capex presentation 30 nov

MITTAL STEEL SOUTH AFRICACAPITAL PROJECTS INFORMATION DAY : 

MITTAL STEEL SOUTH AFRICA CAPITAL PROJECTS INFORMATION DAY Programme – 30 November 2005 10:00 – 10:15 Opening and welcoming by the CEO 10:15 – 10:45 Presentation by General Manager, Procurement & Logistics 10:45 – 11:15 Presentation by Manager, Relines 11:15 – 12:00 Closure by General Manager, Procurement & Logistics

Today’s discussion: 

Today’s discussion Mittal Steel South Africa Strategic Goals and Throughput Strategy Overview of Capital Projects planned by Mittal Steel South Africa Limited (2006 – 2010) Blast Furnace D Reline 2006 BEE and areas of concern

Strategic Goals and Throughput Strategy of Mittal Steel South Africa: 

Strategic Goals and Throughput Strategy of Mittal Steel South Africa

Strategic Goals: 

Strategic Goals Industry leading value-creation for our shareholders - Positive EVA over the cycle Improve operating Capabilities - Value-creating throughput increases of 2 Mtpa - 20% reduction in HRC/billet cash cost by 2007 Build a high performance culture - Create an environment that generates true employee pride & attracts, develops & retains top-performing people Be a responsible corporate citizen

Throughput Strategy: 

Throughput Strategy Increase production by – 1,5 Mtpa by end 2007 with initial capex - 325 ktpa – 2 new DRI kilns at Vanderbijlpark by 2H/07 - 660 ktpa – efficiency improvements by 2H/06 - 445 ktpa – Blast furnace D reline at Vanderbijlpark by 2H/06 - Expand sinter capacity at Vanderbijlpark by 1H/08 Utilize opportunities to increase throughput by further – 1Mtpa with capital expenditure - 505 ktpa – Additional DRI kilns at Vanderbijlpark by 2H/09 - 355 ktpa – Blast Furnace C reline at Vanderbijlpark by 2012 - 105 ktpa – Smaller capital projects at Saldanha and Vereeniging Rationalization of other facilities to follow

Overview of Capital Projects planned by Mittal Steel South Africa Limited(2006 – 2010): 

Overview of Capital Projects planned by Mittal Steel South Africa Limited (2006 – 2010)

Distribution per Geographical area: 

Distribution per Geographical area

Vanderbijlpark Steel: 

Vanderbijlpark Steel An overview of the projects planned at Vanderbijlpark Steel is the following: 30 Projects > R 20m 17 Projects R10m to R20m 200 Projects < R10m

Saldanha Steel: 

Saldanha Steel An overview of the projects planned at Saldanha Steel is the following: 8 Projects > R20m 5 Projects R10m to R 20m 90 Projects < R10m

Newcastle Steel : 

Newcastle Steel An overview of the projects planned at Newcastle Steel is the following: 14 Projects > R20m 11 Projects R10m to R 20m 80 Projects < R10m

Vereeniging Steel: 

An overview of the projects planned at Vereeniging Steel is the following: 6 Projects > R20m 4 Projects R10m to R 20m 110 Projects < R10m Vereeniging Steel

Mittal Coke & Chemicals: 

Mittal Coke & Chemicals An overview of the projects planned at Mittal Coke & Chemicals is the following: 2 Projects > R20m 5 Projects R10m to R 20m 96 Projects < R10m

Overview on 2 new DRI Kilns 5 & 6 and additional sinter strand: 

Overview on 2 new DRI Kilns 5 & 6 and additional sinter strand

Kiln 5 & 6 Project ScopeThe project is an integral part of our expansion strategy and consists of five main components:: 

Kiln 5 & 6 Project Scope The project is an integral part of our expansion strategy and consists of five main components: Material Handling Raw Materials Handling Product Handling Ash Handling Kiln and Cooler Proper (2 off) 80 m Kiln, 4.8 m diam 50 m Cooler, 3.2 m diam After Burner Chamber (ABC) and Dust Settling Chamber (DSC) Various bought out items: fans,motors,gearboxes,pumps…. 66 Bar Waist Heat Boilers (2 off) Electrostatic Precipitators (2 off) Power Plant (Turbo Alternator Set)

Kiln 5 & 6 Project Activities: 

Kiln 5 & 6 Project Activities Design Project Management of total or portions of project Site establishment Civil Construction Electrical supply and control equipment Various bought out items: fans, motors, gearboxes, pumps…. Erection of buildings, kiln and coolers, Boilers, ESP Transport and cranes

Sinter Upgrade Project ScopeThis project is an integral part of the expansion strategy and consists of the following elements.: 

Raw Material Handling Extend Fine Material Blending bed by 150 m Install new Tippler Install raw material buffer facility New conveyors ca 2500 m Sinter Plant proper 159 m² Sintering area, 130 pallet cars Off strand rotary Cooler Extend cold screening, crushers and screens 4 x 400 m3 steel bins and mixing drum Various bought out items: fans,motors,gearboxes,pumps…. Install extra power supply capacity ca 20 MWh Sinter Upgrade Project Scope This project is an integral part of the expansion strategy and consists of the following elements.

Blast Furnace D Reline 2006: 

Blast Furnace D Reline 2006

Blast Furnace D Reline 2006: 

Blast Furnace D Reline 2006 Index Objective of reline Background Overview of scope

Blast Furnace D Reline 2006Objective of Reline: 

Blast Furnace D Reline 2006 Objective of Reline Campaign life of +20 years. Minimum downtime - 90 days. Production capacity – 5700tHM/day after sinter plant increased production. An improved hot metal quality level and lower standard deviation with respect to hot metal silicon, sulphur and temperature. Increased availability

Blast Furnace D Reline 2006Background: 

Blast Furnace D Reline 2006 Background Blast Furnace D was relined in 1990 and since then it has received 3 intermediate repairs In 1997 the refractory material in the hearth walls, the bosh, the belly of the furnace, and the ceramic burners in all hot blast stoves were replaced In 2000 the refractory material in the lower shaft, the throat armour, part of the furnace shell and three segments of the bustle pipe were replaced In 2004 the cooling elements in the lower shaft were replaced with staves, the furnace was shotcreted, a water cooled under hearth system was installed and the Paul Wurth gearbox was replaced

Blast Furnace D Reline 2006Background: 

Blast Furnace D Reline 2006 Background The project will be handled in the following phases: Phase 0 Conceptual study – completed Phase 1 Fixing of scope and budget - completed Phase 2 Engineering and procurement - present Phase 3 Reline – start 1 July 2006 Phase 4 Project closure

Blast Furnace D Reline 2006Overview of Scope: 

Blast Furnace D Reline 2006 Overview of Scope Stockhouse and Furnace Charging Furnace Proper Casthouse Raw Gas System Electrical, Instrumentation & Control

Blast Furnace D Reline 2006Overview of Scope: 

Blast Furnace D Reline 2006 Overview of Scope Stockhouse and Furnace Charging Refurbish existing equipment Increase coke storage capacity from 5 hours to 12 hours Replace the redundant skip charging system with a conveyor charging system Install an additional dust extraction system

Blast Furnace D Reline 2006Overview of Scope: 

Blast Furnace D Reline 2006 Overview of Scope Furnace Proper Replace the complete furnace shell as the existing bottom plate is cracked Replaced the furnace hearth refractory material Install a copper and cast iron staves cooling system Install a closed cooled water system Replace damaged uptakes Replace the bustle main on a new elevation

Blast Furnace D Reline 2006Overview of Scope: 

Blast Furnace D Reline 2006 Overview of Scope Casthouse Increase the length of the iron troughs The cast house floor will be leveled for mobile access Install a ramp from ground level to the cast house floor Install air cooled troughs Install a new tuyere platform Install new slag runners to accommodate a new casthouse layout

Blast Furnace D Reline 2006Overview of Scope: 

Blast Furnace D Reline 2006 Overview of Scope Raw Gas System Replace the primary dust catcher internal trumpet Replace the dust discharge equipment Refurbish the existing gas scrubber Install a new cooling tower

Blast Furnace D Reline 2006Overview of Scope: 

Blast Furnace D Reline 2006 Overview of Scope Electrical, Instrumentation & Control Supply new electrical system for all new equipment Refurbish existing electrical systems

BEE and Areas of Concern: 

BEE and Areas of Concern

BEE Policy: 

BEE Policy Realising that Black Economic Empowerment (BEE) are the cornerstone of a strong and sustainable economy, Mittal Steel South Africa Ltd commits itself to actively support and contribute to the development and growth of BEE’s in the Republic of South Africa. We believe that the active development and the participation of BEE’s will ensure broad based growth of the economy and the achievement of sustainable development, job creation and general prosperity in our country. A BEE policy is in place that will enable Mittal Steel South Africa Ltd and its employees the opportunity to contribute effectively to a better South Africa. Mittal Steel South Africa Ltd commits itself to pursue and actively promote this process.

The objectives of the BEE policy: 

To facilitate access of BEE Vendors, to Mittal Steel South Africa Ltd procurement activities To contribute to development and growth of BEE To establish, monitor and report progress against annual targets – for goods/services procured To encourage major non-BEE vendors to establish and implement BEE initiatives The following shall not be compromised in the process of giving effect to this policy: The expertise and experience of persons supplying services The specifications and quality of goods to be supplied Delivery reliability Pricing The objectives of the BEE policy

BEE Management: 

BEE Management Preferential treatment of BEE vendors: In the process of awarding tenders by Mittal Steel South Africa Ltd, preference shall be given to BEE Vendors who meet all the tender requirements. Mittal Steel South Africa Ltd spend R1,023 Billion on BEE suppliers in 2004 Projected spend on BEE suppliers for 2005 will be R 1,615 Billion During 2006 Mittal shall align its supplier database with the new codes of Good Practice as determined by the DTI

Areas of Concern: 

Areas of Concern General skills shortage in the country due to Engineers and artisans seeking international employment during the last 10 years Infrastructure and other expansion projects in South Africa sucking up most of the Engineering, Project Management and Manufacturing Capacity Delivery Reliability – due to the tight deadlines, commitments to equipment delivery and commissioning of projects must be adhered to at all times Sub-contracting of work – Mittal Steel SA Ltd conduct business with reliable vendors that are capable of rendering a quality, affordable and timely service. In the event of subcontracting work, main contractors should verify the capabilities of sub-contractors to perform the work Safety of contractors high activity at the business units due to capital expansions leads to a higher safety risk. Proof of section 16.1 or 16.2 responsible person appointments in terms of the OSHACT is compulsory