Annual Report - 1 - 2010 Annual Report - 2 - 2010 INSTITUTIONAL REFERENCES Name Industrial & Mining National Company (Société Nationale Industrielle & Minière) « SNIM» Main office Nouadhibou, Mauritania SNIM is a limited company under Mauritanian law, governed by the law of 01.18..2000 Legal Form bearing Commercial law and by the law N° 78-104 dated on 04/15/78 bearing creation of SNIM. SNIM was created by the law N°78-104 on 04/15/1978 under the name « Industrial & Constitution Date Mining National Company» (succeeding the former MIFERMA that was created in 1952). and Duration The duration of the company is 99 years from January 1st, 1978, except in case of continuation or early dissolution provided for in its statutes. Business Purpose The business purpose of the company is : Extraction and sale of iron ore as well as promotion of research and exploitation of mineral resources. Fiscal Year The fiscal year starts on January 1st and ends on December 31. Trade Register SNIM is regsitered in the Trade Register of the Commercial Court of Nouakchott under the N° 4579 of the analytical register. SNIM’S SHAREHOLDING (in %) MauritanianEtat Mauritanien; State 78,35 IBK; 7,17 ARMICO; 5,66 Irak Fund; 4,59 ONHYM; 2,3 BID ; 1,79 Mauritanian Privates Privé mauritanien; 0,14 Contacts Main Office Paris Branch Nouakchott Representation Nouadhibou, Mauritanie 7, rue du 4 Septembre Nouakchott - Mauritanie P.O. Box 42 75002 Paris - France P.O.Box : 40259 Phone : +222 4574 10 21 Tel : +33 1 42 96 80 90 Phone: + 222 45 29 90 50 Fax : +222 4574 53 96 Fax : +33 1 42 96 12 26 Fax : +222 4525 36 89 Email : [email protected] Email : [email protected] Email : [email protected] Annual Report Company’s Information - 3 - 2010 GOVERNANCE General Assembly Audit committee The legally constituted General Assembly of the Company represents all the shareholders. Every shareholder The Board of directors created has the right to attend General among its members, an Audit Assembly meetings or to be committee consisted of 5 represented. The General Assembly administrators. It approves the names administrators and appoints proposition of the name of statutory auditors. auditors and the annual program of the internal audit. It examines audit Board of Directors reports and formulates the necessary The Company is administered by a recommendations. Board of directors that is consisted of 12 members, appointed by the Managing Committee Ordinary General Assembly. The Board of Directors meets at least three A managing committee, including (3) times during a same fiscal year. SNIM’s deputy directors, Railroad and The Board of Directors delegated to the Administrator Chief Executive Port managers and that of Officer (ACEO) extended and Exploitation Site, meets around necessary powers for General Administrator Chief Executive Officer. Management and current It examines questions relating to the administration of the Company with management of the company and to power of partial or total replacement. its orientations. Executive Committee Committee of Coordination The Board of Directors created, among its members, an Executive A Committee of Coordination that Committee consisted of 4 gathers Administrator Chief Executive administrators. It prepares the sessions Officer, deputy directors, main of the Board of Directors and acts as advisers and sector-based managers a Markets Commission to approve of SNIM, is held every month to review any market that is superior or equal to the production program and the € 2 million. It meets at least three (3) execution of the budget. times a year. Annual Report - 4 - 2010 BOARD OF DIRECTORS Full Name Position Institution Mohamed Cherif Chairman of BD Mauritanian State Jewad Al-Qallaf Vice-Chairman Industrial Bank of Kuwait (IBK) Mohamed Abdellahi Ould Administrator CEO- Mauritanian State Oudaâ SNIM Brahim Ould Chadhli Administrator Mauritanian State Brahim Ould Abdellahi Ould Administrator Mauritanian State Ravé Yeslem Ould Hamdane Administrator Mauritanian State Cheikh El Kébir O/ Chbih Administrator Mauritanian State Ahmad Mashaqbah Administrator Arab Mining Company Hussien Mohsen Obied Administrator Iraq Fund For External Development Hydrocarbons and Mines Abdellah Mouttaqi Administrator National Office (Morocco) Ahmed Benali Administrator Islamic Bank of Development Moulay Sidi Mohamed Abass Administrator BMCI (Mauritanian Privates) Session of the Board of directors Annual Report Company’s Information - 5 - 2010 MESSAGE OF THE CHAIMAN OF THE BOARD OF DIRECTORS Dear shareholders , These exceptional financial results will The World strengthen the major role of our company in economy will have the national economic development by been marked, contributing more to the evolution of the GDP, during the last to the export earnings, to the Budget, to the three years, by a fight against unemployment and to the deep crisis which transfer of skills. was translated by a harder difficulty of The integration of SNIM in the State economy access to financial strengthened also in 2010 by the creation of resources, and by a shrinkage of the market of two new subsidiaries in the field of Insurances our business sector. (DAMANE INSURANCES) and in that of the Management of Oil Installations ( GIP). The resumption of growth, observed since the beginning of year 2010, and which was SNIM’s definitive commitment to place human translated by a very strong pressure on the iron resources in the heart of its policies and ore, as well in the developed countries which strategies of development materialized in 2010 constitute the main part of our traditional by the extension of social benefits, with, in customers, as in emerging countries, led to a particular, the approval of the program of neglecting, by mining producers, of the classic social modernization the most important mechanism of annual setting of prices for the sectors of which will have been the benefit of a system of quarterly prices setting, implementation of the supplementary based on spot average. pension, the modernization of medical infrastructures and the housing policy. It is in the context of this world industrial and steel-making renewal that SNIM was able to In the term of a year that was rich in happy obtain globally satisfactory operating profits events, and at the beginning of another other by selling 11,1 million tons of iron ore among full of promises, I make a commitment in the which 57 % in Europe and 43 % in Asia and to name of the Board of directors, to spare no get an exceptional financial balance carried efforts to allow our Company to realize its in particular by the rise in prices of iron ore. objectives of development thanks to a more steady mining research, a better knowledge The signature of PDM financing Agreements of its deposits, a substantial increase of its and the launch of its various constituents, production capacities, and a control of the further to levying all precedent conditions to costs. the first payments, a stronger control of the quality of our products and the effectiveness In the name of the Board, I insist on of a balanced presence on the world market congratulating all our employees for the work will have made of year 2010 one of our best carried out during the past year and to thank fiscal years. all customers, investors and suppliers for their renewed confidence. The increase of sales volume, the increase of the prices of the ton and the control of costs My thanks and my congratulations also go to were translated by a considerable progress of our shareholders and to Mauritanian State the our turnover which passes from 139 009 MUM continuous support of which to SNIM allowed it in 2009 to 303 522 MUM in 2010; our profit so to reach new records of performances in 2010. strongly progressed, passing from 32 684 MUM to 158 730 MUM in 2010. The Chaiman of the Board of Directors MOHAMED CHERIF Annual Report - 6 - 2010 STRICKING FACTS Reopening of T4/T5 sites. Historic Record of Crushed in the RHEIN Extension of the electrical air network 30KV and 5KV in Rhein and TO14. Giving up of the annual mechanism of pricing (Benchmark) for the benefit of a quarterly system based on the average of the spot Strong increase of the turnover and the profit Creation of two new subsidiaries: DAMANE INSURANCES, Management of Oil Installations (GIP). Effective Starting up of the majority of construction sites of PDM projects Temporary Reception of port installations rehabilitation Signature of the contract of 5MW Wind Power Plant Project in Nouadhibou Setting a complementary system of pension Annual Report - 7 - 2010 World Market Situation: After particularly difficult years of 2008 World plan, the production of steel and 2009, World economy globally increased by 16,7 % with regard to got better in 2010. A real growth was 2009. The main increases were registered in the emerging countries registered in the USA (38,5 %), in and even in certain developed Japan (25,3 %) and in Europe (24,6 %). countries, as the United States and Most of the installations of production, Germany. In Europe, the economy stopped since 2009, restarted to slowly recovers, but it remains answer a more and more increasing threatened by financial instability and demand. the weight of national debt. Chinese production, which was already raised during the years of The steel-making sector took crisis, registered a growth rate of 9,3%. advantage of this resumption. On the Attracted by steel consumption, the imported quantities of iron ore also followed the trend. The main demand results from the Chinese market which continues to attract half of the World trade of ores. This strong pressure on the product is at the origin of the deep changes registered by the market in 2010: - Substantial Increase of the prices: approximately 77 %. - Substitution of the classic mechanism of annual pricing (Benchmark) by a quarterly system based on the average of the spot.