BROADENING OUR HORIZONS - Arrium

OneSteel Annual Report 2011ABOUTONESTEEL2Our missionOneSteel’s mission is to deliver superior and sustainable returns through leading market positions in the resources, construction, recyclingand industrial markets, with the leadership of our high calibre people, and operating and distribution capabilities.Our achievementsOperationally, the resources focused Iron Ore and Mining Consumables segments performed well in the 2011 financial year, underpinned bycontinued strong mining activity. Our Iron Ore segment was again the standout performer for the year, delivering revenue of $948 millionand EBIT of $524 million.During the year, we acquired and successfully integrated the Moly-Cop Group mining consumables businesses in the Americas. Thisrepresented another significant milestone in OneSteel’s long-term growth strategy and transformation. The acquisition positions OneSteelas a global player in grinding media with participation in some of the world’s largest and most attractive mining consumables markets, aswell as providing OneSteel with a solid platform for further growth in mining consumables.Following completion of the acquisition at the end of 2010, we established a new Mining Consumables segment. This segment also performedwell delivering EBIT of $65 million for the year.the resources focused Iron Ore and Mining Consumables segmentsperformed well, underpinned by continued strong mining activityThe Recycling segment delivered a much improved EBIT result for the year of $21 million, which included a very solid second half performance.OneSteel’s increased emphasis on driving safety improvement and on facilitating greater employee involvement in safety activities helpeddeliver further improvements to the company’s overall safety performance for the year.OneSteel’s balance sheet remains sound. Statutory gearing at year end was 27.7%, which includes debt related to financing the Moly-Cop Group acquisition. The company successfully completed its debt refinancing program during the year to smooth and extend its debtmaturity profile. This increased the duration of OneSteel’s drawn debt to an average of 5.7 years, compared to 2.6 years at the end of theprior financial year.OneSteel remains well positioned to continue to manage through difficult domestic and international economic conditions and hassignificant leverage to economic recovery.Investment merits• Miner and exporter of iron ore• Significant mining consumables business• Exposure to global resources sector• Vertically integrated operations• Self-sufficient in iron ore• Ability for self-sufficiency in scrap steel• Flexible steel production with bothintegrated and electric arc furnace(EAF) processesLeading market positions• #1 globally in grinding media• #1 in general Australian steel distribution• #1 in Australian reinforcing• #1 in Australian wire• #2 in Australian recycling• #1 in New Zealand general distributionStrong position in niche markets• Rail wheels• Mining ropes• Rail• Fluid transmission®