ArcelorMittal holds investor day in India | 25.09.24

Event highlights India’s position as the world’s fastest growing steel market and AM/NS India’s vision to become the benchmark for quality, scale and sustainability in Indian steel production

September 25, 2024, 11:30 AM CET

ArcelorMittal today hosted an investor day at AM/NS India’s flagship facility in Hazira, Gujarat. The event provided members of the investment community with an opportunity to witness first-hand the progress that AM/NS India – a 60/40 joint venture between ArcelorMittal and Nippon Steel – is making with the first phase of its project to expand steel production capacity at Hazira and gain insight into its long-term vision to reach 40 million tonnes of annual capacity.

In addition to the site tour, the event included presentations and a Q&A session with Aditya Mittal, CEO of ArcelorMittal and Chairman of AM/NS India, and members of the AM/NS India Management Committee, including Dilip Oommen, CEO of AM/NS India. The focus of the presentations was on AM/NS India’s progress over the past four years and its growth plans, including:

• Strong performance by AM/NS India since acquisition in 2019: Debottlenecking of capacity has led to record production levels in the first quarter of this year, and AM/NS India’s EBITDA per tonne exceeded the average of Indian steel peers in H1 2024.
• Cash generation of $5.8 billion since acquisition, enabling $5.8 billion in growth investments – including securing the company’s supply chain and improving profitability through several strategic acquisitions including slurry pipelines, iron ore mines, ports, power plants and land. Despite these investments, net debt has remained stable since acquisition, given low cash requirements including very competitive financing costs.
• Insight into the progress being made on the first phase of AM/NS India’s transformative expansion project at Hazira. The upstream capacity expansion ($5.1 billion) is aimed at increasing annual steel production capacity from 9 million tonnes to 15 million tonnes by 2026, while the downstream expansion ($1 billion) will significantly enhance AM/NS India’s ability to produce technically advanced steel products for the most demanding customer sectors, including automotive, and introduce advanced products such as Magnelis®, which offers best-in-class corrosion resistance, to its product portfolio.
• These projects – part of a total investment program of USD 7.7 billion – are progressing according to plan and are expected to have a transformative impact on profitability. After Phase 1, AM/NS India’s EBITDA and investment cash flow (operating cash flow minus maintenance capital expenditures) are expected to increase by 2.5 times.
• Plans are being developed to further expand production. Phase 2A is a capex-efficient expansion project that would grow steel production capacity to 18 million tonnes by 2028, while Phase 2B would take capacity at Hazira to 24 million tonnes by the end of the decade, making AM/NS Hazira the world’s largest, single site, coastal steel production facility. Upon completion, EBITDA and investable cash flow would grow to approximately 4x current levels.
• Further greenfield development options are being considered to expand steel production capacity to 40 million tonnes in the long term, meaning AM/NS India is ideally positioned to benefit from the expected growth in Indian domestic demand in this decade and beyond.
• India is expected to become the world’s third-largest economy by 2028, with a GDP of over $5 trillion. Domestic demand for steel is expected to grow at a compound annual growth rate (CAGR) of over 6 percent over the next decade, making India the fastest-growing steel market in the world.
• AM/NS India’s plans to ensure growth is achieved in a responsible and sustainable manner: target to reduce the carbon intensity of the steel it produces by 20 percent by 2030 (from a 2021 baseline); ambitious plans to develop indigenous renewable energy capacity ($0.7 billion, 1 GW renewable energy project – funded by ArcelorMittal – recently commissioned with further projects under evaluation).

Copies of the presentations used during today’s meeting can be found on the Company’s website: https://corporate.arcelormittal.com/investors/equity-investors/shareholders-events

AM/NS India Expansion Plans (Progress to Date & Phase 1) in Detail

• Following the completion of the acquisition in 2019, AM/NS India commenced a $0.8 billion debottlenecking project to realise the 9 million tonne nameplate capacity of the Hazira plant. This project is nearing completion and AM/NS India has achieved a production run rate of over 8 million tonnes this year.
• Organic growth has been complemented over the past four years with several strategic acquisitions, including: four power plants with a total capacity of 1,345 MW; a 250 km sludge pipeline; several key infrastructure ports and energy assets; two downstream coating facilities (Uttam Galva (1.2 million tonnes capacity) and Indian Steel (0.6 million tonnes capacity)).
• Phase 1 Expansion: The $5.1 billion Phase 1 upstream expansion project to increase annual production capacity to 15 million tonnes is underway and is expected to be completed in 2026. The project includes the construction of two state-of-the-art blast furnaces with a capacity of 3.5 million tonnes and associated assets (three basic oxygen furnaces, a hot strip mill, two sinter plants, a pellet plant, four coke oven batteries, plus auxiliary equipment and feedstock handling systems)
• Phase 1 Expansion: The $1 billion Phase 1 downstream expansion project is designed to enhance AM/NS India’s ability to supply technically advanced, value-added products for sectors such as automotive. It involves the construction of a cold rolling complex, which includes: a pickling line and tandem cold rolling mill; a 1 million tonne capacity continuous galvanizing and annealing line; and two 0.5 million tonne capacity continuous galvanizing lines, the second of which was commissioned in December 2023 and is a dedicated facility to produce Magnelis®.

END

About ArcelorMittal

ArcelorMittal is one of the world’s leading integrated steel and mining companies with a presence in 60 countries and primary steel production operations in 15 countries. It is the largest steel producer in Europe, one of the largest in the Americas, and has a growing presence in Asia, including India, through its AM/NS India joint venture.

ArcelorMittal sells its products to a wide range of customers, including the automotive, machinery, construction and equipment industries. In 2023, the company generated revenues of $68.3 billion and produced 58.1 million tons of crude steel and 42.0 million tons of iron ore.

Our purpose is to produce smarter steels for people and the planet. Steels made using innovative processes that use less energy, emit significantly less carbon and reduce costs. Steels that are cleaner, stronger and reusable. Steels for the renewable energy infrastructure that will support societies as they transform through this century. With steel at our core, our inventive people and an entrepreneurial culture at heart, we will support the world in making that change.

ArcelorMittal is listed on the stock exchanges of New York (MT), Amsterdam (MT), Paris (MT), Luxembourg (MT) and on the Spanish stock exchanges of Barcelona, ​​​​Bilbao, Madrid and Valencia (MTS). For more information about ArcelorMittal, please visit: http://corporate.arcelormittal.com.