Arrium Limited Asx Appendix 4D Abn 63 004 410 833 Half-Year Financial Report

ARRIUM LIMITED ASX APPENDIX 4D ABN 63 004 410 833 HALF-YEAR FINANCIAL REPORT

ARRIUM LIMITED RESULTS FOR ANNOUNCEMENT TO THE MARKET

HALF-YEAR ENDED 31 DECEMBER 2014

Comparison to previous corresponding period (pcp) Movement % A$ million Change

Total revenue from ordinary activities down 12% to 3,218.7 Loss from ordinary activities after tax attributable to ordinary equity holders down -777% to 1,493.1 Net loss for the period attributable to ordinary equity holders down -777% to 1,493.1 -

Dividends Interim Dividend Final Dividend Interim Dividend 2015 2014 2014 Amount per security 0.0c 3.0c 6.0c Franked amount per security N/A 0.0c 0.0c Amount per security declared to be N/A 0.0c 0.0c conduit foreign income

Total dividend and dividend payment N/A 41.0 81.7 (A$ million)

Date Ex-dividend date for Interim Dividend 11 March 2015 Record date for determining entitlement to Interim Dividend 13 March 2015 Last date to elect to participate in the DRP 16 March 2015

Date payable (on or around) 16 April 2015

Net Tangible Assets 31 December 2014 31 December 2013 Net Tangible Assets per security ($) 0.40 1.34

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ARRIUM LIMITED ASX APPENDIX 4D ABN 63 004 410 833 HALF-YEAR FINANCIAL REPORT

Details of Associates and Joint Venture Entities

Name of Associate or Joint Venture Entity Associate or Joint Percentage Percentage Venture Entity holding holding December 2014 December 2013 BOSFA Pty Ltd Jointly controlled 50% 50% entity

GenAlta Recycling Inc. Jointly controlled 50% 50% entity

Details of entities over which control was gained during the period

Name of Entity Date International Recyclers (Thailand) Ltd 1 July 2014 Moly-Cop Brasil Participacoes Ltda 19 August 2014

There were no entities over which control was lost during the period.

Dividend Reinvestment Plan

The Dividend Reinvestment Plan (DRP) provides eligible shareholders with an option to use dividend entitlements to acquire Arrium Limited ordinary shares. Participation is optional. The DRP Acquisition Price is the arithmetic average of the Daily Volume Weighted Average Market Price during the 10 Trading Days (or any other number of Trading Days as the Board may determine) commencing on second Trading Day immediately after the Record date (rounded to two decimal places or such other number of decimal places as the Company may determine) less a discount (if any) determined by the Board from time to time. The DRP will not operate for the interim dividend.

Other disclosures

Further ASX Appendix 4D disclosures are located in the Arrium Limited Half-Year Financial Report.

This report is based on a Financial Report that has been subject to review and is not subject to

any dispute or qualification. For personal use only use personal For

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ASX RELEASE 18 February 2015 ARRIUM LIMITED 1H15 RESULTSi,ii,iii AT A GLANCE

. Underlying NLAT $22 million – average iron ore price down ~40% on 1H14 . Statutory NLAT $1,493 million – includes $1,335 million of asset impairments . Underlying EBITDA $189 million – in line with guidance . Statutory EBITDA loss of $22 million . Mining Consumables – continued strong performance and outlook  EBITDA $101 million, up 16% on 2H14  Grinding media sales volumes up 8% on 2H14 . Mining – announced re-design of business for low price environment  Export hematite sales, up 8% to 6.6Mt  Earnings substantially impacted by lower iron ore prices  Re-design expected to deliver a sustainable, low cost and cash positive business in FY16iv . Steel – EBITDA and cash positive despite impact of historic low SE Asian steel margins . Arrium cost reductions tracking to plan (additional $40 – $50 million in FY15) . Net proceeds of ~$730 million from fully underwritten capital raising used to pay down debt . Net debt in line with guidance: $1,430 million at 82c AUD/USD ($1,234 million at 93c AUD/USD) . Asset divestments ~$150 million by end March 15 – to exceed FY15 target of ~$100 million . No interim dividend declared

Arrium Mining Consumables – Continued strong performance and outlook

. EBITDA $101 million, up 16% from $87 million 2H14 . Continued strong grinding media demand, particularly in North and South America . Grinding media volumes up 8% on 2H14 . Maintained stable grinding media margins . ROFE ~14% for Moly-Cop grinding media businesses in North and South Americav . Capacity expansions in Canada and Peru tracking to plan . Roll out of next generation SAG ball tracking to plan

Arrium Mining – Announced re-design for low price environment

1H15 . Export hematite sales of 6.6Mt, up 8% from 6.1Mt 1H14 . EBITDA $77 million, down 82% from $423 million in 1H14 . Platts average market index price (62% Fe) US$82/dmt, down 39% from US$134/dmt 1H14 . Realised average price US$68/dmt, down 46% from US$127/dmt 1H14 . Average loaded cash costvi A$45.70/wmt, down 8% from A$49.50/wmt 1H14

FY16 target . ~27% reduction in loaded cash costvi to A$37/wmt (US$29/wmt) . ~30% (~$200m) reduction in capital expenditure FY16 – 19vii . ~9Mtpa export sales from Middleback Ranges operation, Southern Iron ‘mothballed’

Arrium Steel – EBITDA and cash positive, improved outlook

. Steel EBITDA and cash positive despite impact of historic low SE Asian margins

For personal use only use personal For . Steel EBITDA $16 million, in line with guidance . Domestic sales volumesviii up 6% on 1H14, and 8% on 2H14 . Cost reductions tracking to plan . Significant leverage to increasing construction, lift in SE Asian steel margins and lower AUD . Recycling EBITDA $9 million, up from $3 million in 1H14

Arrium Limited ABN 63 004 410 833 Arrium Head Office: Level 40, 259 George St, Sydney NSW 2000, GPO Box 536, Sydney NSW 2001, Australia Phone: +612 9239 6666 Fax: +612 9251 3042

RESULTS COMMENTARY

Mining and materials group, Arrium Limited (ASX:ARI) today reported an underlying net loss after tax (NLAT) of $22 million for the six months ended 31 December 2014, down from a net profit after tax (NPAT) of $201 million for the prior corresponding half. The decrease primarily reflects the impact of lower earnings in the Mining business related to a ~40% decline in the average market price for iron ore compared to the prior corresponding half.

Last month Arrium announced it was re-designing its Mining business to deliver a sustainable, low cost business for a low price environment. The re-design is expected to return Mining to a cash flow positive position in FY16iv.

On a statutory basis, NLAT for the half was $1,493 million. This includes asset impairments announced last month of $1,335 million, a write off of the MRRT deferred tax asset of $70 million following repeal of the MRRT during the half, and additional tax, restructuring and other adjustments of $66 million. The asset impairments largely relate to the impact of lower iron ore prices.

Arrium Managing Director and CEO, Mr Andrew Roberts said: “External factors, including the sharp and substantial fall in iron ore prices, as well as historic low South East Asian steel margins, made the half a very challenging one.

“Going forward, we are well positioned for improvement through our increased leverage to a stronger outlook for Steel, our leading market positions and continued strong demand for grinding media, particularly in North and South America, and the re-design of the Mining business.

“Notwithstanding the external challenges, the businesses performed well operationally. Mining Consumables continued to demonstrate its quality, significantly lifting earnings and volumes compared to the prior half. Mining lowered its cost base and was on track to achieve its pre re-design export sales target of ~13Mt for FY15. Steel continued to lower its cost base and increase its leverage to improved sales volumes and a lower Australian dollar, and Recycling capitalised on the benefits of re-positioning its footprint last half, delivering a strong lift in earnings.

Mining Consumables EBITDA increased 16% on the prior half to $101 million as the Moly-Cop grinding media business delivered strong volume growth, particularly in North and South America, and maintained stable margins.

Total grinding media sales volumes were up 8% on the prior half, including a 7% increase in sales volumes in North and South America underpinned by strong levels of mining activity, particularly copper and gold. In Australasia, sales volumes were also up on the prior half as customers in Indonesia recommenced placing orders following resolution with the Indonesian Government on its Minerals Value Added Tax.

Our grinding media capacity expansions in Kamloops, Canada and La Joya, Peru are tracking on time and budget, and the roll out of the next generation SAG ball is progressing to plan and receiving broad customer support. Both initiatives are expected to further strengthen the business’ sustainable competitive advantage.

In Mining, the ~40% decline in average market prices for iron ore more than offset the work by the business to lower its cost base. EBITDA decreased from $423 million in the prior corresponding half to $77 million.

For personal use only use personal For The Mining re-design includes a targeted 27% reduction in the average loaded cash cost to A$37/wmt (US$29/wmt)ix, and a 30% or ~A$200 million reduction in the business’ FY16–FY19 capital expenditure planvii. Implementation is expected to be completed by the end of FY15.

In Steel, EBITDA was in line with guidance at $16 million and the business remained cash positive despite the impact of historic low South East Asian margins. Domestic construction activity has continued to improve from a low base, with sales volumes up 8% on the prior half. The business’ key 2

Arrium Limited ABN 63 004 410 833 Arrium Head Office: Level 40, 259 George St, Sydney NSW 2000, GPO Box 536, Sydney NSW 2001, Australia Phone: +612 9239 6666 Fax: +612 9251 3042

earnings drivers such as: construction activity, particularly infrastructure; FX; costs; and SE Asian Steel margins are all improving and underpin the most positive set of key drivers for our Steel business since the GFC.

The company has continued to focus on managing well what it can control, including announcing last September that it is targeting additional company-wide annualised cost reductions in FY15 of $60 – $90 million. We are tracking to plan for achieving this target, and have achieved $40 million of reductions in the first half.

A key priority for the company remains debt reduction. The announcement earlier this month of the sale of our Wire Ropes business will take asset divestment proceeds to date above our FY15 target of ~$100 million, to ~$150 millionx, and we continue to look at other divestment opportunities.

“We expect underlying earnings for FY15 to be weighted to the second half. We have significant earnings and cash leverage to the recent significant fall in the Australian dollar and expect this to be realised in the second half. Earnings in Steel and Mining Consumables are expected to be stronger, and we expect to benefit from the timing of our cost reduction program, which is weighted to the second half”, Mr Roberts said.

RESULTS SUMMARY

Statutory Dec-14 Dec-13 % Change $m $m Total Operations Sales revenue 3,219 3,643 (12%) EBITDA (22) 499 (104%) EBIT (1,368) 317 nm Net profit/(loss) after tax (1,493) 220 nm

Operating cash flow 93 344 (73%) Net debt 1,430 1,975 (28%) Gearing % (net debt / net debt + equity) 32.6% 33.8% (1.2 pp) Earnings per share (weighted average) - centsxi (68.8) 15.3 nm

Underlying Dec-14 Dec-13 % Change $m $m Total Operations Sales revenue 3,219 3,643 (12%) EBITDA 189 503 (62%) EBIT (32) 322 (110%) Net profit after tax (22) 201 (111%)

Operating cash flow 183 379 (52%) Leverage Ratio (net debt / EBITDA, 12 month rolling basis 2.6 2.3 15% xi Earnings per share (weighted average) - cents (1.0) 13.9 (107%)

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Arrium Limited ABN 63 004 410 833 Arrium Head Office: Level 40, 259 George St, Sydney NSW 2000, GPO Box 536, Sydney NSW 2001, Australia Phone: +612 9239 6666 Fax: +612 9251 3042

SEGMENT ANALYSIS

ARRIUM MINING CONSUMABLES

Mining Consumables continued to perform well, underpinned by strong and growing demand for grinding media, particularly in North and South America.

Total revenue for the half increased slightly from $787 million in the prior corresponding half to $794 million. Total sales volumes increased 3% to 610 thousand tonnes, and the average selling price was slightly lower than for the prior corresponding half due to the ’pass through’ impact in grinding media of lower steel raw material costs. Margins remained stable during the half.

Grinding media sales volumes, which account for the majority of sales in Mining Consumables, were up 8% on the prior half ended 30 June 2014, and 2% on the prior corresponding half. This reflects strong sales growth in North and South America and the recommencement, part way through the half, of sales to customers in Indonesia, following resolution with the Indonesian Government on its Mineral Value Added Tax. Sales of grinding media to customers in Indonesia were down significantly in the prior half ended 30 June 2014.

In North and South America, grinding media sales volumes increased 7% compared to both the June 2014 half and the prior corresponding half. The business continued to win at least its strong share of the growth in demand and continued to build on its sustainable competitive advantage, including through the roll out of the next generation SAG ball, which is tracking to plan and receiving broad customer support. The business is well placed to continue this success through its superior ball quality, supply chain, technical assistance to customers and capacity advantage.

The 120 thousand tonne capacity expansion at Kamloops, Canada is continuing to progress in line with schedule and budget for completion mid-2015. The 175 thousand tonne expansion at La Joya, in Southern Peru is also progressing to plan for completion mid-2016.

The return on funds employed for grinding media in North and South America was ~14%v.

Sales in the Australian rail wheel business remained weak as demand continued to be affected by delayed capital investment and maintenance expenditure in the mining sector. Cost savings related to the restructure of the Waratah, Newcastle facility in the prior half are being realised in line with plan.

Underlying EBITDA in Mining Consumables was $101 million, up 16% from $87 million for the prior half due to the stronger performance in grinding media.

The company announced earlier this month that it had entered into an agreement for the sale of its Wire Ropes business to Bekaert for $90 million. The sale is expected to complete by end of the March 2015 quarter.

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Arrium Limited ABN 63 004 410 833 Arrium Head Office: Level 40, 259 George St, Sydney NSW 2000, GPO Box 536, Sydney NSW 2001, Australia Phone: +612 9239 6666 Fax: +612 9251 3042

ARRIUM MINING

Mining re-design – FY16 target . ~27% reduction in loaded cash costvi to A$37/wmt (US$29/wmt)ix . ~30% (~$200m) reduction in capital expenditure FY16 – 19vii . ~9Mtpa export sales from Middleback Ranges operation, Southern Iron ‘mothballed’

The Mining business performed well operationally, lifting export sales volumes and reducing its cost base, but earnings were substantially impacted by ~40% reduction in the average market price for iron ore compared to the prior corresponding half.

Revenue decreased 42% to $512 million, from $877 million in the prior corresponding half due to lower prices, partly offset by an 8% increase in export sales volumes to 6.6Mt, from 6.1Mt. Export sales were tracking to achieve the business’ pre re-design target for FY15 of ~13Mt.

Arrium’s average price for the half was US$68/dmt CFR, down 46% from US$127/dmt for the prior corresponding half. In Australian dollars, the average price for the half was $76/dmt. The average loaded cash cost for the half was A$45.70/wmt, down from A$49.50/wmtvi.

EBITDA for the half was $77 million, down from $423 million in the prior corresponding half primarily due to the impact of lower iron ore prices.

The substantial fall in iron ore prices over the last half, as well as increased uncertainty around the timing and extent of any price recovery led to Arrium announcing last month that it is re-designing the Mining business to provide a sustainable, cash flow positive business in a low iron ore price environment.

The re-design is aimed at maximizing cash generation by ‘mothballing’ the higher cost Southern Iron operation and optimising the lower cost Middleback Ranges operation to deliver approximately 9Mtpa of iron ore for sale.

The re-design provides a step change in the Mining business’ cash costs and capital requirements. Cash costs loaded onto ship are targeted to average A$37/wmt (US$29/wmt) in FY16 down 23% or ~A$11/wmt from FY14. Total cash costs (CFR China)xii are targeted to reduce by 20%, from A$71/dmt in FY14 to an average of A$57/dmt in FY16. The business has also targeted ~A$200 or a ~30% reduction in its FY16 to FY19 capital expenditure planvii. Completion is expected by the end of FY15, leaving Arrium Mining well positioned for maximising cash generation and returning cash to the Arrium Group in FY16xiii.

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Arrium Limited ABN 63 004 410 833 Arrium Head Office: Level 40, 259 George St, Sydney NSW 2000, GPO Box 536, Sydney NSW 2001, Australia Phone: +612 9239 6666 Fax: +612 9251 3042

ARRIUM STEEL

. Steel EBITDA and cash positive despite impact of historic low SE Asian margins . Steel EBITDA $16 million, in line with guidance . Domestic sales volumesviii up 6% on 1H14, and 8% on 2H14 . Cost reductions tracking to plan . Significant leverage to increasing construction, lift in SE Asian steel margins & lower AUD . Recycling EBITDA $9 million, up from $3 million in 1H14

The earnings benefit from improved sales volumes, a lower Australian dollar and further cost reductions were more than offset by the impact of historic low South East Asian steel margins on domestic prices and margins.

South East Asian steel margins started to lift towards the end of the half, supported by lower scrap prices. However, there is an approximate 3 month lag before this improvement is reflected in Steel’s domestic prices and margins.

Sales revenue increased 4% to $1,499 million, from $1,438 million in the prior corresponding half. Demand continued to improve, albeit from a low base, with sales volumesviii up 6% on the prior corresponding half and 8% on the prior half ended 30 June 2014. The average sales price was lower compared to the prior corresponding half due to the impact of lower South East Asian steel margins. However, price increases were announced in the December quarter supported by the decline in the Australian dollar.

The driver of stronger sales volumes in the half was increased domestic construction activity, which accounts for ~80% of Steel’s sales. Residential construction continued to improve, particularly high density residential apartments construction in capital cities. There was an increase in commercial construction activity in NSW, but overall non-residential construction remained relatively weak. In engineering construction, government funded infrastructure activity continued to gain momentum.

EBITDA for the half was in line with guidance at $16 million, slightly down from $21 million for the 30 June 2014 half.

In addition to improved South East Asian steel margins towards the end of the half, other key drivers of earnings have become more positive, albeit SE Asian prices are still at historic lows. These drivers include the Australian dollar, which has continued to decline, a stronger outlook for domestic demand, and a lower cost base in Steel which has increased the businesses leverage to these improvements.

In Recycling, EBITDA was $9 million, up from $3 million in the prior corresponding half. Cost and operational improvements, together with stronger earnings in the non ferrous business more than offset the impact of weaker ferrous margins and volumes, particularly as scrap prices fell sharply towards the end of the half.

INTERIM DIVIDEND

The Board announced today that no interim dividend has been declared for FY15.

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Arrium Limited ABN 63 004 410 833 Arrium Head Office: Level 40, 259 George St, Sydney NSW 2000, GPO Box 536, Sydney NSW 2001, Australia Phone: +612 9239 6666 Fax: +612 9251 3042

OUTLOOK

In Mining Consumables, we expect continued strong demand for grinding media, particularly in North and South America underpinned by high levels of copper and gold production and deteriorating head grades. Earnings in the second half are expected to benefit from grinding media sales growth and from on-going stable margins.

In Mining, we expect demand for seaborne iron ore to remain strong but prices in the second half to continue to be subject to the supply/demand balance and negative sentiment. Export sales of iron ore in the second half are expected to be ~5Mt as the business transitions to a low cost, cash flow positive ~9Mtpa Middleback Ranges operation in FY16iv.

In Arrium Steel, despite on-going weakness in international and domestic steel markets, we expect domestic construction activity to continue to improve from its low base. Earnings in the second half, particularly in the fourth quarter, are expected to benefit from improvements to key drivers including increased sales volumes, a sustained lower Australian dollar, increased South East Asian steel margins and further reductions to the business’ cost base. Earnings in Recycling in the second half are expected to be impacted by the recent significant fall in ferrous and non-ferrous prices.

Arrium Group underlying earnings for the second half are expected to be greater than in the first half due to expected stronger earnings in Mining Consumables and Steel, and from cost reductions, which are weighted to the second halfxiv.

ENDS Further information about Arrium Limited can be accessed via the website www.arrium.com.

CONTACTS:

Investor & Analyst Media Steve Ashe Gillian Burrows General Manager Chief Executive Investor Relations & External Affairs Corporate Affairs Tel: +612 9239 6616 Tel: +612 9239 6661 Mob: +61408 164 011 Mob: +61409 929 387 Email: [email protected] Email: [email protected]

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Arrium Limited ABN 63 004 410 833 Arrium Head Office: Level 40, 259 George St, Sydney NSW 2000, GPO Box 536, Sydney NSW 2001, Australia Phone: +612 9239 6666 Fax: +612 9251 3042

i Except as otherwise expressed, references in this document to net profit/loss after tax refer to net profit/loss attributable to equity holders of the parent. ii Unless otherwise stated, certain financial measures referred to in this document, including underlying results and ratios based on underlying results are non-statutory financial measures, which have not been audited or reviewed as part of KPMG’s review report on the half year financial report. However, KPMG have undertaken a set of procedures to agree the financial information in this document to underlying information supplied by the Company. The Directors believe that using these non-statutory financial measures appropriately represents the financial performance of the Group’s total operations including continuing and discontinued operations. All balance sheet items are based on statutory financial information. Details of the reconciliation of non-statutory to statutory results can be found attached to this document. The ASX Release forms part of a package of information about the Group’s Half Year Financial Results for the half year ended 31 December 2014 and should be read in conjunction with the other Half Year 2015 financial results materials including the 2015 Half Year Results Presentation and the Half Year Financial Report for the 6 months to 31 December 2014. iii Segment results referred to throughout this release are those reported in the 2015 Half Year Financial Report. They are equivalent to segment underlying results. iv Expected based on iron ore prices and FX at Monday 16 February 2015, and targeted cost base; excludes restructuring and other one-off costs. v Excludes capacity expansions yet to be commissioned. vi Includes mining, crushing, beneficiation, rail, road haulage and transhipping costs. Excludes capitalised costs (infrastructure, pre-stripping and mining licences) and depreciation and amortisation charges in respect of those costs, royalties, sales and marketing and corporate costs. vii Includes PPE, mine development (including capitalised stripping) and exploration. Hawks Nest and Monarch Stage 2 removed from capital plan. viii Includes internal steel despatches. Excludes billet and slab sales. ix FY16 targeted average loaded cash cost is A$37/wmt with the inclusion of 600kt of magnetite concentrate. x Wire Ropes sale expected to complete by end March 2015. xi December 2013 statutory and underlying earnings per share has been restated as a result of the Placement and Entitlement Offers in September and October 2014. xii Includes loaded cash cost, royalties, sale and marketing and corporate costs, adjustments for moisture content and freight, based on current market levels. Excludes capitalised costs (infrastructure, pre-stripping and mining licences) and depreciation and amortisation charges in respect of those costs; excludes working capital movement over the period. xiii Before restructuring and other one-off costs. xiv Based on iron ore prices and FX at Monday 16 February 2015.

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Arrium Limited ABN 63 004 410 833 Arrium Head Office: Level 40, 259 George St, Sydney NSW 2000, GPO Box 536, Sydney NSW 2001, Australia Phone: +612 9239 6666 Fax: +612 9251 3042

ATTACHMENT

Half-Year ended 31 December 2014 Statutory Results Underlying Results Total Total Reconciliation between Underlying and Continuing Discontinued Restructuring Asset Tax Operations Other items5 Operations Statutory Results ($m) operations operations 1 costs2 Impairment3 adjustments4 Statutory Underlying Sales revenue 3,141.3 77.4 3,218.7 - - - - 3,218.7 Other revenue/income 58.1 3.1 61.2 - - - - 61.2 Total revenue/income 3,199.4 80.5 3,279.9 - - - - 3,279.9 Gross profit/(loss) 131.9 (48.4) 83.5 - - - - 83.5 EBITDA 36.3 (58.7) (22.4) 4.2 205.9 - 1.3 189.0 Depreciation, amortisation and impairment (1,350.9) 5.4 (1,345.5) - 1,124.1 - - (221.4) EBIT (1,314.6) (53.3) (1,367.9) 4.2 1,330.0 - 1.3 (32.4) Finance costs (49.4) - (49.4) - - - 2.6 (46.8) Profit/(loss) before tax (1,364.0) (53.3) (1,417.3) 4.2 1,330.0 - 3.9 (79.2) Tax (expense)/benefit (88.9) 13.5 (75.4) (1.3) 1.6 133.5 (1.2) 57.2 Profit/(loss) after tax (1,452.9) (39.8) (1,492.7) 2.9 1,331.6 133.5 2.7 (22.0) Non-controlling interests (0.4) - (0.4) - - - - (0.4) Net profit/(loss) after tax (1,453.3) (39.8) (1,493.1) 2.9 1,331.6 133.5 2.7 (22.4) Operating cash flow - - 92.5 36.0 - - 54.0 182.5

1 Comprising the results of Australian Tube Mills, Merchandising and US Recycling businesses. Excludes intercompany transactions. Statutory EBITDA and statutory net profit after tax including intercompany transactions are $3.3m loss and $0.7m loss respectively. 2 Redundancies from organisational changes and other direct expenditure associated with business restructures. 3 Comprising inventory write down in Mining and impairment of intangible assets, mine development expenditures and property, plant and equipment in Mining, Mining Consumables, Steel and Recycling and discontinued operations. 4 Prior period tax adjustments and write off of deferred tax assets including the impact of the repeal of the Mineral Resource Rent Tax

5 Break fees associated with early termination of cross currency and interest rate swaps and other non-recurring costs. For personal use only use personal For

Arrium Limited ABN 63 004 410 833 Arrium Head Office: Level 40, 259 George St, Sydney NSW 2000, GPO Box 536, Sydney NSW 2001, Australia Phone: +612 9239 6666 Fax: +612 9251 3042

ATTACHMENT

Half-year ended 31 December 2013 Statutory Results Underlying Results Total Total Reconciliation between Underlying and Continuing Discontinued Restructuring Asset Tax Operations Operations Statutory Results ($m) operations operations 1 costs2 Impairment3 adjustments4 Statutory Underlying Sales revenue 3,358.6 283.9 3,642.5 - - - 3,642.5 Other revenue/income 70.0 4.4 74.4 - - - 74.4 Total revenue/income 3,428.6 288.3 3,716.9 - - - 3,716.9 Gross profit/(loss) 721.5 (27.4) 694.1 - - - 694.1 EBITDA 568.8 (70.0) 498.8 4.6 - - 503.4 Depreciation, amortisation and impairment (185.7) 3.7 (182.0) - 1.0 - (181.0) EBIT 383.1 (66.3) 316.8 4.6 1.0 - 322.4 Finance costs (62.0) - (62.0) - - - (62.0) Earnings before tax 321.1 (66.3) 254.8 4.6 1.0 - 260.4 Tax expense/(benefit) (54.9) 21.0 (33.9) (1.4) (0.3) (23.7) (59.3) Profit/(loss) after tax 266.2 (45.3) 220.9 3.2 0.7 (23.7) 201.1 Non-controlling interests (0.5) - (0.5) - - - (0.5) Net profit/(loss) after tax 265.7 (45.3) 220.4 3.2 0.7 (23.7) 200.6 Operating cash flow - - 344.4 34.5 - - 378.9

1 Comprising the results of Australian Tube Mills, Merchandising and US Recycling businesses. Excludes intercompany transactions. Statutory EBITDA and statutory net profit after tax including intercompany transactions are $10.4m loss and $4.1m loss respectively. 2 Redundancies from organisational changes and other direct expenditure associated with business restructures. 3 Impairment of property, plant and equipment and intangible assets associated with Mining Consumables, Steel, US Recycling and Merchandising businesses.

4 Net impact of Mineral Resource Rent Tax. For personal use only use personal For

Arrium Limited ABN 63 004 410 833 Arrium Head Office: Level 40, 259 George St, Sydney NSW 2000, GPO Box 536, Sydney NSW 2001, Australia Phone: +612 9239 6666 Fax: +612 9251 3042

ATTACHMENT

SEGMENT

Half year ended 31 December Mining Consumables Mining Steel Recycling $ millions 2014 2013 % Chg 2014 2013 % Chg 2014 2013 % Chg 2014 2013 % Chg Total Revenue/Income 793.8 786.5 0.9% 511.8 877.4 (41.7%) 1,498.9 1,438.1 4.2% 600.5 547.0 9.8% EBITDA 100.6 100.4 0.2% 76.6 423.1 (81.9%) 16.0 30.1 (46.8%) 9.3 3.2 190.6% EBIT 77.1 76.4 0.9% (64.6) 323.5 (120.0%) (35.0) (21.2) (65.1%) 4.3 (2.1) 304.8% Sales Margin % (EBIT) 9.7% 9.7% 0pts (12.6%) 36.9% -49.5pts (2.3%) (1.5%) -0.8pts 0.7% (0.4%) 1.1pts Assets 2,620.2 2,519.4 4.0% 1,170.0 2,171.2 (46.1%) 1,847.8 2,154.0 (14.2%) 359.7 372.9 (3.5%) Funds Employed 2,183.5 2,139.4 2.1% 614.7 1,688.2 (63.6%) 1,309.6 1,619.6 (19.1%) 288.6 295.9 (2.5%) Return on Funds Employed (%) 7.3% 7.3% 0pts (11.4%) 39.7% -51.1pts (4.9%) (2.5%) -2.4pts 2.9% (1.4%) 4.3pts Employees (number) 1,948 2,063 (5.6%) 583 585 (0.3%) 4,986 5,163 (3.4%) 658 628 4.8%

Segment results are equivalent to the underlying results of each segment and comprised of continuing operations only. The results of discontinued operations form part of unallocated.

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Arrium Limited ABN 63 004 410 833 Arrium Head Office: Level 40, 259 George St, Sydney NSW 2000, GPO Box 536, Sydney NSW 2001, Australia Phone: +612 9239 6666 Fax: +612 9251 3042

ATTACHMENT FINANCIAL RATIOS HALF YEAR ENDED $A millions Dec-14 Jun-14 Dec-13 Jun13 Dec-12 Jun-12 Dec-11 Jun-11 Dec-10 Jun-10 Dec-09 Jun-09 Dec-08 Jun-08 Dec-07 Jun-07 Dec-06 Jun-06 Dec-05 Dec-14 to Dec-13

Group Results1 Sales revenue 3,218.7 3,364.1 3,642.5 3,436.6 3,404.4 3,797.4 3,797.1 3,817.9 3,315.1 3,231.0 2,973.6 3,113.9 4,127.6 4,216.0 3,218.3 2,166.3 2,134.3 2,015.8 1,988.8 (11.6%) Other revenue/income 61.2 51.1 74.4 60.9 53.0 99.4 22.4 31.8 12.4 38.9 17.4 18.4 47.9 16.9 33.6 17.2 16.7 22.7 16.3 (17.7%) Total income 3,279.9 3,415.2 3,716.9 3,497.5 3,457.4 3,896.8 3,819.5 3,849.7 3,327.5 3,269.9 2,991.0 3,132.3 4,175.5 4,232.9 3,251.9 2,183.5 2,151.0 2,038.5 2,005.1 (11.8%) Gross profit 83.5 485.9 694.1 495.6 556.1 619.3 578.4 838.3 646.3 550.1 683.9 634.6 952.9 980.4 700.8 368.4 468.8 366.4 432.3 (88.0%)

EBITDA 189.0 360.8 503.4 370.2 254.6 342.4 238.6 326.7 315.3 319.8 297.8 162.7 498.5 519.3 288.4 218.1 218.0 193.2 203.5 (62.5%) Depreciation, amortisation & impairment (221.4) (186.4) (181.0) (181.2) (134.9) (118.8) (102.6) (112.9) (100.6) (105.2) (98.7) (101.5) (98.0) (108.8) (86.1) (48.1) (48.1) (46.6) (47.4) 22.3% EBIT (32.4) 174.4 322.4 189.0 119.7 223.6 136.0 213.8 214.7 214.6 199.1 61.2 400.5 410.5 202.3 170.0 169.9 146.6 156.1 (110.1%) Finance costs (46.8) (55.5) (62.0) (61.5) (58.2) (58.9) (62.2) (55.1) (46.0) (44.6) (44.6) (70.6) (101.6) (92.6) (67.0) (29.5) (26.3) (27.3) (29.4) (24.5%) Profit before tax (79.2) 118.9 260.4 127.5 61.5 164.7 73.8 158.7 168.7 170.0 154.5 (9.4) 298.9 317.9 135.3 140.5 143.6 119.3 126.7 (130.4%) Tax benefit/(expense) 57.2 (22.5) (59.3) (16.3) (8.7) (43.5) 6.0 (43.6) (41.2) (47.3) (34.3) 11.0 (75.1) (90.4) (37.6) (35.5) (39.2) (26.3) (34.5) (196.5%) Profit after tax (22.0) 96.4 201.1 111.2 52.8 121.2 79.8 115.1 127.5 122.7 120.2 1.6 223.8 227.5 97.7 105.0 104.4 93.0 92.2 (110.9%) Non-controlling interests (0.4) (0.7) (0.5) (0.3) (1.8) (3.0) (2.9) (3.9) (3.3) (1.1) (1.2) (1.4) (8.7) (5.9) (4.3) (5.7) (6.2) (5.5) (8.1) (20.0%) Net profit after tax (22.4) 95.7 200.6 110.9 51.0 118.2 76.9 111.2 124.2 121.6 119.0 0.2 215.1 221.6 93.4 99.3 98.2 87.5 84.1 (111.2%) Non-trading items, net of tax - Restructuring costs (2.9) (32.6) (3.2) (56.1) (9.6) (15.8) (14.0) (6.2) - 0.4 (1.6) (44.7) (2.1) (31.8) (26.3) - - - - (9.2%) - Impairment (1,331.6) (7.4) (0.7) (421.3) (474.0) 4.1 (129.5) (1.5) - - - - - (8.5) (3.5) - - - - 188618.8% - Transaction costs - 0.0 - 0.0 - (2.7) (16.0) (5.9) (8.0) ------0.0% 1 Unless otherwise stated, certain financial - Steel Transformation Plan - (18.6) - 0.0 - 0.0 ------0.0% - Tax adjustments & other items (136.2) (52.1) 23.7 113.0 (15.0) 27.5 9.00 16.50 - 19.0 - 45.7 15.3 - - 9.5 - 15.9 - 674.7% measures referred to in this document, Net profit after tax - statutory (1,493.1) (15.0) 220.4 (253.5) (447.6) 131.3 (73.6) 114.1 116.2 141.0 117.4 1.2 228.3 181.3 63.6 108.8 98.2 103.4 84.1 (777.5%) including underlying results and ratios based

Total assets 6,406.0 8,002.3 7,921.7 8,168.8 8,241.4 8,931.4 8,665.1 8,343.3 8,195.1 7,067.7 6,729.5 6,933.1 7,520.7 7,291.5 6,999.2 3,569.5 3,375.3 3,138.8 3,058.3 (19.1%) on underlying results are non-statutory Total liabilities 3,443.8 4,271.4 4,044.4 4,517.6 4,407.7 4,430.8 4,267.5 3,837.6 3,715.5 2,575.0 2,347.3 2,596.8 3,864.2 3,862.1 3,636.4 1,919.5 1,804.1 1,637.2 1,619.9 (14.9%) financial measures, which have not been Total equity 2,962.2 3,730.9 3,877.3 3,651.2 3,833.7 4,500.6 4,397.6 4,505.7 4,479.6 4,492.7 4,382.2 4,336.3 3,656.5 3,429.4 3,362.8 1,650.0 1,571.2 1,501.6 1,438.4 (23.6%) audited or reviewed as part of KPMG’s Net debt2 1,429.6 1,707.7 1,975.4 2,114.9 2,154.7 2,143.3 2,241.9 1,728.4 1,891.6 963.7 969.9 1,223.9 2,269.8 1,947.2 1,985.6 769.8 753.1 638.8 660.0 (27.6%) review report on the half year financial Funds employed 4,391.8 5,438.6 5,852.7 5,766.1 5,988.4 6,643.9 6,639.5 6,234.1 6,371.2 5,456.4 5,352.1 5,560.2 5,926.3 5,376.6 5,348.4 2,419.8 2,324.3 2,140.4 2,098.4 (25.0%) statements. However, KPMG have Number of shares on issue (millions) 2,937.3 1,366.2 1,361.5 1,355.4 1,351.5 1,345.7 1,342.4 1,338.1 1,334.7 1,331.6 1,328.4 1,325.8 882.8 878.7 876.5 575.7 573.4 569.3 567.2 115.7% undertaken a set of procedures to agree the Operating cash flow 182.5 367.2 378.9 475.3 183.2 303.8 215.7 300.2 162.9 324.5 328.7 328.3 42.5 359.7 162.5 424.5 90.8 324.1 93.7 (51.8%) financial information in this document to Free cash flow (81.2) 141.5 169.3 259.3 (122.8) 19.6 49.2 161.6 64.1 221.5 258.5 240.6 (57.4) 164.3 51.0 102.1 55.3 53.6 (17.2) (148.0%) underlying information supplied by the Capital and investment expenditure 263.7 225.7 209.6 216.0 306.0 235.3 483.7 152.5 1,091.7 135.7 71.1 85.4 105.5 154.2 2,320.8 183.5 177.0 112.7 114.9 25.8% Company. The directors believe that using Return on equity % (PAT / average total these non-statutory financial measures equity) (1.3%) 5.1% 10.7% 5.9% 2.5% 5.5% 3.6% 5.1% 5.7% 5.5% 5.5% 0.1% 12.6% 13.4% 5.8% 13.0% 13.6% 12.7% 13.1% -12pp appropriately represents the financial Return on funds employed % (EBIT / performance of the Group’s total operations average funds employed) (1.3%) 6.2% 11.1% 6.4% 3.8% 6.7% 4.2% 6.8% 7.3% 7.9% 7.3% 2.1% 14.2% 15.3% 7.6% 14.3% 15.2% 13.8% 15.1% -12.4pp Sales margin % (1.0%) 5.2% 8.9% 5.5% 3.5% 5.9% 3.6% 5.6% 6.5% 6.6% 6.7% 2.0% 9.7% 9.7% 6.3% 7.9% 8.0% 7.3% 7.9% -9.9pp including continuing and discontinued Gross profit margin % 2.6% 14.4% 19.1% 14.4% 16.3% 16.3% 15.2% 22.0% 19.5% 17.0% 23.0% 20.4% 23.1% 23.3% 21.8% 17.0% 22.0% 18.2% 21.7% -16.5pp operations. Details of the reconciliation of Earnings per share (cents)3 (1.0) 6.6 13.9 8.3 3.9 8.8 5.8 8.3 9.4 9.2 9.0 - 24.5 26.6 11.8 17.4 17.3 15.5 14.9 (107.2%) non-statutory to statutory results can be Dividends per share (cents) - 3.0 6.0 3.0 2.0 3.0 3.0 4.0 6.0 6.0 5.0 4.0 6.0 13.5 8.0 10.5 8.0 10.0 7.0 -6cents found in the Appendix to this document. All Dividend payout ratio % 0.0% 42.8% 40.7% 36.7% 53.0% 34.2% 52.4% 48.1% 64.5% 65.8% 55.8% 100.0% 24.6% 53.5% 75.1% 92.2% 46.7% 65.0% 47.2% -40.7pp Gearing % 32.6% 31.4% 33.8% 36.7% 36.0% 32.3% 33.8% 27.7% 29.7% 17.7% 18.1% 22.0% 38.3% 36.2% 37.1% 31.8% 32.4% 29.8% 31.5% -1.2pp balance sheet items are based on statutory Interest cover (times EBITDA, 12m rolling financial information. basis)4 6.2 8.4 8.1 5.8 5.2 4.9 5.4 7.0 7.5 7.4 4.2 4.0 5.2 4.7 4.4 6.2 6.7 6.6 6.8 -1.9 times 2 Net debt for December 2004 has been Leverage Ratio (net debt/EBITDA,12m adjusted to include securitisation which was rolling basis) (underlying) 2.6 2.0 2.3 3.4 3.6 3.7 4.0 2.7 3.0 1.6 2.1 1.9 2.2 2.4 3.9 1.8 1.8 1.6 1.6 15.0% Leverage Ratio (net debt/EBITDA,12m previously classified as off-balance sheet rolling basis) (statutory) 5.5 2.2 2.5 4.0 4.0 4.3 4.4 2.8 2.9 1.5 2.4 2.1 2.3 2.7 4.2 1.8 1.8 1.6 1.4 119.6% 3 Earnings per share for December 2013 and Net tangible assets per share ($) 0.40 1.29 1.34 1.19 1.15 1.20 1.13 1.39 1.30 1.77 1.72 1.65 1.65 1.53 1.38 2.38 2.26 2.15 2.03 (70.4%) June 2014 has been restated as a result of Employees 9,201 9,269 9,606 10,078 10,177 11,007 11,488 11,598 11,549 10,598 10,574 11,104 11,743 11,678 11,639 7,526 7,733 7,527 7,269 (4.2%) the Placement and Entitlement Offers in

Sales per employee ($000s) 350 363 379 341 335 345 331 329 287 305 281 280 351 361 277 288 276 268 274 (7.7%) September and October 2014. Previous For personal use only use personal For Iron ore tonnes sold (Mt) 6.58 6.35 6.12 4.86 3.42 3.16 3.13 2.98 3.06 2.85 3.18 2.89 2.18 2.57 1.89 7.5% periods have not been restated. Raw steel production (Mt) 1.23 1.14 1.22 1.20 1.30 1.29 1.21 1.21 1.11 1.01 1.14 0.80 1.23 1.44 1.26 0.86 0.88 0.83 0.80 0.8% 4 Net of interest revenue and non-cash Steel tonnes despatched (Mt) 1.70 1.56 1.64 1.62 1.64 1.47 1.84 1.84 1.35 1.40 1.35 1.18 1.58 1.90 1.63 1.14 1.14 1.17 1.10 3.8% financing cost.

12 1 Unless otherwise stated, certain financial measures referred to in this document, including underlying results and ratios based on underlying results are non-statutory financial measures, which have not been audited or reviewed as part of KPMG’s review report on the half year financial statements. ArriumHowever, Limited KPMG ABN have 63 undertaken 004 410 833 a set of procedures to agree the financial information in this document to underlying information supplied by the Company. The directors believeArrium that Headusing Office: these Levelnon-statutory 40, 259 George financial St, measures Sydney NSW appropriately 2000, GPO repr Boxesents 536, Sydney the financial NSW 2001, performance Australia of the Group’s total operations including continuing and discontinued operations. Details of the reconciliation of non-statutory to statutory resultsPhone: can +612 be found9239 6666 in the Fax: Appendix +612 9251 to this 3042 document. All balance sheet items are based on statutory financial information. 2 Net debt for December 2004 has been adjusted to include securitisation which was previously classified as off-balance sheet 3 Earnings per share for December 2013 and June 2014 has been restated as a result of the Placement and Entitlement Offers in September and October 2014. Previous periods have not been restated. 4 Net of interest revenue and non-cash financing cost ARRIUM LIMITED 1H15 Results Presentation

Andrew Roberts, Managing Director & CEO

Robert Bakewell, Chief Financial Officer For personal use only use personal For This presentation contains certain forward-looking statements with respect to the financial condition, results of operations and business of Arrium and certain plans and objectives of the management of Arrium. Forward-looking statements can generally be identified by the use of words such as ‘project’, ‘foresee’, ‘plan’, ‘expect’, ‘aim’, ‘intend’, ‘anticipate’, ‘believe’, ‘estimate’, ‘may’, ‘should’, ‘will’ or similar expressions. All such forward looking statements involve known and unknown risks, significant uncertainties, assumptions, contingencies and other factors, many of which are outside the control of Arrium, which may cause the actual results or performance of Arrium to be materially different from any future results or performance expressed or implied by such forward looking statements. Such forward-looking statements speak only as of the date of this presentation. Factors that could cause actual results or performance to differ materially include without limitation the following: risks and uncertainties associated with the Australian and global economic environment and capital market conditions, the cyclical nature of the steel industry, the level ofactivityinthe construction, manufacturing, mining, agricultural and automotive industries in Australia and North and South America and, to a lesser extent, the sameindustriesinAsia and New Zealand, mining activity in the Americas, commodity price fluctuations, fluctuations in foreign currency exchange and interest rates, competition, Arrium's relationships with, and the financial condition of, its suppliers and customers, legislative changes, regulatory changes or other changes in the laws which affect Arrium's business, including environmental laws, a carbon tax, mining tax and operational risk. The foregoing list of important factors is not exhaustive. There can be no assurance that actual outcomes will not differ materially from these statements.

Unless otherwise stated, this presentation contains certain non-statutory financial measures including underlying EBIT, underlying EBITDA, underlying NPAT, underlying earnings per share and underlying effective tax rate. These measures are used to assist the reader understand the financial performance of the company’s operations. Non-statutory financial information has not been audited or reviewed as part of KPMG’s report on the 2015 Half Year Financial Report. However, KPMG have undertaken a set of procedures to agree the financial information in this presentation to underlying information supplied by the company. The Directors believe that using these non- statutory financial measures appropriately represents the financial performance of the Group’s total operations including continuing and discontinued operations. Segment results referred to throughout this presentation are those reported in the 2015 Half Year Financial Report. Except as otherwise stated, they are equivalent to segment underlying results for continuing operations only. Details of the reconciliation between non-statutory and statutory financial measures can be found in the Appendix of this presentation. The presentation forms part of a package of information about the Group’s Half Year Financial Results for the half year ended 31 December 2014 and should be read in conjunction with the other Half Year 2015 financial results materials including the 2015 Half Year ASX Release and the Half Year Financial Report for the 6 months to 31 December 2014.

All balance sheet items are based on statutory financial information. Except as otherwise expressed, references in this document to net profit/loss after tax refer to net profit/loss attributable to equity holders of the parent.

The information in this report that relates to Mineral Resources or Ore Reserves is based on information compiled by Paul Leevers BSc (Hons), MSc Min Eng, a Competent Peron who is a Member of The Australasian Institute of Mining and Metallurgy and is a full-time employee of Arrium. Mr Leevers has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr Leevers consents to the inclusion in this report of the matters based on his information in the form and context in which it appears.

The information in this report that relates to Exploration Results is based on information compiled by Geoff Johnson BSc (Hons), PhD, Grad Dip Env Sc., a Competent Person who is a Fellow of the Australian Institute of Geoscientists and a Fellow of the Australasian Institute of Mining and Metallurgy and is a full-time employee of For personal use only use personal For OneSteel Manufacturing Pty Limited. Dr Johnson has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Dr Johnson consents to the inclusion in this report of the matters based on his information in the form and context in which it appears.

2 Contents

Page

At a glance 4

Segment analysis 7

Financial overview 21

Strategic focus & outlook 31

Appendix 46 For personal use only use personal For

3 1H15 at a glance . Earnings impacted by ~40% decline in iron ore market price pcp . Mining business re-design underway – cash flow positive FY161 . Mining Consumables – strong performance and outlook . Steel – improvement in key drivers of earnings . Further reduction in company cost base – increased leverage . Asset impairments – primarily Mining . Net proceeds from fully underwritten capital raising used to pay down debt

. Divestment proceeds – FY15 target exceeded For personal use only use personal For

1 Expected based on iron ore prices and FX at Monday 16 February 2015, and targeted cost base; excludes restructuring and other one-off costs. 4 1H15 results overview

. Sales revenue $3,219 million, down 12% pcp – lower iron ore prices . Underlying EBITDA1 $189 million – in line with guidance (Stat. loss of $22 million) • Mining Consumables $101 million – up 16% 2H14 • Mining $77 million – lower iron ore prices • Steel $16 million – in line with guidance • Recycling $9 million – up from $3 million pcp

. Underlying NLAT $22 million (Stat. $1,493 million – incl. asset impairments) For personal use only use personal For

1 A reconciliation of non-statutory underlying results to statutory results can be found in the Appendix to this presentation. 5 1H15 results overview (cont.)

. Statutory operating cash flow $93 million, down 73% – lower iron ore prices . Proceeds from asset divestments • ~$60 million 1H • ~$150 million with sale of Wire Ropes business1 . Net debt as at 31 Dec in line with guidance2 • $1,430 million at 82c AUD/USD • $1,234 million3 – restated using 93c AUD/USD . Gearing 32.6% as at 31 Dec (impact of asset impairments 7.6ppts)

. No interim dividend declared For personal use only use personal For

1 Completion expected by end of March 2015 quarter. 2 Guidance of A$1,076m –A$1,276m at time of capital raising included assumptions: 93c AUD/USD FX and no change in trading conditions. 6 3 Includes translation impact of AUD/USD/CAD FX on net debt as at 31 December 2014 (AUD/USD was 82c) and impact of lower AUD/USD FX on the value of AUD proceeds from Arrium’s 2014 capital raising when repaying USD-denominated debt.

1H15 Segment Analysis For personal use only use personal For 1H15 Mining Consumables results

World Copper Ore Milled (Million Tonnes) By Region 2014 - 2019 Market conditions and external factors 3,500 3,000 . Continued strong demand for copper and gold 2,500 . Miners still maximising output despite focus on 2,000 1,500 Ore Milled 1,000 cost reductions Million Tonnes . Strong pipeline of new projects and 500 0 expansions, particularly in North and South 2014 2015 2016 2017 2018 2019 America. Included next 2 years: Sth America Nth America Australasia Africa China Europe ROW • Cerro Verde Source: Wood Mackenzie Q4, Dec 2014 • Las Bambas World Copper Ore Milled (Million Tonnes) • BHPB Escondida expansion By Status 2014 - 2019 3,500 • Imperial Metals Red Chris 3,000

. Head grades of copper and gold continuing to 2,500

deteriorate – increases demand for grinding 2,000 Ore Milled Million Tonnes media 1,500

1,000 2014 2015 2016 2017 2018 2019 “~80% of Arrium’s grinding media sales driven Project - Tentative Project - Possible For personal use only use personal For Project - Probable Project - Highly Probable by copper and gold” Base Case Source: Wood Mackenzie Q4, Dec 2014

8 1H15 Mining Consumables results

1H15 1H14 % change $m $m

Total revenue/income 794 787  1

EBITDA 101 100  1

EBIT 77 76  1

Sales margin (%) 10% 10% - - Assets 2,620 2,519  4

Funds employed 2,184 2,139  2

Return on funds employed1 (%) 7% 7% - -

Employees (number) 1,948 2,063  (6)

External tonnes despatched (Mt)2 0.58 0.56  4 For personal use only use personal For

1 ROFE for Moly-Cop grinding media businesses in North and South America ~14%, excludes capacity expansions yet to be commissioned. 9 2 Excludes scrap sales. 1H15 Mining Consumables results Strong earnings and cash flow . EBITDA $101 million, up slightly on 1H14, up 16% on 2H14 • Grinding media volume growth North and South America • Stable margins1 Grinding media sales volumes and margins . North and South America – strong growth • EBITDA up 5% on 1H14, 13% on 2H14 • Grinding media volumes up 7% on 1H14 & 2H14 • Roll out of next generation SAG ball - Progressing to plan - Further strengthening competitive advantage • Canada and Peru expansions on time and budget Source: Arrium • North and South America Moly-Cop grinding media

businesses return on funds employed ~14%2 For personal use only use personal For

1 Grinding media margins include impact of timing of pass through of lower steel raw material costs into prices. Margins best viewed over extended period. 10 2 Excludes capacity expansions yet to be commissioned. 1H15 Mining Consumables results

. Australasia – lower cost base, improved volumes and earnings • EBITDA up 81% on 2H14 • Recommencement of Indonesia orders across 1H151 • Grinding media volumes up 14% on 2H14 • Rail Wheels slightly down on 2H14 • Waratah, Newcastle restructure in 2H14 delivering cost benefits in line with expectations • Announced sale of Wire Ropes to Bekaert for $90 million - Outside strategic growth focus for Mining Consumables - Completion expected by end March 15 - Wire Ropes EBITDA ~6% of Mining Consumables

EBITDA 1H15 For personal use only use personal For

1 Indonesia sales in 1H15 impacted by some mine operational matters towards end of 1H15. 11 1H15 Mining results Market conditions and external factors . Significant change in supply/demand balance • Increase in seaborne supply • Demand growth impacted by: - Slower growth in China - Slow exit of high cost ores in China - Credit tightening in China . Sharp decline in iron ore prices • Average Platts 62% Fe price down ~40% . Increased negative sentiment and uncertainty

. Lower freight rates For personal use only use personal For

12 1H15 Mining results

1H15 1H14 % change $m $m

Total revenue/income 512 877  (42)

EBITDA 77 423  (82)

EBIT (65) 324  (120) Sales margin (%) (13%) 37%  (50 pp)

Assets 1,1701 2,171  (46) Funds employed 6151 1,688  (64)

Return on funds employed (%) (11%) 40%  (51 pp)

Employees (number) 583 585  -

External lump & fines iron ore sales (Mt) 6.58 6.12  8

Pellets, other ore & by products (Mt)2 0.20 0.20 - - For personal use only use personal For

1 Includes impact of $1,166 million asset impairments. 2 Ore by products include dolomite, centrix, filter cake and pellet chips. 13 1H15 Mining results

Stronger operational performance . Hematite export sales 6.6Mt, up 8% from 1H14 . Average loaded cost (excl royalties & depn) A$45.70/wmt, down 8% from A$49.50/wmt1 1H14 . Average Fe grade ~60%

Earnings impacted by ~40% fall in market prices pcp . Average realised price US$68/dmt CFR, down 46% from US$127/dmt 1H14 . Average AUD realised price $76/dmt . Mix ~70% fines, ~30% lump . Customer mix ~70% contract, ~30% spot

Mining business re-designed for low price environment . ~9Mt MBR operation For personal use only use personal For . Low cost, cash flow positive business in FY162

1 Includes mining, crushing, beneficiation, road haulage and transshipping costs. Excludes capitalised costs (infrastructure, pre-stripping and mining licences) and depreciation, amortisation charges in respect of those costs, royalties, sales and marketing and corporate costs. 14 2 Expected based on iron ore prices and FX at Monday 16 February 2015, and targeted cost base; excludes restructuring and other one-off costs. 1H15 Steel & Recycling results

Construction Activity by Sector Market conditions and external factors Source: Australian Industry Group . Residential construction activity continued to improve – particularly high density residential apartments . Non-residential construction – continued weakness, but some improvement in NSW . Engineering construction – government funded infrastructure gaining momentum . Lower steel making raw material costs . Domestic prices impacted by historic low SE Asian steel margins and prices . Lower AUD/USD positive for domestic prices

and margins For personal use only use personal For

15 1H15 Steel results

1H15 1H14 % change $m $m

Total revenue/income 1,499 1,438  4

EBITDA 16 30  (47)

EBIT (35) (21)  (67)

Sales margin (%) (2%) (1%)  (1 pp) Assets 1,8481 2,154  (14)

Funds employed 1,3101 1,620  (19)

Return on funds employed (%) (5%) (3%)  (2 pp)

Employees (number) 4,986 5,163  (3)

External steel despatches (Mt) 1.12 1.05  7

Steel tonnes produced (Mt) 1.00 0.97  3 For personal use only use personal For

1 Includes impact of asset impairments. 16 1H15 Steel results Increased leverage to improved outlook

. EBITDA $16 million – in line with guidance (2H14 $21 million) • Strengthening demand • Domestic sales volumes up1 - 6% on 1H14 - 8% on 2H14 • Lower average price - Benefit from lower AUD more than offset by - Impact of historic low SE Asian steel margins and Asian steel prices • Underlying profit from asset sales

• Further reductions to cost base For personal use only use personal For

1 Includes internal steel despatches. Excludes billet and slab sales. 17 1H15 Steel results

. Momentum leading into 2H15 • Further decline in AUD • Price increases announced in Q215 • Lift in SE Asian steel margins end 1H15 – supported by decline in scrap price1 • Improving construction activity

. Dumping investigations (~65% of steel volumes) • Structurals – duties up to 20% imposed • Rod in Coil and Reinforcing Bar – progressing

• Further applications being considered For personal use only use personal For

1 Domestic price benefit lags ~3 months. 18 1H15 Recycling results

1H15 1H14 % change $m $m

Total revenue/income 601 547  10

EBITDA 93 200

EBIT 4(2) 300

Sales margin (%) 0.7% (0.4%)  1.1 pp Assets 360 373  (3)

Funds employed 289 296  (2)

Return on funds employed (%) 2.9% (1.4%)  4.3 pp

Employees (number) 658 628  5

Total scrap recycling tonnes (Mt) 0.74 0.74 - - For personal use only use personal For

19 1H15 Recycling results

Earnings improvement . Stronger earnings in Non Ferrous • Improved margins and volumes in Australia and Asia . Cost and operational improvements • Continued to build on benefits of repositioning footprint in 2H14 . Partly offset by: • Weaker earnings in Ferrous - Lower volumes and slightly weaker margins

- Significant decline in scrap price towards end 1H15 For personal use only use personal For

1H15 Financial Overview For personal use only use personal For 1H15 financial overview

Financials impacted by ~40% fall in iron ore market prices pcp . Sales revenue $3,219 million, down 12% pcp . Underlying EBITDA $189 million, down 62% pcp . Statutory EBITDA $22 million loss, down 104% pcp . Underlying NLAT $22 million, down from NPAT $201 million 1H14 . Statutory NLAT $1,493 million • Asset impairments as announced last month $1,335 million – predominantly Mining • Reversal of MRRT deferred tax asset $70 million

• Tax, restructuring and other adjustments $66 million For personal use only use personal For

22 1H15 financial overview

. Statutory operating cash flow $93 million, down 73% – low iron ore prices . Proceeds from asset divestments • ~$60 million 1H15 • ~$150 million with Wire Ropes sale • Target of ~$100 million for FY15 exceeded . Net debt • $1,430 million at 82c AUD/USD • $1,234 million – restated using 93c AUD/USD per

guidance1 For personal use only use personal For

1 Guidance of A$1,076m –A$1,276m at time of capital raising included assumptions: 93c AUD/USD FX and no change in trading conditions. Includes translation impact of AUD/USD/CAD FX on net debt as at 31 December 2014 (AUD/USD was 82c) and impact of lower AUD/USD FX on the value of 23 AUD proceeds from Arrium’s 2014 capital raising when repaying USD-denominated debt. 1H15 financial overview

Statutory results1

1H15 1H14 Comment % change $m $m 1H15 vs 1H14

Sales revenue 3,219 3,643  (12) Market prices for iron ore down ~40% pcp

EBITDA (22) 499  (104) Includes Mining inventory writedown

Depn, amort & impairment 1,346 182  nm Includes impairments

EBIT (1,368) 317  nm

Finance costs 49 62  (20) Lower debt levels following capital raising

Net profit/(loss) after tax (1,493) 220  nm

Operating cash flow 93 344  (73) Market prices for iron ore down ~40% pcp

Net debt restated using AUD/USD rate of 93c would convert Net debt 1,430 1,975  (28) to ~$1,234m (82 cents at 31 December 2014)

Gearing (net debt /net debt plus equity) 32.6% 33.8%  (1.2 pp) Well within banking covenants

Return on funds employed (%) (55.7%) 10.9%  (66.6 pp) For personal use only use personal For Dividend (cents per share) 0.0 6.0  (6.0 c)

1 For total operations (includes continuing and discontinued operations). For a reconciliation of these figures to the statutory results for continuing operations 24 only, refer to the Appendix to this presentation. 1H15 financial overview

Underlying results1

1H15 1H14 Comment % change $m $m 1H15 vs 1H14

Sales revenue 3,219 3,643  (12) Market prices for iron ore down ~40% pcp

EBITDA 189 503  (62) Market prices for iron ore down ~40% pcp

Depreciation & amortisation2 221 181  22

EBIT (32) 322  (110)

Finance costs 47 62  (25) Estimate for FY15 ~$90 million

Profit before tax (79) 260  (130)

Tax benefit/ (expense) 57 (59)  (197)

Net (loss)/profit after tax (22) 201  (111)

Operating cash flow 183 379  (52) Market prices for iron ore down ~40% pcp

EPS (cents) – weighted average3 (1.0) 13.9  (107) Reflects lower earnings For personal use only use personal For Return on funds employed (%) (1%) 11%  (12 pp)

1 For total operations, includes continuing and discontinued operations. A reconciliation of non-statutory underlying results to statutory results can be found in the Appendix to this presentation. 25 2 Depreciation and amortisation for 2H15 expected to be ~$125 million including ~$50 million for Mining. 3 December 2013 EPS has been restated as a result of the Placement and Entitlement Offers in September and October 2014. 1H15 financial overview

Balance sheet summary

1H15 1H14 % change Comments $m $m

Total assets 6,406 7,922  (19) Asset sales and impairments

Total liabilities 3,444 4,044  (15) Reflecting debt reduction

Net assets 2,962 3,877  (24)

2  Capital raising used to reduce debt, Net debt 1,430 1,975 (28) and FX adjustment at 31 Dec

Inventories 1,078 1,333  (19) Includes Mining inventory writedown

Funds employed 4,392 5,853  (25) Includes impact of asset impairments

Gearing % (net debt/net debt 32.6% 33.8%  plus equity) Well within banking covenants Interest cover – (times EBITDA, 6.2 8.1 

12-mth rolling)1 For personal use only use personal For NTA / share – ($) 0.40 1.34  (70)

1 Underlying interest cover is underlying EBITDA divided by finance costs, net of interest revenue and non cash financing items. 26 2 Net debt $2,119 million restated at 31 December 2014 exchange rate. 1H15 financial overview

Cash flow reconciliation - statutory

1H15 1H14 $m $m

(Loss)/profit after tax (1,493) 221

Depreciation, amortisation and impairment 1,346 182

Other non-cash items (37) (21)

Changes in assets and liabilities including working capital 277 (38)

Operating cash flow 93 344

Capital expenditure (264) (209)

Free cash flow (171) 135

Asset and business sales 59 117

Operating and investing cash flow (112) 252 For personal use only use personal For

27 1H15 capital expenditure – cash basis

1H15 1H14 FY15 Est. $m $m $m Mining 130 107 170–1801 Mining Consumables 42 33 80–85 Steel & Recycling 32 30 70–75 Total capital expenditure (excluding stripping 204 170 320–340 asset) Mining stripping activity asset 60 40 80–901 Total 264 210 400–430 Mining . FY15 capital expenditure includes • Investment in IKMA • 2H15 optimisation of MBR in transitioning to ~9Mtpa MBR operation • ~$38 million related to magnetite stream – cost transfer to Steel through pellet sales . FY16 capital expenditure ~$13/t2

For personal use only use personal For . FY16 – FY19 capital expenditure plan average $8/t3 1 Excludes Southern Iron capital costs to be expensed through Mining transition period. 2 FY16 capital expenditure~$13/t. Includes PPE, mine development (including capitalised stripping). Excludes exploration. Includes hematite only. 3 Average FY16-FY19 capital expenditure ~$8/t, based on current operations, revised business plan and forecast sales. Underpinned by MBR Hematite Reserves & Beneficiation Stockpiles Reserves in 2014 Reserves & Resources statement (prepared by a Competent Person under JORC 2012). Reserves 28 and resources are as at 30 June 2014 and are reviewed annually in accordance with the company’s normal practice. Capitalised stripping cost FY16 – FY19 ~$1/t. Cost reductions tracking to plan

Targeted FY15 1H15 actual $m $m From FY14 initiatives 45 22 40-50 18 FY15 cost reduction program (60-90 annualised) Weighted to 2H15, to Mining1 then Steel

FY15 cost reduction program on track to deliver $60-$90 million annualised savings For personal use only use personal For

1 Targeted FY16 total cash cost (CFR) A$57/dmt. Includes loaded cash cost, royalties, sale and marketing and corporate costs, adjustments for moisture 29 content and freight based on current market levels. Excludes capitalised costs (infrastructure, pre-stripping and mining licences) and depreciation and amortisation charges in respect of those costs, excludes working capital movement over the period. Funding

. Total facilities A$2.9 billion end 1H15 . ~$1.3 billion available committed undrawn facilities end 1H15 . Average interest rate for total drawn and undrawn funding ~4% . Next significant maturity FY18 . ~$730 million net proceeds from capital raising used to pay down debt . Investigating opportunities to diversify existing debt finance . Covenants: • Gearing ratio at a level which is greater than 50% • Interest cover (based on underlying EBITDA

to debt service)1 between 3.0 and 3.5 times For personal use only use personal For

1 Calculation based on rolling 12 month basis. Debt service for Dec 14 covenant calculation ~85% of total statutory interest expense. 30

Strategic focus & outlook For personal use only use personal For Arrium strategic focus

A leading mining and materials company

Mining Mining Consumables Steel

. Implement business re- . Capture our share of strong . Focus on markets with a design grinding media growth sustainable competitive advantage . Strong focus on cost . Maintain stable margins reductions . Build on our leading market . Deliver capacity expansions positions . Replenish and add lower in Canada and Peru Priorities cost ore reserves . Capitalise on improving . Complete roll out of next outlook including increasing . Maintain portfolio and generation SAG ball demand and lower FX infrastructure flexibility – . Further cost reductions and option value . Strong focus on cost efficiencies reductions . Anti-dumping opportunities

For personal use only use personal For Debt reduction continues to be a key priority

32 Mining Consumables

A growth business with stable margins and a sustainable competitive advantage . Good visibility of new projects and mine expansions . Majority of copper and gold customers positioned low on cost curve . Expect to win at least strong market share of grinding media growth . ~7% CAGR FY14 – FY19 estimated grinding media demand growth for North

and South America1 For personal use only use personal For Cilegon, Indonesia

1 Calculated August 2014, Moly-Cop Management top down/bottom up assessment incorporating Wood Mackenzie study. 33 Mining Consumables

Strengthening competitive advantage “40ktpa new capacity” Commissioned August 2013 . Roll out of next generation SAG ball progressing to plan – strong customer support • Lima, Peru Q2 FY14 • Kansas City, USA Q2 FY15 • Waratah, Australia Q2 FY15 • Kamloops, Canada Q4 FY15 • Mejillones, Chile Q1 FY16 Lima, Peru . Capacity expansions on time and budget – extending capacity advantage • Kamloops, Canada (120kt) – completion end FY15 • La Joya, Peru (175kt) – completion end FY16 • Business well placed to meet demand over medium

term For personal use only use personal For

Source: Moly-Cop June 2014 (estimates)

34 Mining re-design

A sustainable low cost, cash positive business in a low price environment

. Simplified product offer (single fines and single lump products) . Average grade ~59% Fe Simplification of . ~9Mtpa (~60% fines, 40% lump) operating model . Single point of blending at Inner Harbour . Reduced overhead structure . Consolidate all port operations within inner harbour Maximise utilisation . Inner harbour capacity ~11Mtpa of existing . Outer harbour operations on care and maintenance – ~7Mtpa infrastructure latent capability . Lift additional magnetite concentrate to ~600kt1 for blending . Tier 1 and 2 Chinese steel mills, with regional diversity Retain close . Strong support from contract customers relationships with . Moving to rolling 12 month agreements customers . Targeting mix ~70% contract, ~30% spot shipments

For personal use only use personal For Cash positive business in FY16 after re-design

1 Underpinned by MBR Magnetite Ore Reserves reported in Arrium’s 2014 Reserves & Resources statement (prepared by a Competent Person under JORC 35 2012). Reserves and resources are as at 30 June 2014 and are reviewed annually in accordance with the company’s normal practice. 2 Expected based on iron ore prices and FX at Monday 16 February 2015, and targeted cost base; excludes restructuring and other one-off costs. Mining re-design

Indicative MBR financial profile post re-design

A$/t US$/t

1 FY16 Consensus iron ore price (dmt) 90 72 (62% CFR Index)

Arrium realised price (dmt) 79 63 (~88% of 62% CFR index, AUD:USD 80c - FY16 analyst consensus1)

Average loaded cash cost2 (wmt) 37 29

Average total cash cost (dmt) (CFR China)3 57 46

Arrium realised price LESS average total cash cost 22 18 For personal use only use personal For

1 Analyst consensus based on forecasts as at January 2015. 2 Includes $2/t related to addition of 600kt of magnetite concentrate. 36 3 Excludes capitalised costs (infrastructure, pre-stripping and mining licences) and depreciation and amortisation charges in respect of those costs, excludes working capital movement over the period. Steel

Improvement in key drivers of earnings Domestic Building Activity Approvals . Domestic sales volumes1 • 1H15 volumes up 8% on 2H14 • ~80% of sales base from Construction sector • Solid pipeline of new construction projects – Housing construction (particularly high rise dwellings) – Government funded infrastructure . AUD/USD • A key driver of margins • Sensitivity – each 1c change in the AUD/USD FX rate is worth indicatively ~$6-$8 million2 EBIT p.a.

• Continued to decline post 1H15 For personal use only use personal For

1 Includes internal steel despatches. Excludes billet and slab sales. 37 2 Based on 1H15 raw material costs, volumes and Asian USD margins. Steel

. USD scrap to coal spread • SE Asian scrap based EAF producers a driver of domestic prices • ~1.2Mtpa of total Arrium steel production is coal based from Whyalla steelworks • USD scrap to USD coal spread is favourable

. USD South East Asian margins (margin over scrap) • Significant factor in domestic prices • SE Asian margin fell to historic low of ~US$90/t in 1H15 – Improvement towards end 1H15 – lower scrap prices • SE Asian rebar prices remain at historic lows • Domestic price impact lags ~3 months • 10 year average SE Asian margin ~US$200– For personal use only use personal For 220/t

38 Steel

Increasing leverage to improved outlook Employee and contractor numbers . Accelerated cost reductions well advanced • $30 million in FY15 from labour initiatives commenced in FY14 • Additional FY15 - Further labour and overhead reductions - Site rationalisations

- Operational cost and freight savings Source: Arrium

- Raw material usage and sourcing For personal use only use personal For

39 Outlook

Mining Consumables . Continued strong demand for grinding media, particularly in North and South America, underpinned by: • High levels of copper and gold production • Deteriorating head grades . Modest improvement in rail wheel sales expected . 2H15 earnings to benefit from: • Grinding media sales growth

• On-going stable margins For personal use only use personal For

40 Outlook

Mining . Demand for seaborne iron ore to remain strong . Prices to remain subject to weaker supply/demand balance . Continuing negative sentiment and uncertainty over timing and extent of any recovery . Re-design transition – 2H15 estimates • Sales volumes ~5Mt (~12Mt FY15) • Grade 59 – 60% Fe • Mix: ~70% fines, ~30% lump • Loaded cash cost (on ship)1 ~A$44 – 46/wmt • 2H15 cost reductions ~$25 million, lower oil prices and freight rates • First ores from IKMA expected end March 15 quarter

. Re-design expected to be completed end FY15 – cash flow positive in FY162 For personal use only use personal For

1 Includes mining, crushing, beneficiation, road haulage and transshipping costs. Excludes capitalised costs (infrastructure, pre-stripping and mining licences) and depreciation, amortisation charges in respect of those costs, royalties, sales and marketing and corporate costs. Excludes Southern Iron capital 41 costs to be expensed through the Mining transition period. 2 Expected based on iron ore prices and FX at Monday 16 February 2015, and targeted cost base; excludes restructuring and other one-off costs. Outlook

Steel . Ongoing weakness in international and domestic steel markets, but domestic construction activity continuing to improve from low base . Earnings in 2H15, particularly Q4 expected to benefit from improvement in key drivers • Increased sales volumes • Sustained lower AUD/USD • Improvement in SE Asian steel margins • Further reduction in cost base . In Recycling, earnings in 2H15 expected to be impacted by significant fall in ferrous and non

ferrous prices from Q2 FY15 For personal use only use personal For

42 Outlook

. 2H15 Group underlying earnings expected to be greater than 1H15 • Stronger earnings expected in Mining Consumables and Steel • Cost reduction program weighted to 2H15 . More specific quantitative guidance not appropriate at this time due to level of uncertainty around: • Iron ore prices • FX • Scrap prices and SE Asian margins • Level of domestic demand . Significant variance and/or volatility in above can materially impact earnings and

cash flow For personal use only use personal For

43 Summary

. Earnings impacted by ~40% decline in iron ore market price . Mining business re-design underway – cash flow positive FY161 . Mining Consumables – strong performance and outlook . Steel – improvement in key drivers of earnings . Further reduction in company cost base – increased leverage . FY15 divestment proceeds target exceeded with Ropes sale

. Continuing focus on debt reduction For personal use only use personal For

1 Expected based on iron ore prices and FX at Monday 16 February 2015, and targeted cost base; excludes restructuring and other one-off costs. 44 For personal use only

TITLE TEXT Appendix For personal use only use personal For 1H15 safety performance

4.0 Lost Time Injury Frequency Rate (LTIFR) Medical35.0 Treatment Injury Frequency Rate (MTIFR) 3.7 3.5 3.5 30.0 29.6

3.0 3 25.0 24.5 2.6 2.5 21.5 20.0

2.0 1.9 1.8 1.8 1.7 1.7 15.8 1.6 1.6 15.0 1.5 14.2 1.4 1.3 1.3 12.1 1.2 11.7 11.3 10.0 1.0 0.9 9.1 8.3 8.1 7.4 7.0 6.0 0.5 5.0 5.3 5.4

0.0 0.0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 1H15 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 1H15 Per million hours worked Per million hours worked

A key element of our Safety effort has been improving our capability to recognise, For personal use only use personal For assess and manage high consequence as well as high frequency risks

47 1H15 business tonnage

Half-Year ended 31 December Dec-144 Dec-134 Dec-124 Dec-11 Dec-10 Dec-09 Dec-08 Dec-071 Dec-06 Dec-05 Mt Mt Mt Mt Mt Mt Mt Mt Mt Mt

Despatches - external Iron Ore Iron ore lump 2.00 2.13 1.42 1.29 1.52 1.50 0.77 1.32 Iron ore fines 4.58 3.99 2.00 1.84 1.54 1.68 1.41 0.57 Total lump & fines 6.58 6.12 3.42 3.13 3.06 3.18 2.18 1.89

Pellets, other ore and by products2 0.20 0.20 0.28 0.19 0.31 0.22 0.36 0.34

Mining Consumables3 0.61 0.59 0.60 0.55 0.19 0.19 0.17 0.14 Mining Consumables - internal despatched 0.03 0.02 0.04 0.05 0.05 0.05 0.02 -

Steel Manufacturing 0.57 0.56 0.40 0.57 0.51 0.51 0.60 0.66 0.48 0.46 Distribution 0.55 0.49 0.64 0.72 0.65 0.65 0.81 0.83 0.66 0.64 Total Steel 1.12 1.05 1.04 1.29 1.16 1.16 1.41 1.49 1.14 1.10

Recycling Ferrous - external 0.24 0.23 0.19 0.44 0.51 0.36 0.39 0.39 Ferrous - internal 0.38 0.40 0.42 0.44 0.47 0.47 0.48 0.38 Ferrous 0.62 0.63 0.61 0.88 0.98 0.83 0.87 0.77 Non-ferrous 0.12 0.11 0.11 0.12 0.13 0.08 0.08 0.08 Total Recycling 0.74 0.74 0.72 1.00 1.11 0.91 0.95 0.85

Raw steel production Waratah 0.10 0.12 0.13 0.11 0.12 0.11 0.13 0.09 AltaSteel 0.13 0.13 0.14 0.15 - - - - Total Mining Consumables 0.23 0.25 0.27 0.26 0.12 0.11 0.13 0.09 Whyalla 0.54 0.54 0.58 0.52 0.54 0.56 0.54 0.59 0.59 0.56 Sydney Steel Mill 0.22 0.16 0.17 0.17 0.20 0.21 0.26 0.31 0.28 0.24 Laverton 0.24 0.27 0.28 0.26 0.25 0.26 0.29 0.27 - - Total Steel 1.00 0.97 1.03 0.95 0.99 1.03 1.09 1.17 0.88 0.80 1.23 1.22 1.30 1.21 1.11 1.14 1.23 1.26 0.88 0.80 For personal use only use personal For Total raw steel production 1 Tonnages for Dec-07 reported for raw steel production and steel despatches include the SSX businesses as if they were part of the Arrium Group from 1 July 2007. All other production and despatch statistics presented above are actual. 2 Ore by products include dolomite, centrix, filter cake and pellet chips. 3 Includes scrap sales. 48 4 Excludes discontinued operations. Pre-2005 tonnage information can be found on Arrium's website. Mining re-design

~27% reduction in loaded cash cost

Targeted average loaded cash cost1 post re-design Across the board cost savings. Includes: . Rail ~27% . Haulage . Mining . Port

1 FY14 Loaded cash FY16 Targeted 1 cost hematite average 2

loaded cash cost2 For personal use only use personal For

1 Includes mining, crushing, beneficiation, road haulage and transshipping costs. Excludes capitalised costs (infrastructure, pre-stripping & mining licences), 49 depreciation & amortisation charges in respect of those costs, royalties, sales & marketing and corporate costs. 2 FY16 Targeted average loaded cash cost is A$37/wmt with the inclusion of 600kt of magnetite concentrate. Mining re-design

~20% reduction in total cash cost

Targeted total cash cost (CFR China)1 post re-design A$/dmtFY16 Targeted 80 ~20% loaded cash cost = $37/wmt 60 2 3 13 2 40 71 2 57 20 35

0 FY16 Targeted Magnetite Freight3 Royalties Overheads Wet to Dry FY16 Targeted 4 FY14 Hematite concentrate2 Total Cash Loaded Cash Cost

Cost For personal use only use personal For

1 Includes loaded cash cost, royalties, sale and marketing and corporate costs, adjustments for moisture content and freight, based on current market levels. Excludes capitalised costs (infrastructure, pre-stripping and mining licences) and depreciation and amortisation charges in respect of those costs, excludes working capital movement over the period. 2 Addition of 600kt of magnetite concentrate adds $2/t to loaded cash cost. 50 3 Freight includes current Pilbara C5 x 1.4 and impact of weighted average of Arrium’s COAs and translated to AUD at 82c FX. 4 FY14 reported total cash cost (CFR China) of $73/dmt included $2/t related to magnetite overheads. Mining re-design

~30% reduction in capital expenditure FY16-19

. FY16 – 19 capital plan reduced by ~$200 million1 or ~30% . Average FY16 – 19: ~$8/t 2,3,4 . FY16: ~$13/t4

For personal use only use personal For 1 Includes PPE, mine development (including capitalised stripping) and exploration. Hawks Nest and Monarch Stage 2 removed from capital plan. 2 Based on current operations, revised business plan and forecast sales. Underpinned by MBR Hematite Reserves & Beneficiation Stockpiles Reserves in 2014 Reserves & Resources statement (prepared by a Competent Person under JORC 2012). Reserves and resources are as at 30 June 2014 and are reviewed annually in accordance with the company’s normal practice. 3 Capitalised stripping cost FY16 – FY19 ~$1/t 51 4 Includes PPE, mine development (including capitalised stripping). Excludes exploration. Includes hematite only. Magnetite capital expenditure FY16-19 is ~$30 million per year across the plan. Mining restructuring costs

. Southern Iron contractor break fees and costs: • Discussions ongoing with contractors to mitigate costs • Total costs yet to be finalised and expected to be spread over ~2.5 years – remainder of term • Estimated cash impact of restructuring costs in FY15 ~$70 million • Targeting payback <1 year1 . Workforce reduction: • ~200 FTEs (~30%)

• Southern Iron contractor reduction ~380 Southern Iron, SA For personal use only use personal For

1 Based on full restructuring cash costs over ~2.5 years. 52 Arrium FX exposure

Exposure to movements in AUD vs USD1 . Direct impact: 1c change in AUD/USD = ~$8-11 million2 EBIT impact (annualised) . Indirect impact: 1c change in AUD/USD = ~$7-10 million3 EBIT impact (annualised) . USD debt acts as natural hedge against FX exposure on USD net assets • Change in USD debt offset by change in

value of USD assets For personal use only use personal For

1 Based on 2H FY15 annualised. 2 Based on impact of USD iron ore sales, translation of overseas earnings (Mining Consumables and Recycling), impact on Recycling Australia’s margins, 53 particularly offset by USD purchases of coal and alloys in Steel. 3 Indicative indirect impact on continuing businesses, which assumes constant raw material prices and demand levels. Grinding media – forecast projects

Additional grinding media demand ~460ktpa by FY18 (North & South America)

Country Forecast Copper & Gold Projects Chile • CODELCO MMH – commenced operations • Caserones – commenced operations • Sierra Gorda – commenced operations • Vale Brazil Expansion – commenced operations Imperial metals • BHPB Expansion – under construction Ktsult Thompson Creek Peru • Toromocho –commenced operations New Prosperity Eleonore Harper Creek • Cerro Verde expansion – under construction Magnetation • Constancia – under construction Mt Hope Morenci Expansion • Las Bambas – under construction Rosemont New Cananea • Cuajone/Toquepala expansions New Cananea Cobre Panama Canada • Thompson Creek - Mt Milligan, commenced operations Frisco Exp. • Goldcorp – Eleonore, commenced operations Vale • Imperial Metals – Red Chris, Commissioning Las Bambas expansion Toromocho • Avanti – Kitsult Constancia Cerro Verde • Yellowhead – Harper Creek Cuajone Toquepala Sierra Gorda BHPB USA • Freeport – Morenci Expansion, commenced MMH Expansion • Hudbay – Rosemont Caserones • General Moly – Mt Hope

Mexico/ • Baja – Boleo, commenced operations For personal use only use personal For Central • Grupo Mexico – New Cananea, under construction America • Minera Frisco Expansions • First Quantum – Cobre Panama, under construction 54 Moly-Cop’s capacity advantage

. Strategy of building capacity ahead of forecast market demand . Secures ‘first mover’ advantage . Current expansion projects secure longer-term in-region position

Moly-Cop South America – Capacity1 Moly-Cop North America – Capacity1 1200 1000 All Others - South America All Others - North America Moly-Cop South America 1000 Moly-Cop North America 800

800 600 600 400 400

200 200 Installed Capacity Installed Capacity (ktpa) Installed Capacity Installed Capacity (ktpa)

0 0

For personal use only use personal For Source: Moly-Cop

* FY14 based on forecast estimates and includes current planned expansions. 55 1 Estimates.

Mining Consumables – CRUspi Longs Index For personal use only use personal For

56 Anti-Dumping – inefficient process

Rod in Coil (Wire Rod Rebar – AltaSteel Structurals Rebar CASES for Mesh) Canada Korea, Malaysia, Korea, Taiwan, Thailand, Indonesia, Taiwan, Export countries Singapore, Spain, China, Korea, Turkey Japan Turkey Thailand, Turkey, Taiwan Application lodged 26/08/13 24/02/2014 8/08/2014 24/04/2014 Investigation initiated 24/10/2013 10/04/2014 17/10/2014 13/06/2014 Earliest date securities 23/12/2013 9/06/2014 16/12/2014 11/09/2014 (PAD) (Actual 14/03/14) (Actual – none yet) (Actual – none yet) Statement of essential 17/07/2014 1/03/2015 21/03/2015 26/09/2014 facts Final report to Minister 30/10/2014 15/04/2015 4/05/2015 10/12/2014 Minister's decision 20/10/2014 15/05/2015 3/06/2015 9/01/2015 expected Final dumping determination 10/12/14 Duties up to 20% Late - yet to reach Status Yet to reach PAD stage Injury decision 9/01/15 imposed PAD stage Duties up to 41% Time taken >1 year ~1 year to date ~5 mths to date ~8 mths

. Regulation announced December 14 to address “minor modifications” used to circumvent

dumping duties (e.g. addition of alloys such as boron) – yet to be implemented For personal use only use personal For

57 Steel major projects – current or awarded

VIC QLD . Webb Dock Maritime Package . 480 Queen St Tower . Tullamarine Airport Car Park . Apartments West End . Chadstone Shopping Centre . Yeppean South . T4 Melbourne Airport . South Coast University Hospital . 699 Bourke Street . Caulfield Village Redevelopment SA . ATO Box Hill . Adelaide Convention Centre . Monash Medical Hospital Car Park . 35 Dalmore Park NSW . Monash University . Barangaroo Precinct . Pacific Highway Upgrade WA . North West Rail Link . Roy Hill Package Three . Darling Harbour LIVE . Crown Towers . Centrium Chatswood . Old Treasury Building . Toplace, Mascot . Perry Lakes Development . The Ribbon, Darling Harbour . Arthur Street, North Sydney

For personal use only use personal For . 161 Sussex Street

58 Government Budget – Infrastructure ~$16bn New Infrastructure Projects – mostly roads (historically steel intensive and positive for reinforcing)

. NSW $2.9bn . SA $1.9bn • West Sydney road development supporting • North South Corridor ($0.9bn) Badgery’s Creek airport development ($1.7bn) • Goodwood & Torrens ($0.2bn) • Other new projects ($1.2bn) • Other new projects ($0.8bn)

. Vic $3.2bn . Other States & Territories $1.2bn • M80 & other new projects ($3.2bn) • TAS ($0.5bn) • East West Link ($5.3bn) • NT ($0.5bn) • ACT ($0.2bn) . Qld $4.4bn • Warrego Highway ($0.5bn) . $300M toward the Inland Rail Project • Other projects ($3.9bn) case – Brisbane to Melbourne freight – 599km new rail and 426km of upgrade. . WA $2.5bn • Perth freight – Kewdale to Fremantle Port $0.9bn . Asset Recycling $5bn – dependent on • Other new projects $1.6bn State asset sales. (apply for 15% of

For personal use only use personal For investment)

59 Steel key markets Steel Domestic Sales by Market Segment

FY14 . ~80% of Steel revenue is driven by construction . Residential, non-residential and engineering construction (incl mining investment) drives demand for reinforcing bar and wire, rod for mesh, structural pipe, HRS and rail . Agriculture drives demand for rural wire, rural posts and rural pipe FY13 products . Mining production drives demand for grinding bar which is feed for grinding media . Manufacturing has limited exposure to automotive and manufacturing For personal use only use personal For segments

1H15 summary of facilities For personal use only use personal For

1 As at 31 December 2014. 2 USD and CAD denominated facilities converted to AUD at closing rate of 0.8183 and 0.9503 respectively 61 1H15 financial overview

Reconciliation of statutory to underlying results1

1H15 1H14 TOTAL OPERATIONS $m $m

Statutory net (loss)/profit after tax (1,493) 220 Add back significant items, after tax Restructuring 34 Impairment 1,332 1 Tax and other adjustments 136 (24)

Underlying net (loss)/profit after tax (22) 201 For personal use only use personal For

1 Full details of this reconciliation can be found in the Appendix to this presentation. 62 1H15 financial overview

Reconciliation of income tax expense Half year ended 31 December Statutory Underlying1 2014 2013 2014 2013 $m $m $m $m Total (loss)/profit before tax (1,417) 255 (79) 260

Prima facie income tax (benefit)/expense calculated at 30% (425) 77 (24) 78 Tax effect of permanent differences Research and development allowance (9) (10) (9) (10) Adjustments in respect of income tax of previous years 24 - - - Adjustments to deferred tax assets (derecognition of previously recognised tax losses) 39 - - - Unrecognised tax benefit relating to asset impairment 385 - - - Non-deductible goodwill impairment 16 - - - Capital gains non-taxable (7) (8) (7) (8) Deductible foreign currency items (14) (4) (14) (4) Other items (2) 6 (1) 6 Difference in overseas tax rates (2) (3) (2) (3) Income tax expense/(benefit) excluding MRRT 5 58 (57) 59 Effective tax rate excluding MRRT (0%) 23% 72% 23% Write off of MRRT deferred tax balances 70 (24) - - Total income tax expense/(benefit) 75 34 (57) 59

Effective tax rate including MRRT (5%) 13% 72% 23% For personal use only use personal For

1 Underlying profit before tax excludes restructuring, transaction costs and asset impairments. 63

Market conditions and external factors For personal use only use personal For

1H15 financial overview For personal use only use personal For

66 Historical data – profit and loss underlying

Half-year ended 31 December 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 14/13 $m $m $m $m $m $m $m $m $m $m % chg Sales revenue 3,218.7 3,642.5 3,404.4 3,797.1 3,315.1 2,973.6 4,127.6 3,218.3 2,134.3 1,988.8 (11.6%) EBITDA 189.0 503.4 254.6 238.6 315.3 297.8 498.5 288.4 218.0 203.5 (62.5%) Depreciation, amortisation and impairment (221.4) (181.0) (134.9) (102.6) (100.6) (98.7) (98.0) (86.1) (48.1) (47.4) 22.3% EBIT (32.4) 322.4 119.7 136.0 214.7 199.1 400.5 202.3 169.9 156.1 (110.1%) Finance costs (46.8) (62.0) (58.2) (62.2) (46.0) (44.6) (101.6) (67.0) (26.3) (29.4) (24.5%) Profit before tax (79.2) 260.4 61.5 73.8 168.7 154.5 298.9 135.3 143.6 126.7 (130.4%) Tax (expense)/benefit 57.2 (59.3) (8.7) 6.0 (41.2) (34.3) (75.1) (37.6) (39.2) (34.5) (196.5%) Non-controlling interests (0.4) (0.5) (1.8) (2.9) (3.3) (1.2) (8.7) (4.3) (6.2) (8.1) (20.0%)

Net profit after tax (22.4) 200.6 51.0 76.9 124.2 119.0 215.1 93.4 98.2 84.1 (111.2%) EPS (cents) - weighted average1 (1.0) 13.9 3.9 5.8 9.4 9.0 24.5 11.8 17.3 15.0 (107.2%) ROFE (%) (1.3%) 11.1% 3.8% 4.2% 7.3% 7.3% 14.2% 7.6% 15.2% 15.1% -12.4pts Dividends (cents/share) 0.0 6.0 2.0 3.0 6.0 5.0 6.0 8.0 8.0 7.0 (100.0%)

Reconciliation of underlying NPAT to statutory NPAT: Half-year ended 31 December 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 $m $m $m $m $m $m $m $m $m $m Net profit after tax - underlying (22.4) 200.6 51.0 76.9 124.2 119.0 215.1 93.4 98.2 84.1 Non-trading items, net of tax - Restructuring costs (2.9) (3.2) (9.6) (14.0) - (1.6) (2.1) (26.3) - - - Impairment (1,331.6) (0.7) (474.0) (129.5) - - - (3.5) - - - Transaction costs - - - (16.0) (8.0) ------Tax adjustments & other items (136.2) 23.7 (15.0) 9.0 - - 15.3 - - -

Net profit after tax - statutory (1,493.1) 220.4 (447.6) (73.6) 116.2 117.4 228.3 63.6 98.2 84.1 For personal use only use personal For

1 Earnings per share for December 2013 has been restated as a result of the Placement and Entitlement Offers in September and October 2014. Previous periods have not been restated. 67 Pre-2005 results can be found on Arrium's website. Historical data – key balance sheet items

Balance Sheet 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 As at 31 December $m $m $m $m $m $m $m $m $m $m Cash 181.7 240.5 326.1 224.2 141.5 88.5 29.8 84.2 20.8 37.0 Receivables 591.9 613.2 743.3 817.1 753.7 695.1 851.3 925.2 605.3 559.0 Inventory 1,078.2 1,332.5 1,486.8 1,524.3 1,687.1 1,270.4 1,727.7 1,308.5 888.8 840.2 Property, plant and equipment & Mine Development 2,494.3 3,173.3 3,090.8 2,883.8 2,671.6 2,449.4 2,493.2 2,397.3 1,527.1 1,273.6 Intangibles 1,789.8 2,046.2 2,273.9 2,824.5 2,687.8 2,037.5 2,134.7 2,085.2 218.2 230.6 Other assets 270.1 516.0 320.5 391.2 253.4 188.6 284.0 198.8 115.1 117.9 TOTAL ASSETS 6,406.0 7,921.7 8,241.4 8,665.1 8,195.1 6,729.5 7,520.7 6,999.2 3,375.3 3,058.3

Interest-bearing liabilities 1,611.3 2,215.9 2,480.8 2,466.1 2,033.1 1,058.4 2,299.6 2,069.8 773.9 697.0 Payables 1,183.0 1,031.0 935.0 898.8 847.0 596.4 832.0 883.7 586.9 503.7 Provisions 483.9 555.2 598.3 513.3 456.9 383.0 403.9 398.8 212.7 203.9 Other liabilities 165.6 242.3 393.6 389.3 378.5 309.5 328.7 284.1 230.6 215.3 TOTAL LIABILITIES 3,443.8 4,044.4 4,407.7 4,267.5 3,715.5 2,347.3 3,864.2 3,636.4 1,804.1 1,619.9

NET ASSETS 2,962.2 3,877.3 3,833.7 4,397.6 4,479.6 4,382.2 3,656.5 3,362.8 1,571.2 1,438.4

Contributed equity 3,707.1 2,962.8 3,774.3 3,767.0 3,753.3 3,738.8 2,949.5 2,913.6 1,143.4 1,118.2 Non-controlling interests 4.9 3.5 2.3 58.4 56.9 59.8 65.6 60.7 61.6 64.0 Retained earnings & reserves (749.8) 911.0 57.1 572.2 669.4 583.6 641.4 388.5 366.2 256.2 TOTAL EQUITY 2,962.2 3,877.3 3,833.7 4,397.6 4,479.6 4,382.2 3,656.5 3,362.8 1,571.2 1,438.4

Funds Employed 4,391.8 5,852.7 5,988.4 6,639.5 6,371.2 5,352.1 5,926.3 5,348.4 2,324.3 2,098.4 Gearing % 32.6% 33.8% 36.0% 33.8% 29.7% 18.1% 38.3% 37.1% 32.4% 31.5% Interest cover (times EBITDA, 12m rolling basis) 6.2 8.1 5.2 5.4 7.5 4.2 5.2 4.4 6.7 6.8

NTA/Share $ 0.4 1.3 1.2 1.1 1.3 1.7 1.7 1.4 2.3 2.0 For personal use only use personal For

1 Pre-2005 financial information can be found on Arrium's website. 68 Historical data – statutory cash flow*

Half-year ended 31 December 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 $m $m $m $m $m $m $m $m $m $m

Profit after tax (1,492.7) 220.9 (445.8) (70.7) 119.5 118.6 237.0 67.9 104.4 92.2

Depreciation, amortisation and impairment 1,345.5 182.0 608.9 232.1 100.6 98.7 96.2 91.1 48.1 47.4 Non-cash items (37.5) (20.5) (9.7) 21.0 (7.4) (8.2) (22.2) 12.9 (2.4) 0.2 Other changes in assets and liabilities including working capital 277.2 (38.0) 21.6 4.8 (55.9) 114.5 (273.4) (25.6) (59.3) (46.1) Operating cash flow 92.5 344.4 175.0 187.2 156.8 323.6 37.6 146.3 90.8 93.7

Capital expenditure (263.7) (209.6) (306.0) (166.5) (98.8) (70.2) (102.6) (160.9) (174.9) (110.9) Free Cash Flow (171.2) 134.8 (131.0) 20.7 58.0 253.4 (65.0) (14.6) (84.1) (17.2)

Investment expenditure - - - (317.2) (992.9) (0.9) (2.9) (425.0) (2.1) (4.0)

Asset Sales 58.1 117.4 76.0 1.4 0.9 0.5 32.3 1.0 3.9 0.5 Other 1.6 ------(0.4) 1.9

Operating & investing cash flow (111.5) 252.2 (55.0) (295.1) (934.0) 253.0 (35.6) (438.6) (82.7) (18.8) For personal use only use personal For

* The financial measures displayed in this table are based on statutory results. Pre-2005 financial information can be found on Arrium's website. 69 Historical data – Mining Consumables

Half Year ended 31 December 2014 2013 2012 2011 2010 $m $m $m $m $m

Total revenue/income 793.8 786.5 793.9 768.4 338.9

EBITDA 100.6 100.4 100.4 81.3 31.2

EBIT 77.1 76.4 81.1 65.2 21.1

Sales Margin (%) 9.7% 9.7% 10.2% 8.5% 6.2%

Assets 2,620.2 2,519.4 2,295.3 2,312.8 2,421.0

Funds Employed 2,183.5 2,139.4 1,916.1 1,975.0 2,052.2

Return on funds employed (%) 7.3% 7.3% 8.3% 6.7% 2.7%

Employees (number) 1,948 2,063 1,994 1,976 1,836

External tonnes despatched (Mt)1 0.58 0.56 0.57 0.53 0.19

Internal tonnes despatched (Mt) 0.03 0.02 0.04 0.05 0.05

Steel tonnes produced (Mt) 0.23 0.25 0.27 0.26 0.12 For personal use only use personal For

1 Excludes scrap sales. 70 Historical data – Mining

Half Year ended 31 December 2014 2013 2012 2011 2010 2009 2008 2007 $m $m $m $m $m $m $m $m

Total revenue/income 511.8 877.4 372.5 421.0 465.3 331.1 291.7 222.3

EBITDA 76.6 423.1 132.1 186.3 289.7 126.1 68.9 92.1

EBIT (64.6) 323.5 90.6 170.7 275.5 113.0 56.6 89.1

Sales Margin (%) (12.6%) 36.9% 24.3% 40.5% 59.2% 34.1% 19.4% 40.1%

Assets 1,170.0 2,171.2 1,865.5 1,427.8 849.6 794.8 713.3 479.2

Funds Employed 614.7 1,688.2 1,541.0 1,196.1 735.7 708.0 620.8 427.0

Return on funds employed (%) (11.4%) 39.7% 13.2% 34.6% 75.8% 32.4% 20.9% 41.7%

Employees (number) 583 585 565 504 338 352 334 128

External lump & fines iron ore sales (Mt) 6.58 6.12 3.42 3.13 3.06 3.18 2.18 1.89

Pellets, other ore and by products (Mt)1 0.20 0.20 0.28 0.19 0.31 0.22 0.36 0.34 For personal use only use personal For

1 Ore by products include dolomite, centrix, filter cake and pellet chips. 71 Historical data – Steel

Half Year ended 31 December 2014 20132 20122 20112 20101 20091 20081 20071 20061 20051 $m $m $m $m $m $m $m $m $m $m

Total revenue/income 1,498.9 1,438.1 1,545.5 1,644.8 2,396.4 2,774.2 4,079.9 2,953.2 2,275.6 2,071.4

EBITDA 16.0 30.1 33.8 (17.4) (18.3) 196.7 474.0 194.3 217.6 188.1

EBIT (35.0) (21.2) (14.7) (67.8) (82.2) 123.0 401.7 120.5 174.0 144.7

Sales Margin (%) (2.3%) (1.5%) (1.0%) (4.1%) (3.4%) 4.4% 9.8% 4.1% 7.6% 7.0%

Assets 1,847.8 2,154.0 2,472.4 2,662.3 4,013.5 5,064.6 5,690.6 5,366.8 3,100.3 2,778.7

Funds Employed 1,309.6 1,619.6 1,939.2 2,187.0 3,221.1 4,238.2 4,738.1 4,299.1 2,389.6 2,161.8

Return on funds employed (%) (4.9%) (2.5%) (1.4%) (5.0%) (4.4%) 5.5% 17.8% 7.2% 15.3% 13.9%

Employees (number) 4,986 5,163 5,350 5,461 6,942 7,937 9,035 9,071 6,499 6,253

External tonnes despatched (Mt)3 1.12 1.05 1.04 1.29 1.16 1.16 1.41 1.49 1.14 1.10

Steel tonnes produced (Mt)3 1.00 0.97 1.03 0.95 0.99 1.03 1.09 1.17 0.88 0.80 For personal use only use personal For

1 Steel historical information has been derived by adding together the Manufacturing and Distribution segments. Transactions between these segments have not been eliminated. 2 Steel information for 2013, 2012 & 2011 excludes transactions between entities previously in the Manufacturing and Distribution segments and excludes discontinued operations. 72 3 December 2013 and 2012 tonnage has been restated to exclude discontinued operations. Historical data – Recycling

Half Year ended 31 December 20141 20131 20121 20111 2010 2009 2008 2007 $m $m $m $m $m $m $m $m

Total revenue/income 600.5 547.0 574.5 631.7 714.4 492.1 685.9 527.4

EBITDA 9.3 3.2 (9.0) 2.1 3.2 3.8 (29.0) 10.4

EBIT 4.3 (2.1) (15.2) (5.0) (5.3) (3.6) (37.0) 5.7

Sales Margin (%) 0.7% (0.4%) (2.6%) (0.8%) (0.7%) (0.7%) (5.4%) 1.1%

Assets 359.7 372.9 617.3 659.8 647.0 614.0 671.3 628.3

Funds Employed 288.6 295.9 538.4 581.2 567.5 548.9 604.8 536.5

Return on funds employed (%) 2.9% (1.4%) (5.4%) (1.7%) (1.8%) (1.3%) (12.1%) 2.1%

Employees (number) 658 628 715 823 1,017 962 1,010 1,054

Ferrous tonnes - external (Mt)2 0.24 0.23 0.19 0.44 0.51 0.36 0.39 0.39

Ferrous tonnes - internal (Mt)2 0.38 0.40 0.42 0.44 0.47 0.47 0.48 0.38

Non-ferrous tonnes (Mt)2 0.12 0.11 0.11 0.12 0.13 0.08 0.08 0.08 For personal use only use personal For

1 Excludes discontinued operations. 2 December 2013 and 2012 tonnage has been restated to exclude the results of Recycling US as discontinued operations. 73 1H15 statutory vs underlying results

For personal use only use personal For 1 Comprising the results of Australian Tube Mills, Merchandising and US Recycling businesses. Excludes intercompany transactions. Statutory EBITDA and statutory net profit after tax including intercompany transactions are $3.3m loss and $0.7m loss respectively. 2 Redundancies from organisational changes and other direct expenditure associated with business restructures. 3 Comprising inventory write down in Mining and impairment of intangible assets, mine development expenditures and property, plant and equipment in Mining, Mining Consumables, Steel and Recycling and discontinued operations. 4 Prior period tax adjustments and write off of deferred tax assets including the impact of the repeal of the Mineral Resource Rent Tax 74 5 Break fees associated with early termination of cross currency and interest rate swaps and other non-recurring costs. 1H14 statutory vs underlying results

Operating cash flow - - 344.4 34.5 - - 378.9 For personal use only use personal For

1 Comprising the results of Australian Tube Mills, Merchandising and US Recycling businesses. Excludes intercompany transactions. Statutory EBITDA and statutory net profit after tax including intercompany transactions are $10.4m loss and $4.1m loss respectively. 2 Redundancies from organisational changes and other direct expenditure associated with business restructures. 3 Impairment of property, plant and equipment and intangible assets associated with Mining Consumables, Steel, US Recycling and Merchandising businesses. 75 4 Net impact of Mineral Resource Rent Tax.

ARRIUM LIMITED ABN 63 004 410 833

FINANCIAL REPORT for the half-year ended 31 December 2014

For personal use only use personal For Arrium Limited – Half-Year Financial Report

Contents

Directors’ Report 3

Income Statement 5

Statement of Comprehensive Income 6

Balance Sheet 7

Cash Flow Statement 8

Statement of Changes in Equity 9

Notes to the Financial Statements 11

Directors’ Declaration 29

Independent Auditor’s Review Report 30

Corporate Directory 32

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Arrium Limited – Half-Year Financial Report

Directors’ Report

Your Directors submit their report for the half-year ended 31 December 2014.

Directors The following persons were Directors of Arrium Limited during the half-year and up to the date of this report unless stated otherwise: J C R Maycock (appointed a Director 19 August 2014, elected as Chairman 17 November 2014) R B Davis C R Galbraith, AM P G Nankervis A G Roberts G J Smorgon, AM R Warnock P J Smedley (resigned as Chairman and as a Director 17 November 2014) D A Pritchard (resigned as a Director 17 November 2014)

Principal activities The principal activities of Arrium Limited (“Arrrium” or “the Company”) and its subsidiaries (“the Group”) during the half-year were: mining and supplyy of iron ore and other steelmaking raw materials to steel mills internationally and in Australia; manufacture and supply of mining consumables products with key market positions globally; manufacture and distribution of steel long products;; and recycling of ferrous and non-ferrous scrap metal.

Review of operations A review of operations of the Group during the half-year and the results of those operations is attached. Net loss after tax attributable to members of AArrium as parent entity for the half-year was $1,493.1m (2013: profit of $220.4m).

Rounding of amounts The Company is of the kind referred to in Australian Securities and Investments Commission (ASIC) Class Order 98/100. In accordance with that Class Order, amounts in the report have been rounded off to the nearest one hundred thousand dollaars, or where the amount is $50,000 or less, zero, unless specifically stated to be otherwise.

Lead Auditor’s Independence Declarationn The Lead Auditor’s Independence Declaration is set out on page 4 and forms parrtt of the Directors’ Report for the half-year ended 31 December 2014.

Signed in accordance with a resolution of the Directors. For personal use only use personal For

Jeremy Maycock Andrew Roberts Chairman Managing Director & Chief Executive Officer Sydney 18 February 2015

Arrium Limited – Half-Year Financial Report

LEAD AUDITOR’S INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE CORPORATIONS ACT 2001

To the Directors of Arrium Limited

I declare that, to the best of my knowledge and belief, in relation to the review for the half-year ended 31 December 2014 there have been:

(a) no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the review; and

(b) no contraventions of any applicable code of professional conduct in relation to the review.

KPMG

A W Young Partner

Sydney 18 February 2015

For personal use only use personal For

KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG Liability limited by a scheme approved under International Cooperative (“KPMG International”), a Swiss entity. Professional Standards Legislation. 4

Arrium Limited – Half-Year Financial Report

Income Statement FOR THE HALF-YEAR ENDED 31 DECEMBER

CONSOLIDATED 2014 2013 Notes $m $m Sales revenue 3,141.3 3,358.6 Cost of sales (3,009.4) (2,635.8) Gross profit 131.9 722.8 Other revenue 12.2 18.7 Other income 45.9 51.3 Operating expenses, including impairment losses (1,505.9) (409.5) Finance costs (49.4) (62.0) Share of net profit/(loss) of investments accounted for using the equity method 1.3 (0.2) (Loss)/Profit from continuing operations before income tax 4 (1,364.0) 321.1

Income tax expense 6 (88.9) (54.9) (Loss)/Profit from continuing operations after tax (1,452.9) 266.2 Loss from discontinued operations after tax (39.8) (45.3) Net (loss)/profit for the period (1,492.7) 220.9

Net (loss)/profit for the period is attributable to: Non-controlling interests 0.4 0.5 Equity holders of the parent (1,493.1) 220.4 (1,492.7) 220.9

The accompanying notes form an integral part of the financial statements. For personal use only use personal For

Arrium Limited – Half-Year Financial Report

Statement of Comprehensive Income FOR THE HALF-YEAR ENDED 31 DECEMBER

CONSOLIDATED 2014 2013 Notes $m $m

(Loss)/Profit after tax (1,492.7) 220.9

Items that may be reclassified subsequently to profit or loss:

Cash flow hedges: - net losses taken to equity (2.5) (3.4) - transferred to profit or loss (2.9) 4.1 - transferred to initial carrying amount of hedged items (0.1) 0.6

Fair value hedges: - reclassified to amortised cost 1.6 - - transferred to profit or loss (0.9) -

Currency translation differences: - net investment hedges (187.3) (52.4) - exchange fluctuations on overseas net assets 231.4 67.5

Items that may not be reclassified subsequently to profit or loss: Actuarial (losses) /gains on retirement benefit obligation (3.1) 15.6

Other comprehensive income, net of tax 36.2 32.0

Total comprehensive (loss)/income (1,456.5) 252.9

Total comprehensive (loss)/income attributable to: Equity holders of the parent (1,457.4) 252.3 Non-controlling interests 0.9 0.6

(1,456.5) 252.9

(Loss)/Earnings per share attributable to the ordinary equity holders of the parent: Basic (loss)/earnings per share (cents per share) 8 (68.79) 15.28 Diluted (loss)/earnings per share (cents per share) 8 (68.79) 15.16

The accompanying notes form an integral part of the financial statements.

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Arrium Limited – Half-Year Financial Report

Balance Sheet AS AT CONSOLIDATED 31 December 30 June 2014 2014 Notes $m $m ASSETS Current assets Cash and cash equivalents 181.7 650.5 Receivables 591.6 627.4 Derivative financial instruments 10.4 8.0 Inventories 1,078.2 1,234.5 Current tax assets 5.5 15.1 Other current assets 8.9 10.1 Disposal groups and assets held for sale 84.1 124.9 Total current assets 1,960.4 2,670.5

Non-current assets Receivables 0.3 - Investments accounted for using the equity method 13.6 13.3 Derivative financial instruments 15.1 19.5 Other financial assets 1.0 1.0 Other non-current assets 16.3 22.6 Property, plant and equipment 2,361.3 2,672.2 Mine development expenditure 133.0 539.4 Other intangibles and goodwill 1,789.8 1,964.1 Deferred tax assets 115.2 99.7 Total non-current assets 4,445.6 5,331.8 TOTAL ASSETS 6,406.0 8,002.3

LIABILITIES Current liabilities Payables 1,182.7 1,175.0 Derivative financial instruments 14.3 51.2 Interest-bearing liabilities 161.2 120.6 Current tax liabilities 13.4 13.5 Provisions 268.6 333.6 Disposal groups and liabilities held for sale 72.5 87.2 Total current liabilities 1,712.7 1,781.1

Non-current liabilities Payables 0.3 0.3 Derivative financial instruments 4.4 3.6 Interest-bearing liabilities 1,450.1 2,237.6 Deferred tax liabilities 61.0 47.7 Provisions 215.3 201.1 Total non-current liabilities 1,731.1 2,490.3 TOTAL LIABILITIES 3,443.8 4,271.4 NET ASSETS 2,962.2 3,730.9

EQUITY Contributed equity 9 3,707.1 2,969.0 (Accumulated losses)/Retained earnings (755.4) 778.7

Reserves 5.6 (20.8) For personal use only use personal For Parent interests 2,957.3 3,726.9 Non-controlling interests 4.9 4.0 TOTAL EQUITY 2,962.2 3,730.9

The accompanying notes form an integral part of the financial statements.

Arrium Limited – Half-Year Financial Report

Cash Flow Statement FOR THE HALF-YEAR ENDED 31 DECEMBER

CONSOLIDATED 2014 2013 $m $m Inflows/(Outflows) Cash flows from operating activities Receipts from customers 3,561.7 3,846.0 Payments to suppliers and employees (3,400.8) (3,415.2) Interest received 1.2 1.5 Interest and other finance costs paid (46.3) (58.2) Income taxes paid (23.3) (29.7) Net operating cash flows 92.5 344.4

Cash flows from investing activities Purchases of property, plant and equipment, mine development expenditure and other intangibles (263.7) (209.6) Proceeds from sale of property, plant and equipment 58.1 88.2 Proceeds from sale of businesses - 29.2 Dividend received from associate entity 1.6 - Net investing cash flows (204.0) (92.2)

Cash flows from financing activities Proceeds from issue of shares 727.7 - Purchase of shares for equity based compensation (2.6) (2.1) Net repayment of borrowings (1,058.5) (420.7) Loan to related party - (0.5) Repayment of principal of finance leases (0.6) (0.3) Dividends paid (41.0) (33.1) Net financing cash flows (375.0) (456.7)

Net decrease in cash and cash equivalents (486.5) (204.5)

Cash and cash equivalents at the beginning of the half- 650.5 438.3 year Effect of exchange rate fluctuations on cash and cash equivalents held 17.7 6.7 Cash and cash equivalents at the end of the half-year 181.7 240.5

The accompanying notes form an integral part of the financial statements.

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Arrium Limited – Half-Year Financial Report

Share-based payments expense - - - - (4.0) (4.0) - (4.0) Shares issued under Institutional Placement and Entitlement Offer 754.1 - 754.1 - - 754.1 - 754.1 Transaction costs arising on share issue, net of tax (18.7) - (18.7) - - (18.7) - (18.7) Purchase of shares for equity based compensation - (2.6) (2.6) - - (2.6) - (2.6) Vested shares - 5.3 5.3 - (5.3) - - - Dividends paid - - - (41.0) - (41.0) - (41.0)

Total transactions with equity holders 735.4 2.7 738.1 (41.0) (9.3) 687.8 - 687.8 Balance at 31 December 2014 3,721.0 (13.9) 3,707.1 (755.4) 5.6 2,957.3 4.9 2,962.2

The accompanying notes form an integral part of the financial statements.

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Arrium Limited – Half-Year Financial Report

Statement of Changes in Equity NON- CONTROLLING TOTAL ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT INTERESTS EQUITY CONTRIBUTED EQUITY Employee Total Total Issued compensation contributed Retained Total parent capital shares equity earnings reserves interests CONSOLIDATED $m $m $m$m $m $m $m $m Balance at 1 July 2013 3,803.6 (25.6) 3,778.0 (128.0) (1.7) 3,648.3 2.9 3,651.2 Net profit for the period -- -220.4 - 220.4 0.5 220.9 Other comprehensive income -- -- 31.9 31.9 0.1 32.0 Total comprehensive income for the period, net of tax -- -220.4 31.9 252.3 0.6 252.9 Transactions with equity holders: Share capital reduction (831.8) - (831.8) 831.8 - - - - Share-based payments expense - - - - 8.4 8.4 - 8.4 Purchase of shares for equity based compensation - (2.1) (2.1) - - (2.1) - (2.1) Vested shares - 11.1 11.1 - (11.1) - - - Dividends paid - - - (40.7) - (40.7) - (40.7) Shares issued under dividend reinvestment plan 7.6 - 7.6 - - 7.6 - 7.6 Total transactions with equity holders (824.2) 9.0 (815.2) 791.1 (2.7) (26.8) - (26.8) Balance at 31 December 2013 2,979.4 (16.6) 2,962.8 883.5 27.5 3,873.8 3.5 3,877.3

The accompanying notes form an integral part of the financial statements. For personal use only use personal For

Arrium Limited – Half-Year Financial Report

Notes to the financial statements

1. Basis of Preparation of Half-Year Financial Report 12 2. Significant Accounting Estimates and Judgements 12 3. Segment Information 13 4. Significant Income Statement Items 18 5. Impairment of Non-current Assets 18 6. Income Tax 21 7. Dividends 22 8. Earnings Per Share 23 9. Contributed Equity 24 10. Held For Sale Assets and Discontinued Operations 25 11. Financial instruments 26 12. Contingencies 28 13. Events after Balance Sheet Date 28

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Arrium Limited – Half-Year Financial Report

1. BASIS OF PREPARATION OF HALF-YEAR FINANCIAL REPORT

The financial report includes the condensed financial statements for the consolidated entity consisting of Arrium Limited and its subsidiaries. This condensed general purpose financial report for the half-year ended 31 December 2014 has been prepared in accordance with Accounting Standard AASB 134 “Interim Financial Reporting” and the Corporations Act 2001. This half-year financial report does not include all the notes of the type normally included in an annual financial report. Accordingly, this report is to be read in conjunction with the annual report for the year ended 30 June 2014 and any public announcements made by Arrium Limited during the half-year in accordance with the continuous disclosure requirements of the Corporations Act 2001. The accounting policies adopted in the preparation of the interim financial statements are consistent with those followed in the preparation of the Group’s annual financial statements for the year ended 30 June 2014, except for the adoption of new standards and interpretations as of 1 July 2014, noted below:

AASB 2012-3 Amendments to Australian Accounting Standards – Offsetting Financial Assets and Financial Liabilities (applicable to annual reporting periods beginning on or after 1 January 2014) AASB 2012-3 adds application guidance to AASB 132 Financial Instruments: Presentation to address inconsistencies identified in applying some of the offsetting criteria of AASB 132, including clarifying the meaning of “currently has a legally enforceable right of set-off” and that some gross settlement systems may be considered equivalent to net settlement. There was no impact of the amendment to the standard on the Group’s financial statements.

AASB 2013-3 Amendments to AASB 136 – Recoverable Amount Disclosures for Non-Financial Assets (applicable to annual reporting periods beginning on or after 1 January 2014) AASB 2013-3 amends the disclosures required by AASB 136 Impairment of Assets to remove the requirement to disclose recoverable amount when a cash generating unit (CGU) contains goodwill or indefinite lived intangible assets but there has been no impairment, to require disclosure of the recoverable amount of an asset or CGU when an impairment loss has been recognised or reversed and to require detailed disclosure of how the fair value less costs of disposal has been measured when an impairment loss has been recognised or reversed. There was no significant impact of the amendment to the standard on the Group’s financial statements. The Group has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective.

2. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts in the financial statements. Management continually evaluates its judgements and estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses based on historical experience and on other various factors it believes to be reasonable

under the circumstances. Actual results may differ from the judgements, estimates and assumptions. For personal use only use personal For

Arrium Limited – Half-Year Financial Report

3. SEGMENT INFORMATION Mining Total HALF-YEAR ENDED 31 DECEMBER 2014 Mining1 Consumables1 Steel1 Recycling1 segments $m $m $m $m $m Segment revenues Sales to external customers 508.3 762.0 1,419.1 451.9 3,141.3 Intersegment revenue - 27.2 38.1 141.8 207.1 Other revenue/income from external customers 3.5 4.6 41.7 6.8 56.6 Total segment income 511.8 793.8 1,498.9 600.5 3,405.0 Unallocated and discontinued operations Discontinued operations 135.9 Other revenue/income2 9.4 Intersegment eliminations3 (270.4) Consolidated Income 3,279.9

Segment share of profit of investments accounted for using the equity method - 1.1 - - 1.1 Unallocated 0.2 Consolidated share of profit of equity accounted investments 1.3

Segment earnings before interest, tax, depreciation and amortisation 76.6 100.6 16.0 9.3 202.5 Depreciation and amortisation (141.2) (23.5) (51.0) (5.0) (220.7) Segment earnings before interest and tax (64.6) 77.1 (35.0) 4.3 (18.2) Restructuring costs4 (4.2) Write down of inventory to net realisable value5 (205.9) Impairment6 (1,124.1) Other (1.3) Finance costs7 (49.4) Unallocated and discontinued operations Discontinued operations (3.2) Other8 (12.7) Intersegment eliminations3 1.7 Consolidated loss before tax9 (1,417.3) Tax expense (75.4) For personal use only use personal For Consolidated loss after tax (1,492.7)

Arrium Limited – Half-Year Financial Report

3. SEGMENT INFORMATION (CONTINUED) Mining Total AS AT 31 DECEMBER 2014 Mining1 Consumables1 Steel1 Recycling1 segments $m $m $m $m $m Segment assets 1,170.0 2,611.5 1,847.8 359.7 5,989.0 Investments accounted for using the equity method 8.7 8.7 Unallocated and discontinued operations Tax assets 120.7 Cash and cash equivalents 181.7 Discontinued operations 89.7 Other assets 53.6 Intersegment eliminations3 (37.4) Consolidated assets 6,406.0

Segment liabilities 555.3 436.7 538.2 71.1 1,601.3 Unallocated and discontinued operations Tax liabilities 74.5 Interest-bearing liabilities 1,611.3 Discontinued operations 72.7 Other liabilities 119.6 Intersegment eliminations3 (35.6) Consolidated liabilities 3,443.8

Other segment information Capital expenditure 188.1 42.4 28.9 3.0 262.4 Unallocated capital expenditure 1.3

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Arrium Limited – Half-Year Financial Report

3. SEGMENT INFORMATION (CONTINUED) Mining Total HALF-YEAR ENDED 31 DECEMBER 2013 Mining1 Consumables1 Steel1 Recycling1 segments $m $m $m $m $m Segment revenues Sales to external customers 855.0 747.91,359.7 396.0 3,358.6 Intersegment revenue 0.1 28.1 39.0 150.1 217.3 Other revenue/income from external customers 22.3 10.5 39.4 0.9 73.1 Total segment income 877.4 786.5 1,438.1 547.0 3,649.0 Unallocated and discontinued operations Discontinued operations 348.0 Other revenue/income2 (3.2) Intersegment eliminations3 (276.9) Consolidated Income 3,716.9

Segment share of profit of investments accounted for using the equity method - 0.7 - - 0.7 Unallocated (0.9) Consolidated share of (loss) of equity accounted investments (0.2)

Segment earnings before interest, tax, depreciation and amortisation 423.1 100.430.1 3.2 556.8 Depreciation and amortisation (99.6) (24.0) (51.3) (5.3) (180.2) Segment earnings before interest and tax 323.5 76.4 (21.2) (2.1) 376.6 Unallocated and discontinued operations Restructuring costs4 (4.6) Finance costs (62.0) Impairment6 (1.0) Discontinued operations (8.2) Other8 (41.9) Intersegment eliminations3 (4.1) Consolidated profit before tax9 254.8 Tax expense (33.9)

Consolidated profit after tax 220.9 For personal use only use personal For

Arrium Limited – Half-Year Financial Report

3. SEGMENT INFORMATION (CONTINUED) Mining Total AS AT 31 DECEMBER 2013 Mining1 Consumables1 Steel1 Recycling1 segments $m $m $m $m $m Segment assets 2,171.2 2,511.4 2,154.0 372.9 7,209.5 Investments accounted for using the equity method - 8.0 - - 8.0 Unallocated and discontinued operations Tax assets 210.1 Cash and cash equivalents 240.5 Discontinued operations 207.4 Other assets 80.7 Intersegment eliminations3 (34.5) Consolidated assets 7,921.7

Segment liabilities 483.0 380.0 534.4 77.0 1,474.4 Unallocated and discontinued operations Tax liabilities 72.6 Interest-bearing liabilities 2,215.9 Discontinued operations 111.3 Other liabilities 198.2 Intersegment eliminations3 (28.0) Consolidated liabilities 4,044.4

Other segment information Capital expenditure 143.8 33.4 28.2 1.8 207.2 Unallocated capital expenditure 2.4 Consolidated capital expenditure 209.6 1 Segment results are equivalent to the underlying results of each segment and are comprised of continuing operations only. The results of discontinued operations form part of unallocated. 2 Other income of unallocated includes foreign exchange losses reported within net foreign exchange gains in other income at the consolidated group. 3 Intersegment eliminations include eliminations between the reportable segments and discontinued operations. 4 Restructuring costs related to redundancies from organisation changes and other direct expenditures associated with restructuring comprising Mining $0.4m, Mining Consumables $0.1m and the reversal of previously raised restructuring provisions in Recycling $0.7m. The remaining balance is unallocated. In 2013, restructuring costs related to Mining Consumables $2.6m and reversal of previously raised restructuring provisions in Recycling $0.4m, with the remaining balance unallocated. 5 Related to Mining low grade ore stocks. 6 Impairment of property, plant and equipment, mine development expenditure and intangibles in Mining $960.1m, Steel $117.1m, Mining Consumables $39.4m, Recycling $12.7m, unallocated

For personal use only use personal For $0.1m (Note 5) and remaining balance discontinued operations. In 2013, impairment related to property, plant and equipment in Mining Consumables $0.5m, Steel $4.2m with the remaining balance discontinued operations. 7 Includes $2.6m of break fees associated with early termination of cross currency and interest rate swaps. 8 Includes corporate costs and other provisions and costs. 9 Consolidated profit/(loss) before tax includes a loss of $53.3m (2013: loss of $66.3m) relating to discontinued operations.

Arrium Limited – Half-Year Financial Report

3. SEGMENT INFORMATION (CONTINUED)

Identification of reportable segments The Group has identified its operating segments based on internal reporting that is reviewed and used by the MD&CEO and the executive management team in assessing performance and in determining the allocation of resources. The operating segments are identified by management based on the nature of the products provided, with each operating segment representing a strategic business unit that offers different products and serves different markets. The reportable segments are based on operating segments including those that meet the aggregation criteria as determined by the similarity of the products produced and sold as these are the sources of the Group’s major risks and have the most effect on the rates of return. Mining The Mining segment’s operations are located in South Australia; the Middleback Ranges, approximately 60 kilometres from the Whyalla township, and Southern Iron, which includes the Peculiar Knob tenement, located approximately 90 kilometres from the Cooper Pedy township. The Mining segment exports hematite iron ore to external customers and supplies both pelletised magnetite iron ore and some hematite lump iron ore to Arrium’s integrated steelworks at Whyalla. On 23 January 2015, the Group announced the redesign of its Mining segment including the mothballing of its Southern Iron operations. Refer to Note 13. Mining Consumables The Mining Consumables segment comprises Moly-Cop grinding media businesses, Moly-Cop Ropes, Waratah Steel Mill and AltaSteel, with businesses located across North America, South America, Indonesia and Australia. The Mining Consumables segment supplies resource companies with a range of key mining consumables, including grinding media, wire ropes and rail wheels. On 6 February 2015, the Group announced that it has entered into an agreement for the sale of its Wire Ropes business to Bekaert, a Belgium based company for $90.0 million. Accordingly, the Wire Ropes business has been classified as held for sale from that date. The sale is expected to completed before 30 June 2015.

Arrium has reviewed the recoverable amount of the Wire Ropes assets and associated goodwill as at 31 December 2014. Following this review, $39.4 million of goodwill allocated to the business has been impaired in the 31 December 2014 financial statements as an adjusting event. Refer to Note 5.

Steel The Steel segment manufactures billet at its integrated steelworks in Whyalla and two electric arc furnaces. The manufacturing operations also include several rolling and wire mills. The Whyalla steelworks produces common and special grade billet as feedstock for the downstream Rod and Bar mills as well as producing rail and structural steel products for sale to external customers. Billets produced from Whyalla and the Sydney and Laverton electric arc furnaces are rolled into a wide range of long products for sale or further processing. The Steel segment also distributes a diverse range of manufactured and externally sourced steel and metal products including structural steel sections, steel plate, angles, channels, reinforcing steel and carbon products to the construction, manufacturing and resource markets. Recycling The Recycling segment supplies steelmaking raw materials to domestic and international steel For personal use only use personal For mills, as well as non-ferrous metals for recycling. The Recycling segment operates in 8 countries through a combination of physical operations in the form of collection sites and trading offices that supply raw materials to foundries, smelters and steel mills in Australia and globally.

Arrium Limited – Half-Year Financial Report

3. SEGMENT INFORMATION (CONTINUED)

Intra/intersegment transfers The Mining segment sells pelletised and lump iron ore to the Steel segment. The Recycling segment sells raw materials to the Steel and Mining Consumables segment. All sales between segments are conducted on an arm’s length basis, with terms and conditions no more favourable than those which it is reasonable to expect when dealing with an external party. Unallocated Investments accounted for using the equity method, cash and cash equivalents, current taxes, deferred taxes, borrowings, derivative financial instruments and certain financial assets and liabilities are not allocated to the segments as they are managed on a group basis.

4. SIGNIFICANT INCOME STATEMENT ITEMS CONSOLIDATED 2014 2013 $m $m

(Loss)/profit before income tax includes the following specific expenses:

Depreciation of property, plant and equipment 116.8 111.0 Amortisation of mine development expenditure 81.2 44.4 Amortisation of finite-life intangible assets 23.5 25.6 Restructuring costs1 4.2 2.3 Inventory write down to net realisable value2 208.5 1.0 1 Restructuring costs related to redundancies from organisational changes and other direct expenditure associated with business restructures. 2 Includes write down of Mining low grade ore stocks of $205.9m to net realisable value.

5. IMPAIRMENT OF NON-CURRENT ASSETS

The Group assesses impairment of all assets at each reporting date by evaluating conditions specific to the Group and to the particular asset or cash generating unit (CGU) that may lead to impairment. These include business performance, technology, economic and political environments and future business expectations. If an impairment indicator exists, the recoverable amount of the asset is determined. Given the current uncertain economic environment, management considered that the indicators of impairment were significant enough, and as such, these assets have been tested for impairment in this financial period.

As a result of testing, asset impairment of $960.1m has been recognised in the Mining CGU primarily relating to the impact of low iron ore prices and the mothballing of Southern Iron, $13.0m in the Recycling group of CGUs and $117.0m in the Long Products Supply Chain CGU within the Steel group of CGUs primarily due to the impact of a delayed recovery in SE Asian steel margins on forecast future cash flows.

As a result of the post balance date announcement of the sale of the Wire Ropes business which forms part of the Mining Consumables group of CGUs (see Note 13), goodwill within the Mining Consumables group of CGUs has been allocated to the Wire Ropes business and impaired to its recoverable amount as at 31 December 2014 by $39.4 million.

For personal use only use personal For The above impairments have been recognised in “Operating Expenses” in the Income Statement.

Arrium Limited – Half-Year Financial Report

5. IMPAIRMENT OF NON-CURRENT ASSETS (CONTINUED)

(a) Summary of impairment losses recognised during the half year period

Impairment losses recognised during the half year ended 31 December by category of assets are as follows: CONSOLIDATED 2014 2013 $m $m Goodwill 52.4 - Other intangible assets - (0.1) Mining tenement rights 219.8 - Property, plant and equipment 361.2 4.8 Exploration rights 20.1 - Mine development expenditure 475.9 - 1,129.4 4.7

Impairment losses recognised during the half year ended 31 December by CGUs/groups of CGUs are as follows: CONSOLIDATED 2014 2013 $m $m Mining 960.1 - Mining Consumables 39.4 0.5 Steel 117.1 4.2 Recycling 12.7 - Unallocated 0.1 - 1,129.4 4.7

(b) Carrying amount of goodwill and intangibles with indefinite useful lives allocated to each of the CGUs

For the purpose of impairment testing, goodwill and/or indefinite life intangibles have been allocated to the Group’s CGUs/groups of CGUs which represent the lowest level within the Group at which they are monitored for internal management purposes. The aggregate carrying value of goodwill and indefinite life brand names according to the operating segments are as follows: CONSOLIDATED Indefinite life As at 31 December 2014 Goodwill intangibles Total $m $m $m Mining -- - Mining Consumables 1,306.0 54.4 1,360.4 Steel 190.9 - 190.9 Recycling 163.7 - 163.7 Unallocated - 0.7 0.7 1,660.6 55.1 1,715.7

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Arrium Limited – Half-Year Financial Report

5. IMPAIRMENT OF NON-CURRENT ASSETS (CONTINUED)

CONSOLIDATED Indefinite life As at 30 June 2014 Goodwill intangibles Total $m $m $m Mining - 17.4 17.4 Mining Consumables 1,251.6 48.2 1,299.8 Steel 190.9 - 190.9 Recycling 176.7 - 176.7 Unallocated - 0.7 0.7 1,619.2 66.3 1,685.5 (c) Key assumptions used in value in use calculations The recoverable amount of the CGUs/groups of CGUs to which goodwill and/or indefinite life brand names have been allocated has been determined based on a value in use calculation using the cash flow projections based on the five-year forecast approved by the Board. Cash flows beyond the five-year period are extrapolated using the estimated growth rates stated below. DISCOUNT TERMINAL RATE (POST-TAX) GROWTH RATE As at 31 As at 30 As at 31 As at 30 December 2014 June 2014 December 2014 June 2014 CGU/group of CGUs %% % % Mining 9.8 9.8 N/A N/A Mining Consumables 10.1 10.2 3.0 3.0 Steel 9.6 9.6 2.5 2.5 Recycling 9.4 9.5 2.5 2.5

The calculation of value in use is most sensitive to the following assumptions:  Discount rates  Gross margins  Raw materials price fluctuation  Market conditions  Growth rate used to extrapolate cash flows beyond the forecast period. Discount rates – discount rates reflect management’s estimate of the time value of money and the risks specific to each CGU/group of CGUs that are not already reflected in the cash flows. In determining appropriate discount rates for each unit, regard has been given to a weighted average cost of capital of the entity as a whole and adjusted for country and business risk specific to the CGU. The Group has applied post-tax discount rates to discount the forecast future attributable post-tax cash flows. The equivalent pre-tax discount rates are as follows: Mining 12.7% (June 2014: 15.8%), Mining Consumables 13.0% (June 2014: 12.6%), Steel 11.5% (June 2014: 11.6%) and Recycling 11.6% (June 2014: 12.1%). Gross margins – the basis used to determine the value assigned to the margins in the CGUs are the actual margins achieved, adjusted for efficiency improvement as well as movements in input costs and international steel prices in line with external sources of information. Raw materials price fluctuation – values assigned to this key assumption are consistent with external sources of information except for Arrium owned mines, where the value assigned is in line with mining contracts and other cost escalators such as oil. Market conditions – assumptions on key domestic market segment activity including construction,

mining, agriculture and manufacturing are consistent with external sources of information. For personal use only use personal For Assumptions including GDP, CPI and wages escalation are consistent with external sources of information. Long-term forecast exchange rates are used which are consistent with external sources of information. Growth rate estimates – are based on published industry research and do not exceed the growth rate of the markets or country to which the CGUs/group of CGUs are dedicated.

Arrium Limited – Half-Year Financial Report

5. IMPAIRMENT OF NON-CURRENT ASSETS (CONTINUED)

(d) Sensitivity to changes in assumptions Any reasonably probable adverse movement in the assumptions used in projections for the Steel, Recycling, and Mining CGUs/groups of CGUs would result in further impairments. For the Mining Consumables group of CGUs, the actual recoverable amount based on the value in use calculation exceeds its carrying amount. Management recognises that the cash flow projections, discount and growth rates used to calculate value in use may vary to what they have estimated. Management notes the value in use estimate is particularly sensitive to changes in the terminal growth rate assumption, which if decreased to 1% would result in an impairment loss of $62.1m.

6. INCOME TAX (a) Reconciliation of income tax expense to prima facie tax payable

Half year ended 31 December CONSOLIDATED 2014 2013 $m $m (Loss)/Profit from continuing operations before income tax (1,364.0) 321.1 Loss from discontinued operations before income tax (53.3) (66.3) Total (loss)/profit before income tax (1,417.3) 254.8 Prima facie income tax (credit)/expense calculated at 30% (425.2) 76.5 Research and development allowance (9.1) (9.7) Capital gains non-taxable (6.9) (8.0) Difference in overseas tax rates (1.8) (3.4) Adjustments in respect of income tax of previous years 24.1 (0.1) Derecognition of previously recognised tax losses 39.0 - Unrecognised tax benefit relating to asset impairment 384.9 - Non-deductible goodwill impairment 15.8 - Deductible foreign currency items (13.8) (3.9) MRRT related taxation expense/(benefit) 70.2 (23.7) Other items (1.8) 6.2 Total taxation expense 75.4 33.9

CONSOLIDATED 2014 2013 $m $m Aggregate income tax expense/(benefit) is attributable to: Continuing operations 88.9 54.9 Discontinued operations (13.5) (21.0) 75.4 33.9

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Arrium Limited – Half-Year Financial Report

6. INCOME TAX (CONTINUED)

(b) Unrecognised deferred tax assets Deferred tax assets are recognised for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax asset that can be recognised, based upon the likely timing and the level of future taxable profits. Deferred tax assets have not been recognised in respect of the following items: CONSOLIDATED As at 31 As at 30 June December 2014 2014 $m $m Deductible temporary differences 384.9 - Tax losses 39.0 - Capital losses 57.9 76.9 481.8 76.9

7. DIVIDENDS The following dividends have been paid, declared or recommended since the end of the preceding financial year: On ordinary shares Dividend per ordinary $m cents December 2014 Final dividend for 30 June 2014, paid on 16 October 2014 41.0 3.0

December 2013 Final dividend for 30 June 2013, paid on 17 October 2013 40.7 3.0

Dividend not recognised at the end of the half-year No interim dividend was declared for the half-year ended 31 December 2014. The interim dividend declared for the half-year ended 31 December 2013 was $81.7m (6.0 cents per fully paid ordinary share).

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Arrium Limited – Half-Year Financial Report

8. EARNINGS PER SHARE The following reflects the earnings and share data used in the calculation of basic and diluted earnings per share: (a) Earnings Half year ended 31 December 2014 2013* $m $m

(Loss)/profit attributable to equity holders of the parent (1,493.1) 220.4 Add: Adjustment for employee compensation shares 1.0 (0.5) (Loss)/Earnings used in calculating basic and diluted earnings per share attributable to equity holders of the parent (1,492.1) 219.9

Net (loss)/profit for the period attributable to continuing operations (1,452.9) 266.2 Less: Non-controlling interests (0.4) (0.5) (Loss)/profit from continuing operations attributable to equity holders of the parent (1,453.3) 265.7 Add: Adjustment for employee compensation shares 1.0 (0.6) (Loss)/Earnings used in calculating basic and diluted earnings per share from continuing operations attributable to equity holders of the parent (1,452.3) 265.1

(b) Number of ordinary shares Number of shares Weighted average number of ordinary shares used in the calculation of basic earnings per share 2,169,091,659 1,438,499,246 Dilutive effect of employee compensation shares - 10,911,001 Weighted average number of ordinary shares used in the calculation of diluted earnings per share 2,169,091,659 1,449,410,247

(Loss)/Earnings per share attributable to the ordinary equity holders of the parent: Basic (loss)/earnings per share (cents per share) (68.79) 15.28 Diluted (loss)/earnings per share (cents per share) (68.79) 15.16

(Loss)/Earnings per share for (loss)/profit from continuing operations attributable to the ordinary equity holders of the parent: Basic (loss)/earnings per share (cents per share) (66.95) 18.43 Diluted (loss)/earnings per share (cents per share) (66.95) 18.28 * The 2013 basic earnings per share and diluted earnings per share have been restated as a result of the Placement and Entitlement offers in September and October 2014. This restatement has been made by adjusting the weighted average number of shares by an adjustment factor calculated in accordance with AASB133.

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Arrium Limited – Half-Year Financial Report

9. CONTRIBUTED EQUITY CONSOLIDATED As at 31 As at 30 June December 2014 2014 $m $m

Issued capital (a) 3,721.0 2,985.6 Employee compensation shares (b) (13.9) (16.6) Total contributed equity 3,707.1 2,969.0

(a) Issued capital Number of ordinary shares: 2,937,293,755 (June 2014: 1,366,183,142) Issued and paid-up 3,721.0 2,985.6

(b) Employee compensation shares Number of ordinary shares: 6,508,056 (June 2014: 4,969,280) Shares held in trust under equity-based compensation arrangements (13.9) (16.6)

Number of Value of ordinary shares ordinary shares $m

Movements in issued capital for the period On issue at the beginning of the period 1,366,183,142 2,985.6 Shares issued under Institutional Placement and Entitlement Offer 1,571,110,613 754.1 Transaction costs arising on share issue, net of tax - (18.7) On issue at the end of the period 2,937,293,755 3,721.0

Movements in employee compensation shares for the period Held in trust at the beginning of the period (4,969,280) (16.6) Shares purchased on-market (3,490,283) (2.6) Shares vested 1,951,507 5.3 Held in trust at the end of the period (6,508,056) (13.9)

On 26 September 2014, 762,542,673 ordinary shares were issued under the Institutional Entitlement Offer and 204,927,471 ordinary shares were issued under the Institutional Placement, at an issue price of $0.48 per share. On 17 October 2014, 603,640,469 ordinary shares were issued under the Retail Entitlement Offer at an issue price of $0.48 per share. Under the Entitlement offer, eligible shareholders were invited to participate on a pro-rate basis to their existing shareholdings by subscribing to 1 new Arrium shares for every 1 Arrium shares owned, at a price of $0.48 per share.

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Arrium Limited – Half-Year Financial Report

10. HELD FOR SALE ASSETS AND DISCONTINUED OPERATIONS Changes to the details of the operations held for sale and discontinued operations during the period are as follows:

Australian Tube Mills (ATM) The ATM business has met the classification as held for sale. The ATM business manufactures structural pipe and tube from facilities at Acacia Ridge, QLD and Newcastle, NSW. During the period, the company has progressed the sale process for the ATM business and expects the disposal to be effected within the next 12 months. Accordingly, at 31 December 2014 the ATM business continues to be classified as a discontinued operation.

Merchandising At 30 June 2013, the non-integrated Merchandising business met the criteria for classification as held for sale. The remaining business within the Merchandising portfolio as at 30 June 2014 was the Metpol business. During the six months to 31 December 2014, the Metpol business was exited and its assets sold. Accordingly, at 31 December 2014, the Merchandising business continues to be presented as a discontinued operation.

US Recycling The US Recycling operations were classified as held for sale at 30 June 2013. By 30 June 2014, the Maine and Florida businesses were sold. The company expects to complete the sale process for the remaining Virginia business during the next 12 months. Accordingly, at 31 December 2014, the US Recycling operations continue to be presented as discontinued.

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Arrium Limited – Half-Year Financial Report

11. FINANCIAL INSTRUMENTS Carrying amounts versus fair values The fair values of financial assets and financial liabilities, together with the carrying amounts in the balance sheet, are as follows: Carrying Fair value amount $m $m Current financial assets Cash and cash equivalents 181.7 181.7 Receivables 591.6 591.6 Derivative financial instruments Forward contracts – cash flow hedges 0.3 0.3 Forward contracts – held for trading 7.9 7.9 Forward contracts – net investment hedges 0.8 0.8 Option contracts – cash flow hedges 0.5 0.5 Interest rate swap contracts – fair value hedges 0.9 0.9 783.7 783.7

Non-current financial assets Receivables 0.3 0.3 Derivative financial instruments Interest rate swap contracts – fair value hedges 12.2 12.2 Interest rate swap contracts – cash flow hedges 0.4 0.4 Forward contracts – held for trading 2.5 2.5 Other financial assets 1.0 1.0 16.4 16.4

Current financial liabilities Payables 1,182.7 1,182.7 Derivative financial instruments Forward contracts – cash flow hedges 1.9 1.9 Forward contracts – held for trading 8.0 8.0 Option contracts – cash flow hedges 3.0 3.0 Interest rate swap contracts – cash flow hedges 1.4 1.4 Interest-bearing liabilities Finance lease 1.4 1.4 Unsecured US Private Placement – at amortised cost 159.8 164.9 1,358.2 1,363.3

Non-current financial liabilities Payables 0.3 0.3 Derivative financial instruments Forward contracts – held for trading 3.5 3.5 Interest rate swap contracts – cash flow hedges 0.9 0.9 Interest-bearing liabilities For personal use only use personal For Finance lease 9.7 9.7 Unsecured Bank loans 1,181.9 1,181.9 US Private Placement – at amortised cost 258.5 278.4 1,454.8 1,474.7

Arrium Limited – Half-Year Financial Report

11. FINANCIAL INSTRUMENTS (CONTINUED) Management assessed that cash and short-term deposits, trade receivables, trade payables, bank overdrafts and other current liabilities approximate their carrying amounts largely due to the short- term maturities of these instruments. Financial instruments carried at fair value The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for disclosure purposes. The Group uses various methods in estimating the fair value of a financial instrument. These comprise: Level 1: The fair value is calculated using quoted prices in active markets. Level 2: The fair value is estimated using inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices). Level 3: The fair value is estimated using inputs for the asset or liability that are not based on observable market data. The fair values of the financial instruments as well as the methods used to estimate the fair values are summarised below: As at 31 December 2014 As at 30 June 2014 Level 2 Total Level 2 Total $m $m $m $m Financial assets Forward contracts 11.5 11.5 9.0 9.0 Option contracts 0.5 0.5 1.9 1.9 Interest rate swaps 13.5 13.5 16.6 16.6 25.5 25.5 27.5 27.5

Financial liabilities Forward contracts 13.4 13.4 7.0 7.0 Options contracts 3.0 3.0 0.1 0.1 Interest rate swaps 2.3 2.3 5.0 5.0 Cross-currency interest rate swaps - - 42.7 42.7 18.7 18.7 54.8 54.8

For financial instruments not quoted in active markets, the Group uses valuation techniques such as present value techniques, comparison to similar instruments for which market observable prices exist and other relevant models used by market participants. These valuation techniques use both observable and unobservable market inputs. Financial instruments that use valuation techniques with only observable market inputs or unobservable inputs that are not significant to the overall valuation include interest rate swaps, cross-currency interest rate swaps and forward exchange contracts not traded on a recognised exchange. These instruments are included in Level 2. Transfer between categories The Group recognises transfers between levels of the fair value hierarchy as of the end of the reporting period during which the transfer has occurred. There were no transfers between categories during the period.

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Arrium Limited – Half-Year Financial Report

12. CONTINGENCIES Third party claims The Group has been involved from time to time in various claims and lawsuits incidental to the ordinary course of business, including claims for damages and commercial disputes relating to its products and services. Based on legal advice obtained, other than amounts already provided for in the accounts, the Directors do not expect any material liability to eventuate.

Taxation From time to time, the Company is subject to information requests, reviews, audits and investigations by tax authorities in the various jurisdictions in which the Group operates, including the Australian Taxation Office (“ATO”). The Company has now reached a settlement with the ATO regarding a dispute over amended assessments issued by the ATO in respect of a sale and leaseback transaction entered into by the Company in 2004. The matter has been fully resolved and no contingency is required in respect of that matter. All relevant amounts have been recognised as at 31 December 2014.

13. EVENTS AFTER BALANCE SHEET DATE On 23 January 2015, the Group announced the redesign of its Mining segment resulting from the substantial fall in iron ore prices, as well as increased uncertainty around the timing and extent of any price recovery. This includes the mothballing of its Southern Iron operations. No restructuring costs have been recognised in relation to the mothballing of Southern Iron as at 31 December 2014.

On 6 February 2015, the Group announced that it has entered into an agreement for the sale of its Wire Ropes business to Bekaert, a Belgium based company for $90.0 million. Accordingly, the Wire Ropes business has been classified as held for sale from that date. The sale is expected to completed before 30 June 2015.

There have been no other circumstances arising since 31 December 2014 that have significantly affected or may significantly affect: (a) the operations; (b) the results of those operations; or (c) the state of affairs of Arrium in future financial years.

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Arrium Limited – Half-Year Financial Report

Directors’ Declaration

In the opinion of the Directors of Arrium Limited (“the Group”):

(a) the consolidated financial statements and accompanying notes set out on pages 5 to 28 of the Group are in accordance with the Corporations Act 2001 (Cth), including:

(i) giving a true and fair view of the Group’s financial position as at 31 December 2014 and of its performance for the half-year ended on that date; and

(iii) complying with Australian Accounting Standard AASB 134 “Interim Financial Reporting” and the Corporations Regulations 2001;

(b) there are reasonable grounds to believe that the Group will be able to pay iits debts as and when they become due and payable.

Signed in accordance with a resolution of the Directors.

Jeremy Maycock Andrew Roberts Chairman Managing Director & Chief Executive Officer

Sydney 18 February 2015

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Independent Auditor’s Review Report

To the members of Arrium Limited

Report on the financial report We have reviewed the accompanying condensed half-year financial report of Arrium Limited, which comprises the consolidated balance sheet as at 31 December 2014, consolidated income statement and consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated cash flow statement for the half-year ended on that date, notes 1 to 13 comprising a summary of significant accounting policies and other explanatory information and the Directors’ declaration of the Group comprising the company and the entities it controlled at the half-year’s end or from time to time during the half-year.

Directors’ responsibility for the half-year financial report The Directors of the company are responsible for the preparation of the half-year financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the Directors determine is necessary to enable the preparation of the half-year financial report that is free from material misstatement, whether due to fraud or error.

Auditor’s responsibility Our responsibility is to express a conclusion on the half-year financial report based on our review. We conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity, in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the half-year financial report is not in accordance with the Corporations Act 2001 including: giving a true and fair view of the Group’s financial position as at 31 December 2014 and its performance for the half-year ended on that date; and complying with Australian Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001. As auditor of Arrium Limited, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report. A review of a half-year financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

For personal use only use personal For Independence In conducting our review, we have complied with the independence requirements of the Corporations Act 2001.

Conclusion Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the condensed half-year financial report of Arrium Limited is not in accordance with the Corporations Act 2001, including: (a) giving a true and fair view of the Group’s financial position as at 31 December 2014 and of its performance for the half-year ended on that date; and (b) complying with Australian Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001.

KPMG

A W Young Partner

Sydney 18 February 2015

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Corporate Directory

ACN 004 410 833

ABN 63 004 410 833

DIRECTORS Mr Jeremy C R Maycock (Chairman)

Mr R Bryan Davis

Mr Colin R Galbraith, AM

Mr Peter G Nankervis

Mr Andrew G Roberts (MD&CEO)

Mr Graham J Smorgon, AM

Ms Rosemary Warnock

COMPANY SECRETARY Ms Kara L Nicholls

REGISTERED OFFICE AND PRINCIPAL PLACE OF BUSINESS C/- Company Secretary, Arrium Limited Level 40, 259 George Street Sydney NSW 2000 Australia Telephone: +61 2 9239 6666 Facsimile: +61 2 9251 3042 Internet: www.arrium.com

SHARE REGISTRY Boardroom Pty Limited GPO Box 3993 Sydney NSW 2001 Australia

Telephone: 1300 131 856 or +61 2 9290 9688 Facsimile: +61 2 9279 0664 Email: [email protected] Internet: www.boardroomlimited.com.au

EXTERNAL AUDITOR

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AUSTRALIAN SECURITIES EXCHANGE LISTING Arrium Limited’s fully paid ordinary shares are quoted on the Australian Securities Exchange (ASX:ARI).