Annual review 2013 Annual review 2013 Overview 1

Message from the chairman and CEO

Dear shareholders, The Phase 2 expansion of the Liberia creating a stronger company, now expected to grow by 15% over project to a production capacity of the imperative is to capture the the next ten years, with much of Thank you for taking the time 15 million tonnes per annum sinter opportunities from a recovery. the growth expected to be in the to view ArcelorMittal’s 2013 feed is underway. The first sinter south-eastern US, where Calvert annual review. We are implementing a strategy feed production is expected at the is located. that leverages four distinctive and In recent years we have adapted end of 2015, replacing the Phase 1 valuable attributes which will enable The acquisition recently closed and our industrial footprint to new – 4 million tonnes per annum us to capture leading positions in the we are already working to integrate demand realities, intensified our direct-shipped operation. most attractive areas of the steel the plant into our existing supply efforts to control costs, and Net debt reduction has been an industry value chain, from mining at chain alongside NSSMC, with whom focussed on investing in our key important priority in recent years. one end to distribution and we have an excellent and proven franchise businesses. These We exceeded our target to reach first-stage processing at the other. partnership spanning some twenty initiatives addressed profound US$17 billion of net debt by the end years. Calvert will enable us to structural and macroeconomic These attributes are our global scale of the first half 2013, closing the enhance customer service in NAFTA, conditions that were challenging and scope, our unmatched technical year with net debt of US$16.1 optimizing our product flows and the performance of our company capabilities, our diverse portfolio of billion, the lowest level since the thus reducing logistics costs. as well as the broader sector. businesses, and, last but not least, merger that created ArcelorMittal. our financial capability. We are also seeking to capture I am happy to be able to report to Our medium-term net debt target recovery-related opportunities by you that these considerable efforts remains unchanged at US$15 billion. Our strategy focusses on three restarting selected steel growth are yielding results. 2013 has been a key areas: Cash flow from operations improved projects in our existing steel year of progress. We have made to US$4.3 billion. After capital • In steel, we aim to be the supplier business. In Brazil, we have strategic progress, we have made expenditure of US$3.5 billion, the of choice for customers and to re-started the first phase of the progress on profitability, and we business had free cash flow of grow in regional and product project at Monlevade, where during have made progress in strengthening US$0.8 billion. I want to highlight markets with attractive 2015 we expect to commission a the balance sheet. that even in very challenged markets fundamentals. In commodity new wire rod mill with additional Looking at financial and operational the company has continued to products we strive to minimise capacity of 1 million tonnes. performance, we set ourselves a generate positive free cash flow. costs, to reduce risks and to In a related project, we are also number of targets and objectives capture the potential of high- increasing rebar capacity at We set ourselves a new that we are making good progress demand market conditions. Juiz de Fora. management gains target of US$3 in meeting. billion and are on target to deliver • In mining, we aim to grow a At Dofasco in Canada, a key facility Our Ebitda1 in 2013 was US$6.9 this, achieving US$1.1 billion in world-class business by utilising for our NAFTA auto franchise, we billion - an underlying improvement annualised management gains over our financial strength and diverse restarted our project to expand and of 10.7% compared to 2012. Ebitda the year. Our management gains portfolio of assets, including the upgrade galvanising capacity by per tonne reached US$91/t in the are making a positive contribution demand provided by our steel 2015. And at Acindar, our Argentina fourth quarter – compared with to Ebitda. operations. We will invest to long products facility, our project to US$78/t in the fourth quarter of expand output at our best optimise and expand downstream Finally, health and safety remains 2012. We continue to have a mining assets. capacity by 2016 is underway. our highest priority; and here we also medium-term Ebitda per tonne The new rolling mill there will enable continue to make progress. The lost • Across all our operations, our aim target of US$150; and whilst there Acindar to optimise production at its time injury frequent rate (LTIFR), is to achieve best-in-class is still a gap to close, we are moving special bar quality rolling mill in Villa covering our own personnel as well competitiveness by leveraging in the right direction. Constitución, which in the future will as contractors, once again improved, our technical capabilities and our only manufacture products for the We reported a net loss for the year dropping to 0.8 from 1.0 in 2012. diverse portfolio of assets and automotive and mining industries. of US$2.5 billion, including US$1.5 This was ahead of our own internal businesses, which provide us billion of exceptional items. However target. Encouragingly, ArcelorMittal tremendous opportunities for Taken together, these projects are in the fourth quarter, stripping out is also one of the better performing benchmarking and best-practice expected to generate an average one-time items, we made a small companies in the industry; 114 out sharing. pre-tax return on capital of around profit. This further cemented our of 176 of World Steel Association 25% and have the potential to An excellent example of the view that the second half of 2012 members’ sites that have an LTIFR increase annual Ebitda by US$150 implementation of this strategy was was the low point of this cycle. of below 1 belong to ArcelorMittal. – 200 million. our acquisition of ThyssenKrupp’s A further acknowledgement of the Steel shipments increased by only rolling mill in Calvert, Alabama. We also have two important progress we have made was the 0.6% to 84.3 million tonnes due to We agreed with Nippon Steel & greenfield steel projects being recognition from the World Steel contraction in our core markets. Sumitomo Metal Corporation commissioned. Association for safety programmes However we continue to target an (NSSMC) to acquire 100% of at our plants in Lázaro Cárdenas in The first seamless pipe at our new increase in shipments to 95 million TK USA for a purchase price of Mexico and Unicon in Venezuela. seamless tube mill in Jubail was tonnes over the medium term. US$1,550 million, to be financed by successfully produced in November Despite this encouraging a combination of JV-level debt and On the mining side of the business, 2013, and certification is expected improvement, we know there is equity. This transaction will have a we are on track to reach our 2015 in the second quarter of the year, more to be done, particularly when minimal impact on ArcelorMittal’s capacity target of 84 million tonnes. after which commercial production it comes to reducing fatalities. consolidated net debt. We increased capacity by 10 million of API products can start. Our absolutely priority is to continue tonnes in 2013 and market priced This is one of the highest quality to drive further progress in this Our China automotive steel JV with iron-ore shipments also increased finishing lines in the world, capable regard until we reach and sustain our Hunan Valin, VAMA, is proceeding significantly by 22%. Ebitda was of producing the most advanced target of zero accidents. well and is expected to become positively impacted by higher high strength steels. Calvert is a operational in the second half of the marketable volumes and lower If the period since the onset of the strategically important and year. This is an important strategic costs, primarily at ArcelorMittal crisis has been marked by adapting complementary asset for our investment that will produce steel Mines Canada following the ramp to the changed environment and automotive franchise business. for high-end applications in the up to 24 million metric tonnes. The NAFTA automotive market is

1 Ebitda is defined as operating income plus depreciation, impairment expenses and exceptional items. Annual review 2013 Overview 2

Message from the chairman and CEO continued

automobile industry, supplying announced at our recent investor to the organisation and our ability Our final priority is employee international automakers and day, it has become clear that we to move swiftly to capture engagement. We employ 232,000 first-tier Chinese car manufacturers have additional stretch potential opportunities. Indeed, I am already people at our mines and plants as as well as their supplier networks for beyond our current growth plans seeing such benefits. well as a large number of the rapidly growing Chinese market. and at low capital intensity. We have contractors. In order for the Looking ahead, we expect the VAMA will extend our automotive identified additional potential at both company to deliver the optimum changes we have made to franchise to this fast-growing and ArcelorMittal Mines Canada and in results, we need and want our strengthen our business and important market. Liberia - both of which are well employees to feel motivated and improved economic conditions to placed in the lower half of the cost engaged, to understand why we Even as we are approving have a positive impact on curve - and will be studying these take the decisions we do, and to feel investments in our franchise steel performance in 2014. The opportunities further. they have the opportunity to learn businesses, we are also aware of the ArcelorMittal weighted global PMI and progress. necessity to improve performance in Underlying all our improvement was at 52.9 in January, supportive other steel operations, particularly initiatives is our commitment to of improving industrial demand. In I would like to take this opportunity those in our AACIS segment. technical leadership and innovation. the US, underlying fundamentals to thank all of my colleagues at Growth is expected in apparent steel Our R&D operation is vast, with a continue to be positive. In Europe, ArcelorMittal who work every day to consumption in this segment’s worldwide network of laboratories; the recovery will continue to be produce our wonderful products. domestic and export markets, which and we have again increased the slow; but underlying steel demand is I greatly appreciate of my colleagues should support better utilisation R&D budget for 2014 to ensure rising. In China, steel demand on the board of directors, the rates and lower fixed costs going that we maintain our leadership continues to be robust, although we Group Management Board, and the forward. We have also made some position in the key end markets still expect underlying steel demand management committee for their changes to the segment leadership we serve. growth to slow in 2014. Overall, guidance, support, and leadership. in order to drive this improvement. we expect global steel demand Specifically, I would like to thank In 2013 we unveiled an innovative, The team is focussed on world class growth for the year to be between Michel Wurth, who in December award-winning ultra-lightweight car manufacturing and maintenance 3.5% and 4%. Although this is similar announced his intention to retire door that highlighted not only our transformation to drive to the global growth rate of 2013, from the company in April 2014. advanced high strength steels but improvement, and I am confident we the balance of the growth is more Michel is a much valued and also our distinctive engineering and will soon start to see the results. favourable for ArcelorMittal, since respected colleague, who has a very design capabilities. More broadly, our two thirds of our deliveries are to real and genuine passion and Turning to mining, the big global R&D automotive team has the developed markets that are commitment to the steel industry. achievement during the year was demonstrated that currently showing relative improvement. I am delighted that he will retain his the completion of the expansion of available advanced high strength We have already communicated to links with the company, as both a ArcelorMittal Mines Canada to steels can provide roughly 25% the market that we are anticipating member of the ArcelorMittal board 24 million tonnes of annual capacity. saving in vehicle weight without Ebitda for the year to improve to of directors, subject to approval at Production in 2013 was 18 million compromising safety and structural approximately US$8 billion. the annual general meeting, and as tonnes, compared with 15 million requirements and at highly chairman of ArcelorMittal tonnes in 2012 - with the 24 million competitive costs. By looking ahead In order to support our ability to Luxembourg. tonne production rate achieved in to new advanced high strength deliver on these expectations we December 2013. This project was steels that will come to market over have several key priorities. Safety, In conclusion, I am very satisfied a major contributor to the the next few years, there are of course, comes first, with the with the progress we are making. considerable increase in marketable additional solutions that will deliver focus on fatality reduction the clear The actions we have taken over the iron-ore shipped during the year. even greater weight savings and priority. I have already addressed this past five years are yielding the right consumer benefits. earlier, but we are very clear that the results. We have a competitive cost Our Liberia project is also delivering only satisfactory number when it position in each of the markets we good results. Phase One shipments Like our technical capabilities, comes to safety incidents is zero. serve and are exposed to the areas increased by over 150% in 2013 ArcelorMittal’s scale and scope are We have a number of sites that are with the biggest potential for compared with 2012 to over defining characteristics that give us consistently delivering this goal, so demand recovery over the next five 5 million tonnes, ahead of a competitive advantage and are we know it is achievable. Now we years. We are investing in our key expectations. Phase Two of the key enablers of our overall strategy. need to move forward and replicate franchise businesses and are expansion plan is ongoing, with However, they also introduce these success at all our operations. continuing to meet the demands of major equipment procurement complexity and the risks of our customers with the highest complete and civil works inefficiency, bureaucracy, and diffuse Our second priority is the effective quality products. commenced at the mine and accountability. To manage these execution of the specific initiatives I concentrator sites. We expect the risks, the company favours a have described and of strategic This is key. ArcelorMittal exists to expansion to 15 million tonnes sinter structure in which the responsibility plans to maximise profitability. These make a fundamental product that is feed concentrate to be completed for profit and loss is focused on encompass top-line growth, vital to the world in which we live. by the end of 2015. business units aligned with markets. reliability, cost-reduction, and new We call it ‘the fabric of life’. We are project ramp-ups. proud of the product we make, In Baffinland, the Phase 1 early To this end, in December 2013 we proud of the role it has in the world, revenue phase is progressing well, announced the completion of a A third priority is stakeholder and proud of our employees who and we are on track for a 3.5 million review of our organisation with the engagement. ArcelorMittal has a make it. tonne production run-rate in the aim of simplifying it. We decided to wide range of stakeholders, and second half of 2015. We expect the manage the business according to they are a critical factor in our product – which is a high grade region while also maintaining the licence to operate. Being trusted Lakshmi N Mittal direct shipping pellet – to achieve a product specialisation within those by our stakeholders – whether full premium value in the market. regions. This will enable these governments, customers, Chairman and chief executive officer businesses to continue to have their employees, or the communities As these projects indicate, we are own dedicated strategy and focus where we operate – is extremely very much on track to achieve our while capturing all the synergies important to us. And we are working production target of 84 million within the region. I am confident that hard to build and maintain that trust. tonnes by 2015. In fact, as we the new organisation will add value Annual review 2013 Overview 3

Financial highlights

Sales (US$ million) 2013 79,440 2012 1 84,213

Ebitda 2 (US$ million) 2013 6,888 2012 1 7,679

Steel shipments (million tonnes) 2013 84.3 2012 83.8

Operating income / (loss) (US$ million) 2013 1,197 2012 1 (2,645)

Net (loss) (US$ million) 2013 (2,545) 2012 1 (3,352)

Basic (loss) per share (US$) 2013 (1.46) 2012 1 (2.17)

2013 steel shipments by geographic location (thousand tonnes) 3

Segment Total Flat Carbon Americas: 22,341 North America 18,127 South America 4,214 Flat Carbon Europe: 27,219 Europe 27,219 Long Carbon Americas and Europe: 22,370 North America 4,661 South America 5,478 Europe 11,247 Other 4 984 AACIS (Asia, Africa and CIS): 12,345 Africa 4,163 Asia, CIS and other 8,182 1 On January 1, 2013, in accordance with IFRS as issued by the International Accounting Standards Board (‘IASB’), ArcelorMittal mandatorily adopted IFRS 10 (‘Consolidated Financial Statements’), IFRS 11 (‘Joint Arrangements’), IFRS 12 (‘Disclosure of Interests in Other Entities’), IFRS 13 (‘Fair Value Measurement’), the revision of IAS 19 (‘Employee Benefits’) and IFRIC 20 (‘Stripping Costs in the Production Phase of a Surface Mine’). Prior period 2012 information has been adjusted retrospectively for the mandatory adoption of these new standards and interpretations except for IFRS 13 which is applied only prospectively. The main effects for ArcelorMittal are related to the revision of IAS 19R which was applied retrospectively. Following the changes, the previously unrecognised actuarial gains and losses on pension liabilities are recorded in the statements of financial position in full against equity. It means that the previously unrecognised actuarial gains and losses are no longer recorded over time against profit and loss following the then allowed ‘corridor approach’. All future actuarial gains and losses will also be immediately recognised in other comprehensive income (OCI). In addition, for purposes of measuring the net financial cost on pension liabilities/assets, the expected rate of return on assets must be equal to the discount rate applicable to liabilities. 2 Ebitda is defined as operating income plus depreciation, impairment expenses and exceptional items. 3 Shipments originating from a geographical location. 4 Includes Tubular products business. Annual review 2013 Overview 4

Financial highlights continued

Number of employees at December 31, 2013 according to segments 5

Segment Total % Flat Carbon Americas 28,792 12 Flat Carbon Europe 58,726 25 Long Carbon Americas and Europe 42,210 18 AACIS (Asia, Africa and CIS) 50,066 22 Distribution Solutions 13,341 6 Mining 36,775 16 Other activities 2,443 1 Total 232,353 100 5 Full time equivalent (FTE).

Allocation of employees at December 31, 2013 according to geographical location 5

Region Total % EU28 6 86,242 37 Other European countries 7 37,131 16 North America 37,023 16 South America 21,093 9 Asia 38,441 17 Middle East and Africa 12,423 5 Total 232,353 100 5 Full time equivalent (FTE). 6 EU28 includes Austria, Belgium, Bulgaria, Croatia ,Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden and the United Kingdom. 7 Other European countries include Bosnia, Macedonia, Norway, Russia, Serbia, Switzerland, Turkey and Ukraine.

Own annual coal production (million tonnes) 8 2013 8.1 2012 8.2 2011 8.3 8 Not including supplies under strategic long-term contracts.

Own annual iron ore production (million tonnes) 8 2013 58.4 2012 55.9 2011 54.1 8 Not including supplies under strategic long-term contracts. Annual review 2013 Overview 5

Steel and raw materials: market analysis

More than four years on from Steel production in the third to reach an August peak Prices picked up in the third quarter the 2008/9 recession, the of US$500-US$510 a tonne vat on the back of Chinese demand global recovery is far from World crude steel production excluded. Prices then slipped back and touched US$152 a tonne in continued to recover in 2013, in the final quarter to finish the year September. However, despite robust with the growth rate rising from 1.56 billion tonnes to at US$490-US$495. continued strong import demand still below pre-crisis levels. 1.62 billion tonnes. The increase from China, the seaborne coking 1 While global GDP growth was almost entirely driven by For construction-related long coal market weakened again, improved in the second half Chinese growth. Steel output in products, depressed demand in finishing the year at US$131 a of 2013, the weak first half China set another record, with a Europe maintained the downward tonne. The softening of price was meant that overall 2013 rise of 7.5% to 786 million tonnes. pressure on prices in the first half largely down to weak demand growth slowed to an China’s share of global steel of 2013. Rebar prices fell from a outside of China, improved supplies estimated 2.5%. That production rose to a record 48.6%. January peak of €505-€535 a in Australia and strong domestic tonne to a low in July of €445- production in China. compares with 2.6% in 2012. Global production outside of China €455. There was a recovery to Encouragingly, however, grew by just 2 million tonnes, to €480-€490 a tonne in September Outlook for 2014 industrial output in the 830 million tonnes. That was still and prices remained stable towards 2 OECD countries expanded some way short of the pre-crisis the year-end, supported by steady, While there remain risks to the by an estimated 1.8% in the peak of 858 million tonnes though not buoyant, demand and global demand picture, the demand second half, having recorded in 2007. Among the firm scrap prices. fundamentals in the developed contracted in the first six major producers, Japan and India world are expected to be more months, and industrial led the way, with increases of 3.3% supportive in 2014. In the US, and 2.4% respectively. African Raw material prices indicators in the US and EU economic momentum remains output was also up, by 4.6%. In the Iron ore prices increased positive. With an anticipated generally finished the year EU, the decline in output slowed in dramatically in the first quarter of improvement in non-residential strongly. Auto sales rose by 2013, with a fall of 1.7% to 166 the year. The twin drivers for the construction, apparent steel 7.3% in the US but contracted million tonnes. Production in the increase were re-stocking in China consumption is expected to grow by 1.7% in Europe over NAFTA region fell 2% as a result of before the New Year holiday and by between 3.5% and 4.5%. This the year. a similar decline in US production. seasonally weaker supply following compares with a contraction of However, both Europe and the US weather-related disruptions in 0.7% in 2013. Despite strong growth in Chinese experienced a strong rebound over production in Brazil and Australia. steel production, lower real the second half of the year. Prices then declined significantly in In Europe, manufacturing output demand for steel elsewhere the second quarter as a result of grew steadily over the second half dampened demand for raw Steel prices stock cuts stemming from of 2013 and forward indicators in materials, pushing prices for iron uncertainties over the outlook for the Eurozone suggest that ore and coal down in the second Steel prices in Europe improved China. The spot iron ore price recovery is set to continue. The quarter of 2013. This resulted in during the first quarter of 2013, touched a low of US$110 a outlook for construction is de-stocking by end-users and with spot hot rolled coil (HRC) tonne in May. gradually improving, although it stockists, causing apparent steel reaching €490-€510. In contrast, remains weak in Southern Europe. consumption in the US and EU to prices in the US declined in January, Spot prices then recovered, Overall, apparent steel decline by an estimated 5% in the reaching US$680 a tonne averaging US$132 a tonne over consumption in Europe is expected first half. In Europe, this came on compared with a peak US$715 in the third quarter, as a result of to increase by between 1.5% and top of a 9.5% fall in 2012. November 2012. In the second strong steel production rates in 2.5% in 2014. quarter, demand remained weak in China and re-stocking by Chinese In the second half of 2013, steel Europe and the HRC price reached mills through the end of August. Chinese industrial output growth demand rebounded in both regions, €430-€450 a tonne. In the US, Despite substantial new seaborne stabilised in the fourth quarter of with strong year-on-year growth HRC prices also softened, touching supply coming on stream from the 2013. While the automotive supported by steel product a low of US$630 a tonne in May, third quarter onwards, the spot market is expected to remain re-stocking. For the year as a before recovering sharply in June, price remained above US$130 a strong in 2014, alongside an whole, both the US and Europe to US$680 a tonne. tonne. The market stabilised within improvement in the machinery and experienced a slight decline in the US$130 to US$140 range in shipbuilding sectors, a slowdown in demand. In comparison, apparent In the second half, European HRC the final quarter as increasing the real estate market and weaker steel consumption in China prices remained generally low as a supply was met by higher demand infrastructure investment growth accelerated during the first half of result of weak buyer sentiment, for the winter season re-stock. are likely to lead to slower growth the year, to approximately 7% strong domestic competition and in steel demand. year-on-year. Chinese demand low import prices. They finished the With plentiful supply and a weak remained strong in the second half year at around €445-€455. In the demand outlook, the spot coking In global terms, apparent steel but began to weaken in the fourth US, prices trended upwards in both coal market remained weak in consumption is expected to quarter as lack of finance affected the third and fourth quarters, with 2013. Better than average supply increase in 2014 by between traders’ ability to hold inventory HRC reaching US$740-US$750 a conditions during the Australian 3.5% and 4%. and pressure to stem production tonne by the year-end. wet season in early 2013 for environmental reasons. contributed to a fall in hard coking In China, a strong start to the year coal prices over the first half of the saw prices peak in February. They year, with the price of premium then softened in the second coking coal reaching a low of quarter before recovering slightly US$130 a tonne (FOB Australia) at the end of the second quarter.

1 Gross Domestic Product. 2 Organisation for Economic Co-operation and Development. Annual review 2013 Overview 6

Our business

ArcelorMittal is the world’s We have a diversified portfolio of estimated at 4.6 billion tonnes run leading steel and mining steel products to meet a wide of mine and our total coking coal company, with a presence in range of customer needs across all reserves are estimated at 318 steel-consuming industries, million tonnes run of mine, or 173 more than 60 countries and including the automotive, appliance, wet recoverable million tonnes. an industrial footprint in over engineering, construction, energy 20 countries. Guided by a and machinery industries. We sell Our long-life iron ore and coal philosophy to produce safe, our products in local markets and reserves provide a measure of sustainable steel, we are the through a centralised marketing security of supply and an important leading supplier of quality organisation to customers in over natural hedge against raw material steel in the major global steel 170 countries. Our diversified volatility and global supply markets including automotive, product offering, together with our constraints. Since 2011, the mining distribution network and research business has been managed construction, household and development (R&D) separately as a segment. This appliances and packaging, programmes, enable us to build enhances the ability to optimise with world-class research and strong relationships with capital allocation and pursue development and outstanding customers, which include many of growth plans, which include a distribution networks. We are the world’s major automobile and material increase in production also one of the world’s largest appliance manufacturers. With and sales to third parties at producers of iron ore and our approximately 17% of the market prices. mining business is an essential worldwide market share of flat steel sheets for the automotive part of our growth strategy. industry, we are a strategic partner With a geographically for the major original equipment diversified portfolio of iron manufacturers (OEMs) and have ore and coal assets, we are the capability to build long-term strategically positioned to contractual relationships with them serve our network of steel based on early vendor involvement, plants and the external global contributions to global OEM market. We employ around platforms and common value- creation programmes. 232,000 people. Market leader in steel A world-class mining We are the world’s largest steel business producer, with annual achievable We have a global portfolio of 16 production capacity of operating units with mines in approximately 119 million tonnes operation and development and are of crude steel in 2013. Steel among the largest iron ore shipments in 2013 totalled producers in the world. In 2013, 84.3 million tonnes. our mines and strategic contracts produced 70.1 million tonnes of We are the largest producer of iron ore and met 62% of the steel in North and South America company’s iron ore requirements. and Africa, a significant steel We also produced 8.8 million producer in the CIS region, and tonnes of coking coal and PCI, have a growing presence in Asia, meeting 19 % of the company’s including investments in China and PCI and coal requirements. India. We are also the largest steel producer in the EU, with significant We currently have iron ore mining operations in France, Germany, activities in Algeria, Brazil, Bosnia, Belgium, Spain, Luxembourg, Canada, Kazakhstan, Liberia, Poland, the Czech Republic and Mexico, Ukraine and the US. We Romania. In addition, many of our have projects under development operating units have access to or prospective development in developing markets that are Canada and India. We currently expected to experience, over time, have coal mining activities in above-average growth in steel Kazakhstan, Russia and the US. Our consumption (such as Central and main mining products include iron Eastern Europe, South America, ore lump, fines, concentrate, India, Africa, CIS and pellets, sinter feed, coking coal, PCI Southeast Asia). and thermal coal. As of December 31, 2013, our iron ore reserves are Annual review 2013 Overview 7

Our business continued

Mining business portfolio Key assets and projects

5

17 4 16 14 15 2 3 10 9

1 18 19

8

6 Non ferrous mine 7 13 Iron ore mine 11 Coal mine 12

1 Mexico Iron Ore 5 Canada Iron Ore Baffinland 50% 2 12 South Africa Manganese 50% 3 17 Russian Coal 2 mines 98.64% Las Truchas & Volcan 100%, Peña 6 Brazil Iron Ore Serra Azul 100% 13 Coal of Africa 12.03% 18 India Iron Ore Colorada 50%* 7 Brazil Iron Ore Andrade 100% 14 Ukraine Iron Ore 95.13% 19 India Steam Coal 2 US Iron Ore Minorca 100%, 8 Liberia Iron Ore 85% 15 Kazakhstan Coal Hibbing 62.3%* 9 Algeria Iron Ore 2 mines 70% 8 mines 100% 3 Princeton 100% 10 Bosnia Iron Ore 51% 16 Kazakhstan Iron Ore 4 Canada Iron Ore 11 South Africa Iron Ore* 4 mines 100% (Mont-Wright) 85% 1

1 On January 2, 2013 ArcelorMittal entered into an agreement to sell 15% of its stake in ArcelorMittal Mines Canada to a consortium led by POSCO and China Steel Corporation (CSC). 2 Following an agreement signed off in December 2012, on February 20, 2013, Nunavut Iron Ore subscribed for new shares in Baffinland Iron Mines Corporation which diluted ArcelorMittal’s stake to 50%. 3 In November 2012, ArcelorMittal signed a share pruchase agreement with Mrs Mashile-Nkosi providing, subject to various conditions, for the acquisition by her or her nominee of ArcelorMittal’s 50% interest in Kalagadl Manganese. * Includes share of production not controlled by ArcelorMittal.

Diversified and efficient energy use, and increased ability while developing markets utilise a company-wide knowledge to meet varying customer higher proportion of long products management practices with producer requirements in the markets and commodity grades. As these respect to raw materials. Certain of As a global steel manufacturer we serve. economies develop and as market our operating units also have with a leading position in many needs evolve, local customers will access to infrastructure such as markets, we benefit from scale Product and geographic require increasingly advanced steel deep-water port facilities, railway and production cost efficiencies diversification products. To meet these diverse sidings and engineering workshops in various markets and a measure By operating a portfolio of assets needs, we maintain a high degree that lower transportation and of protection against the cyclicality that is diversified across product of product diversification and seek logistics costs. of the steel industry and raw segments and geographic areas, opportunities to increase the materials prices. we benefit from a number of proportion of higher value-added Downstream integration natural hedges. As a global steel products in our product mix. Downstream integration through Diversified production process producer with a broad range of our Distribution Solutions segment In 2013, approximately 67.2 high-quality finished and semi- Upstream integration enables us to provide customised million tonnes of crude steel were finished steel products, we are able We believe that our own raw steel solutions to our customers produced through the basic oxygen to meet the needs of diverse material production provides a more directly. Our downstream furnace route, approximately 20.9 markets. Steel consumption and competitive advantage over time. assets have cut-to-length, million tonnes through the electric product requirements are different Additionally, we benefit from the slitting and other processing arc furnace route and in mature economy markets and ability to optimise the efficient use facilities, which provide value approximately 3.1 million tonnes developing economy markets. Steel of raw materials in our steel- additions and help us maximise through the open hearth furnace consumption in mature economies making facilities, a global operational efficiencies. route. This gives us greater is weighted towards flat products procurement strategy and the flexibility in raw material and and a higher value-added mix, implementation of overall Annual review 2013 Overview 8

Our business continued

2013 highlights November President Obama visits January ArcelorMittal Cleveland facilities, ArcelorMittal is declared gold where he meets employees at the class within the steel sector in the hot dip galvanising line and gives 2013 RobecoSAM Sustainability a speech on the economy. Yearbook at the World Economic Forum in Davos. ArcelorMittal acquires ThyssenKrupp Steel USA with February Nippon Steel & Sumitomo Metal ArcelorMittal Florange launches Corporation for US$1,550 million. the first line in the world to The transaction was completed in produce extra-wide Usibor® for February 2014. the automotive industry. December June ArcelorMittal simplifies its ArcelorMittal unveils new ultra organisation. The business will be lightweight car door solutions managed according to regions, offering up to 34 percent while maintaining the product weight savings over existing specialisation within those regions, steel car doors. enabling them to have their own dedicated strategy and focus, July while capturing synergies. ArcelorMittal Brazil sites supply half the steel needed for 2014 Michel Wurth notifies his intention FIFA World Cup, for a variety of to retire from ArcelorMittal in buildings from stadiums, to train April 2014. He will retain his links stations to giant aquariums. with the company as chairman of ArcelorMittal Luxembourg and, September subject to approval at the annual ArcelorMittal maintains general meeting, as a member membership in Dow Jones of the ArcelorMittal board Sustainability Index Europe. of directors.

ArcelorMittal and Sider finalise a The ramp-up of expanded capacity strategic agreement including an at ArcelorMittal Mines Canada investment plan of US$763 million is completed with run-rate of with a project to more than double 24 million tonnes. the plant’s production capacity from 1 million to 2.2 million tonnes per year by 2017.

October The World Steel Association recognises ArcelorMittal’s sites in Venezuela and Mexico for excellence in their health and safety programmes. Annual review 2013 Overview 9

Our group strategy

ArcelorMittal’s success is built enhance our ability to serve our Five key strategic customers. Given the current on its core values of enablers sustainability, quality and environment, that investment will be highly disciplined. Commodity leadership and the Critical to implementing this steel markets will inevitably remain strategy are five key enablers: entrepreneurial boldness that an important part of our steel has empowered its portfolio. Here, a lean cost A clear licence to operate emergence as the first truly structure should limit the downside Many of our businesses are located global steel and mining in weak markets while allowing in regions that are in the early company. Acknowledging that us to capture the upside in stages of economic development. a combination of structural strong markets. Practically all are resource- issues and macroeconomic intensive. We recognise that conditions will continue to Mining we have an obligation to act We are working to grow responsibly towards all challenge returns in its sector, our already world-class business. we have adapted our stakeholders. Sustainability is a core Mining forms part of the steel value that underlies our efforts to footprint to the new demand value chain but typically enjoys a be both the world’s safest steel and realities, intensified our number of structural advantages, mining company and a responsible efforts to control costs and such as a steeper cost curve. environmental steward. repositioned our operations to Our strategy is to create value outperform our competitors. by expanding our Tier I and Tier II A strong balance sheet assets, such as our mines in Our balance sheet currently Against this backdrop, our strategy Canada and Liberia; by controlling constrains our flexibility for funding is to leverage four distinctive cost and capital expenditure; and organic growth or transformative attributes that will enable us to by producing products that are acquisitions. While good progress capture leading positions in the highly valued by steel producers. has been made in recent years to most attractive areas of the steel reduce debt, achieving the industry value chain, from mining at Our financial capability has allowed medium-term targeted net debt one end to distribution and us to continue to invest in key level of US$15 billion remains a first-stage processing at the other: mining assets throughout the crisis, critical objective. while the diversity of our steel • Global scale and scope and mining portfolio facilitates A decentralised organisational the ability of our mining business • Unmatched technical capabilities structure to optimise the value of our Our scale and scope are defining • Diverse portfolio of steel products in the steelmaking characteristics that give us a and related businesses, process. Our mining business competitive advantage. They also particularly mining aspires to be the supplier of choice introduce complexity and the risks for a balanced mix of both internal • Financial capability. of inefficiency, bureaucracy and and external customers, while at diffuse accountability. To manage the same time providing a natural these risks, we favour a structure Three themes hedge against market volatility for in which the responsibility for profit our steel operations. and loss is focused on business Steel units aligned with markets. ArcelorMittal looks to expand its All operations leadership role in attractive We strive to achieve best-in-class Active portfolio management markets and segments by competitiveness. Operational Throughout our history, we have leveraging the company’s technical excellence, including health and sought to grow and strengthen the capabilities and its global scale and safety, the number one priority, is business through acquisition. That scope. These are critical at the core of our strategy in both remains the case. The acquisition of differentiators for sophisticated steel and mining. We steadily existing assets and businesses is customers that value the optimise our asset base to ensure typically seen as a more attractive distinctive technical and service we are achieving high operating growth path than greenfield capabilities we offer. Such rates at our best assets. Our investment. But we are also willing customers are typically found in the technical capabilities and the to dispose of businesses that automotive, energy, infrastructure diversity of our portfolio of cannot meet our performance and a number of smaller markets businesses underpin a strong standards or that have more value where we are a market leader. In commitment to institutional to others. addition, we are present in, and will learning and continuous further develop, attractive steel improvement through measures The best talent businesses that benefit from such as benchmarking and Our success will depend on the favourable market structures or best-practice sharing. Innovation in quality of our people, and our geographies. In developing products and processes also plays ability to engage, motivate and attractive steel businesses, an important role while supporting reward them. We plan to ArcelorMittal’s goal is to be the overall competitiveness. continuously improve our supplier of choice by anticipating processes to attract, develop customers’ requirements and and retain the best talent. exceeding their expectations. We will invest to develop and grow these businesses and Annual review 2013 Overview 10

The leader in automotive steels

When automotive as well as a joint venture in China, of the curve. Our research centre in won us a host of awards from manufacturers conceive a VAMA. And with 20 tailored blanks Maizières-les-Metz in France is the OEMs and trade and government new product, they often turn sites around the world, we can single largest R&D facility in the bodies. We have a 17% share of offer the same quality of laser world for the automotive to ArcelorMittal to help them the world automotive steel market, welded blanks wherever a steel industry. and in both North America and make it a reality. We are not customer may be located. Europe, our share of the fast- just the world’s largest We have achieved several growing AHSS market is higher supplier of automotive steels But it is not just about today’s breakthroughs. In 2010, we than our average auto market with more than half of all product. The automotive industry unveiled our ‘S-in motion’ solutions share, and we expect that trend to original equipment faces an immense challenge over comprising a portfolio of press- continue. OEMs around the world manufacturers (OEMs) – the coming few years, and hardened and AHSS steels with the continue to show faith in us, and ranking us number one – we ArcelorMittal is doing everything in potential to deliver up to 20% we intend to repay that faith in its power to help them meet it. weight saving for the body-in- the future. also enjoy close relationships white of a C-segment vehicle with many of our customers. Steel as the most affordable (such as the Ford Focus or Transforming the car of material to save weight Volkswagen Golf). In June 2013 tomorrow, today That challenge comes from ever we unveiled new ultra-lightweight Over many years, we have worked tighter fuel economy targets – car door solutions offering up to closely with OEMs at the vehicle which must be met without 34% weight savings over existing design stage. We were the first compromising safety standards and steel car door solutions. We have steel company in the world to at an affordable cost. In recent continued to develop new steels embed our own engineers within years, the EU, US, Canada, China, with still higher tensile strengths an automotive customer to provide Japan, South Korea, Brazil and and new hot stamping solutions to engineering support. We begin Mexico have all enacted new fuel deliver further weight savings. We work with OEMs as much as five economy targets of varying are also developing new steel years before a vehicle reaches the severity. Many of these are grades for chassis parts. showroom, providing generic steel scheduled to take effect between solutions, co-engineering, and 2015 and 2020. Opening the door to more helping with the industrialisation weight savings of the project. Once a vehicle is In some cases there are still tighter Our new lightweight steel door ring in production, we may help follow-up targets, either proposed combines laser welding technology with quality management or or agreed. The EU has recently with hot stamping and is stamped process optimisation. deferred the full implementation of as one part as opposed to the four its 2020 target by a year, but it will that are usually required. Already in Today, around 50 of our engineers still represent the toughest serial production in North America, are either permanently working in challenge proposed to date. In the the new door ring provides a customer plants in Europe, the US and Canada, the standards will 19.8% saving in weight and has Americas and Asia or providing have the effect of doubling the fuel achieved remarkable results in dedicated stamping and joining economy of new passenger safety tests. support during the industrialisation vehicles by 2025 compared with a phase or over the vehicle’s life. We 2010 baseline. We are not stopping there. A third were the first steel supplier to generation of cold stamping AHSS move to global customer teams. In Against this backdrop, we have is being launched and a new grade the few major markets where we been pioneering new, lightweight of AHSS with a tensile strength one have no steel plants, we have solutions using a range of advanced third higher than our current representative offices that act as high strength steels (AHSS) which offering is under development. extensions of our global customer we ourselves developed and These will offer further substantial teams, helping with new products patented. These deliver the weight savings. and solutions, and assisting required weight reduction at a customers in their materials trials lower cost to the carmaker and Electrifying steels for electric or tooling tests. consumer and with less and hybrid cars environmental impact than We have also launched a range of alternatives such as aluminium, electrical steels for electric/hybrid Driving steel solutions around ™ the world magnesium or carbon fibre. cars - called iCARe - which help An increasing number of OEMs OEMs deliver lower CO2 emissions operate global manufacturing Ongoing research and innovation and ensure the most efficient use platforms. They want a consistent, All are a product of our R&D teams of the current coming from the global product. Our global model who are located in 11 research battery providing the highest levels means we produce in multiple laboratories across Europe and of mechanical power output for a regions. Customers have one point North America. Five of those motor or current supply for of contact with us but know they laboratories are devoted solely to a generator. can get a consistent product developing the next-generation delivered almost anywhere. We solutions that will help our It is this commitment to the future have a network of coating lines in automotive customers stay ahead that that has made us a reliable Europe, Africa and the Americas steel solutions provider and has Annual review 2013 Operations 11

Corporate responsibility

Our commitment to corporate projects were completed at Recycling Employees responsibility (CR) is an ArcelorMittal Temirtau in With nearly 23% of crude steel important driver of long-term Kazakhstan, and another one is produced in 2013 in electric arc A number of programmes ensure underway. These projects are the talent within our workforce is shareholder value. By acting furnaces, which use scrap as a designed to reduce dust emissions feedstock, we are one of the harnessed through the in a responsible and by approximately 2,700 tonnes a world’s biggest recyclers. To ensure development, engagement, transparent manner, and by year. The total spent to date on optimal use of scrap, we are inclusion and leadership of all maintaining good relationships these projects amounts to US$147 participating in a global partnership employees, and by building strong with stakeholders, we can million. We also monitor air, water, programme with the World Steel leadership for the future. better manage social and energy and residues data at all Association to research country- environmental risk, mitigate production sites and report by-country recycling practices. Diversity the impact of our operations regularly on our performance. With a presence in 60 countries and employees from many more, on society, meet local By-products CO2 To minimise final waste, a dedicated the diversity of our workforce is expectations and foster local Reducing emissions to tackle R&D team promotes the internal important in bringing fresh economic development. climate change is an important use of by-products such as basic perspectives and experiences to challenge for the steel industry. We oxygen furnace (BOF) slag or oily the business. Our diversity and Our CR approach is structured are targeting a reduction in CO2 mill sludge wherever possible or inclusion policy reflects an effort to around four areas: making steel emissions of 170kg per tonne of their sale for further use in the encompass different cultures, more sustainable, investing in our steel by 2020, equivalent to an 8% wider economy. A proprietary tool, generations, genders, ethnic people, enriching our communities reduction in normalised emissions ROMEO, has been developed to groups, nationalities, abilities and and transparent governance. In from the 2007 baseline. This will calculate the value of by-products social backgrounds. 2013, we achieved a lost time be achieved through improved in any usage scenario. injury frequency rate of 0.8, process management, increased There is a particular focus on exceeding our target and reflecting energy efficiency and investment improving the gender balance our best performance to date. Water in new technologies. In 2013, we As a major water user, we act to within the business and to We maintained our membership in were recognised in the Climate ensure we preserve local resources supporting women leaders. the DJSI Europe index and were Disclosure Leadership Index for shared use. We measure inlet Our Group Management Board is awarded ‘gold class’ status within Benelux, compiled by CDP, the water by facility and by process to committed to creating and the steel sector in the 2013 world’s leading climate change data identify opportunities to recycle maintaining a more inclusive culture Sustainability Yearbook produced portal. In France, we are leading the and reuse water. We also work to and ensuring that the company by RobecoSAM, assessors of Low-Impact Steelmaking (LIS) maintain the integrity of key water becomes an employer of choice for the Dow Jones Sustainability programme, a private-public resources. In 2013, ArcelorMittal women. It has set a goal of Index (DJSI). collaboration to develop new USA’s achievements in respect of increasing the number of women methods of reducing CO2 emissions the ‘Sustain Our Great Lakes’ directors from two to three by the Environment in the steelmaking process. project, a long-term conservation end of 2015, based upon a board partnership with six U.S. size of 11 members. In 2011, While steel production is resource- We also continue to develop new governmental agencies and a a Global Diversity and Inclusion intensive, we constantly seek new steel solutions that help our non-governmental organisation, Council (GDIC) was created to ways to minimise our customers and end users reduce were recognised with an define the gender diversity and environmental impact, driving new their CO2 emissions. As an example, ‘Excellence in Sustainability’ award inclusion strategy, identify the efficiencies and focusing our the S-in motion programme helps from the World Steel Association. barriers that women face in the investment where the car makers create lighter, safer, business, and establish key environmental benefits can be more environmentally-friendly Bio-diversity performance indicators. With maximised. It is important to note automobiles. A new range of We seek to protect local membership including one Group that, in manufacturing steel, we are electrical steels, iCARe™, is biodiversity in the environments Management Board member and creating a resource for future designed to reduce the weight of where we operate. Wherever we three members of the generations - one that can be electric and hybrid vehicles. We are develop a new mine or steel management committee, the almost infinitely recycled. The also piloting a research programme project, we carry out detailed council comprises both men and environmental impacts of to develop a photo-voltaic steel environmental impact assessments women. A mentoring programme production therefore need to be roof, called Phoster. so as to establish an environmental for women will be launched to considered over the entire lifetime management plan covering both support the foundation of an of the steel produced. We are Energy the life of the mine and what internal network. In 2013, the committed to having all our steel We continuously seek process happens to the land afterwards. At ArcelorMittal University delivered operations certified to improvements that will lessen our our Liberian iron ore mines, situated two sessions of its new ‘Women in internationally recognised energy usage, thereby reducing close to both mountain and lowland Leadership’ course developed with environmental management both CO2 emissions and costs. In rainforests, we are engaged in the Instituto de Empresa business systems, such as ISO 14001. the US, we have an initiative in major environmental investments school in Madrid, Spain, and an Nearly all our main sites had been place to reduce energy to offset the impact of the project. inaugural ‘Women Emerging in accredited by the end of 2013. consumption by 10% and have In Baffinland, where we plan to Leadership’ course aimed at been honoured with an Energy Star develop a greenfield iron ore talented women in non-managerial Emissions award from the US Environmental project, we have been carefully levels. This course will be rolled out We are committed to minimising Protection Agency for six years in a documenting the biotic and abiotic to other regions in 2014. the environmental impact of our row. In Flat Carbon Europe, the environment at Mary River. operations on local communities. Energize programme initiated in The heaviest area of related early 2012 targets a 10% saving in spending is on dust emission energy costs by the end of 2015. reduction. In 2013, two such Annual review 2013 Operations 12

Corporate responsibility continued

Employee development It allows employees to relay • Leadership assessments business is governed by our code Our training and development feedback anonymously to the provide an objective insight into of business conduct. This covers activities are centred on the executive leadership. an individual’s potential, providing not only employees’ legal ArcelorMittal University, which them with an opportunity to responsibilities but areas such as provides online and classroom In 2013, the survey registered the accelerate their personal potential conflicts of interest, fair training courses and offers a highest ever rate of response, at development and effectiveness. dealing with customers and diverse choice of leadership, 75% of the targeted population. The assessment process is now suppliers, data protection and the management, functional, technical The majority of business units fully integrated with proper use of company assets. and bespoke programmes, showed increased favourability in development processes such as encouraging lifelong learning and the way the company engaged selection, nomination, promotion More detailed policies and enabling professional progression. with employees. At the group level, and development. procedures are in place to deal with The University achieved a key favourability increased across all issues such as human rights, • Succession management is a landmark in February 2013 when it areas. Employees specifically rated anti-trust, anti-corruption, insider key means of ensuring the was awarded Corporate Learning health and safety and dealing, political donations and sustainability of the business and Improvement Process (CLIP) communications as consistently economic sanctions. We continuity in leadership positions. accreditation from the European strong across the organisation. understand the importance of Every year, senior management Foundation for Management Leaders are encouraged to hold monitoring, managing and being dedicate time to reviewing Development (EFMD). EFMD is regular, formal face-to-face accountable for the impact of our succession plans for around 350 recognised as a high-quality meetings at the segment, business operations. We develop stakeholder key positions, from general accreditation body in the unit, country and operation level. engagement plans for all our major manager to senior executive management field and CLIP is a Other initiatives include ‘Lunch & operations and aim to vice president. benchmark for quality in the Learn’ training sessions which give communicate with stakeholders on design and functioning of corporate employees the opportunity to • Strategic workforce planning a regular basis. We are continuously training and educational network, improve their enables us to plan our long-term developing our disclosures through organisations. understanding of key topics or workforce requirements to annual CR reports issued at both competencies and develop their ensure critical jobs are secured; the corporate and local level. An objective in 2013 was to bring knowledge of ArcelorMittal and the changing age structure of the main campus-delivered its strategy. the workforce is analysed and For more information on corporate programmes to the business units appropriate actions advised; the responsibility, please see to reduce travel and other costs. As part of a move to enhance organisation is appropriately ArcelorMittal’s corporate This was achieved with the internal communications and staffed; and skill shortages in the responsibility report at ‘Explore’ leadership programme in employee engagement, we have market are identified and http://corporate.arcelormittal.com/ Canada and South Africa and the launched a global communications addressed before the corporate-responsibility roll-out of technical programmes in cascading process based on internal organisation is negatively the US and CIS. Approximately best practice. It includes a message impacted. In 2013, 60% of the participants in track of key information to flow we developed our own steel-related training programmes throughout all areas of the group proprietary ‘Strategic Workforce connected remotely from 48 and a measurement system to Planning’ tool which is currently different sites. The Learning ensure these messages are being being piloted. Council, an advisory board on received by employees. Data from group-wide learning policies, the measurement system is Enriching our organised the first-ever globally reported to the Group ArcelorMittal Learning Week in Management Board and communities September 2013. More than management committee. Wherever we operate, we play an 11,000 employees participated in important role in the local market the various events from Building the future and seek to contribute to the approximately 60 locations. Given Our management is focused on the development of strong and the success of the event, Learning development of a strong leadership sustainable local communities. We Week will now be an annual event pipeline. We focus on internal pay particular attention to local for all employees. mobility and are keen to develop our people and encourage the cultures, issues and priorities, and aim to engage with communities in Employee engagement sharing of best practices. There are an open and transparent way, We view employee engagement as a number of processes that ensure working in partnership with local a combination of alignment the right skills are in place where organisations. The ArcelorMittal (knowing what to do) and and when they are needed: Foundation coordinates the engagement (wanting to do it). In company’s community investment all engagement practices, we seek • Career committees enable the activities to support long-term to integrate feedback into action management and development social and economic development. plans to address employees’ of individuals, raise competency concerns. The principal vehicle to levels across the organisation help the company’s management and ensure a pipeline of talent Transparent governance understand and measure available for key positions. employees’ opinions, attitudes and This process is conducted We believe that good governance satisfaction is the ArcelorMittal through periodic meetings at is the key to ensuring we operate Climate Survey. The survey looks different levels within the ethically at all times in all parts of at a variety of key dimensions company using information the world. It also supports our including organisational direction, collected through the Global commitment to embed the leadership and professional Employee Development principles of corporate deployment and development. Programme (GEDP). responsibility into our everyday decision-making. Our way of doing Annual review 2013 Operations 13

Health and safety

It is our stated aim to have Journey to Zero has achieved a the best safety record in our significant improvement in safety sector, producing steel and performance. The LTIFR has fallen for six years in a row, from extracting minerals with no 3.3 incidents per million hours fatalities or lost-time injuries. worked in 2007 to 0.8 in 2013. Our company-wide safety This compares with an average of programme, Journey to Zero, 1.4 for the steel industry in 2012 is designed to achieve this (source: World Steel Association), goal by creating a culture the latest available data. Two of shared vigilance in which ArcelorMittal business units the risks and hazards are received the World Steel Association Excellence Awards in understood and monitored, 2013 for projects that have best practice is shared and resulted in major improvements in appropriate action is taken their safety record. at every level. Nevertheless, our performance in Our advanced safety monitoring 2013 was marred by 23 fatalities, systems take into account both an unacceptable and deeply the physical and human aspects saddening outcome. Reinforcing of workplace safety. They include the implementation of our fatality safety leadership and awareness prevention standards, conducting programmes, which are backed more pro-active assessments of up by workshops, training risk and hazards, and intensifying sessions and ongoing efforts to instil a safety culture communications programmes. among contractors are priorities for 2014. The LTIFR target for 2014 An annual Health and Safety Day has been reduced to 0.8 from 1.0 provides a focus for best-practice in 2013. sharing across the group. Safety performance is measured by As with safety, we take a proactive tracking the number of injuries per approach on health. We are a million hours worked that result in member of the International employees or contractors taking Occupational Hygiene Association time off work (the lost-time injury and are building a network of frequency rate or LTIFR). We occupational health and hygiene investigate all accidents and professionals across the group. designated Group Management In 2013, more than 400 sites Board members review all fatalities ran their own health awareness to ensure lessons are learned programme, with approximately throughout the company. 135,000 employees participating Management accountability for in the various activities. safety is reinforced through a remuneration policy that links an element of executive bonuses to the LTIFR and to the number of fatalities in the relevant area.

In Mining, the Journey to Zero programme is supported by a ‘Courageous Leadership’ campaign. This aims to ensure that everyone takes responsibility for safety – both their own and that of others.

We work closely with our trade unions to drive safety improvements. A Joint Global Health and Safety Committee at the corporate level is complemented by similar committees at every production unit. We are the only company in our sector to have established such a global partnership. Annual review 2013 Operations 14

Research and development

Research and development weight savings with a major used in the transmission of oil and (R&D) provides the technical advance in crash-resistance. A new gas, the R&D team is developing a foundation for the project on the model of S-in new generation of higher strength motion® has been launched to materials designed to perform in sustainability and commercial offer weight-saving solutions for conditions of extreme cold and success of the company the light truck market. new corrosion-resistant products by stimulating continuous for the transportation of sour product and process A third generation of AHSS is crudes. It is also working with a improvement. With 11 major now in development to take the major oil company to apply AHSS research centres, we possess lightweighting process a further in the manufacture of offshore oil a leading R&D capability step forward. A first steel grade platforms in order to both reduce among steel producers. belonging to this family of products their CO2 footprint and to cope was commercialised in 2013. with Arctic conditions. We also maintain strong Other grades will be ready for academic partnerships with approval in 2014. We also intend We are a large supplier of steels universities and other to expand our Usibor® range for for wind turbine towers. R&D is scientific bodies, while our hot stamping. It will especially currently developing alternative close customer relationships progress in the development of designs and new steels for and well-established design Usibor® 2000, which enables both on-shore and off-shore and engineering skills enable another 10% lightweighting towers that will reduce a us to foster the development compared to the regular Usibor®. tower’s CO2 footprint, improve corrosion performance and of new steel products and facilitate installation. solutions that meet our Creating niche products customers’ evolving needs. to grow our non-auto In packaging, a new generation of In 2013, our R&D expense segments ultra-thin steels was launched in was US$270 million. 2013 and the R&D team will In the construction sector, a prime focus on further decreasing the The main focusses of our R&D are: focus for R&D is the development gauge of packaging steels while of low-energy buildings. Rather improving their formability in 2014. Maintaining the than simply providing steel The next generation of steels will components, the approach is be uniquely compatible with the competitiveness of steel holistic, encompassing a variety of new, ecologically friendly coatings versus alternative techniques. These range from new required under new EU regulations. floor systems offering high levels materials, particularly in of insulation to photo-voltaic steel our unique automotive roof products, the latter being Ensuring a continuing franchise currently developed in the and growing Phoster project co-financed by contribution to our R&D has been at the forefront of the EU Life+ programme. industry developments to pioneer management gains advanced high-strength steel As the global leader in sheet piles, programme through (AHSS) grades and manufacturing we continue to broaden and processes that help automotive improve our offering. The focus of research dedicated customers create lighter yet R&D is on improved installation, to improving the stronger vehicles and meet new coatings and improved company’s steelmaking demanding new targets for fuel corrosion-resistance. The R&D economy. These developments department has pioneered unique processes are designed to ensure that steel fire-resistance qualities involving One of the biggest contributors to remains the material of choice new steel coatings and the use process savings in 2013 was the for the automotive industry of of composite materials. roll-out of innovative, research- the future, while protecting and developed technical solutions. In all, expanding our market share in In electrical steels, we launched there were 145 instances of new this segment. a new generation of steels for electrical motors in 2013. Aimed process technology roll-outs in 2013. More than 190 are planned The S-in motion® project, at the automotive industry, for 2014. R&D also supports our introduced in 2010, reduces the iCARe™ products offer a major involvement in the Low-Impact the body weight of a typical advance in mechanical Steelmaking (LIS) programme, C-segment vehicle by up to 19% performance, combining low being led in collaboration with the and has been widely adopted to core loss with good magnetic French government authorities. differing degrees by automotive permeability. R&D is now working Launched in April 2013, the LIS producers worldwide. In 2013, with automotive customers on programme aims to reduce the Honda launched a new MDX SUV the application of iCARe™ to their level of CO in the steelmaking model incorporating our integrated hybrid and electrical vehicles. 2 process through the recycling of door ring concept, which combines blast furnace top gas and the use the benefits of laser welding In the energy markets, R&D is of captured CO . technology with the high engaged in a wide range of 2 performance of press hardened projects. With respect to American steel (PHS), combining substantial Petroleum Institute (API) products Annual review 2013 Operations 15

Our steel and mining operations

The steel industry Despite this encouraging stronger, with the North network. It nonetheless achieved experienced a difficult first performance, there is still more American market for flat rolled significant cost reductions. After half in 2013 as lower raw work to be done. Our target for products returning to levels last allowing for special factors in the 2014 is to ensure an LTIFR no seen in 2007. The slab previous year’s figures, material prices followed by higher than 0.8 while focusing operations in Brazil and Mexico Distribution Solutions achieved customer de-stocking in the on further reducing the incidence had to contend with depressed an improvement in Ebitda. second quarter dented of severe injuries and export markets. Overall, • Mining represents an important demand in both North preventing fatalities. profitability was marginally lower source of growth for the group. on the year. America and Europe. In all cases where its iron ore or Performance By contrast, the second half • Flat Carbon Europe lifted its coal production is capable of In 2013, we produced 91.2 million saw a sharp rebound in shipments, increasing market being marketed, it is either tonnes of crude steel, up from demand in both regions and share in what was a difficult transferred to the group’s steel 88.2 million tonnes in 2012. Our marketplace for much of the operations at market price or much improved pricing in the shipments rose marginally, from year. With production sold to third parties through the US. In China, demand was 83.8 million tonnes to 84.3 million increasingly centred on its most business’s global marketing arm. strong for much of the year tonnes. Sales decreased by 5.7% to efficient plants, profitability In 2013, iron ore shipments at before weakening in the final US$79.4 billion, primarily as a improved despite lower average market price increased by 22% result of lower average selling quarter. Outside of China, selling prices. as production expanded in both prices. We reported Ebitda of global production was Canada and Liberia. US$6.9 billion, compared with • Long Carbon Americas and essentially stable. US$7.7 billion in 2012. After Europe saw improving demand Against the backdrop of a Our focus in 2013 was on US$444 million of impairment over the course of the year, relatively stable iron ore price, delivering the benefits of our asset charges and US$552 million of despite difficult conditions in Mining lifted both sales and optimisation plan, designed to restructuring charges, we recorded Europe in the first half and fierce Ebitda in 2013. The expanded concentrate production on our a net loss of US$2.5 billion (against competition from imports in the capacity at ArcelorMittal Mines most competitive sites, and a net loss of US$3.4 billion US. While average selling prices Canada reached full ramp-up initiating a new management gains in 2012). fell, moves taken to optimise the rate in December, underpinning programme targeting US$3 billion asset base in the previous year an anticipated 15% expansion of of savings over three years. All our steel segments had to resulted in a significant marketable iron ore in 2014. We also restarted a limited number contend with weak pricing in the improvement in margins. of projects that had been put on first half of the year, and a • Asia, Africa and CIS experienced hold during the crisis and slowdown in Chinese growth a fall of around 10% in average continued to invest in expanding affected international export selling prices in 2013, which it our mining operations. markets. While the recovery in was unable to recoup despite a Europe remained fragile, our major cost reduction Safety European operations reaped the programme. In addition, Temirtau In 2013, our safety performance benefits of the decisions taken in in Kazakhstan was faced with improved significantly, with the lost 2012 to optimise the steelmaking weaker export markets while the time injury frequency rate (LTIFR) footprint. In the Americas, South African operations falling from 1.0 per million hours domestic markets generally experienced softer conditions in worked to 0.8. This marks the sixth experienced firmer conditions the local construction market. year in a row that our safety record as the year progressed. has improved. A majority of the • Distribution Solutions segments contributed to the • Flat Carbon Americas experienced weaker demand improvement, in particular experienced a challenging first both within its European service Distribution Solutions, Flat Carbon half as de-stocking among centre network and in Americas and Flat Carbon Europe. customers reduced demand. ArcelorMittal International, the The second half proved much group’s international sales

Ebitda 1 split by segment

Segment US$ million Flat Carbon Americas 1,793 Flat Carbon Europe 1,055 Long Carbon Americas and Europe 1,991 AACIS (Asia, Africa and CIS) 292 Distribution solutions 85 Mining 1,980 1 Ebitda is defined as operating income plus depreciation, impairment expenses and exceptional items. Annual review 2013 Operations 16

Our steel and mining operations continued

Flat Carbon Americas The average selling price, however, Our efforts to save energy are AM/NS Calvert fell from US$854 a tonne to good economics: since 2006, In November 2013, we entered Flat Carbon Americas US$818. ‘Export markets for slab Flat Carbon Americas has reduced into a 50/50 joint venture operates 19 plants located in out of Brazil and Mexico were its energy costs by more than partnership with Nippon Steel & Canada, the US, Mexico and depressed, with intense US$165 million through focused Sumitomo Metal Corporation to Brazil. Offering a complete competition from integrated improvements and energy acquire ThyssenKrupp Steel USA producers in the CIS countries in management. for an agreed US$1.55 billion. The portfolio of flat products, it is particular,’ says Mr Schorsch. This renamed AM/NS Calvert is one of the largest producer of both had the effect of reducing the We were also recognised in 2013 the most modern steel finishing sheet and plate in North value of sales from US$20.2 billion by the US Department of Energy facilities in the world, with a America. It is a major supplier in 2012 to US$19.5 billion in for our leadership in the Better capacity of 5.3 million tons in to the automotive industry 2013. Ebitda finished the year at Buildings, Better Plants programme, Calvert, Alabama. With a state-of- with a North American market US$1.8 billion compared with which supports the Administration’s the-art hot-strip mill, the share of over 35% and a share US$1.9 billion the previous year. target of increasing energy acquisition provides the efficiency in US commercial and opportunity for retaining our in Mercosul of 24%. On the product front, we industrial buildings. We joined the leadership in the high value end of Safety continued to expand our offering programme in August 2013, the growing NAFTA automotive We achieved further progress in in advanced high strength steels making a commitment to reduce steel market. It also expands our 2013, reducing the lost time injury (AHSS) and to introduce new our energy intensity by 10% across presence in other important frequency rate from 1.1 per million weight saving solutions for the our US plants. markets, notably energy. Significant hours worked to 0.9 and achieving automotive market. A recent synergies have been identified. a particularly good performance in example is the launch of the Investments The acquisition was completed in Brazil, Mexico and Canada. Lázaro industry’s first laser-welded, During the year, we approved two February 2014. Cárdenas in Mexico won hot-stamped door ring found in the significant projects. We restarted recognition from the World Steel 2014 Acura MDX. Working from construction of galvanising line no. Outlook Association for its work in cutting Honda’s design of the door ring, 6 at Dofasco in Canada, a project Mr Schorsch sees continuing the incidence of injuries among our Usibor ® steel and laser ablation that had been put on hold following recovery in demand in North contractors. Regrettably, there technology was critical in creating the crisis. With a capacity of America in 2014. ‘The inventory were two fatalities in the US. this important body structure 660,000 tonnes a year, the new liquidation that we saw in 2013 ‘We will continue to put every component which provides line will allow Dofasco to close line has run its course, so we enter possible effort into eliminating substantial weight savings and no. 2, increase production of 2014 with a more favourable serious injuries and ensuring that increased crash resistance. galvanised sheet by a net 260,000 demand picture,’ he says. The our fatality prevention standards tonnes a year, and improve mix and scheduled outage of blast furnace are adhered to by contractors as Corporate responsibility optimise cost. Importantly, it will be no. 7 at Indiana Harbor in the well as by our own people,’ Flat Carbon Americas is involved in capable of producing heavy-gauge, second quarter should have no says Lou Schorsch, GMB a wide range of CR programmes. In high-strength products, improving impact on shipments. ‘We have had member responsible for Flat October 2013, the World Steel Dofasco’s ability to serve two years to plan for it and have Carbon Americas. Association presented us with its customers in a number of markets, built up substantial inventories to ‘Excellence in Sustainability’ award especially automotive. The project compensate,’ he says. Performance for our long-standing involvement is expected to cost US$43 million Flat Carbon Americas experienced in the Sustain Our Great Lakes to complete, with commissioning In Latin America, the picture is also challenging conditions in the first programme. A public-private scheduled for 2015. positive. ‘Macro-economic growth half of 2013, with inventory partnership, the programme seeks in Brazil has been somewhat liquidation among customers to sustain, restore and protect fish, In Brazil, we approved investment disappointing for the past two affecting apparent consumption. wildlife and habitat in the US Great of US$15 million to produce Usibor years. However, we do expect The second half proved much Lakes basin. ArcelorMittal is the steels at Vega do Sul. This modest growth in consumption in stronger, with improving pricing only private sector participant, proprietary, high-strength 2014 while competitiveness will be across the region. The automotive working with a group of six automotive product enjoys supported by the depreciation of market was buoyant throughout Federal agencies. growing demand in Brazil, which the Brazilian Real,’ he says. As a NAFTA and in Brazil. The we have been supporting with testament to Flat Carbon Americas’ depreciation of the Brazilian Real We work continuously to improve imports from Europe. Shortly after confidence in the future, it will be boosted the competitiveness of our energy efficiency and reduce the year-end, we approved a restarting blast furnace no. 3 at Flat Carbon Americas’ operations in the impact of our operations on US$40 million expansion of the Tubarao in Brazil in the third quarter that country. the environment. In 2013, we Vega do Sul plant to debottleneck of 2014. ‘This will be the first time received ‘The Energy Star’ award the cold rolling and pickling since the onset of the crisis that ‘In North America, we are back to from the US Environmental operations. The project will increase we will have three blast furnaces where we were in flat rolled Protection Agency and the capacity by around 120,000 operating in Brazil’, says products before the crisis,’ says US Department of Energy for the tonnes a year and materially Mr Schorsch. Mr Schorsch. ‘Brazil is already some sixth year in a row. The award reduce costs. way ahead.’ Over the year, we recognised our achievement in lifted crude steel production from reducing our energy intensity by In 2014, blast furnace no. 7 at 23.9 million tonnes to 24.4 million 1.9% in 2012. The energy saved Indiana Harbor, the largest in the tonnes. Shipments were marginally was the equivalent of powering western hemisphere, will be up at 22.3 million tonnes. The 142,000 homes a year. shut down temporarily for repair. Canadian operations achieved The work is scheduled to cost record production and shipments. approximately US$89 million. Annual review 2013 Operations 17

Our steel and mining operations continued

Flat Carbon Europe million related to the long-term • new thermal cycle in the • The ‘Energize’ project to boost idling of the Florange liquid phase in continuous annealing line of energy efficiency by sharing best Flat Carbon Europe is the ArcelorMittal Atlantique et Lorraine Kessales in Liège. The practices. Thanks to ‘Energize’, largest producer of flat steel and US$354 million, including programme runs over three we reduced our energy in Europe. It operates 14 social and environmental costs, years and amounts to consumption by 3% in 2013. related to the agreed industrial US$300 million; integrated and mini-mill sites • The LIS programme (‘Low and social plan for the finishing • Repair of coke batteries and Impact Steelmaking’), exploring in Belgium, France, Germany, facilities at the Liège site of modernisation of the coke gas emerging technologies for the Poland, Romania and Spain, ArcelorMittal Belgium. with downstream activities in desulphurisation plant in Fos, to cheap capture of CO2 and for reduce emissions; the re-use of CO into valuable a further five countries. It These charges were partially offset 2 products. The programme will by a reversal of provisions of • Adaptation of coke production produces hot-rolled and run until 2017 with a large US$38 million in France and capacity and related gas supply cold-rolled coils, coated number of partners, mainly Belgium following the revision of in Asturias, Spain; products, tinplate, laser- concentrated in France. certain assumptions. Flat Carbon • Modernisation of a hot metal welded blanks, plate and slab. Europe’s operating loss was crane, commissioning of a Outlook It sells to a variety of reduced by a non-cash gain of casting crane and start of works “We expect a ‘cautious recovery’ in industries. These include US$92 million corresponding to the on re-enforcement of the 2014 for the European market,” packaging, general industry final settlement of income relating continuous caster moulds in says Mr Van Poelvoorde. “While to the unwinding of hedges on raw and, in particular, automotive the steelmaking shop in real demand for steel should material purchases. where its advanced products Bremen, Germany; improve, apparent consumption and steel solutions have growth is expected to remain Flat Carbon Europe’s operating loss • Commissioning of a ladle contributed to major moderate.” The high load in the also included impairment charges furnace in Bremen for high plants is expected to contribute to improvements in crash of US$45 million. Within that added value products. more management gains, and we worthiness and weight figure, there was a US$55 million Additionally, some high CAPEX will move our sales portfolio reduction. charge in connection with the authorisations were granted to further toward high-added long-term idling of the Health and safety sustain future development, value products. ArcelorMittal Tallinn galvanising line The major efforts made to such as: in Estonia, largely offset by the implement health and safety Geographic proximity with reversal of an impairment loss of actions bore fruit in 2013 with a • Blast furnace no. 2 relining in customers, allowing full focus on US$52 million at the Liège site of further reduction in the lost time Dunkerque in 2015; service, and the scale of operations ArcelorMittal Belgium following the injury frequency rate, from 1.3 per guaranteeing security of supply restart of the hot dip galvanising • Modernisation of coke gas million hours worked to 1.0. towards our customers will line HDG5, and US$22 million desulphurisation in Dunkerque However, Flat Carbon Europe still remain the core strength of Flat relating to the closure of the and the reduction of dust experienced six fatalities. “This is Carbon Europe. organic coating and tin plate lines emissions in sinter plant no.3 highly regrettable and completely at the Florange site of ArcelorMittal in Dunkerque; unacceptable,” says Geert Van Atlantique et Lorraine in France. Poelvoorde, chief executive officer • Modernisation of by-products of Flat Carbon Europe. “We will be equipment in the coke plant in Investments making another huge effort to Zakłady Koksownicze Capital expenditure in 2013 ensure the implementation of our Zdzieszowice (ZKZ), Poland; amounted to US$0.6 billion. That fatality prevention standards and compares with US$0.7 billion in • Modernisation of the power taking specific measures relating to 2012. The major areas of plant in ArcelorMittal Ostrava for contractors and maintenance investment were: reducing SOx and NOx management. This is a moral emissions; obligation towards our workforce.” • Maintenance (47%) • Modernisation of the hot strip Performance in 2013 • Health, safety and environment mill in Gent with a new walking Flat Carbon Europe operated in a (10%) beam furnace and new basic fragile European recovery in 2013. automation; • Efficiency improvements (7%) The current asset strategy • Start of production of the new combined with market share • Growth projects (4%) continuous annealing line of St recovery resulted in improvement Key projects and programmes Chély d’Apcher, France, for in steel shipments from 26 million included: electrical steels; tonnes to 27.2 million tonnes and an increase in crude steel • Optimisation of the logistics for • Blast furnace relining project in production from 27.4 million coal and coke transport between Poland for the two blast furnaces tonnes to 29.6 million tonnes. Sales Florange and Dunkerque. of Dabrowa; decreased from US$27.2 billion to US$26.6 billion impacted by lower • Launch of a multi-year plan to Energy saving selling price but profitability upgrades facilities for As part of ArcelorMittal’s improved with Ebitda up from automotive advanced high commitment to improve energy US$1 billion to US$1.1 billion. strength steels, including efficiency and reduce CO2 construction of a ladle furnace in emissions, Flat Carbon Europe Flat Carbon Europe’s operating loss Gent, Belgium, and reinforcing launched a double initiative: of US$0.9 billion included the hot strip mills in Gent, restructuring costs amounting to Dunkerque and Florange (France) US$481 million, of which US$137 and also the development of a Annual review 2013 Operations 18

Our steel and mining operations continued

Long Carbon Americas Leveraging a model first developed more than a quarter, to US$447 improvements in quality, cost and in Brazil, we offer our customers a million. ‘The results demonstrate competitiveness at what is one of and Europe wide range of products available on the effectiveness of the decisions only three rail producers in the short-notice delivery. In Europe, taken in previous years to enrich United States. With 33 mills in 17 countries, we co-operate closely with the product mix and to improve Long Carbon is the world’s ArcelorMittal’s Distribution service for our customers, as well In January, 2014, we announced largest producer of steel Solutions segment to ensure as to optimise the footprint,’ says the planned reopening of the sections and sheet piles and prompt availability and high-quality Mr Wurth. Harriman, Tennessee long products offers the widest range – service for our customers. finishing facility. This is expected to from small and medium to Long Carbon Americas lifted its be fully operational by April, 2014. jumbo beams. We are a leader Safety shipments from 9.9 million tonnes It will receive billets from in wire rod, rebars, special and Good progress was made in further to 10.15 million. Ebitda increased ArcelorMittal LaPlace, Louisiana, reducing the lost time injury from US$1.11 billion to US$1.26 reheat them and roll them into light merchant bar. Using scrap to frequency rate (LTIFR). In Long billion on an expansion in margins structural shapes and merchant produce more than half of our Carbon Europe the LTIFR improved from 11% to 12.6%. bars for the construction market. annual production, we are the from 1.6 per million hours worked The reopening will add around largest recycler of steel in to 1.3. In Long Carbon America, Tubular Products shipments fell 100,000 tonnes of capacity and the world. the LTIFR fell marginally below the about 80,000 tonnes to 1.4 enhance the long product portfolio. target of 1.0. million. Ebitda decreased by US$34 We enjoy strong market million to US$285 million. In Europe, a long rail project in penetration in Europe, the Americas Despite this progress, Long Carbon Poland was successfully completed and North Africa, and are the still experienced five fatalities – Investments at the end of the year. A state-of- largest provider of steel to the two in Europe and three in the In 2013, we took the decision to the-art facility with the capability world’s construction industry. Americas. ‘This is not only restart a number of projects that to produce 120-metre-long rails, it We have been involved in many saddening, but hugely had been on hold since the onset has received a very positive of the world’s most challenging disappointing,’ says Michel Wurth, of the crisis. Prime among them response from customers. Also in construction and infrastructure GMB member responsible for Long was the expansion of Monlevade, Poland, a new, 85,000 tonnes-a- projects. As world leader in sheet Carbon. ‘For 2014, we have a Brazil, which is producing at close year service centre for sheet piles piles, we work closely with major focus on reinforcing our to full capacity. The expansion was commissioned. It is designed engineering services firms and fatality prevention standards. programme has several elements. to be complementary with the provide technical solutions for Everybody is very motivated to It involves a new wire rod mill to sheet pile plant in Belval, some of the most demanding drive home the message and to add more than 1 million tonnes of Luxembourg. structures. implement it on the shop floor.’ production; an increase in rebar capacity at Juiz de Fora from In the Czech Republic, the new With strong support from R&D, Performance in 2013 50,000 tonnes a year to 400,000 round billets continuous caster at Long Carbon is continuously adding Long Carbon experienced an tonnes, coupled with a 200,000 Ostrava was successfully to the range of higher value-added improvement in demand over the tonnes increase in meltshop commissioned in the second half of products. In 2013, good progress course of 2013. This was despite capacity and a reduction of wire the year. It will supply the new pipe was made developing long continuing difficult conditions in rod capacity; and debottlenecking and tube mill in the Jubail joint products to complement the range Europe in the first half of the year at Piracicaba to increase steel venture in Saudi Arabia. of automotive solutions offered by and fierce competition from capacity by around 100,000 the Flat Carbon business and imports in the US market. Cuts in tonnes a year. The full programme, ArcelorMittal Annaba capitalise on its strong presence in infrastructure spending reduced costing US$280 million, is In September 2013, ArcelorMittal this sector. demand in Mexico. ‘Brazil and scheduled for completion in 2015. finalised a strategic agreement with Argentina, where we are a strong the Algerian state-owned In 2013, Long Carbon was market leader, both saw much At Acindar in Argentina, a new company, Sider, that will see the engaged in a number of landmark improved demand,’ says Mr Wurth. rolling mill under construction will plant’s production capacity more projects. In Germany, we provided increase rebar capacity by around than doubled, from 1 million tonnes premium sheet piles for river flood Overall, Long Carbon, including 450,000 tonnes a year and enable to 2.2 million tonnes a year, by defences and shipped a 60 Tubular products, shipped 22.4 Acindar to optimize production at 2017. The agreement includes an metre-long bridging beam, the million tonnes of steel in 2013 its special bar quality rolling mill in investment of US$763 million for largest jumbo beam to date. Long compared with 22.6 million the Villa Constitución. In future, this the steel complex at Annaba and Carbon Americas supplied weigh previous year. Despite lower plant will specialise in products for the mines in Ouenza and rods for the Baluarte Bicentennial average selling prices, Ebitda the automotive and mining Boukhadra, funded by low-cost, Bridge in Mexico, the world’s finished the year at US$1.99 billion, industries. The cost of the project local bank financing. As part of the highest cable-stayed bridge, and up from US$1.79 billion in 2012. is around US$100 million. Expected agreement, ArcelorMittal’s was the number one supplier of This reflected a substantial completion is in 2016. shareholding in both ArcelorMittal steels for more than 200 projects improvement in margin, from 8.2% Annaba and ArcelorMittal Tebessa related to the coming football to 9.5%, thanks to many cost In North America, the DRI plant in has been reduced to 49%, with the world cup in Brazil. initiatives and a richer mix of high Contrecoeur, Quebec, was state of Algeria holding the added-value products. successfully restarted and both remaining share of 51%. Long Carbon has a strong modules will provide 1.5 million ArcelorMittal will continue to be downstream presence in wire Long Carbon Europe shipments fell tonnes of DRI in a full year. In in charge of the operations of drawing and distribution. In 2013, by around 450,000 tonnes to addition, the go-ahead for a new the plant. we continued to expand our 11.25 million. There was also some reheating furnace at Steelton, distribution network throughout slippage in average selling prices. Pennsylvania, was given in the The plan represents a major step Latin America, drawing on strong Despite these two factors, Long second half of 2013. The new forward for Annaba. The local connections and partners. Carbon Europe increased Ebitda by furnace will offer major production unit will be modernised Annual review 2013 Operations 19

Our steel and mining operations continued

through the relining of the blast award from the World Steel furnace and the modernisation of Association. Regrettably, there was the sinter plant, steel plant and one fatality. We have redoubled our rolling mills. A new electric steel efforts to reinforce our fatality plant will be built (including an prevention standards in the electric arc furnace and continuous year ahead. casting line). The downstream units will be reinforced with the A number of factors combined to construction of a new rolling mill dampen performance in 2013. A for rebar and wire rod with a small reduction in average selling production capacity of prices, lower demand for oil and 1 million tonnes. gas products globally, for mining products in North America and for Outlook automotive products in Europe, all With signs that Europe is emerging combined with a strike in Venezuela from recession and prospects of a to reduce shipments from 1.52 revival in industrial activity in the million tonnes in 2012 to 1.44 USA, the demand outlook in the million in 2013. Ebitda was further developed world is positive. The impacted by a margin squeeze in consequences of currency the US energy market and upheaval among some developing finished the year at US$284 markets are harder to predict. million, down from US$317 million the previous year. ‘What is certain,’ says Mr Wurth, ‘is that we will see the benefit of all Our seamless tube joint venture in the measures taken to reassess our Jubail, Saudi Arabia, successfully footprint and of the investment produced its first saleable pipe on that continues to go into our November 30, 2013. The plant has franchise businesses, such as sheet produced some limited ranges of pile and high quality wire rod. ASTM1 pipes and is in the process Among other things, we will be of obtaining American Petroleum modernising our Belval sheet pile Institute (API) certification. This is mill to further strengthen our expected early in the second worldwide leadership in this area.’ quarter of 2014, after which commercial production of API Tubular products products can start, as well as ArcelorMittal is one of the world’s certification from key regional leading producers of tubular customers (i.e. Aramco). products, with 23 facilities located Additional downstream facilities mainly in the Americas and Europe will be completed in 2014. (including our greenfield joint With a total project cost of venture in Saudi Arabia). The US$910-950 million (excluding markets we serve include energy, financing), the plant relies on mechanical, construction and leading-edge furnace and finishing automotive. We offer a complete technology. At full production, it range of products, seamless, spiral will have an installed rolling welded and longitudinal welded. capacity of more than 600,000 tonnes and produce the highest We achieved a notable advance in quality seamless pipes. safety in 2013, with a reduction in the LTIFR from 1.1 in 2012 to 0.5. The most marked improvement was in the Venezuelan operation, where a reduction in the LTIFR from 5.4 to 1.6 was recognised in an

1 American Society for Testing and Materials. Annual review 2013 Operations 20

Our steel and mining operations continued

Asia, Africa and CIS For the year, average selling prices In Ukraine, we invested with no seasonal adjustments. were around 10% lower than in US$16.2 million to install a fish We expect the macroeconomic (AACIS) 2012, falling from around US$660 bone packing line, together with a parameters to improve, which will a tonne at the start of the year to straightening machine, to supply help to make our assets more Our Asia, Africa and CIS US$590 at the end. top-quality bars. competitive. Our focus remains on segment has operations in productivity, reliability and, Ukraine, Kazakhstan and Overall, we lifted crude steel In Kazakhstan, a number of projects importantly, customer service.” South Africa. Kryviy Rih in production by around 100,000 were commissioned to reduce dust Ukraine ranks as the world’s tonnes to 14.4 million tonnes in emissions. The largest of these, In Ukraine, despite the political largest producer of long 2013. Shipments fell from 12.8 costing US$132 million, was for unrest at the beginning of 2014, products. In 2013, it million tonnes to 12.3 million. “To the dedusting of the primary and operations in Kryviy Rih have produced 6.4 million tonnes compensate for the fall in average secondary gas treatment facilities continued as normal. The raw selling prices, we instituted a major from converters 1 to 3. Bag filters materials supplies and rail, road and of crude steel. Temirtau is cost reduction programme,” says were installed and commissioned to sea flows are stable. Domestic Kazakhstan’s largest Mr Urquijo. “This was successful in dedust the cold side of the sinter market demand in first quarter and integrated steelmaker and generating cost savings of around plant at a cost of US$26 million. beginning of the second quarter of produces both flat and long US$20/t, though this was still not We invested a further US$9.5 2014 was at a slightly lower level. products. Its crude steel enough to mitigate the fall in million in dedusting in the production in 2013 was 3.0 prices.” Ebitda finished the year at lime plant. million tonnes. Our four plants US$292 million, down from in South Africa together US$337 million (excluding the In South Africa, we one-time income from the disposal decommissioned one of the coke produced 5 million tonnes, of of Paul Wurth of US$242 million) batteries at Vanderbijlpark, which around two-thirds was the previous year. This reflected a replacing output with full flat products. decline in the average margin from production from the remaining five around US$26 a tonne to US$24. batteries at the same plant and at Safety other ArcelorMittal South Africa AACIS sustained the progress made We achieved a major landmark sites. The investment necessary to in 2012 with another strong during the year with the resolution restore full production following performance. The lost time injury of all of ArcelorMittal South Africa’s the fire at the plant was frequency rate (LTIFR) was steady long-running disputes with Kumba undertaken as quickly as possible, at 0.5. This is significantly below Iron Ore and the establishment of a at a cost of US$16 million. At the the average for the group as a new long-term supply agreement Newcastle plant, a US$42 million whole. Strenuous efforts to for up to 6.25 million tonnes of iron project to reduce effluent discharge improve safety at the South ore a year. The new agreement, to zero is close to completion. It will African operations have resulted in which takes effect from the make the plant a world leader in two years without a fatality. beginning of January 2014, terms of water management. Regrettably there were still four ensures a supply of competitively fatalities elsewhere in AACIS. priced iron ore. It offers significant A few major projects are scheduled Gonzalo Urquijo, GMB member cost benefits compared with the for the current year: responsible for AACIS in 2013, interim supply agreement in place says: “We are working very hard on since March 2010 and the • In South Africa, a blast furnace this. Our focus is on three areas: excessive costs associated with the reline at the Newcastle plant; working at heights, crushes and Thabazimbi mine, which is improving safety awareness among • At Kryviy Rih, sinter plant strand approaching the end of its life in its our contractors.” 6, coke battery 5, PCI injection in current configuration. ArcelorMittal blast furnace and blast furnace South Africa will no longer retain an no. 6 intermediate reline; Performance economic interest in Thabazimbi. A number of factors impacted the The new agreement will reduce • At Temirtau, a reline of blast results in 2013. The South African ArcelorMittal South Africa’s cost furnace no.3, steel plant operations, which are heavily base and support its dedusting and widening of cold dependent on the domestic competitiveness. rolling mill. market, were affected by a softer construction market and a fire at Investments Outlook the Vanderbijlpark plant. Temirtau Our capital expenditure, at Mr Urquijo expects the in Kazakhstan encountered a US$395 million, was slightly below environment to remain challenging reduction in export demand, with that of 2012 (US$433 million). It in 2014. “While volume and price weaker markets in the Middle East involved a mix of projects aimed at pressures are unlikely to go away, and China in particular. Kryviy Rih improving reliability, productivity, our focus remains through increased its shipments, but, in expanding the product range or maintenance transformation and common with the rest of AACIS, addressing safety and WCM2 to bring operational experienced weaker prices. environmental issues. reliability and run the assets full

2 World Class Manufacturing. Annual review 2013 Operations 21

Our steel and mining operations continued

Distribution Solutions Sales fell from US$16.3 billion to US$14.1 billion with a reduction in Operating through a network the average selling price from of around 300 sites (steel US$886 a tonne to US$850. service centres and ‘The market was extremely stockholding), Distribution challenging in terms of both volume and price,’ says Gonzalo Solutions provides value- Urquijo, GMB member responsible added, customised solutions for Distribution Solutions. Reported to around 100,000 Ebitda was US$85 million customers every year. compared with US$407 million in Centred on Europe, 2012. However, the prior-year Distribution Solutions sells a figure included a one-time gain mix of flat and long products, from the disposal of the Skyline steel foundation distribution and has specialist capabilities business. Adjusting for this and in wire drawing and metal other exceptional items, Ebitda sheet operations. increased from US$36 million to US$85 million. Cutting and packaging steels to meet individual customer ‘We made substantial progress in requirements, Distribution reducing our costs through our Solutions has a 12% share of the asset optimisation programme and European steel market, with leading reaped the benefits of working positions in France, Belgium, the closely with both our upstream Netherlands, Spain and Poland. Flat business and our customers,’ says products make up two-thirds of Mr Urquijo. ‘There was continued its sales. growth in our projects business and in the oil and gas solutions area.’ In Internationally, Distribution September, Distribution Solutions’ Solutions is active in project site in Bourg-en-Bresse, France, management. Through won a five-year contract to ArcelorMittal International, it also fabricate and supply high- acts as the international sales performance steel wires for a major network for the group’s mills. engineering and oil industry project management business, reinforcing Safety its position as a leading provider of The major drive on safety training high-end technical solutions to the in recent years continued to pay offshore oil and gas market. dividends at Distribution Solutions in 2013. We further reduced our lost time injury frequency rate Outlook With modest growth in European (LTIFR) from 1.6 per million hours manufacturing output over the worked to 1.2. Tragically, there was second half of 2013 and generally one fatality during the year. In positive indicators for 2014, there 2014, the focus will be on is cautious optimism within reinforcing the group’s fatality Distribution Solutions for the year prevention standards across ahead. ‘The outlook is for some Distribution Solutions’ diverse improvement in demand across network and driving the LTIFR Europe,’ says Mr Urquijo. ‘What is down to the targeted 1 and below. certain is that we will continue to grow our projects business.’ Performance In 2013, we shipped 16.1 million tonnes of steel. That compared with 17.7 million in 2012. Sales within our activities in Europe fell from 9.9 million tonnes to 9.0 million. The other 700,000 tonnes of the shortfall was accounted for by ArcelorMittal International, as the slowdown in Chinese consumption put pressure on world export markets. Annual review 2013 Operations 22

Our steel and mining operations continued

Mining Performance Coal production fell marginally in In Baffinland, work on the planned Increasing tonnages from both 2013, from 8.2 million tonnes to early revenue phase (ERP) began in Mining operates a high Canada and Liberia drove a rise in 8.1 million tonnes. The amount the first quarter of 2013. quality, geographically iron ore production, excluding shipped externally and reported at Budgeted to cost about US$730 diversified portfolio of iron long-term contracts, from 55.9 market price was also lower, at 4.8 million, the ERP is designed to million tonnes compared with 5.1 enable early mining without the ore and coal assets. An million tonnes in 2012 to 58.4 million tonnes. Including ore million tonnes in 2012. The capital investment required for the ambitious development sourced from strategic contracts, average benchmark price for hard full project and demonstrate the programme underway in total production increased from coking coal FOB Australia in 2013 high quality of the Mary River Canada and Liberia is on track 68.1 million tonnes to 70.1 million. of US$158.5 per tonne was 24% product. Following upgrades to the to achieve iron ore production We exceeded our target for lower than 2012. roads and port, DSO will be trucked capacity of 84 million tonnes marketable shipments, which rose to Milne Inlet throughout the year in 2015. With an increasing 22% to a record 35.1 million Reserve update for shipping during the open water tonnage of iron ore being tonnes. There was a progressive We have a strong reserve and season. We anticipate shipping the increase in marketable shipments resource base to support first ore in the second half of 2015. marketed externally, Mining over the year, with fourth-quarter continuing growth in iron ore At full capacity, production will represents an important shipments some 54% higher than production. In 2013, our reserve reach 3.5 million tonnes a year. source of growth for in the comparable period of 2012. estimates increased by 278 million A second phase, involving the the group. tonnes, taking total iron ore building of a railway, will There were two major milestones reserves to 4.6 million tonnes run be considered in the light of Mining reports as a separate during the year. We completed the of mine. The increase was market conditions. segment. All production that can expansion of ArcelorMittal Mines principally due to a revision of the practically be sold outside the Canada (AMMC) from 16 million life of mine plan of our Canadian In Brazil, we are investing in a group is either transferred to tonnes capacity to 24 million operations in Mont-Wright and Fire high-intensity magnetic separator internal customers at market prices tonnes at a cost of US$1.6 billion. Lake, together with an update of at our Serra Azul mine. The or sold to third parties through the This involved the commissioning of the mine plan of the Lisakovski investment will improve product business’s global marketing arm. In a new spirals line and concentrating open pit operation in Kazakhstan, quality and reduce the cost profile 2013, iron ore shipments at plant, together with upgrades to offset in part by the tonnages of the mine. market price increased by more the railway and Port-Cartier, now mined during the year. The addition than a fifth. Where marketing to one of Canada’s largest private of higher grade iron ore reserves in Corporate responsibility third parties is constrained by ports with a capacity to handle Canada resulted in a 0.8% increase For the Mary River Project, logistics or quality, production is 160,000-plus tonne ships. in the average Fe grade. Baffinland Iron Mines Corporation transferred to the group’s steel has been collecting environmental facilities on a cost-plus basis. Over the year, production rose Our coal reserves remained baseline information since 2005. from 15 million tonnes to 18 constant at 318 million tonnes. The species and habitat information Safety million tonnes. The targeted Annual mining depletion of 16 was used to assess and minimize We remain firmly committed to run-rate of 2 million tonnes a million tonnes was entirely offset potential impacts to all valued becoming the safest business in month was hit in December. by a re-evaluation of the mine plan ecological components and their the metals and mining industry. at our Kazakhstan operations. habitat. By way of a thorough With the introduction of our In Liberia, 2013 shipments environmental assessment process Courageous Leadership exceeded expectations to hit 5.2 Growth plans inclusive of the local Inuit programme, we have improved our million tonnes, a year-on-year rise With the expansion of AMMC now communities and all interested performance for five years in a row. of 152%. Current mine capacity is complete, the principal focus of our government and non-government Courageous Leadership is designed around 4 million tonnes. Shipments growth plans is on developing the parties has enabled Baffinland to to encourage safety-first thinking in 2013 were entirely made up of second phase of our Liberian proceed with the construction of at all times and empower people to direct shipping ore (DSO) and operation and deriving early the mine and associated speak out if they feel anything is included inventory built up from revenue from the Mary River joint infrastructure while adhering to wrong. It has now been rolled out earlier years. ‘This represented an venture project in Baffinland. high standards for environmental in substantially all of our sites. outstanding shipping performance protection. Species specific with a full year of offshore Our Phase 2 expansion in Liberia monitoring results will be reviewed In 2013, our lost time injury Cape-size trans-shipment’, says will take production capacity from with all interested parties to ensure frequency rate once again fell - Mr Scotting. 4 million tonnes a year to 15 million that the Mary River Project is from 0.7 per million hours worked tonnes while replacing DSO with an carried out in a sustainable manner to 0.6. Despite this improvement, We lifted our sales in 2013 from enriched, and significantly more acceptable to all stakeholders. Mining still experienced four US$5.5 billion to US$5.8 billion. marketable, premium sinter feed. Baffinland’s Closure and fatalities. ‘Over the past six years, Ebitda increased from US$1.8 All environmental permits for Phase Reclamation Plan will ensure that all we have reduced our injury billion to US$2 billion. This was 2 have been received and the government and Inuit mine closure frequency rate by around 80%, but against the backdrop of a relatively major equipment procurement is objectives are achieved. to continue to experience fatalities strong iron ore price over the year complete. Civil works have started is just not acceptable,’ says Bill and increasing shipments. The at the mine, concentrator site and The Liberia corporate responsibility Scotting, Mining CEO. ‘We will average benchmark iron ore price the port of Buchanan. The project programme in 2013 covered the continue to reinforce the per tonne in 2013 of US$135.2 involves an investment of around four pillars of the ArcelorMittal Courageous Leadership programme CFR China (62% Fe) was 4% higher US$1.7 billion and is due to corporate responsibility vision with and work on encouraging the right than in 2012. complete in late-2015 with a renewed emphasis on improving behaviours. This is the number one ramp-up to full capacity programme quality. Key priority for 2014.’ commencing in 2016. interventions to improve the Annual review 2013 Operations 23

Our steel and mining operations continued

working conditions of employees included the equalisation of conditions of service for employees and contractors, increasing the number of training opportunities for employees and promoting a safe working environment for all. The biodiversity programme was hailed as one of the best in the industry following the publication of a landmark report. The proactive stakeholder engagement received special recognition from the United Nations Global Compact in its September 2013 publication, Responsible Business: Advancing Peace. As part of the mining development agreement (MDA) agreement all social commitments in 2013 were achieved.

Outlook Against the backdrop of continuing pricing pressures throughout the mining industry, our focus in the year ahead will be on operational excellence to ensure that our unit costs come down as our production volumes increase. ‘Cost control is key,’ says Mr Scotting: ‘We are working on debottlenecking, on productivity, maintenance and reliability, and benchmarking to ensure we share best practice.’

Similar rigour is being applied in the monitoring of capital investment, with a focus on on-time and on-budget delivery. A central project management office conducts regular project reviews, with standardised project controls to track time or cost divergences and risks.

‘Our plans envisage a steady rise in iron ore production and marketable tonnages over the next two to three years. We want to ensure that our mines are positioned low on the cost curve and that our growth is profitable,’ says Mr Scotting. Annual review 2013 Operations 24

Mining: iron ore and coal reserves and resources

ArcelorMittal’s mining segment has production facilities in North and South America, Africa, Europe and CIS. The following table provides an overview by type of facility of ArcelorMittal’s principal mining operations:

Unit Country Locations ArcelorMittal interest (%) Type of mine Type of product Iron ore Iron ore mine Concentrate and ArcelorMittal Mines Canada Canada Mont-Wright 85 (open pit) pellets Iron ore mine Minorca Mines USA Virginia, MN 100 (open pit) Pellets Iron ore mine Hibbing Taconite Mines USA Hibbing, MN 62.31 (open pit) Pellets ArcelorMittal Lázaro Cárdenas Iron ore mine Volcan Mines Mexico Sonora 100 (open pit) Concentrate ArcelorMittal Lázaro Cárdenas Iron ore mine Concentrate and Peña Colorada Mexico Minatitlán 50 (open pit) pellets Iron ore mine Concentrate, lump ArcelorMittal Las Truchas Mexico Lázaro Cárdenas 100 (open pit) and fines State of Minas Iron ore mine ArcelorMittal Brasil Andrade Mine Brazil Gerais 100 (open pit) Fines State of Minas Iron ore mine ArcelorMittal Mineração Serra Azul Brazil Gerais 100 (open pit) Lump and fines Iron ore mine (open pit and ArcelorMittal Tebessa Algeria Annaba 70 underground) Fines Bosnia and Iron ore mine Concentrate and ArcelorMittal Prijedor Herzegovina Prijedor 51 (open pit) lump Iron ore mine (open pit and Concentrate, lump ArcelorMittal Kryviy Rih Ukraine Kryviy Rih 95.13 underground) and sinter feed Lisakovsk, Iron ore mine Kentobe, (open pit and Concentrate, lump ArcelorMittal Temirtau Kazakhstan Atasu, Atansore 100 underground) and fines Iron ore mine ArcelorMittal Liberia Liberia Yekapa 85 (open pit) Fines Coal Coal mine McDowell, WV; (open pit and ArcelorMittal Princeton USA Tazewell, VA 100 underground) Coking and PCI coal Coal mine Coking coal ArcelorMittal Temirtau Kazakhstan Karaganda 100 (underground) and thermal coal Coal mine ArcelorMittal Kuzbass Russia Kemerovo 98.64 (underground) Coking coal

Iron ore of Fermont are connected by interest in the joint ventures, and are located, with the exception of a Highway 389 to Baie Comeau on on May 30, 2013, the consortium small area which remains the ArcelorMittal Mines Canada the North Shore of the Gulf of purchased a further 3.95% interest property of the Quebec ArcelorMittal Mines Canada is a St. Lawrence, a distance of 570 in the joint ventures. As part of the Government but in no way major North American producer of kilometers. The property was first transaction, POSCO and CSC compromises the mining rights. iron ore concentrate and several explored in 1947 and the project entered into long-term iron ore types of pellets. It holds mining was constructed by Quebec Cartier off-take agreements proportionate The expiration dates of the mining rights over 74,000 hectares of Mining (‘QCM’) between 1970 to their joint venture interests. leases range from 2015 to 2025. land in the province of Québec, and 1975 and began operating in These leases are renewable for Canada. ArcelorMittal Mines 1976. In 2006, QCM was ArcelorMittal Mines Canada also three periods of ten years provided Canada operates the Mont-Wright purchased by ArcelorMittal when it owns mining rights to iron ore the lessee has performed mining Mine and concentrator at Fermont acquired control of Dofasco. On deposits in Fire Lake and Mont operations for at least two years in in northeastern Québec. Mont- December 31, 2012, ArcelorMittal Reed. Fire Lake, located the previous ten years of the lease. Wright is located 416 kilometers and a consortium led by POSCO approximately 53 kilometers south north of the port of Port-Cartier, and China Steel Corporation (‘CSC’) of Mont-Wright, previously a The Mont-Wright and Fire Lake the site of the pelletizing plant and and also including certain financial seasonal operation from which mines are part of the highly-folded shipping terminal on the north investors, created joint venture approximately 2.5 million tonnes of and metamorphosed southwestern shore of the Gulf of St. Lawrence, partnerships to hold ArcelorMittal’s crude ore are transported by rail to branch of the Labrador Trough. and approximately 1,000 Labrador Trough iron ore mining the Mont-Wright concentrator The most important rock type in kilometers northeast of Montreal. and infrastructure assets. In the annually will as from 2014 operate the area is the specular hematite A private railway connects the first half of 2013, the consortium year-round. The Mont Reed iron formation forming wide mine and concentrator with completed the acquisition, through deposit is currently not mined. In massive deposits that often form Port-Cartier. The railway and the two installments, of an aggregate addition, ArcelorMittal Mines the crest of high ridges extending port are owned and operated by 15% interest in the joint ventures. Canada holds surface rights over for many kilometers in the ArcelorMittal Mines Canada. The On March 15, 2013, the the land on which the Mont- Quebec-Labrador area. Mont-Wright mine and the town consortium acquired an 11.05% Wright and Port Cartier installations Annual review 2013 Operations 25

Mining: iron ore and coal reserves and resources continued

The Mont-Wright operation transport the pellets to Indiana ArcelorMittal Lázaro Cardenas concentrations of magnetite within consists of open pit mines and a Harbor. The Minorca taconite plant Mining Assets breccia zones and results from concentrator. The ore is crushed in was constructed and operated by AMLC operates three iron ore several magmatic, metamorphic two gyratory crushers and the Inland Steel between 1977 and mines in Mexico, the El Volcan and and hydrothermal mineralization concentrator operates with seven 1998 when it was purchased by Las Truchas mines and, through a stages with associated skarns, lines of three stage spiral classifiers then ISPAT International, a joint ownership with Ternium SA, dykes and late faults sectioning the and horizontal filters. The predecessor company of the Peña Colorada mine. entire deposit. concentrator has a production ArcelorMittal. capacity of 24 million tonnes of Peña Colorada El Volcan concentrate per annum. The The Hibbing Taconite Company Peña Colorada holds mining rights ArcelorMittal holds mining rights Port-Cartier pellet plant produces holds mining rights over 7,380 over 68,209 acres located at over 1,050 hectares to support its acid and flux pellets that operate acres in 43 contiguous mineral about 60 kilometers by highway to El Volcan operations located six ball mills, ten balling discs and leases, is located six kilometers the northeast of the port city of approximately 68 kilometers two induration machines. The north of Hibbing in the northeast Manzanillo, in the province of northwest of the city of Obregon pelletizing plant has a capacity of of Minnesota accessible by road Minatitlán in the northwestern part and 250 kilometers from the 9.3 million tonnes of pellets. The and rail. The Hibbing operations are of the State of Colima, Mexico. Guaymas port facility in the state mine produced 9.1 million tonnes jointly owned by ArcelorMittal USA ArcelorMittal owns 50% of Peña of Sonora, Mexico. The El Volcan of pellets and 8.9 million tonnes of (62.3%), Cliffs Natural Resources Colorada Ltd., and Ternium SA operations control all of the mineral concentrate in 2013. (23.0%) and U.S. Steel (14.7%), owns the other 50% of rights and surface rights needed to and Cliffs Natural Resources is the the company. mine and process its estimated Electric power for Mont-Wright operator of the joint venture mine 2013 iron ore reserves. and the town of Fermont is and processing facilities. The Peña Colorada operates an open pit ArcelorMittal operates a supplied by Hydro-Quebec via a Hibbing Taconite Company controls mine as well as a concentrating concentrating facility along with an 157 kilometer line. In the event of all of the mineral rights and surface facility and a two-line pelletizing open pit mine and a pre- an emergency, the Hart Jaune rights needed to mine and process facility. The beneficiation plant is concentration facility at the mine Power plant, also connected to the its estimated 2013 iron ore located at the mine, whereas the site. The mine site is accessible by a Hydro-Quebec grid, can supply reserves. The operations consist of pelletizing plant is located in 90-kilometer road from the city of sufficient power to maintain the open pit mining, crushing, Manzanillo. Major processing Obregon, where the concentrator operations of the essential concentrating and pelletizing. The facilities include a primary crusher, is located. processing facilities. finished pellets are then a dry cobbing plant, one transported by rail to the port of autogenous mill, horizontal and Government concessions are ArcelorMittal USA Allouez at Superior, Wisconsin, a vertical ball mills and several stages granted by the Mexican federal Iron Ore Mines distance of 130 kilometers and of magnetic separation. The government for a period of 50 ArcelorMittal USA operates an iron then over the Great Lakes by lake concentrate is sent as a pulp years and are renewable. The ore mine through its wholly-owned vessels to ArcelorMittal’s through a pipeline from the mineral expiration dates of the current subsidiary ArcelorMittal Minorca integrated steelmaking plants, processing plant. Peña Colorada has mining concessions range from and owns a majority stake in principally Burns Harbor. The operated since 1974. The Peña 2021 to 2061. Hibbing Taconite Company, which Hibbing Taconite Company began Colorada mine receives electrical is managed by Cliffs Natural operating in the third quarter of power from the Comisión Federal The pre-concentration facilities at Resources. 1976. The mine produced 7.7 de Electricidad (CFE), which is a the mine include one primary million metric tonnes of taconite federal government company that crusher, one secondary crusher, a ArcelorMittal Minorca holds mining pellets in 2013 (of which 62.3% is serves the entire country. dry cobbing high intensity magnetic rights over 13,210 acres and ArcelorMittal’s share). pulley and three tertiary crushers. leases an additional 3,350 acres of Government concessions are The concentration plant includes land to support its operations Both the Minorca and Hibbing granted by the Mexican federal two ball mills on line, a magnetic located approximately three mines are located in the Mesabi government for a period of 50 separation circuit, flotation kilometers north of the town of iron range where iron ore has been years and are renewable. The systems, a belt conveyor filter and Virginia in the northeast of extracted for over 100 years. The expiration dates of the current a disposal area for tails. The major Minnesota accessible by road ore bodies are within the Biwabik mining concessions range from port installations include a tippler and rail. The Minorca operations Iron Formation, a series of shallow 2021 to 2061. for railroad cars, a conveyor, control all the mineral rights and dipping Precambrian sedimentary transfer towers and two ship surface rights needed to mine and rocks known as taconite with a The Peña Colorada pelletizing loading systems. The mine process its estimated 2013 iron total thickness in excess of 200 facility produced 3.8 million tonnes exploitation and crushing ore reserves. ArcelorMittal Minorca meters and running for of pellets and 0.1 million tonnes of operations and all transport operates a concentrating and approximately 200 kilometers. concentrate in 2013 (of which activities are performed by pelletizing facility, along with two Although the first deposits mined in 50% is ArcelorMittal’s share). Both contractors. The concentrate and open pit iron ore mines – the Mesabi iron range consisted of magnetite concentrate and iron ore port operations are operated with Laurentian and East Pits located oxidized hematite ores, production pellets are shipped from Manzanillo ArcelorMittal’s own resources. The 12 kilometers from the processing was shortened in the mid 1950s to to ArcelorMittal Lazaro Cardenas concentrate is transported by rail facilities. The processing operations low grade magnetic taconite ores. and for export, as well as to to the Pacific port of Guaymas and consist of a crushing facility, a The processing of this ore involves Ternium’s steel plants, by ship and then shipped to the Lázaro three-line concentration facility a series of grinding and magnetic by rail. Cárdenas steel plant or exported. and a single-line straight grate separation stages to remove the The mining operation uses two pelletizing plant. The Minorca magnetite from the silica. Electric Peña Colorada is a complex Caterpillar 3516B electric pelletizing facility produced 2.9 power constitutes the sole source polyphase iron ore deposit. The iron generators in continuous operation, million metric tonnes of fluxed of energy for both Minorca and mineralization at Peña Colorada with one generator operating pellets in 2013. Pellets are Hibbing and is provided from the consists of banded to massive 24 hours per day at an average transported by rail to ports on Lake Minnesota state power grid. consumption of 540 kilowatt hours Superior. Lake vessels are used to Annual review 2013 Operations 26

Mining: iron ore and coal reserves and resources continued

while the second generator is plant. The aggregated 2013 Belgo-Mineira (‘CSBM’) initiated Leme, located 20 kilometers from on standby. The concentration production concentrate, lumps and mining operations at the property the mine. The electricity is locally facility uses electric power from fines totaled 2.6 million tonnes. The in 1944 in order to facilitate the transformed into 380 volts by six the national grid. concentrator includes one primary supply of ore to its steel plant in transformers spread around the crusher, two secondary crushers Joao Monlevade. The mine was operation. Minas Itatiauçu (MIL) The Volcan mine concession was and three tertiary crushers, one ball managed by CSBM until 2000. In initiated mining operations at the bought from the Sonora provincial mill and one bar mill and two wet 2000, Vale acquired the property, property in 1946. In 2007, London government in 2004, followed by magnetic separation circuits. The although the mine continued to be Mining Brazil Mineração Ltda exploration of the property in electrical energy supplier for the operated by CSBM until Vale (London Mining) purchased the 2005. The development of the Las Truchas mine is a state-owned entered into a 40-year lease for mineral rights from MIL. Following mine started in 2007. Mining company, Comisión Federal de the Andrade mineral rights in 2004 the acquisition of the property operations were halted during the Electricidad (CFE). The (subject to the condition that the from London Mining, ArcelorMittal 2008-2009 crisis and on several concentrated ore is pumped from supply to CSBM would be assured). has operated the mine since 2008. occasions due to structural the mine site through a In November 2009, Vale returned In 2013, ArcelorMittal Mineração problems in the crushing facilities. 26-kilometer slurry pipeline to the Andrade mine to CSBM, which Serra Azul produced 1.4 million Operations have resumed without the steel plant facility in then transferred it to ArcelorMittal. tonnes of lumps and sinter fines. interruption since 2010. The Lazaro Cardenas. In 2013, the Andrade mine Volcan operations produced 2.2 produced 2.5 million tonnes of Both the Andrade and Serra Azul million tonnes of concentrate The Las Truchas deposits consist of sinter feed. An increase of the mines are located in the Iron in 2013. massive concentrations of mine’s production capacity to 3.5 Quadrangle (Quadrilátero magnetite of irregular morphology. million tonnes per year of sinter Ferrifero), a widely-explored and The iron mineralization at the El The main Las Truchas deposits feed was completed in 2012. In mined region. The mineralization Volcan deposit presents many occur along a trend of about seven 2013 a cross road was built in occurs as Itabirites, banded similarities with Peña Colorada, kilometers long and about two order to improve shipments to the hematite-silica rocks, with varying with magnetite rich skarn kilometers wide. The Las Truchas local Brazilian market. weathering degrees. While the associated to the intrusion and mineral deposits have been Serra Azul ore reserve estimates extrusion of magmas rich in iron classified as hydrothermal deposits, ArcelorMittal Mineração are constituted of rich friable and formed in a volcanic which may have originated from Serra Azul Itabirites requiring some environment. An active exploration injections of late stage-plutonic- ArcelorMittal Mineração Serra Azul beneficiation, the Andrade ore program aims to extend the activity through older sedimentary holds mining rights over the central reserve estimates are dominated estimated remaining three-year rocks. The mineralization of the Las and east claims of the Serra Azul by directly shippable hematite ore. mine life of the current open pit Truchas iron deposits occurs in deposit over 6,006,700 square mine both through defining the disseminated and irregular massive meters, located approximately 50 ArcelorMittal Tebessa down-dip extension of the concentrations of magnetite within kilometers southwest of the town ArcelorMittal Tebessa holds mining mineralization zone being currently metamorphic rocks and skarns. of Belo Horizonte in the Minas rights over 14 square kilometers mined and by exploring other The mineralization also occurs as Gerais state of Brazil. over two main areas to support its regional targets. fillings of faults, breccia zones, ArcelorMittal’s operations control iron ore mining operations: the and fractures. all of the mineral rights and surface Ouenza open pit mine and the Las Truchas rights needed to mine and process Boukhadra underground mine The Las Truchas mine holds mining ArcelorMittal Brasil – its estimated 2013 iron ore located 150 and 180 kilometers, rights over 14,489 hectares to Andrade Mine reserves. ArcelorMittal operates an respectively, from the Annaba support its operations located ArcelorMittal Brazil holds mining open pit mine and a concentrating ArcelorMittal steel plant in approximately 27 kilometers rights over the central claims of the facility. The mine site is accessible southeast Algeria near the Tunisian southeast of the town of Lazaro Andrade deposit over 27,333,100 by 80 kilometers of public highway border. Both mines can be accessed Cardenas in the State of square meters located from Belo Horizonte. by road and by electrified railways Michoacán, Mexico. The Las approximately 80 kilometers east that run between the mines and Truchas operations are accessible of Belo Horizonte in the Minas In addition to the open pit mine, the ArcelorMittal Annaba by public highway and control all Gerais state of Brazil. processing operations consist of a steel plant. the mineral rights and surface ArcelorMittal’s operations control crushing facility and a three-line rights needed to mine and process all of the mineral rights and surface concentration facility including Processing at the mines is limited its estimated 2013 iron rights needed to mine and process screening, magnetic separation, to primary crushing. The two mines ore reserves. its estimated 2013 iron ore spirals separators and jigging. produced 0.7 million metric tonnes reserves. ArcelorMittal operates an Production is transported either by of lumps and sinter fines in 2013. Government concessions are open pit mine and a crushing truck for local clients of lump, or by Electric power constitutes the sole granted by the Mexican federal facility. The mine site is accessible truck to two railway terminals source of energy for both mines government for a period of 50 by 110 kilometers of public located 35 and 50 kilometers, and the crushing facilities and is years and are renewable. The highway from Belo Horizonte. respectively, from the mine site for provided from the state power expiration dates of the current Power is mostly generated from selling to local clients of sinter feed grid. In 1913, the Societe de mining concessions range from hydroelectric power plants and or for export through third-party L’Ouenza was created and mining 2021 to 2061. supplied by CEMIG, an open capital port facilities located in the Rio de of the ore began in 1921. The company controlled by the Janeiro State. Sinter feed mines were nationalized in 1966 The Las Truchas mine is an Government of the State of production is shipped to following Algeria’s independence integrated iron ore operation. It Minas Gerais. ArcelorMittal’s plants in Europe as from France. In 1983, the Ferphos began operating in 1976 as a well as to the local Brazilian market Company was created and, in government enterprise (Sicartsa), The Andrade mine supplies sinter including the ArcelorMittal Brasil 1990, it became autonomous from and its mining activities consist of feed to ArcelorMittal Long Carbon integrated plants. The Companhia the government. Since October an open pit mine exploitation, – João Monlevade integrated plant Energética de Minas Gerais 2001, both the Ouenza mine and crushing, dry cobbing through an internal railway of 11 (CEMIG) supplies power through a the Boukhadra mine have been preconcentrate and concentration kilometers. Companhia Siderurgica 13,800 volt line from Mateus Annual review 2013 Operations 27

Mining: iron ore and coal reserves and resources continued

owned by ArcelorMittal (70%) and The Omarska deposit is composed The iron ore extracted from the Temirtau, with production of Ferphos (30%), an Algerian public of two ore bodies: Jezero and Kryviy Rih open cast is first 2.1million tonnes of concentrate in sector company. Buvac. The Jezero open pit began processed at the mine site through 2013. This mine was initially operating in 1983 and, following primary crushing. After initial commissioned in 1976 and was Although both the Ouenza and an interruption in production during processing, the product is loaded acquired by ArcelorMittal in 1999. Boukhadra mines have been the Bosnian civil war in the 1990s, on a rail-loading facility and The existing subsoil agreement producing iron ore for several production resumed in 2004. transported to the crushing plant. expires in 2020. The production decades, no iron ore reserves are The concentrator production process comprises crushing, reported for these mines in 2013 However, since 2011, ore has only process includes crushing, screening, grinding, wet jigging and due to material deficiencies in the been produced at the Buvac pit. classification, magnetic separation wet magnetic separation. The iron drilling data recording and archiving The Buvac pit was opened in 2008 and filtering. The iron ore extracted mineralization at Lisakovsk occurs process. ArcelorMittal intends to and is located within a from the Kryviy Rih’s underground as oolite containing mainly conduct drilling campaigns at the carboniferous clastic and mine by a modified sub-level hygoethite and goethite. The two mines in accordance with carbonates sediments containing caving method is crushed on phosphorous content in the industry best practices. The iron mineralization in the form of surface and transported by rail to mineralization limits its utilization in Ouenza and Boukhadra deposits beds concordant with host rocks or the steel plant. The main consumer the steel-making process. At principally consist of hematite that in the form of massive irregular of the sinter and concentrate Lisakovsk, natural gas is supplied by results from the oxidization of blocks. The genesis of this deposit products is the ArcelorMittal Kryviy KazTransGazAimak JSC and siderites and pyrites. is attributed to hydrothermal Rih steel plant, with some transmitted through the local grid. replacement and syn-sedimentary concentrate being shipped to other Electric power for the other Following the strategic agreement processes. Buvac ore body is mainly ArcelorMittal affiliates in Eastern facilities is supplied by Stroiinvest signed on October 5, 2013 composed of limonite-goethite Europe, as well as to third parties. and Sarbai Interregional. between ArcelorMittal and Sider, mineralization, which was formed Operations began at the Kryviy Rih the Company will sell to Sider a during weathering oxidization of open cast in 1959 and at the Kentobe is an open pit operation 21% controlling stake in the primary siderite bodies. Kryviy Rih underground mine in located about 300 kilometers ArcelorMittal Tebessa in 2014 . 1933. ArcelorMittal acquired the southeast of Temirtau, initially ArcelorMittal Kryviy Rih operations in October 2005 from started in 1994, with production ArcelorMittal Prijedor ArcelorMittal Kryviy Rih (‘AMKR’) the State Property Fund of Ukraine. of 0.7 million tonnes of ArcelorMittal Prijedor, located near holds mining and surface rights to concentrate in 2013. It was Prijedor in the Republic of Srpska in support its operations located The iron mineralization is hosted by acquired by ArcelorMittal in 2001. Bosnia and Herzegovina, is an iron roughly within the limits of the city early Proterozoic rocks containing The existing subsoil agreement ore mining operation that is of Kryviy Rih, 150 kilometers seven altered ferruginous quartzite expires in 2015. Ore processing is 51%-owned by ArcelorMittal. southwest of Dnepropetrovsk, strata with shale layers. The major performed by crushing and dry ArcelorMittal Prijedor holds mining Ukraine over 4,373 hectares. iron ore bearing units in the open magnetic separation, producing rights over 2,000 hectares to AMKR’s operations control all of the pit mines have carbonate-silicate- coarse concentrate. The Kentobe support ArcelorMittal’s steel- mineral rights and surface rights magnetite composition. In addition, mine is located in the Balkhash making operations located needed to mine and process its oxidized quartzite is mined metallogenic province hosting approximately 243 kilometers estimated 2013 iron ore reserves. simultaneously with primary ore numerous volcanic, sedimentary south of Prijedor in northern Bosnia AMKR operates a concentrating but cannot be processed at present and hydrothermal deposits. The (Zenica). ArcelorMittal Prijedor has facility, along with two open pit and is stored separately for future mineralization at Kentobe includes no reason to believe that it will not and one underground iron ore possible processing. Only the two types of iron ore: oxidized and maintain the operating licenses mines. The iron ore deposits are magnetite mineralization is included primary magnetite. The magnetite required to continue operations and located within the southern part of in the 2013 open pit iron ore mineralization constitutes the vast process its estimated 2013 iron the Krivorozhsky iron-ore basin. reserve estimates. The majority of the 2013 estimated ore reserves. The operation is in Access to the mines is via public underground mine is hosted by a ore reserves. Electric power is close proximity to long-established roads, which are connected by a ferruginous quartzite with martite supplied to the Kentobe operations public roads. The production paved highway to Dnepropetrovsk. and jaspilite. by Karaganda Energosbyt LLP. process includes crushing, with The area is well served by rail. hydro-cyclones and magnetic Power is supplied by the Ukraine Lisakovsk, Kentobe, Atasu, Atasu is an underground mine separation at the concentration government and is generated from Atansore (Temirtau Iron Ore) operation located about 400 plant. The plant is close to the mine a mix of nuclear, gas and coal-fired ArcelorMittal Temirtau (formerly kilometers south/southwest from site, and materials are transported power stations. AMKR has two iron known as Ispat Karmet, Temirtau with production of 0.6 through a conveyor. Power is ore mines: an open pit mine feeding Kazakhstan) has four iron ore million tonnes of lump and fines in supplied from the national grid a concentration plant that mining operations in Kazakhstan. 2013. The mine began operating in through a local power distribution produced 10.2 million tonnes of The mines are Lisakovsk, Kentobe, 1956 with open pit exploitation of company. In 2013, ArcelorMittal concentrate in 2013, known as the Atasu and Atansore. The four mines near surface reserves. Surface Prijedor produced 2.1 million Kryviy Rih open cast, and an are connected by all-weather roads operations ended in 1980. tonnes of aggregated lumps underground mine with production and railways. Dispatch of ore from Underground operations and fines. of 1 million tonnes of lump and these mines to the ArcelorMittal commenced in 1976. ArcelorMittal sinter feed in 2013, known as the steel plant is by railway. Temirtau acquired the mine in In 1916, Austrian mining Kryviy Rih underground mine. ArcelorMittal Termitau’s operations 2003 and operations continue to companies established the first control all of the mineral rights and consist of underground mining. The industrial production of iron ore in The expiration of the agreements surface rights needed to mine and existing subsoil agreement expires the Prijedor area. The mines were on the subsoil use conditions and process its estimated 2013 iron in 2014, renewal of licence is in nationalized in the 1950s, and the subsoil use permits range from ore reserves. progress. Processing comprises of were then owned by Iron Mines 2016 to 2021, while the land lease crushing and wet jigging. The Atasu Luubija Company until Mittal Steel agreements expiration range from Lisakovsk is an open pit operation mine is hosted by the West acquired 51% of the company 2060 to 2061. located in northwest Kazakhstan Karazhal deposit, which is a primary in 2004. about 1,100 kilometers from magnetite ore with associated Annual review 2013 Operations 28

Mining: iron ore and coal reserves and resources continued

manganese mineralization. Studies configuration. Currently only high corporate office is located. The thin coal beds, one to five have indicated that the deposit grade ore reserves of oxidized iron properties consist of two operating feet thick. could have a sedimentary- ore (direct shipping ore, or DSO) areas: the Low Vol operations and volcanogenic origin caused by are mined. This ore only requires the Mid Vol operations, which are The combined production of the underwater hydrothermal activity. crushing and screening to make it situated south of U.S. Route 52. mines in 2013 was 2.6 million The mine receives electric power suitable for export. High-voltage power lines, typically tonnes of washed and directly from the Prometei-2003 grid via 12,500 volts, deliver power to shippable coal. NovoKarazhal substation. The materials-handling operation work stations where transformers consists of stockyards at both the reduce voltage for specific ArcelorMittal Temirtau Atansore is an open pit operation mine and port areas, linked by a equipment requirements. (Karaganda Coal Mines) located about 500 kilometers 250-kilometer single track railway ArcelorMittal Temirtau has eight northeast of Temirtau with running from Tokadeh to the port The larger Low Vol operations are underground coal mines and two production of 0.4 million tonnes of of Buchanan. Production in 2013 located in McDowell County, West coal preparation plants (CPP concentrate and fines in 2013. The was at 4.1 million tonnes. The Virginia, near the communities of “Vostochnaya” and Temirtau mining lease was obtained by power for the current Liberia DSO Northfork, Keystone, Eckman, Gary, Washery-2). The coal mines of ArcelorMittal in 2004. The existing operations is obtained from a Berwind, and War. The Eckman ArcelorMittal Temirtau are located subsoil agreement expires in 2029. combination of diesel and electric Plant, Dans Branch Loadout, in the Karaganda Coal Basin. The The Atansor deposit is located sources. Planning and construction Eckman 2 and Redhawk 1 surface basin is more than 3,000 square within skarn zones related to a of the project were commenced in mines are also located here, as well kilometers and was formed by volcanic intrusion that can be 1960 by a group of Swedish as the following deep mines: XMV strata of Upper Devonian and traced for more than 1.5 companies, which ultimately Mine Nos. 32, 35, 37, 39, 40 Carbonic ages, Mesozoic and kilometers. The mineralization became the Liberian American- and 42. Cainozoic formations. Due to includes both martitic oxidized ore Swedish Minerals Company structural peculiarities, the coal and primary magnetite ore. A new (LAMCO), and production The Mid Vol operations are in basin is divided into three geology- concentrator is processing the commenced on the Nimba deposit southeastern McDowell County, based mining areas: Karagandinskiy, magnetite portion of the ore by in 1963. Production reached a West Virginia and northwestern Sherubay-Nurinskiy and Tentekskiy. simple dry crushing and magnetic peak of 12 million metric tonnes in Tazewell County, Virginia. The separation while the low-grade 1974 but subsequently declined nearest communities are Horsepen The mines are located in an area oxidized portion of the ore is sold due to market conditions. and Abbs Valley, Virginia as well as with well-developed infrastructure as fines to a third party for further Production started at Mt. Tokadeh Anawalt, West Virginia. The mine around the regional center of beneficiation. At the Atansore in 1985 to extend the life of the operations office is located at Karaganda city. Within a distance of operations, electric power is Nimba ore bodies to 1992 when Horsepen, Virginia near the 10 to 60 kilometers are the provided from the operations ceased due to the Mid Vol operations. following satellite towns: Kokshetauenergo center. Liberian civil war. In 2005, Mittal Shakhtinsk, Saran and Abay, as well Steel won a bid to resume The property has a long history of as Shakhan and Aktas. All mines are ArcelorMittal Liberia operations and signed the MDA coal mining, mostly by connected to the main railway, and ArcelorMittal (Liberia) Holdings with the GOL. Rehabilitation work predecessors in title to AMP. coal is transported by railway to Limited (‘AMLH’), through its agent on the railway started in 2008 and, Significant underground mining of the coal wash plants and (and subsidiary) ArcelorMittal in June 2011, ArcelorMittal started some of the deeper coal seams on power stations. Liberia Limited (‘AML’), has started mining operations at Tokadeh, the properties have occurred, to extract ‘direct shippable’ iron ore followed by a first shipment of iron notably the Pocahontas no. 3 and The Kostenko mine began from the first of three deposits in ore in September 2011. no. 4 seams. In addition, a operations in 1934 and merged the Mt. Tokadeh, Mt. Gangra and substantial amount of the thicker with the neighboring Mt. Yuelliton mountain ranges in The Nimba Itabirites is a 250 to coal outcrops have been previously Stakhanovskaya mine in 1998. The northern Nimba, Liberia. Mining 450 meter thick recrystallized iron contour mined, providing access for field of Kostenko mine falls within commenced in June 2011. AML formation. Although the iron highwall mining and on-bench the Oktyabrskiy district of signed a Mineral Development deposits at Tokadeh, Gangra and storage of excess spoil from future, Karaganda city. Agreement (MDA) in 2005 with Yuelliton fit the general definition of larger-scale surface mining. AMP the Government of Liberia (‘GOL’) Itabirite as laminated was created in 2008 when the The Kuzembaeva mine was that is valid for 25 years and metamorphosed oxide-facies iron Mid-Vol Coal Group and the established in 1998. The nearest renewable for an additional formation, they are of lower iron Concept Mining Group communities are Saran, Abay and 25-year period. The MDA covers grade than the ore previously were integrated. Shakhtinsk, which are located 18 three deposits to support AML’s mined at Mount Nimba. Tropical kilometers to the northeast, 15 operations located approximately weathering has caused the The properties are located in the kilometers to the southeast and 12 300 kilometers northeast of decomposition of the rock forming Pocahontas Coalfields of the kilometers to the west, Monrovia, Liberia over 513 square minerals resulting in enrichment in Central Appalachian Coal Basin. The respectively. The eastern part of kilometers. These three deposits the iron content that is sufficient to Carboniferous age coal deposits are the mine falls within the center of are grouped under the name support a DSO operation. situated in the Pottsville Group, Karaganda City. ‘Western Range Project’, which New River and Pocahontas includes the Tokadeh, Gangra and Coal Formations. The rock strata, The Saranskaya mine began Yuelliton deposits. In addition to the including the coal deposits, are operations in 1955. It merged with rights to explore and mine iron ore, ArcelorMittal Princeton sedimentary rocks formed by the Sokurskaya mine in mid-1997 the GOL has granted the right to The ArcelorMittal Princeton (‘AMP’) alluvial, fluvial, and deltaic and the Aktasskaya mine in 1998. develop, use and operate and properties are located in McDowell sediments deposited in a shallow, The nearest communities are Saran, maintain the Buchanan to Yekepa County, West Virginia and Tazewell subsiding basin. The most common Abay and Shakhtinsk, which are railroad and Buchanan port. A County, Virginia, approximately 30 rock types are various types of located 18 kilometers to the phased approach has been taken to miles west of the city of Princeton, sandstone and shale. The coal northeast, 15 kilometers to the establish the final project West Virginia, where AMP’s deposits are typically in relatively southeast and 12 kilometers to the Annual review 2013 Operations 29

Mining: iron ore and coal reserves and resources continued

west, respectively. Karaganda City The railway station MPS-Karabas is beneficiation of coking coal, two approximately 2.5 kilometers from is located approximately 35 located 35 kilometers to washeries are operated. Surplus the mine site. The mine is located kilometers to the northeast. the southeast. coal is supplied to ArcelorMittal within the boundaries of the Kryviy Rih in Ukraine, and to Berezovo-Biryulinsky coal deposit Kostenko, Kuzembaeva and The Shakhtinskaya mine began external customers in Russia and in the Kuznetsk intermountain Saranskaya mines receive energy operations in 1973. The nearest China. In 2013, the Karaganda Coal trough on the eastern side of the from public district networks community is Shakhtinsk, which is Mines produced 4.8 million tonnes Kemerovo syncline. through transforming substations located ten kilometers to the of metallurgical coal and of Karagandaenergo Company. southeast, and Shakhan, which is approximately 1.6 million tonnes of The Pervomayskaya mine began located seven kilometers to the thermal coal consumed by the operations in 1975 and is located The Abayskaya mine began north. Saran is located 18 Temirtau steel operations. in the northern part of the operations in 1961. In 1996, it kilometers to the east. Karaganda Kemerovo district of Kuzbass, 40 was merged with the Kalinina mine. City is located approximately 35 ArcelorMittal Coal Mines kilometers from the city of The nearest communities are Saran, kilometers to the east. Kuzbass Kemerovo. The mine is located in Abay and Shakhtinsk, which are ArcelorMittal Coal Mines Kuzbass an area that has a well-developed located 18 kilometers to the The Tentekskaya mine began in Siberia, Russia includes the highway system. The Berezovsky northeast, 15 kilometers to the operations in 1979. The nearest Berezovskaya and Pervomayskaya – Anzhero-Sudzhensk highway is southeast and 20 kilometers to the community is Shakhtinsk. mines, as well as the Severnaya situated north of the mine. west, respectively. Karaganda City Karaganda City is located coal washery. ArcelorMittal holds is located approximately 30 approximately 50 kilometers to the approximately 98.64% of these The Severnaya wash plant is kilometers to the northeast. northeast. The railway station mines. Power is supplied to JSC located adjacent to the MPS-Karabas is located “Ugolnaya kompaniya “Severniy Berezovskaya mine and began The Kazakhstanskaya mine began approximately 35 kilometers to Kuzbass” from the wholesale operations in 2006. It processes all operations in 1969. The nearest the southeast. market by the national grid of the coal from ArcelorMittal community is Shakhtinsk. company FSK (Federal Grid Kuzbass’ mines. Coal is transported Karaganda City is located Abayskaya, Shakhtinskaya, Lenina, Company) Russia through grids of from the Berezovskaya mine and approximately 50 kilometers to the Tentekskaya and Kazakhstanskaya MRSK (Interregional Distribution from the Pervomayskaya mine northeast. The railway station at mines receive energy from Grid Company) Siberia. via rail. MPS-Karabas is located high-voltage lines of Karaganda. approximately 35 kilometers to The Berezovskaya mine began The main consumers of the coking the southeast. The subsoil use contract and operations in 1958 and is located coal produced are some local coke license (all coal mines in Temirtau) in the northeastern part of the producers and ArcelorMittal Kryviy The Lenina mine was put in will expire in 2022. Total land area Kemerovo district of Kuzbass, 30 Rih. In 2013, ArcelorMittal Coal operation in 1964 and was under mining rights is 286 kilometers from the city of Mines Kuzbass produced 0.7 subsequently merged with square kilometers. Kemerovo. The mines’ million tonnes of metallurgical coal. Naklonnaya no. 1/2 mine in 1968. administrative division is located in The nearest community is The mines produce primarily coking the town of Berezovsky. There is a Shakhtinsk, located seven coal used in steel-making at well-developed highway system in kilometers to the southeast, ArcelorMittal Temirtau as well as the region and the Novosibirsk- and Karaganda City, is located thermal coal for ArcelorMittal Achinsk federal highway connects 50 kilometers to the northeast. Temirtau’s power plants. For to the mine via an asphalt road

Capital expenditure projects The following tables summarise the Company’s principal growth and optimization projects involving significant capital expenditure completed in 2013 and those that are currently ongoing. Completed projects

Segment Site Project Capacity/particulars Actual completion Replacement of spirals Increase iron ore production by Mining ArcelorMittal Mines Canada for enrichment 0.8mt/year 1Q 2013 Increase concentrator capacity by Mining ArcelorMittal Mines Canada Expansion project 8mt/year (16 to 24mt/year) 2Q 2013 1

Ongoing projects 2

Segment Site Project Capacity/particulars Actual completion Increase production capacity to Phase 2 15mt/ year (iron ore premium Mining Liberia mines expansion project sinter feed concentrate) 2015 3 1 Final capex for the ArcelorMittal Mines Canada expansion project was US$1.6 billion. The ramp-up of expanded capacity at ArcelorMittal Mines Canada hit a run-rate of 24mt by year end 2013. 2 Ongoing projects refer to projects for which construction has begun (excluding various projects that are under development), or have been placed on hold pending improved operating conditions. 3 The Phase 2 expansion of the Liberia project to a production capacity of 15 million tonnes per annum sinter feed is underway. The first sinter feed production is expected at the end of 2015, replacing the Phase 1 – 4 million tonnes per annum direct-shipped operation. Annual review 2013 Operations 30

Mining: iron ore and coal reserves and resources continued

Reserves and resources adequately spaced. The degree assumed, but not verified, changes to the 2011 year-end iron of assurance, although lower geological and grade continuity. ore and coal reserve and resource (iron ore and coal) than that for proven reserves, is The estimate is based on limited estimates were recommended by Introduction high enough to assume information and sampling them. The year-end 2013 ore ArcelorMittal has both iron ore and continuity between points of gathered through appropriate reserve and mineral resource metallurgical coal reserves. The observation. techniques from locations such estimates were independently as outcrops, trenches, pits, estimated by Roscoe Postle Company’s iron ore mining • The mineral resource estimates workings and drill holes. Associates for the Baffinland operations are located in the United constitute the part of a mineral project and by Cardno MM&A for States, Canada, Mexico, Brazil, deposit that have the potential The ore reserve and mineral the Princeton coal operations. Liberia, Bosnia, Ukraine, Algeria and to be economically and legally resource estimates are updated Kazakhstan. In Canada, the extracted or produced at the annually in order to reflect new ArcelorMittal owns less than 100% Company is developing a large time of the resource geological information and current of certain mining operations; greenfield project on Baffin Island. determination. The potential for mine plan and business strategies. reserve and resource estimates The Company’s metallurgical coal economic viability is established The Company’s reserve estimates have not been adjusted to reflect mining operations are located in through high level and are of in-place material after ownership interests and therefore the United States, Kazakhstan conceptual engineering studies. adjustments for mining depletion reflect 100% of the reserves and and Russia. and mining losses and recoveries, • A ‘measured mineral resource’ is resources of each mine. Please see with no adjustments made for that part of a mineral resource the table above under “Mining” for The estimates of proven and metal losses due to processing. The for which quantity, grade or the ownership interest of probable ore reserves and mineral mineral resource estimates are of quality, densities, shape, and ArcelorMittal in each mine. All of resources at the Company’s mines in-situ wet metric tonnage material physical characteristics are so the reserve figures presented and projects and the estimates of prior to adjustments for mining well established that they can be represent estimates at the mine life included in this annual recovery and dilution factors and estimated with confidence December 31, 2013 (unless report have been prepared by reported exclusive (in addition to sufficient to allow the otherwise stated). ArcelorMittal’s experienced ore reserve estimates). engineers and geologists. Cardno appropriate application of technical and economic Mine life is derived from the life of MM&A prepared the estimates of For a description of risks relating to parameters, to support mine plans and corresponds to the reserves for the Princeton reserves and resource estimates, production planning and duration of the mine production underground and open pit see the risk factor entitled evaluation of the economic scheduled from ore reserve operations. The reserve calculations ‘ArcelorMittal’s reserve and viability of the deposit. The estimates only. were prepared in compliance with resource estimates may materially estimate is based on detailed and the requirements of USA Securities differ from mineral quantities that reliable exploration, sampling and The Company’s mineral leases are and Exchange Commission’s (‘SEC’) it may be able to actually recover; testing information gathered of sufficient duration (or convey a Industry Guide 7 and the mineral ArcelorMittal’s estimates of mine through appropriate techniques legal right to renew for sufficient resource estimates were prepared life may prove inaccurate; and from locations such as outcrops, duration) to enable all ore reserves in accordance with the market price fluctuations and trenches, pits, workings and drill on the leased properties to be requirements of Canadian National changes in operating and capital holes that are spaced closely mined in accordance with current Instrument NI 43-101, costs may render certain ore enough to confirm both production schedules. Ore reserves under which: reserves uneconomical to mine’ geological and grade continuity. may include areas where some (more details page 59). additional approvals remain • reserves are the part of a • An ‘indicated mineral resource’ is outstanding but where, based on mineral deposit that could be that part of a mineral resource The demonstration of economic the technical investigations the economically and legally for which quantity, grade or viability is established through the Company carries out as part of its extracted or produced at the quality, densities, shape and application of a life of mine plan for mine planning process and its time of the reserve physical characteristics, can be each operation or project providing knowledge and experience of the determination. estimated with a level of a positive net present value on a approvals process, the Company confidence sufficient to allow the cash-forward looking basis. • proven reserves are reserves for expects that such approvals will be appropriate application of Economic viability is demonstrated which (a) quantity is computed obtained as part of the normal technical and economic using forecasts of operating and from dimensions revealed in course of business and within the parameters, to support mine capital costs based on historical outcrops, trenches, working or timeframe required by the current planning and evaluation of the performance, with forward drill holes; grade and/or quality life of mine schedule. are computed from the results of economic viability of the deposit. adjustments based on planned The estimate is based on process improvements, changes in detailed sampling; and (b) the In eastern Europe (Bosnia) and the detailed and reliable exploration production volumes and in fixed sites for inspection, sampling and Commonwealth of Independent and testing information gathered and variable proportions of costs, measurement are spaced so States (CIS), ArcelorMittal has through appropriate techniques and forecasted fluctuations in costs closely and the geologic conducted in-house and from locations such as outcrops, of raw material, supplies, energy character is so well defined that independent reconciliations of ore trenches, pits, workings and drill and wages. Detailed independent size, shape, depth and mineral reserve and mineral resource holes that are spaced closely verifications of the methods and content of reserves are estimate classifications based on enough for geological and procedures used are conducted on well-established. Industry Guide 7, National grade continuity to be a regular basis by external Instrument NI 43-101 and • probable reserves are reserves reasonably assumed. consultants. Sites are reviewed on standards used by the State for which quantity and grade a rotating basis; all operations with • An ‘inferred mineral resource’ is Committee on reserves, known as and/or quality are computed significant ore reserve and mineral that part of a mineral resource the GKZ in the CIS. The GKZ from information similar to that resource estimates as of December for which quantity and grade or constitute the legal framework for used for proven reserves, but 31, 2011 were independently quality can be estimated on the reserve and resource reporting in the sites for inspection, sampling audited in 2012 by Roscoe Postle basis of geological evidence and several former Soviet Union and measurement are farther Associates and SRK Consulting limited sampling and reasonably countries where ArcelorMittal apart or are otherwise less (UK) Limited and no material Annual review 2013 Operations 31

Mining: iron ore and coal reserves and resources continued

operates mines. On the basis of reference price for the last three these reconciliations, years (2011 – 2013) was ArcelorMittal’s mineral resources US$144.8/dmt CFR China duly have been classified as measured adjusted for quality, Fe content, for categories A and B, indicated logistics and other considerations. for category C1 and inferred for For the same period, the average category C2. Ore reserves have coal reference price was been estimated by applying mine US$218.9/tonne FOB Australia. planning, technical and economic The Company establishes optimum assessments defined as categories design and future operating A, B and C1 only according to the cut-off grade based on its forecast CIS standards. In general, provided of commodity prices and operating Guide 7’s economic criteria for and sustaining capital costs. The reserves are met (which is the case cut-off grade varies from here), A+B is equivalent to ‘proven’ operation to operation and during and C1 is equivalent to ‘probable’. the life of each operation in order to optimize cash flow, return on The reported iron ore and coal investments and the sustainability reserves contained in this annual of the mining operations. report do not exceed the quantities Sustainability in turn depends on that the Company estimates could expected future operating and be extracted economically if future capital costs. prices were at similar levels to the average contracted price for the Tonnage and grade estimates are three years ended to December reported as ‘Run of Mine’. Tonnage 31, 2013. The average iron ore is reported on a wet metric basis.

Iron ore reserve and resource estimates The tables below detail ArcelorMittal’s estimated iron ore reserves and resources as at December 31, 2013. The classification of the iron ore reserve estimates as proven or probable and of the iron ore resource estimates as measured, indicated or inferred reflects the variability in the mineralization at the selected cut-off grade, the mining selectivity and the production rate and ability of the operation to blend the different ore types that may occur within each deposit. Proven iron ore reserve and measured mineral resource estimates are based on drill hole spacing ranging from 25m x 25m to 100m x 100m, and probable iron ore reserve and indicated mineral resource estimates are based on drill hole spacing ranging from 50m x 50m to 300m x 300m. Inferred mineral resource estimates are based on drill hole spacing ranging from 100m x 100m to 500m x 500m.

As at December 31, 2013 As at December 31, 2012 Proven ore reserves Probable ore reserves Total ore reserves Total ore reserves Business units Million tonnes % Fe Million tonnes % Fe Million tonnes % Fe Million tonnes % Fe Canada (excluding Baffinland) 2,112 30.3 85 28.8 2,197 30.2 1,952 28.4 Baffinland – Canada 108 65.4 272 66.0 380 65.8 375 64.7 Minorca – USA 139 23.4 4 22.7 143 23.4 151 23.3 Hibbing – USA 282 19.1 21 18.9 303 19.1 321 19.1 Mexico (excluding Peña Colorada) 49 29.0 77 28.0 126 28.4 136 29.8 Peña Colorada – Mexico 120 23.6 131 22.9 251 23.2 259 23.6 Brazil 100 58.9 20 53.2 120 57.9 121 58.2 Liberia - - 505 48.5 505 48.5 526 48.4 Bosnia - - 29 45.8 29 45.8 32 45.8 Ukraine open pit 222 33 - - 222 33.0 245 33.0 Ukraine underground 24 55 - - 24 54.8 24 55.0 Kazakhstan open pit 31 37.0 249 39.7 280 39.4 150 39.4 Kazakhstan underground - - 29 45.0 29 45.0 37 42.3 Total 4,609 35.5 4,331 34.7 Annual review 2013 Operations 32

Mining: iron ore and coal reserves and resources continued

As at December 31, 2013 As at December 31, 2012 Measured and Measured and indicated resources Inferred resources indicated resources Inferred resources Business units Million tonnes % Fe Million tonnes % Fe Million tonnes % Fe Million tonnes % Fe Canada (excluding Baffinland) 3,663 29.6 1,850 29.0 4,931 29.3 1,082 29.1 Baffinland – Canada 55 65.6 545 66.2 41 65.0 444 66.2 Minorca – USA 339 22.3 7 22.2 161 22.7 91 23.2 Hibbing – USA 260 18.2 1 16.2 260 18.2 1 16.2 Mexico (excluding Peña Colorada) 63 28.0 71 27.0 55 28.0 73 27.5 Peña Colorada – Mexico 101 27.3 - - 90 24.6 5 24.2 Brazil 240 38.5 77 37.4 321 38.0 131 36.0 Liberia 45 43.5 2,206 38.8 39 44.0 1,968 40.0 Algeria - - 92 53.0 - - 93 53.0 Bosnia 2 41.3 ------Ukraine open pit 507 33.4 - - 823 37.0 - - Ukraine underground 365 36.5 353 32.5 43 55.0 - - Kazakhstan open pit 834 34 5 48 1,018 34.7 93 29.0 Kazakhstan underground 448 51.2 30 49.6 437 51.7 30 51.2 Total 6,921 32.0 5,237 37.9 8,219 32.1 4,010 39.3

Supplemental information on iron ore operations The table below provides supplemental information on the producing mines:

2013 run-of-mine 2013 saleable production production Estimated mine life Operations/projects % ownership In operation since (million tonnes) * (million tonnes) 1 * (years) 2 Canada (excluding Baffinland) 85 1976 58.6 18.0 32 Project in Baffinland – Canada 50 development 21 Minorca – USA 100 1977 9.0 2.9 16 Hibbing – USA 62.31 1976 28.1 7.7 10 Mexico (excluding Peña Colorada) 100 1976 8.4 4.8 20 Peña Colorada – Mexico 50 1974 9.5 3.9 18 Brazil 100 1944 5.6 3.9 20 Algeria 70 1921 0.8 0.7 N/A3 Liberia 85 2011 3.9 4.1 19 Bosnia 51 2008 2.9 2.1 10 Ukraine open pit 95.13 1959 24.4 10.2 7 Ukraine underground 95.13 1933 1.1 1.0 15 Kazakhstan open pit 100 1976 5.7 3.1 32 Kazakhstan underground 100 1956 1.0 0.6 18 1 Saleable production is constituted of a mix of direct shipped ore (DSO), concentrate, pellet feed and pellet products which have an iron content of approximately 65% to 66%. Exceptions in 2013 included the DSO produced in Bosnia, Ukraine underground and the Kazakh mines which have an iron content ranging between 55% to 60% and are solely for internal use at ArcelorMittal’s regional steel plants. The DSO produced from Liberia had an average iron content of approximately 60% in 2013 while the sinter fines produced for external customers in Brazil from the Serra Azul operations averaged approximately 62% and the lumps averaged 60.5%. 2 The estimated mine life reported in this table corresponds to the duration of the production file of each operation based on the 2013 year-end iron ore reserve estimates only. The production varies for each operation during the mine life and as a result the mine life is not the total reserve tonnage divided by the 2013 production. ArcelorMittal believes that the life of these operations will be significantly expanded as exploration and engineering studies confirm the economic potential of the additional mineralization already known to exist in the vicinity of these iron ore reserve estimates. 3 Estimated mine life from iron ore reserve estimates is not available by end of 2013 due to deficiencies in the drilling data recording and archiving process. * Represents 100% of production. Annual review 2013 Operations 33

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Changes in Iron Ore Reserve category in Canada based on a Metallurgical Coal Reserve and Estimates: 2013 versus 2012 more prudent approach to resource Estimates The Company’s iron ore reserve geological risks at depth. The more The table below details estimates have increased between prudent approach to geological ArcelorMittal’s estimated December 31, 2012 and 2013 by uncertainty at depth also explains metallurgical coal reserve and 278 million metric tonnes of Run of the decrease observed in Brazil. In resource estimates as at December Mine. This increase is mostly due to Ukraine and Kazakhstan, a portion 31, 2013. The classification of coal a revision of the life of mine plan of of the open pit mineral resource reserve estimates as proven or the Canadian operations in Mt estimates were replaced by probable and of coal resource Wright and Fire Lake resulting in underground resource estimates estimates as measured, indicated the addition of 300 million metric resulting in a net increase in or inferred reflects the variability in tonnes and an update of the mine Kazahkstan. An increase in the coal seams thickness and plan of the Lisakovski open pit measured and indicated resource quality, the mining selectivity and operation in Kazakhstan resulting in estimates also occurred at the the planned production rate for the addition of 130 million metric Minorca mine (USA). each deposit. Proven coal reserve tonnes. This increase was partially and measured coal resource offset by approximately 159 Iron inferred mineral resource estimates are based on drill hole million tonnes from the 2013 estimates have increased between spacing ranging from 50m x 50m mining depletion. Other minor December 31, 2012 and 2013 by to 500m x 500m and Probable re-evaluations of ore reserves 1,227 million tonnes of run-of- coal reserve and indicated coal totalled a net increase of 7 million mine. This change includes a 768 resource estimates are based on tonnes between the 2012 and the million tonnes increase in Canada drill hole spacing ranging from 2013 year-end reserve estimates. due to reclassification of measured 100m x 100m to 1,000m x The average Fe grade increased by and indicated resources at depth 1,000m. Measured coal resource 0.8% on an absolute basis and the addition of 459 million estimates are based on drill hole essentially due to the addition of tonnes through additional drilling spacing ranging from 200m x higher grade iron ore reserves and re-evaluations in Baffinland, 200m to 2,000 x 2,000m. in Canada. Liberia and at the Ukraine underground operations. Changes in iron mineral resource estimates: 2013 versus 2012 Overall, the increase in inferred Iron measured and indicated resources largely offset the mineral resource estimates have decrease in measured and indicated decreased between December 31, resources and when the increase in 2012 and 2013 by 1,298 million iron reserve estimates is metric tonnes of run-of-mine. The considered, the total resource and reduction of measured and reserve estimates have in fact indicated resources is explained increased between December 31, mostly through conversion to 2012 and December 31, 2013. reserve in Canada and by a reclassification to the inferred

As at 31 December 2013 As at 31 December 2012 Proven coal reserves Probable coal reserves Total coal reserves Total coal reserves ROM million Wet recoverable Wet recoverable Wet recoverable Wet recoverable tonnes million tonnes 1 Million tonnes million tonnes 1 Million tonnes million tonnes 1 Ash (%) Sulfur (%) Volatile (%) Million tonnes million tonnes 1 Princeton- USA 96 58 16 8 112 66 6.5 0.68 17.1 116 69 Karaganda- Kazakhstan 18 9 160 80 178 89 10.5 0.69 27.0 173 83 Kuzbass - Russia 15 10 12 8 27 18 9.8 0.68 24.7 29 19 Total 318 173 8.9 0.69 23.0 318 170 1 Washed or directly shipped saleable tonnage. This tonnage does not include the production in Kazakhstan of approximately 2 million tonnes annually and 30 million tonnes for the life of the Kazakhstan mines of Run of Mine high ash coal which is sold internally within ArcelorMittal as thermal coal.

As at December 31, 2013 As at December 31, 2012 Measured and indicated Inferred coal Measured and indicated Inferred coal coal resources resources coal resources resources Wet Wet Wet Wet ROM million recoverable recoverable recoverable recoverable Business units tonnes million tonnes Million tonnes million tonnes Million tonnes million tonnes Million tonnes million tonnes Princeton - USA 96 50 4 2 92 52 4 2 Karaganda - Kazakhstan 566 283 8 4 551 260 8 5 Kuzbass - Russia 60 53 38 32 60 53 38 32 Total 722 386 50 38 703 365 50 39 Annual review 2013 Operations 34

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Supplemental information on metallurgical coal operations The table below provides supplemental information on the producing mines:

2013 run-of-mine 2013 wet recoverable production production Estimated mine life Operations/projects % ownership In operation since (million tonnes) (million tonnes) 1 (years) 2 Princeton – USA 100 1995 4.0 2.6 35 Karaganda – Kazakhstan 100 1934 11.1 4.8 14 Kuzbass – Russia 98.64 1958 1.2 0.7 15 1 Washed or directly shipped saleable tonnage. This tonnage does not include the production in Kazakhstan of approximately 2 million tonnes annually and 30 million tonnes for the life of the Kazakhstan mines of Run of Mine high ash coal which is sold internally within ArcelorMittal as thermal coal. 2 The estimated mine life reported in this table corresponds to the duration of the production file of each operation based on the 2013 year-end metallurgical coal reserve estimates only. The production varies for each operation during the mine life and as a result the mine life is not the total reserve tonnage divided by the 2013 production. ArcelorMittal believes that the life of these operations will be significantly expanded as exploration and engineering studies confirm the economic potential of the additional mineralization already known to exist in the vicinity of these estimated coal reserves.

Changes in Metallurgical Coal Changes in coal resource Cautionary note concerning Reserve Estimates: estimates: 2013 versus 2012 reserve and resource estimates: 2013 versus 2012 Iron measured and indicated coal With regard to ArcelorMittal’s Metallurgical coal reserve resource estimates have increased reported resources, investors are estimates have remained between December 31, 2012 and cautioned not to assume that any essentially unchanged between 2013 by 19 million tonnes of part or all of ArcelorMittal’s December 31, 2012 and 2013 as run-of-mine due to re-evaluation estimated mineral deposits that the annual mining depletion of in Kazakhstan and successful constitute either ‘measured mineral 16.3 million tonnes was entirely exploration programs in Princeton resources’, ‘indicated mineral offset by a corresponding addition (USA). There was no change in the resources’ or ‘inferred mineral of coal reserves at the Kazakhstan run-of-mine coal inferred resource resources’ (calculated in operations through re-evaluation estimates between December 31, accordance with the guidelines set of the mine plan. No other material 2012 and 2013. out in Canadian National changes have occurred between Instrument 43-101) will ever be the 2012 and the 2013 year-end converted into reserves. There is a reserve estimates. particularly great deal of uncertainty as to the existence of ‘inferred mineral resources’ as well as with regard to their economic and legal feasibility and it should not be assumed that all or part of an ‘inferred mineral resource’ will ever be upgraded to a higher category. Annual review 2013 Performance 35

Key performance indicators

The key performance indicators that we use to analyse operations are provided below.

Health and safety (Lost time injury frequency rate for steel and mining) 2013 0.8 2012 1.0 2011 1.4 2010 1.8 2009 1.9

We have a clear and strong health every business unit and site. We Health and safety performance, the Distribution Solutions, Flat and safety policy aimed at have also implemented an injury based on figures of own personnel Carbon Americas and Flat Carbon reducing the severity and tracking and reporting database to plus contractors, lost time injury Europe segments. Despite this frequency of accidents on a track all information on injuries, frequency rate (LTIFR), significantly encouraging performance in LTIFR, continuing basis across the entire lost man-days and other improved to 0.8 for the year 2013 there is still more work to be done; organisation. The corporate health significant events. from 1.0 for the year 2012. In our effort to improve health and and safety department defines 2013, a majority of the segments safety record will continue. and follows-up performance contributed to the significant targets and monitors results from overall improvement, in particular

Sales (US$ million) 2013 79,440 2012 84,213 2011 93,973 2010 78,025 2009 61,021

The majority of our steel sales are unit or at the production unit level. production units around the world. to lower average steel selling destined for domestic markets; For some specific markets, such as In 2013, sales amounted to prices (-5%), reflecting lower raw these sales are usually approached automotive, there is a global US$79.4 billion, as compared with material prices, partially offset by as a decentralised activity, approach offering similar products 2012 sales of US$84.2 billion. improved marketable mining managed either at the business manufactured in different This 6% decrease is primarily due shipments (+22%).

Steel shipments (Thousand tonnes) 2013 84,275 2012 83,775 2011 85,757 2010 1 84,952 2009 2 69,624 1 2010 steel shipments including discontinued operations amount to 86,681 thousand tonnes. 2 2009 steel shipments including discontinued operations amount to 71,071 thousand tonnes.

We had steel shipments of Flat Carbon Europe segment 84.3 million tonnes for 2013, (+5%) and declined in the Long representing a decrease of 1% Carbon (-1%), AACIS (-4%) and from steel shipments of Distribution Solutions (-9%) 83.8 million tonnes in 2012. segments. Steel shipments increased in the Annual review 2013 Performance 36

Key performance indicators continued

Crude steel production (Liquid steel in thousand tonnes) 2013 91,186 2012 88,231 2011 91,891 2010 1 90,582 2009 2 71,620 1 2010 crude steel production including discontinued operations amounts to 92,629 thousand tonnes. 2 2009 crude steel production including discontinued operations amounts to 73,236 thousand tonnes.

In 2013, around 67.2 million arc furnace route and around 3.1 material and energy use, and the Americas, 46% in Europe and tonnes of our crude steel were million tonnes of crude steel increased ability to meet varying 16% in other countries, such as produced through the basic through the open hearth furnace customer requirements in the Kazakhstan, South Africa oxygen furnace route, around 20.9 route. This provides ArcelorMittal markets it serves. In 2013, around and Ukraine. million tonnes through the electric with greater flexibility in raw 38% of our steel was produced in

Ebitda 1 (US$ million) 2013 6,888 2012 7,679 2011 10,450 2010 8,732 2009 5,600 1 On January 1, 2013, in accordance with IFRS as issued by the International Accounting Standards Board (‘IASB’), ArcelorMittal mandatorily adopted IFRS 10 (‘Consolidated Financial Statements’), IFRS 11 (‘Joint Arrangements’), IFRS 12 (‘Disclosure of Interests in Other Entities’), IFRS 13 (‘Fair Value Measurement’), the revision of IAS 19 (‘Employee Benefits’) and IFRIC 20 (‘Stripping Costs in the Production Phase of a Surface Mine’). Prior period 2012 information has been adjusted retrospectively for the mandatory adoption of these new standards and interpretations except for IFRS 13 which is applied only prospectively. The main effects for ArcelorMittal are related to the revision of IAS 19R which was applied retrospectively. Following the changes, the previously unrecognized actuarial gains and losses on pension liabilities are recorded in the statements of financial position in full against equity. It means that the previously unrecognized actuarial gains and losses are no longer recorded over time against profit and loss following the then allowed ‘corridor approach’. All future actuarial gains and losses will also be immediately recognized in other comprehensive income (OCI). In addition, for purposes of measuring the net financial cost on pension liabilities/assets, the expected rate of return on assets must be equal to the discount rate applicable to liabilities.

Ebitda is defined as operating Ebitda in 2013 included the income plus depreciation, positive impact of a US$47 million impairment expenses and fair valuation gain relating to the exceptional items. We generated acquisition of an additional Ebitda of US$6.9 billion in 2013, ownership interest in a 10.7% improvement versus DJ Galvanizing in Canada and 2012 on an underlying basis. US$92 million of DDH income. Annual review 2013 Performance 37

Key performance indicators continued

Average steel selling prices 2 (US$ a tonne) Flat Carbon Americas 2013 818 2012 854 2011 892 2010 781 2009 698

Flat Carbon Europe 2013 820 2012 863 2011 982 2010 821 2009 799

Long Carbon Americas and Europe 2013 848 2012 879 2011 937 2010 802 2009 743

Asia, Africa and CIS (AACIS) 2013 609 2012 667 2011 736 2010 608 2009 506

Distribution Solutions 2013 850 2012 886 2011 993 2010 832 2009 767 2 Average steel selling prices are calculated as steel sales divided by steel shipments.

Average steel selling price for Average steel selling price in the 2013 decreased 5% compared to first half of 2013 decreased by 2012, following continued 6% from the same period in 2012, weakness in demand in Europe, while average steel selling price in a slight decline of demand in the second half of the year was North America combined with down 3% from the same period increased competition in in 2012. international markets. Annual review 2013 Performance 38

Key performance indicators continued

Iron ore production 3 (Million tonnes) Total own mines Total strategic long-term contracts Total 2013 58.4 11.7 70.1 2012 55.9 12.3 68.1 2011 54.1 11.1 65.2 2010 48.9 19.6 68.5 2009 37.7 15.0 52.7 3 Total of all finished production of fines, concentrate, pellets and lumps.

We source significant portions of existing mines in Canada, started quarter of 2012. In addition, we suppliers located near our our iron ore needs from our own development of an early revenue have prospective mining production facilities, some of mines in Kazakhstan, Ukraine, phase in Baffinland, expanded developments in India and Canada. which supply the relevant plant’s Bosnia, Algeria, Canada, the United capacity of our mines in Liberia, Several of our steel plants also iron ore requirements on a States, Mexico, Liberia and Brazil. and completed the expansion of have in place off-take cost-plus basis and are considered In 2013, we expanded capacity of our mines in Brazil in the fourth arrangements with mineral strategic long-term contracts.

Coal production (Million tonnes) Total own mines Total strategic long-term contracts Total 2013 8.1 0.8 8.8 2012 8.2 0.7 8.9 2011 8.3 0.6 8.9 2010 7.0 0.4 7.4 2009 7.1 0.5 7.6

As with iron ore, we source a Our mines in Kazakhstan supply the mines in Russia and the United percentage of our coking coal from substantially all the requirements States supply other steel plants our own coal mines in Kazakhstan, for our steelmaking operations at within the group together with Russia and the United States. ArcelorMittal Temirtau, while external customers. Annual review 2013 Performance 39

Operating results

Key indicators The key performance indicators that ArcelorMittal’s management uses to analyze operations are sales revenue, average steel selling prices, steel shipments, iron ore and coal production and operating income. Management’s analysis of liquidity and capital resources is driven by operating cash flows.

Year ended December 31, 2013 compared to year ended December 31, 2012 Sales, steel shipments, average steel selling prices and mining production The following tables provide a summary of ArcelorMittal’s sales, steel shipments, changes in average steel selling prices by reportable segment and mining (iron ore and coal) production and shipments for the year ended December 31, 2013 as compared to the year ended December 31, 2012:

Sales for the year ended December 31 1 Steel shipments for the year ended December 31 2 Changes in 2012 2013 2012 2013 Average steel selling Segment (US$ million) (US$ million) (thousand tonnes) (thousand tonnes) Sales (%) Steel shipments (%) price (%) Flat Carbon Americas 20,152 19,474 22,291 22,341 (3) - (4) Flat Carbon Europe 27,192 26,647 26,026 27,219 (2) 5 (5) Long Carbon Americas and Europe 21,882 21,009 22,628 22,370 (4) (1) (4) AACIS 10,051 8,305 12,830 12,345 (17) (4) (9) Distribution Solutions 16,294 14,056 17,693 16,100 (14) (9) (4) Mining 5,493 5,766 N/A N/A 5 N/A N/A Total 84,213 79,440 83,775 84,275 (6) 1 (5) 1 Amounts are prior to inter-company eliminations (except for total) and sales include non-steel sales. 2 Amounts are prior to inter-company eliminations and Distribution Solutions shipments are eliminated in consolidation as they primarily represent shipments originating from other ArcelorMittal operating subsidiaries.

Mining shipments (million tonnes) 1 Year ended December 31, 2012 Year ended December 31, 2013 Total iron ore shipments 2 54.4 59.6 Iron ore shipped externally and internally and reported at market price 3 28.8 35.1 Iron ore shipped externally 10.4 11.6 Iron ore shipped internally and reported at market price 3 18.4 23.5 Iron ore shipped internally and reported at cost-plus 3 25.6 24.4 Total coal shipments 4 8.2 7.72 Coal shipped externally and internally and reported at market price 3 5.1 4.84 Coal shipped externally 3.3 3.26 Coal shipped internally and reported at market price 3 1.8 1.58 Coal shipped internally and reported at cost-plus 3 3.1 2.88 1 There are three categories of sales: (1) ‘External sales‘: mined product sold to third parties at market price; (2) ‘Market prices tonnes’: internal sales of mined products to ArcelorMittal facilities reported at prevailing market prices; (3) ‘Cost-plus tonnes’: internal sales of mined product to ArcelorMittal facilities on a cost-plus basis. The determinant of whether internal sales are reported at market price or reported at cost-plus is whether or not the raw material could practically be sold to third parties (i.e., there is a potential market for the product and logistics exist to access that market). 2 Total of all finished products of fines, concentrate, pellets and lumps and includes tonnes shipped externally and internally and reported at market price as well as tonnes shipped internally on a cost-plus basis. 3 Market-priced tonnes represent amounts of iron ore and coal from ArcelorMittal mines that could practically be sold to third parties. Market-priced tonnes that are transferred from the Mining segment to the company’s steel producing segments are reported at the prevailing market price. Shipments of raw materials that do not constitute market-priced tonnes are transferred internally on a cost-plus basis. 4 Total of all finished products of coal and includes tonnes shipped externally and internally and reported at market price as well as tonnes shipped internally on a cost-plus basis. Annual review 2013 Performance 40

Operating results continued

Year ended Year ended Iron ore production (million tonnes) 1 Type Product December 31, 2012 December 31, 2013 Own mines Concentrate, lump, North America 2 Open pit fines and pellets 30.3 32.5 South America Open pit Lump and fines 4.1 3.9 Europe Open pit Concentrate and lump 2.1 2.1 Africa Open pit / underground Fines 4.7 4.8 Concentrate, lump, Asia, CIS and other Open pit / underground fines and sinter feed 14.7 15.0 Total own iron ore production 55.9 58.4 Strategic long-term contracts – iron ore North America 3 Open pit Pellets 7.6 7.0 Africa 4 Open pit Lump and fines 4.7 4.7 Total strategic long-term contracts – iron ore 12.3 11.7 Total 68.1 70.1 1 Total of all finished production of fines, concentrate, pellets and lumps. 2 Includes own mines and share of production from Hibbing (United States, 62.30%) and Peña (Mexico, 50%). 3 Consists of a long-term supply contract with Cleveland Cliffs for purchases made at a previously set price, adjusted for changes in certain steel prices and inflation factors. 4 Includes purchases under an interim strategic agreement with Sishen Iron Ore Company (Proprietary) Limited (‘SIOC’) which was entered into on December 13, 2012 and became effective on January 1, 2013, pursuant to which SIOC supplied a maximum annual volume of 4.8 million tonnes of iron ore at a weighted average price of US$65 per tonne. Since 2010, SIOC and ArcelorMittal have entered into a series of strategic agreements that established interim pricing arrangements for the supply of iron ore to ArcelorMittal on a fixed-cost basis. On November 5, 2013, ArcelorMittal and SIOC entered into an agreement establishing long-term pricing arrangements for the supply of iron ore by SIOC to ArcelorMittal. Pursuant to the terms of the agreement, which became effective on January 1, 2014, ArcelorMittal may purchase from SIOC up to 6.25 million tonnes iron ore per year, complying with agreed specifications and lump-fine ratios. The price of iron ore sold to ArcelorMittal by SIOC is determined by reference to the cost (including capital costs) associated with the production of iron ore from the DMS Plant at the Sishen mine plus a margin of 20%, subject to a ceiling price equal to the Sishen Export Parity Price at the mine gate. While all prices are referenced to Sishen mine costs (plus 20%) from 2016, the parties agreed to a different price for certain pre-determined quantities of iron ore for the first two years of the 2014 Agreement.

Coal production (million tonnes) Year ended December 31, 2012 Year ended December 31, 2013 Own mines North America 2.44 2.62 Asia, CIS and other 5.77 5.43 Total own coal production 8.21 8.05 North America 1 0.36 0.37 Africa 2 0.35 0.42 Total strategic long-term contracts – coal 0.72 0.79 Total 8.93 8.84 1 Includes strategic agreement – prices on a fixed price basis. 2 Includes long-term lease – prices on a cost-plus basis.

ArcelorMittal had sales of 2012. Sales for the first half of ArcelorMittal had steel shipments ArcelorMittal had own iron ore US$79.4 billion for the year ended 2013 did not include any of 84.3 million tonnes for the production of 58.4 million tonnes December 31, 2013, representing contribution from Paul Wurth and year ended December 31, for the year ended December 31, a decrease of 6% from sales of Skyline Steel, which amounted to 2013, representing an increase 2013, an increase of 4% as US$84.2 billion for the year ended US$0.7 billion in the first half of of 1% from steel shipments of compared to 55.9 million tonnes December 31, 2012, primarily 2012. In the second half of 2013, 83.8 million tonnes for the year for the year ended December 31, due to lower average steel selling sales of US$39.5 billion ended December 31, 2012. 2012. ArcelorMittal had own prices (which were down 5%) represented an increase of 1% Average steel selling price for the coking coal production of reflecting lower raw material from sales of US$39.0 billion in year ended December 31, 2013 8.1 million tonnes for the year prices, partially offset by improved second half of 2012 primarily decreased 5% compared to the ended December 31, 2013, a marketable mining shipments driven by an increase in steel year ended December 31, 2012, decrease of 2% as compared to (which were up 22%). Sales in shipments of 5% offset by a drop following continued weakness in 8.2 million tonnes for the year 2012 also included US$0.9 billion in average steel prices of 3%. The demand in Europe, a slight decline ended December 31, 2012. related to the divested operations latter includes lower average steel of demand in North America The increase in iron ore production Paul Wurth and Skyline Steel. prices during the third quarter of combined with increased resulted primarily from expanded In the first half of 2013, sales 2013 as a result of weaker market competition in international operations in Canada. of US$39.9 billion represented a conditions in Europe for flat and markets. Average steel selling price 12% decrease from sales of long products and higher average in the first half of 2013 decreased US$45.2 billion in the first half of prices in the fourth quarter of by 6% from the same period in 2012, primarily due to a drop in 2013 due in particular to stronger 2012, while average steel selling average steel prices and lower market conditions in the Americas. price in the second half of the year shipments, resulting from weaker was down 3% from the same market conditions compared to period in 2012. Annual review 2013 Performance 41

Operating results continued

Flat Carbon Americas although average steel selling steel shipments. Sales in the first half of 2013, down 8% from the Sales in the Flat Carbon Americas pricein the fourth quarter of 2013 half of 2013 were US$10.5 billion, same period in 2012 (primarily segment were US$19.5 billion for was 3% higher as compared to the down 8% from the same period in due to lower volumes in South the year ended December 31, fourth quarter of 2012. 2012, while sales in the second Africa, caused by fire disruption 2013, representing a decrease of half of the year were US$10.5 at the Vanderbijlpark site, and 3% as compared to US$20.2 Flat Carbon Europe billion, up 1% from the same Kazakhstan) while shipments in billion for the year ended Sales in the Flat Carbon Europe period in 2012. the second half of the year were December 31, 2012. Sales segment were US$26.6 billion for 6.2 million tonnes and remained decreased primarily due to a 4% the year ended December 31, Total steel shipments reached flat against the same period decrease in average steel selling 2013, representing a decrease of 22.4 million tonnes for the year in 2012. prices as shipments were relatively 2% as compared to US$27.2 ended December 31, 2013, flat. Sales in the first half of 2013 billion for the year ended a decrease of 1% from steel Average steel selling price were US$9.6 billion, down 9% December 31, 2012. The shipments for the year ended decreased 9% for the year ended from the same period in 2012 decrease was primarily due to a December 31, 2012. Shipments December 31, 2013 as compared primarily driven by a 4% decrease 5% decrease in average steel were 11.2 million tonnes in the to the year ended December 31, in shipments and 7% decrease selling price while steel shipments first half of 2013, down 4% from 2012. This decrease was mainly in average steel selling prices, increased by 5%. Sales in the first the same period in 2012 (primarily related to the weakening of local and in the second half of the year half of 2013 were US$13.7 billion, due to lower volumes in Europe currencies (South African rand and sales were US$9.9 billion, up 3% down 8% from the same period in following lower demand), while Russian ruble) against US dollar, from the same period in 2012 2012, and in the second half of shipments in the second half of lower prices in CIS and weak primarily driven by a 5% increase the year sales were US$12.9 the year were 11.2 million tonnes, international demand. Average in shipments along with a 1% billion, up 5% from the same up 1% from same period in 2012. steel selling price in the first half decrease in average steel period in 2012. of 2013 was down 11% from selling prices. Average steel selling price the same period in 2012, while Total steel shipments were 27.2 decreased 4% for the year ended average steel selling price in the Total steel shipments were 22.3 million tonnes for the year ended December 31, 2013 as compared second half of the year was down million tonnes for the year ended December 31, 2013, an increase to the year ended December 31, 6% from the same period in 2012. December 31, 2013 and of 5% from steel shipments for 2012, primarily due to lower remained flat compared to the the year ended December 31, demand in Europe and lower raw Distribution Solutions year ended December 31, 2012. 2012. Shipments were 14.0 material prices. Average steel In the Distribution Solutions Shipments were 11.0 million million tonnes in the first half of selling price in the first half of segment, sales were US$14.1 tonnes in the first half of 2013, 2013, down 2% from the same 2013 was down 5% from the billion for the year ended down 4% from the same period period in 2012, while shipments same period in 2012; average December 31, 2013, representing in 2012, while shipments in the in the second half of the year steel selling price in the second a decrease of 14% from sales of second half of the year were were 13.2 million tonnes, up 12% half of the year was down 2% US$16.3 billion for the year ended 11.3 million tonnes, up 5% from from the same period in 2012. from the same period in 2012 December 31, 2012. The the same period in 2012. The The decrease in the first half of but average steel selling price decrease was primarily due to a decrease in steel shipments in the 2013 was primarily driven by was up in the fourth quarter of 9% decrease in steel shipments first half of 2013 reflected lower continued decline in demand due 2013 as compared to the fourth while the average steel selling crude steel production in the to macroeconomic conditions. quarter of 2012. price decreased 4%. Sales for the United States due to labor issues The increase in the second half of year ended December 31, 2012 at Burns Harbor and operational 2013 resulted in particular from AACIS also included a US$0.4 billion incidents at Indiana Harbor East recovery in demand following an In the AACIS segment, sales were contribution from Skyline Steel, and West, partially offset by the improvement in market sentiment. US$8.3 billion for the year ended which was disposed of in June use of inventory and supplies December 31, 2013, representing 2012. Sales in the first half of from other Flat Carbon Americas Average steel selling price a decrease of 17% from sales of 2013 were US$7.2 billion, down units. The increase in the second decreased 5% for the year ended US$10.0 billion for the year ended 18% from the same period in half of the year reflected the December 31, 2013 as compared December 31, 2012. The 2012, while sales in the second resolution of the labor issues to the year ended December 31, decrease was primarily due to a half of the year were US$6.9 and operational incidents that 2012. Average steel selling price 9% decrease in average selling billion, down 9% from the same had affected the second quarter in the first half of 2013 and in the price with shipments decreasing period in 2012. of 2013, partially offset by second half of 2013 were down 4%. Sales for the year ended operational issues in Brazil. 5% as compared to the first and December 31, 2012 also included Total steel shipments reached second half of 2012, respectively, a US$0.5 billion contribution from 16.1 million tonnes for the year Average steel selling price reflecting weaker buyer sentiment, Paul Wurth, which was disposed ended December 31, 2013, decreased 4% for the year ended strong domestic competition and of in December 2012. Sales a decrease of 9% from steel December 31, 2013 as compared declining raw material prices. in the first half of 2013 were shipments for the year ended to the year ended December 31, US$4.2 billion, down 22% from December 31, 2012. Shipments 2012. Average steel selling price in Long Carbon Americas the same period in 2012, while were 8.1 million tonnes in the the first half of 2013 was down and Europe sales in the second half of the year first half of 2013, down 11% 7% from the same period in 2012 In the Long Carbon Americas and were US$4.1 billion, down 11% from the same period in 2012, (which reflected slightly lower Europe segment, sales were from the same period in 2012. while shipments in the second demand and decreasing trend in US$21.0 billion for the year ended half of the year were 8.0 million raw material prices and subdued December 31, 2013, representing Total steel shipments reached tonnes, down 6% from the same market sentiment), while average a decrease of 4% from sales 12.3 million tonnes for the year period in 2012. The decrease steel selling price in the second of US$21.9 billion for the year ended December 31, 2013, in steel shipments reflected half of the year was down 1% ended December 31, 2012. a decrease of 4% from steel weaker demand in Europe and from the same period in 2012, The decrease was due to a 4% shipments for the year ended the reduction of export business decrease in average steel selling December 31, 2012. Shipments in the CIS operations. price along with a 1% decrease in were 6.2 million tonnes in the first Annual review 2013 Performance 42

Operating results continued

Average steel selling price evolution in international prices Sales to external customers were were 68% higher than in the first decreased 4% for the year ended and higher iron ore shipments from stable at US$1.7 billion for the half primarily as a result of higher December 31, 2013 as compared own mines, partly offset by lower year ended December 31, 2013 shipments from the company’s to the year ended December 31, prices for a portion of iron ore as compared to US$1.7 billion for Canadian operations. With respect 2012. The decrease in average shipments priced on a quarterly the year ended December 31, to prices, for example, the average steel selling prices was mainly lagged basis, lower coal prices as a 2012. Iron ore shipments to benchmark iron ore price per related to demand contraction in result of evolution in international external customers increased 12% tonne in 2013 of US$135.2 CFR Europe. Average steel selling price prices and lower coal shipments from 10.4 million tonnes in 2012 China (62% Fe) and the average in the first half of 2013 was down from own mines. Sales in the first to 11.6 million tonnes in 2013 benchmark price for hard coking 6% from the same period in 2012, half of 2013 were US$2.6 billion, while coal shipments to external coal FOB Australia in 2013 of while average steel selling price in down 12% from the same period customers decreased by 2% from US$158.5 per tonne were 4% the second half of the year was in 2012, while sales in the second 3.33 million tonnes to 3.26 million higher and 24% lower than in down 1% from the same period half of the year were US$3.2 tonnes. The increase in the volume 2012, respectively. It should be in 2012. billion, up 24% from the same of external sales of iron ore was noted, however, that there may period in 2012. Sales in the mainly due to the company’s not be a direct correlation Mining second half of 2013 were higher increasing marketing efforts in between benchmark prices and In the Mining segment, sales were than in the first half primarily due anticipation of increasing mining actual selling prices in various US$5.8 billion for the year ended to higher marketable iron ore production. The company expects regions at a given time. December 31, 2013, representing shipments in the second half of the trend toward an increase in an increase of 5% from sales of 2013 as compared to the first half the external sales as a percentage US$5.5 billion for the year ended following the commissioning of of overall mining sales to continue December 31, 2012. The increase additional capacity in the in the near to mid-term. In the was primarily due to higher iron company’s Canadian operations. second half of 2013, iron ore ore selling prices driven by the shipments to external customers

Operating income (loss) The following table provides a summary of operating income (loss) and operating margin of ArcelorMittal for the year ended December 31, 2013, as compared with operating income and operating margin for the year ended December 31, 2012:

Operating income (loss) for the year ended December 31 1 Operating margin Segment 2012 (US$ million) 2013 (US$ million) 2012 (%) 2013 (%) Flat Carbon Americas 1,010 852 5 4 Flat Carbon Europe (3,720) (933) (14) (4) Long Carbon Americas and Europe (514) 1,075 (2) 5 AACIS (79) (476) (1) (6) Distribution Solutions (688) (132) (4) (1) Mining 1,209 1,176 22 20 Total adjustments to segment operating income and other 2 137 (365) - - Total consolidated operating income (2,645) 1,197 1 Segment amounts are prior to inter-segment eliminations. 2 Total adjustments to segment operating income and other reflects certain adjustments made to operating income of the segments to reflect corporate costs, income from non-steel operations (e.g. energy, logistics and shipping services) and the elimination of stock margins between the segments. See table below.

Year ended December 31, 2012 (US$ million) Year ended December 31, 2013 (US$ million) Corporate and shared services 1 (158) (200) Real estate and financial activities 54 (13) Shipping and logistics 32 (22) Provisions 47 - Intragroup stock margin eliminations 218 (75) Depreciation and impairment (56) (55) Total adjustments to segment operating income and other 137 (365) 1 Includes primarily staff and other holding costs and results from shared service activities. Annual review 2013 Performance 43

Operating results continued

ArcelorMittal’s operating income Operating income for the year Canada, a joint operation in Operating income for the year for the year ended December 31, ended December 31, 2013 which the company acquired ended December 31, 2012 was 2013 was US$1.2 billion, as included impairment losses of the remaining 50% interest held positively affected by the compared with an operating loss US$444 million, which compared by the other joint operator. curtailment gain of US$285 million of US$2.6 billion for the year to impairment losses of resulting from the changes to the ended December 31, 2012. The US$5,035 million for the year Operating income for the year pension plan and health and dental operating income in 2013 ended December 31, 2012. ended December 31, 2013 benefits in ArcelorMittal Dofasco reflected US$0.4 of fixed asset These impairment losses included was negatively affected by in Canada and included a charge impairment charges and US$0.6 a charge of US$181 million related restructuring charges totaling of US$72 million corresponding billion of restructuring charges. to the Thabazimbi mine in US$552 million primarily related to to one-time signing bonus and ArcelorMittal South Africa (AACIS) costs incurred for the long-term actuarial losses related to post Operating income in the first nine following the transfer of the future idling of the Florange liquid phase retirement benefits following months of 2013 (US$1.2 billion) operating and financial risks of the in ArcelorMittal Atlantique et the conclusion of the new US was lower than in the first nine asset to Kumba as a result of the Lorraine (including voluntary labor agreement. months of 2012 (when it reached iron ore supply agreement signed separation scheme costs, site US$2.1 billion), while the with Sishen on November 5, rehabilitation/safeguarding costs Flat Carbon Europe operating loss in the fourth 2013. ArcelorMittal also and take or pay obligations) and to Operating loss for the Flat Carbon quarter of 2013 (US$36 million) recognized impairment charges social and environmental costs as a Europe segment for the year was a significant improvement of US$101 million and US$61 result of the agreed industrial and ended December 31, 2013 was over the operating loss recorded in million for the costs associated social plan for the finishing US$0.9 billion compared to the fourth quarter of 2012 with the discontinued iron ore facilities at the Liège site of operating loss of US$3.7 billion for (US$4.7 billion). The fourth projects in Senegal and Mauritania ArcelorMittal Belgium. the year ended December 31, quarter of 2013 was negatively (Mining), respectively. The 2012. Operating loss for the affected by the above-mentioned company recorded an impairment Operating loss for the year segment amounted to US$0.6 impairment losses and loss of US$55 million in ended December 31, 2012 was billion for the second half of the restructuring charges for connection with the long-term negatively impacted by the year, compared to operating loss US$0.7 billion while the fourth idling of the ArcelorMittal Tallinn US$4.3 billion impairment of of US$0.3 billion in the first half of quarter of 2012 was negatively galvanizing line in Estonia (Flat goodwill in the European the year. Despite a continuous affected by a US$4.3 billion Carbon Europe) and reversed an businesses and US$1.3 billion difficult economic environment in impairment of goodwill and impairment loss of US$52 million charges related to asset Europe reflected in lower average US$1.3 billion of charges related at the Liège site of ArcelorMittal optimization (of which steel selling prices in 2013 to asset optimization (of which Belgium (Flat Carbon Europe) US$0.7 billion of fixed asset compared to 2012 (which US$0.7 billion of fixed asset following the restart of the hot dip impairment charges and US$0.6 represented a decrease impairment charges and US$0.6 galvanizing line HDG5. billion of restructuring charges). of approximately €50/tonne), billion of restructuring charges). ArcelorMittal also recognized an shipments increased by 5% in impairment charge of US$24 Flat Carbon Americas 2013 as a result of a mild pick-up Cost of sales consists primarily million relating to the closure of Operating income for the Flat in demand particularly in the of purchases of raw materials the organic coating and tin plate Carbon Americas segment second half of 2013. Excluding necessary for steel-making (iron lines at the Florange site of amounted to US$0.9 billion for the impairment and restructuring ore, coke and coking coal, scrap ArcelorMittal Atlantique et year ended December 31, 2013, charges, gain on sale of carbon and alloys), electricity, repair & Lorraine in France (Flat Carbon compared to operating income of dioxide credits and unwinding of maintenance costs, as well as Europe). Additionally, in connection US$1.0 billion for the year ended hedges on raw material purchases, direct labor costs, depreciation and with the agreed sale of certain December 31, 2012. Operating operating income improved by impairment. Cost of sales for the steel cord assets in the US, Europe income for the segment amounted US$0.8 billion reflecting higher year ended December 31, 2013 and Asia (Distribution Solutions) to US$0.6 billion for the second shipment volumes and benefits was US$75.2 billion as compared to the joint venture partner half of the year, compared to from management gains and to US$83.5 billion for the year Kiswire Ltd, ArcelorMittal recorded operating income of US$0.3 billion asset optimization. ended December 31, 2012. an impairment charge of US$41 in the first half. Operating income Excluding impairment losses of million with respect to the in the first half of 2013 was Flat Carbon Europe’s operating US$0.4 billion and restructuring subsidiaries included in this negatively affected by lower loss included restructuring costs charges for US$0.6 billion as transaction (see note 5 to shipments following labor issues at amounting to US$481 million, described below for the year ArcelorMittal’s consolidated Burns Harbor and operational of which US$137 million of costs ended December 31, 2013 and financial statements for a incidents at Indiana Harbor East incurred for the long-term idling US$5.6 billion for the year ended breakdown of the impairment and West during the second of the Florange liquid phase in December 31, 2012, cost of sales charges with respect to this sale). quarter and positively affected by ArcelorMittal Atlantique et decreased by 5% as a result of a US$47 million fair valuation gain Lorraine (including voluntary lower raw material prices. Selling, Operating income for the year relating to DJ Galvanizing in separation scheme costs, site general and administrative ended December 31, 2013 was Canada, a joint operation in which rehabilitation/safeguarding costs expenses (‘SG&A’) for the year positively affected by a non-cash the company acquired the and take or pay obligations) and ended December 31, 2013 gain of US$92 million remaining 50% interest held by US$354 million (including social were US$3.0 billion as compared corresponding to the final recycling the other joint operator. The and environmental costs) as a to US$3.3 billion for the year of income relating to unwinding of higher operating income in the result of the agreed industrial and ended December 31, 2012. hedges on raw material purchases second half of 2013 compared social plan for the finishing facilities SG&A remained relatively (see ‘ – overview – impact of to the first half was largely driven at the Liège site of ArcelorMittal stable compared to sales as it exchange rate movements’) and by 4% higher volumes partly Belgium. These charges were represented 3.8% of sales for the a US$47 million fair valuation gain offset by lower average steel partially offset by a reversal of year ended December 31, 2013 relating to DJ Galvanizing in selling prices in particular in the provisions of US$38 million in as compared to 3.9% for the year third quarter. France and Spain following the ended December 31, 2012. revision of certain assumptions. Annual review 2013 Performance 44

Operating results continued

Flat Carbon Europe’s operating loss Long Carbon Americas South Africa following the transfer Mining was reduced by a non-cash gain of and Europe of the operating and financial risks Operating income for the Mining US$92 million corresponding to Operating income for the Long of the asset to Kumba as a result segment for the year ended the final recycling of income Carbon Americas and Europe of the iron ore supply agreement December 31, 2013 was stable at relating to unwinding of hedges on segment for the year ended signed with Sishen on November US$1.2 billion, compared to raw material purchases. Flat December 31, 2013 was 5, 2013. Operating loss for the operating income of US$1.2 billion Carbon Europe’s operating US$1.1 billion compared to first half of 2013 was increased by for the year ended December 31, loss included also impairment operating loss of US$0.5 billion for the impact of the fire that 2012. The stability in operating charges of US$45 million, of which the year ended December 31, occurred in February at the income in 2013 generally reflected US$55 million in connection with 2012. Operating income for the Vanderbijlpark plant in slightly improved iron ore prices the long-term idling of the segment amounted to US$0.6 ArcelorMittal South Africa. It partly offset by lower coal selling ArcelorMittal Tallinn galvanizing billion for the second half of the caused extensive damage to the prices. As noted above, the line in Estonia largely offset by the year, compared to operating steel making facilities resulting in average reference price of iron ore reversal of an impairment loss of income of US$0.5 billion in the an immediate shutdown of the increased from US$130/tonne US$52 million at the Liège site of first half of the year. Excluding facilities. No injuries were reported CFR China for 62% Fe in 2012 to ArcelorMittal Belgium following impairment and restructuring as a result of the incident. US$135.2/tonne in 2013. Coal the restart of the hot dip charges, operating income Repairs were completed and full prices decreased by US$51/tonne galvanizing line HDG5 and improved by US$0.2 billion operations resumed during the between 2012 and 2013. Iron ore US$24 million primarily relating to in 2013 as compared to 2012 second week of April 2013. marketable volume for the year the closure of the organic coating primarily due to a positive price An estimated 361,000 tonnes of ended December 31, 2013 was and tin plate lines at the Florange cost squeeze and improved production volumes was lost as a 35.1 million tonnes, compared to site of ArcelorMittal Atlantique et profitability in South America in result of the incident. The resulting 28.8 million tonnes for the year Lorraine in France. particular during the first half operating loss net of insurance ended December 31, 2012. Coal of 2013. indemnification is currently marketable volume for the year Flat Carbon Europe’s operating loss estimated at US$56 million. ended December 31, 2013 was for the year ended December 31, Operating loss for the year ended slightly lower at 4.8 million tonnes, 2012 mainly resulted from a December 31, 2012 (in particular Operating loss for the year ended compared to 5.1 million tonnes US$2,493 million impairment in the second half of 2012) was December 31, 2012 included the for the year ended December 31, charge of goodwill and US$448 increased by an impairment charge gain on disposal of Paul Wurth for 2012. Operating income for the million impairment losses related of goodwill for US$1,010 million US$242 million. year ended December 31, 2013 to property, plant and equipment and an impairment charge of was negatively impacted by in the framework of asset property, plant and equipment Distribution Solutions impairment charges of US$0.2 optimization, of which US$130 for US$270 million, including Operating loss for the Distribution billion including US$101 million million in respect of the long-term US$222 million related to Spanish Solutions segment for the year and US$61 million for the costs idling of the liquid phase at the and North African entities and ended December 31, 2013 was associated with the discontinued Florange site of ArcelorMittal US$61 million related to the US$0.1 billion, compared to iron ore projects in Senegal Atlantique et Lorraine in France extended idling of the electric arc operating loss of US$0.7 billion for and Mauritania, respectively. and US$296 million with respect furnace and continuous caster at the year ended December 31, The increase in cost of sales from to the intention to permanently the Schifflange site in Luxembourg. 2012. Operating loss was US$4.0 billion in 2012 to US$4.4 close the coke plant and six In addition, operating loss for the increased by an impairment charge billion in 2013 resulted from the finishing lines at the Liège site of year ended December 31, 2012 of US$41 million with respect to US$0.2 billion impairment ArcelorMittal Belgium. In addition, was increased by restructuring the subsidiaries included in the charge mentioned above and operating loss for the year ended costs totaling US$98 million agreed sale of certain steel cord the remaining increase by 5% December 31, 2012 was associated with asset optimization, assets in the US, Europe and Asia was primarily related to increased by restructuring costs primarily in Spanish entities. to the joint venture partner Kiswire higher shipments. amounting to US$355 million as Ltd. Operating loss for the part of asset optimization, of AACIS segment amounted to US$104 Operating income for the segment which US$231 million related to Operating loss for the AACIS million for the second half of the amounted to US$0.6 billion for the the closure of the primary facilities segment for the year ended year, compared to operating loss second half of the year, compared at the Liège site of ArcelorMittal December 31, 2013 was of US$28 million in the first half of to US$0.6 billion in the first half. Belgium and US$64 million US$0.5 billion, compared to 2013, primarily as a result of the Operating income for the second associated with separation operating loss of US$0.1 billion for impairment charge recorded in the half of 2013 was negatively schemes primarily relating to the year ended December 31, second half of 2013. Overall affected by the above mentioned ArcelorMittal Poland. These 2012. Lower profitability in 2013 operating performance was impairment charges. charges were partially offset by a was primarily due to a negative affected by lower shipments and gain of US$210 million recorded price-cost squeeze, lower average steel selling prices. on the sale of carbon dioxide average steel selling prices, credits (the proceeds of which will which declined 9% compared to Operating loss for the year ended be re-invested in energy saving 2012 and lower shipments December 31, 2012 was mainly projects) and a non-cash gain of (down 4% as compared to 2012). related to an US$805 million US$566 million relating to Operating loss for the segment goodwill impairment charge. unwinding of hedges on raw amounted to US$326 million for Operating loss for the year ended material purchases. the second half of the year, December 31, 2012 also included compared to US$150 million in restructuring charges of the first half. Operating loss in the US$127 million relating to asset second half included a charge of optimization and the US$331 US$181 million related to the million gain on disposal of Thabazimbi mine in ArcelorMittal Skyline Steel. Annual review 2013 Performance 45

Operating results continued

Income (loss) from associates, Income from associates, joint Foreign exchange and other net joint ventures and other ventures and other investments financing costs (which include investments for the year ended December 31, bank fees, interest on pensions and ArcelorMittal recorded a loss of 2012 included a net gain of fair value adjustments of US$442 million from associates, US$101 million on the disposal of derivative instruments) increased joint ventures and other a 6.25% stake in Erdemir and an slightly from US$0.9 billion for the investments for the year ended impairment loss of US$185 year ended December 31, 2012 December 31, 2013, as compared million, reflecting the reduction of to US$1.3 billion for the year with income from associates, joint the carrying amount of the ended December 31, 2013. ventures and other investments of investment in Enovos to the net Foreign exchange and other net US$185 million for the year ended proceeds from the sale. financing costs for the year ended December 31, 2012. Loss for the December 31, 2013 included an year ended December 31, 2013 Financing costs-net expense of US$80 million relating included impairment charges for a Net financing costs include net to interest and penalties with total amount of US$422 million, of interest expense, revaluation of respect to the settlement of a tax which US$200 million related to financial instruments, net foreign amnesty program in Brazil. the company’s 47% stake in the exchange income/expense (i.e., associate China Oriental as a result the net effects of transactions Income tax expense (benefit) of current expectations regarding in a foreign currency other than ArcelorMittal recorded a future performance. In addition, the functional currency of a consolidated income tax expense the company recorded an subsidiary) and other net financing of US$0.2 billion for the year impairment charge of US$111 costs (which mainly include bank ended December 31, 2013, as million relating to the company’s fees, accretion of defined benefit compared to a consolidated 50% interest in the associate obligations and other long-term income tax benefit of US$1.9 Kiswire ArcelorMittal Ltd in the liabilities). Net financing costs billion for the year ended framework of the agreed sale of were slightly higher for the year December 31, 2012. The full year certain steel cord assets to the ended December 31, 2013, at 2013 income tax expense includes joint venture partner Kiswire Ltd US$3.1 billion, as compared with an expense of US$222 million (with another impairment charge US$2.9 billion for the year ended related to the settlement of two recorded in cost of sales in the December 31, 2012. tax amnesty programs in Brazil. Distribution Solutions segment as For additional information related described above and in note 5 to Net interest expense (interest to ArcelorMittal’s income taxes, ArcelorMittal’s consolidated expense less interest income) was see note 21 to ArcelorMittal’s financial statements). Loss for the US$1.8 billion for the year ended consolidated financial statements. year ended December 31, 2013 December 31, 2013 as compared also included an impairment to US$1.9 billion for the year ArcelorMittal’s consolidated charge of US$111 million relating ended December 31, 2012. income tax expense (benefit) is to the associate Coal of Africa as a Interest expense was slightly lower affected by the income tax laws result of lower profitability and for the year ended December 31, and regulations in effect in the decline in market value. Loss for 2013 at US$1.9 billion, compared various countries in which it the year ended December 31, to interest expense of US$2.0 operates and the pre-tax results 2013 included a charge of billion for the year ended of its subsidiaries in each of these US$57 million following the December 31, 2012, primarily countries, which can vary from disposal of a 6.66% interest in due to the positive effect of lower year to year. ArcelorMittal Erdemir shares by way of a single debt following the tender and operates in jurisdictions, mainly in accelerated book built offering to repayment of bonds and privately Eastern Europe and Asia, which institutional investors. placed notes at the end of June have a structurally lower corporate 2013, partly offset by step-ups in income tax rate than the statutory In addition, loss for the year ended the interest rate payable on most tax rate as in effect in Luxembourg December 31, 2013 included a of the company’s outstanding (29.22%), as well as in US$56 million expense for bonds as a result of the company’s jurisdictions, mainly in Western contingent consideration with rating downgrades in the second Europe and the Americas, which respect to the Gonvarri Brasil half of 2012. Interest income for have a structurally higher acquisition made in 2008 partly the year ended December 31, corporate income tax rate. offset by a gain of US$45 million 2013 amounted to US$0.1 billion, with respect to the sale of a 10% compared to US$0.2 billion for the interest in Hunan Valin Steel Tube year ended December 31, 2012. and Wire Co Ltd (‘Hunan Valin’) following the exercise of the first and second put options. On February 8, 2014, the company exercised the third put option and decreased its interest in Hunan Valin to 15.05%. Annual review 2013 Performance 46

Operating results continued

The statutory income tax expense (benefit) and the statutory income tax rates of the countries that most significantly resulted in the tax expense (benefit) at statutory rate for each of the years ended December 31, 2012 and 2013 are as set forth below:

2012 2013 Statutory income tax Statutory income tax rate Statutory income tax Statutory income tax rate United States 133 35.00% (120) 35.00% Argentina 43 35.00% 52 35.00% France (312) 34.43% (224) 34.43% Brazil (124) 34.00% 94 34.00% Belgium (44) 33.99% (208) 33.99% Germany (225) 30.30% (138) 30.30% Spain (253) 30.00% (218) 30.00% Luxembourg (1,343) 29.22% 203 29.22% Mexico 71 28.00% (93) 30.00% South Africa (24) 28.00% (57) 28.00% Canada 174 26.90% 240 26.90% Algeria (21) 25.00% (26) 25.00% Russia 18 20.00% (14) 20.00% Kazakhstan 13 20.00% (24) 20.00% Czech Republic 19 19.00% (7) 19.00% Poland (23) 19.00% (8) 19.00% Romania (4) 16.00% (29) 16.00% Ukraine (58) 16.00% (32) 16.00% Dubai - 0.00% - 0.00% Others (156) 18 Total (2,116) (591) Note: The statutory tax rates are the rates enacted or substantively enacted by the end of the respective period.

Non-controlling interests Net loss attributable to equity Net loss attributable to non- holders of the parent controlling interests was ArcelorMittal’s net loss attributable US$30 million for the year to equity holders of the parent ended December 31, 2013, for the year ended December 31, as compared with net loss 2013 amounted to US$2.5 billion attributable to non-controlling compared to net loss attributable interests of US$117 million for the to equity holders of US$3.3 billion year ended December 31, 2012. for the year ended December 31, Net loss attributable to non- 2012, for the reasons controlling interests decreased discussed above. in 2013 primarily as a result of income attributable to non-controlling interests in ArcelorMittal Mines Canada following the sale of a 15% stake in the first half of 2013. Annual review 2013 Performance 47

Liquidity and capital resources

ArcelorMittal’s principal As of December 31, 2013, ArcelorMittal’s principal credit Non-compliance with the sources of liquidity are cash ArcelorMittal’s total debt, which facilities, which are (i) the covenants in the company’s generated from its operations includes long-term debt and syndicated revolving credit facility borrowing agreements would short-term debt, was US$22.3 entered into on March 18, 2011, entitle the lenders under such and its credit facilities at the billion, compared to US$26.3 originally for an amount of facilities to accelerate the corporate level. billion as of December 31, 2012. US$6 billion, but subsequently company’s repayment obligations. Because ArcelorMittal is a holding Total debt decreased as compared reduced by amendment on The company was in compliance company, it is dependent upon to prior year mainly due to the November 26, 2013 to with the financial covenants in the the earnings and cash flows of, repayment of €1.5 billion and US$3.6 billion (the ‘US$3.6 billion agreements related to all of its and dividends and distributions US$1.2 billion in unsecured bonds facility’) and (ii) the syndicated borrowings as of December 31, from, its operating subsidiaries to and notes upon maturity in June revolving credit facility entered 2013 and December 31, 2012. pay expenses and meet its debt 2013 as well as other privately into on May 6, 2010, originally service obligations. Significant placed notes. Net debt (defined for an amount of US$4 billion, As of December 31, 2013, cash or cash equivalent balances as long-term debt plus short- but subsequently reduced by ArcelorMittal had guaranteed may be held from time to time term debt, less cash and cash amendment on November 26, approximately US$0.4 billion of at the company’s international equivalents and restricted cash) 2013 to US$2.4 billion and debt of its operating subsidiaries operating subsidiaries, including was US$16.1 billion as of extended until November 6, 2018 and US$0.6 billion of total debt in particular those in France, December 31, 2013, down from (the ‘US$2.4 billion facility’), of ArcelorMittal Finance. where the company maintains a US$21.8 billion at December 31, contain restrictive covenants. ArcelorMittal’s debt facilities cash management system under 2012. Net debt decreased as Among other things, these have provisions whereby the which most of its cash and cash compared to prior period primarily covenants limit encumbrances on acceleration of the debt of another equivalents are centralized, and due to improvement in cash from the assets of ArcelorMittal and its borrower within the ArcelorMittal in Argentina, Brazil, South Africa, operations, cash proceeds from subsidiaries, the ability of group could, under certain Ukraine and Venezuela. Some divestments and the issuance in ArcelorMittal’s subsidiaries to incur circumstances, lead to acceleration of these operating subsidiaries January 2013 of shares (for debt and the ability of under such facilities. have debt outstanding or are gross proceeds of US$1.75 billion) ArcelorMittal and its subsidiaries to subject to acquisition agreements and of Mandatorily Convertible dispose of assets in certain that impose restrictions on Subordinated Notes due 2016 (for circumstances. These agreements such operating subsidiaries’ gross proceeds of US$2.25 also require compliance with a ability to pay dividends, but such billion). Most of the external debt financial covenant, as restrictions are not significant in is borrowed by the parent summarized below. the context of ArcelorMittal’s company on an unsecured basis overall liquidity. Repatriation of and bears interest at varying levels The company must ensure that funds from operating subsidiaries based on a combination of fixed the ratio of ‘Consolidated Total Net may also be affected by tax and and variable interest rates. Gearing Borrowings’ (consolidated total foreign exchange policies in place (defined as net debt divided by borrowings less consolidated from time to time in the various total equity) at December 31, cash and cash equivalents) countries where the company 2013 was 30% as compared to to ‘Consolidated Ebitda’ (the operates, though none of these 43% at December 31, 2012. consolidated net pre-taxation policies is currently significant in profits of the ArcelorMittal group the context of ArcelorMittal’s The margin under ArcelorMittal’s for a Measurement Period, subject overall liquidity. principal credit facilities and certain to certain adjustments as set out of its outstanding bonds is subject in the facilities) does not, at the In management’s opinion, to adjustment in the event of a end of each ‘measurement period’ ArcelorMittal’s credit facilities change in its long-term credit (each period of 12 months ending are adequate for its present ratings. Due to, among other on the last day of a financial requirements. things, the weak steel industry half-year or a financial year of the outlook and ArcelorMittal’s credit company), exceed a certain ratio. As of December 31, 2013, metrics and level of debt, Standard The company refers to these ratios ArcelorMittal’s cash and cash & Poor’s, Moody’s and Fitch as the ‘leverage ratios’. Most of equivalents, including restricted downgraded the company’s rating ArcelorMittal’s credit facilities have cash, amounted to US$6.2 billion to below ‘investment grade’ in a leverage ratio of 3.5 to one. The as compared to US$4.5 billion as August, November and December US$3.6 billion facility and of December 31, 2012. In 2012, respectively, and Standard US$2.4 billion facility were addition, ArcelorMittal had & Poor’s and Moody’s currently recently amended to increase the available borrowing capacity of have ArcelorMittal’s credit rating leverage ratio to 4.25 to one. US$6.0 billion under its credit on negative outlook. These As of December 31, 2013, facilities as of December 31, downgrades triggered the the company was in compliance 2013 as compared to US$10.0 interest rate ‘step-up’ clauses with the leverage ratios. billion as of December 31, 2012. in most of the company’s outstanding bonds, resulting in an increased incremental interest expense of US$87 million in 2013 and US$38 million in 2012. Annual review 2013 Performance 48

Liquidity and capital resources continued

The following table summarizes the repayment schedule of ArcelorMittal’s outstanding indebtedness, which includes short-term and long-term debt, as of December 31, 2013.

Repayment amounts per year (billion US$) Type of indebtedness as of December 31, 2013 2015 2016 2017 >2017 2018 >2018 Total Term loan repayments Convertible bonds 1 2.5 - - - - - 2.5 Bonds 0.8 2.2 1.9 2.7 2.2 7.6 17.4 Subtotal 3.3 2.2 1.9 2.7 2.2 7.6 19.9 Long-term revolving credit lines ------US$3.6 billion syndicated credit facility ------US$2.4 billion syndicated credit facility ------Commercial paper 2 ------Other loans 0.8 0.3 0.5 0.2 0.1 0.5 2.4 Total gross debt US$4.1 US$2.5 US$2.4 US$2.9 US$2.3 US$8.1 US$22.3 1 Represents the financial liability component of the approximately US$2.5 billion of convertible bonds issued on April 1, 2009 (euro-denominated 7.25% convertible bonds due 2014 (the ‘Euro Convertibles’) and May 6, 2009 (US dollar denominated 5% convertible notes due 2014 (the ‘USD Convertibles’), respectively. 2 Commercial paper is expected to continue to be rolled over in the normal course of business.

The following table summarizes the amount of credit available as of December 31, 2013 under ArcelorMittal’s principal credit facilities:

Credit lines available Facility amount Drawn Available US$3.6 billion facility US$3.6 - US$3.6 US$2.4 billion facility US$2.4 - US$2.4 Total committed lines US$6.0 - US$6.0

The average debt maturity of Principal credit facilities On September 30, 2010, 2013 capital markets the company was 6.2 years as of On March 18, 2011, ArcelorMittal ArcelorMittal entered into the transactions December 31, 2013, as entered into a US$6 billion facility US$500 million revolving On January 14, 2013, compared to 6.1 years as of (now defined herein as the multi-currency letter of credit ArcelorMittal completed an December 31, 2012. US$3.6 billion facility), a facility (the ‘Letter of Credit offering of 104,477,612 of its syndicated revolving credit facility Facility’). The Letter of Credit ordinary shares, priced at Further information regarding which may be utilized for general Facility is used by the company US$16.75 per share, for a total ArcelorMittal’s outstanding corporate purposes and which and its subsidiaries for the issuance aggregate amount of US$1.75 long-term indebtedness as of matures in 2016. On November of letters of credit and other billion. As a result of this offering, December 31, 2013, including 26, 2013, the facility was instruments and matures on the aggregate number of the breakdown between fixed amended and reduced to US$3.6 September 30, 2016. The terms ArcelorMittal shares issued and rate and variable rate debt, billion. As of December 31, 2013, of the letters of credit and other fully paid up increased to is set forth in note 17 to the the US$3.6 billion facility remains instruments contain certain 1,665,392,222. Consolidated Financial Statements. fully available. restrictions as to duration. Further information regarding The Letter of Credit Facility was On January 16, 2013, ArcelorMittal’s use of financial On May 6, 2010, ArcelorMittal amended on October 26, 2012 ArcelorMittal issued mandatorily instruments for hedging purposes entered into a US$4 billion facility to reduce its amount to convertible subordinated notes is set forth in note 18 to the (now defined herein as the US$450 million. (‘MCNs’) with net proceeds of Consolidated Financial Statements. US$2.4 billion facility), a US$2,222 million. The notes have syndicated revolving credit facility On December 20, 2013, a maturity of three years, were which may be utilized for general ArcelorMittal entered into a issued at 100% of the principal Financings corporate purposes. On November term loan facility in an aggregate amount and are mandatorily The principal financings of 26, 2013, the facility was amount of US$300 million, converted into ordinary shares ArcelorMittal and its subsidiaries amended and reduced to US$2.4 maturing on December 20, 2016. of ArcelorMittal at maturity unless are summarized below by billion and the maturity date The facility may be used by the earlier converted at the option category. Further information extended from May 6, 2015 to group for the general corporate of the holders or ArcelorMittal regarding ArcelorMittal’s short- November 6, 2018. As of purposes. Amounts repaid under or upon specified events in term and long-term indebtedness December 31, 2013, the this agreement may not be accordance with the terms of the is provided in note 17 to the US$2.4 billion facility remains re-borrowed. MCNs. The notes pay a coupon Consolidated Financial Statements. fully available. of 6.00% per annum, payable quarterly in arrears. The initial Annual review 2013 Performance 49

Liquidity and capital resources continued

minimum conversion price of the purchased US$310.7 million US$5,368 million, as of December In view of the continued MCNs was equal to US$16.75, principal amount of notes for a 31, 2012 and 2013, respectively. challenging global economic corresponding to the placement total aggregate purchase price Through the TSR programs, certain conditions affecting the company’s price of shares in the concurrent (including accrued interest) of operating subsidiaries of business in 2013 and its priority to ordinary shares offering as US$327.0 million. An additional ArcelorMittal surrender the deleverage, ArcelorMittal’s board described above, and the initial US$0.8 million principal amount control, risks and benefits of directors recommended on May maximum conversion price was of notes for a total aggregate associated with the accounts 7, 2013 a further reduction of the set at approximately 125% of purchase price (including accrued receivable sold; therefore, the annual dividend to US$0.20 per the minimum conversion price interest) of US$0.8 million were amount of receivables sold is share from US$0.75 per share in (corresponding to US$20.94), accepted on the final settlement recorded as a sale of financial 2012. The recommendation was subject to adjustment upon the date of July 16, 2013. Accordingly, assets and the balances are approved by the annual general occurrence of certain events. The a total of US$311.5 million removed from the consolidated meeting of shareholders on May company determined the notes principal amount of notes were statements of financial position at 8, 2013, and the dividend was met the definition of a compound accepted for purchase, for a total the moment of sale. The total paid in full on July 15, 2013. financial instrument and as such aggregate purchase price amount of receivables sold under determined the fair value of the (including accrued interest) of TSR programs and derecognized On February 7, 2014, financial liability component of US$327.8 million. Upon in accordance with IAS 39 for ArcelorMittal’s board of directors the bond was US$384 million on settlement for all of the notes the years ended 2011, 2012 announced a gross dividend the date of issuance. The value accepted pursuant to the offer, and 2013 was US$35.3 billion, payment of US$0.20 per share, of the equity component of US$188.5 million principal amount US$33.9 billion and US$35.4 subject to the approval of US$1,838 million was determined remained outstanding. billion, respectively (with amounts shareholders at the annual general based upon the difference of of receivables sold converted to meeting of shareholders to be held the cash proceeds received from On July 30, 2013, ArcelorMittal US dollars at the monthly average on May 8, 2014. The dividend the issuance of the bond and repurchased the full amount exchange rate). Expenses incurred payment calendar is available on the fair value of the financial outstanding in respect of its under the TSR programs www.arcelormittal.com. liability component on the date €125 million 6.2% Fixed Rate (reflecting the discount granted to of issuance and is recognized Notes due 2016, while on the acquirers of the accounts ArcelorMittal held 11,792,674 in equity. August 29, 2013, ArcelorMittal receivable) recognized in the shares in treasury as of repurchased the full amount consolidated statements of December 31, 2013, as compared On June 26, 2013, in connection outstanding in respect of its operations for the years ended to 11,807,462 shares as of with a zero premium cash tender US$120 million 6.38% privately December 31, 2011, 2012 and December 31, 2012. As of offer to purchase any and all of its placed Notes due 2015. 2013 were US$152 million, December 31, 2013, the number 4.625% euro-denominated notes Total cash spent on the two US$182 million and US$172 of shares held by the company in due in November 2014, transactions was million, respectively. treasury represented approximately ArcelorMittal purchased €139.5 approximately US$328.1 million 0.71% of the company’s total million principal amount of notes (including interest). Earnings Distribution issued share capital. for a total aggregate purchase In light of the downturn in global price (including accrued interest) True sale of receivables economic conditions that Pension/OPEB liabilities of €150.1 million. Upon (‘TSR’) Programs commenced in September 2008, The net deficit of the obligation settlement for all of the notes The company has established a ArcelorMittal’s board of directors for employee benefits decreased accepted pursuant to the offer, number of programs for sales recommended on February 10, by US$2.6 billion from US$11.3 which occurred on July 1, 2013, without recourse of trade 2009 a reduction of the annual billion as of December 31, 2012 €360.5 million principal amount accounts receivable to various dividend in 2009 to US$0.75 per to US$8.7 billion as of December of 4.625% euro-denominated financial institutions (referred to as share (with quarterly dividend 31, 2013. The main effects for notes due in November 2014 True Sale of Receivables (‘TSR’)) payments of US$0.1875) from ArcelorMittal are related to the remained outstanding. for an aggregate amount of US$1.50 per share previously. The change in financial assumptions US$5,624 million as of December dividend policy was approved by such as the increase of discount On June 28, 2013, in connection 31, 2013. This amount represents the annual general meeting of rates used to calculate the with the early tender portion of a the maximum amount of unpaid shareholders on May 12, 2009, pension, other post-employment zero premium cash tender offer to receivables that may be sold and and was also maintained in 2010, benefits (‘OPEB’) and early purchase any and all of its 6.5% US outstanding at any given time. 2011 and 2012. retirement obligations, dollar denominated notes due in Of this amount, the company has combined with the higher April 2014, ArcelorMittal utilized US$4,424 million and returns on plan assets.

Sources and uses of cash The following table presents a summary of cash flow of ArcelorMittal:

(US$ million) Summary of cash flow year ended December 31 2012 2013 Net cash provided by operating activities 5,340 4,296 Net cash used in investing activities (3,730) (2,877) Net cash (used in) provided by financing activities (1,019) 241 Annual review 2013 Performance 50

Liquidity and capital resources continued

Net cash provided by operating to proceeds received from the activities in 2013 was mainly activities reduction in the company’s stake related to an offering of 104 For the year ended December 31, in Baffinland and US$267 million million of the company’s ordinary 2013, net cash provided by from the sale of Erdemir shares. shares for a total aggregate operating activities decreased to amount of US$1.75 billion, the US$4.3 billion, as compared with In 2013, capital expenditure of issuance of mandatorily US$5.3 billion for the year ended US$3.5 billion included US$2.4 convertible subordinated notes December 31, 2012, mainly billion related to maintenance with net proceeds of US$2.2 because of lower operating (including health and safety billion, and the receipt of cash working capital release. The net investments) and US$1.1 billion proceeds of US$1.1 billion from cash provided by operating dedicated to growth projects the disposal of a 15% interest in activities was positively affected mainly in mining. In 2012, capital ArcelorMittal Mines Canada. Net by a US$0.8 billion decrease in expenditure was US$4.7 billion, cash from financing activities also working capital (consisting of US$3.2 billion of which was included debt repayment of inventories plus trade accounts related to steelmaking facilities US$3.3 billion, primarily €1.5 receivable less trade accounts (including health and safety billion for the 8.25% bond due payable), including a US$0.6 billion investments) and US$1.5 billion 2013 and US$1.2 billion for the increase in inventories, a dedicated to mining projects. In 5.375% bond due 2013. US$0.1 billion decrease in 2014, capital expenditure is In addition, it included US$0.8 accounts receivable and a US$1.3 expected to increase slightly to billion following the completion of billion increase in accounts payable. approximately US$3.8-4.0 billion. a cash tender offer to purchase Increase in inventories is primarily The company continues to focus any and all of the company’s 6.5% related to higher levels of steel primarily on core growth capital US dollar denominated notes due production compared to 2012 and expenditure in its franchise in April 2014 and the 4.625% to a lower extent to slightly higher businesses. While most planned euro-denominated notes due in average number of rotation days steel investments remain November 2014 as well as to of inventories (102 days as suspended, the company has prepay €125 million of 6.2% fixed compared to 99 days). This selectively restarted some of its rates notes maturing in 2016 and increase in inventories affected capital expenditure projects US$120 million of 6.38% privately particularly the second half of to support the development placed notes maturing in 2015. 2013 as during the first half of of franchise steel businesses, 2013, inventories decreased by in particular Phase 1 of the Dividends paid during the year US$0.4 billion mainly as a result of expansion project in Monlevade ended December 31, 2013 were lower levels of steel production (Brazil) focusing on downstream US$0.4 billion, including US$332 and lower raw material prices. facilities and restarted in the million paid to ArcelorMittal Accounts payable increased as a second quarter of 2013. The shareholders, US$57 million paid result of higher purchases of raw Phase 2 expansion of the Liberian to holders of subordinated materials and higher iron ore mining operation involving the perpetual capital securities and prices. The decrease in net cash construction of a concentrator, US$26 million paid to non- provided by operating activities in among other things, is underway controlling shareholders in 2013 as compared to 2012 was and will be capital-intensive until subsidiaries. Dividends paid in the due in particular to operating cash completion expected by end year ended December 31, 2012 flow deployment in the first of 2015. were US$1.2 billion. quarter for US$0.3 billion and in the third quarter for US$0.4 billion, ArcelorMittal’s major capital Equity themselves driven by a expenditures in the year ended Equity attributable to the equity deployment of working capital for December 31, 2013 included the holders of the parent increased US$0.5 billion and US$0.8 billion, following major projects: to US$49.8 billion at December respectively (resulting in turn completion of capacity expansion 31, 2013, as compared to largely from higher trade in ArcelorMittal Mines Canada, US$47.0 billion at December 31, receivables and lower payables). Liberia greenfield mining project; 2012, primarily due to share capacity expansion in finished offering for US$1.8 billion, Net cash used in investing products, rebar and meltshop in issuance of mandatorily activities Monlevade; construction of a new convertible subordinated notes for Net cash used in investing rolling mill in Acindar; construction US$1.8 billion, disposal of 15% activities was US$2.9 billion for of a heavy gauge galvanizing line interest in ArcelorMittal Mines the year ended December 31, to optimize galvanizing operations Canada for US$0.7 billion and 2013 as compared to US$3.7 in ArcelorMittal Dofasco, capacity recognized actuarial gains and billion for the year ended expansion plan and replacement of losses for US$2.0 billion. This December 31, 2012. This spirals for enrichment in increase was partly offset by the significant decrease is mainly ArcelorMittal Mines in Canada. net loss attributable to the equity related to capital expenditure holders of the parent of US$2.5 which amounted to US$3.5 billion Net cash used in financing billion and dividend payments of for the year ended December 31, activities US$0.4 billion. See note 19 to 2013 as compared to US$4.7 Net cash provided by financing ArcelorMittal’s consolidated billion for the year ended activities was US$0.2 billion for financial statements for the year December 31, 2012. Net inflows the year ended December 31, ended December 31, 2013. from other investing activities 2013, as compared to net cash amounted to US$0.6 billion, used of US$1.0 billion in 2012. including US$139 million related The cash inflow from financing Annual review 2013 Performance 51

Disclosures about market risks

ArcelorMittal is exposed to a All financial market hedges are Derivative instruments ArcelorMittal faces transaction number of different market risks governed by ArcelorMittal’s risk, where its businesses generate arising from its normal business treasury and financial risk ArcelorMittal uses derivative sales in one currency but incur activities. Market risk is the management policy, which instruments to manage its costs relating to that revenue in a possibility that changes in raw includes a delegated authority and exposure to movements in interest different currency. For example, materials prices, foreign currency approval framework, sets the rates, foreign exchange rates and ArcelorMittal’s non-US subsidiaries exchange rates, interest rates, boundaries for all hedge activities commodity prices. Changes in the may purchase raw materials, base metal prices (zinc, nickel, and dictates the required approvals fair value of derivative instruments including iron ore and coking coal, aluminum and tin) and energy for all treasury activities. Trading are recognized in the consolidated in US dollars, but may sell finished prices (oil, natural gas and power) activity and limits are monitored statements of operations or in steel products in other currencies. will adversely affect the value on an ongoing basis. ArcelorMittal equity according to nature and Consequently, an appreciation of ArcelorMittal’s financial assets, enters into transactions with effectiveness of the hedge. of the US dollar will increase liabilities or expected future numerous counterparties, mainly For more information, see note 18 the cost of raw materials, cash flows. banks and financial institutions, of ArcelorMittal’s consolidated thereby negatively impacting the as well as brokers, major energy financial statements. company’s operating margins. The fair value information producers and consumers. presented below is based on Derivatives used are conventional the information available to As part of its financing and exchange-traded instruments management as of the date of cash management activities, such as futures and options, the consolidated statements ArcelorMittal uses derivative as well as non-exchange traded of financial position. Although instruments to manage its derivatives such as over-the- ArcelorMittal is not aware of any exposure to changes in interest counter swaps, options and factors that would significantly rates, foreign exchange rates forward contracts. affect the estimated fair value and commodities prices. These amounts, such amounts have not instruments are principally interest Currency exposure been comprehensively revalued rate and currency swaps, spots for purposes of this annual report and forwards. ArcelorMittal ArcelorMittal seeks to manage since that date, and therefore, may also use futures and each of its entities’ exposure to its the current estimates of fair value options contracts. operating currency. For currency may differ significantly from the exposure generated by activities, amounts presented below. Counterparty risk the conversion and hedging of The estimated fair values of revenues and costs in foreign certain financial instruments have ArcelorMittal has established currencies is typically performed been determined using available detailed counterparty limits to using currency transactions on the market information or other mitigate the risk of default by its spot market and forward market. valuation methodologies that counterparties. The limits restrict For some of its business segments, require considerable judgment in the exposure ArcelorMittal may ArcelorMittal hedges future interpreting market data and have to any single counterparty. cash flows. developing estimates. Counterparty limits are calculated taking into account a range of Because a substantial portion of Risk management factors that govern the approval ArcelorMittal’s assets, liabilities, of all counterparties. The factors sales and earnings are ArcelorMittal has implemented include an assessment of the denominated in currencies other strict policies and procedures to counterparty’s financial soundness than the US dollar (its reporting manage and monitor financial and its ratings by the major rating currency), ArcelorMittal has market risks. Organizationally, agencies, which must be of a high exposure to fluctuations in the supervisory functions are quality. Counterparty limits are values of these currencies relative separated from operational monitored on a periodic basis. to the US dollar. These currency functions, with proper segregation fluctuations, especially the of duties. Financial market All counterparties and their fluctuation of the value of the activities are overseen by the respective limits require the prior US dollar relative to the euro, CFO, the corporate finance and approval of the corporate finance the Canadian dollar, Brazilian real tax committee and the GMB. and tax committee. Standard and South African rand, as well agreements, such as those as fluctuations in the currencies All financial market risks are published by the International of the other countries in which managed in accordance with Swaps and Derivatives ArcelorMittal has significant the treasury and financial risk Association, Inc. (ISDA) are operations and/or sales, could management policy. These risks negotiated with all ArcelorMittal have a material impact on its are managed centrally through trading counterparties. results of operations. group treasury by a group specializing in foreign exchange, interest rate, commodity, internal and external funding and cash and liquidity management. Annual review 2013 Performance 52

Disclosures about market risks continued

Based on estimates for 2013, the table below reflects the impact of a 10% depreciation during 2013 of the functional currency on budgeted cash flows expressed in the respective functional currencies of the various entities:

Transaction impact of 10% depreciation Entity functional currency of the subsidiaries’ functional currency on cash flows in US$ equivalent (in millions) US dollar (244) Euro (609) Other 15

ArcelorMittal faces translation risk, which arises when ArcelorMittal translates the financial statements of its subsidiaries, denominated in currencies other than the US dollars for inclusion in ArcelorMittal’s consolidated financial statements.

The table below, in which it is assumed that there is no indexation between sales prices and exchange rates, illustrates the impact of a depreciation of 10% during 2013 of the US dollar.

Translation impact of 10% depreciation Entity functional currency of dollar on operating results in US$ equivalent (in millions) Euro (106) Other 129

The table below illustrates the impact of exchange rate fluctuations on the conversion of the net debt of ArcelorMittal into US dollars as of December 31, 2013 (sensitivity taking derivative transactions into account):

Impact of 10% appreciation Currency of the US dollar on net debt translation in US$ equivalent (in millions) Brazilian real (17) Canadian dollar - Euro (459) Other (16)

Interest rate sensitivity Short-term interest rate exposure and cash Cash balances, which are primarily composed of euros and US dollars, are managed according to the short-term (up to one year) guidelines established by senior management on the basis of a daily interest rate benchmark, primarily through short-term interest rate swaps and short-term currency swaps, without modifying the currency exposure.

Interest rate risk on debt ArcelorMittal’s policy consists of incurring debt at fixed and floating interest rates, primarily in US dollars and euros according to general corporate needs. Interest rate and currency swaps are utilized to manage the currency and/or interest rate exposure of the debt.

The estimate fair values of ArcelorMittal’s short- and long-term debt are as follows:

2012 2013 Carrying value Estimated fair value Carrying value Estimated fair value (US$ million) Instruments payable bearing interest at variable rates 1,485 1,629 1,015 989 Instruments payable bearing interest at fixed rates 24,096 25,853 20,751 22,875 Long-term debt, including current portion 25,581 27,482 21,766 23,864 Short-term bank loans and other credit facilities including commercial paper 732 893 545 552 Annual review 2013 Performance 53

Disclosures about market risks continued

Commodity price sensitivity ArcelorMittal utilizes a number of exchange-traded commodities in the steel-making process. In certain instances, ArcelorMittal is the leading consumer worldwide of certain commodities. In some businesses and in certain situations, ArcelorMittal is able to pass this exposure on to its customers. The residual exposures are managed as appropriate.

Financial instruments related to commodities (base metals, energy and freight) are utilized to manage ArcelorMittal’s exposure to price fluctuations.

Hedges in the form of swaps and options are utilised to manage the exposure to commodity price fluctuations.

The table below reflects commodity price sensitivity during 2013.

Commodities Impact of 10% move of market prices on operating results at December 31, 2013 in US$ equivalent (in millions) Zinc 60 Nickel 3 Tin 13 Aluminium 6 Gas 61 Brent 95 Freight 16

In respect of non-exchange traded commodities, ArcelorMittal is exposed to possible increases in the prices of raw materials such as iron ore (which is generally correlated with steel prices with a time lag) and coking coal. This exposure is almost entirely managed through long-term contracts, however some limited hedging of iron ore exposures is made through derivative contracts. Annual review 2013 Performance 54

Risks related to the global economy and the steel industry

ArcelorMittal’s business, industries, has continued to slow and on ArcelorMittal’s results of significant amounts of steel and financial condition, results down, along with growth in other operations and financial condition steel products at prices that are of operations or prospects emerging economies that are in particular. at or below their costs of substantial consumers of steel production, putting downward could be materially adversely (such as Brazil, Russia, India, and Excess capacity and oversupply pressure on steel prices in other affected by any of the many markets in the Asian, Middle in the steel industry may weigh markets, including the United risks and uncertainties Eastern and CIS regions). A on the profitability of steel States and Europe. described below. faltering of the recovery in North producers, including America, continued stagnation in ArcelorMittal. Given these structural capacity ArcelorMittal’s business and results Europe or a continued slowdown issues, ArcelorMittal remains are substantially affected by in emerging economies would In addition to economic conditions, exposed to the risk of steel regional and global macroeconomic likely result in continued and the steel industry is affected by production increases in China and conditions. Recessions or prolonged subdued demand for global and regional production other markets outstripping any prolonged periods of weak growth (and hence the price of) steel, capacity and fluctuations in steel increases in real demand. This in the global economy or the while a significant slowing of steel imports/exports and tariffs. The ‘overhang’ will likely weigh on steel economies of ArcelorMittal’s key demand in China would likely have steel industry globally has prices and therefore exacerbate selling markets have in the past a negative impact on mineral historically suffered from structural the ‘margin squeeze’ in the steel had and in the future would be prices. Should such events occur, overcapacity, which is amplified industry created by high-cost raw likely to have a material adverse they would likely have a material during periods of global or regional materials, in particular in markets effect on the mining and steel adverse effect on the mining and economic weakness due to marked by overcapacity such industries and on ArcelorMittal’s steel industries in general and on weaker global or regional demand. as Europe. business, results of operations and ArcelorMittal’s results of In Europe, structural overcapacity financial condition. operations and financial condition is considerable, with studies Volatility in the supply and in particular. indicating that European prices of raw materials, energy The mining and steel industries production capacity may exceed and transportation, and have historically been highly Continued weakness of the European demand by as much as mismatches with steel price volatile. This is due largely to the eurozone economy may 40%. In 2013, demand levels in trends, as well as protracted low cyclical nature of the business continue to adversely affect the Europe were more than 30% raw materials prices, could sectors that are the principal steel industry and ArcelorMittal’s below those of 2007, widely adversely affect ArcelorMittal’s consumers of steel and the business, results of operations considered to have been a peak results of operations. industrial raw materials produced and financial condition. in the industry cycle. Reaching from mining, namely the equilibrium would therefore require Steel production consumes automotive, construction, Steel producers with substantial supply-side reductions and/or substantial amounts of raw appliance, machinery, equipment, sales in Europe, such as demand recovery. These are materials including iron ore, coking infrastructure and transportation ArcelorMittal, were deeply difficult and costly to implement in coal and coke. Because the industries. Demand for minerals affected by macroeconomic the European context. Moreover, production of direct reduced iron, and metals and steel products thus conditions in Europe over the the supply excess could be the production of steel in electric generally correlates to 2011-2013 period, when the exacerbated by an increase in arc furnaces (‘EAFs’) and the macroeconomic fluctuations in the eurozone sovereign debt crisis and imports from emerging market re-heating of steel involve the use global economy. This correlation resulting austerity measures and producers. Outside of Europe, of significant amounts of energy, and the adverse effect of other factors led to recession or steel production capacity in China steel companies are also sensitive macroeconomic downturns on stagnation in many of the national and certain other developing to natural gas and electricity prices metal mining companies and steel economies in the eurozone. In economies including Russia, and dependent on having access producers were evidenced in the 2013, demand for steel in the Ukraine and Turkey, has to reliable supplies of energy. Any 2008/2009 financial and eurozone declined again, albeit increased substantially in recent prolonged interruption in the subsequent economic crisis. The mildly to over 30% below 2007 years in response to a rapid supply of raw materials or energy results of both mining companies levels. While macroeconomic increase in steel consumption would adversely affect and steel producers were conditions in the Eurozone began in those markets. ArcelorMittal’s results of operation substantially affected, with many to stabilize in 2013, growth and financial condition. steel producers (including remains anemic and current China is the largest global steel ArcelorMittal), in particular, expectations are for a continued producer by a large margin, and The prices of iron ore, coking coal, recording sharply reduced sluggish recovery in the Eurozone the balance between its domestic coke and scrap are highly volatile revenues and operating losses. in the near to mid-term, with production and consumption has (for example in 2013 iron ore spot Recovery from the severe forecasts of 1.0% and 1.1% of been an important factor prices fluctuated between a peak economic downturn of growth in 2014 from the influencing global steel prices in of US$160 per tonne in mid- 2008/2009 has been sluggish International Monetary Fund recent years. Steel production February and US$110 per tonne and uneven across various (forecast made in October 2013) capability in China now appears to at the end of May) and may be industries and sectors, and there and the European Central Bank be well in excess of China’s home affected by, among other factors: can be no assurance that such (forecast made in December market demand. This imbalance industry structural factors recovery will continue. In 2013, 2013), respectively. Continued has been exacerbated by the (including the oligopolistic nature growth slowed although it weakness or a renewed recent slowdown in China’s of the (sea-borne) iron ore continued in the emerging deterioration of the eurozone economic growth rate, which has industry and the fragmented economies. Macroeconomic economy would most likely result led to decreased demand for steel nature of the steel industry); conditions improved in certain in continued and prolonged products in China. As a result, demand trends in the steel developed regions, such as North reduced demand for (and hence China has become an increasingly industry itself and particularly from America, but remained weak in price of) steel in Europe and have larger net exporter of steel Chinese steel producers (as the Europe. Growth of the Chinese a material adverse effect on the (principally to Asia). Excess largest group of producers); economy, which in recent years European steel industry in general capacity from developing massive stocking and destocking has been one of the main demand countries, such as China, may activities (sudden drops in ore drivers in the mining and steel continue to result in exports of Annual review 2013 Performance 55

Risks related to the global economy and the steel industry continued

prices can push end-users to delay between raw material and steel inventory levels and exchange Any of these developments could orders pushing prices further prices may also occur and result in rates. ArcelorMittal’s results have have a material adverse effect on down); new laws or regulations; a ‘price-cost squeeze’ in the steel shown the material adverse effect its business, financial condition, suppliers’ allocations to other industry. ArcelorMittal experienced of prolonged periods of low prices. results of operations or prospects. purchasers; business continuity of such a squeeze in late 2011, for Following an extended period of suppliers; changes in pricing example, when iron ore prices fell rising prices, global steel prices fell Unfair trade practices in models; expansion projects of over 30% in three weeks in sharply during the financial and ArcelorMittal’s home markets suppliers; interruptions in October 2011 and quickly economic crisis of 2008/2009 as could negatively affect steel production by suppliers; accidents resulted in a significant fall in steel a result of the sharp drop in prices and reduce or other similar events at suppliers’ prices while lower raw material demand exacerbated by massive ArcelorMittal’s profitability, premises or along the supply chain; prices had yet to feed into the industry destocking (i.e. customer while trade restrictions could wars, natural disasters, political company’s operating costs and it reductions of steel inventories). limit ArcelorMittal’s access to disruption and other similar events; continued to sell steel products This had a material adverse effect key export markets. fluctuations in exchange rates; the using inventory manufactured with on ArcelorMittal and other steel bargaining power of raw material higher priced iron ore. producers, who experienced ArcelorMittal is exposed to the suppliers; and the availability and ArcelorMittal experienced similar lower revenues, margins and, effects of ‘dumping’ and other cost of transportation. Although price-cost squeezes at various as discussed further below, unfair trade and pricing practices ArcelorMittal has substantial points in 2012 and in 2013. write-downs of finished steel by competitors. Moreover, sources of iron ore and coal from Because ArcelorMittal sources products and raw material government subsidization of the its own mines and strategic a substantial portion of its raw inventories. Steel prices gradually steel industry remains widespread long-term contracts (the materials through long-term recovered in late 2009 and into in certain countries, particularly company’s self-sufficiency rates contracts with quarterly (or more 2010 while remaining below their those with centrally-controlled were 62% for iron ore and 19% frequent) formula-based or pre-financial crisis peaks. Steel economies such as China. As a for pulverized coal injection (‘PCI’) negotiated price adjustments and prices were highly volatile in both consequence of the recent global and coal in 2013) and is both sells a substantial part of its steel 2011 and 2012, with particularly economic crisis, there is an expanding output at such mines products at spot prices, as a steel sharp drops in both steel and iron increased risk of unfairly-traded and has new mines under producer, it faces the risk of ore prices occurring during the steel exports from such countries development, it nevertheless adverse differentials between its third quarter of 2012. In 2013, into various markets including remains exposed to volatility in the own production costs, which are steel prices (as well as iron ore North America and Europe, in supply and price of iron ore, coking affected by global raw materials prices) were volatile, and remained which ArcelorMittal produces and coal and coke given that it obtains and scrap prices, on the one hand, subject to the risk of price sells its products. Such imports a significant portion of such raw and trends for steel prices in corrections, in particular to spreads could have the effect of reducing materials under supply contracts regional markets, on the other between higher prices in the prices and demand for from third parties. The company is hand. In addition to the company’s United States than in China. ArcelorMittal products. also exposed directly to price exposure as a steelmaker, ArcelorMittal’s results will likely volatility in iron ore and coal as it protracted periods of low prices of continue to be affected by In addition, ArcelorMittal has sells such minerals to third parties iron ore and to a lesser extent coal volatility in steel and raw material significant exposure to the effects to an increasing extent. This would weigh on the revenues and prices, as well as the ongoing risk of trade sanctions and barriers volatility was reflected directly in profitability of the company’s of protracted low steel prices as due to the global nature of its the results of the company’s mining business, as occurred in the any sustained steel price recovery operations. Various countries mining segment in 2013. second half of 2012 and at would likely require raw material have in the past instituted various points in 2013. price support as well as a broad trade sanctions and barriers, Historically, energy prices have economic recovery in order to a recurrence of which could varied significantly, and this trend Protracted low iron ore and underpin an increase in real materially and adversely affect is expected to continue due to steel prices would have a demand for steel products by ArcelorMittal’s business by limiting market conditions and other material adverse effect on end users. the company’s access to factors beyond the control of ArcelorMittal’s results, as could steel markets. steel companies. price volatility. Developments in the competitive environment in the Steel and raw material prices have ArcelorMittal sells both iron ore steel industry could have an historically been highly correlated. and steel products. Protracted low adverse effect on A drop in raw material prices iron ore prices have a negative ArcelorMittal’s competitive therefore typically triggers a effect on the results of its mining position and hence its business, decrease in steel prices. During the business, as a result of lower sale financial condition, results of 2008/2009 crisis and again in prices and lower margins on such operations or prospects. 2012, both steel and raw sales. In addition, as indicated materials prices dropped sharply. above, iron ore prices and steel The markets in which steel Another risk is embedded in the prices are generally highly companies operate are highly timing of the production cycle: correlated, and a drop in iron ore competitive. Competition – in the rapidly falling steel prices can prices therefore typically triggers a form of established producers trigger write-downs of raw decrease in steel prices. expanding in new markets, smaller material inventory purchased producers increasing production in when steel prices were higher, as As indicated above, the prices of anticipation of demand increases, well as of unsold finished steel iron ore and steel products are amid an incipient recovery, or products. ArcelorMittal recorded influenced by many factors, exporters selling excess capacity substantial write-downs in including demand, worldwide from markets such as China – 2008/2009 as a result of this. production capacity, capacity- could cause ArcelorMittal to lose Furthermore, a lack of correlation utilization rates, global prices and market share, increase or a time lag in correlation contract arrangements, steel expenditures or reduce pricing. Annual review 2013 Performance 56

Risks related to the global economy and the steel industry continued

ArcelorMittal has incurred and impose increasingly stringent activities as having a detrimental requirements, or other regulatory may incur in the future environmental protection effect on their natural initiatives, could have a negative operating costs when standards regarding, among environment and conditions of life. effect on ArcelorMittal’s production capacity is idled or others, air emissions, wastewater Any actions taken by such production levels, income and increased costs to resume storage, treatment and discharges, individuals or communities in cash flows. Such regulations production at idled facilities. the use and handling of hazardous response to such concerns could could also have a negative effect or toxic materials, waste disposal compromise ArcelorMittal’s on the company’s suppliers and ArcelorMittal’s decisions about practices and the remediation profitability or, in extreme cases, customers, which could result in which facilities to operate and at of environmental contamination. the viability of an operation or the higher costs and lower sales. which levels are made based upon The costs of complying with, development of new activities in customers’ orders for products and the imposition of liabilities the relevant region or country. Moreover, many developing as well as the capabilities and cost pursuant to, environmental laws nations have not yet instituted performance of the company’s and regulations can be significant, Laws and regulations restricting significant greenhouse gas facilities. Considering temporary and compliance with new and emissions of greenhouse regulations. It is possible that a or structural overcapacity in more stringent obligations gases could force ArcelorMittal future international agreement the current market situation, may require additional capital to incur increased capital to regulate emissions may production operations are expenditures or modifications and operating costs and could provide exemptions and lower concentrated at several plant inoperating practices. Failure to have a material adverse standards for developing nations. locations and certain facilities are comply can result in civil and or effect on ArcelorMittal’s In such case, ArcelorMittal may idled in response to customer criminal penalties being imposed, results of operations and be at a competitive disadvantage demand with operating costs still the suspension of permits, financial condition. relative to steelmakers having incurred at such idled facilities. requirements to curtail or suspend more or all of their production in operations and lawsuits by third Compliance with new and more such countries. When idled facilities are restarted, parties. Despite ArcelorMittal’s stringent environmental ArcelorMittal incurs costs to efforts to comply with obligations relating to greenhouse replenish raw material inventories, environmental laws and gas emissions may require prepare the previously idled regulations, environmental additional capital expenditures facilities for operation, perform the incidents or accidents may occur or modifications in operating required repair and maintenance that negatively affect the practices, as well as additional activities and prepare employees company’s reputation or the reporting obligations. The to return to work safely and operations of key facilities. integrated steel process involves resume production responsibilities. carbon and creates carbon dioxide ArcelorMittal also incurs costs (CO2), which distinguishes Competition from other and liabilities associated with the integrated steel producers from materials could reduce market assessment and remediation of mini-mills and many other prices and demand for steel contaminated sites. In addition to industries where CO2 generation products and thereby reduce the impact on current facilities is primarily linked to energy use. ArcelorMittal’s cash flow and operations, environmental The EU has established and profitability. remediation obligations can give greenhouse gas regulations and rise to substantial liabilities in is revising its emission trading In many applications, steel respect of divested assets and system for the period 2013 to competes with other materials past activities. This may also be 2020 in a manner that may that may be used as substitutes, the case for acquisitions when require ArcelorMittal to incur such as aluminum (particularly liabilities for past acts or omissions additional costs to acquire in the automobile industry), are not adequately reflected in the emissions allowances. The United cement, composites, glass, terms and price of the acquisition. States required reporting of plastic and wood. Government ArcelorMittal could become greenhouse gas emissions from regulatory initiatives mandating subject to further remediation certain large sources beginning in the use of such materials in lieu of obligations in the future, as 2011 and has begun adopting steel, whether for environmental additional contamination is and implementing regulations to or other reasons, as well as the discovered or cleanup standards restrict emissions of greenhouse development of other new become more stringent. gases under existing provisions substitutes for steel products, of the Clean Air Act. Further could significantly reduce market Costs and liabilities associated with measures, in the EU, the United prices and demand for steel mining activities include those States, and many other countries, products and thereby reduce resulting from tailings and sludge may be enacted in the future. ArcelorMittal’s cash flow disposal, effluent management, In particular, an international and profitability. and rehabilitation of land disturbed agreement, the Durban Platform during mining processes. for Enhanced Action, calls for a ArcelorMittal is subject to ArcelorMittal could become second phase of the Kyoto strict environmental laws and subject to unidentified liabilities Protocol’s greenhouse gas regulations that could give rise in the future, such as those emissions restrictions to be to a significant increase in costs relating to uncontrolled tailings effective through 2020 and for a and liabilities. breaches or other future events new international treaty to come or to underestimated emissions into effect and be implemented ArcelorMittal is subject to a of polluting substances. from 2020. Such obligations, broad range of environmental laws whether in the form of a national and regulations in each of the ArcelorMittal’s operations may be or international cap-and-trade jurisdictions in which it operates. located in areas where individuals emissions permit system, a carbon These laws and regulations or communities may regard its tax, emissions controls, reporting Annual review 2013 Performance 57

Risks related to the global economy and the steel industry continued

ArcelorMittal is subject to of workers and nearby residents. market factors could cause this to In addition, credit rating agencies stringent health and safety laws The industry is concerned that happen again. Under such could downgrade ArcelorMittal’s and regulations that give rise to the court decision could lead to circumstances, the company could ratings either due to factors significant costs and could give more stringent permit and other experience difficulties in accessing specific to ArcelorMittal, a rise to significant liabilities. requirements, particularly at the financial markets on acceptable prolonged cyclical downturn in the the local level, or to other similar terms or at all. steel industry or macroeconomic ArcelorMittal is subject to a broad local or national court decisions trends (such as global or regional range of health and safety laws in the EU. ArcelorMittal’s high level of debt recessions) and trends in credit and regulations in each of the outstanding could have adverse and capital markets more jurisdictions in which it operates. Risks related to ArcelorMittal consequences more generally, generally. In this respect, Standard These laws and regulations, as ArcelorMittal has a substantial including by impairing its ability & Poor’s, Moody’s and Fitch interpreted by relevant agencies amount of indebtedness, which to obtain additional financing downgraded the company’s rating and the courts, impose increasingly could make it more difficult or for working capital, capital to below ‘investment grade’ in stringent health and safety expensive to refinance its expenditures, acquisitions, general August, November and December protection standards. The costs of maturing debt, incur new debt corporate purposes or other 2012, respectively, and Standard complying with, and the imposition and/or flexibly manage its purposes, and limiting its flexibility & Poor’s and Moody’s currently of liabilities pursuant to, health business. to adjust to changing market have ArcelorMittal’s credit rating and safety laws and regulations conditions or withstand on negative outlook. The margin could be significant, and failure As of December 31, 2013, competitive pressures, resulting in under ArcelorMittal’s principal to comply could result in the ArcelorMittal had total debt greater vulnerability to a downturn credit facilities and certain of its assessment of civil and criminal outstanding of US$22.3 billion, in general economic conditions. outstanding bonds is subject to penalties, the suspension of consisting of US$4.1 billion of While ArcelorMittal is targeting adjustment in the event of a permits or operations, and lawsuits short-term indebtedness a further reduction in ‘net debt’ change in its long-term credit by third parties. (including payables to banks and (i.e. long-term debt net of current ratings, and the August, November the current portion of long-term portion plus payables to banks and and December 2012 downgrades Despite ArcelorMittal’s efforts to debt) and US$18.2 billion of current portion of long-term debt, resulted in increased interest monitor and reduce accidents at long-term indebtedness. less cash and cash equivalents, expense. Any further downgrades its facilities, health and safety As of December 31, 2013, restricted cash and short-term in ArcelorMittal’s credit ratings incidents do occur, some of which ArcelorMittal had US$6.2 billion investments), there is no would result in a further increase in may result in costs and liabilities of cash and cash equivalents, assurance that it will succeed. its cost of borrowing and could and negatively impact including restricted cash, and significantly harm its financial ArcelorMittal’s reputation or the US$6.0 billion available to be Moreover, ArcelorMittal could, condition and results of operations operations of the affected facility. drawn under existing credit in order to increase its financial as well as hinder its ability to Such accidents could include facilities. As of December 31, flexibility and strengthen its refinance its existing indebtedness explosions or gas leaks, fires or 2013, substantial amounts of balance sheet, implement capital on acceptable terms. collapses in underground mining indebtedness mature in 2014 raising measures such as equity operations, vehicular accidents, (US$4.1 billion), 2015 (US$2.5 offerings (as was done in January ArcelorMittal’s principal credit other accidents involving mobile billion), 2016 (US$2.4 billion), 2013), which could (depending facilities contain restrictive equipment, or exposure to 2017 (US$2.9 billion) and 2018 on how they are structured) covenants. These covenants limit, radioactive or other potentially (US$2.3 billion). dilute the interests of existing inter alia, encumbrances on the hazardous materials. Some of shareholders. In addition, assets of ArcelorMittal and its ArcelorMittal’s industrial activities If the mining and steel markets ArcelorMittal is pursuing a policy subsidiaries, the ability of involve the use, storage and were to deteriorate again, of asset disposals in order to ArcelorMittal’s subsidiaries to transport of dangerous chemicals consequently reducing operating reduce debt. These asset disposals incur debt and the ability of and toxic substances, and cash flows, ArcelorMittal’s gearing are subject to execution risk and ArcelorMittal and its subsidiaries ArcelorMittal is therefore subject (long-term debt, plus short-term may fail to materialize, and the to dispose of assets in certain to the risk of industrial accidents debt, less cash and cash proceeds received from them circumstances. ArcelorMittal’s which could have significant equivalents and restricted cash, may not reflect values that principal credit facilities also adverse consequences for the divided by total equity) would management believes are include the following financial company’s workers and facilities, likely increase, absent sufficient achievable and/or cause covenant: ArcelorMittal must as well as the environment. Such asset disposals and further capital substantial accounting losses ensure that the ‘leverage ratio’, accidents could lead to production raises. In such a scenario, (particularly if the disposals are being the ratio of ‘consolidated stoppages, loss of key personnel, ArcelorMittal may have difficulty done in difficult market total net borrowings’ (consolidated the loss of key assets, or put at accessing financial markets to conditions). In addition, to the total borrowings less consolidated risk employees (and those of refinance maturing debt on extent that the asset disposals cash and cash equivalents) to sub-contractors and suppliers) or acceptable terms or, in extreme include the sale of all or part of ‘consolidated Ebitda’ (the persons living near affected sites. scenarios, come under liquidity core assets (including through an consolidated net pre-taxation pressure. ArcelorMittal’s access to increase in the share of minority profits of the ArcelorMittal group Under certain circumstances, financial markets for refinancing interests, such as the ArcelorMittal for a measurement period, subject authorities could require also depends on conditions in the Mines Canada transaction to certain adjustments as defined ArcelorMittal facilities to curtail or global capital and credit markets completed in 2013), this could in the facilities), at the end of each suspend operations based on which are volatile. During the reduce ArcelorMittal’s consolidated ‘measurement period’ (each period health and safety concerns. For 2008/2009 financial and cash flows and or the economic of 12 months ending on the last example, in August 2012 a local economic crisis and again at the interest of ArcelorMittal day of a financial half-year or a court in Italy ordered the partial height of the eurozone sovereign shareholders in such assets, which financial year of ArcelorMittal), is closure of another company’s large debt crisis, access to the financial may be cash-generative and not greater than a ratio of 4.25 to steel manufacturing facility, based markets was restricted for many profitable ones. one or 3.5 to one, depending on concerns that its long lasting air companies and various emissions were harming the health macroeconomic and financial Annual review 2013 Performance 58

Risks related to the global economy and the steel industry continued

on the facility. As of December 31, ArcelorMittal’s growth strategy Greenfield projects can also, in any of which could result in 2013, the company was in includes greenfield and addition to general factors, have production shortfalls or damage to compliance with the brownfield projects that are project-specific factors that persons or property. In particular, leverage ratios. inherently subject to completion increase the level of risk. For hazards associated with open-pit and financing risks. example, the company, via mining operations include, The restrictive and financial Baffinland Iron Mines Corporation among others: covenants could limit As a part of its growth strategy, (‘Baffinland’), a 50/50 joint • flooding of the open pit; ArcelorMittal’s operating and the company plans to expand its arrangement, is developing the financial flexibility. Failure to steel-making capacity and raw Mary River iron ore deposit in the • collapse of the open-pit wall; comply with any covenant would materials production through a northern end of Baffin Island in the • accidents associated with the enable the lenders to accelerate combination of brownfield growth, Canadian Arctic. The scale of this operation of large open-pit ArcelorMittal’s repayment new greenfield projects and project, which has been split into mining and rock transportation obligations. Moreover, acquisitions, mainly in emerging several developmental phases, equipment; ArcelorMittal’s debt facilities have markets. To the extent that these the first of which was commenced provisions whereby certain events plans proceed, these projects in 2013, and the location of the • accidents associated with the relating to other borrowers within would require substantial capital deposit raise unique challenges, preparation and ignition of the ArcelorMittal group could, expenditures, including in 2014 including extremely harsh weather large-scale open-pit blasting under certain circumstances, lead and 2015, and their timely conditions, lack of transportation operations; to acceleration of debt repayment completion and successful and other infrastructure and • production disruptions due to under such credit facilities. operation may be affected by environmental concerns. Similar weather; and Any invocation of these cross- factors beyond the control of to other greenfield development acceleration clauses could cause ArcelorMittal. These factors projects, it is subject to • hazards associated with the some or all of the other debt to include receiving financing on construction and permitting risks, disposal of mineralized waste accelerate, creating liquidity reasonable terms, obtaining or including the risk of significant water, such as groundwater and pressures. In addition, even market renewing required regulatory cost overruns and delays in waterway contamination. perception of a potential breach of approvals and licenses, securing construction, infrastructure any financial covenant could have and maintaining adequate property development, start-up and Hazards associated with a negative impact on ArcelorMittal’s rights to land and mineral commissioning. The region is underground mining operations, ability to refinance its indebtedness resources (especially in connection known for its harsh and of which ArcelorMittal has several, on acceptable conditions. with mining projects in certain unpredictable weather conditions include, among others: developing countries in which resulting in periods of limited • underground fires and Furthermore, some of security of title with respect to access and general lack of explosions, including those ArcelorMittal’s debt is subject to mining concessions and property infrastructure. Other specific risks caused by flammable gas floating rates of interest and rights remains weak), local the project is subject to include, thereby exposes ArcelorMittal to opposition to land acquisition but are not limited to (i) delays in • gas and coal outbursts interest rate risk (i.e., if interest or project development obtaining, or conditions imposed • cave-ins or falls of ground rates rise, ArcelorMittal’s debt (as experienced, for example, in by, regulatory approvals; (ii) risks service obligations on its floating connection with the company’s associated with obtaining • discharges of gases and toxic rate indebtedness would increase). Keonjhar steel project in India, amendments to existing regulatory chemicals Depending on market conditions, which resulted in the approvals or permits and additional • flooding ArcelorMittal from time to time abandonment of the project), regulatory approvals or permits uses interest-rate swaps or other managing relationships with or which will be required; (iii) existing • sinkhole formation and ground financial instruments to hedge obtaining consents from other litigation risks; (iv) fluctuations in subsidence a portion of its interest rate shareholders, revision of economic prices for iron ore affecting the • other accidents and conditions exposure either from fixed to viability (as experienced, for future profitability of the project; resulting from drilling floating or floating to fixed. After example, in connection with the and (v) risks associated with the taking into account interest-rate termination of the Mauritania iron company and its partner being in a • difficulties associated with derivative financial instruments, ore mining project), demand for position to finance their respective mining in extreme weather ArcelorMittal had exposure to the company’s products and share of project costs and/or conditions, such as the Arctic; 93% of its debt at fixed interest general economic conditions. obtaining financing on and rates and 7% at floating rates as Any of these factors may cause commercially reasonable terms. As • blasting, removing, and of December 31, 2013. the company to delay, modify or a result, there can be no assurance processing material from an forego some or all aspects of its that the Mary River Project will underground mine. Finally, ArcelorMittal has foreign expansion plans. The company proceed in accordance with exchange exposure in relation to cannot guarantee that it will be current expectations. ArcelorMittal is exposed to all of its debt, approximately 29% of able to execute its greenfield or these hazards. The occurrence of which is denominated in euros brownfield development projects, ArcelorMittal’s mining any of the events listed above as of December 31, 2013, and to the extent that they operations are subject to risks could delay production, increase while its financial statements are proceed, that it will be able to associated with mining production costs and result in denominated in US dollars. This complete them on schedule, within activities. death or injury to persons, damage creates balance sheet exposure, budget, or achieve an adequate to property and liability for with a depreciation of the US return on its investment. ArcelorMittal operates mines and ArcelorMittal, some or all of which dollar against the euro leading to has substantially increased the may not be covered by insurance, an increase in debt (including for scope of its mining activities in as well as substantially harm covenant compliance recent years. Mining operations ArcelorMittal’s reputation as a measurement purposes). are subject to hazards and risks company focused on ensuring the usually associated with the health and safety of its employees. exploration, development and production of natural resources, Annual review 2013 Performance 59

Risks related to the global economy and the steel industry continued

ArcelorMittal’s reserve • obtain environmental and at any time. For example, in (when aggregated with ordinary estimates may materially differ other licenses November 2013, the company shares of ArcelorMittal and options entered into a 50/50 joint venture to acquire ordinary shares held from mineral quantities that it • construct mining, processing partnership with Nippon Steel & directly by Mr and Mrs Mittal) to may be able to actually recover; facilities and infrastructure Sumitomo Metal Corporation 656,031,811 shares, representing ArcelorMittal’s estimates of required for greenfield (‘NSSMC’) to acquire from 39.39% of ArcelorMittal’s mine life may prove inaccurate; properties; and and market price fluctuations ThyssenKrupp 100% of outstanding shares. The trust has and changes in operating and • obtain the ore or coal or ThyssenKrupp Steel USA (‘TK the ability to significantly influence capital costs may render certain extract the minerals from the Steel USA’), a steel processing the decisions adopted at the ore reserves uneconomical ore or coal. plant situated in Calvert, Alabama, ArcelorMittal general meetings of to mine. for an agreed price of US$1.55 shareholders, including matters If a project proves not to be billion. The waiting period under involving mergers or other ArcelorMittal’s reported reserves economically feasible by the time the US Hart-Scott-Rodino business combinations, the are estimated quantities of ore and ArcelorMittal is able to exploit it, Antitrust Improvements Act (‘US acquisition or disposition of metallurgical coal that it has ArcelorMittal may incur substantial HSR Act’) terminated on January assets, issuances of equity and the determined can be economically losses and be obliged to recognize 29, 2014 with respect to this incurrence of indebtedness. mined and processed under impairments. In addition, potential acquisition. The transaction is The trust also has the ability to present and anticipated conditions changes or complications involving expected to close during the first significantly influence a change of to extract their mineral content. metallurgical and other quarter of 2014. control of ArcelorMittal. There are numerous uncertainties technological processes arising inherent in estimating quantities of during the life of a project may The company’s past growth The loss or diminution of the reserves and in projecting potential result in delays and cost overruns through acquisitions has entailed services of the chairman of the future rates of mineral production, that may render the project not significant investment and board of directors and chief including factors beyond economically feasible. increased operating costs, as well executive officer of ArcelorMittal’s control. Reserve as requiring greater allocation of ArcelorMittal could have an engineering involves estimating ArcelorMittal faces rising management resources away from adverse effect on its business deposits of minerals that cannot extraction costs over time as daily operations. Managing growth and prospects. be measured in an exact manner, reserves deplete. has required the continued and the accuracy of any reserve development of ArcelorMittal’s The chairman of the board of estimate is a function of the Reserves are gradually depleted in financial and management directors and chief executive quality of available data and the ordinary course of a given information control systems, the officer of ArcelorMittal, Mr engineering and geological mining operation. As mining integration of acquired assets with Lakshmi N Mittal, has for over 30 interpretation and judgment. As a progresses, distances to the existing operations, the adoption years contributed significantly to result, no assurance can be given primary crusher and to waste of manufacturing best practices, shaping and implementing the that the indicated amount of ore deposits become longer, pits attracting and retaining qualified business strategy of Mittal Steel or coal will be recovered or that it become steeper and underground management and personnel and subsequently ArcelorMittal. will be recovered at the operations become deeper. As a (particularly to work at more His strategic vision was anticipated rates. Estimates may result, over time, ArcelorMittal remote sites where there is a instrumental in the creation of the vary, and results of mining and usually experiences rising unit shortage of skilled personnel) as world’s largest and most global production subsequent to the date extraction costs with respect to well as the continued training and steel group. The loss or any of an estimate may lead to each mine. supervision of such personnel, and diminution of the services of the revisions of estimates. Reserve the ability to manage the risks and chairman of the board of directors estimates and estimates of mine ArcelorMittal has grown liabilities associated with the and chief executive officer could life may require revisions based on through acquisitions and may acquired businesses. Failure to have an adverse effect on actual production experience and continue to do so. Failure to continue to manage such growth ArcelorMittal’s business and other factors. For example, manage external growth and could have a material adverse prospects. ArcelorMittal does fluctuations in the market prices of difficulties integrating acquired effect on ArcelorMittal’s business, not maintain key person life minerals and metals, reduced companies and subsequently financial condition, results of insurance on its chairman of the recovery rates or increased implementing steel and mining operations or prospects. board of directors and chief operating and capital costs due to development projects could In particular, if integration of executive officer. inflation, exchange rates, mining harm ArcelorMittal’s future acquisitions is not successful, duties or other factors may render results of operations, financial ArcelorMittal could lose key ArcelorMittal is a holding proven and probable reserves condition and prospects. personnel and key customers, and company that depends on the uneconomic to exploit and may may not be able to retain or earnings and cash flows of its ultimately result in a restatement ArcelorMittal results from Mittal expand its market position. operating subsidiaries, which of reserves. Steel’s 2006 acquisition of, and may not be sufficient to meet 2007 merger with, Arcelor, a A Mittal family trust has the future operational needs or for Drilling and production risks company of approximately ability to exercise significant shareholder distributions. could adversely affect the equivalent size. Arcelor itself influence over the outcome of mining process. resulted from the combination of shareholder votes. Because ArcelorMittal is a holding three steel companies, and Mittal company, it is dependent on the Substantial time and expenditures Steel had previously grown As of December 31, 2013, a trust earnings and cash flows of, and are required to: through numerous acquisitions (HSBC Trust (C.I.) Limited, as dividends and distributions from, over many years. ArcelorMittal trustee), of which Mr Lakshmi N. its operating subsidiaries to pay • establish mineral reserves made numerous acquisitions in Mittal, Mrs Usha Mittal and their expenses, meet its debt service through drilling 2007 and 2008. While the children are the beneficiaries, obligations, pay any cash dividends • determine appropriate mining company’s large-scale M&A beneficially owned (within the or distributions on its ordinary and metallurgical processes for activity has been less extensive meaning of Rule 13d-3 under the shares or conduct share buy- optimizing the recovery of since the 2008 financial crisis, it Securities Exchange Act of 1934, backs. Significant cash or cash metal contained in ore and coal could make substantial acquisitions as amended) shares amounting equivalent balances may be held Annual review 2013 Performance 60

Risks related to the global economy and the steel industry continued

from time to time at the generating unit) is reviewed in If management’s estimates Such sources may not suffice, company’s international operating order to determine the amount of change, the estimate of the however, depending on the subsidiaries, including in particular the impairment, if any. The recoverable amount of goodwill or amount of internally generated those in France, where the recoverable amount is the higher the asset could fall significantly and cash flow and other uses of cash. company maintains a cash of its net selling price (fair value result in impairment. While If not, ArcelorMittal may need to management system under which reduced by selling costs) and its impairment does not affect choose between incurring external most of its cash and cash value in use. reported cash flows, the decrease financing, further increasing the equivalents are centralized, and in of the estimated recoverable company’s level of indebtedness, or Argentina, Brazil, South Africa, In assessing value in use, the amount and the related non-cash foregoing investments in projects Ukraine and Venezuela. Some of estimated future cash flows are charge in the consolidated targeted for profitable growth. these operating subsidiaries have discounted to their present value statements of operations could debt outstanding or are subject to using a pre-tax discount rate have a material adverse effect on Underfunding of pension and acquisition agreements that that reflects current market ArcelorMittal’s results of other post-retirement benefit impose restrictions on such assessments of the time value of operations. For example, in 2012, plans at some of ArcelorMittal’s operating subsidiaries’ ability to money and the risks specific to the company recorded an operating subsidiaries could pay dividends, but such the asset (or cash generating unit). impairment charge of US$4.3 require the company to make restrictions are not significant in If the recoverable amount of an billion with respect to goodwill in substantial cash contributions to the context of ArcelorMittal’s asset (or cash generating unit) its European businesses (US$2.5 pension plans or to pay for overall liquidity. Repatriation of is estimated to be less than its billion, US$1 billion and US$0.8 employee healthcare, which funds from operating subsidiaries carrying amount, an impairment billion in the Flat Carbon Europe, may reduce the cash available may also be affected by tax and loss is recognized. An impairment Long Carbon Europe and for ArcelorMittal’s business. foreign exchange policies in place loss is recognized as an expense Distribution Solutions segments, from time to time in the various immediately as part of operating respectively). Following these ArcelorMittal’s principal operating countries where the company income in the consolidated impairment charges, substantial subsidiaries in Brazil, Canada, operates, though none of these statements of operations. amounts of goodwill and other Europe, South Africa and the policies are currently significant intangible assets remain recorded United States provide defined in the context of ArcelorMittal’s Goodwill represents the excess of on its balance sheet (there was benefit pension plans to their overall liquidity. Under the laws the amounts ArcelorMittal paid to US$7.7 billion of goodwill and employees. Some of these plans of Luxembourg, ArcelorMittal acquire subsidiaries and other US$1.0 billion of other intangibles are currently underfunded. At will be able to pay dividends or businesses over the fair value of on the balance sheet at December December 31, 2013, the value of distributions only to the extent their net assets at the date of 31, 2013). No assurance can be ArcelorMittal USA’s pension plan that it is entitled to receive cash acquisition. Goodwill has been given as to the absence of assets was US$2.9 billion, while dividend distributions from its allocated at the level of the significant further impairment the projected benefit obligation subsidiaries, recognize gains from company’s eight operating losses in future periods, was US$3.6 billion, resulting in a the sale of its assets or record segments; the lowest level at particularly if market conditions deficit of US$0.7 billion. At share premium from the issuance which goodwill is monitored for continue to deteriorate. In December 31, 2013, the value of of shares. internal management purposes. particular, management believes the pension plan assets of Goodwill is tested for impairment that reasonably possible changes ArcelorMittal’s Canadian If earnings and cash flows of annually at the levels of the groups in key assumptions would cause an subsidiaries was US$3.2 billion, its operating subsidiaries are of cash generating units which additional impairment loss to be while the projected benefit substantially reduced, ArcelorMittal correspond to the operating recognized in respect of the Flat obligation was US$3.6 billion, may not be in a position to meet segments during the fourth Carbon Europe, Flat Carbon resulting in a deficit of US$0.4 its operational needs or to make quarter, or when changes in the Americas, Long Carbon Europe and billion. At December 31, 2013, shareholder distributions in line circumstances indicate that AACIS segments, which account the value of the pension plan with announced proposals. the carrying amount may not be for US$5.2 billion of goodwill at assets of ArcelorMittal’s European recoverable. The recoverable December 31, 2013. See note 10 subsidiaries was US$0.8 billion, Changes in assumptions amounts of the groups of cash to ArcelorMittal’s consolidated while the projected benefit underlying the carrying value generating units are determined financial statements. obligation was US$2.8 billion, of certain assets, including on the basis of value in use resulting in a deficit of US$2.0 as a result of adverse market calculations, which depend on The company’s investment billion. ArcelorMittal USA, conditions, could result in certain key assumptions. These projects may add to its financing ArcelorMittal’s Canadian impairment of such assets, include assumptions regarding the requirements and adversely subsidiaries, and ArcelorMittal’s including intangible assets shipments, discount rates, growth affect its cash flows and results European subsidiaries also had such as goodwill. rates and expected changes to of operations. partially underfunded post- selling prices and direct costs employment benefit obligations At each reporting date, during the period. Management The steelmaking and mining relating to life insurance and ArcelorMittal reviews the carrying estimates discount rates using businesses are capital intensive medical benefits as of December amounts of its tangible and pre-tax rates that reflect current requiring substantial ongoing 31, 2013. The consolidated intangible assets (excluding market rates for investments of maintenance capital expenditure. obligations totalled US$5.9 billion goodwill, which is reviewed similar risk. The growth rates are In addition, ArcelorMittal has plans as of December 31, 2013, while annually or whenever changes based on the company’s growth to continue certain investment underlying plan assets were only in circumstances indicate that forecasts, which are in line with projects and has certain capital US$0.7 billion, resulting in a deficit the carrying amount may not industry trends. Changes in selling expenditure obligations from of US$5.2 billion. See note 25 to be recoverable) to determine prices and direct costs are based transactions entered into in the ArcelorMittal’s consolidated whether there is any indication on historical experience and past. See note 24 to financial statements. that the carrying amount of those expectations of future changes in ArcelorMittal’s consolidated assets may not be recoverable the market. See notes 2 and 10 financial statements. ArcelorMittal ArcelorMittal’s funding obligations through continuing use. If any such to ArcelorMittal’s consolidated expects to fund these capital depend upon future asset indication exists, the recoverable financial statements. expenditures primarily through performance, which is tied to amount of the asset (or cash internal sources. equity markets to a substantial Annual review 2013 Performance 61

Risks related to the global economy and the steel industry continued

extent, the level of interest rates Florange, France attracted reforms necessary to complete potential in emerging markets is used to discount future liabilities, substantial media and political such transformation may not strong, and intends them to be the actuarial assumptions and attention – even at one stage progress sufficiently. On occasion, focus of the majority of its experience, benefit plan changes involving the threat of ethnic, religious, historical and near-term growth capital and government regulation. nationalization – and the other divisions have given rise to expenditures, legal obstacles could Because of the large number of resolution was negotiated with the tensions and, in certain cases, have a material adverse effect variables that determine pension government. Such situations carry wide-scale civil disturbances and on the implementation of funding requirements, which are the risk of delaying or increasing military conflict. The political ArcelorMittal’s growth plans and difficult to predict, as well as the cost of production systems in these countries are its operations in such countries. any legislative action, future rationalization measures, harming vulnerable to their populations’ cash funding requirements for ArcelorMittal’s reputation and dissatisfaction with their ArcelorMittal’s results of ArcelorMittal’s pension plans and business standing in given government, reforms or the lack operations could be affected by other post-employment benefit markets and even the risk of thereof, social and ethnic unrest fluctuations in foreign exchange plans could be significantly nationalization. and changes in governmental rates, particularly the euro to higher than current estimates. policies, any of which could have a US dollar exchange rate, as well In these circumstances funding ArcelorMittal is subject to material adverse effect on as by exchange controls requirements could have a material economic policy risks and ArcelorMittal’s business, financial imposed by governmental adverse effect on ArcelorMittal’s political, social and legal condition, results of operations or authorities in the countries business, financial condition, uncertainties in certain of the prospects and its ability to where it operates. results of operations or prospects. emerging markets in which it continue to do business in these operates or proposes to operate, countries. For example, ArcelorMittal operates and sells ArcelorMittal could experience and these uncertainties may widespread civil unrest in the products globally, and, as a result, labor disputes that may have a material adverse effect Ukraine resulted in the removal of its business, financial condition, disrupt its operations and its on ArcelorMittal’s business, the President from office in results of operations or prospects relationships with its customers financial condition, results of February 2014 and calls by the could be adversely affected by and its ability to rationalize operations or prospects. country’s interim leadership for a fluctuations in exchange rates. operations and reduce labor presidential election in the coming A substantial portion of costs in certain markets may be ArcelorMittal operates, or months. In addition, certain of ArcelorMittal’s assets, liabilities, limited in practice or encounter proposes to operate, in a large ArcelorMittal’s operations are also operating costs, sales and earnings implementation difficulties. number of emerging markets. located in areas where acute are denominated in currencies In recent years, many of these drug-related violence (including other than the US dollar A majority of the employees of countries have implemented executions and kidnappings of (ArcelorMittal’s reporting ArcelorMittal and of its contractors measures aimed at improving non-gang civilians) occurs and the currency). Accordingly, fluctuations are represented by labor unions the business environment and largest drug cartels operate, such in exchange rates to the US dollar, and are covered by collective providing a stable platform as the states of Michoacan, could have an adverse effect on bargaining or similar agreements, for economic development. Sinaloa and Sonora in Mexico. its business, financial condition, which are subject to periodic ArcelorMittal’s business strategy results of operations or prospects. renegotiation. Strikes or work has been developed partly In addition, the legal systems in stoppages could occur prior to, or on the assumption that this some of the countries in which ArcelorMittal operates in several during, the negotiations preceding modernization, restructuring and ArcelorMittal operates remain less countries whose currencies are, new collective bargaining upgrading of the business climate than fully developed, particularly or have in the past been, subject agreements, during wage and and physical infrastructure will with respect to the independence to limitations imposed by those benefits negotiations or during continue, but this cannot be of the judiciary, property rights, countries’ central banks, or which other periods for other reasons, in guaranteed. Any slowdown in the the protection of foreign have experienced sudden and particular in connection with any development of these economies investment and bankruptcy significant devaluations. In Europe, announced intentions to close could have a material adverse proceedings, generally resulting in the ongoing weakness raises the certain sites. ArcelorMittal effect on ArcelorMittal’s business, a lower level of legal certainty or risk of a substantial depreciation periodically experiences strikes and financial condition, results of security for foreign investment of the euro against the US dollar. work stoppages at various operations or prospects, as could than in more developed countries. In emerging countries where facilities. Prolonged strikes or work insufficient investment by ArcelorMittal may encounter ArcelorMittal has operations stoppages, which may increase in government agencies or the difficulties in enforcing court and/or generates substantial their severity and frequency, may private sector in physical judgments or arbitral awards in revenue, such as Argentina, Brazil, have an adverse effect on the infrastructure. For example, the some countries in which it Venezuela and Ukraine, the risk of operations and financial results failure of a country to develop operates among other reasons significant currency devaluation is of ArcelorMittal. reliable electricity and natural gas because those countries may not high. Currency devaluations, the supplies and networks, and any be parties to treaties that imposition of new exchange Faced with temporary or structural resulting shortages or rationing, recognize the mutual enforcement controls or other similar restrictions overcapacity in various markets, could lead to disruptions in of court judgments. Assets in on currency convertibility, or the particularly developed ones, ArcelorMittal’s production. certain countries where tightening of existing controls, in ArcelorMittal has in the past ArcelorMittal operates could also the countries in which ArcelorMittal sought and may in the future seek Moreover, some of the countries be at risk of expropriation or operates could adversely affect its to rationalize operations through in which ArcelorMittal operates nationalization, and compensation business, financial condition, results temporary shutdowns and have been undergoing substantial for such assets may be below fair of operations or prospects. closures of plants. These initiatives political transformations from value. For example, the Venezuelan have in the past and may in the centrally-controlled command government has implemented a future lead to protracted labor economies to market-oriented number of selective disputes and political controversy. systems or from authoritarian nationalizations of companies For example, in 2012, the regimes to democratically-elected operating in the country to date. announced closure of the liquid governments and vice-versa. Although ArcelorMittal believes phase of ArcelorMittal’s plant in Political, economic and legal that the long-term growth Annual review 2013 Performance 62

Risks related to the global economy and the steel industry continued

Disruptions to ArcelorMittal’s unaffected facilities, severely Product liability claims could matters. For example, in manufacturing processes could affect ArcelorMittal’s ability to have a significant adverse September 2008, Standard Iron adversely affect its operations, conduct its business operations financial impact on ArcelorMittal. Works filed a class action customer service levels and and, as a result, reduce its future complaint in US federal court financial results. operating results. ArcelorMittal sells products to against ArcelorMittal, major manufacturers engaged ArcelorMittal USA and other steel Steel manufacturing processes are ArcelorMittal’s insurance policies in manufacturing and selling manufacturers, alleging that the dependent on critical steel-making provide limited coverage, a wide range of end products. defendants had conspired to equipment, such as furnaces, potentially leaving it uninsured ArcelorMittal also from time restrict the output of steel continuous casters, rolling mills against some business risks. to time offers advice to these products in order to affect steel and electrical equipment (such manufacturers. Furthermore, prices. Since the filing of the as transformers), and such The occurrence of an event that is ArcelorMittal’s products are also Standard Iron Works lawsuit, other equipment may incur downtime uninsurable or not fully insured sold to, and used in, certain similar direct purchaser lawsuits as a result of unanticipated could have a material adverse safety-critical applications, such have been filed in the same court failures or other events, such as effect on ArcelorMittal’s business, as, for example, pipes used in gas and consolidated with the fires or furnace breakdowns. financial condition, results of or oil pipelines and in automotive Standard Iron Works lawsuit. In ArcelorMittal’s manufacturing operations or prospects. applications. There could be January 2009, ArcelorMittal and plants have experienced, and may ArcelorMittal maintains insurance significant consequential damages the other defendants filed a in the future experience, plant on property and equipment and resulting from the use of or motion to dismiss the direct shutdowns or periods of reduced product liability insurance in defects in such products. purchaser claims. In June 2009, production as a result of such amounts believed to be consistent ArcelorMittal has a limited amount the court denied the motion to equipment failures or other events, with industry practices but it is not of product liability insurance dismiss and the class certification such as the fire that occurred fully insured against all such risks. coverage, and a major claim for discovery and briefing stage has in February 2013 at the ArcelorMittal’s insurance policies damages related to ArcelorMittal now closed, though no decision on Vanderbijlpark plant of cover physical loss or damage to products sold and, as the case class certification has been issued ArcelorMittal South Africa. To the its property and equipment on a may be, advice given in connection by the court yet. The hearing on extent that lost production as a reinstatement basis arising from a with such products could leave the pending class certification result of such a disruption cannot number of specified risks and ArcelorMittal uninsured against a motion is scheduled for March be compensated for by unaffected certain consequential losses, portion or the entirety of the 2014. Antitrust proceedings, facilities, such disruptions could including business interruption award and, as a result, materially investigations and follow-on have an adverse effect on arising from the occurrence of an harm its financial condition and claims involving ArcelorMittal ArcelorMittal’s operations, insured event under the policies. future operating results. subsidiaries are also currently customer service levels and results Under ArcelorMittal’s property and pending in various countries of operations. equipment policies, damages and ArcelorMittal is subject to including Brazil, Germany, losses caused by certain natural regulatory risk, and may incur Romania and South Africa. Natural disasters could damage disasters, such as earthquakes, liabilities arising from ArcelorMittal’s production floods and windstorms, are also investigations by governmental Because of the fact-intensive facilities. covered. ArcelorMittal also authorities, litigation and fines, nature of the issues involved and maintains various other types of among others, regarding its the inherent uncertainty of such Natural disasters could significantly insurance, such as directors’ and pricing and marketing practices litigation and investigations, damage ArcelorMittal’s production officers’ liability insurance, or other antitrust matters. negative outcomes are possible. facilities and general infrastructure. workmen’s compensation An adverse ruling in the For example, ArcelorMittal Lázaro insurance and marine insurance. ArcelorMittal is the largest steel proceedings described above or in Cárdenas’s production facilities producer in the world. As a result other similar proceedings in the located in Lázaro Cárdenas, In addition, ArcelorMittal of this position, ArcelorMittal may future could subject ArcelorMittal Michoacán, Mexico and maintains trade credit insurance be subject to exacting scrutiny to substantial administrative ArcelorMittal Galati’s production on receivables from selected from regulatory authorities and penalties and/or civil damages. facilities in Romania are located customers, subject to limits that private parties, particularly In cases relating to other in or close to regions prone to it believes are consistent with regarding its trade practices and companies, civil damages have earthquakes of varying those in the industry, in order to dealings with customers and ranged as high as hundreds of magnitudes. The Lázaro Cárdenas protect it against the risk of counterparties. As a result of its millions of US dollars in major civil area has, in addition, been subject non-payment due to customers’ position in the steel markets and antitrust proceedings during the to a number of tsunamis in the insolvency or other causes. Not all its historically acquisitive growth last decade. With respect to the past. ArcelorMittal Point Lisas is of ArcelorMittal’s customers are strategy, ArcelorMittal could be pending US federal court litigation, located in Trinidad & Tobago, an or can be insured, and even when subject to governmental ArcelorMittal could be subject to area vulnerable to both hurricanes insurance is available, it may not investigations and lawsuits based treble damages. Unfavorable and earthquakes. The ArcelorMittal fully cover the exposure. on antitrust laws in particular. outcomes in current and potential wire drawing operations in the These could require significant future litigation and investigations United States are located in an Notwithstanding the insurance expenditures and result in liabilities could reduce ArcelorMittal’s area subject to tornados. coverage that ArcelorMittal or governmental orders that could liquidity and negatively affect its Extensive damage to the foregoing and its subsidiaries carry, have a material adverse effect on financial performance and its facilities or any of ArcelorMittal’s the occurrence of an event that ArcelorMittal’s business, operating financial condition. other major production complexes causes losses in excess of limits results, financial condition and and potential resulting staff specified under the relevant policy, prospects. ArcelorMittal and casualties, whether as a result of or losses arising from events certain of its subsidiaries are floods, earthquakes, tornados, not covered by insurance currently under investigation by hurricanes, tsunamis or other policies, could materially harm governmental entities in several natural disasters, could, to the ArcelorMittal’s financial condition countries, and are named as extent that lost production could and future operating results. defendants in a number of lawsuits not be compensated for by relating to various antitrust Annual review 2013 Performance 63

Risks related to the global economy and the steel industry continued

ArcelorMittal is currently and The income tax liability of ArcelorMittal may face a significant ArcelorMittal’s reputation may in the future be subject to ArcelorMittal may substantially increase in its income taxes if and business could be legal proceedings, the resolution increase if the tax laws and tax rates increase or the tax laws materially harmed as a result of of which could negatively affect regulations in countries in or regulations in the jurisdictions data breaches, data theft, the company’s profitability and which it operates change in which it operates, or treaties unauthorized access or cash flow in a particular period. or become subject to adverse between those jurisdictions, are successful hacking. interpretations or inconsistent modified in an adverse manner. ArcelorMittal’s profitability or cash enforcement. This may adversely affect ArcelorMittal’s operations depend flow in a particular period could be ArcelorMittal’s cash flows, liquidity on the secure and reliable affected by adverse rulings in legal Taxes payable by companies in and ability to pay dividends. performance of its information proceeding currently pending or by many of the countries in which technology systems. An increasing legal proceedings that may be filed ArcelorMittal operates are If ArcelorMittal were unable number of companies, including against the company in the future. substantial and include value- to utilize fully its deferred ArcelorMittal, have recently added tax, excise duties, profit tax assets, its profitability experienced intrusion attempts or ArcelorMittal’s business is taxes, payroll-related taxes, and future cash flows could even breaches of their information subject to an extensive, property taxes and other taxes. be reduced. technology security, some of complex and evolving Tax laws and regulations in some which have involved sophisticated regulatory framework and its of these countries may be subject At December 31, 2013, and highly targeted attacks governance and compliance to frequent change, varying ArcelorMittal had US$8.9 billion on their computer networks. processes may fail to prevent interpretation and inconsistent recorded as deferred tax assets on ArcelorMittal’s corporate website regulatory penalties and enforcement. Ineffective tax its consolidated statements of was the target of a hacking attack reputational harm, whether at collection systems and national financial position. These assets can in January 2012, which brought operating subsidiaries, joint or local government budget be utilized only if, and only to the the website down for several days. ventures and associates. requirements may increase the extent that, ArcelorMittal’s Because the techniques used to likelihood of the imposition of operating subsidiaries generate obtain unauthorized access, disable ArcelorMittal operates in a global arbitrary or onerous taxes and adequate levels of taxable income or degrade service or sabotage environment, and its business penalties, which could have a in future periods to offset the tax systems change frequently straddles multiple jurisdictions and material adverse effect on loss carry forwards and reverse and often are not recognized complex regulatory frameworks, ArcelorMittal’s financial condition the temporary differences prior until launched against a target, at a time of increased enforcement and results of operations. to expiration. the company may be unable activity and enforcement In addition to the usual tax burden to anticipate these techniques initiatives worldwide. imposed on taxpayers, these At December 31, 2013, the or to implement in a timely Such regulatory frameworks, conditions create uncertainty amount of future income required manner effective and efficient including but not limited to the as to the tax implications of to recover ArcelorMittal’s deferred countermeasures. area of economic sanctions, are various business decisions. tax assets of US$8.9 billion was at constantly evolving, and This uncertainty could expose least US$32.1 billion at certain If unauthorized parties attempt ArcelorMittal may as a result ArcelorMittal to significant fines operating subsidiaries. or manage to bring down the become subject to increasing and penalties and to enforcement company’s website or force access limitations on its business activities measures despite its best efforts ArcelorMittal’s ability to generate to its information technology and to the risk of fines or other at compliance, and could result in a taxable income is subject to systems, they may be able to sanctions for non-compliance. greater than expected tax burden. general economic, financial, misappropriate confidential Moreover, ArcelorMittal’s See note 21 to ArcelorMittal’s competitive, legislative, regulatory information, cause interruptions governance and compliance consolidated financial statements. and other factors that are beyond in the company’s operations, processes, which include the its control. If ArcelorMittal damage its computers or review of internal controls over In addition, many of the generates lower taxable income otherwise damage its reputation financial reporting, may not jurisdictions in which ArcelorMittal than the amount it has assumed and business. In such prevent breaches of law, operates have adopted transfer in determining its deferred tax circumstances, the company could accounting or governance pricing legislation. If tax authorities assets, then the value of deferred be held liable or be subject to standards at the company or its impose significant additional tax tax assets will be reduced. regulatory or other actions for subsidiaries. Risks of violations liabilities as a result of transfer In addition, changes in tax law breaching confidentiality and are also present at the company’s pricing adjustments, it could have may result in a reduction in the personal data protection rules. joint ventures and associates a material adverse effect on value of deferred tax assets. Any compromise of the security where ArcelorMittal has only a ArcelorMittal’s financial condition of the company’s information non-controlling stake and does and results of operations. technology systems could result not control governance practices in a loss of confidence in the or accounting and reporting It is possible that tax authorities company’s security measures procedures. In addition, in the countries in which and subject it to litigation, civil or ArcelorMittal may be subject to ArcelorMittal operates will criminal penalties, and adverse breaches of its Code of Business introduce additional revenue publicity that could adversely Conduct, other rules and protocols raising measures. The introduction affect its reputation, financial for the conduct of business, as of any such provisions may condition and results of operations. well as instances of fraudulent affect the overall tax efficiency behavior and dishonesty by its of ArcelorMittal and may result employees, contractors or other in significant additional taxes agents. The company’s failure to becoming payable. Any such comply with applicable laws and additional tax exposure could have other standards could subject it to a material adverse effect on its fines, litigation, loss of operating financial condition and results licenses and reputational harm. of operations. Annual review 2013 Governance 64

Board of directors

We place a strong emphasis No member of the board of Lewis B Kaden, 71, is the lead Mr Vaghul is chairman of the on corporate governance. directors, including the executive independent director of Indian Institute of Finance ArcelorMittal has eight director, has entered into any ArcelorMittal. He has around 40 Management & Research and is service contract with ArcelorMittal years of experience in corporate also a board member of Wipro, independent directors on its or any of its subsidiaries providing governance, financial services, Mahindra & Mahindra, Piramal 11-member board of for benefits upon the end of his or dispute resolution and economic Healthcare Limited and Apollo directors. The board’s audit her service on the board. In policy. He was vice chairman of Hospitals. He received a Lifetime committee and December 2013, all non- Citigroup since between 2005 and Achievement Award from the appointments, remuneration executive directors of the 2013. He was previously a partner Economic Times. In 2009, he was and corporate governance company signed the company’s of the law firm Davis Polk & awarded the Padma Bhushan, committee (ARCG appointment letter, which confirms Wardwell, and served as counsel to India’s third highest civilian honor. the conditions of their the governor of New Jersey, as a Mr Vaghul is a citizen of India. Committee) are each appointment including compliance professor of law at Columbia comprised exclusively of with a non-compete provision, the University and as director of Wilbur L Ross, Jr, 76, has been the independent directors. 10 principles of corporate Columbia University’s Centre for chairman and chief executive In addition, half of the risk governance of the Luxembourg Law and Economic Studies. officer of WL Ross & Co. LLC, a management committee Stock Exchange and the merchant banking firm, since April is comprised of independent company’s code of Mr Kaden has served as a director 2000. WL Ross & Co is part of directors. business conduct. of Bethlehem Steel Corporation Invesco Private Capital, a listed for 10 years and is chairman of company, of which Mr Ross is The annual general meeting of Lakshmi N Mittal, 63, is the the board of trustees of the chairman. Mr Ross is also the shareholders on May 8, 2013 Chairman and CEO of Markle Foundation and vice chairman and chief executive acknowledged the expiration of ArcelorMittal. Mr Mittal founded chairman of the board of trustees officer of several unlisted Invesco the terms of office of Ms Vanisha Mittal Steel (formerly LNM) in of Asia Society. He is a member of portfolio companies. Mr Ross is Mittal Bhatia, Ms Suzanne P 1976, and guided its strategic the Council on Foreign Relations the chairman of Ohizumi Nimocks and Mr Jeannot Krecké. development, culminating in the and has been a moderator of the Manufacturing Company in Japan, At the same meeting, the merger in 2006 with Arcelor. Business-Labor Dialogue. International Textile Group and shareholders re-elected Ms Bhatia, Mr Mittal is an active Mr Kaden is a US citizen. Diamond S Shipping, which are Ms Nimocks and Mr Krecké for a philanthropist and a member of unlisted companies, and of the new term of three years each. various boards and trusts, including Vanisha Mittal Bhatia, 33, was Japan Society and the Economics chairman of the board of Aperam appointed as a member of the Studies Council of the The board of directors is and the boards of Goldman Sachs LNM Holdings Board of Directors Brookings Institution, which are composed of 11 directors, of and EADS. He is a member of the in June 2004. Ms Vanisha Mittal non-profit entities. which 10 are non-executive Indian Prime Minister’s Global Bhatia was appointed to Mittal directors and eight are Advisory Council, the Foreign Steel’s Board of Directors in Mr Ross is a director of independent directors. The board Investment Council in Kazakhstan, December 2004. International Automotive is assisted by a company secretary. the Ukrainian President’s Domestic Components and Compagnie The company secretary fulfills and Foreign Investors Advisory She has a Bachelor of Arts degree Européenne de Wagons those tasks and functions that are Council, the World Economic in Business Administration from (Luxembourg), both non-listed assigned to him by the board of Forum’s International Business the European Business School and companies. He is also a director of directors. In particular, the Council, the World Steel has worked at Mittal Shipping Ltd, the Yale School of Management company secretary ensures that all Association’s Executive Committee Mittal Steel Hamburg GmbH, an and the Harvard Business School directors are timely and properly and the Presidential International Internet-based venture capital Dean’s Advisory Board. He is on informed and receive appropriate Advisory Board of Mozambique. fund, within the procurement the boards of Air Lease Corp., documentation for the department of Mittal Steel, in Assured Guaranty, BankUnited, performance of their tasks. He sits on the advisory board of charge of a cost-cutting project, EXCO Resources and Greenbrier, The board of directors comprises the Kellogg School of and is currently head of strategy all NYSE-listed, and of PLASCAR, only one executive director, Management in the US and is a for Aperam. Ms Bhatia is a citizen which is listed in Brazil. Mr Ross is Mr Lakshmi N Mittal, the chairman member of the board of trustees of India. a US citizen. and chief executive officer of of Cleveland Clinic. Among his ArcelorMittal. many awards and honours, he was Narayanan Vaghul, 77, has over named ‘Business Person of 2006’ 50 years of experience in the Mr Lewis B Kaden is the lead by The Sunday Times, financial sector and was the independent director. Mr Kaden’s ‘International Newsmaker of the Chairman of ICICI Bank between principal duties and responsibilities Year 2006’ by Time magazine and 2002 and April 2009. He was as lead independent director are as ‘Person of the Year 2006’ by the previously chairman of the follows: coordination of activities Financial Times. He has received Industrial Credit and Investment of the other independent the Padma Vibhushan, India’s Corporation of India, a long-term directors; liaison between the second highest civilian honour, and credit development bank for 17 chairman and the other a Forbes Lifetime Achievement years and before that, he was independent directors; calling Award. In 2013, he has been chairman of the Bank of India and meetings of the independent awarded with a Doctor Honoris Executive Director of the Central directors when necessary and Causa by the AGH University of Bank of India. Mr Vaghul was also a appropriate; leading the board of Science and Technology in Krakow, visiting professor at the Stern directors’ self-evaluation process Poland. Mr Mittal is a citizen Business School at New and such other duties as are of India. York University. assigned from time to time by the board of directors. Annual review 2013 Governance 65

Board of directors continued

Jeannot Krecké, 63, was Mr Spillmann previously worked Bruno Lafont, 57, started his appointed as Luxembourg’s for leading investment banks in career at Lafarge in 1983. On Minister of the Economy and London from 1986 to 2000. He January 1, 2006, he became chief Foreign Trade and Minister of studied in Switzerland and London, executive officer and in May Sport in 2004. As of July 2004, receiving diplomas from the 2007, he was appointed chairman he represented the Luxembourg London Business School in and chief executive officer of government at the Council of Investment Management and the group. Ministers of the European Union in Corporate Finance. Mr Spillmann is the internal market and industry a citizen of Switzerland. Mr Lafont currently chairs the sections of its competitiveness Energy & Climate Change Working configuration as well as in the HRH Prince Guillaume de Group of the European Roundtable Economic and Financial Affairs Luxembourg, 50, worked for five of Industrialists. He is Special Council and in the energy years at the International Adviser to the Mayor of section of its transport, Monetary Fund in Washington, Chongqing (China) and a Board telecommunications and DC, and spent two years working Member of EDF. Mr Lafont is a energy configuration. for the Commission of European citizen of France. Communities in Brussels. On February 1, 2012, Jeannot Tye Burt, 56, was appointed Krecké retired from government Prince Guillaume headed a president and chief executive and decided to end his active governmental development officer of Kinross Gold political career in order to pursue a agency, Lux-Development, for 12 Corporation, a mining company range of different projects. years. He was afterwards listed in New York and Toronto, in Mr Krecké is currently the chief appointed Honorary President of March 2005, and served in this executive officer of Key the board of directors of Lux- capacity until August 1, 2012. He International Strategy Services and Development. HRH Prince has been a member of the board a strategic adviser to GENII- Guillaume de Luxembourg is a of directors of Kinross since joining Capital. He is on the board of JSFC citizen of Luxembourg. the company. Prior to joining Sistema, East West United Bank, Kinross, he held the position of China Construction Bank Europe, Suzanne P Nimocks, 54, was a Vice Chairman and Executive and Calzedonia Finanziara and director (senior partner) with Director of Corporate Novenergia Holding Company. McKinsey & Company from 1999 Development at Barrick Mr Krecké is a citizen of to 2010 and was with the firm in Gold Corporation. Luxembourg. various other capacities since 1989. She chaired the Mr Burt is a board member of Antoine Spillmann, 50, is CEO and Environmental Committee of the Dacha Strategic Metals, a small executive partner at the firm Greater Houston Partnership, the rare earths trading company based Bruellan Wealth Management, an primary advocate of Houston’s in Canada. He is the Life Sciences independent asset management business community, until 2010. Research Campaign Chair of the company based in Geneva, University of Guelph’s Better Switzerland. He is defending the Ms Nimocks is currently a board Planet Project. He is a member of rights of shareholders and member for Encana Corporation, the Duke of Edinburgh’s Award investors in quoted companies in Rowan Companies and Owens Charter for Business Board of Switzerland. He served for five Corning, all listed companies, and Governors. Mr Burt is a citizen years as vice president of the Valerus, a private company. In the of Canada. Swiss Association of Asset non-profit sector, she serves on Managers and is also a non- the board of directors of the independent board member of Houston Zoo and serves as a Bondpartners (BPL), Leclanché Trustee of the Texas Children’s and Sibelco Switzerland. BPL is a Hospital. Ms Nimocks is a Swiss financial services company US citizen. founded in 1972, authorised under the law to trade securities and controlled by the Swiss Financial Market Supervisory Authority. BPL is also a member of the Swiss Bankers Association, of the International Capital Market Association and associated member of the Swiss Stock Exchange; it is quoted on the SIX Stock Exchange. Leclanché is a 100-year-old Swiss company, which develops and produces energy storage systems using large-format lithium-ion-cells, also quoted on the SIX Stock Exchange. Annual review 2013 Governance 66

Senior management

ArcelorMittal’s senior Advisory Council, the World Before becoming a senior executive ArcelorMittal management executive management is Economic Forum’s International vice president of ArcelorMittal, he committee. He previously led the comprised of the members Business Council, the World Steel served as the CEO of Mittal Steel US operations of predecessor Association’s Executive Committee South Africa until 2006. He worked companies Mittal Steel USA and of the Group Management and the Presidential International in South Africa from 2002 as Ispat Inland. Dr Schorsch spent Board (GMB). Advisory Board of Mozambique. He director of commercial and much of his early career as a partner On December 11, 2013 we sits on the advisory board of the marketing at Mittal Steel South at McKinsey & Co. and co-leader of announced that, following an internal Kellogg School of Management in Africa (ISCOR) and upon acquisition its metals practice. He is the author review aimed at simplifying our the US and is a member of the board by the group in 2004, took over as of numerous articles related to the organisational structure, our of trustees of Cleveland Clinic. CEO. He led the turnaround and steel sector and co-authored the integration of the South African 1983 book, Steel: Upheaval in a business will be managed according Among his many awards and operation. He was vice president of Basic Industry. to region, while product honours, he was named ‘Business purchasing in Mittal Steel Europe specialisations will be maintained Person of 2006’ by The Sunday Gonzalo Urquijo, 52, is member of until 2002, where he consolidated within each region. This will enable Times, ‘International Newsmaker of the Group Management Board, procurement and logistics across the businesses to continue to have the Year 2006’ by Time magazine responsible for tubular products, as plants in Europe. Between 1995, their own dedicated strategy and and ‘Person of the Year 2006’ by the well as health and safety and upon joining Mittal Steel and 1999 focus, while capturing all the Financial Times. He has received the corporate affairs (government he worked as general manager synergies within the region. These Padma Vibhushan, India’s second affairs, corporate responsibility and purchasing, Hamburg Steel Works changes took effect as from highest civilian honour, and a Forbes communication); he is chairman of and general manager purchasing, January 1, 2014. Lifetime Achievement Award. In the investment allocation Mittal Steel Germany. Prior to joining 2013, he has been awarded with a committee. Gonzalo Urquijo was Additionally, in December 2013, Mittal Steel, he held senior positions Doctor Honoris Causa by the AGH previously responsible for AACIS Michel Wurth notified the company at the Steel Authority India Limited University of Science and (excluding China and India), of his intention to retire from the in New Delhi, India. company in April 2014 and, Technology in Krakow, Poland. Distribution Solutions, Tubular accordingly, will no longer be a Mr Mittal is a citizen of India. Sudhir Maheshwari, 50, is member products, corporate responsibility, of the Group Management Board, investment allocation committee member of the GMB following his Aditya Mittal, 37, is CFO of CEO of India and China, head of chairman. Prior to this he was senior retirement. He will, however, remain ArcelorMittal, CEO of ArcelorMittal M&A, finance and risk management; executive vice president and chief chairman of ArcelorMittal Europe, member of the Group he is also alternate chairman of the financial officer (CFO) of Arcelor. Luxembourg and, subject to Management Board with additional corporate finance and tax approval at the ArcelorMittal annual responsibility for investor relations. Before the creation of Arcelor in committee (CFTC) and chairman of general shareholders’ meeting, serve Prior to this, he was CFO of 2002, when he became executive the risk management committee. as a member of the ArcelorMittal ArcelorMittal with responsibility for vice president of the Operational Mr Maheshwari was previously a board of directors. Flat Carbon Europe, investor Unit South of the Flat Carbon member of the management relations and communications. Steel sector, Mr Urquijo was CFO of The GMB has responsibility for, and committee of ArcelorMittal, He joined Mittal Steel in 1997, Aceralia. its remuneration is tied to, the responsible for finance and M&A. and was president and CFO of day-to-day management of the Before this, he was managing Between 1984 and 1992 he held a Mittal Steel Company from 2004 business of ArcelorMittal on a global director, business development and variety of positions at Citibank and to 2006. As CFO of Mittal Steel, he basis. In 2012, the ARCG committee treasury at Mittal Steel from 2005 Crédit Agricole before joining initiated and led Mittal Steel’s offer of the board of directors decided to until its merger with Arcelor in 2006 Aristrain in 1992 as CFO, and later for Arcelor. further improve the remuneration and CFO of LNM Holdings from co-chief executive officer. disclosure published by the company In 2008, Mr Aditya Mittal was 2002 until its merger with Ispat Michel Wurth, 59, is chairman of by focusing on those executive named ‘European Business Leader of International in 2004. ArcelorMittal Luxembourg. Michel officers whose remuneration is tied the Future’ by CNBC Europe. In Over his 23-year career with Wurth was previously responsible for to the performance of the entire 2011, he was also ranked fourth in ArcelorMittal, Mr Maheshwari has Long Carbon worldwide. Prior to this ArcelorMittal group. Consequently, the ‘40 under 40’ list of Fortune also held the positions of CFO at he was vice president of the group information regarding the magazine. He is a member of the Mittal Steel Europe SA, Mittal Steel management board of Arcelor and management committee, which is World Economic Forum’s Young Germany and Mittal Steel Point deputy chief executive officer, with an advisory body to the GMB, is no Global Leaders Forum, the Young Lisas, and director of finance and responsibility for Flat Carbon Steel longer included. The GMB is defined, President’s Organisation and a board M&A at Mittal Steel. He serves on Europe and Auto, Flat Carbon Steel going forward, as ArcelorMittal’s member at the Wharton School. senior management. the board of various subsidiaries of Brazil, Coordination Brazil, Davinder Chugh, 57, is CEO of ArcelorMittal. Coordination Heavy Plate, R&D, and Lakshmi N Mittal, 63, is the ArcelorMittal Africa and CIS, NSC Alliance. Since 2004, Mr Wurth Lou Schorsch, 64, is member of the chairman and CEO of ArcelorMittal. member of the Group Management has been chairman of the Group Management Board, CEO of Mr Mittal founded Mittal Steel Board responsible for Algeria, Luxembourg Chamber of Commerce ArcelorMittal Americas, responsible (formerly LNM) in 1976, and guided Kazakhstan, South Africa and and of the Union des Entreprises for Flat and Long Carbon Americas, its strategic development, Ukraine. Davinder Chugh has over Luxembourgeoises (UEL). with additional oversight of strategy, culminating in the merger in 2006 three decades of experience in the technology, R&D, global automotive Mr Wurth is also a former senior with Arcelor. steel industry in general and commercial coordination. executive vice president and CFO of management, materials purchasing, Mr Mittal is an active philanthropist Dr Schorsch was previously Arcelor. Before this he held a variety marketing, logistics, warehousing and a member of various boards and responsible for these functions for of positions at steel company Arbed, and shipping. He was previously a trusts, including chairman of the Flat Carbon Americas, while serving including head of the Arbed senior executive vice president of board of Aperam and the boards of as a member of the investment subsidiary Novar, before joining the ArcelorMittal, member of the Group Goldman Sachs and EADS. He is a allocation committee. Arbed group management board Management Board responsible for member of the Indian Prime and becoming CFO in 1996. He shared services until 2013. Prior to joining the Group Minister’s Global Advisory Council, was named executive vice Management Board in 2011, he was the Foreign Investment Council in president in 1998. Kazakhstan, the Ukrainian President’s president and CEO of Flat Carbon Domestic and Foreign Investors Americas and a member of the Annual review 2013 Governance 67

Operational group structure

ArcelorMittal is a holding company with no business operations of its own. All of ArcelorMittal’s significant operating subsidiaries are indirectly owned by ArcelorMittal through intermediate holding companies. The following chart represents the operational structure of the company, including ArcelorMittal’s significant operating subsidiaries and not its legal or ownership structure.

ArcelorMittal

Flat Carbon Americas Flat Carbon Europe Long Carbon Americas AACIS Mining Distribution Solutions and Europe

ArcelorMittal ArcelorMittal ArcelorMittal ArcelorMittal Acindar ArcelorMittal ArcelorMittal ArcelorMittal ArcelorMittal ArcelorMittal ArcelorMittal Brasil USA Atlantique Belgium Belval Kryviy Rih South Africa Mines Kuzbass International et Lorraine & Differdange Canada Luxembourg

ArcelorMittal ArcelorMittal ArcelorMittal ArcelorMittal ArcelorMittal ArcelorMittal ArcelorMittal Minorca ArcelorMittal Lázaro Dofasco España Flat Carbon Brasil Hamburg Temirtau Mines Lázaro Cárdenas Europe Cárdenas

ArcelorMittal ArcelorMittal ArcelorMittal ArcelorMittal Hibbing ArcelorMittal Galati Poland Duisburg Las Truchas Taconite Princeton Mines

ArcelorMittal ArcelorMittal ArcelorMittal ArcelorMittal ArcelorMittal ArcelorMittal Méditerranée Bremen Gipuzkoa Montreal Mineração Kryviy Rih Serra Azul

ArcelorMittal Industeel ArcelorMittal ArcelorMittal ArcelorMittal ArcelorMittal Eisen- Belgium Point Lisas Ostrava Temirtau Liberia hüttenstadt

Industeel ArcelorMittal Sonasid France Warszawa Annual review 2013 Governance 68

Operational group structure continued

The following table identifies each significant operating subsidiary of ArcelorMittal, including its registered office and ArcelorMittal’s percentage ownership thereof.

Flat Carbon Americas 1330 Burlington Street East, PO Box 2460, ArcelorMittal Dofasco Inc L8N 3J5 Hamilton, Ontario, Canada 100.00% Fco. J. Mujica no. 1-B, 60950, Cd. Lázaro ArcelorMittal Lázaro Cárdenas SA de CV Cárdenas, Michoacán, Mexico 100.00% ArcelorMittal USA LLC 1, South Dearborn, Chicago, IL 60603, USA 100.00% 1115, avenida Carandai, 24° Andar, ArcelorMittal Brasil SA 30130-915 Belo Horizonte-MG, Brazil 100.00%

Flat Carbon Europe Immeuble ‘Le Cezanne’, 6, rue Andre Campra, ArcelorMittal Atlantique et Lorraine SAS 93200, St Denis, France 100.00% Boulevard de l’Impératrice 66, ArcelorMittal Belgium NV B-1000 Brussels, Belgium 100.00% Residencia La Granda, 33418 Gozon, ArcelorMittal España SA Asturias, Spain 99.85% Avenue de la Liberté, 19, ArcelorMittal Flat Carbon Europe SA L-2930 Luxembourg, Luxembourg 100.00% ArcelorMittal Galati SA Strada Smardan nr. 1, Galati, Romania 99.70% Al. J. Pilsudskiego 92, ArcelorMittal Poland SA 41-308 Dąbrowa Górnicza, Poland 100.00% Industeel Belgium SA Rue de Châtelet, 266, 6030 Charleroi, Belgium 100.00% Immeuble ‘Le Cezanne’, 6, rue Andre Campra, Industeel France SA 93200, St Denis, France 100.00% Werkstr. 1, D-15890 Eisenhüttenstadt, ArcelorMittal Eisenhüttenstadt GmbH Brandenburg, Germany 100.00% ArcelorMittal Bremen GmbH Carl-Benz Str. 30, D-28237 Bremen, Germany 100.00% Immeuble ‘Le Cezanne’, 6, rue Andre Campra, ArcelorMittal Méditerranée SAS 93200, St Denis, France 100.00%

Long Carbon Americas and Europe Leandro N Alem 790 8° floor, Acindar Industria Argentina de Aceros SA Buenos Aires, Argentina 100.00% 66, rue de Luxembourg, ArcelorMittal Belval & Differdange SA L-4221 Esch sur Alzette, Luxembourg 100.00% 1115, Avenida Carandai, 24° Andar, 30130- ArcelorMittal Brasil SA 915 Belo Horizonte- MG, Brazil 100.00% Dradenaustrasse 33, ArcelorMittal Hamburg GmbH D-21129 Hamburg, Germany 100.00% Francisco J Mujica 1, 60950, ArcelorMittal Las Truchas, SA de CV Lázaro Cárdenas Michoacán, Mexico 100.00% 4000, route des Aciéries, J0L 1C0, ArcelorMittal Montreal Inc Contrecoeur, Québec, Canada 100.00% Carretera Nacional Madrid-Irun S/N, 20212 ArcelorMittal Gipúzkoa SL Olaberría, Spain 100.00% Vratimovska Str, 689, CZ-70702 Ostrava- ArcelorMittal Ostrava as Kunčice, Czech Republic 100.00% ISCOTT Complex, Mediterranean Drive, Point ArcelorMittal Point Lisas Ltd Lisas, Couva, Trinidad and Tobago 100.00% Route Nationale no. 2, Km 18, BP 551, Société Nationale de Sidérurgie SA Al Aarroui, Morocco 32.43% 1 Vohwinkelstraße 107, ArcelorMittal Duisburg GmbH D-47137 Duisburg, Germany 100.00% ArcelorMittal Warszawa Spzoo Ul. Kasprowicza 132, 01-949 Warszawa, Poland 100.00% 1 Société Nationale de Sidérurgie, SA is controlled by Nouvelles Sidérurgies Industrielles, an entity controlled by ArcelorMittal. Annual review 2013 Governance 69

Operational group structure continued

AACIS Main Building, Room N3/5, Delfos Boulevard, ArcelorMittal South Africa Ltd 1911, Vanderbijlpark, South Africa 52.02% Republic Ave, 1, 101407, Karaganda Region, JSC ArcelorMittal Temirtau Temirtau, Republic of Kazakhstan 100.00% 1 Ordzhonikidze Street, Kryviy Rih, 50095 OJSC ArcelorMittal Kryviy Rih Dnepropetrovsk Oblast, Ukraine 95.13%

Mining 1801 McGill College, Suite 1400, Montreal, ArcelorMittal Mines Canada Inc Québec, Canada H3A2N4 100.00% 2 14th Street, Tubman Blvd, Sinkor, Arcelormittal Liberia Ltd Monrovia, Liberia 85.00% Republic Ave, 1, 101407 Temirtau, Karaganda JSC ArcelorMittal Temirtau Region, Republic of Kazakhstan 100.00% 1 Ordzhonikidze Street, Kryviy Rih, 50095 OJSC ArcelorMittal Kryviy Rih Dnepropetrovsk Oblast, Ukraine 95.13%

Distribution Solutions 19, avenue de la Liberté, ArcelorMittal International Luxembourg SA L-2930 Luxembourg, Luxembourg 100.00% 2 ArcelorMittal Mines Canada Inc holds an 85% interest in the joint venture partnerships. Annual review 2013 Governance 70

Corporate governance

This section describes the The articles of association provide (b) he or she is unaffiliated with shares in compliance with this corporate governance practices of that directors are elected and any shareholder owning or policy must comply with the ArcelorMittal. removed by the general meeting controlling more than two percent ArcelorMittal insider dealing of shareholders by a simple of the total issued share capital of regulations and, in particular, and majority of votes cast. Other than ArcelorMittal, and refrain from trading during any Board practices/ as set out in the company’s articles restricted period, including any Corporate governance of association, no shareholder has (c) the board of directors makes such period that may apply any specific right to nominate, an affirmative determination to immediately after the director’s Board of directors and Group elect or remove directors. this effect. departure from the board of Management Board Directors are elected by the directors for any reason. ArcelorMittal is governed by a general meeting of shareholders For these purposes, a person is board of directors and managed for three-year terms. In the event deemed affiliated to a shareholder On October 30, 2012, the board by a GMB. The GMB is assisted by that a vacancy arises on the board if he or she is an executive officer, of directors also adopted a policy a management committee. of directors for any reason, the a director who also is an employee, that places limitations on the remaining members of the board a general partner, a managing terms of independent directors A number of corporate governance of directors may by a simple member or a controlling as well as the number of provisions in the articles of majority elect a new director to shareholder of such shareholder. directorships directors may hold in association of ArcelorMittal reflect temporarily fulfill the duties The 10 Principles of Governance order to align the company’s provisions of the Memorandum of attaching to the vacant post until of the Luxembourg Stock corporate governance practices Understanding signed on June 25, the next general meeting of Exchange, which constitute with best practices in this area. 2006 (prior to Mittal Steel’s the shareholders. ArcelorMittal’s domestic corporate The policy provides that an merger with Arcelor), amended in governance code, require independent director may not April 2008 and which mostly The board of directors has ArcelorMittal to define the serve on the board of directors for expired on August 1, 2009. proposed Michel Wurth to serve independence criteria that apply more than 12 consecutive years, as a member of the ArcelorMittal to its directors. although the board of directors ArcelorMittal fully complies with board of directors, subject to may, by way of exception to this the 10 principles of corporate approval at the ArcelorMittal Specific characteristics of the rule, make an affirmative governance of the Luxembourg annual general shareholders’ director role determination, on a case-by-case Stock Exchange. This is explained in meeting to be held on The company’s articles of basis, that he or she may continue more detail in ‘ – other corporate May 8, 2014. association do not require to serve beyond 12 years in governance practices’ below. directors to be shareholders of the consideration of his or her ArcelorMittal also complies with The board of directors is company. The board of directors exceptional contribution to the the New York Stock Exchange comprised of 11 members, nevertheless adopted a share board. A director will no longer be Listed Company Manual as of which 10 are non-executive ownership policy on October 30, considered ‘independent’ as applicable to foreign private issuers. directors and one is an executive 2012, considering that it is in the defined in the 10 principles of director. The chief executive best interests of all shareholders corporate governance of the Board of directors officer of ArcelorMittal is the sole for all non-executive directors Luxembourg Stock Exchange and Composition executive director. to acquire and hold a minimum the New York Stock Exchange The board of directors is in charge number of ArcelorMittal ordinary Listed Company Manual as of the overall governance and Mr Lakshmi N Mittal was elected shares in order to better align their applicable to foreign private issuers direction of ArcelorMittal. It is chairman of the board of directors long-term interests with those of after he or she has completed responsible for the performance of on May 13, 2008. Mr Mittal is ArcelorMittal’s shareholders. The 12 years of service on the board. all acts of administration necessary also ArcelorMittal’s chief executive board of directors believes that or useful in furtherance of the officer. Mr Mittal was re-elected this share ownership policy will As membership of the board of corporate purpose of ArcelorMittal, to the board of directors for a result in a meaningful holding of directors represents a significant except for matters reserved by three-year term by the annual ArcelorMittal shares by each time commitment, the policy Luxembourg law or the articles of general meeting of shareholders non-executive director, while at requires both executive and association to the general meeting on May 10, 2011. the same time taking into account non-executive directors to devote of shareholders. The articles of the fact that the share ownership sufficient time to the discharge of association provide that the board Eight of the 11 members of requirement should not be their duties as a director of of directors is composed of a the board of directors are excessive in order not to ArcelorMittal. Directors are minimum of three and a maximum independent. The non- unnecessarily limit the pool of therefore required to consult with of 18 members, all of whom, independent directors are the available candidates for the chairman and the lead except the chief executive officer, executive director, Ms Vanisha appointment to the board. Directly independent director before must be non-executive directors. Mittal Bhatia and Mr Jeannot or indirectly, and as sole or joint accepting any additional None of the members of the board Krecké. A director is considered beneficiary owner (e.g. with a commitment that could conflict of directors, except for the chief ‘independent’ if: spouse or minor children), within with or impact the time they can executive officer, may hold an five years of the earlier of October devote to their role as a director executive position or executive (a) he or she is independent within 30, 2012 or the relevant person’s of ArcelorMittal. Furthermore, mandate within ArcelorMittal the meaning of the New York election to the board of directors, a non-executive director may not or any entity controlled by Stock Exchange Listed Company the lead independent director serve on the boards of directors of ArcelorMittal. Manual, as applicable to foreign should own a minimum of 15,000 more than four publicly listed private issuers, ordinary shares and each other companies in addition to the non-executive director should ArcelorMittal board of directors. own a minimum of 10,000 However, a non-executive ordinary shares. Each director will director’s service on the board of hold the shares acquired on the directors of any subsidiary or basis of this policy for so long as affiliate of ArcelorMittal or of any he or she serves on the board of non-publically listed company shall directors. Directors purchasing not be taken into account for Annual review 2013 Governance 71

Corporate governance continued

purposes of complying with the Share transactions by can take decisions by written Mr Lewis B Kaden was elected foregoing limitation. Directors management circulation, provided that all by the board of directors as have a time period of three years In compliance with laws prohibiting members of the board of ArcelorMittal’s first lead from October 30, 2012 to reach insider dealing, the board of directors agree. independent director in April 2008 the limit of five directorships of directors of ArcelorMittal has and remains lead independent public companies. adopted insider dealing regulations, The board of directors held eight director, having been re-elected as which apply throughout the meetings in 2013. The average a director for a three-year term on Although non-executive directors ArcelorMittal group. These attendance rate of the directors at May 10, 2011. of ArcelorMittal who change their regulations are designed to ensure the board of directors’ meetings principal occupation or business that insider information is treated was 94.95%. The agenda of each meeting of association are not necessarily appropriately within the company the board of directors is decided required to leave the board of and avoid insider dealing and In order for a meeting of the board jointly by the chairman of the directors, the policy requires each market manipulation. Any breach of directors to be validly held, a board of directors and the lead non-executive director, in such of the rules set out in this majority of the directors must be independent director. circumstances, promptly to inform procedure may lead to criminal or present or represented, including the board of directors of the civil charges against the individuals at least a majority of the Separate meetings of action he or she is contemplating. involved, as well as disciplinary independent directors. In the independent directors Should the board of directors action by the company. absence of the chairman, the The independent members of the determine that the contemplated board of directors will appoint by board of directors may schedule action would generate a conflict of Shareholding requirement for majority vote a chairman for the meetings outside the presence interests, such non-executive non-executive directors meeting in question. The chairman of non-independent directors. director would be asked to tender In consideration of corporate may decide not to participate in a Four meetings of the independent his or her resignation to the governance trends indicating that board of directors’ meeting, directors outside the presence chairman of the board of directors, a reasonable amount of share provided he has given a proxy to of management and non- who would decide to accept the ownership helps better align the one of the directors who will be independent directors were resignation or not. interests of the directors with present at the meeting. For any held in 2013. those of all shareholders, the meeting of the board of directors, None of the members of the board board of directors adopted on a director may designate another Annual self-evaluation of directors, including the October 30, 2012 share director to represent him or her The board of directors decided in executive director, have entered ownership guidelines for non- and vote in his or her name, 2008 to start conducting an into service contracts with executive directors. The directors provided that the director so annual self-evaluation of its ArcelorMittal or any of its are required to own 10,000 shares designated may not represent functioning in order to identify subsidiaries that provide for any and the lead independent director more than one of his or her potential areas for improvement. form of remuneration or for is required to own 15,000 shares, colleagues at any time. The first self-evaluation process benefits upon the termination of both within five years of October was carried out in early 2009. their term. In December 2013, all 30, 2012, or if the director is Each director has one vote and The self-evaluation process non-executive directors of the appointed after October 30, none of the directors, including includes structured interviews company signed the company’s 2012, within five years of his or the chairman, has a casting vote. between the lead independent appointment letter, which confirms her appointment. Decisions of the board of directors director and each director and the conditions of their are made by a majority of the covers the overall performance of appointment including compliance Operation directors present and represented the board of directors, its relations with certain non-compete at a validly constituted meeting. with senior management, the provisions, the 10 principles of General performance of individual corporate governance of the The board of directors and the Lead independent director directors, and the performance Luxembourg Stock Exchange and board committees may engage In April 2008, the board of of the committees. The process the company’s code of the services of external experts or directors created the role of lead is supported by the company business conduct. advisers as well as take all actions independent director. His or her secretary under the supervision necessary or useful to implement function is to: of the chairman and the lead All members of the board of the company’s corporate purpose. independent director. The findings • coordinate the activities of the directors are required to sign the The board of directors (including of the self-evaluation process independent directors, company’s code of business its three committees) has its own are examined by the ARCG conduct upon first joining the budget, which covers functioning • liaise between the chairman of committee and presented with board and confirm their costs such as external consultants, the board of directors and the recommendations from the adherence thereto on an continuing education activities for independent directors, ARCG committee to the board annual basis thereafter. directors and travel expenses. of directors for adoption and • lead the board of directors’ implementation. Suggestions for self-evaluation process, The remuneration of the members Meetings improvement of the board of of the board of directors is The board of directors meets • call meetings of the directors’ process based on the determined on a yearly basis when convened by the chairman independent directors when he prior year’s performance and by the annual general meeting of the board or any two members or she considers it necessary or functioning are implemented of shareholders. of the board of directors. The appropriate, and during the following year. board of directors holds physical • perform such other duties as meetings at least on a quarterly The 2013 board of directors’ may be assigned to him or her basis as five regular meetings are self-evaluation was completed by by the board of directors from scheduled per year. The board of the board on February 6, 2014. time to time. directors holds additional meetings Directors believe that the quality if and when circumstances require, of discussions within the board of in person or by teleconference and Annual review 2013 Governance 72

Corporate governance continued

directors continued to progress in who actively contribute to the • an understanding of the health, board’s diversity not only relates 2013. Directors also continue to board in a collegial manner. Each safety, environmental, political to gender, but also to the region, support the governance structure director must also ensure that no and community challenges that background and industry of and think it is working well. The decision or action is taken that we face. its members. previous year’s recommendation places his or her interests in front regarding the balance of the time of the interests of the business. Each director is required to adhere Director induction, training and spent by the board of directors on Each director has an obligation to to the values set out in, and development strategic and other specific issues protect and advance the interests sign, the ArcelorMittal code of The board considers that the as compared to time spent on the of the company and must refrain business conduct. development of the directors’ review of financial and operational from any conduct that would knowledge of the company, results and performance was harm it. Renewal the steel-making and mining successfully implemented. The The board plans for its own industries, and the markets in board has also set new priorities In order to govern effectively, succession, with the assistance of which the company operates is for discussion and review and non-executive directors must the ARCG committee. In doing this, an ongoing process. To further identified a number of topics that have a clear understanding of the board: bolster the skills and knowledge it wishes to spend additional time the company’s strategy, and a of directors, the company set • considers the skills, on in 2014. thorough knowledge of the up a continuous development backgrounds, knowledge, ArcelorMittal group and the program in 2009. experience and diversity of The board of directors believes industries in which it operates. geographic location, nationality that its members have the Non-executive directors must Upon his or her election, each new and gender necessary to allow it appropriate range of skills, be sufficiently familiar with the non-executive director undertakes to meet the corporate purpose; knowledge and experience, as company’s core business to an induction program specifically well as the degree of diversity, effectively contribute to the • assesses the skills, backgrounds, tailored to his or her needs and necessary to enable it to development of strategy and knowledge, experience and includes ArcelorMittal’s long-term effectively govern the business. monitor performance. diversity currently represented; vision centered on the concept of Board composition is reviewed on ‘safe sustainable steel’. • identifies any inadequate a regular basis and additional skills With specific regard to the representation of those and experience are actively non-executive directors of the The board’s development activities attributes and agrees the searched for in line with the company, the composition of include the provision of regular process necessary to ensure a expected development of the group of non-executive updates to directors on each of candidate is selected who brings ArcelorMittal’s business as and directors should be such that the company’s products and them to the board; and when appropriate. the combination of experience, markets. Non-executive directors knowledge and independence • reviews how board performance may also participate in training Required skills, experience and of its members allows the board to might be enhanced, both at an programs designed to maximize other personal characteristics fulfill its obligations towards the individual director level and for the effectiveness of the directors Diverse skills, backgrounds, company and other stakeholders the board as a whole. throughout their tenure and link in knowledge, experience, in the best possible manner. with their individual performance geographic location, nationalities The board believes that orderly evaluations. The training and and gender are required in order The ARCG committee ensures that succession and renewal is achieved development program may cover to effectively govern a global the board is comprised of through careful planning and by not only matters of a business business the size of the company’s high-caliber individuals whose continuously reviewing the nature, but also matters falling into operations. The board and its background, skills, experience and composition of the board. the environmental, social and committees are therefore required personal characteristics enhance governance area. to ensure that the board has the the overall profile of the board and When considering new right balance of skills, experience, meets its needs and diversity appointments to the board, the Structured opportunities are independence and knowledge aspirations by nominating high ARCG committee oversees the provided to build knowledge necessary to perform its role in quality candidates for election to preparation of a position through initiatives such as visits to accordance with the highest the board by the general meeting specification that is provided to an plants and mine sites and business standards of governance. of shareholders. independent recruitment firm briefings provided at board retained to conduct a global meetings. Non-executive directors The company’s directors must Board profile search, taking into account, among also build their company and demonstrate unquestioned The key skills and experience of other factors, geographic location, industry knowledge through the honesty and integrity, the directors, and the extent to nationality and gender. In addition involvement of the GMB and preparedness to question, which they are represented on to the specific skills, knowledge other senior employees in board challenge and critique the board and its committees, and experience required of the meetings. Business briefings, site constructively, and a willingness are set out below. In summary, candidate, the specification visits and development sessions to understand and commit to the the non-executive directors contains the criteria set out in the underpin and support the board’s highest standards of governance. contribute: ArcelorMittal board profile. work in monitoring and overseeing They must be committed to the progress towards the corporate • international and operational collective decision-making process Diversity purpose of creating long-term experience; of the board and must be able to In line with the worldwide effort shareholder value through the debate issues openly and • understanding of the industry to increase gender diversity on development of our business in constructively, and question or sectors in which we operate; the boards of directors of listed steel and mining. We therefore challenge the opinions of others. and unlisted companies, the board continuously build directors’ • knowledge of world capital Directors must also commit has set an aspirational goal of knowledge to ensure that the markets and being a company themselves to remain actively increasing the number of women board remains up-to-date listed in several jurisdictions; and involved in board decisions and on the board to at least three with developments within our apply strategic thought to matters by the end of 2015 based upon segments, as well as at issue. They must be clear a board of directors size of developments in the markets communicators and good listeners 11 members. The ArcelorMittal in which we operate. Annual review 2013 Governance 73

Corporate governance continued

During the year, non-executive directors each year after the and the 10 principles of corporate • evaluate the functioning of the directors participated in the annual general meeting of governance of the Luxembourg board of directors and monitor following activities: shareholders. All of the audit Stock Exchange. The chairman of the board of directors’ committee members must be the audit committee is Mr Vaghul. self-evaluation process; and • comprehensive business independent as defined in the Rule briefings intended to provide • develop, monitor and review 10A-3 of the US Securities According to its charter, the audit each director with a deeper corporate governance principles Exchange Act of 1934, as committee is required to meet at understanding of the company’s and corporate responsibility amended. The audit committee least four times a year. During activities, environment, key policies applicable to makes decisions by a simple 2013, the audit committee met issues and strategy of our ArcelorMittal, as well as their majority with no member having a six times. The average attendance segments. These briefings are application in practice. casting vote. rate of the directors at the audit provided to the board by senior committee meetings was 71%. executives, including GMB The ARCG committee’s principal The primary function of the audit members. The briefings criteria in determining the committee is to assist the board of The audit committee performs provided during the course of compensation of executives is to directors in fulfilling its oversight its own annual self-evaluation, 2013 covered health and safety encourage and reward responsibilities by reviewing: and completed its 2013 self- processes, internal assurance, performance that will lead to evaluation on February 6, 2014. legal, marketing, steel-making, • the financial eportsr and other long-term enhancement of strategy, mining and R&D. financial information provided by shareholder value. The ARCG The charter of the audit Certain business briefings were ArcelorMittal to any committee may seek the advice of committee is available from combined with site visits and governmental body or the outside experts. ArcelorMittal upon request. thus took place on-site and, in public; other cases, they took place at The four members of the ARCG • ArcelorMittal’s system of Appointments, remuneration and board meetings; committee are Mr Lewis B Kaden, internal control regarding corporate governance HRH Prince Guillaume of • site visits to plants and R&D finance, accounting, legal committee Luxembourg, Mr Narayanan centers; and compliance and ethics that the The ARCG committee has been Vaghul, and Ms Suzanne P board of directors and senior • development sessions on comprised since May 10, 2011 Nimocks, each of whom is management have established; specific topics of relevance, of four directors, each of whom is independent in accordance and such as climate change, independent under the New York with the NYSE standards commodity markets, the world • ArcelorMittal’s auditing, Stock Exchange standards and the and the 10 principles of corporate economy, changes in corporate accounting and financial 10 principles of corporate governance of the Luxembourg governance standards, directors’ reporting processes generally. governance of the Luxembourg Stock Exchange. The chairman of duties and shareholder Stock Exchange. the ARCG committee is Mr Kaden. feedback. The audit committee’s primary duties and responsibilities are to: The members are appointed by The ARCG committee is required The ARCG committee oversees the board of directors each year to meet at least twice a year. • be an independent and objective director training and development. after the annual general meeting During 2013, this committee party to monitor ArcelorMittal’s This approach allows induction and of shareholders. The ARCG met seven times. The average financial reporting process and learning opportunities to be committee makes decisions by a attendance rate was 96%. internal controls system; tailored to the directors’ simple majority with no member having a casting vote. committee memberships, as well • review and appraise the audit The ARCG committee performs as the board’s specific areas of efforts of ArcelorMittal’s an annual self-evaluation and focus. In addition, this approach independent auditors and The board of directors has completed its 2013 self- ensures a coordinated process in internal auditing department; established the ARCG evaluation on February 6, 2014. relation to succession planning, committee to: • provide an open avenue of board renewal, training, The charter of the ARCG communication among the • determine, on its behalf and development and committee committee is available from independent auditors, senior on behalf of the shareholders composition, all of which are ArcelorMittal upon request. management, the internal within agreed terms of relevant to the ARCG committee’s audit department and the reference, ArcelorMittal’s role in securing the supply of talent Risk management committee board of directors; compensation framework, to the board. including short and long-term In June 2009, the board of • review major legal and incentives for the chief directors created a risk Board of directors committees compliance matters and their executive officer, the chief management committee to The board of directors has three follow up; financial officer, the members of assist it with risk management, committees: in line with recent developments • approve the appointment and the GMB and the members of in corporate governance best • the audit committee, fees of the independent the management committee; practices and in parallel with auditors; and • review and approve succession • the appointments, remuneration the creation of a group risk and contingency plans for key and corporate governance • monitor the independence of management committee at the managerial positions at the committee, and the independent auditors. executive level. level of the GMB and the • the risk management management committee; Since May 10, 2011, the audit The members are appointed by committee. committee consists of four • consider any candidate for the board of directors each year members: Mr Narayanan Vaghul appointment or reappointment after the annual general meeting Audit committee (chairman), Mr Wilbur L Ross, to the board of directors at the of shareholders. The risk The audit committee must be Mr Antoine Spillmann, and request of the board of management committee must composed solely of independent Mr Bruno Lafont, each of whom directors and provide advice and be comprised of at least two members of the board of is an independent director recommendations to it regarding members. At least half of the directors. The members are according to the NYSE standards the same; members of the risk management appointed by the board of Annual review 2013 Governance 74

Corporate governance continued

committee must be independent proposing of improvements, The charter of the risk incumbent’s term expire. This under the New York Stock with the aim of ensuring that management committee is process applies to all ArcelorMittal Exchange standards and the the group’s management is available from ArcelorMittal executives up to and including the 10 principles of corporate supported by an effective risk upon request. GMB. Succession management governance of the Luxembourg management system; aims to ensure the continued Stock Exchange. The risk effective performance of the • The promotion of constructive Group management board management committee consists The GMB is entrusted with the organization by providing for the and open exchanges on risk of four members: Mr Jeannot day-to-day management of the availability of experienced and identification and management Krecké, Mr Antoine Spillmann, company and the implementation capable employees who are among senior management Ms Suzanne P. Nimocks and of its strategy. Mr Lakshmi N prepared to assume these roles as (through the group risk Mr Tye Burt. Mr Sudhir Mittal, the chief executive officer, they become available. For each management committee), the Maheshwari, a member of the chairs the GMB. The members position, candidates are identified board of directors, the internal GMB who chairs the group of the GMB are appointed and based on performance, potential assurance department, the legal risk management committee, dismissed by the board of and an assessment of leadership department and other relevant is invited permanently to the directors. As the GMB is not capabilities and their ‘years to departments within the meetings of the risk a corporate body created by readiness’. Development needs ArcelorMittal group; management committee. Luxembourg law or ArcelorMittal’s linked to the succession plans are • The review of proposals for articles of association, it exercises discussed, after which ‘personal The members of the risk assessing, defining and only the authority granted to it by development plans’ are put in management committee may reviewing the risk appetite/ the board of directors. place, to accelerate development decide to appoint a chairman by tolerance level of the group and and prepare candidates. Regular majority vote. Mr Spillmann ensuring that appropriate risk On December 11, 2013 reviews of succession plans are currently acts as chairman. limits/tolerance levels are in ArcelorMittal announced its conducted to ensure that they are place, with the aim of helping to decision to manage the business accurate and up to date. Decisions and recommendations define the group’s risk according to region, while Succession management is a of the risk management management strategy; also maintaining the product necessary process to reduce risk, committee are adopted by a specialization within those regions. create a pipeline of future leaders, • The review of the group’s simple majority. The chairman or, This will enable the businesses ensure smooth business continuity internal and external audit plans in the absence of the chairman, to continue to have their own and improve employee motivation. to ensure that they include a any other member of the risk dedicated strategy and focus, Although ArcelorMittal’s review of the major risks facing management committee, will while capturing all the synergies predecessor companies each had the ArcelorMittal group; and report to the board of directors within the region. As a result, certain succession planning at each of the latter’s quarterly • Making recommendations there was a change on the processes in place, the process has meetings or more frequently within the scope of its charter responsibilities of the members been reinforced, widened and if circumstances so require. to ArcelorMittal’s senior of the GMB, applicable as of made more systematic since The risk management committee management and to the board January 1, 2014. 2006. The responsibility to review conducts an annual self-evaluation of directors about senior and approve succession plans and of its own performance and management’s proposals In implementing ArcelorMittal’s contingency plans at the highest completed its 2013 self- concerning risk management. strategic direction and corporate level rests with the board’s evaluation on February 6, 2014. policies, the chief executive officer ARCG committee. To further develop the company’s is supported by the members of The purpose of the risk maturity model with respect to the GMB who have substantial Other corporate governance management committee is to risk management, the risk experience in the steel and mining practices support the board of directors management committee has taken industries worldwide. ArcelorMittal is committed to in fulfilling its corporate initiatives to benchmark its current adhere to best practices in terms governance and oversight risk oversight activities with best The GMB is assisted by a of corporate governance in its responsibilities by assisting with practices implemented in management committee dealings with shareholders and the monitoring and review of comparable companies. These comprised of 30 members. aims to ensure good corporate the risk management framework initiatives should result in the The management committee governance by applying rules on and process of ArcelorMittal. Its creation of a peer group, bringing discusses and prepares decisions transparency, quality of reporting main responsibilities and duties together insights of leading to be made by the GMB on and the balance of powers. are to assist the board of directors practitioners in risk management matters of group-wide ArcelorMittal continually monitors by making recommendations governance and oversight at importance, integrates the US, EU and Luxembourg legal regarding the following matters: the board of directors level and geographical dimension of the requirements and best practices will contribute to the further ArcelorMittal group, ensures in order to make adjustments to • The oversight, development and development of our in-depth discussions with its corporate governance controls implementation of a risk current standards. ArcelorMittal’s operational and and procedures when necessary, identification and management resources leaders and shares as evidenced by the new policies process and the review and The risk management committee information about the situation adopted by the board of reporting on the same in a held a total of five meetings in of the group and its markets. directors in 2012. consistent manner throughout 2013. According to its charter, it is the ArcelorMittal group; required to meet at least four Succession management ArcelorMittal complies with • The review of the effectiveness times per year on a quarterly basis Succession management at the 10 principles of corporate of the group-wide risk or more frequently if circumstances ArcelorMittal is a systematic and governance of the Luxembourg management framework, so require. The attendance rate in deliberate process for identifying Stock Exchange in all respects. policies and process at 2013 was 100%. and preparing employees with However, in respect of corporate, segment and potential to fill key organizational Recommendation 1.3 under business unit levels, and the positions should the current the principles, which advocates Annual review 2013 Governance 75

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separating the roles of chairman of obligations to ArcelorMittal. entities may also be The IDR’s most recent version the board and the head of the Employees are prohibited from communicated through the is available on ArcelorMittal’s executive management body, the acquiring any financial or other ‘corporate governance – website, www.arcelormittal.com. company has made a different interest in any business or whistleblower’ section of choice. This is permitted, however, participate in any activity that the ArcelorMittal website at The IDR apply to the worldwide as, unlike the 10 principles could deprive ArcelorMittal of the www.arcelormittal.com, where operations of ArcelorMittal. themselves with which time or the attention needed to ArcelorMittal’s anti-fraud policy The company secretary of ArcelorMittal must comply, devote to the performance of and code of business conduct ArcelorMittal is the IDR compliance the recommendations are subject their duties. Any behavior that are also available in each of the officer and answers questions that to a more flexible ‘comply or deviates from the code of business main working languages used members of senior management, explain’ standard. conduct is to be reported to the within the group. In recent years the board of directors, or employee’s supervisor, a member ArcelorMittal has implemented employees may have about the The nomination of the same of the management, the head of local whistleblowing facilities, IDR’s interpretation. The IDR person to both positions was the legal department or the head as needed. compliance officer maintains a list approved by the shareholders of the internal assurance of insiders as required by the (with the significant shareholder department. During 2013, there were 103 Luxembourg market manipulation abstaining) of Mittal Steel, which complaints received relating to (abus de marché) law of May 9, was at that time the parent Code of business conduct training alleged fraud, which were referred 2006, as amended. The IDR company of the combined is offered throughout ArcelorMittal to and duly reviewed by the compliance officer may assist ArcelorMittal group. Since that on a regular basis in the form of company’s internal assurance senior executives and directors date, the rationale for combining face-to-face trainings, webinars department. Following review with the filing of notices required the positions of chief executive and online trainings. Employees by the audit committee, none of by Luxembourg law to be filed officer and chairman of the board are periodically trained about the these complaints was found to with the Luxembourg financial of directors has become even code of business conduct in each be significant. regulator, the CSSF (Commission more compelling. The board of location where ArcelorMittal has de Surveillance du Secteur directors is of the opinion that operations. The code of business Internal assurance Financier). Furthermore, the IDR Mr Mittal’s strategic vision for the conduct is available in the ArcelorMittal has an internal compliance officer has the power steel industry in general and for ‘corporate governance – code assurance function that, through to conduct investigations in ArcelorMittal in particular in his of business conduct’ section its head of internal assurance, connection with the application role as CEO is a key asset to the of ArcelorMittal’s website at reports to the audit committee. and enforcement of the IDR, in company, while the fact that he www.arcelormittal.com. The function is staffed by full-time which any employee or member is fully aligned with the interests professional staff located within of senior management or of the of the company’s shareholders In addition to the code of business each of the principal operating board of directors is required means that he is uniquely conduct, ArcelorMittal has subsidiaries and at the corporate to cooperate. positioned to lead the board of developed a human rights policy level. Recommendations and directors in his role as chairman. and a number of other compliance matters relating to internal control Selected new employees of The combination of these roles policies in more specific areas, and processes are made by the ArcelorMittal are required to was revisited at the annual general such as anti-trust, anti-corruption, internal assurance function and participate in a training course meeting of shareholders of the economic sanctions and insider their implementation is regularly about the IDR upon joining company held in May 2011, when dealing. In all these areas, reviewed by the audit committee. ArcelorMittal and every three Mr Lakshmi N Mittal was reelected specifically targeted groups of years thereafter. The individuals to the board of directors for employees are required to undergo Independent auditors who must participate in the IDR another three year term by a specialized compliance training. The appointment and training include the members of strong majority. Furthermore, ArcelorMittal’s determination of fees of the senior management, employees compliance program also includes independent auditors is the direct who work in finance, legal, sales, Ethics and conflicts of interest a quarterly compliance certification responsibility of the audit mergers and acquisitions and other Ethics and conflicts of interest are process covering all business committee. The audit committee is areas that the company may governed by ArcelorMittal’s code segments and entailing reporting further responsible for obtaining, determine from time to time. of business conduct, which to the audit committee. at least once each year, a written In addition, ArcelorMittal’s code establishes the standards for statement from the independent of business conduct contains a ethical behavior that are to be Process for handling complaints auditors that their independence section on ‘trading in the securities followed by all employees and on accounting matters has not been impaired. The audit of the company’ that emphasizes directors of ArcelorMittal in the As part of the procedures of the committee has also obtained a the prohibition to trade on the exercise of their duties. Each board of directors for handling confirmation from ArcelorMittal’s basis of inside information. An employee of ArcelorMittal is complaints or concerns about principal independent auditors to online interactive training tool required to sign and acknowledge accounting, internal controls and the effect that none of its former based on the IDR was developed the code of conduct upon joining auditing issues, ArcelorMittal’s employees are in a position within in 2010 and deployed across the the company. This also applies to anti-fraud policy and code of ArcelorMittal that may impair the group in different languages in the members of the board of business conduct encourage all principal auditors’ independence. 2011 through ArcelorMittal’s directors of ArcelorMittal, who in employees to bring such issues intranet, with the aim to enhance December 2013 signed the to the audit committee’s Measures to prevent insider the staff’s awareness of the risks company’s appointment letter in attention on a confidential basis. dealing and market manipulation of sanctions applicable to insider which they acknowledged their In accordance with ArcelorMittal’s The board of directors of dealing. The importance of the IDR duties and obligations. anti-fraud and whistleblower ArcelorMittal has adopted insider was again underscored in the policy, concerns with regard to dealing regulations (‘IDR’), which group policies and procedures Employees must always act in the possible fraud or irregularities in are updated when necessary and manual in 2013. best interests of ArcelorMittal and accounting, auditing or banking in relation to which training is must avoid any situation in which matters or bribery within conducted throughout the group. their personal interests conflict, ArcelorMittal or any of its or could conflict, with their subsidiaries or other controlled Annual review 2013 Governance 76

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Luxembourg Takeover Law 2008 on the transparency 9(a)(2) of the U.S. Securities Disclosure requirements regarding issuers of Exchange Act of 1934, as The following disclosure is securities (the ‘Transparency Law’) amended (the ‘Exchange Act’), provided based on article 11 of but have not notified the company and Rule 10b-5 promulgated the Luxembourg law of 19 May accordingly. The sanction of under the Exchange Act. The 2006 transposing Directive suspension of voting rights will authorization is valid for a period 2004/25/EC of 21 April 2004 on apply until such time as the of five years, i.e., until the annual takeover bids (the ‘Takeover Law’). notification has been properly general meeting of shareholders to The Articles of Association of the made by the relevant be held in May 2015, or until the company are available on www. shareholder(s). date of its renewal by a resolution arcelormittal.com, under Investors of the general meeting of – Corporate Governance. Article 11(1)(g) of the Takeover shareholders if such renewal date Law is not applicable to the is prior to the expiration the With regard to articles 11 (1)(a) company. five-year period. The maximum and (c) of the Takeover Law, the number of own shares that the company has issued a single With regard to article 11(1)(h) of company may hold at any time category of shares (ordinary the Law, the Articles of directly or indirectly may not have shares), and the company’s Association provide that the the effect of reducing its net shareholding structure showing directors are elected by annual assets (‘actif net’) below the each shareholder owning 2.5% or general meeting of shareholders amount mentioned in paragraphs more of the company’s share for a term that may not exceed 1 and 2 of Article 72-1 of the capital is available elsewhere in this three years, and may be re- Law. The purchase price per share report and on www.arcelormittal. elected. The rules governing to be paid shall not represent more com under Investors – Corporate amendments to the Articles of than 125% of the trading price of Governance – Shareholding Association are described the shares on the New York Stock Structure, where the elsewhere in this report and are Exchange and on the Euronext shareholding structure chart set out in article 19 of the Articles markets where the company is is updated monthly. of Association. listed, the Luxembourg Stock Exchange or the Spanish stock With regard to article 11(1)(b) of With regard to article 11(1)(i) of exchanges of Barcelona, Bilbao, the Takeover Law, the ordinary the Takeover Law, the general Madrid and Valencia, depending on shares issued by the company are meeting of shareholders held on the market on which the listed on various stock exchanges May 11, 2010 granted the board purchases are made, and no less including NYSE Euronext and are of directorsa new share buy-back than one cent. For off-market freely transferable. authorization whereby the board transactions, the maximum may authorize the acquisition or purchase price shall be 125% of With regard to article 11(1)(d), sale of company shares including, the price on the Euronext markets each ordinary share of the but not limited to, entering into where the company is listed. The company gives right to one vote, off-market and over-the-counter reference price will be deemed to as set out in article 13.6 of the transactions and the acquisition of be the average of the final listing Articles of Association, and there shares through derivative financial prices per share on the relevant are no special control rights instruments. Any acquisitions, stock exchange during 30 attaching to the shares. Article 8 disposals, exchanges, contributions consecutive days on which the of the Articles of Association or transfers of shares by the relevant stock exchange is open provides that the Mittal company or other companies in for trading preceding the three Shareholder (as defined in the the ArcelorMittal group must be in trading days prior to the date of Articles of Association) may, at its accordance with Luxembourg laws purchase. In the event of a share discretion, exercise the right of transposing Directive 2003/6/EC capital increase by incorporation of proportional representation and regarding insider dealing and reserves or issue premiums and nominate candidates for market manipulation and EC the free allotment of shares as well appointment to the board of Regulation 2273/2003 regarding as in the event of the division or directors(defined as ‘Mittal exemptions for buy-back regrouping of the shares, the Shareholder Nominees’). The programmes and stabilisation of purchase price indicated above Mittal Shareholder has not, to financial instruments and may be shall be adjusted by a multiplying date, exercised that right. carried out by all means, on or coefficient equal to the ratio off-market, including by a public between the number of shares Articles 11(1)(e) and (f) of the offer to buy-back shares, or by comprising the issued share capital Takeover Law are not applicable to the use of derivatives or option prior to the transaction and such the company. However, the strategies. The fraction of the number following the transaction. sanction of suspension of voting capital acquired or transferred in The total amount allocated for the rights automatically applies, the form of a block of shares may company’s share repurchase subject to limited exceptions set amount to the entire program. program may not in any event out in the Transparency Law (as Such transactions may be carried exceed the amount of the defined below), to any shareholder out at any time, including during a company’s then available equity. (or group of shareholders) who tender offer period, in accordance has (or have) crossed the with applicable laws and Articles 11(1)(j) and (k) of the thresholds set out in article 7 of regulations. Any share buy-backs Takeover Law are not applicable to the Articles of Association and on the New York Stock Exchange the company. articles 8 to 15 of the must be performed in compliance Luxembourg law of 11 January with Section 10(b) and Section Annual review 2013 Governance 77

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Controls and Management’s annual report Organizations of the Treadway on internal control over Commission (‘COSO’). Based on procedures financial reporting this assessment, management concluded that ArcelorMittal’s Disclosure controls and Management is responsible for internal control over financial procedures establishing and maintaining We maintain disclosure controls adequate internal control over reporting was effective as of and procedures that are designed financial reporting. Internal control December 31, 2013. to ensure that information required over financial reporting is a process to be disclosed in our reports designed to provide reasonable Changes in internal control under the Securities Exchange assurance regarding the reliability over financial reporting Act of 1934, as amended of financial reporting and the There have been no changes in our (the ‘Exchange Act’) is recorded, preparation of financial statements internal control over financial processed, summarized and for external purposes in reporting that occurred during the reported within time periods accordance with generally year ending December 31, 2013 specified in the SEC’s rules and accepted accounting principles. that have materially affected or forms, and that such information is are reasonably likely to materially accumulated and communicated Our internal control over financial affect our internal control over to management, including the reporting includes those policies financial reporting. chief executive officer and chief and procedures that: financial officer, as appropriate, to • pertain to the maintenance of allow timely decisions regarding records that, in reasonable required disclosures. ArcelorMittal’s detail, accurately and fairly controls and procedures are reflect the transactions and designed to provide reasonable dispositions of the assets of assurance of achieving their ArcelorMittal; objectives. • provide reasonable assurance We carried out an evaluation under that transactions are recorded, the supervision, and with the as necessary, to permit participation of our management, preparation of financial including our chief executive statements in accordance officer and chief financial officer, of with IFRS; the effectiveness of the design • provide reasonable assurance and operation of our disclosure that receipts and expenditures controls and procedures (as of ArcelorMittal are made in defined in Exchange Act Rule accordance with authorizations 13a-15(e)) as of December 31, of ArcelorMittal’s management 2013. Based upon that evaluation, and directors; and our chief executive officer and chief financial officer concluded • provide reasonable assurance that our disclosure controls and that unauthorized acquisition, procedures were effective as of use or disposition of December 31, 2013 to provide ArcelorMittal’s assets that could reasonable assurance that have a material effect on the (1) information required to be financial statements would be disclosed by us in the reports that prevented or detected on a we file under the Exchange Act is timely basis. recorded, processed, summarized and reported within the time Because of its inherent limitations, periods specified in the SEC’s rules internal control over financial and forms, and (2) that such reporting is not intended to information is accumulated and provide absolute assurance that a communicated to our misstatement of our financial management, including our chief statements would be prevented or executive officer and our chief detected. In addition, projections financial officer, as appropriate, of any evaluation of effectiveness to allow timely decisions regarding to future periods are subject to required disclosures. the risk that controls may become inadequate because of changes in There are inherent limitations to conditions, or that the degree of the effectiveness of any system of compliance with the policies or disclosure controls and procedures, procedures may deteriorate. including the possibility of human error and the circumvention or Management assessed the overriding of the controls and effectiveness of internal control procedures. Accordingly, even over financial reporting as of effective disclosure controls and December 31, 2013 based upon procedures can only provide the framework in Internal Control reasonable assurance of achieving – Integrated Framework issued by their control objectives. the Committee of Sponsoring Annual review 2013 Governance 78

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Compensation Board of directors Directors’ fees The ARCG committee of the board of directors prepares proposals on the remuneration to be paid annually to the members of the board of directors.

At the May 8, 2013 annual general meeting of shareholders, the shareholders approved the annual remuneration for non-executive directors for the 2012 financial year at US$1,981,469, based on the following annual fees:

• Basic director’s remuneration: €134,000 (US$176,800); • Lead independent director’s remuneration: €189,000 (US$249,367); • Additional remuneration for the chair of the audit committee: €26,000 (US$34,304); • Additional remuneration for the other audit committee members: €16,000 (US$21,110); • Additional remuneration for the chairs of the other committees: €15,000 (US$19,791); and • Additional remuneration for the members of the other committees: €10,000 (US$13,194).

The total annual remuneration of the members of the board of directors paid in 2012 and 2013 was as follows:

Year ended December 31, (Amounts in US$ thousands except share information) 2012 2013 Base salary 1 US$1,770 US$1,760 Director fees US$1,930 US$2,119 Short-term performance-related bonus 1 US$1,941 US$530 Long-term incentives 1,2 7,500 150,576 1 Chairman and chief executive officer only. 2 PSUs were granted in 2012 and 2013; see ‘ – Remuneration Framework – Long-Term Incentives: Equity Based Incentives (Share Unit Plans)’.

The annual remuneration paid for 2012 and 2013 to the current and former members of the board of directors for services in all capacities was as follows:

2012 2013 2012 2013 (Amounts in US$ thousands Short-term Short-term Long-term number Long-term number except share information) 2012 1 2013 1 performance related performance related of RSUs of PSUs Lakshmi N Mittal US$1,770 US$1,760 US$1,941 US$530 7,500 150,576 Vanisha Mittal Bhatia 172 184 — — — — Narayanan Vaghul 218 233 — — — — Suzanne P Nimocks 198 206 — — — — Wilbur L Ross, Jr 193 206 — — — — Lewis B Kaden 262 280 — — — — Bruno Lafont 193 206 — — — — Tye Burt 2 112 184 — — — — Antoine Spillmann 212 226 — — — — HRH Prince Guillaume de Luxembourg 185 197 — — — — Jeannot Krecké 185 197 — — — — Total US$3,700 US$3,879 US$1,941 US$530 7,500 150,576 1 Remuneration for non-executive directors with respect to 2012 (paid after shareholder approval at the annual general meeting held on May 8, 2013) is included in the 2012 column. Remuneration for non-executive directors with respect to 2013 (subject to shareholder approval at the annual general meeting to be held on May 8, 2014) will be paid in 2014 and is included in the 2013 column. Slight differences between the amounts previously disclosed and the final approved amounts are possible, due to foreign currency effect. 2 Mr Burt was elected to ArcelorMittal’s board of directors effective May 8, 2012. Annual review 2013 Governance 79

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As of December 31, 2012 and 2013, ArcelorMittal did not have any loans or advances outstanding to members of its board of directors and, as of December 31, 2013, ArcelorMittal had not given any guarantees in favor of any member of its board of directors.

None of the members of the board of directors, including the chairman and chief executive officer, benefit from an ArcelorMittal pension plan.

The policy of the company is not to grant any share-based remuneration to members of the board of directors who are not executives of the company.

The following tables provide a summary of the options and the exercise price of options, Restricted Share Units (‘RSUs’) and Performance Share Units (‘PSUs’) granted to the chairman and chief executive officer, who is the sole executive director on the board of directors, as of December 31, 2013.

Weighted average Options granted in Options granted in Options granted in Options granted in Options granted in Options granted in exercise price of 2005 2006 2007 2008 2009 2010 Options total options Lakshmi N Mittal 100,000 100,000 60,000 60,000 60,000 56,500 436,500 US$41.75 Total 100,000 100,000 60,000 60,000 60,000 56,500 436,500 - Exercise price 1 US$27.31 US$32.07 US$61.09 US$78.44 US$36.38 US$30.66 - US$41.75 Term (in years) 10 10 10 10 10 10 - - Expiration date Aug. 23, 2015 Sep. 1, 2016 Aug. 2, 2017 Aug. 5, 2018 Aug. 4, 2019 Aug. 3, 2020 - - 1 Due to the spin-off of Aperam on January 25, 2011, the strike price of outstanding options was reduced by 5% in line with the spin-off ratio. The table above reflects this adjustment.

PSUs granted in 2012 PSUs granted in 2013 Lakshmi N Mittal 7,500 150,576 Total 7,500 150,576 Term (in years) 3 3 Vesting date 1 Mar. 30, 2015 June 28, 2016 1 See ‘Remuneration Framework – Long-Term Incentives: Equity Based Incentives (Share Unit Plans)’, for vesting conditions.

Remuneration of senior management The total remuneration paid in 2013 to members of ArcelorMittal’s senior management (including Mr Lakshmi N Mittal in his capacity as chief executive officer) was US$9.8 million in base salary and other benefits paid in cash (such as health insurance, lunch allowances, financial services, gasoline and car allowance) and US$5.9 million in short-term performance-related variable remuneration consisting of a bonus linked to the company’s 2012 results.

During 2013, approximately US$800,000 was accrued by ArcelorMittal to provide pension benefits to senior management (other than Mr Mittal).

No loans or advances to ArcelorMittal’s senior management were made during 2013, and no such loans or advances were outstanding as of December 31, 2013. Annual review 2013 Governance 80

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The following table shows the remuneration received by the chief executive officer and the GMB members as determined by the ARCG committee in relation to 2013 and 2012, including all remuneration components.

Chief executive officer Other GMB members (Amounts in US$ thousands except for Long-term incentives) 2012 2013 2012 2013 5 Base salary 1 1,770 1,760 7,682 7,824 Retirement benefits - - 778 780 Other benefits 2 30 38 153 165 Short-term incentives 3 1,941 530 8,522 5,328 Long-term incentives - fair value in US$ thousands 4 127 2,500 709 7,976 - number of share units 7,500 150,576 42,000 480,501 1 No increase in base salary in 2013 for the chief executive officer. The increase in base salary for the other GMB members in 2013 was 5% on average (effective April 2013), as compared to 2012. 2 Other benefits comprise benefits paid in cash such as health insurance and other insurances, lunch allowances, financial services, gasoline and car allowances. Benefits in kind such as company car (US$105,000 in 2013) and tax returns not included. 3 Short-term incentives are entirely performance-based and are fully paid in cash. The short-term incentive for a given year relates to the company’s results in the previous year. 4 Fair value determined at the grant date is recorded as an expense using the straight line method over the vesting period and adjusted for the effect of non-market based vesting conditions. The remuneration expenses recognized for the RSUs/PSUs granted to the chief executive officer and other GMB members was US$0.6 million and US$2.3 million for the years ended December 31, 2012 and 2013, respectively. 5 Mr Peter Kukielski is included until his resignation on August 3, 2013.

The company allocated 2013 remuneration according to the following timeline:

Short-term STI payout PSUs allocation incentive 2012 performance performance measurement related. New starts base salary effective

Long-term incentives Performance measured 3 years Short-term Performance measured incentives (cash)

Base salary and benefits

1/2012 1/2013 4/2013 6/2013 12/2013

SOX 304 and clawback policy issuance or filing with the SEC first public issuance or filing with to, demanding repayment or Under Section 304 of the (whichever occurs first) of the the SEC (whichever first occurs) cancellation of cash bonuses, Sarbanes-Oxley Act, the SEC relevant filing, and any profits of the filing that contained the incentive-based or equity-based may seek to recover remuneration realized from the sale of material misstatement of remuneration or any gains realized from the chief executive officer ArcelorMittal securities during that accounting information. as the result of options being and chief financial officer of the 12-month period. exercised or awarded or long-term company in the event that it is For purposes of determining incentives vesting. The board may required to restate accounting The board of directors, through its whether the clawback policy also choose to reduce future information due to any material ARCG committee, decided in should be applied, the board remuneration as a means of misstatement thereof or as a 2012 to adopt its own clawback of directors will evaluate the recovery. result of misconduct in respect of policy (the ‘clawback policy’) that circumstances giving rise to the a financial reporting requirement applies to the members of the restatement (in particular, Remuneration policy under the US securities laws GMB and to the executive vice whether there was any fraud or Board oversight (the ‘SOX Clawback’). president of finance, of misconduct), determine when The board is responsible for ArcelorMittal. any such misconduct occurred ensuring that the group’s Under the SOX Clawback, the and determine the amount of remuneration arrangements chief executive officer and the The clawback policy comprises remuneration that should be are equitable and aligned with chief financial officer may have to cash bonuses and any other recovered by the company. In the the long-term interests of the reimburse ArcelorMittal for any incentive-based or equity-based event that the board of directors company and its shareholders. bonus or other incentive- or remuneration, as well as profits determines that remuneration It is therefore critical that the equity-based remuneration from the sale of the company’s should be recovered, it may take board remain independent of received during the 12-month securities received during the appropriate action on behalf of the management when making period following the first public 12-month period following the company, including, but not limited Annual review 2013 Governance 81

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decisions affecting remuneration • facilitate the evaluation of the executive vice presidents, vice The company does not have any of the chief executive officer and board; presidents, general managers deferred compensation plans for his direct reports. and managers. senior management. • review the succession planning and the executive development To this end, the board has Fixed annual salary of GMB members; Remuneration philosophy established the ARCG committee ArcelorMittal’s remuneration Base salary levels are reviewed to assist it in making decisions • submit proposals to the board philosophy for its senior annually and compared to the affecting employee remuneration. on the remuneration of GMB managers is based on the market to ensure that All members of the ARCG members, and on the following principles: ArcelorMittal remains committee are required to be appointment of new directors competitive with market • provide total remuneration independent under the company’s and GMB members; median base pay levels. competitive with executive corporate governance guidelines, • make recommendations to the remuneration levels of a peer the NYSE standards and the 10 Short-term incentives board in respect of the group composed of a selection principles of corporate Annual performance bonus plan company’s framework of of industrial companies of a governance of the Luxembourg ArcelorMittal has a short-term remuneration for the members similar size and scope; Stock Exchange. incentive plan consisting of a of the GMB and such other • encourage and reward performance-based bonus plan. members of the executive The members are appointed by performance that will lead to Bonus calculations for each management as designated by the board of directors each year long-term enhancement of employee reflect the performance the committee. In making such after the annual general meeting shareholder value; of the ArcelorMittal group as a recommendations, the of shareholders. The members whole and /or the performance of committee may take into • promote internal pay equity have relevant expertise or the relevant business units, the account factors that it deems and provide ‘market’ median experience relating to the achievement of objectives specific necessary. This may include a (determined by reference to its purposes of the committee. The to the department and the member’s total cost of identified peer group) base pay ARCG committee makes decisions individual employee’s overall employment (factoring in levels for ArcelorMittal’s senior by a simple majority with no performance and potential. equity/stock options), any managers with the possibility to member having a casting vote. perquisites and benefits in kind move up to the third quartile of The calculation of ArcelorMittal’s and pension contributions. the market base pay levels, The ARCG committee is chaired 2013 performance bonus is depending on performance over by Mr Lewis Kaden, lead aligned with its strategic The ARCG committee met seven time; and independent director. objectives of improving health times in 2013. Its members • promote internal pay equity and and safety performance and comprise Mr Lewis Kaden target total direct remuneration overall competitiveness and the Appointments, remuneration (chairman), HRH Prince Guillaume (base pay, bonus, and long-term following principles: and corporate governance de Luxembourg, Mr Narayanan incentives) levels for senior committee Vaghul and Ms Suzanne Nimocks. • no performance bonus will be The primary function of the ARCG managers at the 75th percentile Regular invitees include triggered if the achievement committee is to assist the board of of the market. Mr Lakshmi N Mittal (chief level of the performance directors, among others with executive officer and chairman) measures is less than the respect to the following: and Mr Henri Blaffart (head of Remuneration framework threshold of 80%; The ARCG committee develops • review and approve corporate group human resources). Mr Henk proposals on senior management • achievement of 100% of the goals and objectives relevant to Scheffer (company secretary) acts remuneration annually for performance measure yields the GMB and other members of as secretary. The relevant persons consideration by the board of 100% of the performance executive management as are not present when their directors. Such proposals include bonus pay-out; and deemed appropriate by the remuneration is discussed by the the following components: committee regarding their ARCG committee. The ARCG • achievement of more than remuneration, and assess committee chairman presents its • fixed annual salary; 100% and up to 120% of the performance against goals and decisions and findings to the performance measure • short-term incentives (i.e. objectives; board of directors after each generates a higher performance performance-based bonuses); committee meeting. bonus pay-out, except as • make recommendations to the and explained below. board with respect to incentive Remuneration strategy • long-term incentives (i.e. stock remuneration plans and Scope options (prior to May 2011), The performance bonus for each equity-based plans; ArcelorMittal’s remuneration RSUs (after May 2011) and individual is expressed as a • identify candidates qualified to philosophy and framework apply PSUs (after May 2011). percentage of his or her annual serve as members of the board to the following group of senior base salary. Performance bonus and the GMB; management: A decision was taken by the board pay-outs may range from 50% of of directors not to allocate any the target bonus for achievement • review and evaluate on a yearly • the chief executive officer; and RSUs and PSUs to the members of performance measures at the basis the performance of the • the six other members of the of GMB between May 2012 and threshold (80%), to up to 150% GMB as a whole and its GMB (seven until the May 2013. for an achievement at or in excess individual members; resignation of Mr Peter Kukielski of the ceiling of 120%. Between • recommend candidates to the in August 2013) A grant of PSUs to members of the 80% threshold and the 120% board for appointment by the the GMB pursuant to the GMB ceiling, the performance bonus is general meeting of shareholders The remuneration philosophy and Performance Share Unit Plan calculated on a proportional, or for appointment by the board governing principles also apply, (‘GMB PSU Plan’) approved in straight-line basis. to fulfill interim board vacancies; with certain limitations, to a wider the annual general meeting held on group of employees including May 8, 2013 was made in • develop, monitor and review June 2013. corporate governance principles applicable to the company; Annual review 2013 Governance 82

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For the chief executive officer and • Free cash flow (‘FCF’) at the For the chief executive officer, the The different performance the other members of the GMB, group level: 20%; and performance bonus at 100% measures are combined through a the 2013 bonus formula achievement of performance cumulative system: each measure • Health and safety performance is based on: targets linked to the business plan is calculated separately and is at the group level: 20%. is equal to 100% of his base salary. added up for the performance • Operating income plus For the members of the GMB, the bonus calculation. Ebitda operating as a ‘circuit depreciation, impairment performance bonus at 100% breaker’ for financial measures expenses and exceptional items achievement of performance Performance below threshold means that the 80% threshold (‘Ebitda’) at the group level: targets linked to the business plan will result in zero performance described above must be met for 60% (this acts as ‘circuit is equal to 80% of the relevant bonus payout. Ebitda in order to trigger any breaker’ with respect to base salary. bonus payment with respect group-level financial The achievement level of to the Ebitda and FCF performance measures as performance for performance performance measures. explained below); bonus is summarized as follows:

Functional level Target achievement threshold @ 80% Target achievement @ 100% Target achievement ≥ ceiling @ 120% Chief executive officer 50% of base pay 100% of base pay 150% of base pay Other GMB members 40% of base pay 80% of base pay 120% of base pay

Individual performance and performers, an individual multiplier The principles of the performance At the end of the financial year, potential assessment ratings of up to 1.5 may cause the bonus plan, with different weights achievement against the measures define the individual bonus performance bonus pay-out to be for performance measures and is assessed by the ARCG multiplier that will be applied to higher than 150% of the target different levels of target bonuses, committee and the board and the the performance bonus calculated bonus, up to 225% of target are applicable to approximately short-term incentive award is based on actual performance bonus being the absolute 2,000 employees worldwide. determined. The achievement of against the performance maximum for the chief executive the 2012 Performance Bonus Plan measures. Those individuals who officer. Similarly, a reduction factor In exceptional cases, there are with respect to senior consistently perform at expected will be applied for those at the some entitlements to a retention management and paid out in April levels will have an individual lower end. bonus or a business specific bonus. 2013 was as follows: multiplier of 1. For outstanding

2012 Measures % Weighting for chief executive officer and GMB members Assessment Ebitda 60% No incentive attributable to this metric FCF 20% No incentive attributable to this metric Incentive attributable to this metric as the Health and safety 20% assessment was at target

Other benefits equity incentive plan provides for shareholders’ meeting. For the framework. Between 500 and In addition to the remuneration the grant of RSUs and PSUs to period from the May 2013 annual 700 of the group’s most senior described above, other benefits eligible company employees and is general shareholders’ meeting to managers are eligible for RSUs. may be provided to members of designed to incentivize employees, the May 2014 annual general the GMB and, in certain cases, improve the company’s long-term shareholders’ meeting, a maximum In September 2011, the company other employees. These other performance and retain key of 3,500,000 RSUs and PSUs may made a grant of 1,303,515 RSUs benefits can include insurance, employees. On May 8, 2013, be allocated to eligible employees to a total of 772 eligible housing (in cases of international the annual general meeting of under the ArcelorMittal equity employees; in March 2013, the transfers), car allowances and shareholders approved the GMB incentive plan and the GMB PSU company made a grant of tax assistance. PSU Plan, which provides for the plan combined. 1,071,190 RSUs to a total of 681 grant of PSUs to GMB members. eligible employees; and in Long-term incentives: Until the introduction of the GMB ArcelorMittal equity September 2013, the company equity-based incentives PSU Plan in 2013, GMB members incentive plan made a grant of 1,065,415 (share unit plans) were eligible to receive RSUs and RSUs. RSUs granted under the RSUs to a total of 682 On May 10, 2011, the annual PSUs under the ArcelorMittal ArcelorMittal equity incentive plan eligible employees. general meeting of shareholders equity incentive plan. are designed to provide a retention approved the ArcelorMittal equity incentive to eligible employees. PSUs. The grant of PSUs under the incentive plan, a new equity-based The maximum number of RSUs RSUs are subject to ‘cliff vesting’ ArcelorMittal equity incentive plan incentive plan that replaced the and PSUs available for grant during after three years, with 100% of aims to serve as an effective Global Stock Option Plan. The any given year is subject to the the grant vesting on the third performance-enhancing scheme ArcelorMittal equity incentive plan prior approval of the company’s anniversary of the grant based on the employee’s is intended to align the interests of shareholders at the annual general contingent upon the continued contribution to the eligible the company’s shareholders and meeting. The annual shareholders’ active employment of the eligible achievement of the company’s eligible employees by allowing meeting on May 8, 2013 employee within the group. RSUs strategy. Awards in connection them to participate in the success approved the maximum to be are an integral part of the with PSUs are subject to the of the company. The ArcelorMittal granted until the next annual company’s remuneration fulfillment of cumulative Annual review 2013 Governance 83

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performance criteria over a The members of the GMB the median TSR, and up to a three-year period from the date of including the chief executive maximum of 200% for an the PSU grant. The employees officer are eligible for PSU grants. achievement above the eligible to receive PSUs are a The GMB PSU Plan provides for upper quartile. sub-set of the group of employees cliff vesting on the third year • For 25% of PSUs, performance eligible to receive RSUs. The target anniversary of the grant date, is compared to the S&P 500 group for PSU grants initially under the condition that the index. The percentage of PSUs included the chief executive officer relevant GMB member continues vesting will be 50% for and the other GMB members. to be actively employed by the achieving performance equal to However, from 2013 onwards, the group on that date. If the GMB 80% of the index, 100% for chief executive officer and other member is retired on that date or achieving a performance equal GMB members receive PSU grants in case of an early retirement by to the index, 150% for under the GMB PSU Plan instead mutual consent, the relevant GMB achieving a performance equal of the ArcelorMittal equity member will not automatically to index plus an outperformance incentive plan (see ‘ – GMB forfeit PSUs and pro rata vesting of 2%, and up to a maximum of PSU Plan’). will be considered at the end of 200% for achieving a the vesting period at the sole performance equal to index plus In March 2012, the company discretion of the company, an outperformance of 5%. made a grant of 267,165 PSUs to represented by the ARCG a total of 118 eligible employees; committee of the board of The other 50% of the criteria to in March 2013, the company directors. Awards under the GMB be met to trigger vesting of the made a grant of 182,970 PSUs to PSU Plan are subject to the PSUs is based on the development a total of 94 eligible employees; fulfillment of cumulative of earnings per share (EPS), and in September 2013, the performance criteria over a defined as the amount of earnings company made a grant of three-year period from the date of per share outstanding compared 504,075 PSUs to a total of 384 the PSU grant. The value of the to a peer group of companies. The eligible employees. grant at grant date will equal one percentage of PSUs vesting will be year of base salary for the chief 50% for achievement of 80% of PSUs vest three years after their executive officer and 80% of base the median EPS, 100% for date of grant subject to the eligible salary for the other GMB achieving the median EPS, 150% employee’s continued employment members. Each PSU may give right for achieving 120% of the median with the company and the to up to two shares of EPS, and up to a maximum of fulfillment of targets related to the the company. 200% for an achievement above following performance measures: the upper quartile. return on capital employed (ROCE) In June 2013, the company made and total cost of employment (in a grant of 631,077 PSUs under The allocation of PSUs to eligible US dollars per tonne) for the steel the GMB PSU plan to a total of GMB members is reviewed by the business (TCOE) and the mining seven eligible GMB members. ARCG committee of the board volume plan and ROCE for the of directors, which is comprised of Mining segment. Each Two sets of performance criteria four independent directors, and performance measure has a must be met for vesting of the which makes a proposal and weighting of 50%. In case the level PSUs. 50% of the criteria is based recommendation to the full board of achievement of both on the total shareholder return of directors. The vesting criteria of performance targets together (TSR) defined as the share price at the PSUs are also monitored is below 80%, there is no vesting, the end of period minus the share by the ARCG committee. and the rights are price at start of period plus any The company will report in its automatically forfeited. dividend paid divided by the share annual reports on the progress price at the start of the period. of meeting the vesting criteria ‘Start of period’ and ‘end of period’ GMB PSU Plan on each grant anniversary date The GMB PSU Plan is designed to will be defined by the ARCG as well as on the applicable enhance the long-term committee of the board of peer group. performance of the company directors. This will then be and align the members of the compared with a peer group of GMB to the company’s objectives. companies and the S&P 500 The GMB PSU Plan complements index, each counting for half of the ArcelorMittal’s existing program of weighting. No vesting will take annual performance-related place for performance below 80% bonuses which is the company’s of the median compared to the reward system for short-term peer group or below 80% of the performance and achievements. S&P 500 index measured over The main objective of the GMB three years. PSU plan is to be an effective • For 25% of PSUs, performance performance-enhancing scheme is compared to the peer group. for GMB members based on the The percentage of PSUs vesting achievement of ArcelorMittal’s will be 50% for achieving 80% strategy aimed at creating a of the median TSR, 100% for measurable long-term achieving the median TSR, shareholder value. 150% for achieving 120% of Annual review 2013 Governance 84

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The table below lists the applicable peer group of companies for the GMB PSU plan. The peer group consists of 12 steel manufacturers, 5 iron ore miners/producers and 8 other miners/producers. The peer group have been selected by the board of directors based on industry classification, size (limited to companies not smaller than approximately one quarter of ArcelorMittal’s market capitalization – except US Steel which has a market capitalization of below 25 % of ArcelorMittal’s market capitalization) and on correlation of TSR performance over three years in order to identify whether this peer group of companies is appropriate from a statistical viewpoint.

Company 3 year correlation at 1 January, 2013 Market cap (US$m) at 1 January, 2013 Category ArcelorMittal n/a 26,620 Steel producers Thyssenkrupp 82% 12,040 Steel manufacturers BHP Billiton 84% 196,814 Iron ore miners/producers Tenaris 77% 24,250 Steel manufacturers Anglo American 78% 42,823 Other miners/producers Xstrata 79% 50,854 Other miners/producers US Steel 72% 3,441 Steel producers Antofagasta 75% 21,217 Other miners/producers Vale PNA 72% 109,339 Iron ore miners/producers Rio Tinto 81% 110,417 Iron ore miners/producers SIDER Nacional ON 68% 8,445 Steel producers Alcoa 73% 9,309 Other miners/producers Kumba Iron Ore 71% 21,594 Iron ore miners/producers Southern Copper 68% 32,013 Other miners/producers Nucor 74% 13,709 Steel manufacturers GMexico ‘B’ 68% 28,098 Other miners/producers Severstal 60% 10,112 Steel producers Cameco 64% 7,778 Other miners/producers Novolipetsk Steel 61% 12,007 Steel producers POSCO 55% 28,442 Steel producers MMC Norilsk Nickel 55% 34,964 Other miners/producers China Steel 53% 14,437 Steel producers Nippon stl. & sumit. mtl. 56% 23,081 Steel manufacturers Steel authority of India 51% 6,834 Steel producers Fortescue Metals GP. 59% 15,032 Iron ore miners/producers Jindal Steel & Power 50% 7,641 Steel manufacturers JFE Holdings 52% 11,384 Steel manufacturers

Share unit plan activity is summarized below as of and for each year ended December 31, 2012 and 2013:

Restricted share unit (RSU) Performance share unit (PSU)

Number of shares Fair value per share Number of shares Fair value per share Outstanding, December 31, 2011 1,303,515 US$14.45 – – Granted – – 267,165 US$16.87 Exited (787) 14.45 – – Forfeited (59,975) 14.45 (4,500) 16.87 Outstanding, December 31, 2012 1,242,753 14.45 262,665 16.87 Granted 2,136,605 12.77 1,318,122 14.70 Exited (14,788) 14.35 – – Forfeited (120,904) 13.92 (53,640) 15.85 Outstanding, December 31, 2013 3,243,666 13.36 1,527,147 15.03 Annual review 2013 Governance 85

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The following table summarizes information about total share unit plan of the company outstanding as of December 31, 2013:

Shares units outstanding

Fair value per share Number of shares Shares exercised Maturity US$16.87 221,220 - March 30, 2015 16.60 631,077 - June 28, 2016 14.45 1,138,577 22,449 September 29, 2014 13.17 504,075 - September 27, 2016 13.17 1,065,415 - September 27, 2016 12.37 1,039,674 1,122 March 29, 2016 12.37 170,775 - March 29, 2016 US$16.87 – 12.37 4,770,813 23,571

For RSUs and PSUs, the fair value determined at the grant date is recorded as an expense using the straight line method over the vesting period and adjusted for the effect of non-market based vesting conditions.

The remuneration expense recognized for the RSUs granted under the ArcelorMittal equity incentive plan was US$6 million and US$10 million for the years ended December 31, 2012 and 2013, respectively. The remuneration expense recognized for the PSUs granted under the ArcelorMittal equity incentive plan and GMB PSU Plan was US$1 million and US$4 million for the years ended December 31, 2012 and 2013, respectively.

Global stock option plan Prior to the adoption in 2011 of the ArcelorMittal equity incentive plan described above, ArcelorMittal’s equity-based incentive plan took the form of a stock option plan known as the Global Stock Option Plan.

Under the terms of the ArcelorMittal Global Stock Option Plan 2009-2018 (which replaced the ArcelorMittalShares plan that expired in 2009), ArcelorMittal may grant options to purchase ordinary shares to senior management of ArcelorMittal and its associates for up to 100,000,000 ordinary shares. The exercise price of each option equals not less than the fair market value of ArcelorMittal shares on the grant date, with a maximum term of ten years. Options are granted at the discretion of ArcelorMittal’s ARCG committee, or its delegate. The options vest either ratably upon each of the first three anniversaries of the grant date, or, in total upon the death, disability or retirement of the participant.

With respect to the spin-off of Aperam, the ArcelorMittal Global Stock Option Plan 2009-2018 was amended to reduce by 5% the exercise prices of existing stock options. This change is reflected in the information given below.

Year of grant Initial exercise prices (per option) New exercise prices (per option) August 2008 US$82.57 US$78.44 December 2007 74.54 70.81 August 2007 64.30 61.09 August 2009 38.30 36.38 September 2006 33.76 32.07 August 2010 32.27 30.66 August 2005 28.75 27.31 December 2008 23.75 22.56 November 2008 22.25 21.14

No options have been granted since 2010, although RSUs and PSUs were granted (see ‘long-term incentives: equity based incentives (share unit plans)’).

The fair values for options and other share-based remuneration are recorded as expenses in the consolidated statements of operations over the relevant vesting or service periods, adjusted to reflect actual and expected levels of vesting. The fair value of each option grant to purchase ArcelorMittal common shares is estimated on the date of grant using the Black-Scholes-Merton option pricing model.

The expected life of the options is estimated by observing general option holder behavior and actual historical lives of ArcelorMittal stock option plans. In addition, the expected annualized volatility has been set by reference to the implied volatility of options available on ArcelorMittal shares in the open market, as well as, historical patterns of volatility. Annual review 2013 Governance 86

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The remuneration expense recognized for stock option plans was US$73 million, US$25 million and US$5 million for each of the years ended December 31, 2011, 2012, and 2013, respectively. At the date of the spin-off of Aperam, the fair value of the stock options outstanding were recalculated with the modified inputs of the Black-Scholes-Merton option pricing model, including the weighted average share price, exercise price, expected volatility, expected life, expected dividends, the risk-free interest rate and an additional expense of US$11 million was recognized in the year ended December 31, 2011.

Option activity with respect to ArcelorMittalShares and ArcelorMittal Global Stock Option Plan 2009-2018 is summarized below as of and for each of the years ended December 31, 2011, 2012 and 2013:

Number of options Range of exercise prices (per option) Weighted average exercise price (per option) Outstanding, December 31, 2011 27,670,222 2.15 – 78.44 48.35 Exercised (154,495) 2.15 2.15 Forfeited (195,473) 30.66 – 61.09 33.13 Expired (2,369,935) 2.15 – 78.44 58.23 Outstanding, December 31, 2012 24,950,319 21.14 – 78.44 47.85 Forfeited (139,993) 30.66 – 78.44 40.54 Expired (3,246,700) 21.14 – 78.44 45.80 Outstanding, December 31, 2013 21,563,626 21.14 – 78.44 48.31

Exercisable, December 31, 2011 21,946,104 2.15 – 78.44 52.47 Exercisable, December 31, 2012 23,212,008 21.14 – 78.44 49.14 Exercisable, December 31, 2013 21,563,626 21.14 – 78.44 48.31

The following table summarizes certain information regarding total stock options of the company outstanding as of December 31, 2013:

Options outstanding Weighted average contractual life Options exercisable Exercise prices (per option) Number of options (in years) (number of options) Maturity US$78.44 5,059,350 4.60 5,059,350 August 5, 2018 70.81 13,000 3.95 13,000 December 11, 2017 61.09 3,665,003 3.59 3,665,003 August 2, 2017 36.38 4,893,900 5.60 4,893,900 August 4, 2019 32.07 1,786,103 2.67 1,786,103 September 1, 2016 30.66 5,047,000 6.60 5,047,000 August 3, 2020 27.31 1,096,685 1.65 1,096,685 August 23, 2015 21.14 2,585 4.87 2,585 November 10, 2018 US$21.14 – 78.44 21,563,626 4.81 21,563,626 Annual review 2013 Governance 87

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Performance consideration Remuneration mix The target total remuneration of the chief executive officer and the GMB is structured to attract and retain executives; the amount of the remuneration actually received is dependent on the achievement of superior business and individual performance and on generating sustained shareholder value from relative performance.

The following remuneration charts, which illustrate the various elements of compensation of the chief executive officer and the GMB, are applicable for 2013. For each of the charts below, the columns on the left, middle and on the right, respectively, reflect the breakdown of compensation if targets are not met, met and exceeded.

CEO Remuneration Mix (No pension contribution)

200%

100%

225% 100%

100% 100% 100%

Below threshold Target Maximum

Other GMB Members – Remuneration Mix

160%

80% 180% 80% 13% 13% 13%

100% 100% 100%

Target Target Maximum

Long-term incentives Short-term incentives Other benefits Base salary Annual review 2013 Governance 88

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Share ownership member of senior management directors and senior management In accordance with the beneficially owns less than 1% (including the significant Luxembourg Stock Exchange’s 10 As of December 31, 2013, the of ArcelorMittal’s shares. For shareholder) was 49,500; upon principles of corporate aggregate beneficial share purposes of this section, ordinary vesting of the PSUs subject to governance, independent ownership of ArcelorMittal shares held directly by Mr Lakshmi performance conditions, the non-executive members of directors and senior management Mittal and his wife, Mrs Usha corresponding treasury shares or ArcelorMittal’s board of directors (16 individuals) totaled 1,901,064 Mittal, and options held directly new shares will be transferred to do not receive share options, RSUs ArcelorMittal shares (excluding by Mr Lakshmi Mittal are the beneficiaries on March 30, or PSUs. shares owned by ArcelorMittal’s aggregated with those ordinary 2015. In 2013, the number of significant shareholder and shares beneficially owned by the PSUs granted to directors and The following table summarizes including options to acquire significant shareholder. senior management (including the outstanding share options, as of 1,240,506 ArcelorMittal ordinary significant shareholder) was December 31, 2013, granted to shares that are exercisable within In 2011, the number of 631,077; upon vesting of the the members of the GMB of 60 days of December 31, 2013), ArcelorMittal RSUs granted to PSUs, subject to performance ArcelorMittal (or its predecessor representing 0.11% of the total senior management (including the conditions, the corresponding company Mittal Steel, depending issued share capital of significant shareholder) was treasury shares or new shares will on the year): ArcelorMittal. Excluding options to 82,500; upon vesting of the RSUs, be transferred to the beneficiaries acquire ArcelorMittal ordinary the corresponding treasury shares on June 28, 2016. Neither RSUs shares, these 16 individuals or new shares will be transferred nor PSUs were granted to beneficially own 660,558 to the beneficiaries on September members of the board of directors ArcelorMittal ordinary shares. 29, 2014. In 2012, the number of other than to the chairman in his Other than the significant ArcelorMittal PSUs granted to capacity as chief executive officer. shareholder, each director and

Weighted average Options granted in Options granted in Options granted in Options granted in Options granted in Options granted in exercise price of 2005 2006 2007 2008 2009 2010 Options total options GMB (including chief executive officer) 198,504 222,002 296,000 326,000 328,000 306,500 1,677,006 Total 198,504 222,002 296,000 326,000 328,000 306,500 1,677,006 — Exercise price1 US$27.31 US$32.07 US$61.09 US$78.44 US$36.38 US$30.66 — US$46.23 Term (in years) 10 10 10 10 10 10 — — Expiration date Aug. 23, 2015 Sep. 1, 2016 Aug. 2, 2017 Aug. 5, 2018 Aug. 4, 2019 Aug. 3, 2020 — — 1 Due to the spin-off of Aperam on January 25, 2011, the strike price of outstanding options was reduced by 5% in line with the spin-off ratio. The table above reflects this adjustment.

The following table summarizes outstanding RSUs and PSUs granted to the members of the GMB of ArcelorMittal in 2012 and 2013.

PSUs granted in 2012 PSUs granted in 2013 GMB (including chief executive officer) 43,500 631,077 Total 43,500 631,077 Term (in years) 3 3 Vesting date Mar. 30, 2015 June 28, 2016

In accordance with the Luxembourg Stock Exchange’s 10 principles of corporate governance, independent non-executive members of ArcelorMittal’s board of directors do not receive share options, RSUs or PSUs. Annual review 2013 Governance 89

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Employee share purchase plan The purchase price was equal to Shares purchased under the With respect to the spin-off of (ESPP) the average of the opening and the plan are subject to a three-year ArcelorMittal’s stainless and The annual general shareholders’ closing prices of the ArcelorMittal lock-up period as from the specialty steels business, an meeting held on May 11, 2010 shares trading on the NYSE settlement date, except for addendum to the charter of the adopted an Employee Share on the exchange day immediately the following early exit events: 2008, 2009 and 2010 ESPPs was Purchase Plan (the ‘ESPP 2010’) preceding the opening of the permanent disability of the adopted providing, among other as part of a global employee subscription period, which is employee, termination of the measures, that: engagement and participation referred to as the ‘reference price’, employee’s employment or death • the spin-off shall be deemed an policy. As with the previous less a discount equal to: of the employee. At the end of early exit event for the employee share purchase plans this lock-up period, the employees participants who will be implemented in 2008 and 2009, (a) 15% of the reference price for will have a choice either to sell employees of one of the entities the ESPP 2010’s goal was to a purchase order not exceeding their shares (subject to compliance that will be exclusively strengthen the link between the the lower of 100 shares and the with ArcelorMittal’s insider dealing controlled by Aperam, except in group and its employees and to number of shares (rounded down regulations) or keep their shares certain jurisdictions where align the interests of ArcelorMittal to the nearest whole number) and have them delivered to their termination of employment is employees and shareholders. corresponding to an investment of personal securities account, or not an early exit event; and The main features of the plan, which US$7,500 (the first cap); and make no election, in which case was implemented in November thereafter, shares will be automatically sold. • the Aperam shares to be 2010, were the following: Shares may be sold or released received by ESPP participants (b) 10% of the reference price for within the lock-up period in the will be blocked in line with the The ESPP 2010 was offered to any additional acquisition of shares case of early exit events. During lock-up period applicable to the 183,560 employees in 21 up to a number of shares this period, and subject to the ArcelorMittal shares in relation jurisdictions. ArcelorMittal offered (including those in the first cap) early exit events, dividends paid on to which the Aperam shares are a maximum total number of not exceeding the lower of 200 shares are held for the employee’s allocated based on a ratio of one 2,500,000 shares (0.16% of the shares and the number of shares account and accrue interest. Aperam share for 20 current issued shares on a fully (rounded down to the nearest Employee shareholders are entitled ArcelorMittal shares. diluted basis). A total of 164,171 whole number) corresponding to any dividends paid by shares were subscribed, 1,500 of to an investment of US$15,000 ArcelorMittal after the settlement In connection with ESPP 2010, which were subscribed by (the second cap). date and they are entitled to vote employees subscribed for a total members of the GMB and the their shares. of 164,171 ArcelorMittal shares management committee of the All shares purchased under the (with a ceiling of up to 200 shares company. The subscription price ESPP 2008, 2009 and 2010 are per employee) out of a total of was US$34.62 before discounts. held in custody for the benefit of 2,500,000 shares available for the employees in global accounts subscription. The shares subscribed Pursuant to the ESPP 2010, with BNP Paribas Securities by employees under the ESPP eligible employees could apply to Services, except for shares 2010 program were treasury purchase a number of shares not purchased by Canadian and US shares. Due to the low participation exceeding that number of whole employees, which are held in level in previous years and the shares equal to the lower of 200 custody in one global account complexity and high cost of setting shares and the number of whole with Computershare. up an ESPP, management decided shares that may be purchased for not to implement another ESPP in US$15,000, rounded down to the 2011, 2012 and 2013. nearest whole number of shares. Annual review 2013 Governance 90

Major shareholders and related party transactions

As a result of the company’s and was increased by the nominal value. The increase was on May 8, 2013, 330,464,991 issuance on January 14, extraordinary general meeting of sought by the company in the ordinary shares were available for 2013 of 104,477,612 shareholders held on May 8, 2013 wake the company’s issuance on issuance under the company’s to €8,249,049,316.38, January 16, 2013 of $2.25 billion authorized share capital as at ordinary shares at a price of represented by 1,995,857,213 6% Mandatorily Convertible December 31, 2013. $16.75 per share, the shares and was unchanged at Subordinated Notes due 2016 company’s issued share December 31, 2013. (the ‘MCNs’) in order to cover capital was increased to conversions of the 2013 MCNs Major shareholders €6,883,209,119.84 The May 8, 2013 extraordinary and other outstanding convertible The following table sets out represented by general meeting of shareholders bonds of the company. The information as of December 31, 1,665,392,222 ordinary approved an increase of the increase would also permit the 2013 with respect to the company to return to the historical shares and was unchanged company’s authorized share capital beneficial ownership of by 19.84% of its then issued share level of flexibility of 10% of share at December 31, 2013. ArcelorMittal ordinary shares by capital, i.e., by capital following the issue of new each person who is known to be The company’s authorized share €6,883,209,119.84, represented shares on January 14, 2013. the beneficial owner of more capital, including the issued share by 1,665,392,222 shares without than 5% of the shares and all capital, was €7,725,260,599.18, nominal value, resulting in an Following the issue of new shares directors and senior management represented by 1,773,091,461 authorized share capital of on January 14, 2013 and as a group. shares, at December 31, 2012 €8,249,049,316.38 represented subsequent increase in the by 1,995,857,213 shares without company’s authorized share capital

ArcelorMittal ordinary shares 1 Number % Significant shareholder2 656,031,811 39.39 Treasury shares 3 10,115,668 0.61 Other public shareholders 999,244,743 60 Total 1,665,392,222 100.00 Of which: directors and senior management 4 1,901,064 0.11 1 For purposes of this table, a person or group of persons is deemed to have beneficial Nuavam and Lumen (within the meaning set forth in Rule 13d-3 of the Exchange Act). ownership of any ArcelorMittal ordinary shares as of a given date on which such person or Accordingly, Mr Mittal was the beneficial owner of 655,986,811 ArcelorMittal ordinary group of persons has the right to acquire such shares within 60 days after December 31, shares, Mrs Mittal was the beneficial owner of 655,293,711 ordinary shares and the 2013 upon exercise of vested portions of stock options. All stock options that have been Significant Shareholder was the beneficial owner of 656,031,811 ordinary shares. Excluding granted to date by ArcelorMittal have vested. options, Mr Lakshmi Mittal and Mrs Usha Mittal together beneficially owned 655,595,311 2 For purposes of this table, ordinary shares owned directly by Mr Lakshmi Mittal and his wife, ArcelorMittal ordinary shares at such date. Mrs Usha Mittal, and options held directly by Mr Lakshmi Mittal, are aggregated with those 3 Represents ArcelorMittal ordinary shares repurchased pursuant to share repurchase programs ordinary shares beneficially owned by the Significant Shareholder. At December 31, 2013. in prior years, fractional shares returned in various transactions, and the use of treasury shares Mr Lakshmi Mittal and his wife, Mrs Usha Mittal, had direct ownership of ArcelorMittal in various transactions in prior years; excludes (1) 1,240,506 stock options that can be ordinary shares and indirect ownership, through the Significant Shareholder, of two holding exercised by senior management (other than Mr Mittal) and (2) 436,500 stock options that companies that own ArcelorMittal ordinary shares – Nuavam Investments S.à r.l. (‘Nuavam’) can be exercised by Mr Mittal, in each case within 60 days of December 31, 2013. Holders and Lumen Investments S.à r.l. (‘Lumen’). Nuavam, a limited liability company organized of these stock options are deemed to beneficially own ArcelorMittal ordinary shares for the under the laws of Luxembourg, was the owner of 112,338,263 ArcelorMittal ordinary purposes of this table due to the fact that such options are exercisable within 60 days. shares. Lumen, a limited liability company organized under the laws of Luxembourg, was the 4 Includes shares beneficially owned by directors and members of senior management listed in owner of 542,910,448 ArcelorMittal ordinary shares. Mr Mittal was the direct owner of this annual report; excludes shares beneficially owned by Mr Mittal. Note that (i) stock options 301,600 ArcelorMittal ordinary shares and held options to acquire an additional 436,500 included in this item that are exercisable within 60 days are excluded from ‘Treasury Shares’ ArcelorMittal ordinary shares, all of which are, for the purposes of this table, deemed to be above (see also note 3 above) and (ii) ordinary shares included in this item are included in beneficially owned by Mr Mittal due to the fact that these options are exercisable within 60 ‘Other Public Shareholders’ above. days. Mrs Mittal was the direct owner of 45,000 ArcelorMittal ordinary shares. Mr Mittal, Mrs Mittal and the Significant Shareholder shared indirect beneficial ownership of 100% of each of

On January 16, 2013, The ArcelorMittal ordinary shares Barcelona), which are registered in name of the shareholder, the ArcelorMittal issued US$2.25 may be held in registered form ArcelorMittal’s shareholders’ number of shares held by such billion aggregate principal amount only. Registered shares may register, or shareholder and the amount of its 6% Mandatorily Convertible consist of: paid up on each share in the Notes due 2016, of which Lumen c. ArcelorMittal European Registry shareholder register of subscribed for US$300 million in a. shares traded on the NYSE, or Shares, which are registered in a ArcelorMittal. principal amount. Based on the New York Registry Shares, which local shareholder register kept by methodology used above, as of are registered in a register kept by or on behalf of ArcelorMittal by At December 31, 2013, 2,545 December 31, 2013, assuming or on behalf of ArcelorMittal by its BNP Paribas Securities Services in shareholders other than the conversion of all mandatorily New York transfer agent, Amsterdam, or directly on significant shareholder, holding an convertible notes, the percentage ArcelorMittal’s Luxembourg aggregate of 52,836,475 of ordinary shares owned by the b. shares traded on Euronext shareholder register without being ArcelorMittal ordinary shares were significant shareholder would be Amsterdam by NYSE Euronext, held on ArcelorMittal’s local Dutch registered in ArcelorMittal’s 37.42% (assuming conversion of Euronext Paris by NYSE Euronext, shareholder register. shareholder register, representing all notes at the maximum the regulated market of the approximately 3.17% of the conversion ratio) or 37.79% Luxembourg Stock Exchange and Under Luxembourg law, the ordinary shares issued (including (assuming conversion of all notes the Spanish Stock Exchanges ownership of registered shares is treasury shares). at the minimum conversion ratio). (Madrid, Bilbao, Valencia and evidenced by the inscription of the Annual review 2013 Governance 91

Major shareholders and related party transactions continued

At December 31, 2013, there Acquisition of ordinary shares any portion of any loan made the relationship between Aperam were 233 shareholders holding an and mandatorily convertible there under at any time and that and ArcelorMittal following the aggregate of 94,308,088 New notes in the January 2013 all outstanding loans would spin-off, as well as certain York Shares, representing offering of such securities by terminate on the date which was agreements relating to financing. approximately 5.66% of the ArcelorMittal, and entry into three business days after the date ordinary shares issued (including the lock-up letter and share on which a general meeting of The transitional services treasury shares). ArcelorMittal’s lending agreement in shareholders of ArcelorMittal had agreement between ArcelorMittal knowledge of the number of New connection therewith approved a resolution approving and Aperam expired at year-end York Shares held by US holders is ArcelorMittal issued 104,477,612 sufficient authorized share capital 2012. The parties agreed to based solely on the records of its ordinary shares in an offering that and authorizing the board of renew a limited number of New York transfer agent regarding closed on January 14, 2013 directors of the company to cancel services where expertise and registered ArcelorMittal (the ‘Share Offering’) and issued the preferential subscription right bargain powers create values ordinary shares. US$2,250,000,000 aggregate of existing shareholders to allow for both parties. ArcelorMittal principal amount of 6.00% return to Lumen of all borrowed will continue to provide certain At December 31, 2013, mandatorily convertible ordinary shares. Under the share services during 2014 relating 862,998,948 ArcelorMittal subordinated notes due 2016 lending agreement, Lumen had no to certain areas, including ordinary shares were held through (the ‘MCNs’) in an offering that rights (including voting or environmental and technical the Euroclear/Iberclear clearing closed on January 16, 2013. disposition rights) with respect to support, IT services relating to system in The Netherlands, France, Lumen subscribed for 17,910,448 any ordinary shares that had been the global wide area network Luxembourg and Spain. ordinary shares in the share loaned to ArcelorMittal and not yet contract, press clipping offering and acquired US$300 returned to Lumen. Subject to this communication, ArcelorMittal million in principal amount of condition being met, it was University training in human Related party MCNs. The underwriting expected that any ordinary shares resources, maintenance and transactions agreement entered into in to be delivered by ArcelorMittal to customization of back office connection with such offerings Lumen upon termination of the finance software and registered ArcelorMittal engages in certain provided as a closing condition loan(s) would be newly issued shareholder management. commercial and financial that Lumen and Nuavam each ordinary shares issued in favor of transactions with related parties, execute a lock-up letter whereby Lumen (with a cancellation of the In the area of research and including associates and joint they would each agree not to shareholders’ preferential development, Aperam entered ventures of ArcelorMittal. Please offer, sell, contract to sell, pledge, subscription right). The into an arrangement with refer to note 16 of ArcelorMittal’s grant any option to purchase, extraordinary general meeting of ArcelorMittal to establish a consolidated financial statements. make any short sale or otherwise shareholders of ArcelorMittal that framework for future cooperation dispose of, directly or indirectly, took place on May 8, 2013 (the between the two groups in Shareholder’s agreement any ordinary shares, the acquired ‘May 2013 EGM’) approved relation to certain ongoing or new The significant shareholder, a MCNs or other securities sufficient authorized share capital research and development holding company owned by the exchangeable for or convertible and authorized the board of programs. Moreover, Aperam and significant shareholder and into ordinary shares owned by directors of the company to cancel ArcelorMittal are keeping open the ArcelorMittal are parties to a them for a period of at least the preferential subscription right possibility to enter into ad hoc shareholder and registration rights 180 days from January 9, 2013, of existing shareholders to allow cooperation agreements for agreement (the ‘shareholder’s subject to certain limited return to Lumen of all borrowed future research and agreement’) dated August 13, exceptions or the prior written ordinary shares. Accordingly, the development purposes. 1997. Pursuant to the consent of the representatives. share lending agreement with shareholder’s agreement and In connection with the share Lumen was terminated three The purchasing and sourcing of subject to the terms and offering and the offering of the business days after the date of the raw materials generally were not conditions thereof, ArcelorMittal MCNs, ArcelorMittal entered into May 2013 EGM. covered by the transitional shall, upon the request of certain a share lending agreement with services agreement. Aperam is holders of restricted ArcelorMittal Lumen on January 9, 2013, Agreements with Aperam responsible for the sourcing of its shares, use its reasonable efforts pursuant to which Lumen agreed post-stainless steel spin-off key raw materials, including nickel, to register under the Securities to make available for borrowing In connection with the spin-off of chromium, molybdenum and Act of 1933, as amended, the sale by ArcelorMittal up to a maximum its stainless steel division into a stainless steel scrap. However, of ArcelorMittal shares intended to amount of 48.9 million ordinary separately focused company, under the terms of the purchasing be sold by those holders. By its shares in exchange for a loan fee Aperam, which was completed on services agreement, Aperam still terms, the shareholder’s of US$0.00046 per lent ordinary January 25, 2011, ArcelorMittal relies on ArcelorMittal for advisory sgreement may not be amended, share, accruing daily from and entered into several agreements services in relation to the other than for manifest error, including the date on which the with Aperam. These agreements negotiation of certain contracts except by approval of a majority of loaned ordinary shares were include a master transitional with global or large regional ArcelorMittal’s shareholders (other delivered to the borrower to, but services agreement dated January suppliers, including those relating than the significant shareholder excluding, the date of return of 25, 2011 (the ‘transitional to the following key categories: and certain permitted transferees) the borrowed ordinary shares. services agreement’) for support energy (electricity, natural gas, at a general shareholders’ meeting. Under the share lending for/from corporate activities, a industrial gas), operating materials agreement, deliveries of the purchasing services agreement for (rolls, electrodes, refractory Memorandum of understanding loaned shares by Lumen was to negotiation services from materials) and industrial products The memorandum of occur on the dates an equal ArcelorMittal Purchasing and a and services. The purchasing understanding entered into in number of ordinary shares were sourcing services agreement for services agreement also permits connection with the Mittal Steel required to be delivered by negotiation services from Aperam to avail itself of the acquisition of Arcelor, certain ArcelorMittal pursuant to the ArcelorMittal Sourcing, certain services and expertise of provisions of which expired in terms of the MCNs. The share commitments regarding cost- ArcelorMittal for certain capital August 2009 and August 2011 lending agreement provided that sharing in Brazil and certain other expenditure items. The purchasing (see Material contracts below). ArcelorMittal could terminate all or ancillary arrangements governing services agreement and the Annual review 2013 Governance 92

Major shareholders and related party transactions continued

sourcing services agreement were employees. On May 8, 2013, the conform with the corporate Once the Significant Shareholder each entered into for an initial term annual general meeting of governance aspects of the NYSE exceeds the threshold mentioned of two years, which was to expire shareholders approved the GMB listing standards applicable to in the first paragraph of this on January 24, 2013. However, PSU Plan, which provides for the non-U.S. companies and Ten “Standstill” subsection or the 45% both agreements were extended grant of PSUs to GMB members. Principles of Corporate limit, as the case may be, as a for an additional year on similar Until the introduction of the GMB Governance of the Luxembourg consequence of any corporate terms. It is expected that the term PSU Plan in 2013, GMB members Stock Exchange. event set forth in (1) or (2) above, of the purchasing services were eligible to receive RSUs and it shall not be permitted to agreement will be further PSUs under the ArcelorMittal The following summarizes the increase the percentage of shares extended until the end of January Equity Incentive Plan. Since 2011, main provisions of the MoU that it owns or controls in any way 2015 on similar terms. It is also the company has made the remain in effect or were in effect except as a result of subsequent expected that the term of the following grants to employees in 2013. occurrences of the corporate sourcing servicing agreement will under the ArcelorMittal Equity events described in (1) or (2) be extended until the end of Incentive Plan: a grant of RSUs in Standstill above, or with the prior written January 2015, although its scope September 2011, a grant of PSUs The Significant Shareholder agreed consent of a majority of the will be limited to IT maintenance in March 2012, a grant of both not to acquire, directly or independent directors on the and support until Aperam switches RSUs and PSUs in March 2013, indirectly, ownership or control of company’s Board of Directors. to its own system. and a grant of both RSUs and PSUs an amount of shares in the capital in September 2013 (the GMB stock of the company exceeding If subsequently the Significant In connection with the spin-off, members were excluded from the the percentage of shares in the Shareholder sells down below the management also renegotiated an afore-mentioned 2013 grants in company that it will own or control threshold mentioned in the first existing Brazilian cost-sharing light of the creation of the GMB following completion of the Offer paragraph of this “Standstill” agreement between, inter alia, PSU Plan). In June 2013, the (as defined in the MoU) for Arcelor subsection or the 45% limit, as the ArcelorMittal Brasil and Aperam company made a grant of PSUs and any subsequent offer or case may be, it shall not be Inox América do Sul S.A. (formerly under the GMB PSU Plan to the compulsory buy-out, except with permitted to exceed the threshold known as ArcelorMittal Inox Brasil), GMB members. For further details, the prior written consent of a mentioned in the first paragraph of pursuant to which starting as of see also “Other benefits” above. majority of the independent this “Standstill” subsection or the April 1, 2011, ArcelorMittal Brasil directors on the company’s Board 45% limit, as the case may be, continued to perform only Memorandum of Understanding of Directors. Any shares acquired other than as a result of any purchasing, insurance and real On June 25, 2006, Mittal Steel, in violation of this restriction will corporate event set out in (1) or estate activities for the benefit of the Significant Shareholder and be deprived of voting rights and (2) above or with the prior written certain of Aperam’s Brazilian Arcelor signed a binding shall be promptly sold by the consent of a majority of the subsidiaries, with costs being Memorandum of Understanding Significant Shareholder. independent directors. shared on the basis of cost (“MoU”) to combine Mittal Steel Notwithstanding the above, if (and allocation parameters agreed and Arcelor in order to create the whenever) the Significant Finally, the Significant Shareholder between the parties. Since the world’s leading steel company. In Shareholder holds, directly and is permitted to own and vote demerger of ArcelorMittal April 2008, the board of indirectly, less than 45% of the shares in excess of the threshold BioEnergia Ltda in July 2011, its directorsapproved resolutions then-issued company shares, the mentioned in the first paragraph of payroll functions have also been amending certain provisions of the Significant Shareholder may this “Standstill” subsection or the handled by ArcelorMittal Brasil. MoU in order to adapt it to the purchase (in the open market or 45% limit mentioned above if it The real estate and insurance company’s needs in the post- otherwise) company shares up to acquires the excess shares in the activities of Aperam’s Brazilian merger and post-integration such 45% limit. In addition, the context of a takeover bid by a subsidiaries have not been handled phase. Significant Shareholder is also third party and (1) a majority of by ArcelorMittal Brasil since permitted to own and vote shares the independent directors of the January 1, 2013 and June 30, On the basis of the MoU, Arcelor’s in excess of the threshold company’s board of directors 2013, respectively. board of directors recommended mentioned in the immediately consents in writing to such Mittal Steel’s offer for Arcelor and preceding paragraph or the 45% acquisition by the Significant Certain services will continue to be the parties to the MoU agreed to limit mentioned above, if such Shareholder or (2) the Significant provided to Aperam pursuant to certain corporate governance and ownership results from (1) Shareholder acquires such shares existing contracts with other matters relating to the subscription for shares or rights in in an offer for all of the shares of ArcelorMittal entities that it has combined ArcelorMittal group. proportion to its existing the company. specifically elected to assume. Certain provisions of the MoU shareholding in the company relating to corporate governance where other shareholders have not Non-compete were incorporated into the Articles exercised the entirety of their For so long as the Significant Material Contracts of Association of ArcelorMittal at rights or (2) any passive crossing Shareholder holds and controls at Share Lending Agreement the extraordinary general meeting of this threshold resulting from a least 15% of the outstanding Please refer to Related Party of the shareholders on reduction of the number of shares of the company or has Transactions above. November 5, 2007. company shares (e.g., through representatives on the company’s self-tender offers or share board of directors or GMB, the ArcelorMittal Equity Incentive Certain additional provisions of the buy-backs) if, in respect of (2) Significant Shareholder and its Plan and GMB PSU Plan MoU expired effective August 1, only, the decisions to implement affiliates will not be permitted to On May 10, 2011, the annual 2009 and on August 1, 2011. such measures were taken at a invest in, or carry on, any business general shareholders’ meeting ArcelorMittal’s corporate shareholders’ meeting in which the competing with the company, approved the ArcelorMittal Equity governance rules will continue to Significant Shareholder did not except for PT ISPAT Indo. Incentive Plan, a new equity-based reflect, subject to those provisions vote or by the company’s board of incentive plan that replaced the of the MoU that have been directors with a majority of Global Stock Option Plan. The incorporated into the Articles of independent directors voting ArcelorMittal Equity Incentive Plan Association, the best standards of in favor. provides for the grant of RSUs and corporate governance for PSUs to eligible company comparable companies and to Annual review 2013 Governance 93

Major shareholders and related party transactions continued

Minority shareholders litigation complaints (plainte avec On January 8, 2008, ArcelorMittal constitution de partie civile) of received a writ of summons on AAA and several hedge funds behalf of four hedge fund (who quantified their total alleged shareholders of Arcelor to appear damages at €246.5 million), before the civil court of including those who filed the Luxembourg. The summons was claims before the Luxembourg also served on all natural persons courts described (and sitting on the board of directors of quantified) above. ArcelorMittal at the time of the merger and on the Significant Shareholder. The plaintiffs alleged in particular that, based on Mittal Steel’s and Arcelor’s disclosure and public statements, investors had a legitimate expectation that the exchange ratio in the second-step merger would be the same as that of the secondary exchange offer component of Mittal Steel’s June 2006 tender offer for Arcelor (i.e., 11 Mittal Steel shares for seven Arcelor shares), and that the second-step merger did not comply with certain provisions of Luxembourg company law. They claimed, inter alia, the cancellation of certain resolutions (of the board of directors and of the Shareholders meeting) in connection with the merger, the grant of additional shares, or damages in an amount of approximately €180 million. By judgment dated November 30, 2011, the Luxembourg civil court declared all of the plaintiffs’ claims inadmissible and dismissed them. The judgment was appealed in May 2012 and the appeal proceedings are ongoing.

On May 15, 2012, ArcelorMittal received a writ of summons on behalf of Association Actionnaires d’Arcelor (“AAA”), a French association of former minority shareholders of Arcelor, to appear before the civil court of Paris. In such writ of summons, AAA claimed (on grounds similar to those in the Luxembourg proceedings summarized above) inter alia damages in a nominal amount and reserved the right to seek additional remedies including the cancellation of the merger. The proceedings before the civil court of Paris have been stayed, pursuant to a ruling of such court on July 4, 2013, pending a preparatory investigation (instruction préparatoire) by a criminal judge magistrate (juge d’instruction) triggered by the Annual review 2013 Governance 94

Additional information about ArcelorMittal

ArcelorMittal produces a the principal finance vehicle of the range of publications to ArcelorMittal group and, in this inform its shareholders. connection, it issued a number of bonds listed on the Luxembourg These documents are Stock Exchange. ArcelorMittal available in various formats: Finance’s CSSF issuer number they can be viewed online, is E-0225. downloaded or obtained on request in paper format. Please refer to www.arcelormittal.com to the Investors menu, under Financial Reports. Corporate responsibility ArcelorMittal’s corporate responsibility is detailed in a report that will be published during the second quarter of 2014 and will be available on www.arcelormittal.com in the Corporate Responsibility menu.

ArcelorMittal as parent company of the ArcelorMittal group ArcerlorMittal, incorporated under the laws of Luxembourg, is the parent company of the ArcelorMittal group and is expected to continue this role during the coming years. The company has no branch offices and generated a net loss of US$1,603 million in 2013.

Group companies listed on the Luxembourg Stock Exchange ArcelorMittal’s securities are traded on several exchanges, including the Luxembourg Stock Exchange, and its primary stock exchange regulator is the Luxembourg CSSF (Commission de Surveillance du Secteur Financier). ArcelorMittal’s CSSF issuer number is E-0001. In addition to ArcelorMittal, the securities of one other ArcelorMittal group company are listed on the Luxembourg Stock Exchange. ArcelorMittal Finance S.C.A. is a société en commandite par actions with registered office address at 19, avenue de la Liberté, L-2930 Luxembourg, Grand Duchy of Luxembourg, registered with the Registre du Commerce et des Sociétés Luxembourg under number B 13.244. ArcelorMittal Finance is indirectly 100% owned by ArcelorMittal. ArcelorMittal Finance was, until June 18, 2008, Annual review 2013 Governance 95

Shareholder information

ArcelorMittal is listed on the prices. As the European economy Investor relations Analysts and moved out of recession, our share stock exchanges of New York institutional investors (MT), Amsterdam (MT), price recovered in the second half, By implementing high standards of outperforming the Global Metals, financial information disclosure and Paris (MT), Luxembourg As the world’s leading steel Mining & Steel sector. providing clear, regular, transparent company and major investment (MT) and on the Spanish and even-handed information to stock exchanges of vehicle in the steel sector, Dividend all its shareholders, ArcelorMittal ArcelorMittal constantly seeks to Barcelona, Bilbao, Madrid aims to be the first choice for develop relationships with financial and Valencia (MTS). Considering the challenging global investors in the sector. analysts and international economic conditions, and the investors. Depending on their Indexes company’s priority to deleverage, To meet this objective and provide geographical location, investors ArcelorMittal’s board of directors information to fit the needs of all may use the following e-mails: ArcelorMittal is member of more parties, ArcelorMittal implements proposes to maintain the annual institutionalsamericas@ than 120 indices including the an active and broad investor dividend payment at US$0.20/ arcelormittal.com following leading indices: DJ STOXX communications policy: conference share for 2014. Subject to investor.relations@ 50, DJ EURO STOXX 50, CAC40, calls, road shows with the financial shareholder approval at the next arcelormittal.com AEX, FTSE Eurotop 100, MSCI annual general meeting on May 8, community, regular participation Pan-Euro, DJ Stoxx 600, S&P 2014, this dividend will be paid on at investor conferences, plant Europe 500, Bloomberg World July 15, 2014. visits and meetings with individual Socially responsible Index, IBEX 35 Index and NYSE investors. investors Composite Index. Recognised for Once the deleveraging plan is its commitment to Sustainable complete and market Individual investors The Investor Relations team is also Development, ArcelorMittal is also conditions improve, the board a source of information for the a member of the FTSE4Good intends to progressively increase ArcelorMittal’s senior management growing socially responsible Index and Dow Jones the dividend. plans to meet individual investors investment community. The team Sustainability Index. and shareholder associations in organises special events on The dividend payments will be paid road shows throughout 2014. A ArcelorMittal’s corporate Share price as a single payment in 2014 (see dedicated toll free number for responsibility strategy and answers financial calendar below). individual investors is available at all requests for information sent to performance Dividends are announced in US$ +352 4792 3198. Requests for the group [email protected] During 2013 the price of and paid in US$ for shares listed on information or meetings on the ArcelorMittal shares increased by the New York Stock Exchange and virtual meeting and conference Credit and fixed income paid in euros for shares listed on centre may also be sent to: 2% in US dollar terms, investors outperforming the Global Metals, the European stock exchanges PrivateInvestors Mining & Steel sector which (The Netherlands, France, Spain, @arcelormittal.com Credit, fixed income investors and decreased by 9% over the period. and Luxembourg). rating agency are followed by a Our share price declined from dedicated team from investor January through April as global relations: markets reacted to a falling iron creditfixedincome@ ore price and its impact on steel arcelormittal.com

Share price performance since 1st August 2006 (USD)

330

280

230 ArcelorMittal 180

130 Global Metals & Mining index 80

30 Feb-11 Feb-11 Feb-07 Feb-08 Feb-09 Feb-10 Feb-12 Feb-13 Aug-11 Aug-11 Nov-11 Nov-11 Aug-06 Aug-07 Aug-08 Aug-09 Aug-10 Aug-12 Aug-13 Nov-06 Nov-07 Nov-08 Nov-09 Nov-10 Nov-12 Nov-13 May-11 May-11 May-07 May-08 May-09 May-10 May-12 May-13 Annual review 2013 Governance 96

Shareholder information continued

Financial calendar The schedule is available on ArcelorMittal’s website www.arcelormittal.com under Investors > Equity investors > Dividends

Financial results* February 7, 2014 Earnings release for 4th quarter 2013 and 12 months 2013 May 9, 2014 Earnings release for 1st quarter 2014 August 1, 2014 Earnings release for 2nd quarter 2014 and 6 months 2014 November 7, 2014 Earnings release for 3rd quarter 2014 and 9 months 2014 * Earnings results are issued before the opening of the stock exchanges on which ArcelorMittal is listed.

General meeting of shareholders May 8, 2014 Ordinary meeting of shareholders in Luxembourg

Institutional investor events March 10, 2014 Investor day with Group Management Board members

Dividend payment (subject to shareholder approval) July 15, 2014 Annual payment of base dividend

Contact the investor relations team on the information detailed above or please visit www.arcelormittal.com/corp/investors/contact