Outlook and Challenges for Midsize Mining

Companies Operating in a Market with

Increasing Supply

Eduardo Costa de Faria Commercial General Manager – Mineração Usiminas

Aussie advantage = Brazilian disadvantage 11 p.p. over Platts in average

C3 C5

Mine

Railway

Port

VVVVLOC

Customer Mine

Truck

Rail Terminal

Railway

3rd Party Port

Capes or Panamax

Customer

BIG 4 MID

Lower contaminants level, Better chemistry x sizing, Value in use.

More quality, More quantity, Less resources.

The more the better Cost dillution Oversupply = kill competition

Finer and poorer New technologies needed Intensive mixers, lower productivity Market Concentration x Diversification

Chinese demand... Chinese production... Marginal producers out... India...(?)

COST PRESSURE

4.5

7.5 Conc

SF

12 Mt/yr from 2015 to 2021

Up to 4 Mt/yr captive to Usiminas

Remaining sold either to domestic or export markets

Million t

Fe

SiO2

Al2O3

P

Sizing

Moisture

Concentrate

65 ~ 66

2,7 ~ 3,0

1,32

0,051

< 0,044 = 33%

9,0%

Fe

SiO2

Al2O3

P

Sizing

Moisture

Sinter Feed

62 ~ 63%

6 ~ 7%

1,50%

0,070%

> 1 = 35%; < 106 = 40%

9,0%

Crushing

Screening

Jigs

Spirals

eduardo.faria@usiminas.com