BLUESCOPE LIMITED ANNUAL REPORT 2006/07 PART 1 OF 2 BLUESCOPE BUILDING A TEAM

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TABLE OF CONTENTS 24 - COATED OUR BOND RECOGNISES OUR EMPLOYEES AS THE STRENGTH OF PART 1 AND BUILDING PRODUCTS OUR COMPANY. BLUESCOPE STEEL’S LEADERSHIP IN SAFETY AND 28 4 BLUEPRINT EMPLOYEE SHAREHOLDING HELPS US ATTRACT AND RETAIN 6 CHAIRMAN’S REPORT 32 8 MANAGING DIRECTOR 36 OUR COMMUNITY TALENTED PEOPLE, CREATING A BETTER COMPANY. AND CEO’S REPORT 38 BOARD OF DIRECTORS 12 OUR BOND PART 2 13 THE MAKING OF A GLOBAL 43 DIRECTORS’ REPORT STEEL COMPANY 63 CORPORATE GOVERNANCE 13 OUR STRATEGY STATEMENT 14 SAFETY 75 2006 CONCISE FINANCIAL 16 EXECUTIVE LEADERSHIP REPORT TEAM 89 INDEPENDENT AUDIT REPORT 17 OUR BRANDS TO THE MEMBERS 18 PERFORMANCE OVERVIEW 90 SHAREHOLDER INFORMATION 20 AUSTRALIA & 92 CORPORATE DIRECTORY BUILDING A REPUTATION 1

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2007

BLUESCOPE STEEL LIMITED TOTAL SHAREHOLDER RETURN INDEX VS S&P/ASX 100 15/7/02 TO 29/6/07 – BLUESCOPE STEEL – TSR INDEX – S&P/ASX – TSR (REBASED)

IN 2002, WE MADE A COMMITMENT TO REWARD SHAREHOLDERS AS WE GROW. SINCE THEN, TOTAL SHAREHOLDER RETURN HAS 4 BEEN UP TO 500 PER CENT. WE CONTINUE TO BUILD A REPUTATION AS A SOUND, LONG-TERM INVESTMENT.

Front cover: Bluescope Steel’s products feature prominently in the iconic Cricket Ground (MCG). Above Left: Employees Brian Gommers (left) and Luke Claut at the Lyndhurst () facility carrying COLORBOND® steel, one of Australia’s best known building products. Above: Architects used COLORBOND® steel in The Roads and Traffi c Authority NSW Crashlab, at Huntingwood, Australia to create exterior walls that allude to the dynamic purpose of the building. BLUE SKIES 2 BUILDING COMMUNITIES

5.5 BILLION LITRES OF RECYCLED WATER USED AT PORT KEMBLA.

REDUCING FRESH WATER USE BY 60% AT .

WE WORK HARD TO REDUCE OUR ENVIRONMENTAL FOOTPRINT IN EACH COMMUNITY IN WHICH WE OPERATE. INDUSTRY-LEADING PRACTICES IN WATER RECYCLING AND A FOCUS ON REDUCING CARBON EMISSIONS UNDERSCORE OUR COMMITMENT TO BUILDING BETTER COMMUNITIES.

The steel water tank, manufactured by BlueScope Water, has long been a feature of Australia’s rural landscape and is becoming a common sight in urban areas. BLUE HORIZONS BUILDING A FUTURE 3

MIDSTREAM 40.8% MIDSTREAM 35.4%

DOWNSTREAM DOWNSTREAM 19.4% 8.6% 2003 2007

UPSTREAM 50.6% UPSTREAM 45.2%

GLOBAL GROUP SALES REVENUE MIX FOR YEARS 2003 AND 2007

WE NOW HAVE 91 MANUFACTURING PLANTS IN 17 COUNTRIES AND ARE EARNING MORE INCOME FROM HIGH-VALUE DOWNSTREAM OPERATIONS. THROUGH OUR CAPITAL INVESTMENT IN THE WORLD’S HIGH-GROWTH REGIONS, WE ARE BUILDING AN EXCITING FUTURE.

ZINCALUME® and COLORBOND® steel coils at our Lysaght plant at Lyndhurst, Victoria Australia, are ready for processing into steel building products. BLUEPRINT 4 BBUILDINGUILDING TTOO A PPLANLAN

RE-DEFINING THE COMPANY EMBARKING ON A GROWTH JOURNEY At the time of demerger, our company The US$206 million acquisition of the US-based was simply a steel manufacturing division Butler Manufacturing Company signalled of BHP. Our Bond was developed to keep the beginning of our growth phase. Our mid us focused on our promises to customers, and downstream capital investment projects employees, shareholders and communities. saw us double metallic coating capacity in In 2003, we redefi ned this business and Thailand and commence construction of our new became BlueScope Steel. We also refi ned metallic coating and painting facility in Suzhou, and articulated our strategy. Our aim was China, and expansion of our Indonesian coating to increase the value created from steelmaking, and painting operations. This was a period by expanding our downstream operations, of innovation, expanded capability and greater capturing greater margins and offsetting geographic presence, during which our traditional steel market volatility. workforce grew to 16,000 people. SINCE THE COMPANY’S DEMERGER, WE HAVE WORKED OFF A BLUEPRINT AIMED AT GROWTH THROUGH CAPITAL INVESTMENT AND ADDING VALUE TO OUR STEEL. EACH OF THE PAST FIVE YEARS DEMONSTRATES A SPECIFIC PHASE OF OUR PLAN TO REWARD SHAREHOLDERS AS WE GROW.

BUILDING TO A PLAN 5

Far left: TRUECORE® steel is being recognised by the building industry as having signifi cant advantages over traditional framing materials. Middle: Frank Pacitto at No.5 Blast Furnace operations at Port Kembla Steelworks. Right: Working on the Tapping Floor at .

RE-BALANCING OUR PORTFOLIO CONSTRUCTION TO PRODUCTION A WORLD-CLASS STEEL BUSINESS BlueScope Steel’s footprint had grown As our new operations reached start-up, In fi ve years we have built a company with an considerably and our Company could now be we moved from construction to production and enviable record for safety, shareholder rewards defi ned as truly global, with operations in 17 focused on growing the markets for our premium and international growth. Our operations across countries. Our expansionist $2 billion capital steel brands. In the Asia-Pacifi c region, our Asia are ramping up and will grow with their investment program positioned us in high value reputation for quality led to BlueScope Steel markets, while our steelmaking businesses in Australia, New Zealand and North America markets in the world’s major growth economies. products being featured in prestigious projects, continue to set production and profi t records. Mid and downstream projects in countries including the Tianjin Olympic Stadium and The successful US$190 million sale of the such as Thailand, Vietnam, , and Australia the Shanghai World Financial Centre in China, Vistawall business and the A$600 million (net) saw us build and transform our businesses, and the Melbourne Cricket Ground (MCG) in acquisition of Smorgon Steel Distribution creating a multinational franchise with greater Australia. In North America, markets responded represent a new level of ambition and capability balance and diversity in geography, products favourably to the reinvigorated Butler and in asset management and another exciting and markets. Vistawall businesses. step in our journey. A YEAR CHARACTERISED BY STRONG PROFIT GROWTH, PRO-ACTIVE ASSET MANAGEMENT AND A SMOOTH CEO SUCCESSION. THE COMPANY IS WORKING HARD TO BALANCE ENVIRONMENTAL SUSTAINABILITY WITH ECONOMIC DEVELOPMENT.

VALUE AND GROWTH 6 CHAIRMAN’S MESSAGE

SHAREHOLDERS Since its public listing, BlueScope Steel has remained committed to rewarding shareholders, and this year was no exception. We paid a total ordinary dividend of 47 cents per share, fully franked, up 3 cents per share or 7 per cent over the previous year. Our focus on shareholder rewards has seen us return a tax effective $3.15 per share, or a total of $2.3 billion, to shareholders in our fi rst fi ve years. During the year, the Company managed its assets effectively. Signifi cant value was generated from the sale of the Vistawall business which was acquired as part of the USA-based Butler Manufacturing Company three years ago. Vistawall, an aluminium business, was not seen as core to our US strategy. BlueScope Steel revitalised this business and the sale of Vistawall for US$190 was an excellent result for shareholders when The 2006/07 fi nancial year was our Company’s compared with the US$206 million paid for second best year and a signifi cant improvement Butler and Vistawall. on the previous year’s results. The strong During the course of the year, BlueScope Steel performance was due to improved pricing and also participated in the consolidation of the sales, better performance from our existing Australian steel industry. In August, the Company Asian operations, and profi t from the divestiture purchased 19.9 per cent of Smorgon Steel. By of the Vistawall business in North America. the end of the fi nancial year, it had been agreed Net Profi t After Tax was $686 million, an that BlueScope Steel would acquire the Smorgon increase of 103% on the previous year’s result Steel Distribution business for $700 million. As of $338 million. Earnings Per Share nearly part of this transaction, BlueScope Steel sold doubled, increasing by 47 cents to 95 cents, its 19.9 per cent shareholding, realising a gain and every business segment was profi table. of $128 million (including dividends) before tax Notwithstanding the impact on margins which will be refl ected in the FY2008 earnings. from higher raw material costs and adverse This acquisition provides a new channel to foreign exchange rates, this was an excellent market for our products and will strengthen our year for BlueScope Steel. downstream market presence in Australia. COLORSTEEL® and stained glass create a striking effect in a church at Waiuku, New Zealand. 7

LONG TERM STRATEGY solutions provider and built a signifi cant presence 0.57 0.78 1.34 0.48 0.95 BlueScope Steel has a strategy designed in Asia and North America. This was a period to differentiate itself and address the volatility of growth, shareholder value creation and world which is typical in the steel sector. In accordance class safety performance. On behalf of the Board with this strategy, the Company continued of Directors, employees and shareholders, I developing its businesses around the world. wish Mr Adams well in his future endeavours. During the year, major projects were completed in Asia, North America and Australia on time CORPORATE AND SOCIAL RESPONSIBILITY and on budget. Our Bond – the Company’s values statement Our Asian investments position us in the world’s – emphasises respect for the communities in fastest growing economies. In 2006/07 we saw which we do business. Accordingly, we take our signifi cantly improved performance from existing environmental responsibilities seriously. During operations in Vietnam, Thailand and Malaysia, the year, BlueScope Steel launched major water 03 04 05 06 07 while the Indonesian coating lines continue to saving programs at Port Kembla Steelworks EARNINGS PER SHARE ($) exceed expectations. Our new Chinese coating and Western Port. These programs will save line investment is on-stream and ramping up a combined total of nearly eight billion litres according to plan, but is operating in tough of water per year, equivalent to the annual water market conditions. consumption of 29,000 households. In September 2006, we welcomed Mr Daniel Grollo to the BlueScope Steel Board, with BlueScope Steel is also committed to reducing SUCCESSION his directorship approved at the 2006 Annual its energy use and greenhouse gas emissions General Meeting. Mr Grollo brings valuable Last year, Managing Director and CEO and is actively contributing to the debate building and construction experience to the Kirby Adams announced his retirement from to establish a national policy framework that Board. BlueScope Steel maintains high standards BlueScope Steel, effective at the end of October balances environmental sustainability with of corporate governance, complying with the 2007. The long notice period provided suffi cient economic development, jobs and exports while ASX principles of Good Corporate Governance time for a smooth succession process and in acknowledging the need for global solutions and Best Practice Recommendations. August 2007, we were pleased to announce the for trade-exposed industries. On behalf of the Board of Directors, I thank my plan to appoint Paul O’Malley as the Company’s The Company is actively considering a project fellow directors for their contribution and support. new CEO. Mr O’Malley joined BlueScope Steel to signifi cantly reduce greenhouse gas I also thank Kirby Adams, his management team as Chief Financial Offi cer in 2005. He is an emissions at Port Kembla Steelworks and our 18,000 employees for their hard work experienced global executive and the Board by recycling waste gases for use in electricity and commitment during the year. is confi dent that he has the qualities to maintain generation. This project requires an appropriate our Company values, including our focus on policy framework, similar to that which we long-term shareholder returns. have negotiated with the NSW government. The Board thanks Kirby Adams for his leadership The year was also a record for safety and guidance since the founding of BlueScope performance, with the excellent results largely Steel. During his tenure, the Company re-defi ned due to high levels of participation in safety itself from a steel manufacturer to a steel programs by BlueScope Steel employees. GRAHAM KRAEHE AO, CHAIRMAN ALL BLUESCOPE STEEL BUSINESSES ACHIEVED EXCELLENT OPERATIONAL PERFORMANCE. RECORDS WERE SET IN SAFETY AND ENVIRONMENTAL PERFORMANCE AND NET PROFIT DOUBLED FOR THE YEAR, RESULTING IN A 5 YEAR TSR OF 500 PER CENT. SAFER AND STRONGER MANAGING DIRECTOR & CEO’S REPORT

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The 2006/07 fi nancial year was an excellent one In 2006/07, our Company incurred no fatal Our safety journey has been an inspiring one, for your Company. New records in safety and incidents, while our injury rate is at world-best which I feel truly privileged to have led. environmental performance, revenue of nearly standards. Lost Time Injury Frequency Rate nine billion dollars and a doubling of net profi t (LTIFR) was 0.4, remaining below 1.0 for FINANCIAL PERFORMANCE – made this a very profi table year in all respects. the third year running. This is a signifi cant 2006/07 MARKS A GREAT YEAR achievement when compared against the Even with the Australian dollar appreciating This great result refl ects the efforts of all International Iron and Steel Institute (IISI) 5.2 per cent, revenue for the year was BlueScope Steel employees and as the end average of 4.0. Medically Treated Injury $8.9 billion, an increase of 11 per cent on the of my tenure approaches, it is very pleasing to Frequency Rate (MTIFR) was 6.5. Today, previous year, while EBIT rose by $543 million see your Company demonstrating such strong BlueScope Steel is recognised as an industry to $1.1 billion. Net Profi t After Tax and Earnings performance. So in my fi nal report as CEO and leader and world-class employer in safety. Per Share also doubled over last year to $686 Managing Director of BlueScope Steel, I am million and 95 cents respectively. Strong These results are due to a high level of proud to convey the details of a strong FY2007 operating cash fl ow and focus on balance sheet dedication among our 18,000 employees, and the dramatic growth achieved in our fi rst fi ve management enabled us to reduce gearing with 95 per cent regularly involved in voluntary years since listing as a public company in 2002. from 38 per cent to 28 per cent which provides safety audits. Many of our businesses around BlueScope Steel with a very strong fi nancial SAFETY – OUR PASSION the world are now logging millions of hours platform for continuing growth. AND OUR ACHIEVEMENTS worked without injury. Our BlueScope Steel Asia Five years ago, we promised our employees, business, which covers nine countries, has not These results were largely due to securing contractors and their families that we would incurred a single lost time injury for 18 months higher prices for our hot rolled coil and steel make BlueScope Steel an even safer place to with 23 million hours worked. These results are slab, improved value added exports, a work. Since then, we have been uncompromising testament to the hard work and attention to favourable mix of sales into our domestic in our efforts to achieve Zero Harm. During safety by all of our employees and a powerful markets and stronger coated and painted this year, we moved even closer to our goal. statement about the values of your Company. coil sales volumes and pricing. 9

Architects have come to appreciate the design possibilities of ZINCALUME® and COLORBOND® , as demonstrated in the award winning Thunder and Lightning alpine lodges at Thredbo, Australia.

Your Company also enjoyed the full-year benefi t Our Australian and New Zealand Industrial In North America our upstream operation, joint of the Hot Strip Mill expansion at Port Kembla Markets had another very good year, with Port venture North Star BlueScope Steel, delivered Steelworks, along with record steel production Kembla Steelworks continuing to be the profi t another outstanding year in terms of operational from this world-class operation. and cash fl ow engine of the Company. performance, customer service and earnings. Our strong operational performance led to In Asia, our established operations in Thailand, Downstream, our Butler Buildings business a very strong net cash fl ow from operations, Indonesia and Malaysia recorded substantial delivered another improved result driven by increasing by 67 per cent to a record $1.343 volume growth with revenue and EBIT growing strong market demand in the non residential billion. Raw materials cost infl ation was, again, to record levels. New operations in China, building sector, improved plant effi ciencies, a major impost on the Company, adding $365 Vietnam, and India were commissioned and lower costs and a strengthening of customer million to our costs of production, primarily ramped up. In China, industry-wide sales relationships. The $70 million EBIT turnaround in the form of higher costs for iron ore, scrap, margins in coated products were weaker than since our acquisition of the Butler business , aluminium and freight. anticipated, while the Thailand political coup in 2004 has been a great contributor OUR BUSINESSES delayed the expected economic expansion and to shareholder value. reduced steel demand. In 2006/07, all BlueScope Steel businesses STEEL INDUSTRY CHANGE AND GROWTH achieved excellent operational performance. Margin compression in our metallic coating Numerous production records were set at and painting businesses prevailed through The global steel industry continues on its path our many facilities around the world and all most of the year. These midstream businesses of consolidation, with principal benefi ts being BlueScope Steel reporting segments were confronted signifi cant increases in zinc and better matching of production to demand and profi table. The stronger Australian and New steel feed costs, as well as growing exports global economies of scale and marketing. We Zealand dollars reduced our relative global from expanding north Asian production. They expect this momentum to continue over the next competitiveness against imports, lowering responded with solid operational performance, few years. some product margins. record production, and higher despatches. During the year, BlueScope Steel was actively complete the construction of a second metallic involved in the consolidation of the Australian coating line with in-line painting capability. This steel industry. Recently, our Company completed new facility will produce thin gauge coil to meet the acquisition of Smorgon Steel Distribution, the strong residential demand. our largest acquisition since listing, at a net Our $150 million Western COLORBOND® cost of $600 million. This is a great business, steel facility commenced operations in August which brings 1,800 dedicated new employees 2007 and BlueScope Water continues to 10 and more than 12,000 new customers to the experience strong growth with an expanding BlueScope Steel family. We welcome them all. order book for our commercial and urban The new BlueScope Distribution business water products. (rebranded from the recently acquired Smorgon Steel Distribution business) will provide an FIVE YEAR ANNIVERSARY important channel to market, signifi cantly expand This is our fi fth year since demerger and our distribution capability for our high quality public listing and we can now truly say the products in Australia, and further our growth transformation of BlueScope Steel from the strategy in downstream markets. former BHP Steel is complete. In June, we realised the value of our Vistawall From the beginning, our focus has been on business, which we acquired through our creating value for shareholders while we grow. US$206 million purchase of Butler Manufacturing In building this ‘very different kind of steel in 2004. The sale of Vistawall to Oldcastle Glass company’ we have never strayed from the for US$190 million represents a strong fi nancial principle of shareholder rewards. BlueScope return for shareholders and capitalises on the Steel’s Enterprise Value has now more than excellent work undertaken by BlueScope Steel’s tripled to approximately $9 billion. The initial and Vistawall’s management and employees share price in 2002 has been fully returned in improving the business. to owners via $2.3 billion in dividends and During the year, we closed our loss making share buybacks. business in Taiwan, and ceased our tinmill Our growth strategy has been successful operations. The tinmill closure was achieved in diversifying the Company’s revenue, products, smoothly and with lower than expected costs, and markets. Consequently, revenue and EBITDA thanks to the excellent performance of the have each doubled over the past fi ve years. tinmill employees. BlueScope Steel has grown from 11,000 to In May, we announced a US$101 million 18,000 employees and approximately 90 per cent investment in our Indonesia operation to of our employees are also shareholders.

Right: XLERPLATE® steel is the material of choice in the growing number of wind farms used to generate ‘green’ electricity, as shown here at Mt Gambier, .

Far right: The Institute’s Library and Information Services building at Shellharbour TAFE campus NSW, Australia, capitalises on the superior environmental qualities of steel to achieve a 40 per cent reduction in energy use. In 2002, we were known as an Australian steel It will also generate electricity, to be fed into the the spread between HRC prices and scrap cost maker. Today, our Company is also a leading NSW grid. The result would be a net reduction has narrowed for our North Star BlueScope Steel global provider of steel building products and of 800,000 tonnes of greenhouse gases a year joint venture business. Asian markets and solutions. We have become a globally diverse – the equivalent of taking 185,000 cars off the opportunities are slightly improved and the company with 91 manufacturing plants in 17 road. We expect to have a clear view on how operational ramp-up of new sites is growing countries around the world. BlueScope Steel to proceed with this project by June 2008. revenue while coated product margins continue has invested in its future and over fi ve years, 20 to be under pressure, particularly in China. major capital projects in 8 countries have been PEOPLE 11 We will continue to aggressively manage implemented with operations now ramping up The Company recently announced Paul O’Malley those factors we can control, including safety for our next exciting growth phase. as the next Managing Director and CEO of and environment, containing costs, improving BlueScope Steel. I believe Paul will be a strong ENVIRONMENT our processes, achieving volume and production successor and am particularly pleased the Board effi ciencies, and optimising mix and margins. In 2006/07 we demonstrated our commitment has chosen your new CEO from within the ranks Clearly, the benefi t of a global footprint and the to the environment with the announcement of of our very strong executive leadership team. diversity of our product lines will be two major water saving initiatives. The fi rst was advantageous going forward. a major recycling program between BlueScope OUTLOOK After fi ve years of growth and with another very Steel and Sydney Water. This has halved the This year, the global steel market was very strong strong year concluded, we thank our shareholders use of fresh water at Port Kembla, equivalent with the forecast for steel demand worldwide and customers for their continuing support. to the annual water use of 26,000 households. remaining positive. China, the USA and Europe The second initiative, a $21 million landmark I would like to personally thank our employees are driving this healthy outlook. The Asia region for their commitment and dedication. They have project with South East Water and the Victorian now produces more than half of worldwide made BlueScope Steel an outstanding company, Government, will cut fresh water use at our demand growth. of which we are all very proud. Western Port plant by over 60 per cent or 660 million litres annually. This is equivalent to water While the Chinese government has been Finally, I thank shareholders for the opportunity consumption of about 3,000 homes. working to close and eliminate ineffi cient mills to lead, build, and transform the iconic BlueScope and reduce exports through its recent export Steel which is now strongly positioned for its Your Company is committed to reducing tax, these initiatives have not signifi cantly next phase of growth. greenhouse gas emissions. We recognise global slowed production growth nor reduced the global warming as a serious community concern and effect of exports. In Australia, we started FY2008 a global issue that requires a global response. with a stronger local currency, stable global steel We are currently examining the feasibility price environment and high metal coating costs. of a new co-generation plant at Port Kembla In North America, the commercial industrial Steelworks. This plant will use by-product construction market remains strong for our Butler gases to produce steam for our internal use. business which has no residential exposure, but KIRBY ADAMS, MANAGING DIRECTOR AND CEO

14.5 18.5 25.9 8.5 14.9 611 818 1,358 556 1,099

03 04 05 06 07 03 04 05 06 07

RETURN ON INVESTED CAPITAL (%) EBIT ($MILLION)

*includes $185 million restructuring charges OUR BOND THE VALUES THAT DEFINE US

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OUR CUSTOMERS ARE OUR PARTNERS WE AND OUR CUSTOMERS PROUDLY BRING Our success depends on our customers INSPIRATION, STRENGTH AND COLOUR TO and suppliers choosing us. Our strength COMMUNITIES WITH BLUESCOPE STEEL. lies in working closely with them to create value and trust, together with superior products, service and ideas.

OUR PEOPLE ARE OUR STRENGTH Our success comes from our people. We work in a safe and satisfying environment. We choose to treat each other with trust and respect and maintain a healthy balance between work and family life. Our experience, teamwork and ability to deliver steel inspired solutions are our most valued and rewarded strengths.

OUR SHAREHOLDERS ARE OUR FOUNDATIONS Our success is made possible by the shareholders and lenders who choose to invest in us. In return, we commit to continuing profitability and growth in value, which together, make us all stronger.

OUR COMMUNITIES ARE OUR HOMES Our success relies on communities supporting our business and products. In turn, we care for the environment, create wealth, respect local values and encourage involvement. Our strength is in choosing to do what is right.

Machale Edwards, Coke Ovens operator, preparing a 7A battery door for service. THE MAKING OF A GLOBAL STEEL COMPANY

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Although BlueScope Steel is a young manufacturing and marketing footprint Our Company operates three fi rst rate company, listing on the Australian Stock spanning Australia, New Zealand, Asia steelmaking facilities - Port Kembla Exchange in 2002, our heritage is great and North America. Our Company is the Steelworks in Australia, New Zealand Steel and we comprise some pioneering world’s leading supplier of high quality near Auckland, and North Star BlueScope businesses in Australia, New Zealand and metallic coated and painted steel products Steel, our Ohio-based joint venture in the North America. These are: the Broken Hill for the building and construction sector. USA. As a result of our recent capital Proprietary Company, John Lysaght, We also supply customers in the general investment phase, we now operate the Australian Iron and Steel, New Zealand manufacturing and automotive sectors. Asia-Pacifi c region’s largest network of Steel and Butler Manufacturing Company. metallic coating and painting, rollforming BlueScope Steel employs more than 18,000 and pre-engineered building facilities. Today, BlueScope Steel is an international people and operates 91 manufacturing steel solutions company with a plants in 17 countries around the world.

OUR STRATEGY PLANNING FOR LONG-TERM SHAREHOLDER REWARDS

Since our public listing, BlueScope Steel has pre-engineered buildings, THINKTANK® The second reason is that revenue derived invested in 20 major capital projects in eight rainwater harvesting systems and SURELINE® from the sale of value-added steel products countries in Asia, North America and Australia. power distribution solutions. is more stable than revenue from ‘upstream’ These operations, which are now ramping up, steel slab and hot rolled coil, as these are prone represent a total capital investment of $2 billion. There are two main reasons for our investment to the volatility of world commodities markets. While we invest considerably to improve strategy. The fi rst is that we earn higher margins By deriving a greater proportion of total revenue our traditional steelmaking operations, most from the sale of midstream and downstream from mid and downstream value-added products, of our new capital projects are what we term products. Each step in the conversion of steel we secure higher margins while reducing the ‘midstream and downstream’ businesses. These slab to painted or coated steel, then to a building effect of steel price volatility. In summary, businesses make products out of steel made product, then to a pre-engineered building, adds our strategy makes BlueScope Steel a more by our steelworks in Port Kembla, New Zealand signifi cant value to that steel. By investing in desirable ongoing investment. Our focus and and the United States. Our midstream products new downstream facilities, particularly in high strategy for long-term shareholder rewards include COLORBOND® and ZINCALUME® steels, growth regions such as Asia, we are maximising makes BlueScope Steel ‘a different kind while downstream products include BUTLER® the opportunity to earn downstream revenue. of steel company.’ OUR PEOPLE ARE FOCUSED ON STAYING SAFE AND WATCHING OUT FOR EACH OTHER EVERY DAY. BLUESCOPE STEEL IS BUILDING A REPUTATION WITHIN AND BEYOND THE STEEL INDUSTRY AS A WORLD-CLASS PERFORMER AND LEADER IN SAFETY. SAFETY TOWARD ZERO HARM

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At BlueScope Steel, nothing is more important and on watching out for each other every day. while Illawarra Coated Products operated than our safety. BlueScope Steel has now moved During the year there were many fi ne safety for a full year, comprising over 2 million hours a step closer to our goal of Zero Harm. Our achievements. lost time injury free. Port Kembla Iron & Slab Company incurred no fatal incidents in the past (Slabmaking) posted 5 million hours lost time ASIA year, while our injury rates remain at world- injury free. Our New Zealand Steel contractors best standards. Every business in all nine Asian countries in have worked for two years lost time injury free. which we operate achieved an LTIFR of zero. The construction of our Western Sydney Service In 2006/07, our Lost Time Injury Frequency Rate Our Asian facilities continue to set new safety Centre was completed without lost time injury (LTIFR) was 0.4, remaining below 1.0 for the third benchmark levels. For example, Thailand’s Map and Western Port ended the year with no Ta Phut facility achieved over 19 million hours year running. This result compares very well medically treated injury for the last three months. to the International Iron and Steel Institute rate lost time injury free. BlueScope Steel Malaysia of around 4.0. Our Medically Treated Injury has had nine consecutive months without any NORTH AMERICA injury. This is a world-leading result. Frequency Rate (MTIFR) was 6.5. (Both rates A number of BlueScope Steel North American express incidence per one million hours worked). AUSTRALIA AND NEW ZEALAND businesses achieved new record lost time A key factor in our safety performance was Australian and New Zealand Industrial Markets injury free periods. These include: Vistawall a very high level of employee participation. For achieved 5.9 million hours lost time injury free and Butler Buildings Laurinburg and Visalia. example, during the year, an average of 95 per while Australian Manufacturing Markets also We believe these efforts demonstrate that cent of employees across our entire Company posted a record lost time injury free period of Zero Harm is achievable and we will continue were involved in conducting safety audits each 3.8 million hours. to work toward this goal. Meanwhile, BlueScope month. In addition, 28,000 near misses were Within these groups, specifi c businesses Steel is building a reputation, within and beyond reported. These measures are a strong indication performed very well. Port Kembla Steelworks the steel industry, as a world-class performer that our people are focused on staying safe, recorded 15 million hours lost time injury free and leader in safety. Zero Harm is the focus at BlueScope Steel. Our employees recognise that nothing is more important than safety. From left to right: Lucy Carson, QA Technologist at Western Port’s Hot Strip Mill. Disha Saxena, Hot Strip Mill electrical engineering graduate, talks with Perry Naylor, HSM operator. Staying within the safety barrier. Kevin Anderson on New Zealand Steel’s recoil line.

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29 16 14 8.0 4.8 3.5 4.1 3.5 2.8 1.8 1.5 0.9 0.8 0.4 68 60 52 47 29 22 22 17 12 9.4 8.0 9.3 6.5 6.5

Reported performance for IISI member companies (employees & contractors)

94 95 96 97 98 99 00 01 02 03 04 05 06 07 94 95 96 97 98 99 00 01 02 03 04 05 06 07

LOST TIME INJURY FREQUENCY RATE MEDICALLY TREATED INJURY FREQUENCY RATE

Per million hours worked Per million hours worked Includes contractor performance from 1996 Includes contractor performance from 2004 Includes Butler performance from May 2004 Includes Butler performance from May 2004 EXECUTIVE LEADERSHIP TEAM

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Brian Kruger is President of Australian Kathryn Fagg is President of BlueScope Steel He joined the Company as its Chief Financial Manufacturing Markets. This business comprises Asia and is also responsible for BlueScope Offi cer (CFO) in December 2005, responsible for the Illawarra Coated Products business, including Steel’s domestic building products and solutions leading BlueScope Steel’s Finance function and the Springhill facility, the Western Port operation businesses, including BlueScope Lysaght. Information Services. Before joining BlueScope and the Service Centre network. Mr Kruger Steel, he was CEO of a leading energy company Noel Cornish is President of Australian and New was previously BlueScope Steel’s Chief based in the United States. Financial Offi cer. Zealand Industrial Markets, with responsibility for the Port Kembla Steelworks, New Zealand Kirby Adams is Managing Director and Chief Lance Hockridge is President of the Company’s and Pacifi c Steel Products businesses, and the Executive Offi ce of BlueScope Steel. Mr Adams North American business, which includes North Company’s worldwide Logistics operations. Mr was appointed to the Board on 10 May 2002, Star BlueScope Steel, Butler Buildings, Castrip Cornish was previously President of the Coated having been Chief Executive Offi cer of BHP Steel LLC, and prior to its divestiture, Vistawall. Mr Products business in Australia. since March 2000. Mr Adams retires from his Hockridge has held this position since 2005 and role on 31 October 2007. was previously President of Industrial Markets. Paul O’Malley was appointed Managing Director Mr Hockridge announced his resignation in and CEO-elect, taking up the role on 1 November Ian Cummin is responsible for People and August 2007 and will step down from his role 2007, and became a Director of the Board in Performance. This role includes Human Resources, at the end of October 2007. August 2007. Safety and Corporate Affairs.

Left to right: Brian Kruger, Lance Hockridge, Kathryn Fagg, Noel Cornish, Paul O’Malley Seated: Kirby Adams, Ian Cummin OUR BRANDS CREATING VALUE THROUGH DIFFERENTIATION

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Developing market-leading brands is a key We have also produced a number of brands component of our strategy. The brands express tailored to the conditions of specifi c countries our Company values to our customers and are in Asia. These include PrimaMaju® and key business assets. As a manufacturer of PrimaDesa® in Malaysia, TRUZINC® in Thailand premium steel solutions, we work hard to ensure and PELANGI® and ABADI® steels in Indonesia. that BlueScope Steel brands are associated with We are regularly adding to our brand portfolio. quality in each of our markets around the world. New products such as HYDRORIB® drainage Our brand portfolio contains some pipes, WATERPOINT® rainwater tanks, AGRIRIB® established and respected names. In Australia, low-pressure irrigation pipes and GALAXY® water COLORBOND®, ZINCALUME® and XLERPLATE® tanks express BlueScope Steel quality to new steels and LYSAGHT® building products are markets. We also allow domestic trade customers highly recognised, and leaders in their respective to benefi t from our reputation through the ® markets. In North America, the BUTLER brand BlueScope ‘Steel By’ program. has been part of the landscape for a century and is the world’s premier brand in pre-engineered In this program, thousands of businesses that use building systems. In newer Asian markets, we our premium steel products gain a competitive have built an enviable reputation for quality with advantage by promoting their partnership with our purpose-designed Clean COLORBOND® steel. BlueScope Steel. PERFORMANCE OVERVIEW BLUESCOPE STEEL BUSINESS SEGMENTS

18

NEW ZEALAND AND PACIFIC ISLANDS AUSTRALIA NEW ZEALAND AND PACIFIC AUSTRALIA HOT ROLLED PRODUCTS STEEL PRODUCTS COATED AND BUILDING PRODUCTS

OUTSTANDING PERFORMANCE FROM PORT A STRONG YEAR FOR NEW ZEALAND STEEL SOLID OPERATIONS IN A CHALLENGING KEMBLA STEELWORKS MARKET Production records set for metallic coating (224kt) Production records set for ironmaking (5.23 Mt), and painting (63kt). Production records set at Springhill facility for slab (5.30 Mt), hot rolled coil (2.82Mt) and cold rolled coil (963 kt), metal coating (822 kt), plate (0.41 Mt). Annualised Q4 FY 2007 slab production very and painting (202 kt). promising - in excess of 600kt. Domestic demand increased with despatches Sales revenue increased by 15% on FY 2006, due up 22 %. Domestic despatches up 9% mainly due to higher despatches and sales pricing. Sales revenue increased by 13% on FY 2006, to stronger construction market. Margins reduced by high coating metal costs, to $3.9 billion. Sales revenue increased by 3% on FY 2006. stronger Australian dollar and import Earnings increase driven by higher sales prices. competition. Preparations underway for $330 million reline Earnings decrease due to a stronger Commissioning commenced on state-of-the-art of No.5 blast furnace in CY 2009. NZD vs USD and higher metal coating costs. Western Sydney COLORBOND® steel facility. Earnings partly offset by stronger AUD vs USD. Opportunities identifi ed in plant optimisation BlueScope Water growing strongly, based Feasibility study commenced for co-generation and mineral extraction from ironsands resources. electricity plant at Port Kembla Steelworks on product demand. to reduce greenhouse gas. Closure of loss-making tinmill at Port Kembla.

FY 06/07 FY 05/06 FY 06/07 FY 05/06 FY 06/07 FY 05/06

EXTERNAL DESPATCHES ('000s of tonnes) EXTERNAL DESPATCHES ('000s of tonnes) EXTERNAL DESPATCHES ('000s of tonnes) DOMESTIC 1,004 826 DOMESTIC 302 278 DOMESTIC 1,468 1,410 EXPORT 1,572 2,109 EXPORT 261 300 EXPORT 695 542 REVENUE $3.919 b $3.472 b REVENUE $728 m $709 m REVENUE $3.186 b $2.767 b EBIT $759 m $456 m EBIT $90 m $105 m EBIT $41 m ($3 m) NET OPERATING ASSETS NET OPERATING ASSETS NET OPERATING ASSETS (pre-tax) $1.782 b $1.837 b (pre-tax) $431 m $342 m (pre-tax) $1.486 b $1.381 b RETURN ON NET ASSETS RETURN ON NET ASSETS RETURN ON NET ASSETS (pre-tax) 41% 24% (pre-tax) 24% 32% (pre-tax) 3% 0% Excludes packaging products

TOTAL SALES% (TONNES) TOTAL SALES% (TONNES) TOTAL SALES% (TONNES)

39 27 28 6 59 13 5122 71 6 11 12

AUSTRALIA ASIA AMERICAS OTHERS NZ/PACIFIC AUSTRALIA ASIA AMERICAS OTHERS AUSTRALIA ASIA AMERICAS OTHERS 19

ASIA NORTH AMERICA NORTH AMERICA COATED AND BUILDING PRODUCTS HOT ROLLED PRODUCTS COATED AND BUILDING PRODUCTS

ESTABLISHED OPERATIONS IMPROVED, ANOTHER OUTSTANDING OPERATIONAL BUTLER BUILDINGS STRONGER, VISTAWALL NEW FACILITIES RAMPING UP PERFORMANCE FROM NORTH STAR SALE SUCCESSFUL BLUESCOPE STEEL JOINT VENTURE Improved operational performance in Vietnam, Vistawall business sold on 29 June 2007 for Thailand and Malaysia. Customer satisfaction very high - voted number US$190 million - total acquisition cost for all $29 million EBIT contribution from established one for fi fth consecutive year in Jacobson Survey. Butler and Vistawall businesses in 2004 was businesses in Thailand, Indonesia and Malaysia High levels of raw steel production (956 kt) US$206 million. offset by $6 million decrease from start-up maintained. Sales revenue decreased by 6%, refl ecting higher AUD vs USD. businesses in Vietnam, China and India. EBIT decreased by 4%, mainly due to lower China coating lines ramping up at new $280 hot rolled coil to scrap spread and higher Butler total despatches increased to 196,135 million Suzhou facility. electricity costs. tonnes, production up marginally on FY 2006. Indonesia coating lines exceeded expectations New baghouse (US$40 million) completed – Improved earnings largely due to better margins, – plant up-time 90% in FY 2007, market signifi cantly improves working conditions. lower costs and improved effi ciencies. demand strong. Castrip LLC joint venture develops stronger, Pre-engineered building (PEB) market stronger Recommencing US$101 million second metal higher-grade steels. Construction of second plant – year-end order backlog up 25% on FY 2006. coating line in Cilegon, Indonesia. in Blythesville, Arkansas commenced.

FY 06/07 FY 05/06 FY 06/07 FY 05/06 FY 06/07 FY 05/06

EXTERNAL DESPATCHES ('000s of tonnes) EXTERNAL DESPATCHES ('000s of tonnes) EXTERNAL DESPATCHES ('000s of tonnes) DOMESTIC 777 631 DOMESTIC 942 926 DOMESTIC 182 183 EXPORT 157 77 EXPORT – 15 EXPORT 14 11 REVENUE $1.387 b $1.048 b REVENUE* $566 m $500 m REVENUE $788 m $834 m EBIT $42 m $19 m EBIT $180 m $188 m EBIT $37 m $9 m NET OPERATING ASSETS NET OPERATING ASSETS NET OPERATING ASSETS (pre-tax) $1.180 b $1.217 b (pre-tax) $233 m $258 m (pre-tax) $63 m $67 m RETURN ON NET ASSETS RETURN ON NET ASSETS RETURN ON NET ASSETS (pre-tax) 3% 2% (pre-tax) 67% 68% (pre-tax) 50% 11% Excludes Taiwan *excludes 50% share of North Star BlueScope Steel sales revenue Excludes Vistawall

TOTAL SALES% (TONNES) TOTAL SALES% (TONNES) TOTAL SALES% (TONNES)

89 2 9 100 100

ASIA AMERICAS OTHERS AMERICAS AMERICAS AUSTRALIA HOT ROLLED PRODUCTS NEW ZEALAND AND PACIFIC STEEL PRODUCTS

20

Operator cleaning the coke ovens bench at Port Kembla Steelworks.

Australia Hot Rolled Products covers the operations of Port Kembla Steelworks, which manufactures steel slab, hot rolled coil and plate. New Zealand and Pacifi c Steel Products is a fully integrated operation with its own raw materials resource. President Noel Cornish discusses a very strong year.

Q. WHAT WAS THE HIGHLIGHT OF 2006/07? We met this demand through increased Higher zinc costs, a strong New Zealand A. While Port Kembla Steelworks and New production volumes and solid delivery dollar and capacity constraints led to a Zealand Steel both had an extremely good year performance. 14 per cent decrease in EBIT, to $90 million. Slab production was much stronger toward the fi nancially, we are most proud of our safety Underpinning this success was a strong performance. These businesses achieved a Lost end of 2006/07, so we’re looking forward fi nancial result. Port Kembla Steelworks to improved throughput in the coming year. Time Injury Frequency Rate (LTIFR) of 0.23, for achieved revenue of $3.9 billion, an increase both employees and contractors. This is an of 13 per cent on the previous year. It is worth mentioning that many of these excellent performance. Further, Port Kembla results are records on records. These Steelworks – a very large, complex facility – Higher domestic and international prices and operations were already demonstrating achieved an LTIFR of zero. These results are outstanding operational performance resulted in excellent performance, so to have improved due to a tremendous amount of work by our an EBIT increase of 66 per cent to $759 million. on this is a real achievement. people in Australia and New Zealand. Production records were set for ironmaking, steelmaking, hot rolled coil and plate. Q. GIVEN STRONG OPERATIONAL PERFORMANCE Q. WHAT OTHER ACHIEVEMENTS WERE IN PREVIOUS YEARS, HOW HAVE WE NOTABLE DURING THE YEAR? Our New Zealand Steel and Pacifi c Islands MANAGED TO ACHIEVE EVEN HIGHER A. Another highlight for 2006/07 was the businesses also had good year, with revenue PRODUCTION LEVELS? reliable supply of products and services to our increasing by three per cent to $728 million. A. It comes down to one factor - people. customers. At both Port Kembla Steelworks The business set records in metallic coated Our employees are educated, well trained, and New Zealand Steel, demand was strong and painted production and showed a 24% motivated and committed and they constitute for all our products. pre-tax return on net assets. an extremely stable workforce.

OUR WORLD–CLASS SAFETY PERFORMANCE, ROBUST FINANCIAL RESULTS AND OPERATIONAL RECORDS ALL REFLECT THE OUTSTANDING EFFORTS OF THE MEN AND WOMEN IN THESE BUSINESSES. NOEL CORNISH - PRESIDENT OF AUSTRALIAN AND NEW ZEALAND INDUSTRIAL MARKETS

21

AUSTRALIA HOT ROLLED PRODUCTS

2.6 2.7 3.7 3.5 3.9 389 488 1149 456 759

03 04 05 06 07 03 04 05 06 07

REVENUE ($BILLION) EBIT ($MILLION)

SURELINE® steel power poles, developed While other businesses may experience in conjuction with the electricity industry, are light weight and long-lasting, as those labour shortages, we do not have this shown here in Mt Gambier, South Australia. problem. Many of the improvements we make are the result of employee initiatives. They are prepared to do whatever it takes to implement good ideas that improve our business. I want to say that we are very proud and appreciative of them all. A good example is the expansion of the Port Kembla Steelworks hot strip mill. This project required capital expenditure of $100 million dollars. It was achieved on time and on budget. To give an indication of the quality of the work, the fi rst hot rolled coil from this new furnace was prime and was sold into the market. MANY IMPROVEMENTS TO OUR BUSINESSES ARE A DIRECT RESULT OF EMPLOYEE INITIATIVES. OUR PEOPLE ARE WILLING TO PUT NEW IDEAS FORWARD, THEN WORK HARD TO SEE THESE IDEAS IMPLEMENTED. 22

Q. WHAT CHALLENGES DID THESE BUSINESSES Our water recycling initiative at Port Kembla The fl exibility of steel is used to dramatic FACE IN 2006/07? effect in the Tennis Centre at Hamilton, Steelworks, in conjunction with Sydney New Zealand. A. One challenge was preparing for the reline of Water, celebrated the use of its three billionth No. 5 blast furnace at Port Kembla. This work litre of recycled water in May. In the past 10 will be undertaken in 2009 and is a $330 years, the Port Kembla operation has halved million project that must be executed precisely its fresh water consumption, which is having and safely. The fact that we’ve still achieved a major positive effect on local water a record in ironmaking indicates how well our supplies. Ninety-eight per cent of the water people have managed to keep this furnace we use in steelmaking is now either salt stable and reliable, despite its age. or recycled water. New Zealand Steel has done a lot of work During the year we also signed a new fi ve-year pollution reduction program. Recent to optimise slabmaking capacity during the work, such as improvements to our sinter plant year and we are starting to see the benefi ts to capture and treat gas and dust emissions, of these efforts. has drawn a positive community response. Q. COULD YOU TELL US ABOUT OTHER At New Zealand Steel we are studying SIGNIFICANT PROJECTS UNDERWAY? a number of projects to further add value A. We are conducting a feasibility study on by extracting additional minerals from our a major electricity co-generation project at ironsands deposits. Port Kembla. This project involves generating electricity from gases produced during Q. WHAT DOES THE COMING YEAR HOLD FOR THESE BUSINESSES? steelmaking and has the potential to save over 800,000 tonnes of greenhouse gases A. We expect demand for our products to remain strong. The drop in coking coal prices in being released each year. This is equivalent 2006/07 was positive, however raw material to taking 185,000 cars off the road every year. prices for the coming year appear to Again at Port Kembla, we are ready to be increasing. upgrade our sinter plant capacity. Increasing iron ore prices have been a major cost impost Q. HOW WOULD YOU SUM UP THE 2006/07 FINANCIAL YEAR? and this $134 million project will help by enabling the plant to use lower-cost iron ore A. It has been a remarkable year during which all our businesses performed well. We have fi nes, rather than pellets. a highly skilled, talented and motivated team We’ve also invested in some standout and I thank everyone for contributing to environmental projects. another outstanding result. NEW ZEALAND AND PACIFIC STEEL PRODUCTS

567 581 745 709 728 49 62 189 105 90

23

03 04 05 06 07 03 04 05 06 07

REVENUE ($MILLION) EBIT ($MILLION)

The lighthouse at Waiheke Island, New Zealand, showcases the durability and design scope of ZINCALUME® steel.

MAJOR ENVIRONMENTAL PROJECTS ARE UNDERWAY. WE HAVE ACHIEVED SIGNIFICANT REDUCTIONS IN WATER USE, AND ARE EXAMINING A PROJECT THAT COULD REDUCE GREENHOUSE GAS EMISSIONS BY 800,000 TONNES PER YEAR, EQUAL TO TAKING 185,000 CARS OFF THE ROAD EVERY YEAR. AUSTRALIA COATED AND BUILDING PRODUCTS

24

Left: The stunning National Museum of Australia, Canberra ACT explores the visual synergy of steel and water. Detail from the Roads and Traffi c Authority NSW Crashlab, Huntingwood, Australia.

Australia Coated and Building Products is involved in the manufacture, sales and distribution of painted and coated products such as COLORBOND® and ZINCALUME® steels. This business includes our Illawarra Coated Products and Western Port facilities, and the Service Centre network. Business President Brian Kruger talks about the achievements and challenges of 2006/07.

Q. WHAT WERE THE HIGHLIGHTS FOR 2006/07? Record sales to the building market segment We also faced increased zinc and aluminium A. We performed very well in a number of key were also a highlight, with our branded costs. These are key materials in our metal areas. The fi rst was safety, where we achieved products continuing to be in strong demand coating processes and the negative impact a 66 percent improvement in LTIFR (Lost Time in that sector. of these increases was almost $100 million. Injury Frequency Rate). Our rate was 0.7 With prices for our feedstock – hot rolled Q. WHAT WERE THE MAJOR CHALLENGES lost time injuries per million hours worked FOR THE BUSINESS? coil and slab – remaining high, and tough market conditions requiring some keen pricing compared to 2.1 last year. We also recorded A. We faced a number of challenges – market strategies, our manufacturing businesses a 15 per cent improvement in MTIFR (Medically conditions were diffi cult, and our raw material experienced signifi cant margin squeeze. Treated Injury Frequency Rate). costs were higher. In addition, a number of businesses set This is why our strong operational performance Imports from Asian countries, particularly was so important – it gave us the volumes we production and quality records and our efforts China, together with the strong Australian needed to reduce conversion costs. in these areas helped offset increased raw dollar, created a challenging market for us materials costs. So our operational performance and our customers, especially in the second was a vital factor during 2006/07, and our half of the year. The regional availability of employees did this while achieving signifi cant imports increased during 2006/07 and this improvements in safety performance. led to some intense competition. THIS WAS A CHALLENGING YEAR. OUR OPERATIONAL PERFORMANCE IMPROVED AND DOMESTIC SALES INCREASED, BUT THESE COULD NOT OFFSET THE EFFECTS OF CONTINUING HIGH RAW MATERIALS COSTS AND INCREASING IMPORT COMPETITION. BRIAN KRUGER - PRESIDENT OF AUSTRALIAN MANUFACTURING MARKETS

25

2.3 2.5 2.7 2.8 3.2 156 238 2 -3 41

03 04 05 06 07 03 04 05 06 07

REVENUE ($BILLION) EBIT ($MILLION)

Excludes tinplate manufacturing Excludes tinplate manufacturing

Q. COULD YOU DISCUSS SOME OTHER We successfully closed our loss making closely with our customers, developing unique ACHIEVEMENTS AND INITIATIVES tinplate business, as announced in June 2006. solutions that will help them fi nd greater THAT TOOK PLACE DURING THE YEAR? During the lead up to closure, we were success. We will continue to grow the use of A. We set a new record for COLORBOND® steel particularly proud that our employees steel in the building and construction market, sales, underpinned by high painting and achieved signifi cant safety, quality and while the acquisition of the Smorgon Steel coating volumes from a number of facilities. operational milestones. Distribution business will allow us to compete Production records were set at Illawarra more effectively against imports in the In the environmental area, we announced Coated Products, Acacia Ridge in distribution market segment. and Western Port. a $21 million water recycling project to supply our Western Port plant. This will reduce We are also aiming to improve the profi tability We also saw solid growth – around 30 per Western Port’s fresh water use by over 60 of our export sales. By working more closely ® cent – in TRUECORE steel sales volumes. per cent, or 660 million litres per year. Our with BlueScope Steel’s extensive network of This product continues to gain recognition as partners in this project are South East Water offshore sales offi ces, we can provide a more the preferred material for residential building and the Victorian Government, with BlueScope consistent supply of product to our core export frames and trusses. Steel contributing $8 million. customers. This reliability of supply should Our $150 million Western Sydney Service enable us to reduce the costs of supply, as Q. WHAT DOES THE COMING YEAR HOLD well as achieving improved pricing. Centre is now operational and the location of FOR OUR AUSTRALIAN MANUFACTURING this facility will allow us to better service the MARKETS BUSINESSES? On the costs side, I am encouraged by the ® Greater Sydney area with COLORBOND steel. A. Our goal will be to continue improving our array of cost reduction opportunities we have identifi ed. Our challenge will be to implement Our new Western Australia Service Centre operational performance and at the same time, these opportunities as quickly as possible. at Forrestfi eld continued its strong operational taking action to address the margin squeeze improvement in the second half, with growing issues that affected us in FY2006/07. Of course, we’ll be aiming to do all of this while volumes and improved service levels for our We will be examining ways of increasing we strive to make our business an ever-safer Western Australian customers. sales into the Australian domestic market. place to work, as we continue our journey For example, we’ll be working even more toward Zero Harm. BLUESCOPE LYSAGHT CONTINUED ITS GROWTH THROUGH ACQUISITIONS AND PRODUCT INNOVATION. DEMAND FOR WATER STORAGE AND RAIN WATER HARVESTING SOLUTIONS GREW STRONGLY AS BLUESCOPE WATER EXPANDED ITS CAPACITY, OPENING NEW FACTORIES IN BRISBANE AND MELBOURNE.

26

Australia Coated and Building Products also includes BlueScope Lysaght Australia and BlueScope Water. Highlights for the year for these two businesses are outlined below.

BLUESCOPE LYSAGHT AUSTRALIA This group offers customers tailored services Our water tanks are becoming a feature BlueScope Lysaght designs, manufactures in Design and Construction, Facades and of new urban housing developments, enabling and distributes an extensive range of steel Mobile Rollforming. Australians to reduce their dependency on mains water, while new products such as our building products for residential, commercial, BlueScope Lysaght also introduced several new WATERPOINT® in-ground system and AGRIRIB® industrial and agricultural applications. The products during the year. Azure® and L’Attitude® ® irrigation pipes are positioned to grow BlueScope LYSAGHT brand appears on wall cladding, are a range of durable facade systems that offer Water’s agricultural and commercial markets. rainwater products, steel house framing, fencing enormous fl exibility in materials, from copper and structural products such as roof trusses. and zinc to weathering steel, and a wide range BlueScope Water has also developed the of highly durable colours. Professional design, THINKTANK® rainwater harvesting system, LYSAGHT® is recognised throughout Australia supply and installation are included as part of exemplifying our ‘total solutions’ approach as the premium name in its fi eld and the the Facades® product offering. to maximising water savings. THINKTANK® business has built a reputation for quality, incorporates a WATERPOINT® rainwater tank, Quikform® is a structural walling system in reliability and customer service. In recent years, diversions, fi lters, mains water back up and which two pre-engineered steel skins are fi lled BlueScope Lysaght has focused on delivering a pressure pump to capture and use rainwater. building products tailored to the needs of with concrete to create load-bearing walls that individual customers. have superior acoustic properties and fi re In 2006/07, demand for water storage and ratings. The Quikform® system also makes rainwater harvesting solutions grew strongly. In 2006/07, market conditions remained buoyant concrete pouring more effi cient. To support this growth, we have expanded in and Western Australia, but were capacity in Queensland and Victoria and diffi cult in NSW and Victoria, particularly in the BLUESCOPE WATER expect to open new factories in Brisbane and residential building sector. Drought conditions In 2006/07 water scarcity remained a major Melbourne in late CY2007. and water restrictions also had a softening effect issue in Australia, with concern over water Pioneer Water Tanks, which we acquired in on building activity. consumption resulting in usage restrictions in 2005, is expanding production capacity to meet many parts of the country. The drought affecting In addition to continuing to develop our strong growth in demand in Australian rural, much of Australia is the longest on record. customer base, we have successfully grown commercial and export markets. An expanded the Lysaght business through acquisitions BlueScope Water was established in 2004 Pioneer Water Tanks production facility is due and product innovation. in anticipation of increased water scarcity. to be commissioned in late 2007. In addition, The business has developed and released a the opening of a new warehouse and sales offi ce In November, BlueScope Lysaght acquired range of products designed to help ease the in Austin, Texas in late CY2007, will further Kiteley’s Roofi ng World, based on the south pressure on Australia’s water resources. This support the US market entry for BlueScope coast of . In June, we product range has consolidated BlueScope Water. Given the political and social prominence acquired the -based Highline Limited. Water’s position as the premium brand for of water management issues in Australia and Both businesses are part of the Building rainwater harvesting products, culvert and in other regions, we anticipate continued strong Solutions activities of Lysaght. irrigation infrastructure. growth for BlueScope Water in the coming year. ZINCALUME® and COLORBOND® steels in a range of LYSAGHT® profi les were used in the redevelopment of the Melbourne Showgrounds, Australia. The project called for the restoration of heritage-listed buildings, as well as the construction of the striking new Royal Agricultural Society of Victoria (RASV) Centre shown here.

27 ASIA COATED AND BUILDING PRODUCTS

28

With headquarters in Singapore, BlueScope Steel Asia manufactures and markets premium steel products in nine countries across the region – China, India, Indonesia, Malaysia, Thailand, Vietnam, Singapore, Brunei and Sri Lanka. In addition, there are 22 building solutions facilities, producing the high quality BUTLER® brand of pre-engineered buildings (PEBs) and the LYSAGHT® range of steel building components. There are 106 sales offi ces across the region providing sales and technical services to customers in the commercial, industrial and residential sectors of the building and construction industry. Business President Kathryn Fagg discusses our journey in Asia.

The spectacular BOH Tea Centre overlooks the Tea Estate in the Cameron Highlands, Malaysia. The 140 metre facade contrasts BlueScope Steel products with natural materials set against the rows of tea trees. DESPITE TOUGH CONDITIONS IN SOME COUNTRIES, WE IMPROVED PERFORMANCE AND EXPANDED OUR REGIONAL FOOTPRINT, BUILDING OUR REPUTATION AS A PREMIUM STEEL BRAND IN ASIA. KATHRYN FAGG - PRESIDENT OF BLUESCOPE STEEL ASIA

29

The curved design for the Malaysian National Audit Department called for fl exible building materials. ZINCALUME® and Clean COLORBOND® steels were chosen to detail the slick curves of the walls and roof.

Q. WHAT WAS THE HIGHLIGHT OF THE YEAR Q. WHAT OTHER ACHIEVEMENTS WERE THERE with a LYSAGHT® and BUTLER® design FOR OUR ASIA BUSINESSES? IN ASIA FOR 2006/07? and manufacturing centre in Pune; and our A. Without question, our most outstanding A. There were a number of notable achievements. New Delhi rollforming operation. All three achievement was our safety record. In We saw a major improvement in performance downstream facilities are operating ahead the 2006/07 fi nancial year, our Lost Time from our established operations, while some of schedule, with good PEB (pre-engineered Injury Frequency Ratio (LTIFR) was zero. This exciting new investments have reached start building) sales. means that across our Asia operations, we up. Overall, this was a stronger year for our Also in India, construction is underway on accrued around 22 million work hours without Asia businesses, with revenue increasing by losing any time to injury. We’re extremely 32 per cent to nearly $1.4 billion, and EBIT a fourth facility, a $270 million metallic coating pleased with the work that’s been done by up 121 per cent to $42 million. and painting plant, adjacent to ’s our employees to lift safety standards in existing steelworks at Jamshedpur, in the east In Vietnam, our new A$136 million metallic of that country. this region. In addition, our Medically Treated coating and painting facility near Ho Chi Minh Injury Frequency Ratio (MTIFR) was less than City was offi cially opened by Australian Prime Elsewhere in Asia, among our established one, which represents a reduction of 20% Minister, The Hon. John Howard, in November businesses, our Indonesian plant is operating on the previous year. 2006. This facility showed a signifi cant at capacity, servicing strong domestic demand. We are also creating a safety culture beyond improvement in operations in the second half We’ve also committed US$101 million dollars our business – working closely with contractors of the year and we look forward to building to complete a second metallic coating line, to help them raise safety standards above market share in this country. with in-line painting capability, at our Cilegon operation west of Jakarta. This new facility those that are typical for the Asia region, Another investment that has high growth will give us the scale and effi ciency we need and pushing for higher levels of protection potential is our joint venture with India’s Tata to meet growing market demand in this country. for contractors as well as our employees. Steel. In January this year, we opened our third Overall, we are building a reputation for plant, a rollforming facility at Chennai in the In Thailand, we recorded very strong BlueScope Steel as a company that cares for south of India. This completes our $100 million operational performance from our recently its people - we are perceived as a desirable investment in a network of manufacturing completed metallic coating line. Exports from employer, which helps us attract and retain facilities, which includes: Chennai; Tata Thailand increased and our new PEB facility good people. BlueScope Steel headquarters is operational. 536 653 984 1048 1387 84 101 79 19 42

30 03 04 05 06 07 03 04 05 06 07

REVENUE ($MILLION) EBIT ($MILLION)

Excludes Lysaght Taiwan Excludes Lysaght Taiwan

Our Malaysia business also continued its Q. WHAT CHALLENGES DID BLUESCOPE STEEL Q. WHAT DOES THE IMMEDIATE FUTURE HOLD strong turnaround, with improved yields, good FACE IN ASIA? FOR BLUESCOPE STEEL ASIA? domestic demand and a diversifi cation of its A. Our Asia businesses, which we operate in A. Across the region, we’ll be focusing on export markets. mid and downstream markets, were affected operational effi ciencies. BlueScope Steel In addition, our new China metallic coating and by high steel and coating metal prices, while has undertaken rapid growth in Asia. With painting facility at Suzhou, near Shanghai, was in some countries, we also experienced many of our capital investments now reaching offi cially commissioned. It’s operationally and fl uctuations in demand for our products. This ramp-up stage, we’ll be concentrating our technically proven and we are now looking meant pressure on the production side and energies on creating new markets for our forward to ramping up this facility. from the market, which reduced the spread premium steel brands, on continued expansion for our midstream businesses. in solutions such as PEBs, and on new During the year, we implemented our product development. information technology business management In Thailand, demand softened as a result systems across our Asia operations, and of the country’s political coup. However, Asia is one of the great growth centres, relocated our Asia headquarters from Sydney we were able to offset this by increasing encompassing three of the world’s most to Singapore. This move underlines our our export sales, delivering high quality populous nations – India, Indonesia and commitment to building closer relationships products, and through new market offerings. China. Each Asian country in which we with our customers in Asia. Given the diffi cult domestic conditions, this do business presents unique opportunities business achieved very good results in a and challenges. We are helping to shape the built environment in Asia through our market where many competitors were unable contributions to architecture and building to remain profi table. and we are very enthusiastic about our We also experienced tighter margin prospects in this dynamic part of the world. spread in China for our metallic coating and painting business. In that country, a shift in government policy relating to exports led to buyer uncertainty, downward pressure on prices, and signifi cant volatility in our Chinese markets. Another challenge was the number of start-up businesses across the region. In many cases, we are building new markets, which means creating an understanding within each

BlueScope Steel supplied tsunami relief housing market of the value of our premium steel at Desa Paterik, Banda Aceh, Indonesia. building brands. Colour and light on the detail of the National Audit Department building, Malaysia. 31 The building typifi es contemporary Asian architecture. BlueScope Steel products have featured in many high profi le building projects throughout the region.

WE ARE BECOMING KNOWN THROUGHOUT ASIA AS A WORLD- CLASS COMPANY - A PROVIDER OF HIGH QUALITY STEEL BUILDING PRODUCTS, AND A LEADER IN SAFETY. OUR PROSPECTS ARE VERY STRONG IN THIS FAST-GROWING REGION. NORTH AMERICA HOT ROLLED PRODUCTS COATED AND BUILDING PRODUCTS

32 ANOTHER VERY STRONG FINANCIAL YEAR, WITH FURTHER CONSOLIDATION AND GROWTH, STRONGER CUSTOMER RELATIONSHIPS, AND MAJOR GAINS IN SAFETY. LANCE HOCKRIDGE - PRESIDENT OF BLUESCOPE STEEL NORTH AMERICA

Prefabricated steel trusses await dispatch at our Butler Buildings facility in Laurinburg, NC, USA.

Our North America operations include: Butler Buildings, a pre-engineered building business, North Star BlueScope Steel, a steel mini-mill, Castrip LLC, developing a new strip casting technology, and Steel Americas and Europe, our export arm. Business President Lance Hockridge outlines a year of solid progress.

Q. COULD YOU DISCUSS THE PROGRESS Revenue was $788 million, down six per cent OF OUR NORTH AMERICAN BUSINESSES? on last year - a result of the unfavourable A. Overall we’ve made enormous strides in exchange rate between the Australian and improving our North American operations. US dollars. In 2006/07, we focussed on customer Product quality and output was vastly improved relationships in both our downstream and and there’s a new sense of vitality among our upstream businesses and we saw the benefi ts Butler employees. During the year, a group of of a disciplined approach in areas such as Butler Builders® visited a number of BlueScope safety, fi nancial and operational expertise. Steel facilities in Australia and New Zealand. At the downstream end, our Butler Buildings This trip furthered the understanding of business had a great year, with a strengthening BlueScope Steel’s values and reinforced the fact that the Butler Builder® network is part in customer relationships, improved operations, of the BlueScope Steel family. and better product mix. EBIT was $37 million, up by $28 million on the previous year. This was Our Vistawall business showed a similar due to greater plant effi ciencies and improved level of re-invigoration with sales volumes margins and pricing. increasing by 50 per cent during the year. NORTH AMERICA HOT ROLLED PRODUCTS

317 276 377 500 566 83 78 199 188 180

03 04 05 06 07 03 04 05 06 07 33

REVENUE ($MILLION) EBIT ($MILLION)

Excludes 50% share of North Star BlueScope Steel sales revenue

Ralph Ward of Scott Builders, a Canadian Butler Builder®, which constructed the ATCO Gas facility here in Red Deer, Alberta, Canada. The building meets both the USA ‘LEED’ and Canadian ‘CBID’ sustainability specifi cations, which cover the environmental effect of materials, construction, ongoing energy use and occupant health.

The new product launch of Moduline doors was in a new baghouse, which is a dust and both large and small and these relationships a success and we increased R&D spending emission fi ltering facility. Its installation provide BlueScope Steel with a real to drive new product development. The affected the full-year performance of the strategic advantage. introduction of BlueScope Steel management operation, but has resulted in a dramatic Finally, Castrip LLC, our joint venture company systems led to large gains in productivity. improvement in the quality of working pioneering continuous strip casting, is making conditions, and in environmental At the upstream end, our North Star BlueScope encouraging progress, particularly in improving performance. The place now has a better Steel joint venture in Ohio had a good year, product quality. BlueScope Steel continues to atmosphere and these efforts have been setting many daily, weekly and monthly provide a high level of support in both the US production records. Our half of sales revenue well received by our employees. and at our Port Kembla Research Laboratories. increased by one per cent to $722 million, Our Steel Americas and Europe Business while EBIT was $156 million - down eight One of our joint venture partners, also had a strong year. This is a small group ® per cent, due to the stronger Australian dollar , uses the Castrip process at its Indiana of employees involved in selling our steel and higher costs of electricity and alloys. We plant, and has a second mill under construction are excited by the business winning its fi fth to export customers, and you could say they in Arkansas. This process is potentially consecutive Jacobson Survey of customer are unsung heroes. During the year, they sold revolutionary. It promises lower energy use, satisfaction. It was again voted the best over 1.5 million tonnes of our product to smaller scale, and less capital costs. It’s an of over 30 steel mills in quality, service and customers in Europe, America and the Middle exciting project but we are being patient. delivery performance. East, including our four millionth tonne These things take time. to California Steel. The North Star BlueScope Steel mini-mill has continued to outperform its original capacity, This business maintained very high quality and during the year, we invested US$40 million relationships with hundreds of customers, WE HAVE FOCUSSED ON CUSTOMER RELATIONSHIPS IN BOTH OUR DOWNSTREAM AND UPSTREAM BUSINESSES. WE ARE 34 SEEING THE BENEFITS OF A DISCIPLINED APPROACH IN AREAS SUCH AS SAFETY, FINANCE AND OPERATIONS AND ARE READY TO MEET THE CHALLENGE OF GROWTH.

Q. WHAT WAS THE HIGHLIGHT OF THE YEAR the value of their work has now been realised. FOR BLUESCOPE STEEL NORTH AMERICA? It is important to mention that Vistawall was A. I think our safety journey in North America not our core business. It is an aluminium and has been a real achievement. The extent glass business that specialises in storefronts, of our progress has been nothing short of curtainwalls, skylights, translucent roofs, remarkable and the feedback we’ve been and other such systems. The buyer, Oldcastle getting from our Butler employees, as well Glass, is a more natural owner with a business as from people in our recently sold Vistawall style and values similar to ours. Vistawall’s business, has been very positive. In fact, employees are pleased with this outcome, and the greatest lasting legacy of BlueScope are excited by the prospect of further growth. Steel’s ownership of Vistawall has been the building of a very strong safety culture. Q. WHAT ARE THE CHALLENGES FOR OUR NORTH AMERICA BUSINESSES IN THE Q. COULD YOU DISCUSS THE SALE COMING YEAR? OF THE VISTAWALL BUSINESS? A. To continue our safety journey, to maximise A. On June 28, we announced the sale of the return on our investments, and to grow our Vistawall for US$190 million. The business was businesses. We’ve built a solid platform. A lot part of Butler Manufacturing Company, which of the hard work has been done, and we now BlueScope Steel acquired in April 2004 for have to deliver on the challenge of growth. US$206 million, so this was an excellent result. We must also keep building our reputation The Vistawall people put enormous efforts into as a good employer, and as a good company the business during the past three years and to do business with.

Butler Builder® David Hardy inside the vast athletic training facility at the West Point Military Academy, NY, USA. The facility, built by Butler Heavy Structures and David J Hardy Construction, features a clear span of over 60 metres. 646 798 834 788 -45 -33 9 37

0

35 04* 05 06 07 04* 05 06 07

NORTH AMERICA COATED REVENUE ($MILLION) EBIT ($MILLION) AND BUILDING PRODUCTS

Excludes Vistawall Excludes Vistawall *Normalised results *Normalised results

Butler Buildings employee Mike Clayburg inside the 11,600 square metre US Coast Guard aircraft maintenance hangar at Mobile, AL. The US Coast Guard is one of many government agencies to utilise Butler Building expertise. OUR COMMUNITY CONSERVING RESOURCES

36

BLUESCOPE STEEL IS WORKING TO FURTHER REDUCE OUR ENVIRONMENTAL FOOTPRINT. WE’VE INVESTED IN INDUSTRY-LEADING WATER SAVINGS PROGRAMS AT PORT KEMBLA AND WESTERN PORT AND ARE CONSIDERING A MAJOR ELECTRICITY CO-GENERATION PROJECT AT PORT KEMBLA STEELWORKS TO REDUCE GREENHOUSE GAS EMISSIONS.

Students from Erskineville Public School Our Bond guides us to respect the communities water systems, and cut school water bills. in Sydney, NSW celebrate the launch of The project is designed to initiate water the Tank a Day Challenge. where we operate. Our communities are our homes. In 2006/07, environmental issues conservation programs in schools, and help such as greenhouse gas emissions and water imbue a generation of young Australians with scarcity remained matters of public concern. a water saving philosophy. We are responding with a number of programs During the year we invested in major water and initiatives that represent industry leading saving projects at Port Kembla Steelworks and environmental practice. Western Port. Our water recycling initiative at Port Kembla Steelworks, in conjunction with In May, BlueScope Steel launched the Sydney Water, has celebrated the use of fi ve Tank a Day Challenge. This program will see and a half billion litres of recycled water. In the us donate 200 water tanks to Australian primary past 10 years, the Port Kembla operation has schools – one tank for each day of the primary halved its fresh water consumption, signifi cantly school year. BlueScope Steel will also share reducing its reliance on local water supplies. its expertise in rainwater harvesting and water Ninety-eight per cent of the water we use in management, helping schools to minimise storm steelmaking at Port Kembla is now either salt water run-off, reduce their reliance on mains or recycled water. 37

Above: Slab being water-cooled at Port Kembla In 2006/07, we also announced a $21 million This project will involve building a power Steelworks. 98 per cent of water used at the facility is either salt or recycled water. water recycling project to supply our Western plant to generate electricity from the gases Port plant, in partnership with the Victorian produced during steelmaking. The electricity Above right: Dennis Cavagna, Managing Director of South East Water, former Victorian Government and South East Water. This project will then be fed back into the state power Water, Environment and Climate Change will reduce Western Port’s fresh water use by grid. The co-generation plant would save Minister John Thwaites, and Managing Director over 60 per cent, or 660 mega litres per year – around 800,000 tonnes of greenhouse gas and CEO Kirby Adams are surrounded by media at the announcement of a $21 million water equivalent to the annual water consumption of emissions from entering the atmosphere each recycling project at our Western Port facility. around 3,000 homes. The project, which involves year. This is equivalent to taking 185,000 the installation of a new 13 kilometre pipeline thousand cars off the road annually. to take recycled water to our Western Port plant, During the year, BlueScope Steel also signed will also reduce sewage discharge and landfi ll. a new fi ve-year pollution reduction agreement In the area of greenhouse gas emissions, for Port Kembla Steelworks. Recent work at we commenced a feasibility study into a Port Kembla, such as a project that captures major electricity co-generation project at and treats sinter plant gas and dust emissions, Port Kembla Steelworks. has drawn a positive community response. BLUESCOPE STEEL BOARD OF DIRECTORS

38

GRAHAM KRAEHE AO RON McNEILLY KIRBY ADAMS DIANE GRADY Chairman (Independent) Deputy Chairman (Independent) Managing Director and Chief Non-Executive Director (Independent) Age 65, BEc Age 64, BCom, MBA, FCPA Executive Offi cer Age 59, BA (Hons), MA (Chinese Director since: May 2002 Director since: May 2002 Age 51, BSc (Industrial Eng), MBA Studies), MBA Director since: May 2002 Director since: May 2002 Extensive experience in Over 30 years’ experience in manufacturing. Managing Director the steel industry. Held various Appointed Managing Director Chair of Remuneration and and Chief Executive Offi cer of positions with the BHP Group (now and Chief Executive Offi cer of Organisation Committee. Director Southcorp Limited from 1994 to BHP Billiton), including Executive BlueScope Steel Limited in July of Woolworths Ltd since July 1996, February 2001. Board member of Director and President BHP 2002. Joined the BHP Group in Wattyl Ltd from December 1994 a number of prominent businesses, Minerals, Chief Operating Offi cer, 1995 and held various positions until October 2006, Member of including Brambles Industries Executive General Manager and including President BHP Services, ASIC Business Consultative Panel Limited since December 2005 was Chief Executive Offi cer BHP Group General Manager and and Senior Advisor to McKinsey & and the Reserve Bank of Australia Steel until 1997. Chief Executive Offi cer BHP Co. Has served on the Board of a since February 2007. number of public and not-for-profi t Chairman of Melbourne Business Service Companies, Corporate organisations including Lend Lease Non-Executive Director of National School Limited, Chairman of General Manager Planning and Corporation, MLC, Greengrocer.com Australia Bank Limited from August Parsons Limited and a Director Development and President BHP (Chair), Sydney Opera House and 1997 to September 2005; Chairman since October 2002. Director of Steel since February 2000. as President of Chief Executive from February 2004 to September Alumina Ltd since December 2002. Director and previous Chairman Women. Formerly a partner of 2005. Non-Executive Director of Vice President of the Australia of the International Iron and Steel McKinsey & Co. Experienced Director News Corporation Limited from Japan Business Cooperation Institute and a member of the who brings valuable strategic January 2001 until April 2004 and Committee. Director of Ausmelt Business Council of Australia. business expertise to the Board. Brambles Industries Limited from Limited from September 2002 December 2000 until March 2004. until November 2004.

BlueScope Steel’s Directors see the Port Kembla operations fi rst hand. Left to right: Brad Kaye, Process Engineer at No.6 Blast Furnace with Tan Yam Pin. Douglas De Silva, Ross Schuback, Kirby Adams, Trevor Beaver, Peter Hales and Allan Cody following a tour of 7a coke ovens battery. Andonia McCulloch (seated), Principal Technical Offi cer, demonstrating a scanning electron microscope to Directors Diane Grady, Ron McNeilly, and Paul Rizzo. PAUL O’MALLEY (AGE 43, BCOM, M. APP FIN, ACA) WILL BECOME MANAGING DIRECTOR AND CHIEF EXECUTIVE OFFICER OF BLUESCOPE STEEL FROM NOVEMBER 2007. HE JOINED THE COMPANY AS CHIEF FINANCIAL OFFICER IN 2005, AND BECAME A DIRECTOR IN AUGUST 2007. HE WAS FORMERLY CEO OF TXU ENERGY.

39

PAUL RIZZO KEVIN McCANN AM TAN YAM PIN DANIEL GROLLO Non-Executive Director Non-Executive Director Non-Executive Director Non-Executive Director (Independent) (Independent) (Independent) (Independent) Age 62, BCom, MBA Age 66, BA LLB (Hons), LLM Age 66, BEc (Hons), MBA, CA Age 37 Director since: May 2002 Director since: May 2002 Director since: May 2003 Director since: September 2006 Chairman of the Audit and Risk Comprehensive legal expertise and Formerly Managing Director of Chief Executive Offi cer of Grocon Committee. Director of National commercial experience. Chairman Fraser and Neave Group and Pty Ltd, Australia’s largest Australia Bank Limited since of Limited since 1994, Chief Executive Offi cer of its privately owned development and September 2004. Member of Limited since 2000, subsidiary company, Asia Pacifi c construction company. Director and the Sydney Harbour Federation Advisory Board of Mallesons Breweries Limited. Member of of the Green Building Council of Trust. Lead independent director of Stephen Jaques. Chairman of the Public Service Commission of Australia. President of the Property Foundation for Very Special Kids. Macquarie Bank Limited. Member of the Defence Procurement Advisory Singapore since 1990. Chairman of Council of Australia until May Director of Villa Maria. Formerly Board, the Takeovers Panel and the PowerSereya Limited (Singapore) 2007. Appointed a director of CPI Chief Executive Offi cer and Dean, Council of the National Library of and of the Supervisory Board of Limited in June 2007. Mr Grollo Director and Professorial Fellow Australia. Chairman of Triako Keppel Land Limited (Singapore), brings extensive knowledge of the of the Melbourne Business School. Resources Limited from April 1999 Singapore Post Limited, Great building and construction industry Former Director of Seven Network until September 2006 and served on Eastern Holdings Limited, CISCO to the Board. Limited and N M Rothschild & the Boards of Pioneer International Security Pte. Ltd, and International Sons (Australia) Pty Limited, and Limited, Limited and the State Enterprise Singapore. Director of Chairman of the Financial Reporting Rail Authority of NSW. Former The East Asiatic Company Limited Council. Senior executive positions Chairman of Partners of Allens A/S (Denmark) until April 2006. at Corporation Limited and Arthur Robinson, and a partner from of Australia. 1970 until June 1994.

Left to right: Ray Parsons (right), Manufacturing Consultant Painted Products, Director Kevin McCann and (centre) Chairman Graham Kraehe view various exposure panels in the Weathering Laboratory. David Scott (left), Casting Operations Manager, explains slabmaking to Director Daniel Grollo. BLUESCOPE STEEL 40 A GLOBAL PRESENCE

CHINA Suzhou Province, BlueScope Steel Suzhou THAILAND Map Ta Phut, Rayong, BLUESCOPE BlueScope Steel Thailand BUILDINGS CHINA Shanghai BLUESCOPE LYSAGHT THAILAND Tianjin Bangkok Langfang Khon Kaen Guangzhou MALAYSIA Chengdu Kapar, Selangor, INDIA BlueScope Steel Malaysia TATA BLUESCOPE STEEL BLUESCOPE LYSAGHT MALAYSIA Pune Shah Alam, Selangor Chennai Kota Kinabalu, Sabah New Delhi Kuching, Sarawak Jamshedpur Bintulu, Sarawak OTHER BLUESCOPE LYSAGHT INDONESIA ASIA PACIFIC Cilegon, Java, SINGAPORE BlueScope Steel Indonesia Jurong BRUNEI BLUESCOPE LYSAGHT INDONESIA Bandar Seri Begawan Cibitung, Java Medan, Sumatra SRI LANKA Surabaya, Java Colombo NEW CALEDONIA VIETNAM Noumea Ba Ria-Vung Tau Province, VANUATU BlueScope Steel Vietnam Port Vila BLUESCOPE BUILDINGS VIETNAM FIJI Ho Chi Minh City Suva Hanoi Lautoka 41 AUSTRALIA STEEL PRODUCTION ROLLING, COATING AND PAINTING FACILITIES Acacia Ridge QLD Chullora NSW Hastings VIC Port Kembla NSW Western Sydney NSW SERVICE CENTRES Acacia Ridge QLD Braeside VIC Chullora NSW Forrestfield WA Port Kembla NSW Sunshine VIC Wingfield SA BLUESCOPE LYSAGHT Albury NSW Archerfield QLD NEW ZEALAND Arndell Park NSW Glenbrook – New Zealand Steel Cairns QLD Waikato North Head – Ironsands Mine Campbellfield VIC Taharoa – Ironsands Mine Cardiff NSW Carole Park QLD USA Chinderah NSW BUILDINGS GROUP Coffs Harbour NSW MANUFACTURING PLANTS Coolum QLD Annville PA Dandenong VIC Jackson TN Darwin NT Selmer TN Dubbo NSW Laurinburg NC Emu Plains NSW San Marcos TX Forrestfield WA Visalia CA Geelong VIC BUILDINGS GROUP ADMINISTRATION Gilman SA AND ENGINEERING Launceston TAS Kansas City MO Lyndhurst VIC Birmingham AL Mackay QLD Peoria IIL Queanbeyan ACT Memphis TN Rockhampton QLD Mason OH Rocklea QLD Smeaton Grange NSW KORETECK Smithfield NSW Staunton VA Tamworth NSW JOINT VENTURE OPERATING SITES Toowoomba QLD Delta OH – North Star BlueScope Steel Townsville QLD Crawfordsville IN – Castrip LLC BLUESCOPE WATER CANADA Bellevue WA BUILDINGS GROUP SALES OFFICE Keysborough VIC Burlington, Ontario St Marys NSW Edmonton, Alberta Strapylton QLD Sunshine Coast QLD MEXICO Surrey Hills VIC BUTLER GROUP Taren Point NSW MANUFACTURING PLANT NSW Monterrey, Nuevo Leon BLUESCOPE STEEL LIMITED ABN 16 000 011 058 LEVEL 11, 120 COLLINS STREET MELBOURNE, VICTORIA 3000 AUSTRALIA WWW.BLUESCOPESTEEL.COM