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 are building a world class mining business: we have large iron ore resources, good project returns and a strong global team to execute our market-driven commercial strategy.”
Bill Scotting, chief executive, ArcelorMittal Mining
We are among the five largest mining companies in the world, and in 2012 we shipped 54.4 million tonnes of iron ore and 8.2 million tonnes of coal. Our goal is to produce 84 million tonnes of iron ore 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. In 2012, Ebitda was US$1.7bn, based on 28.8 million tonnes of iron ore and 5.1 million tonnes of coal shipped at market prices.
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. For example, at ArcelorMittal Mining Canada, in 2011-2012, a total of 2 million tonnes of iron ore was shipped, as part of a strategic trial, to new customers in China and the Middle East.
At the same time, we strive to improve our operating costs for business growth at an optimal capital cost per tonne of production. We have a relentless focus on cost control, through operational excellence across all assets, sharing and applying best practice, and focussing on labour productivity, maintenance and reliability.
New projects
ArcelorMittal’s 50% 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 product of high grade direct shipping pellet, containing 66% Fe iron. We expect production capacity to be 3.5 million tonnes a year in 2015, as part of our early revenue phase for the project.
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 have successfully expanded concentrator capacity to achieve 24 million tonnes of annual production in 2013. In Brazil, we have expanded annual production at our Andrade mines to 3.5 million tonnes.
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 reached an annual production of 4 million tonnes in 2012. Phase two of our Liberia operations have been approved, and we are expanding capacity through investing in a concentrator, to 15 million tonnes a year by 2015.
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 and 0.7 in 2012.
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.”
Bill Scotting, chief executive, ArcelorMittal 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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