Mining is a core part of ArcelorMittal’s business. Building up our own mining assets and becoming self-sufficient in iron ore and coal are crucial not just because they are the raw materials for steelmaking, but also because they can generate growth in our business. It also allows us to increase significantly our supply of raw materials to the external international market.
“We’ve got the people. We’ve got the mines, the assets, and the ore bodies. It is really our responsibility to make them now grow in a way that adds sustainable value for the company.”
Phil du Toit, member of the management committee responsible for exploration and mining development
We are among the five largest mining companies in the world, and in 2011 we produced 54.1 million tonnes of iron ore, 8.3 million tonnes of coking coal. Our goal is to produce 100 million tonnes of iron ore and 11 million tonnes of coking coal by 2015, with an increasing supply to customers in diverse markets.
In 2011, ArcelorMittal began to report financial results for mining as a separate part of the business, enabling us to make better operating decisions and optimise capital allocation for mining. With US$1.4bn in EBITDA for the first half of 2011, mining represents around 25% of ArcelorMittal’s first half earnings.
At the end of 2010, we estimated our total iron ore reserve to be 4.3 billion tonnes of crude ore. Our crude coal assets are estimated to be 347 million tonnes by the end of 2012, with an average yield of 52%.
With operations all around the world, we are strategically positioned to ship materials to different markets, and our growth strategy involves both expansion of existing mines and developing untapped reserves. At the same time, we strive to improve our operating costs for business growth at an optimal capital cost per tonne of production.
New projects
ArcelorMittal’s acquisition of 70% shareholding in Baffinland Iron Ore Mines in Canada, which contains 373 million tonnes as reserves, has consolidated our position as a significant iron ore producer now and in the future.
The acquisition of Baffinland is also important because it gives us access to a high-quality iron ore reserve. As a greenfield venture, we will work towards developing the Tier 1 iron ore deposit of the Mary River project, which is located in Canada’s Arctic. The mine will yield a direct shipping mix of 75% high-grade lump and 25% fines, which will need only crushing and screening. We also have expansions under way at our other mines in Canada. With an annual production of 15 million tonnes, we account for 40% of the country’s iron ore production, and are expanding concentrator capacity to achieve 24 million tonnes of yearly production by 2013. In Brazil, we aim to expand annual production of our Andrade mines to 3.5 million tonnes by 2012.
An achievement that we are particularly proud of is our iron ore greenfield project in Liberia, where we have rehabilitated a 240km railway line connecting our mines to the upgraded port and material-handling facilities at Buchanan. The first consignment of ore from the Liberian mines was shipped in September 2011, and we aim for an annual production of 4 million tonnes by 2012.
Safety in mines
It is crucial to our business success that we mine responsibly, meeting our commitments to the people and communities that are involved in our projects or are affected by them. Our first and foremost priority is to safeguard the health and safety of employees against the specific risks of a mine environment. We have made significant progress in our mines, bringing down the lost time injury frequency (LTIF) rate, which is the number of injuries that result in loss of work time per million hours worked, from 3.4 in 2008 to 2.42 in 2009, 1.53 in 2010 and 1.4 in 2011.
The foundation of all our safety programmes is a culture of courageous leadership, which sets out clear expectations that everyone must take personal ownership of safety in their immediate work environment. Our goal is to have zero accidents, and it can only be achieved when every person at a mine has a proactive approach to safety.
“Every single person in our workforce has to become a safety leader. When people feel that they are accountable for their own safety as well as their co-workers’, then I think we would have reached a point at which we can say: we’ve made it for now, but let’s keep on pushing.”
Peter Kukielski, chief executive of mining
Mining responsibly
We are equally driven to ensure that our mining activities ensure sustainable development for local communities. We do so by developing local skills and infrastructure, which can foster economic activity in the long term. As one of a handful of companies who have moved into Liberia since the end of the country’s civil war, our commitment extends beyond the mining project to rehabilitate schools, hospitals and skills training for local people.
Our study of the biodiversity of the rainforest in Liberia’s Nimba mountains was the most comprehensive study ever undertaken in Liberia, and meets our promise to mine responsibly and sustainably without endangering regional ecosystems. Working on a greenfield mine in Liberia allowed us to embed opportunities for social development from the beginning, and we will carry this holistic approach to future projects.
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