MITTAL STEEL SOUTH AFRICA CAPITAL PROJECTS INFORMATION DAY

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MITTAL STEEL SOUTH AFRICACAPITAL PROJECTS
INFORMATION DAY

• Programme 30 November 2005
• 1000 1015 Opening and welcoming by the CEO
• 1015 1045 Presentation by General Manager,
  Procurement Logistics
• 1045 1115 Presentation by Manager, Relines
• 1115 1200 Closure by General Manager,
  Procurement Logistics

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Todays 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

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Strategic Goals and Throughput Strategy of Mittal
Steel South Africa
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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

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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

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Overview of Capital Projects planned by Mittal
Steel South Africa Limited(2006 2010)
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Distribution per Geographical area
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Vanderbijlpark Steel

• An overview of the projects planned at
  Vanderbijlpark Steel is the following
• 30 Projects gt R 20m
• 17 Projects R10m to R20m
• 200 Projects lt R10m

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Saldanha Steel

• An overview of the projects planned at Saldanha
  Steel is the following
• 8 Projects gt R20m
• 5 Projects R10m to R 20m
• 90 Projects lt R10m

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Newcastle Steel

• An overview of the projects planned at Newcastle
  Steel is the following
• 14 Projects gt R20m
• 11 Projects R10m to R 20m
• 80 Projects lt R10m

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Vereeniging Steel

• An overview of the projects planned at
  Vereeniging Steel is the following
• 6 Projects gt R20m
• 4 Projects R10m to R 20m
• 110 Projects lt R10m

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Mittal Coke Chemicals

• An overview of the projects planned at Mittal
  Coke Chemicals is the following
• 2 Projects gt R20m
• 5 Projects R10m to R 20m
• 96 Projects lt R10m

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Overview on 2 new DRI Kilns 5 6 and additional
sinter strand
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Kiln 5 6 Project ScopeThe 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,p
  umps.
• 66 Bar Waist Heat Boilers (2 off)
• Electrostatic Precipitators (2 off)
• Power Plant (Turbo Alternator Set)

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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

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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,p
  umps.
• Install extra power supply capacity ca 20 MWh

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Blast Furnace D Reline 2006
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Blast Furnace D Reline 2006

• Index
• Objective of reline
• Background
• Overview of scope

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Blast Furnace D Reline 2006Objective 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

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Blast Furnace D Reline 2006Background

• 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

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Blast Furnace D Reline 2006Background

• 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

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Blast Furnace D Reline 2006Overview of Scope

• Stockhouse and Furnace Charging
• Furnace Proper
• Casthouse
• Raw Gas System
• Electrical, Instrumentation Control

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Blast Furnace D Reline 2006Overview 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

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Blast Furnace D Reline 2006Overview 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

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Blast Furnace D Reline 2006Overview 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

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Blast Furnace D Reline 2006Overview 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

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Blast Furnace D Reline 2006Overview of Scope

• Electrical, Instrumentation Control
• Supply new electrical system for all new
  equipment
• Refurbish existing electrical systems

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BEE and Areas of Concern
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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 BEEs in the Republic
  of South Africa.
• We believe that the active development and the
  participation of BEEs 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.

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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

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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

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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