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Profit and Loss AccountArcelorMitta
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Notes to the Annual Accounts contin
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Auditors’ Report on the Annual Ac
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Notes160
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Notes162
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Photography: ArcelorMittal Photo Li
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ArcelorMittal Annual Report 2008

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