corporate presentation – october 2008
TRANSCRIPT
Corporate Presentation | October, 2008
THE GROWTH HISTORY GOES ON...
THE GROWTH HISTORY THE GROWTH HISTORY
GOES ON...GOES ON...
Disclaimer
This presentation relating to MMX Mineração e Metálicos S.A. (“MMX”) includes “forward-looking statements”, as that term is defined in the Private Securities Litigation Reform Act of 1995, in Section 27A of the Securities Act of 1933 and Section 21E of the U.S. Securities Exchange Act of 1934. All statements other than statements of historical facts are statements that could be deemed forward-looking statements and are often characterized by the use of words such as “projects”, “expects”, “anticipates”, “intends”, “plans”, “believes”, “estimates”, “may”, “will”, or “intends”, or by discussions or comments about our objectives, strategy, plans or intentions and results of operations. Forward-looking statements include projections regarding our operating capacity, operating expenditures, capital expenditures and start-up dates.
By their nature, these forward-looking statements involve numerous assumptions, uncertainties and opportunities, both general and specific. The risk exists that these statements may not be fulfilled or, even if they are fulfilled, the results or developments described in such statements may not be indicative of results or developments in future periods. We caution participants of this presentation not to place undue reliance on these forward-looking statements as a number of factors could cause future results to differ materially from these statements.
Forward-looking statements may be influenced in particular by factors such as the ability to obtain all required regulatory approvals on a timely basis or at all, exploration for mineral resources and reserves, difficulty in converting geological resources into mineral reserves, and changes in economic, political and regulatory conditions. We caution that the foregoing list is not exhaustive. When relying on forward-looking statements to make decisions, investors should carefully consider these factors as well as other uncertainties and events.
MMX does not undertake to update our forward-looking statements unless required by law. This presentation is neither an offer to sell (which can only be made pursuant to definitive offering documents) nor a solicitation of an offer to buy any securities in the United States, or any other jurisdiction. The securities referred to herein have not been registered in any jurisdiction, and in particular, will not be registered under the U.S. Securities Act of 1933, as amended, or any applicable state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from such registration requirements.
This presentation and its contents are proprietary information and may not be reproduced or otherwise disseminated in whole or in part without MMX’s prior written consent.
Investor Relations
Nelson Guitti – Officer
Marilia Botelho – Manager
Priscylla Setimi - Analyst
Tel. 55 21 2555-5634 / 5558/ 5563
Corporate Structure
MMX Sudeste
100%
Minera MMX
de Chile
30% CentennialAsset Corumbá
Corumbá System
100%70%
MMX Corumbá
Mineração
MMX Corumbá
MineraçãoMMX Metálicos
Corumbá
MMX Metálicos
Corumbá
Greenfield projects developed by MMX: Corumbá System started-up in 2005 (Mining) and 2007 (Metallics); Bom Sucesso start-up scheduled for 2012.
Assets acquired by MMX (AVG: dec-07; Minerminas: jan-08)
100%
100%
Sudeste SystemBom Sucesso
AVGAVG MinerminasMinerminasBom SucessoBom Sucesso
100%
MMX SudesteMMX Sudeste
100%
Free Float
35.88%
Controlling Shareholders
64.12%
Assets
Iron Ore: 6.3 MtpyPig Iron: 0.4 MtpyBillets: 0.4 Mtpy
Forestry Program:
34,000 hectares of eucalyptus forest.
Self-sufficiency in charcoal by 2017.
MMX Corumbá System
MMX Sudeste
Pelletizing Plant 50%-Option(at Açu Port)
Royalties on MMX Minas-Rio production
Royalties on MMX Amapáproduction
Iron Ore: 33.7 Mtpy
MMX Sudeste
Minera MMX de Chile
New Business Development
MMX S.A. is the exclusive vehicle of EBX Group for investments in mining and metals, focusing on the production capacity increase through organic growth and the development of new opportunities.
Management
Joaquim Martino
Executive Officer
Joaquim Martino
Executive Officer
Eike Batista
CEO & Chairman of
Board of Directors
Eike Batista
CEO & Chairman of
Board of Directors
11
Vitor Feitosa
COO
Vitor Feitosa
COO
22
Chequer Bou-
Habib
Commercial Director
Chequer Bou-
Habib
Commercial Director
33
Nelson Guitti
CFO and Investor
Relations
Nelson Guitti
CFO and Investor
Relations
44
Vitor Feitosa Former Geology Coordinator, former Chief of Mine Planning and former General Manager of Sustainable Development of SAMARCO – 24 years of experience
Joaquim Martino Former Director of Pelletizing and Metallics, former Director of Carajás Mine and Ponta da Madeira Port (VALE), former
Superintendent of Casa de Pedra Mine (CSN) and former Mining Director of MMX – 27 years of experience
Chequer Bou-Habib Former Marketing and Administration Director of VALE office in Brussels, former President of SAMITRI, former President of
FERTECO, former CEO of GIIC (VALE subsidiary), former General Director of AVG Mineração (MMX) – 24 years of experience
Nelson Guitti Former Financial Director of BR DISTRIBUIDORA and former Executive Director of Strategy and Planning of GASPETRO –20 years of experience
11
22
33
44
High Performance in Strategic Management
Pro-activity (voluntary public hearings)
Environmental Licensing
Implementation in record time (14 months)
MMX Amapá
Partnership with strategic players
Anglo & Cleveland Cliffs
Eliezer Batista Natural Reserve
Commitment with the Environment
Financial Market trust
OTPP
Traditional Steel Companies
Long Term Off-Take Agreement
Focus oninfrastructure
projects
LLX Logística S/A
70% Capex contracted
MMX Minas-Rio
2 yearsJuly 2006
July2008
Mine implemented in 8 months; Pig iron plant implemented in 12 months
MMX Corumbá
Implementation of AmapáSystem
14 Months
December, 2004“Explorers”
December, 2007Start-up
September, 2006Environmental Licensing and
beginning of construction
December, 20071st shipment
Effectiveness in projects implementation
Since IPO
(07/24/06 = 100)
277,53
166,43
0
100
200
300
400
500
600
700
800
Ju
l-06
Au
g-0
6
Sep
-06
Oct-
06
No
v-0
6
Dec-0
6
Jan
-07
Feb
-07
Mar-
07
Ap
r-07
May-0
7
Ju
n-0
7
Ju
l-07
Au
g-0
7
Sep
-07
Oct-
07
No
v-0
7
Dec-0
7
Jan
-08
Feb
-08
Mar-
08
Ap
r-08
May-0
8
Ju
n-0
8
Ju
l-08
Au
g-0
8
Sep
-08
2
6
23
17
8
31
23
4
110,20,2
65
13
9
16
111310
3
16
21
29 29 30
4
1085
1414
1107
812
5491222
20 2144
2741
65 77591984 95 129 136
104
450
0,0
5,0
10,0
15,0
20,0
25,0
30,0
35,0
Jul/06
Aug/0
6
Sep/0
6
Oct/
06
Nov/0
6
Dec/0
6
Jan/0
7
Feb/0
7
Mar/
07
Apr/
07
May/0
7
Jun/0
7
Jul/07
Aug/0
7
Sep/0
7
Oct/
07
Nov/0
7
Dec/0
7
Jan/0
8
Feb/0
8
Mar/
08
Apr/
08
May/0
8
Jun/0
8
Jul/08
Aug/0
8
Set/
08
0
200
400
600
800
1000
1200
1400
1600
Volume Traded * Number of Trades*
(US$MM)
MMXM3 X IBOVESPA (US$)
MMXM3 IBOVESPA US$ 4.68
*daily average
Results reflected on the outstanding performance of MMX shares
MMX´s Performance Pillars
Iron Ore Market growthIron Ore Market growth
Management delivering as promisedManagement delivering as promised
Added valueAdded value
Health & Safety
Relationship with
communities
EnergyWaste
Water
resources
100
80
60
40
20
0
• Recordable Incidents Frequency Rate• Occupational Diseases Frequency Rate• Compliance with hygiene standards
• ETHOS Social ResponsibilityIndicators
• Energy efficiency• Use of renewables• Charcoal from planted forests
• Domestic waste generation• Reuse of industrial waste
• Compliance with environmental standards• Water consumption• Water recirculation• Compliance with water grants
Sustainable Operation: a MMX Value
� Guided visits in the Forest site for local students;
� Tree planting program in communities adjacent to the
Forestry Program site;
� Permanent local fauna and flora studies;
� Forest handling and fire prevention textbooks;
� Trainee programs;
� Implementation of communitarian plant nursery and
environmental education;
� Local charcoal production and forest diagnosis;
� Seed nursery of native plants for restoring
altered areas.
Ceramic workshop
Environment
Week
Stewardship Management
Plan - Pantanal
Environment: social and environmental awareness and accountability
Strong and close integration with local communities and partnership with technical entities
in social and environmental questions
Eng. Eliezer Batista Private Natural Heritage Reserve – 20 thousand protected hectares
MMX, committed with sustained
development principles, has acquired
and maintains the Eng. Eliezer
Batista Private Natural Heritage
Reserve, in the heart of Pantanal
(largest wetland in the world), an
impressive and relevant area in terms
of bio-diversity and natural richness.
This Heritage Reserve will be the first research and studies center of wetlands in the planet, where there are hundreds of mammals, including jaguars, 300 species of fishes and more than 700 species of birds, some of them considered endangered species. The Reserve has its Stewardship Management Plan ready since the beginning, reflecting MMX´s commitment with preservation.
Environment: commitment with Nature
Ceramic Filter
Roller Press
Vertical Mill
Research Lab
Technological innovation: a value creation tool
Projects based on qualified and
robust technical research, using
recognized ultimate technologies
contributing to CAPEX and OPEX
reduction.
The Growth History Goes on…
The Growth History Goes on: 40 Mtpy
Total CAPEX
US$ 1,509 million
Metallics Production– thousand tons/years
Mining Production – Mpty
231
400 400 400 400 400 400 400
- -34
357
452 452 452 452
2008 2009 2010 2011 2012 2013 2014 2015
Pig Iron
Billets
4.38.7 8.7
18.5
32.1 33.7 33.7 33.7
1.9
2.1 3.2
3.2
6.36.3 6.3 6.3
6.2
10.8 11.9
21.6
38.440.0 40.0 40.0
2008 2009 2010 2011 2012 2013 2014 2015
MMX Corumbá
MMX Sudeste
Business Development
Exploration
599 areas (mineral grants)
approximately 16,000 km2
8 States in Brazil and Chile.
iron ore, manganese, copper, bauxite, and others
Exploration Exploration
599 areas (mineral grants)
approximately 16,000 km2
8 States in Brazil and Chile.
iron ore, manganese, copper, bauxite, and others
Acquisitions
MMX is continuosly evaluating business opportunities, searching for increase in production scale and value
creation, in Brazil and abroad (Minera MMX de Chile).
AcquisitionsAcquisitions
MMX is continuosly evaluating business opportunities, searching for increase in production scale and value
creation, in Brazil and abroad (Minera MMX de Chile).
Mining
Corumbá System
MMX Corumbá Mineração: Production Ramp-Up & Capex
CAPEX US$ 62 million
(coarse fines)
1.91.4
2.1 2.1
3.8 3.8 3.8 3.8
0.2
0.3 0.3
1.0 1.0 1.0 1.0
0.5
0.8 0.8
1.5 1.5 1.5 1.5
1.92.1
3.2 3.2
6.3 6.3 6.3 6.3
2008 2009 2010 2011 2012 2013 2014 2015
Sinter Feed
Hematitinha
Lump
12.2
18.519.8
11.5
2008 2009 2010 2011
Production - Mtpy
Lump Hematitinha Sinter Feed
Fe 64.4 64.6 64.7
SiO2 4.6 4.4 3.7
Al2O3 1.5 1.3 1.4
P 0.058 0.065 0.070
PPC 1.1 1.3 1.7
Expected Quality (%)
Corumbá
MMX Corumbá: Logistics
Transport in barges down the Paraguay River delivering
products to South American costumers and shipments to
Europe and USA at Rosario Port:
� Long Term Agreements with international barge
operators.
Current route
2.7
53 k
m
1.700 km
Metallics
Corumbá System
MMX Metálicos Corumbá: Production Ramp-Up & Capex
Total CAPEX (2008-2015)
US$ 333 million
Pig iron production feeds Billet production.
29
120
101
2117 15 15 15
2008 2009 2010 2011 2012 2013 2014 2015
231
400 400 400 400 400 400 400
- -34
357
452 452 452 452
2008 2009 2010 2011 2012 2013 2014 2015
Pig Iron
Billets
Production Ramp-Up (thousand ton/year)
MMX Corumbá: Timeline
NE
& R
ab
ich
oM
ina 6
3
Operation
2008 2009 2010 2011 2012
Bille
ts
Beginning ofconstruction
Start Up 2nd phase
OperationLicense
Construction
ConstructionLicense
Development
BasicEngineering
Development
BasicEngineering
PreliminaryLicense
Beginning ofconstruction
Construction
Construction License
2013
Operation
Start UpOperationOperationlicense
Development
Basic and detailedengineering
Construction
Beginning ofconstruction
Operation
Operation license
Start Up
MMX Corumbá: Forestry Program – responsible stewardship and biomass self-sufficiency
After starting up a forest program in 2006, MMX will ramp up charcoal production to reach
self-sufficiency by 2017.
Program:
� Target: 34,000 hectares of eucalyptus planting;
� Use of innovative technologies – ferti-irrigations;
� Partnership with universities and experts;
� Partnership with locals for planting - technology and seeds provided by MMX;
� Totally mechanized planting process;
� Emissions and effluents control;
� Environmental education for local communities.
MMX Corumbá: Biomass self-sufficiency under way
After starting up a forest program in 2006, MMX will ramp up charcoal production to reach
self-sufficiency by 2017.
3% 7% 7% 7%
33%
67% 67% 67%
100%
25%25% 25%
28%32% 32%
2009 2010 2011 2012 2013 2014 2015 2016 2017
Acquired Forests
Ow n Forests
Serra Azul & Bom Sucesso
Sudeste System
MMX Sudeste: Production Ramp-Up & Capex
CAPEX US$ 1,1 billion
Production - Mtpy
0.9 1.1 1.1 1.4 1.2 1.2 1.2 1.23.2
6.5 6.5
12.39.5 9.5 9.5 9.5
0.1
1.1 1.1
4.8
21.4 23.0 23.0 23.0
4.3
8.7 8.7
18.5
32.133.7 33.7 33.7
2008 2009 2010 2011 2012 2013 2014 2015
Pellet Feed
Sinter Feed
Lump
34.9
290.7
535.7
241.3
10.9
2008 2009 2010 2011 2012
Bom Sucesso
Sinter Feed Pellet Feed Pellet Feed
Fe 66.2 66.4 67.2
SiO2 3.1 2.9 2.5
Al2O3 0.9 0.5 0.5
P 0.045 0.046 0.0339
PPC 1.0 1.1 0.6FeO* 8.8* aprox 30% magnetite
Expected Quality (%)
Serra Azul
MMX Sudeste: Logistics
Serra
Azul
Serra Azul Business Site:
� Conveyor belt linking mine site to railroad
terminal (8km)
Bom Sucesso Business Site:
� pipeline linking mine site to MRS (40km)
Railroad:
� Long Term Agreement with MRS to grant
transport availability
Port:
� LLX Port Sudest: second half of 2011
Bom Sucesso
Serra Azul
MMX Sudeste: Timeline
Bo
m S
ucesso
Serr
a A
zu
l
Operation
2008 2009 2010 2011 2012
Start Up (SoftItabirite Plant)
OperationLicense (HardItabirite Plant)
Construction
Constructionlicense
Development
Basicengineering
Preliminarylicense
Development
Detailedengineering
Constructionlicense
Beginning ofconstruction
Construction
2013
Operation
Operation license
Procurement
Development
Detailedengineering
Beginning ofconstruction (SoftItabirite Plant)
Beginning ofconstruction (HardItabirite Plant)
Construction Operation
Start Up(Hard ItabiritePlant)
Conceptual andbasicengineering
Development
Operation License(Soft ItabiritePlant)
Preliminarylicense
Start Up
Operation
Total US$ 1.926 bi
2008-2015
Cash Uses & Sources – US$ MM
62
169125
62
77
429
657
274138
598
782
336
28 15 15 15
2008 2009 2010 2011 2012 2013 2014 2015
CAPEX US$ 1.509 bi
Acquisitions US$ 417 MMUses
Sources
295
464
183
8 - - -
138
302
318
152
138
598
782
336
28 15 15 15
2008 2009 2010 2011 2012 2013 2014 2015
Cash from Operations US$ 975 MM
Debt US$ 951 MM
