Bold Future 2007 - cdn.beleggen.nl · of organic growth potential were identified, ... combining Arcelor and Mittal Steel Company, ... Lakshmi N. Mittal,

Bold Future 2007 Building our Company with the needs of future generations in mind

Activity Report 2007

Key Figures

ArcelorMittal is the largest and the most integrated steel company in the world, with an industrial presence in 20 countries and over 310,000 employees. In 2007, we recorded excellent results and this confirmed the strength of the ArcelorMittal business model. We benefited from a healthy global demand for steel in both the high-quality developed countries and fast-growth developing economies. In 2007, ArcelorMittal produced over 116 million tonnes of steel and generated revenues of 105.2 billion US$. 35 acquisitions were announced in 2007 and 20 million tonnes of organic growth potential were identified, all of which is aimed at further strengthening ArcelorMittal’s global steel offering.

ArcelorMittal Financial Highlights1

Key Figures

105,21688,576

Sales(million US$)

+18.8%20072006

109.7110.5

Shipments (million tonnes)

20072006

Operating income (million US$)

20072006

Net Income (million US$)

20072006

1 Flat Carbon Americas 35,491 11%2 Flat Carbon Europe 68,000 22%3 Long Carbon Americas and Europe 56,462 18%4 Asia, Africa and CIS (AACIS) 123,526 40%5 Stainless Steel 11,570 4%6 Steel Solutions and Services 13,086 4%7 Others 3,331 1%Total 311,466 100%

1 EU15 74,548 24%2 Rest EU (EU27) 54,383 17%3 Other European Countries 49,831 16%4 North America 41,073 13%5 South America 22,217 7%6 Asia 49,619 16%7 Middle East 78 1%8 Africa 19,717 6%Total 311,466 100%

Number of employees in 2007 according to segments

Number of employees in 2007 according to geographic location

1

2

3

4

5

6

7 8

2

3

4

5 6 7 1

Basic Earnings per Share (US$)

20072006

1 2006 figures are pro forma (unaudited).

EBITDA (million US$)

20072006

19,400 +26.8%

15,305

14,83011,857

+25.1%

10,368 +30.0%

7,994

+28.2%7.415.78

-0.7%

01 Profile 02 Chairman’s Statement04 Message from the President and CEO08 Questions for the Group Management Board12 Monthly Highlights15 Global Presence20 Board of Directors24 Group Management Board26 Management Committee32 transforming tomorrow 38 A New Brand40 Health and Safety42 Driving Performance Leadership44 Achieving Quality, Developing New Products 46 Sustainability and Climate Change

Operational Review50 Flat Carbon Americas54 Asia, Africa, Mining and Stainless (AAMS)58 Long Carbon, Steel Solutions and Services, Wire Solutions62 Flat Carbon Europe, Automotive, Plates, R&D68 Corporate Responsibility76 Corporate Governance78 Market Information80 Key Operating Subsidiaries

Financial StatementsArcelorMittal Pro Forma Consolidated Financial and Other Information86 Condensed Consolidated Statements of Income87 Condensed Consolidated Statements of Cash Flows88 Condensed Key Financial and Operational InformationArcelorMittal Audited Consolidated Financial Information89 Condensed Consolidated Balance Sheet

90 Report of the Independent Registered Public Accounting Firm

The financial information in this ArcelorMittal Activity Report 2007 has been prepared in accordance with International Financial Reporting Standards as adopted by the European Commission for publicly traded companies. The financial information herein does not contain certain information required to be provided to shareholders under Luxembourg law, including in particular the statutory accounts of ArcelorMittal, which must be approved by the Annual General Meeting of shareholders of ArcelorMittal on May 13 2008. A copy of the ArcelorMittal statutory accounts report will be available free of charge from April 15 2008 at the registered office of ArcelorMittal S.A., 19 avenue de la Liberté, L-2930 Luxembourg, Grand-Duchy of Luxembourg, or by calling +352 4792 2347 or +352 4792 2366 or sending an email to [email protected]

All figures relating to ArcelorMittal are pro forma (unaudited).The information for 2007 and pro forma information for 2006 presented in this ArcelorMittal Activity Report 2007 reflects the combined business as if the two-step merger combining Arcelor and Mittal Steel Company, which took effect on November 13 2007, had taken place at the beginning of the periods presented.

This ArcelorMittal 2007 Activity Report contains forward-looking statements that represent the expectations, beliefs, plans and objectives of ArcelorMittal’s management regarding ArcelorMittal’s financial and operational performance in 2008 and beyond, and assumptions or judgments based on such performance. Future performance expectations are forward-looking and accordingly involve estimates, assumptions, judgments and uncertainties. A number of factors may cause actual results or outcomes to differ materially from the expectations of our management. These risk factors are outlined in ArcelorMittal’s Annual Report on Form 20-F filed each fiscal year with the US Securities and Exchange Commission and available on www.arcelormittal.com in ‘Investors & Shareholders - Activity Reports & Documents - SEC Filings’.

Contents

ProfileArcelorMittal is the world’s largest and most global integrated steel company, with over 310,000 employees and an industrial presence in 20 countries.

ArcelorMittalActivityReport2007 01

The number one supplier to all major market sectors, including automotive, construction, household appliances and packaging, ArcelorMittal has an industrial presence in 20 countries across Europe, Asia, Africa and the Americas. This exposes it to all the key steel markets, from emerging to mature – an exposure it continues to enhance through its three dimensional growth strategy of product diversity, geographical reach and vertical integration.

A key element of the Group’s strategy is to operate as a vertically integrated business. Upstream, it owns sizeable captive supplies of raw materials; downstream, it operates outstanding distribution networks.

Innovation plays a key role at ArcelorMittal. Not only is the Group the largest steelmaker by volume, but it also offers the broadest range of steel grades, advanced products, steel solutions and cutting-edge technologies. Its investment in R&D is substantial and continuous. Close cooperation with customers – involving mutual trust, an open-minded approach and permanent exchanges of personnel – further drives innovation and assists in the development of products and solutions that sustain their competitive edge.

2007 was the first full year following the merger of Arcelor and Mittal Steel. The combined Company has been integrated successfully, building a global giant focused on leading the transformation of the steel industry and building a sustainable future. With crude steel production of 116 million tonnes, representing around 10% of world steel output, ArcelorMittal generated revenues of 105.2 billion US$ in 2007. It continued to explore growth opportunities, conducting 35 transactions and identifying organic growth projects that will expand shipment volumes by 20 million tonnes by 2012.

ArcelorMittal understands that with its Leadership position comes responsibility. By playing its part in consolidating the steel industry it is helping create a more sustainable operating environment. Consistent with its objective of ‘transforming tomorrow’, ArcelorMittal is committed to being a good corporate citizen. This means building a stable, global institution – one with the resources to deliver the products its customers want, that creates sustainable value for all its stakeholders, including the communities in which it operates, and that respects the highest standards in areas such as health, safety and the environment. Responsible business practice is at the heart of the Company’s strategy.

In 2008, the first priority for the Group remains Health and Safety. ArcelorMittal operates in a wide variety of countries, from the developing to the most developed. It recognises that the decisions it makes impact not only its employees and the wider communities in which it operates, but also suppliers, governments and investors.

ArcelorMittal’s ambition is not only to be the undisputed leader of its sector, but also to become recognised as one of the world’s truly great companies, demonstrating excellence in every area of its operations and consistently delivering high quality and results to all of its stakeholders. ArcelorMittal will continue to transform tomorrow and guide the evolution of steel to secure the best future for the Company, the stakeholders and the industry more broadly, now and for generations to come.

Company Profile and Global Business Strategy

FoundrySterling Subhead 1

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FoundrySterling BookItalic Quae ab illo inven-tore veritatis et quasi architecto beatae vitae dicta sunt explicabo. Nemo enim ipsam vo-luptatem quia voluptas sit aspernatur aut odit aut fugit, sed quia consequuntur magni dolo-res eos qui ratione voluptatem sequi nesciunt. Neque porro quisquam est, qui dolorem ipsum quia dolor sit amet, consectetur, adipisci velit, sed quia non numquam eius modi tempora incidunt ut labore et dolore magnam aliquam quaerat voluptatem. Ut enim ad minima veniam, quis nostrum exercitationem ullam corporis suscipit laboriosam, nisi ut aliquid ex ea commodi consequatur? Quis autem vel eum iure reprehenderit qui in ea voluptate velit esse quam nihil molestiae consequatur, vel illum qui dolorem eum fugiat quo voluptas nulla pariatur.


Lakshmi N. Mittal,President and Chief Executive Officer

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00 ArcelorMittalAnnualReport2007

Chairman’s Statement

2007 represents the summit of my career of 47 years devoted to the steel industry. This year illustrates the full achievement of my work. Over the past twelve months, the Company has firmly established itself as a truly global business, demonstrated the industrial logic of our business model and transformed the long-term potential of the steel and mining industry through consolidation.

If 2006 was the year of the creation of ArcelorMittal – a landmark in the history of the steel industry – 2007 has brought us the achievement of our successful integration. Overcoming all initial reticence and obstacles, almost one year after uniting as a single company we can see the evidence all around us that the integration has been fast, smooth and that the amount of synergies achieved has surpassed expectations. This is something all of our stakeholders – from employees to shareholders – can be proud of.

Today, ArcelorMittal has an industrial presence in 20 countries. This expansive geographical positioning and distribution network, coupled with our continuously improving operational performance, is the fruit not only of the merger of two complementary companies, but also of the excellent profile of our management and the engagement of our workforce.

There is no doubt that 2007 has truly been an excellent year for ArcelorMittal. Our shareholders have benefited from the Group’s performance: our share price rose by 73% in Europe and by 96% in the USA. Once again we achieved record financial results, with EBITDA of 19.4 billion US$, some 27% higher than the previous year.

Beyond these figures, 2007 has also been the year of the successful launch of our new brand, and growing recognition of what our Company stands for: our core values of Sustainability, Quality and Leadership, and our promise of ‘transforming tomorrow’, not only for the integrated steel industry but also for our communities.

The launch of our brand has been a key catalyst to galvanising the high motivation of our 310,000 ArcelorMittal people around the world towards progress. In a Group with such a geographical and historical diversity, the brand is our global personality, which binds together all of our complementary cultures. It also underpins our entire business, its philosophy and strategy.

In its aim of being one of the most admired companies in the world, ArcelorMittal is working to bring its brand values to life in every country and in every area of activity where we are operating.

In line with our stated values of Sustainability, Quality and Leadership, one of our main challenges is Health and Safety. ArcelorMittal employees are our primary asset. Across the entire Group, from top management to the shop floor, everyone is committed to making excellent Health and Safety the basis for our performance.

The Group is also focusing on reducing the impact of its operations on the environment. Steel is an environmentally friendly material, due to its excellent recycling performance. It is a unique material, which loses none of its strength and inherent properties, no matter how many times it is recycled.

DearShareholders,LadiesandGentlemen,I am addressing this message to you for the last time, as I am stepping down as Chairman of the Board of Directors of ArcelorMittal in May 2008. I can honestly say that, while writing these lines, I was filled with a sense of pride for what this Group has achieved, and I have full confidence in what lies ahead.

02 ArcelorMittalActivityReport2007





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ArcelorMittalAnnualReport2007 00 ArcelorMittalActivityReport2007 03

Our commitment to the safety and well-being of all of our employees, as well as to the protection of the environment, is part of a very important field that our Group is in the process of further developing: Corporate Responsibility (CR). As part of this emphasis on CR, I am extremely honoured to remain linked to the Group as Chairman of the ArcelorMittal Foundation, which embodies our three core values as described above.

Looking forwards to the future, and then looking backwards on my many years in the steel industry, I see that ArcelorMittal today is demonstrating what I have worked for during my entire career.

When I was just a boy, I realised that steel would have a strong presence in my life: I was born in Esch-sur-Alzette, the cradle of Luxembourgish steel, the son and grandson of steel workers. What I could not imagine at that early stage was that I would not only be able to live first hand, but also participate directly, in the evolution of this industry.

During almost half a century I have had the opportunity to work in the steel industry. I had the honour to chair the world-famous companies Arbed, Arcelor and ArcelorMittal. Now the time has arrived for me to retire and to express my deepest gratitude to my many collaborators and colleagues for their trust in me during these years.

Together, we have lived through difficult and dramatic periods, but we have risen to every challenge. We have always been able to find the proper solutions in the interests of our human and economical environments. Thanks to their assiduity, their talent and their loyalty, we have forged a company which is positioned today at the forefront of our industry, a multicultural Group with the ambition to be, and more importantly to remain, among the worldwide leaders in the fields of innovation, management and governance.

It is with a feeling of great pride and satisfaction that I regard ArcelorMittal today. The Company is both a bold new entity, and an accumulation of years of experience and knowledge. The Quality of our team is the best guarantor of the future of ArcelorMittal, a Group which, I am convinced, offers favourable and sustainable prospects for all of our stakeholders.

Sincerely,

Joseph Kinsch,Chairman of ArcelorMittal







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FoundrySterling BookItalic Quae ab illo inven-tore veritatis et quasi architecto beatae vitae dicta sunt explicabo. Nemo enim ipsam vo-luptatem quia voluptas sit aspernatur aut odit aut fugit, sed quia consequuntur magni dolo-res eos qui ratione voluptatem sequi nesciunt. Neque porro quisquam est, qui dolorem ipsum quia dolor sit amet, consectetur, adipisci velit, sed quia non numquam eius modi tempora incidunt ut labore et dolore magnam aliquam quaerat voluptatem. Ut enim ad minima veniam, quis nostrum exercitationem ullam corporis suscipit laboriosam, nisi ut aliquid ex ea commodi consequatur? Quis autem vel eum iure reprehenderit qui in ea voluptate velit esse quam nihil molestiae consequatur, vel illum qui dolorem eum fugiat quo voluptas nulla pariatur.


Lakshmi N. Mittal,President and Chief Executive Officer


00 ArcelorMittalAnnualReport2007

Message from the President and CEO DearShareholders,LadiesandGentlemen,2007 was always going to be a seminal year in the history of ArcelorMittal. Not only was it the first full year in the life of our Company, but we also finally celebrated the legal merger, formally cementing ArcelorMittal’s position as the undisputed leader of the steel industry. But even I could not have predicted that our inaugural year would have proved quite this successful.

When I wrote to you last year, I highlighted that one of the clear priorities for 2007 would be ensuring a successful integration. I am delighted to be able to report that we have been very successful in this task. Approaching an integration of this size and scale is no easy task, and I am very proud of the way our two companies integrated so quickly and seamlessly. We have created a steel company with one culture, one direction and one strategy – a company fully aligned on leading the transformation of our industry towards a sustainable future.

I can see this in whichever plant I visit in the ever-expanding world of ArcelorMittal. During 2007, together with my Group Management Board (GMB) and Management Committee colleagues, I made it a key priority to visit as many of our operations as possible and I am delighted to be able to report that the benefits of the merger can be seen almost everywhere. Our employees are working together as one team, we are sharing knowledge and skills across the Group, and we are delivering the highest quality products for our customers.

I would like to take this opportunity to thank all of our employees for the role they have played in making this a reality. I am aware that change is not always easy. It requires open and frequent communication, trust, flexibility and commitment. The fact that they have so readily embraced this approach has been a key factor in enabling us to integrate so successfully.

It is very clear to me that this merger has created a company far more sustainable than the sum of its two parts. This increased Sustainability has been created through a combination of size, scale and diversification. ArcelorMittal is the only steel company with a production capacity of over 130 million tonnes, with a balanced portfolio of assets across a wide range of products in both high-quality developed markets and fast-growth developing markets. We are also one of the most integrated steel companies in the world with our operations extending from mining through steelmaking to distribution. We have a truly unique profile in the steel industry today.

This business model carries with it a new level of stability and Sustainability that has underpinned our record results for 2007.

Financial performance for the year was excellent, with EBITDA of 19.4 billion US$, up 27% year-on-year and net income of 10.4 billion US$, up 30% year-on-year. This strong performance allowed us to return 4.4 billion US$ to shareholders in 2007, out of which 2.4 billion US$ related to our dividend policy. For the year 2008, the Board of Directors has recommended to increase the base dividend by 20 cents from 1.30 US$ to 1.50 US$ per share. Based on the 2007 annual net earnings of 10.4 billion US$, we will return a total of 3.1 billion US$ to shareholders by paying a cash dividend of approximately 2.1 billion US$ and a 1.0 billion US$ share buy-back which was already completed in February 2008. Synergies captured at the end of 2007 are ahead of schedule and reached 1.4 billion US$. Cash flow from operations continues to be strong with the Company generating 16.5 billion US$ during the year.






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ArcelorMittalAnnualReport2007 00 ArcelorMittalActivityReport2007 05

1 Including cash purchase price, assumed debt and shares issued at fair market value.

Our financial strength is also enabling us to invest more in important areas such as capital expenditure and Research and Development. In 2007 we invested some 5.4 billion US$ in capital expenditure. We intend to increase this to approximately 7.0 billion US$ in 2008. With 1,400 researchers in 14 centres in Europe, the USA, Canada and Brazil, we are committed to staying at the forefront of steel industry innovation to achieve our objective of Quality.

Despite ArcelorMittal being the only steel producer with production capacity of over 130 million tonnes, we still only account for 10% of global steel production. It is clear that there are still many opportunities for further growth. I am therefore very pleased to report that while integration was a clear priority for 2007, we did not let it distract us from pursuing growth opportunities. We announced in April 2007 our new three dimensional growth strategy aimed at maximising opportunities to further enhance our business model. This strategy focuses on the three key areas of geography, product and value chain. We have continued making strategic and substantial acquisitions and investments, with numerous transactions announced in 2007, and acquisitions and investments for a total value of 12.3 billion US$1 completed in 2007.

On the geographic front, this comprises of acquisitions (including minority interest buy-back) in Argentina, Brazil, China, Costa Rica, Egypt, Mexico and Poland, strengthening our operational presence in a number of key growth markets. With China Oriental, we are the first steel company to have a substantial interest in any Chinese integrated steel mill. From a product perspective, we enhanced our presence in a number of important product areas including pipes and tubes, galvanising, stainless steel and wire businesses. We are convinced of the long-term health of these businesses. We have also made very encouraging progress in expanding our mining capabilities, with new projects announced in Liberia, Senegal, Mauritania and Russia. With raw material costs continuing to soar, this is a critical component of our growth strategy. ArcelorMittal at present has 46% self-sufficiency in iron ore production, with a stated target to increase this to 65%. With the acquisition of mines in Russia, our focus is now to better satisfy our coal needs. These new projects will play an important part in helping us to achieve this target.

This strong deal flow demonstrates our financial strength and flexibility to capitalise on attractive opportunities when they arise.

Acquisitive growth will continue to be an important area of focus for the Company. But one of the added advantages of being a company of this size and scale is the increased opportunity for organic growth. In 2007 we also identified opportunities to grow organically by some 20 million tonnes by 2012, from investment within the Group. The Board of Directors has already approved the investment necessary for capturing 15 million tonnes of that target.

This growth comes in particular from fast growth developing economies including Brazil, Africa and Eastern Europe. We continue to believe that these markets offer exciting potential for steel production and, with 50% of our production located in such markets, we are ideally positioned to benefit from their increased demand for steel. We are also looking at Greenfield opportunities, most specifically in India where we are continuing to make progress with our plans to build two plants in Jharkhand and Orissa. With its fast growing economy and high population combined with a modest steel consumption per capita, India is a very attractive market for ArcelorMittal. Our projects, with an eventual capacity of 24 million tonnes per year, will position us well to capitalise on the growth opportunities there.

Message from the President and CEO


continued

Another highlight of 2007 was the launch of our new brand, ‘transforming tomorrow’. This brand has been developed to promote consistently high standards across the business. As one of the 50 largest companies in the world we recognise that this position brings unique responsibilities. Our goal is to provide the Leadership necessary to help transform tomorrow for our stakeholders through applying consistently high standards to every aspect of our business. This goal is underpinned by our brand values of Sustainability, Quality and Leadership. It is our adherence to these three values which, I believe, has supported our emergence as the ‘World’s Most Admired Metals Company’, according to Fortune’s most recent ranking of the ‘World’s Most Admired Companies’. This is a considerable achievement and again is possible thanks to the dedication of all our employees across the globe.

We will continue to work to ensure that ArcelorMittal shows Quality and Leadership in every aspect of our business. It is this approach that will ensure, as a Company, that we continue to demonstrate long-term Sustainability for our stakeholders. In this respect, organisation, led by our Chief Technology Office (CTO), covers the entire ArcelorMittal perimeter and allows each entity to access best practices and achieve excellence. However, if I am asked if there is one particular area of the business today on which we focus our Leadership, it has to be Health and Safety. In March 2007 and 2008, we staged the ArcelorMittal Health and Safety Day, an opportunity for each of our plants around the world to spend a day focusing on how to improve performance in this area. March 2009 has already been set to hold next year’s Health and Safety Day. I am pleased to report that we have made some commendable progress since this event; our accident frequency rate has fallen from 4.2 per million hours worked in 2006 to 3.2 by the end of 2007 – in line with our internal targets for the year.

This is a good achievement, demonstrating the success of our new Group-wide policies, but it is not enough. The tragic accident at our Abaiskaya mine in Kazakhstan in January 2008 demonstrates the challenges we still have ahead of us. I assure you this will be the top priority for myself and my colleagues on the Group Management Board.

Corporate Responsibility is another important area for the new Company. Over the course of 2007 we have been working on designing the new Corporate Responsibility strategy for the Group which will be published in June of this year. This identifies the key performance indicators for the Company across the four functions of human resources, communities, shareholders and the environment. Having these indicators in place will ensure that we develop the appropriate strategies to ensure we make consistent progress in these areas.

Human Resources, through The Corporate University, is an essential part of the Corporate Responsibility strategy. The budget for The Corporate University in 2008 is more than double the amount granted in 2007, at 19.6 million US$. We have also expanded the Knowledge Management Programme (KMP) in 2007.

No business operating today can ignore the impact it has on the environment. Steel is one of the most recycled materials in the world, making it very sustainable over the life-cycle. However, the steelmaking process is very energy intensive and ArcelorMittal recognises the lead it must take in reducing its impact on the environment. We already have a strong record in reducing CO2 emissions. In Europe alone, we have reduced emissions by more than 20% since 1990. We now have systems in place to measure the footprint of each individual plant, allowing us to detect and target future improvements. We will extend good practices coming from Europe and Brazil to the rest of our worldwide sites. We are also a leading partner in the exciting ULCOS (Ultra Low CO2 Steelmaking) project, aimed at creating a more carbon efficient integrated steelmaking process.


Looking forward, despite an uncertain outlook for the global economy, I believe 2008 will be a good year for the steel industry and for ArcelorMittal in particular. Our integrated and diversified business model leaves us well positioned to deliver another strong performance in 2008. With a strong operational presence in high-growth developing economies we are in a better position to weather any sustained economic downturn in markets such as the United States. The extent to which other economies are decoupled from the United States is yet to be seen, but I do believe that we are going to see ongoing strong economic growth from countries such as Brazil, Russia, India and China and we are well positioned to benefit from the resultant industrialisation these countries are experiencing.

Nevertheless, with ever spiralling input costs, we must not become complacent. Strong cost Leadership is as important as ever. We have been successful to date at passing such costs onto our customers but also we should not take this for granted. We must continue to ensure that our customers fully appreciate the added-value we bring by working closely with them to provide them with tailor-made solutions of the highest quality.

To conclude, I would like to thank my colleagues on the Board of Directors, the Group Management Board and the Management Committee for their advice, guidance and support, without which, these great operational and financial results would not have been possible.

In particular I would personally like to thank Joseph Kinsch for the experience and professionalism which he brought to the Board of Directors as its Chairman. I know I can speak on behalf of all my fellow Directors on the Board when I say that we are very sorry that he has decided to retire at this year’s Annual General Meeting. We will miss his wisdom, professionalism and knowledge. However I am delighted that he has agreed to continue his association with the Company following his retirement, by becoming Chairman of the ArcelorMittal Foundation. Under his Leadership, I am convinced the Foundation will play an important role in the Company.

Finally, I would like to pay tribute to all of our employees, in particular those who work to produce the material that makes this business what it is: steel. If the purpose of our Company is to build the infrastructure of the modern world, it is our employees at the steel mills who make this possible. ArcelorMittal steel can be found all around the world, whether supporting iconic buildings such as the Freedom Tower in New York, helping create lighter and more energy efficient cars, or building the infrastructure that supports economic growth in developing economies. Our impact in the world is considerable and this is something that I hope all our stakeholders can take pride in.

Sincerely,

Lakshmi N Mittal,President and Chief Executive Officer

There are five members on ArcelorMittal’s Group Management Board (GMB): Lakshmi N Mittal, Aditya Mittal, Malay Mukherjee, Gonzalo Urquijo and Michel Wurth. Here, four of them reflect on the past year and the year ahead.

Howwouldyousumuptheachievementsofthepastyear?

AdityaMittal:2007 has been a great year for the Company on many fronts. From the financial perspective we have delivered record earnings clearly showing the financial health of the Company and the strength of our diversified business model. Integration was always going to be an important area of focus in 2007 and we have been very successful in this regard. We have also continued to grow. The profile of the Company today creates many opportunities for further growth and we have capitalised on this in 2007, announcing 35 transactions. Finally, in my area of responsibility for Flat Carbon Americas, we have performed well in a difficult market environment. This is a testament to the new Sustainability of the steel industry and to the Leadership role we have adopted in taking responsible decisions to help balance supply and demand.

MalayMukherjee: The financial results in Mining, Asia and Africa, Stainless, and Pipes and Tubes were substantially better than in 2006 – and even better than we had budgeted. In Mining, we made good progress on our two biggest projects – in Liberia and Senegal – putting us on target to achieve annual iron ore production of between 85 and 90 million tonnes within four years. Among the carbon steel operations, in the Ukraine, Kryviy Rih put in an outstanding performance in terms of both productivity and profitability. In Stainless, we increased substantially our production of ferretics to offset the impact of higher nickel prices.

GonzaloUrquijo:The integration of all our Long Carbon teams, together with the commercial integration of the businesses to deliver one face to the customer, went extremely well. Industrial optimisation – in purchasing, logistics, benchmarking and so on – enabled us to achieve the targeted synergies. In addition, we have now consolidated the product mix around specialist sites in order to make ourselves more efficient. This applies to all long product plants in Europe and the Americas.

MichelWurth:The contribution of Flat Carbon Europe, Automotive and Plates rose strongly in 2007 due to a number of factors. One was the success of the integration process in capturing commercial synergies between the East and West European plants. Another was the recognition on the part of our customers that we could deliver the right products, solutions and services at the right price and on time. We seized the opportunities presented by strong growth in Eastern Europe generally and in the high-end automotive and appliance markets. Towards the end of the year we reorganised all European flat products plants into three regional clusters which will allow us to sharpen our customer focus and drive further improvements in quality, service and costs.

Howhavecustomersbenefitedfromthenew-lookArcelorMittal?

AdityaMittal: The critical factors of the new-look ArcelorMittal are its scale, diversity and Sustainability. Our customers benefit directly from these three components. Scale enables us to offer our global customers a global solution around the globe. Diversity gives our customers a comprehensive product range wherever they might require it. The new period of Sustainability allows us to continually invest in areas such as R&D and provide the best solutions for our customers.

MalayMukherjee: Two factors have had a big impact on Quality and service delivery. From the start of 2007 we ended our arrangements with third-party trading houses and began to channel all sales to international markets through our own distribution network. Together with the expansion of our network of service centres, this has allowed us to expand our coverage, get a lot closer to our end-customers and improve our service to them. Secondly, the ability to transfer European technology to our plants in Kazakhstan and Ukraine has allowed us to move up the Quality scale.

GonzaloUrquijo:We have moved to optimise our service to customers by sourcing our European deliveries from nearby plants wherever possible. We achieved better lead times and improved service levels. Equally important is the fact that an expanded number of long products plants means we have more expertise and more knowledge on which to draw – leading to better Quality. It also provides a bigger platform for our R&D. We lead in areas such as sheet piles and big beams and we want to maintain our edge.

Questions for the Group Management Board



MichelWurth: Customers now have the advantage of global supply and service based around a unified production planning programme – ensuring them the same product quality right across the world. Additionally, the R&D function is now much closer to the customer, with the same know-how now available to every unit. We held two very important customer events in 2007 to demonstrate the opportunities offered by our product development capability.

Whatopportunitiesandchallengesdoyouseeahead?

AdityaMittal:Ensuring that we have the right talent pool is a big challenge. ArcelorMittal is today one of the fifty largest companies in the world and like all big companies, we are continually under pressure to attract and retain the right talents. This is a challenge in both developed markets, where the steel industry may not be a natural career choice, and developing markets, where the skill set may be lacking. We are implementing new HR plans to address this critical issue. In terms of opportunities, there are many as you would expect in a company of this size. Our biggest prospect is to build on the position of responsibility that we have as a global company and really make a difference to our stakeholders. As our brand promise says, we know that our position in the steel industry brings unique responsibilities and we are committed to setting globally recognised standards with the needs of future generations in mind.

MalayMukherjee: The increasing cost of external purchases of raw materials puts pressure on us to move ahead as quickly as possible with the planned expansion of our own mining operations. At the same time, we have the opportunity of capitalising on the rapid growth in demand from emerging markets – provided we can lift our own production in Africa and Asia. That also means improving productivity and the skills base in these operations. The biggest challenge of all is to ensure we fulfil our growth strategy by progressing our many different Greenfield and Brownfield projects around the world.

GonzaloUrquijo: Clearly, safety is priority number one. We are trying to learn from our safest plants and take those lessons to the rest. On the industrial front, the emphasis in Europe and the USA will be on debottlenecking and improving efficiency; in South America it will be on acquisitions and Brownfield or Greenfield expansion. But perhaps our biggest opportunity is also our biggest challenge – to expand the Steel Solutions and Services distribution model from Western Europe to Central and Eastern Europe, the Americas and emerging markets such as Turkey. With a number of acquisitions in 2007, we are off to a good start.

MichelWurth: The road ahead is clear. We will continue to deliver the value plan. As part of ArcelorMittal’s growth targets, European flat product output is planned to increase by around 4 million tonnes by 2012. We have initiatives in place to ensure we deliver that objective. We will also be expanding our presence in the automotive market in Eastern Europe and lifting capacity in plates.

Whatdoes‘transforming tomorrow’meantoyou?

AdityaMittal: The launch of our new global brand was a critical step in the integration process. Building a successfully and universally recognised brand takes time but brings considerable value. It makes decision making easier, but above all it encourages great team cohesiveness and high employee morale. It creates a common bond between employees all over the world, and allows people to grow, develop and achieve professional and personal goals. ‘transforming tomorrow’ is an integral part of our Company’s approach to doing business; it is the way forward to better position our Company and outperform our competitors.

MalayMukherjee:While reopening mines and developing partnerships in emerging countries, we are changing the future of the mining sector. Liberia, for example, has been devastated by a long and hard civil war, with poor infrastructure and high levels of poverty and unemployment. ArcelorMittal is the first major company to have entered the country since the end of the conflict. We have plans to invest up to 1 billion US$ to operate an iron ore mine, construct a railway to the coast and develop the port near Monrovia. This should create around 3,000 direct jobs and several thousand indirect jobs, and is definitely one clear example of how we are ‘transforming tomorrow’, in this instance for the Liberian people.

GonzaloUrquijo:We are a large company with a significant global footprint and our position in the industry brings unique responsibilities. Through our Corporate Responsibility strategy, we want to provide Quality and Leadership that will transform the future of the steel industry. I believe Corporate Responsibility is the key to the success of our Company. We have many examples of good practice across the Group where we are ‘transforming tomorrow’ for communities. In addition, we have the ambition and the commitment to achieve record results in Health and Safety.

MichelWurth: Quality is one of our core values. It is also a key element in ‘transforming tomorrow’, and this goes through innovation and environment. ArcelorMittal has leading R&D facilities in 14 research centres situated around the world. These play a crucial part in our integrated business model and our strategic decision to be at the forefront of innovation in the steel industry. With innovative steels and processes we can have a significant impact on reducing CO2 consumption and minimising effects on the environment. This is the objective of the ULCOS (Ultra Low CO2 Steelmaking) project that we are leading to develop breakthrough technology designed to reduce CO2 emissions in the steel industry.

QWhere do mining projects in development, such as in Liberia and Senegal, fit into ArcelorMittal’s target for iron ore self-sufficiency?

AIn 2007, iron ore availability for ArcelorMittal was 63 million tonnes, representing approximately 46% of the Company’s iron ore requirements. In addition to existing mining activities, ArcelorMittal has started the development of iron mines in Senegal and Liberia and has also initiated projects for expanding the capacity of iron ore production in Ukraine, Mexico and Kazakhstan. These projects are an important part of the Group’s stated ambition to increase iron ore self-sufficiency to approximately 65%. The revitalisation of mining activities in underdeveloped regions offers gainful employment to the local people, but also much more. In Liberia for example, the project includes developing the appropriate infrastructure that will enable the sustainable development of the project and community. This includes investment in areas such as port and road infrastructure, and education and healthcare.

January 2007 • ArcelorMittal sells Huta Bankowa,

located in the South of Poland, to Alchemia SA Capital Group, as part of Mittal Steel’s commitment to the European Commission during the merger process.

February 2007 • ArcelorMittal contracts a joint

venture agreement with the Bin Jarallah Group for a seamless tube mill in Saudi Arabia. The mill will have a capacity of 500,000 tonnes per year; the major part of tubes produced will be used in the oil industry and the remainder for pipelines.

March 2007• ArcelorMittal builds a new

Steel Service Centre in Kraków, Poland. This facility will have a processing capacity of about 450,000 tonnes per year and will strengthen the existing de-coiling and slitting facilities in Huta Sendzimira and Bytom.

• ArcelorMittal holds its Investor Day in New York and Lázaro Cárdenas on March 27-28 2007. President and CEO Lakshmi Mittal introduces the three dimensional growth strategy for reduced risk (Sustainability) and continued growth consisting of product, value chain and distribution.

April 2007 • ArcelorMittal finalises the

acquisition of Sicartsa from Grupo Villacero leading to the creation of Mexico’s largest steel producer. Sicartsa is a fully integrated producer of long steel, with an annual production capacity of about 2.7 million tonnes and with facilities in Mexico and Texas. ArcelorMittal has also entered into a 50/50 commercial joint venture with Grupo Villacero.

June 2007• ArcelorMittal launches its new

global brand. Reflecting the Company’s aspirations, the brand’s vision of ‘transforming tomorrow’ is supported by three main values: Sustainability, Quality and Leadership. The brand launch is an essential part of the integration process, creating a common bond for all employees. ArcelorMittal also launches its ‘boldness changes everything’ global advertising campaign.

• ArcelorMittal starts a share buy-back programme to repurchase class A common shares up to a maximum aggregate amount of 590 million US$, or up to a maximum of 27 million class A common shares, to be used either for supporting potential corporate opportunities or for cancellation.

July 2007• ArcelorMittal is granted

concessions to develop mining, transportation and logistics activities by the Republic of Senegal in the Faleme region (South East Senegal). This integrated mining project will encompass the development of the mine in four locations, comprising both hematite and magnetite deposits, the building of a new port in Bargny near Dakar and the development of approximately 750km rail infrastructure to link the mine to the port.

• The European Works Council (EWC) of ArcelorMittal is installed. The ArcelorMittal EWC represents all employees from within the EU27, 130,000 employees in total, and has 54 members.

• ArcelorMittal acquires two steel tube businesses from Vallourec, France. Both companies enjoy strong positions in the European steel tubes market. This acquisition underlines ArcelorMittal’s strategy to expand its business in the automotive sector, and further strengthens the Company’s pipes and tubes business.

Monthly Highlights2007 was the first full year following the merger, and ArcelorMittal has demonstrated the success of its integration, while continuing to identify further opportunities for progress. More than 35 transactions were conducted during the year, showing considerable advance in the Group’s growth strategy.


August 2007• A landmark delivery of 580 tonnes

of steel, milled in ArcelorMittal Differdange, Luxembourg, is used in the construction of the World Trade Center Memorial in New York City. The jumbo beams represent approximately 20% of the steel used for the project.

• ArcelorMittal and RAG Beteiligungs-AG sign an agreement concerning the acquisition of the 76.88% stake directly held by RAG in Saar Ferngas AG Saarbrücken. Saar Ferngas is the largest gas distribution company in Saarland and Rhineland-Palatinate, Germany. This agreement is an opportunity to increase synergies with ArcelorMittal’s regional energy network.

• ArcelorMittal and Noble International Ltd., North America’s largest producer of laser-welded steel products, complete the transaction to combine their laser-welded tailored blanks businesses, for the benefit of their global automotive customers.

September 2007• ArcelorMittal expands its position

in Turkey by acquiring 51% of Rozak, the main Turkish steel stockholding company. Rozak has five sites in Turkey and is specialised in H-profiles, sheet and plates.

• ArcelorMittal invests 18 million US$ in a new cut length line for hot rolled coils in Ostrava, Czech Republic. The new Steel Service Centre will benefit from significant logistics and cost competitiveness, while being in line with ArcelorMittal’s development strategy in Central and Eastern Europe. This facility has a processing capacity of 250,000 tonnes per year and will start operating in mid-2008.

• ArcelorMittal owns 100% of Arcelor Brasil after having completed the acquisition of all its outstanding shares.

• ArcelorMittal holds its Investor Day in Paris and South Africa on September 11-13 2007.

October 2007• ArcelorMittal and Borusan,

one of Turkey’s leading steel producers, announce a 50/50 joint venture partnership, consisting of a 500 million US$ investment in the construction of a new hot mill in Gemlik. This facility will offer high grade products for the Turkish market and is planned to start operating by 2010 with a capacity of 4.8 million tonnes.

• ArcelorMittal acquires a 70% stake in Carminati Distribuzione S.r.l, one of the leading steel distributors in Northern Italy, which sold over 75,000 tonnes in 2006 with a turnover of 50 million €.

November 2007• The Extraordinary General Meeting

of ArcelorMittal and Arcelor shareholders approve the merger of ArcelorMittal into Arcelor, to be renamed ArcelorMittal. This merger is the second step in the two-step merger process between Mittal Steel and Arcelor, and is effective on November 13 2007.

• ArcelorMittal purchases a 100% stake in Galvex OÜ, the Estonian privately owned steel galvanising line. In 2006, Galvex produced 190,000 tonnes of hot dip galvanised steel, mainly for the construction sector, with sales totalling 125 million €.

• ArcelorMittal is awarded two gold medals for new products it unveiled at the Batimat construction fair. The Golden Innovation Medal is granted to the solar panel Arsolar, and the Golden Design Medal to the Angelina® beam.

• ArcelorMittal signs a Memorandum of Cooperation with the Republic of Mozambique, which aims to develop synergies and plan further investment in the steel industry and in the mining of raw materials. ArcelorMittal plans to build a new bar rolling mill with a yearly capacity of 400,000 tonnes. ArcelorMittal also announces a joint venture partnership with the Mozambique-registered company Black Gold Mining (Moc) Lda.

• The Group acquires a 35% stake in the joint venture company Rio Minjova Mining and Exploration Company at an initial cost of 2.5 million US$.

• ArcelorMittal and Kalagadi Manganese, a South African manganese development company, start a 50/50 joint venture which will see the development of a manganese mine, beneficiation plant, and sinter and smelter complexes in Coega. The project, due to start in 2010, overlies the Kalagadi Manganese Basin, a world-renowned source of manganese ore containing 80% of the world’s known manganese resources.

• ArcelorMittal invests in Greenfield Longitudinal Submerged Arc Welded Pipe Mill in Nigeria with a capacity of 300,000 tonnes per year. This investment, welcomed by the Nigerian National Petroleum Corporation (NNPC), gives ArcelorMittal access to a major oil and gas market. The construction of the mill is due to begin in early 2008, with production due to start in 2010.

• ArcelorMittal acquires a 12.6% equity stake in General Moly, Inc. for a total consideration of 70 million US$. General Moly, Inc. is a USA based molybdenum mineral development, exploration and mining company.

December 2007• Aiming to increase its commercial

presence in the UK, ArcelorMittal acquires NSD Ltd., a leading UK steel distribution company specialising in the sale of heavy sections and tubes.

• ArcelorMittal purchases Slovak ferro-alloys manufacturer OFZ, which manufactures a wide range of ferro-alloys and cored wires. This facility has an operating capacity of 150,000 tonnes per year.



Monthly Highlights

• ArcelorMittal acquires 28% equity interest in China Oriental Group Company Ltd. for 647 million US$. ArcelorMittal becomes the second largest shareholder of this company, which manufactures and sells steel products such as billets, strips, H-beams, cold rolled and galvanised strip. ArcelorMittal also signs a landmark agreement with China Oriental, with the aim of transforming the company into a leading producer of heavy sections in China thanks to technology sharing, technical expertise and know-how. In addition, ArcelorMittal becomes the majority shareholder of China Oriental through an agreement with the controlling shareholders of the Chinese Group. ArcelorMittal completes its mandatory offer to shareholders in February 2008.

• ArcelorMittal acquires M.T. Majdalani y Cia. S.A., the leading stainless Steel Service Centre and distributor in Argentina, and consolidates its position in the South American stainless distribution market. This company is specialised in flat stainless steel products with cut-to-length and slitting facilities.

• ArcelorMittal signs a Greenfield agreement with the administration of the Tver region, Russia. The Group will build a steel complex, with a capacity of one million tonnes of steel and two bar mills. In addition, ArcelorMittal acquires three coal mines and associated assets in Russia for a total of 720 million US$. Annual production from the three operating mines was 3 million tonnes in 2007.

• ArcelorMittal acquires 100% of the shares of the Austrian steel distribution company Eisen Wagner Gmbh. With its 60,000 tonnes of steel products sold in 2007, Eisen Wagner is one of the leading steel distribution companies in Austria.

• In order to strengthen its stainless steel business in South America, ArcelorMittal purchases Cinter S.A., an important stainless steel tube producer in Uruguay. With 200 employees and three sites, Cinter develops specialties that complement its stainless business.

• ArcelorMittal plans to build a 380 million US$ beam mill in Contrecoeur, Canada with a capacity of 800,000 tonnes. Flat carbon steel production will be consolidated in Hamilton and long carbon production in Contrecoeur.

Recent Developments• ArcelorMittal signs a Memorandum

of Understanding with Société Nationale Industrielle et Minière (SNIM) in Mozambique. This agreement provides for the development of a large iron ore mining project in Mauritania, further strengthening the existing presence in the region and creating employment opportunities.

• ArcelorMittal acquires Unicon, the leading manufacturer of welded steel pipes in Venezuela. Unicon, which employs about 2,445 people across six pipe-making facilities, supplies Oil & Gas and Industrial & Construction sectors both domestically and overseas.

• ArcelorMittal inaugurates Arceo, its industrial prototype, for a vacuum plasma steel coating line. With this process, steel can be a sensor, a reflector, a source of light or just simply more aesthetic or endowed with better anti-corrosive properties.

• ArcelorMittal acquires the remaining 50% interest in Laminadora Costarricense and Trefileria Colima, the only major long carbon steel company in Costa Rica. These two facilities together have a product capacity of about 460,000 tonnes a year.

• ArcelorMittal and the federal and regional governments of Belgium agree on carbon dioxide emission allowances and consequently the relaunch of ArcelorMittal Liège, Belgium, Blast Furnace Number 6, is being organised.

• ArcelorMittal enters the Egyptian market by being awarded a licence from the Industrial Development Authority (IDA) of Egypt’s Ministry of Trade and Industry to construct a steel plant in Egypt. The plant will produce 3 million tonnes of steel and is expected to start in 2009.

• ArcelorMittal is allocated steam blocks by the Government of India for the first phase of the Company’s Indian Greenfield projects in Jharkhand and Orissa. In Jharkhand, ArcelorMittal is allocated 83.33 million tonnes of steam coal out of the 150,000 million tonnes allocated. In Orissa, the share is 84.16 million tonnes out of a total of 645.24 million tonnes.

• On March 25 2008 ArcelorMittal provides Noble International with a 50 million US$ convertible subordinated loan. The Group also acquires an additional 10.31% of Noble shares, increasing ArcelorMittal’s shareholding to approximately 49.95%.

• The Court appointed divestiture trustee enters into an agreement to sell ArcelorMittal’s Sparrows Point steel mill to OAO Severstal for 810 million US$, net of debt.

continued

Global Presence - Americas - 36% liquid/crude steel production

São Francisco do Sul

Juiz de Fora

São Paulo

Andrade

Montevideo

Vitória

Feira de Santana

Port-Cartier

Coatesville; Steelton; Conshohocken, Pennsylvania

Georgetown, South Carolina

Montreal; Contrecoeur East & West

Peña

San José

Vespasiano

Timóteo; João Monlevade

Buenos Aires

ContagemItaúna

Piracicaba

Tubarão

La TabladaVilla Constitución

Warren, Ohio

Hamilton

Columbus, OhioBurns Harbor;

East Chicago; Gary; Indiana Harbor, Indiana

Hennepin, IllinoisRiverdale, Illinois

Hibbing; Virginia, Minnesota

Sicartsa

Guanajuato

Lázaro Cárdenas

New Carlisle, Indiana

Detroit, Michigan

Lackawanna, New York

Weirton, West Virginia

Pine Bluff, Arkansas

Jackson, Mississippi

Point Lisas

Cleveland, Ohio

116 million tonnes of steel produced by ArcelorMittal in 2007

Eureka County, Nevada

Caracas

Global Presence - Europe - 47% liquid/crude steel production

Fos-sur-Mer

Bremen

Bilbao; Etxebarri

HamburgLincolnshire

Avilés;Gijón

Sheffield

Montataire; Paris

Dunkerque

Isbergues

Tallinn

Madrid

Florange

Zaragoza

Mouzon

AvellinoPiombino

Zenica

Omarska

Szengotthárd

Skopje

Saint-Chély

Gueugnon

Liège

Le CreusotSaint-Chamond & Châteauneuf

Sagunto

Galati

IasiRoman

Ried im Innkreis

Kryviy Rih

Hunedoara

Eisenhüttenstadt

Kraków

Sycow

Ostrava

Warsaw

Dąbrowa Górnicza; Świętochłowice; Sosnowiec

UnterwellenbornGenkHochfeld; Ruhrort

Bergara; Olaberría; Zumárraga

Charleroi; Châtelet

Luxembourg

Rhineland-PalatinateSaarland

Basse-Indre

Ghent

Desvres

Global Presence - Africa - 7% liquid/crude steel production

Annaba

Jorf LasfarBoukhadra

IstanbulGemlik

Nador

Ouenza

Tiris Zemmour

Faleme Region

Vanderbijlpark; Vereeniging

Thabazimbi

Kathu

Jubail

Saldanha

Newcastle

Monrovia

Global Presence - Asia - 10% liquid/crude steel production

Temirtau

Karaganda

Hunan Valin

Beijing

Shandong


Global Presence

ArcelorMittal is the most global and integrated steel company in the world. With plants on four continents and presence in more than 60 countries, the Group has showed the success of its business model and enjoys market Leadership in North and South America, Western Europe, Eastern Europe and CIS, and Africa. After its successful integration, ArcelorMittal is now continuing to identify further opportunities for growth, demonstrating Sustainability to all stakeholders.

ArcelorMittal’s Board of Directors is composed of 17 members, in charge of the overall supervision of the Company. The organisation of the Board of Directors reflects the principles agreed upon in the Memorandum of Understanding dated June 25 2006. It comprises of 12 independent Directors. The Board is truly international in character.


Joseph Kinsch (01), Born on May 2 1933, Joseph Kinsch is the Chairman of ArcelorMittal’s Board of Directors. At the helm of Luxembourg-based steelmaker Arbed, he has been one of the key consolidators of the world steel industry of the last decades, first by reshaping Arbed’s strategy and steering its growth, notably in Europe and Brazil, then by assuming a significant role in the three-way merger of European steel companies which resulted in Arcelor, and recently by negotiating a merger of equals between Arcelor and Mittal Steel. Mr Kinsch joined Arbed in 1961 at its Burbach (Saar, Germany) plant. A year later, he moved to the Company’s headquarters in Luxembourg. There, he held various financial (accounting and finance) and industrial (steel processing) positions. Mr Kinsch was a member of the Arbed Group’s Management Board from 1980 to 1991, became CEO in 1992 and Chairman of its Board of Directors in 1993. In 2002, at the creation of Arcelor, he was chosen to chair the Board of Directors of the new company. Joseph Kinsch holds a Master’s degree in Economics and is a Doctor of Laws h.c. He is the Honorary Consul of Brazil in Luxembourg. His merits as an entrepreneur have been widely recognised throughout the world.

Lakshmi N Mittal (02), Born on June 15 1950, Mr Mittal is the President and Chief Executive Officer of ArcelorMittal. Mr Mittal founded Mittal Steel Company in 1989 and guided its strategic development, culminating in its merger with Arcelor, agreed in 2006, to found the world’s largest steelmaker. He is widely recognised for the leading role he has played in restructuring the steel industry towards a more consolidated and globalised model. Mr Mittal began his career working in his family’s steelmaking business in India, and has over 30 years of experience working in steel and related industries. In addition to setting the pace of industry consolidation, he has also championed the development of integrated mini-mills and the use of DRI as a scrap substitute for steelmaking. Following the combination of Ispat International and LNM Holdings to form Mittal Steel in December 2004, together with the simultaneous announcement of the acquisition of International Steel Group in the United States to form the world’s then-leading steel producer, Mr Mittal was awarded Fortune magazine’s ‘European Businessman of the Year 2004’. In 1996, Mr Mittal was awarded ‘Steelmaker of the Year’ by New Steel in the United States and in June 1998, the ‘Willy Korf Steel Vision Award’ from American Metal Market and PaineWebber’s World Steel Dynamics, for outstanding vision, entrepreneurship, leadership and success in global steel development. Following the creation of ArcelorMittal, Mr Mittal was named ‘Business Person of 2006’ by the Sunday Times, ‘International Newsmaker of the Year 2006’ by Time Magazine and ‘Person of the Year 2006’ by the Financial Times for his outstanding business achievements. In January 2007, Mr Mittal was presented with a Fellowship from King’s College London, the college’s highest award. He also received the 2007 Dwight D. Eisenhower Global Leadership Award, the Grand Cross of Civil Merit from Spain and was named AIST

Steelmaker of the Year. In January 2008, Mr Mittal was awarded the Padma Vibhushan, India’s second highest civilian honour, by the President of India. Mr Mittal is an active philanthropist and a member of various trusts. Under his guidance, ArcelorMittal is a significant contributor to local community and welfare activities for employees in countries where the ArcelorMittal Group operates. Mr Mittal is a member of the Foreign Investment Council in Kazakhstan, the International Investment Council in South Africa, the Presidential International Advisory Board of Mozambique, the World Economic Forum’s International Business Council and the International Iron and Steel Institute’s Executive Committee. He is a Director of EADS and of ICICI Bank Limited, and sits on the Advisory Board of the Kellogg School of Management in the United States and on the International Advisory Board of Citigroup. Mr Mittal was born in Sadulpur in Rajasthan, India on June 15 1950, and graduated from St. Xavier’s College in Kolkata, where he received a Bachelor of Commerce degree. Mr Mittal is married to Usha Mittal, and has a son, Aditya Mittal, and a daughter, Vanisha Mittal Bhatia.

Vanisha Mittal Bhatia (03), Born on August 23 1980, Vanisha Mittal Bhatia was appointed as a member of the LNM Holdings Board of Directors in June 2004. Mrs Vanisha Mittal Bhatia was appointed to Mittal Steel’s Board of Directors in December 2004. She has a Bachelor of Arts degree in Business Administration from the European Business School and has completed corporate internships at Mittal Shipping, Mittal Steel Hamburg GmbH and with an Internet-based venture capital fund. She is the daughter of Mr Lakshmi N Mittal.

Board of Directors

01 02 03 04


Narayanan Vaghul (04), Born on August 4 1936, Narayanan Vaghul has 50 years of experience in the financial sector and has been the Chairman of Industrial Credit and Investment Corporation of India for 16 years and of ICICI Bank Ltd for the last two years. Prior to that, he was Chairman of the Bank of India and Executive Director of the Central Bank of India. He was chosen as the ‘Businessman of the Year’ in 1992 by Business India, a leading Indian publication, and has served as a consultant to the World Bank, the International Finance Corporation and the Asian Development Bank. Mr Vaghul was also a visiting Professor at the Stern Business School at New York University. Mr Vaghul is Chairman of the Indian Institute of Finance Management & Research and is also a Board member of various other companies, including Wipro Limited, Mahindra & Mahindra Limited, Nicholas Piramal India Limited, Apollo Hospitals Limited and Himatsingka Seide Limited.

Wilbur L Ross, Jr. (05), Born on November 28 1937, Wilbur L Ross, Jr. has served as the Chairman of the ISG Board of Directors since ISG’s inception. Mr Ross is the Chairman and Chief Executive Officer of WL Ross & Co LLC, a merchant banking firm, a position he has held since April 2000. Mr Ross is also the Chairman and Chief Executive Officer of WLR Recovery Fund L.P., WLR Recovery Fund II L.P., Asia Recovery Fund, Asia Recovery Fund Co-Investment, Nippon Investment Partners and Absolute Recovery Hedge Fund. Mr Ross is also Chairman of Ohizumi Manufacturing Company in Japan, Chairman of International Textile Group, International Coal Group and of Marquis Who’s Who Inc. in the United States, and Chairman of Insuratex Ltd in Bermuda. Mr Ross is a Board member of the Turnaround Management Association, Nikko Electric Co. in Japan, Tong Yang Life Insurance Co. in Korea, and of Syms Corp., Clarent Hospital Corp. and News

Communications Inc. in the United States. He is also Director of IAC Acquisition Corporation Ltd in the United Kingdom, Compagnie Européenne de Wagons SARL in Luxembourg, Oxford Automotive in Denmark and Safety Components International in the United States. He is Director of the Japan Society and of the Yale School of Management. Mr Ross is also a member of the Business Roundtable. Previously, Mr Ross served as the Executive Managing Director at Rothschild Inc., an investment banking firm, from October 1974 to March 2000.

Lewis B Kaden (06), Born on March 24 1942, Lewis B Kaden has more than 38 years of experience in corporate governance, dispute mediation, labour and employment law, and economic policy. He is currently Vice Chairman and Chief Administrative Officer of Citigroup Inc. Prior to that, he was a partner at the law firm of Davis Polk & Wardwell and served as Counsel to the Governor of New Jersey, as a Professor of Law at Columbia University and as Director of Columbia’s Centre for Law and Economic Studies. He has served as a Director of Bethlehem Steel Corporation for ten years and is currently Chairman of the Board of Directors of the Markle Foundation. He is a member of the Council on Foreign Relations and the moderator of the Business-Labor Dialogue. Mr Kaden is a magna cum laude graduate of Harvard College and of Harvard Law School. He was the John Harvard Scholar at Emmanuel College, Cambridge University.

François H Pinault (07) Born on August 21 1936, François H Pinault is the founder and former President of the Artemis Group and PPR. The Artemis Group is a 25 billion € global investment holding company including 42% of the listed company PPR. PPR includes retail brands, such as FNAC, La Redoute, Le Printemps, Conforama, and luxury brands, such as Gucci Group, which includes Gucci, Bottega Veneta, Yves Saint Laurent, Boucheron and Balenciaga. Artemis also owns Chateau Latour vineyard in France and Christie’s auction house. In addition, Mr Pinault has insurance and media businesses and holds minority shares in the French Group Bouygues. Mr Pinault serves on the Board of Directors for Financière Pinault and Artemis.

José Ramón Álvarez Rendueles (08), Born on June 17 1940, José Ramón Álvarez Rendueles has extensive experience in the financial, economic and industrial sectors. He was former Governor of the Bank of España and President of the Bank Zaragozano. He is President of the Board of Directors of ArcelorMittal España, Peugeot España and Pirelli España. He is Professor of Public Finance at the Universidad Autónoma de Madrid, the President of the Prince of Asturias Foundation and Director of Gestavisión Telecinco S.A.

05 06 07 08


Sergio Silva de Freitas (09), Born on January 16 1943, Sergio Silva de Freitas has 40 years of experience in the financial sector. He is President of the Board of Directors and of the Audit, Appointments and Remunerations Committee of ArcelorMittal Brasil. After several years spent in high-ranking positions in important financial institutions in London and Washington, he became Senior Vice President of Banco Itaù and is now member of the International Advisory Board of Banco Itaù, São Paulo, Brazil. He has a Bachelor’s degree in Electrical Engineering from Escola Nacional de Engenharia da Universidade Brasil.

Georges Schmit (10), Born on April 19 1953, Georges Schmit is a member of the Board of Directors of ArcelorMittal as a representative of the Luxembourg State. He is Director General at the Ministry of the Economy and Foreign Trade and a Member of the Board of Economic Development of the Grand-Duchy of Luxembourg. He is also Vice Chairman of the Société Nationale de Crédit et d’Investissement (SNCI) and of the Entreprise des Postes et Télécommunications, Luxembourg and Director of SES Global S.A., of Banque et Caisse d’Epargne de l’Etat, Luxembourg and of Paul Wurth S.A. Since 2000, he has been the representative of Luxembourg on the Enterprise Policy Group, an advisory body to the European Commission. Mr Schmit holds a Master of Arts degree in Economics from the University of Michigan.

Edmond Pachura (11), Born on January 31 1934, Edmond Pachura has 40 years of experience in the industrial sector. He is Chairman of the Union des Négociants en Aciers Spéciaux (UNAS), Paris. Previously, he was Director of Renault and CEO of Sollac. Mr Pachura has also been a member of the Board of Directors of Charbonnages de France since 1997 and of the SNCF (Société Nationale des Chemins de Fer) since 1998.

Michel Marti (12), Born on July 6 1947, Michel Marti is a representative of the employees. He is former Secretary of the Conféderation Française Démocratique du Travail (CFDT) union, Broye, France.

Board of Directors

09 10 11 12 13

continued


Manuel Fernández López (13), Born on June 8 1947, Manuel Fernández López is a representative of the employees. He is also Secretary General of the Metal, Construcción y Afines de UGT union, Federación Estatal (MCA-UGT), Madrid, Spain.

Jean-Pierre Hansen (14),Born on April 25 1948, Jean-Pierre Hansen is a member of the Board of Directors of ArcelorMittal as a representative of the Wallonia region. He is also Vice Chairman of the Executive Committee and Senior Executive Vice President of Suez, with responsibility for Operations. He entered the electricity and gas sector in 1975. Since January 1 2005, Mr Hansen has been Vice Chairman and CEO of Electrabel, a role he previously held from 1992 to March 1999. Since March 1999, he has been holding the position of Chairman of the Executive Committee of Electrabel. He is also CEO of Suez-Tractebel, Chairman of Fabricom and Director of Distrigas, Fluxys, AGBAR and ACEA, Vice Chairman of the Federation of Enterprises in Belgium, and associate professor of Economics at the UCL and at the Ecole Polytechnique, Paris. Mr Hansen holds a Master’s degree in Electrical Engineering, a degree in Economics and a Doctorate in Engineering.

John O Castegnaro (15),Born on November 3 1944, John O Castegnaro is a representative of the employees. He is a member of the Luxembourg Parliament and Honorary Chairman of trade union Onhofhängege Gewerkschaftsbond Lëtzebuerg (OGB-L).

Antoine Spillmann (16),Antoine Spillmann is a representative of Corporación JMAC B.V. After several years spent in different banks, mainly in the United Kingdom, he is now an executive partner at the firm Bruellan, an asset management company based in Geneva.

H.R.H. Prince Guillaume de Luxembourg (17), Born on May 1 1963, H.R.H. Prince Guillaume worked at the International Monetary Fund in Washington D.C., USA and spent two years at the European Commission in Brussels. He studied at Oxford University and graduated from Georgetown University in the United States.

14 15 16 17

Group Management BoardThe strategic direction of the business is the responsibility of the Group Management Board (GMB). The GMB members are elected by the Board of Directors and are headed by Lakshmi N Mittal as Chief Executive. Its composition reflects the Group’s structure, which is divided into four key segments.


AdityaMittal,CFO,MemberoftheGroupManagementBoard,ResponsibleforFinance,M&A,StrategyandFlatCarbonAmericas,CommunicationsandInvestorRelations

Aditya Mittal is Chief Financial Officer of ArcelorMittal with additional responsibility for Flat Products Americas and Mergers and Acquisitions. Prior to the merger to create ArcelorMittal, Aditya Mittal held the position of President and CFO of Mittal Steel Company from October 2004 to 2006. He joined Mittal Steel in January 1997 and has held various finance and management roles within the Company. In 1999, he was appointed Head of Mergers and Acquisitions for Mittal Steel. In this role, he led the Company’s acquisition strategy, resulting in Mittal Steel’s expansion into Central Europe, Africa and the United States. These acquisitions included Kryvorizhstal in Ukraine, Polskie Huty Stali in Poland, Nova Hut in Czech Republic, Sidex in Romania, Annaba in Algeria, Iscor in South Africa, and International Steel Group in the USA. Besides his Merger and Acquisition responsibilities, Aditya Mittal was involved in post-integration, turnaround and improvement strategies. This led to Mittal Steel’s emergence as the world’s largest and most global steel producer, growing its steelmaking capacities fourfold. As CFO of Mittal Steel, he also initiated and led Mittal Steel’s offer for Arcelor to create the first 100 million tonne plus steel company. Aditya Mittal holds a Bachelor’s degree of Science in Economics with concentrations in Strategic Management and Corporate Finance from the Wharton School in Pennsylvania from which he graduated magna cum laude. On March 13 2008, Aditya Mittal was awarded European Business Leader of the Future. Aditya Mittal is the son of Mr Lakshmi N Mittal.

MalayMukherjee,MemberoftheGroupManagementBoard,ResponsibleforAsia,Africa,Mining,Stainless,CISandTechnology

Malay Mukherjee has over 30 years of experience in a variety of technical and commercial functions in the steel industry, including iron ore mining, project implementation, materials management and steel plant operations. He joined the LNM Group in 1993 from the Steel Authority of India (SAIL), where his last position was as Executive Director (Works) at the Bhilai Steel Plant, the largest integrated steel plant in India, with a production capacity of approximately four million tonnes. Mr Mukherjee has a Master’s degree in Mining from the USSR State Commission in Moscow and a Bachelor of Science degree from the Indian Institute of Technology in Kharagpur, India. Mr Mukherjee has completed an advanced Management Programme conducted by the Commonwealth Secretariat in joint association with University of Ottawa, Canada, and the Indian Institute of Management, Ahmedabad. Mr Mukherjee joined Ispat Karmet in 1996 from Ispat Mexicana where he was Managing Director. He joined Ispat Europe as President and CEO in June 1999 to take higher responsibilities. Formerly the President and Chief Operating Officer of Ispat International N.V., Mr Mukherjee became Chief Operating Officer of Mittal Steel Company in October 2004. Mr Mukherjee is a recipient of the MECON Award from the Indian Institute of Metals.

GonzaloUrquijo,MemberoftheGroupManagementBoard,ResponsibleforLongProducts,SteelSolutionsandServices,CorporateResponsibility(CR)andArcelorMittalFoundation

Gonzalo Urquijo, previously Senior Executive Vice President and Chief Financial Officer of Arcelor, held the following responsibilities: Finance, Purchasing, IT, Legal Affairs, Investor Relations, Arcelor Steel Solutions and Services, and other activities. Mr Urquijo also held several other positions within Arcelor, including Deputy Senior Executive Vice President and head of the functional directorates of distribution. Until the creation of Arcelor in 2002, when he became Executive Vice President of the Operational Unit South of the Flat Carbon Steel sector, Mr Urquijo was CFO of Aceralia. Between 1984 and 1992, he held a variety of positions at Citibank and Crédit Agricole before joining Aristrain in 1992 as CFO and later Co-CEO. Mr Urquijo graduated in Economics and Political Science from Yale University and holds an MBA from the Instituto de Empresa in Madrid.

MichelWurth,MemberoftheGroupManagementBoard,ResponsibleforFlatProductsEurope,ProductsDevelopmentandR&D,GlobalCustomersandAutomotive

Michel Wurth was previously Vice President of the Group Management Board of Arcelor and Deputy CEO, with responsibility for Flat Carbon Steel Europe and Auto, Flat Carbon Steel Brazil, Coordination Brazil, Coordination Heavy Plate, R&D and NSC Alliance. The merger of Aceralia, Arbed and Usinor leading to the creation of Arcelor in 2002 saw Mr Wurth appointed as Senior Executive Vice President and CFO of Arcelor, with responsibility over Finance and Management by Objectives. Mr Wurth joined Arbed in 1979 and held a variety of functions, including Secretary of the Board of Directors, Head of the Arbed subsidiary Novar and Corporate Secretary, before joining the Arbed Group Management Board and becoming Chief Financial Officer in 1996. He was named Executive Vice President in 1998. Mr Wurth holds a Law degree from the University of Grenoble, a Political Science degree from the Institut d’Etudes Politiques de Grenoble and a Master of Economics from the London School of Economics.

From left to right:Malay MukherjeeGonzalo UrquijoLakshmi N MittalAditya MittalMichel Wurth

Management CommitteeThe GMB relies on the Management Committee, active since early September 2006, responsible for regional or sectoral organisations and Group-level functions such as Purchasing, Marketing and Strategy. The structure is both lean and flat. It aims to create an organisation that is at once inventive and adaptable, with clear accountability at every level. Above all, it aims to foster an entrepreneurial spirit that will keep ArcelorMittal ahead of its competitors.


Bhikam Agarwal, Executive Vice President, Responsible for Financial Controlling and Reporting

Bhikam Agarwal was previously the Managing Director, Controlling of Mittal Steel and has over 30 years of experience in steel and related industries. He has held various senior executive positions within Mittal Steel and was previously its Chief Financial Officer after its formation at Ispat International. He has been responsible for the financial strategy of Mittal Steel and has been a coordinator of its prior activities in the capital markets. Bhikam Agarwal has also led the finance and accounting functions of Ispat International across all its operating subsidiaries.

Vijay Bhatnagar, Executive Vice President, Responsible for Flat and Long Eastern Europe

Prior to his current assignment, Vijay Bhatnagar was Chief Executive Officer of Mittal Steel Poland from June 2005. Previous to that he was Chief Operating Officer of Mittal Steel Temirtau and earlier, Managing Director of Mittal Steel Lázaro Cárdenas from October 2002. Mr Bhatnagar has over 34 years of experience in line and staff functions in aluminium and electronics industries in India, working for Indal (subsidiary of Alcan) as Vice President Human Resources, Environment and Community Development and AT&S India (subsidiary of AT&S Austria) as Managing Director and Chief Spokesperson. Vijay Bhatnagar holds a Bachelor’s degree in Metallurgical Engineering and is an alumnus of the AMP programme of Harvard Business School.

José Armando Campos, Executive Vice President, Responsible for Flat South America

José Armando Campos was formerly President and Officer in charge of the Flat Steel Business area at ArcelorMittal Brasil and President and CEO of CST (Companhia Siderúrgica de Tubarão). He was appointed to the position in 1997. Prior to this he worked in the mining development and metallurgical areas at the Companhia Vale do Rio Doce from 1974 to 1992. Mr Campos has been a member of the ABM – Brazilian Metallurgy and Materials Society – since 1972 and of the Board of Directors of the Brazilian Business Council for Sustainable Development (CEBDS). Mr Campos is also a member of the Board of Directors of Acesita. José Armando Campos is a Mining Engineer, with a degree from the Federal University of Ouro Preto.

Narendra Chaudhary, Executive Vice President, Responsible for Carbon Steel Asia, South Africa, Black Sea Basin

Narendra Chaudhary was appointed CEO of Mittal Steel’s Ukrainian operation in January 2006. Prior to that, Mr Chaudhary was Director, Operations and Maintenance for Mittal Steel. Mr Chaudhary joined Mittal Steel in 1993 at its Mexican operations and has held a number of positions at Mittal Steel since then, including as CEO of Mittal Steel Galati in Romania and CEO of Mittal Steel’s operations in Kazakhstan. Mr Chaudhary possesses over 39 years of experience in a variety of technical and managerial functions in the steel industry. He worked at Steel Authority of India Limited plants in various capacities for 28 years. Narendra Chaudhary has a Bachelor’s degree in Engineering from Bihar Institute of Technology, India.

Davinder Chugh, Senior Executive Vice President, Responsible for Shared Services (Purchasing, Energy, IT, Legal, Real Estate, Shipping, By Products, Shared Service Centres, TCO, SG&A)

Davinder Chugh, previously CEO of Mittal Steel South Africa, has over 25 years’ experience in the steel industry, particularly in materials purchasing, logistics, warehousing and shipping. Mr Chugh also was Commercial Director at Mittal Steel from 2002 to 2006. Before joining Mittal Steel South Africa, he was Vice President of Purchasing at Mittal Steel Europe. Mr Chugh has been with the Company since 1995 and successfully integrated the materials management functions at newly acquired plants in Hamburg and Duisburg in Germany, in France, in Romania and in Algeria. Prior to this, he held several senior positions at the Steel Authority India Limited in New Delhi, India. Davinder Chugh holds Degrees in Science and Law and has a Master’s degree in Business Administration.


Christophe Cornier, Executive Vice President, Responsible for Flat Products Western Europe

Christophe Cornier is Executive Vice President and member of the Management Committee of ArcelorMittal. He has been appointed to his current position of CEO Flat Products Western Europe in October 2006. Prior to that, Mr Cornier was responsible for Arcelor’s Flat Products activities in Europe and for its worldwide automotive sector since December 2005, when he was appointed member of the Arcelor’s Management Committee. In June 2005, he was appointed Head of Arcelor’s Client Value Team. At the creation of Arcelor in 2002, he was named Executive Vice President of FCS Commercial Auto. Before that, he was CEO of Sollac Méditerranée. In 1998, he was appointed CEO of La Magona, after joining Sollac Packaging as Managing Director in 1993. In 1985 he joined Usinor, where he was Business Development Director and Chief Controller of Sollac. He began his career within the French Ministry of Industry, which he left as a Deputy Director. Christophe Cornier is a graduate of the Ecole Polytechnique and the Ecole des Mines, in Paris.

Philippe Darmayan, Executive Vice President, Responsible for Steel Solutions and Services

Philippe Darmayan was appointed Executive Vice President in charge of Arcelor Steel Solutions and Services in January 2005. Before that, he was CEO of Ugine & ALZ, the European flat stainless businesses. A graduate of French business school HEC, Philippe Darmayan joined Arcelor to lead the transformation of Ugine & ALZ in 2002. Before that, he held various management positions in the aluminium businesses of Pechiney Group which he joined in 1996, and he was a Plant Director and Managing Director of Franco-Belge de Fabrication de Combustibles, a subsidiary of Framatome.

Bernard Fontana, Executive Vice President, Responsible for Human Resources

Bernard Fontana joined Arcelor in September 2004 as Program Office Executive manager for Flat Carbon Steel and was appointed as Arcelor Flat Carbon Europe Executive Vice President responsible for People and Development in July 2005. Prior to that, he worked at the Chemical Group SNPE for 18 years. After an appointment as SNPE North American Director based in Princeton, New Jersey, USA, his last responsibility at SNPE was as Executive Vice President of the Group based in Paris. Bernard Fontana is a graduate of the Ecole Polytechnique and of the Ecole Nationale Supérieure des Techniques Avancées (Paris).

Jean-Yves Gilet, Executive Vice President, Responsible for Stainless Steel Worldwide

Jean-Yves Gilet was formerly adviser to the Arcelor CEO with responsibility for the Group’s Stainless Steel business worldwide. Appointed to the post in December 2005, he was in charge of preparing and implementing the strategic reorganisation of this business. Prior to this, he was Senior Executive Vice President of Arcelor in charge of the Stainless Steel Sector, a position he held from 2002 when Arcelor was created. In 1999, he was appointed to the Usinor executive committee. In 1998, he was named Chairman and CEO of Acesita in Brazil. He joined Usinor in 1990 and, between 1991 and 1998, he held management positions at Imphy, Ugine-Savoie and Sprint Métal stainless businesses. Prior to that, he had been Cabinet Head for the Regional Development Minister in France. Jean-Yves Gilet, an engineering graduate of the Ecole Polytechnique (Corps des Mines), began his career in 1981 at the French Ministry of Industry before joining DATAR, the regional development agency.

Management Committeecontinued


Pierre Gugliermina, Executive Vice President and CTO, Responsible for Health and Safety, Operational Excellence and the Environment

Pierre Gugliermina was previously in charge of the Downstream Operations in Flat Carbon West Europe. His career is fully devoted to the steel industry. After co-leading the Business Unit Flat Products South of Europe in Madrid at the early stage of Arcelor, he took on the responsibility of the Industrial Operational Direction of the European Flat Business Unit. Prior to this, and after joining the steel plant in Fos-sur-Mer, France, as a metallurgist, he went successively to General Manager of the Steelmaking shop at Fos-sur-Mer, Managing Director assistant at Sidmed in Spain and CEO at Sollac Atlantique. Pierre Gugliermina graduated from the Ecole Centrale Paris in 1974.

Sudhir Maheshwari, Executive Vice President, Responsible for Finance and M&A

Sudhir Maheshwari was previously Managing Director, Business Development and Treasury of Mittal Steel and has 20 years’ experience in steel and related industries. Prior to this he was the Chief Financial Officer of LNM Holdings N.V. from January 2002 until its merger with Ispat International in December 2004. He played an integral role in all Mittal Steel acquisitions in recent years, including turnaround and integration activities. He also played a key role in various corporate finance and capital market projects, including the initial public offering in 1997. Over an 18-year career with Mittal Steel, Mr Maheswari also held the positions of Chief Financial Officer at Mittal Steel Europe, Mittal Steel Germany and Mittal Steel Point Lisas, and was Director of Finance and Mergers and Acquisitions at Mittal Steel. Mr Maheshwari also served on the Board of various subsidiaries of Mittal Steel. Sudhir Maheshwari is an Honours Graduate in Accounting and Commerce from St. Xavier’s College, Calcutta and a Fellow Member of the Institute of Chartered Accountants and the Institute of Company Secretaries in India.

Carlo Panunzi, Executive Vice President, Responsible for Long Americas

Carlo Panunzi was previously Senior Executive Vice President of Arcelor Brasil, in charge of Long Products and Distribution. Arcelor Brasil (now ArcelorMittal Brasil) results from the merger of three subsidiaries of Arcelor in Brazil, Companhia Siderúrgica Belgo-Mineira, Companhia Siderúrgica de Tubarão (CST) and Vega do Sul (now ArcelorMittal Vega). In 2002, Carlo Panunzi became the President of Belgo Mineira, a company he had joined in 1999 and where he was, among other positions, Managing Director of the Piracicaba plant in the State of São Paulo. Before that, he held several positions at Arbed, which he had joined in 1973 as an engineer at the Differdange plant’s rolling line.

Michael Pfitzner, Executive Vice President, Responsible for Marketing and Commercial Coordination

Michael Pfitzner joined Mittal Steel as Director of Marketing in February 2006. He has over 25 years of extensive industry experience in commercial functions with several steel companies namely Mannesmann, Saarstahl, Krupp Thyssen Stainless and Salzgitter. In his last assignment at Salzgitter, where he worked for nearly five years, Mr Pfitzner was a member of the Executive Board responsible for Sales and Distribution. Michael Pfitzner has a degree in Economics from the University of Bonn, Germany.


Gerhard Renz, Executive Vice President, Responsible for Long Europe

Gerhard Renz was formerly the COO (Chief Operating Officer) of Mittal Steel Europe B.V. He has over 34 years of experience in the steel industry. Mr Renz worked as Managing Director in Mittal Steel Hamburg and Mittal Steel Duisburg and he was also CEO of Mittal Steel Germany. In 2001 Gerhard Renz became President of Mittal Steel Europe S.A. Gerhard Renz holds a Bachelor’s degree in Engineering.

Michael G Rippey, Executive Vice President, Responsible for US

Michael Rippey was elected as President and Chief Executive Officer of Mittal Steel USA in August 2006. Previously, he had been the Company’s Executive Vice President, Sales & Marketing since April 2005, with direct responsibility for all sales and marketing of light flat-rolled and plate products. From January 2004, Mr Rippey was Executive Vice President, Commercial, and Chief Financial Officer at Ispat Inland, a predecessor company. He joined the Company in June 1998. Michael Rippey has a Bachelor’s degree in Marketing from Indiana University, Bloomington; a Master’s degree in Banking and Finance from Loyola University, Chicago, and a Master of Business Administration from the University of Chicago.

Lou Schorsch, Executive Vice President, Responsible for Flat Americas

Lou Schorsch was elected in August 2006 as President and Chief Executive Officer of Flat Americas. Previously, he had been Chief Executive Officer of Mittal Steel USA since the merger of Mittal Steel and ISG in October 2004. Prior to this, Dr Schorsch was the President and Chief Executive Officer of Ispat Inland where he was responsible for significant improvements in the Company’s operational performance. Dr Schorsch has over 25 years of experience in consulting and managerial roles predominantly relating to the steel industry. Prior to joining Ispat Inland in October 2003, Dr Schorsch held various senior positions in the consulting and e-commerce sectors. His immediate previous assignments have been as President and Chief Executive Officer of GSX.com and Principal at McKinsey & Company, where he worked from 1985 until 2000. While at McKinsey, he was a co-leader of its metals practice. Dr Schorsch has published numerous articles in such publications as Business Week and Challenge and has also co-authored a book on steel entitled Upheaval in a Basic Industry.

Bill Scotting,Executive Vice President, Responsible for Strategy

Bill Scotting joined the Mittal Steel Group in September 2002 to lead its Performance Enhancement activities, becoming responsible for Strategy in 2007. Formerly an Associate Principal at McKinsey & Company, Mr Scotting has over 20 years’ experience in the steel industry in technical, operations management and consulting roles. He has also held positions at BHP Steel, Pioneer Concrete UK, the Mascott Partnership and CRU International. Bill Scotting holds a Bachelor of Science degree in Metallurgy from the University of Newcastle in Australia, where he was awarded the Australasian Institute of Metals Prize for Metallurgy, and a Master of Business Administration (with distinction) from Warwick Business School in the United Kingdom.

André van den Bossche, Executive Vice President, Responsible for Globe Trade Policy, Steel Contact Groups, Associations and Mandates

André van den Bossche was previously Arcelor’s Executive Vice President Commercial Worldwide Optimisation, a post he assumed in 2005. Prior to this, he was Managing Director of Arcelor’s Flat Carbon Steel commercial organisation from 2002 to 2005. Between 1995 and 2001, he was Managing Director at the Aceralia Sidstahl Ibérica and Sidstahl sales organisations. Before that, he was Sales Director at TradeArbed Luxembourg (1986-1995). At Sidmar, Ghent, which he joined in 1970, he was Vice President of the Commercial and Customer Relations Department, General Manager of the cold rolling mill and production and management engineer at the cold rolling mill. André van den Bossche is a civil engineer and graduated from the Universities of Louvain and Ghent.

QHow is ArcelorMittal exploiting its wealth of global knowledge and expertise for its two Greenfield projects in Orissa and Jharkhand, India?

The ArcelorMittal Group has two ongoing Greenfield projects in Orissa and Jharkhand as the focus areas for investments worth 20 billion US$ in India. These two very important projects represent an eventual capacity of 24 million tonnes of steel per year and respond to ArcelorMittal’s three dimensional growth strategy in terms of geography. A 15 person specialist team, made up of the best talents in the Company and led by Pierre Gugliermina, EVP and CTO, is assisting the development of ArcelorMittal in India through the exchange of best practices, tapping into the ‘yellow pages of expertise’ available throughout the Group’s worldwide network. For example, the Group is learning from best practices in steel production, environment and safety at ArcelorMittal Tubarão, Brazil. In addition to having an excellent record of Corporate Responsibility, the Group’s facilities in Tubarão are a model of what ArcelorMittal stands for in terms of Sustainable Development and energy self-sufficiency while at the same time manufacturing world-class steel. This success is credited to the establishment of a clear system of procedures in all operational areas, practices which the Company hope replicate in the Indian context.

A

transforming tomorrowBusiness StrategyArcelorMittal’s success has been built on a consistent strategy that emphasises size and scale, vertical integration, product diversity, continuous growth in higher-value products and a strong customer focus. The Group has unique geographical and product diversification which reduces exposure to risk and cyclicity and responds to one of our core values: Sustainability. ArcelorMittal intends to continue to play a leading role in the consolidation of the global steel industry and to be the global leader in the steel industry, in particular through this comprehensive business strategy.


“ Worldwide steel demand is driven by growth in developing economies, in particular in the BRICET countries. Around 50% of our industrial assets are located in developed regions and 50% in emerging markets.” Aditya Mittal, Chief Financial Officer



In March 2007, ArcelorMittal presented its three dimensional strategy for Sustainability and growth, consisting of geography, products and value chain.

The ArcelorMittal Growth Plan 2012 calls for a 20% increase in shipments in the next five years, reaching production of 131 million tonnes by 2012. Growth projects focus on high-growth markets and low-cost areas. At the time of this announcement, approximately 75% of the Growth Plan 2012 was already done or approved for a potential investment of 7 billion US$ over 6 years.

This 20% increase is based on projected world steel production growth of 3-5% per year, translating into an increase of 20-30% over the period. ArcelorMittal has based its growth plan on the low end of this projected world market growth in order to support a healthy global supply/demand situation. ArcelorMittal considers the 20% growth an achievable target considering the Group’s Leadership position in high-growth markets where approximately half of ArcelorMittal’s industrial network is located.

In addition to the three dimensions, ArcelorMittal has three key pillars in the overall growth strategy which consist of Brownfield and Greenfield Projects and targeted acquisitions.

The Growth Plan 2012 is led by Aditya Mittal, Chief Financial Officer and Member of the Group Management Board.

Extending the geographic reach

Q:WhyisgeographysoimportantforbusinessSustainability?

Aditya Mittal: “ArcelorMittal is able to improve management and spread risk by operating in four segments based on geographical and product diversity. Worldwide steel demand is driven by growth in developing economies, particularly in the BRICET countries. Around half of our industrial assets are located in developed economies and half are in emerging markets. Our expansion strategy over recent years has resulted in us having leading positions in Africa, Central and Eastern Europe, South America and Central Asia, but we are also building our presence in China and India. As the latter economies develop and their market needs change, local customers will increasingly require advanced steel products, products that we hope to provide.”

In 2007 ArcelorMittal made a number of transactions aimed at cementing its existing geographic coverage and extending its reach. We acquired the outstanding minorities in ArcelorMittal Poland at a cost of 181 million US$, and ArcelorMittal Brasil, at a cost of 3.7 billion US$. We also announced a cash offer for the outstanding 34.7% minority interest in the Argentine company, Acindar. The 552 million US$ offer closed in February 2008. We completed the acquisition of the Mexican integrated steelmaker Sicartsa, for a consideration of approximately 1.4 billion US$ in April 2007.

In October, ArcelorMittal announced a joint venture partnership with Borusan to construct a 500 million US$ hot strip mill in Gemlik, Turkey. Located next to an existing jointly owned plant, it is planned to come online in the first half of 2010 with a capacity of 4.8 million tonnes.

ArcelorMittal extended its interests in China. In December it announced the acquisition of a 28% interest in the Hong Kong listed China Oriental Group for a consideration of 647 million US$, and in a subsequent announcement, that ArcelorMittal had entered into a shareholder’s agreement with the controlling shareholders of COGC which will enable us to eventually raise our stake in the Company to 73.13%. Based in the People’s Republic of China, China Oriental Group produces billets, strips, H-beams, cold rolled and galvanised strip. In October, ArcelorMittal bought a 90% stake in a privately owned Chinese steel cord wire drawing company, Rongcheng Chengshan Steelcord, for 26.6 million US$. The Group also has approximately a 33% stake in Hunan Valin.

In November, ArcelorMittal entered into Estonia with an agreement to buy Galvex Oü, a privately owned steel galvanising line located in Tallinn.

Enhancing product diversity

Q:Whatarethechallengesforaglobalsteelmakerintermsofproduct?

AM: “A global steel producer must be able to meet the needs of different markets. Steel consumption and product requirements clearly differ between mature and developing economic markets. Steel consumption in mature economies is weighted towards flat products and a higher value-added mix, while developing markets utilise a higher proportion of long products and commodity grades. To meet these diverse needs, we plan to maintain a high degree of product diversification.”

In December we announced the acquisition of a 28% interest in the Hong Kong listed China Oriental Group for a consideration of 647 million US$.

The Orissa and Jharkhand Greenfield projects represent an eventual capacity of 24 million tonnes of steel per year.

28% 24mn


60% of ArcelorMittal’s total shipments are dedicated to value-added products, and 30% to specialties. Several initiatives were taken to expand product diversity. In the area of Pipes and Tubes, acquisitions were made to strengthen ArcelorMittal’s position in the automotive products and energy sectors. In July, the Group acquired two pipes and tubes businesses in France (totalling three manufacturing facilities), both of which supply the automotive industry. Shortly after the end of the year we announced the planned acquisition of Unicon, Venezuela’s leading manufacturer of welded steel pipes and a major supplier to the oil and gas, industrial and construction sectors. In the year ending in March 31 2007, Unicon shipped 552,000 tonnes of steel pipes. The transaction is subject to regulatory approval.

ArcelorMittal also signed a joint venture agreement with the Bin Jarallah Group to construct a seamless tube mill in Jubail Industrial City, Saudi Arabia. The mill, which is due to be completed in the fourth quarter of 2009, will have a capacity of 500,000 tonnes a year.

In the area of ferro-alloys and stainless steels, ArcelorMittal made three moves aimed at strengthening its market position. Towards the end of the year, it agreed to buy OFZ, one of the leading Central European manufacturers of ferro-alloys, with an annual capacity of 150,000 tonnes and announced its intention to launch a de-listing cash offer for the outstanding 43% of ArcelorMittal Inox Brasil (formerly Acesita), thus strengthening its position in silicon steel, ferritics and specialty stainless steel. Finally, as part of a strategy aimed at strengthening its stainless steel business in South America, ArcelorMittal bought Cinter, an important stainless steel tube producer in Uruguay, M.T. Majdalani, a leading stainless Steel Service Centre and distributor in Argentina, and a service centre in Brazil.

The 25% stake formerly held by Arcelor in the Severgal joint venture with Severstal of Russia was sold in May. The two companies agreed to pursue separately their respective development plans in the automotive market. ArcelorMittal also disposed of three European businesses in medium/heavy sections as part of its commitments to the European Commission during the merger of Arcelor and Mittal Steel. The sales achieved an enterprise value of approximately 1 billion US$.

In a major move to build a worldwide business in laser-welded tailored blanks, ArcelorMittal and Noble Investments combined their respective businesses in this area to service their global automotive customers. In exchange for selling eight production facilities in Europe, China, India and the USA, ArcelorMittal received a combination of cash, shares and a loan note to become Noble’s largest shareholder with approximately 40% of the company’s common shares. The transaction was completed in August. In March 2008, ArcelorMittal provided Noble with a 50 million US$ convertible subordinated loan. The Group has also acquired as additional 10.31% of Noble shares, increasing ArcelorMittal’s shareholding to around 49.95%.

The same month, the Group extended its European energy network with the acquisition of a 76.88% stake in Saar Ferngas, the largest gas distribution business in Saarland and Rhineland-Palatinate, Germany.

Vertical integration through the value chain

Q:HowdoesArcelorMittalplantocontinuetodevelopitsdownstreamintegration?

AM: “We already have access to high-quality and low-cost raw materials through our captive sources and long-term contacts. However, we intend to selectively increase our access and ownership of low-cost material supplies, particularly in locations adjacent or accessible to our steel plant operations, as downstream integration is a key element of our strategy to build a global franchise. For high-value products, downstream integration allows companies to be closer to the customer and capture a greater share of value-added activities.”

2007 saw a number of significant transactions to extend the Group’s upstream activities in raw materials. These transactions are part of a long-standing strategy designed to reduce ArcelorMittal’s dependence on outside sources of iron ore and coal and its exposure to rising input prices. The target is to achieve 65% of iron ore self-sufficiency by 2012, and to develop other raw materials such as manganese or coal.

Major progress was achieved in developing new sources of iron. An agreement was signed with the Government of Senegal to develop iron ore mines and related activities in the Faleme region of Senegal, based on a project that will cost around 2.2 billion US$. A Memorandum of Understanding was signed with Société Nationale Industrielle et Minière of Mauritania, to jointly develop a large iron ore mining project.


transforming tomorrowBusiness Strategy continued


On the coal front, ArcelorMittal agreed to acquire three coal mines and associated assets in Russia for a consideration of 720 million US$. Combined annual production from the three mines is 3.14 million tonnes. Estimated total reserves top 140 million tonnes. The acquisition is subject to regulatory approval.

In November, ArcelorMittal entered into a joint venture with Kalagadi Manganese to develop a manganese mine, a beneficiation plant and a sinter complex in South Africa’s Northern Cape Province. The joint venture will ultimately produce 2.4 million tonnes a year of sinter product. It will also see the establishment of a 320,000 tonnes ferromanganese alloy production facility in the Coega Industrial Development Zone, near Port Elisabeth, which will supply at least half of ArcelorMittal’s annual needs.

In the same month, ArcelorMittal entered into a transaction to secure a major proportion of its current annual molybdenum requirements by agreeing to buy a 12.6% equity stake (equivalent to 10% on a fully diluted basis) in General Moly, Inc., for a consideration of 70 million US$. With two properties in central Nevada, USA, General Moly aims to become the largest primary producer of molybdenum worldwide by the middle of the next decade and ArcelorMittal has signed a letter of intent to enter into a long-term off-take agreement.

The expansion of the Group’s downstream activities proceeded apace in 2007. ArcelorMittal has the objective to increase Steel Solutions and Services volumes by 60%. In September, ArcelorMittal announced the proposed acquisition of Turkey’s leading steel stockholder, Rozak. In October, it agreed to buy a 70% stake in Carminati Distribuzione, a leading steel distributor in northern Italy.

In December, the Group agreed to acquire one of Austria’s leading steel distributors, Eisen Wagner, which, in 2007, sold 140,000 tonnes of steel products, of which 60,000 tonnes were processed. The same month, ArcelorMittal bought NSD, a leading steel distribution business in the UK. NSD, based in Scunthorpe, Lincolnshire, specialises in heavy sections and tubes with sales of 130,000 tonnes a year. ArcelorMittal plans to use NSD to build a significant market share in the UK. In Argentina, it acquired M.T. Majdalani, consolidating its position in the stainless steel distribution market in South America.

Forging ahead through Greenfield projects

Q:HowsignificantisthepotentialimpactofsomeoftheexistingGreenfieldprojectsontheoverallgrowthplan?

AM: “Very significant. In terms of internal growth, we hope to see volume increases of 20% by 2012 – but with our Greenfield projects in India alone we expect to add volume growth of 20%! The Orissa and Jharkhand Greenfield projects represent an eventual capacity of 24 million tonnes of steel per year. There is a considerable need for development in the country and this development goes hand-in-hand with a tremendous demand for steel. India’s steel consumption per capita is around 50kg, which is a rather small amount compared to developed countries (for example the consumption in the USA is more than 400kg per capita).

Consequently there is tremendous scope for India to increase its steel usage, and our Greenfield ventures not only provide us with entry into that market, they give us the ability to supply products and services to it.”

In 2007, ArcelorMittal also initiated development plans for Greenfield projects in Liberia and Senegal as well and announced new projects in Mauritania, Mozambique, Nigeria, Russia, Saudi Arabia and Egypt.

Leadership and consolidation by Mergers and Acquisitions

Q:WheredoMergersandAcquisitionsandGreenfieldgrowthfitintotheoverallgrowthstrategy?

AM: “While the ArcelorMittal growth plan is partly based on strong organic expansion, Mergers and Acquisitions remain a key pillar of the Group’s growth strategy as we seek to maximise the opportunities presented by our industry-leading position. Our long experience of successfully integrating acquisitions gives us a strong base from which to operate. Mergers and Acquisitions improve consolidation and synergies. ArcelorMittal seeks out low-risk, value-creative transactions that complement one or more of our three strategic goals – product diversity, geographic reach and vertical integration.”

With a unique intelligence network, ArcelorMittal is presented with a large number of acquisition opportunities every year. In 2007, the Group announced a record 35 transactions, acquisitions and investments for a total value of 12.3 billion US$ completed in 2007.

Future

ArcelorMittal will continue to pursue its business strategy of extending product diversity, geographic reach and vertical integration through a combination of organic expansion and acquisitions. We have sufficient financing in place to fund our future plans, and we enjoy good relations with our banks and continued access to the credit markets. At the balance sheet date, ArcelorMittal had 16 billion US$ in liquidity.


Value chain

ArcelorMittal is not only a steel producer but an integrated metals and mining leader capturing opportunities along the value chain.

A three dimensional strategy

Product

ArcelorMittal is the only producer offering, leveraging and developing the full range of steel products and services.

Geography

ArcelorMittal is the only truly global producer.

ArcelorMittal

With a unique intelligence network, ArcelorMittal is presented with a large number of acquisition opportunities every year. In 2007, the Group announced a record 35 transactions, of which 14 were completed for a capital outlay of 12.3 billion US$ including the assumption of debt.


transforming tomorrowBusiness Strategy continuedMergers and Acquisitions remain a key pillar of the Group’s growth strategy. ArcelorMittal have had the unique advantage of being involved in many successfully integrated acquisitions.

2007 August NobleInternationalUSA

Largest producer of laser-welded steel products.

2007 December ChinaOrientalChina

One of China’s most efficient iron and steel producers. The plant’s strategic geographical location ensures reliable and stable raw material supply and product transport.

2007 February JVwithBinJarallahGroupSaudi Arabia

To undertake the construction of a seamless tube mill.

2007 April SicartsaMexico

Acquisition of leading Mexican long steel producer for an enterprise value of approximately 1.4 billion US$- annual production capacity of approximately 2.7 million tonnes.

2008 JanuaryMemorandumofUnderstandingwithSNIMMauritania

Further strengthening the existing presence in the region and creating employment opportunities.

2007 November GalvexOÜEstonia

Produced 190,000 tonnes of hot dip galvanised steel.

A cross-section of acquisitions made by ArcelorMittal in 2007.



ArcelorMittal is one of the 50 largest companies in the world and the undisputed leader of the steel and mining industry. As such, building our brand was critical; it represents the core of everything we do and say as a company. The challenge was to merge two business cultures, create one new single identity and motivate everyone to work together towards one common goal. Not only does our brand as a clearly defined expression of our Company’s personality help to unite the Group across 60 countries and in a variety of languages, it also has a tangible value.

The new ArcelorMittal brand was launched on May 29 2007 at the Group’s Leadership Convention in Cannes, France. The brand is the DNA of ArcelorMittal, something that binds all employees together. The new brand launched in 2007 is not only a new logo: it reveals the values and philosophy that underpin it. The new brand represents our aspirations, ambitions, and our strategy for the future.

It is clear that the best future is a sustainable one, capable of providing value to all of our stakeholders. We want to be in a position where we can deliver return on investment to our shareholders consistently throughout the cycle. We want to secure the long-term commitment of our employees, by offering them a fulfilling career in a company where they are encouraged to excel. We want to live in harmony with the communities we operate in, helping to develop and transform their long-term prospects. We want to be able to fulfil and outperform the expectations of our customers and deliver product solutions because their long-term satisfaction is critical.

ArcelorMittal’s purpose and vision are clearly defined and represented by our brand –‘transforming tomorrow’ – and the values we stand for: Sustainability, Quality and Leadership. Our ambition is to build a steel industry for the modern age, one that is focused on customer and stakeholder satisfaction.

Boldness changes everything

The new ArcelorMittal advertising campaign, ‘Boldness changes everything’, was launched across the globe on June 4 2007. The advertising campaign fits perfectly with our new identity and answers the following questions: at ArcelorMittal, what do all 310,000 employees stand for? What do we believe in and how does that make us different? At ArcelorMittal, our role is to transform tomorrow. Our ambition is to set globally recognised standards by managing our growth and profits with the needs of future generations in mind. How do we achieve this ambition? By being bold.

Besides achieving record growth, integrating two steel giants successfully and developing numerous partnerships in 2007, ArcelorMittal also launched its new global brand. Our brand embodies what ArcelorMittal stands for, what it intends to achieve and by what values and guiding principles we will operate.

A New Brand

On September 13 2007, ArcelorMittal employees from all the Liège, Belgium sites were dressed in orange to celebrate the launching of the new brand. Around 5,500 people from 20 sites gathered to discover the new values of the Group and some even created a human logo of ArcelorMittal.Patrick Bardet gave a presentation about the new brand highlighting how it will be implemented within ArcelorMittal Liège. Employees from different shifts were invited to learn more about the Group brand strategy, values and application through a panel presentation.


‘transforming tomorrow’: Our philosophy, our valuesWe know that our position in the steel industry brings unique responsibilities. We are committed to setting globally recognised standards with the needs of future generations in mind. Our goal is to provide the Leadership that will transform tomorrow’s steel industry. We have a clear vision of the future, underpinned by a consistent set of values:

SustainabilityWe are guiding the evolution of steel to secure the best future for the industry and for generations to come. Our commitment to the world around us extends beyond the bottom line, which is why we invest in the people and support the communities and the world in which we operate. This long-term approach is central to our business philosophy.

QualityWe look beyond today to envision the steel of tomorrow. Because Quality outcomes depend on Quality people, we seek to attract and nurture the best people to deliver superior solutions to our customers.

LeadershipWe are visionary thinkers, creating opportunities every day. This entrepreneurial spirit brought us to the forefront of the steel industry. Now, we are moving beyond what the world expects of steel.

One of the earliest moves in the wake of the merger was to define a new, Group-wide Health and Safety policy. As a mark of the importance attached to the safety issue, every meeting of both the Group Management Board and the Management Committee begins with a Health and Safety review.

The new Health and Safety policy was launched in March 2007. It is aimed at reducing the frequency of accidents on a continuing basis. It underlines the commitment ArcelorMittal has made to the well-being and safety of all employees – both on and off the job – in order to meet its aim of becoming the safest steel and mining company in the world.

A common Health and Safety model has been implemented throughout the Group. Drawing on the best systems and reporting standards of the two predecessor companies, it allows the Corporate Health and Safety Department to define and follow-up performance targets and monitor results from every business unit. The new model was presented and discussed at a special Health and Safety convention held in Paris in January 2007 and attended by around 100 Health and Safety managers from around the world.

An injury tracking and reporting database is being put in place to track all information on injuries, lost man days and other significant events. It incorporates a Return-of-Experience (REX) system fordisseminating lessons learned from individual incidents and thus improve prevention and prevent recurrences.

Performance

Overall Health and Safety performance has improved over the past two years but injury rates remain above acceptable levels. The rate of injuries fell in 2007 to 3.2 for every million working hours compared with 4.2 in 2006.

‘Leading by Example’ is an essential concept to promote Health and Safety within the Group. Two urgent initiatives are in process to achieve a rapid improvement in 2008:

• The key to build on the best performing plants in locations such as Western Europe and Brazil where the safety culture is already strongly developed. An information circulation system has been introduced to ensure quick and efficient dissemination of key measures and action plans.

• All managers from Management Committee level down are being trained to carry out shop floor safety audits on a monthly basis. Once all individuals have been trained, around 1,000 such audits will be carried out each month. Where an audit uncovers breaches of safety rules, an immediate retraining programme will take place.

Health and Safety

At ArcelorMittal Dunkerque on Health and Safety Day, March 6 2008, 120 employees and subcontractors were rewarded for 21 actions conducted in 2007 and in the beginning of 2008. Strong testimonials were given and progress actions were presented. Everybody proved to be passionately working towards improving Health and Safety conditions.


Ensuring the highest standards of Health and Safety is an overarching priority for ArcelorMittal. ArcelorMittal is committed to the well-being of all employees and aims to become the safest steel and mining company in the world.


Health and Safety Day

Raising awareness of Health and Safety is a vital element in the drive for improvement. In March 2007 and 2008, ArcelorMittal held a Health and Safety Day that was observed in all of its worldwide operations. Now a regular annual event, Health and Safety Day is an occasion to involve all staff in discussing safety improvements, new targets and associated safety programmes at Group as well as plant level.

The day involved all 310,000 employees as well as around 140,000 contractors. The participation of the latter reflected the importance ArcelorMittal attaches to reducing injuries among its contractors. Approximately half of all severe accidents and fatalities within ArcelorMittal involve contractors.

At all sites, a corporate campaign video was played together with a series of short films. They included a personal message from President and CEO Lakshmi N Mittal subtitled into 13 languages and stressing the critical role Health and Safety plays within the Group. He and other GMB members spent the day visiting as many plants as they could to communicate the message in person.

Coal Mining activities

In 2007 ArcelorMittal initiated changes in local management and operating practices and embarked on an investment programme aimed at modernising the mines, ensuring a safe working environment for employees and improving productivity. The programme will take four years to complete. It includes upgrading of the methane degassing and mine ventilation systems and installing electrical and gas detection telemetry systems.

The Group also received a 100 million US$ loan from the European Bank for Reconstruction and Development (EBRD) to improve Health and Safety and productivity at its mining operations.

In January 2008, a tragic accident at the Abaiskaya coal mine in Kazakhstan claimed the lives of 30 miners. Following a lengthy investigation into the cause of the accident, a set of recommendations for reinforcing coal mine safety was drawn up and a detailed action plan set in motion. A follow-up report on this action plan is now provided on a weekly basis to the Group Management Board to ensure that every step is implemented urgently and effectively to ensure the safety of all employees engaged in the Group’s mining operations.

As part of our commitment to improve safety in the Kazakhstan mines, ArcelorMittal is working with Petron Ensafe, leading consultants in coal methane degassing, to investigate techniques which extract the methane before mining. Once the methane is extracted, it can be converted into an energy source such as electricity or fuel. This method is environmentally friendly as it reduces greenhouse gas emissions.

Health initiatives

ArcelorMittal views the health of its workforce as a key element in the success of its operations. The thrust of its work in this area focuses on the Continuous Improvement in protection from dust and gases arising out of the many different processes in which staff are engaged. A series of investment projects to upgrade occupational protection is underway.

In March 2008, a health audit was realised in the Temirtau plant (Kazakhstan) to evaluate the health conditions of employees. The strategy is to define a health project for steel and mining operations, to restructure and modernise equipment. Over a three-year programme, priorities are set on hygiene, equipment renewing, occupational and general health, emergency and training of doctors and nurses.

A number of other specific regional projects have begun. For example in South Africa, an initiative to tackle the challenge of HIV/AIDS is underway. It aims at behavioural change through:

• Encouraging employees to test for HIV/AIDS through a ‘Know Your Status’ campaign.

• Providing a support programme for HIV-positive employees that monitors compliance with treatment offered by external networks.

• Institutionalising effective governance structures to enhance visible leadership and advocacy at all levels.

The projects include educational and awareness programmes using poster campaigns, articles in local Company journals and newsletters, industrial theatre, voluntary counselling and testing events, and the availability of free condoms.

Generally speaking, the Group promotes and provides health and well-being programmes and check-ups. Through the ArcelorMittal Foundation, ArcelorMittal promotes and develops health programmes for the communities surrounding operations. Occupational health and care programmes are also developed in all units.

Driving Performance Leadership

A culture of Continuous Improvement, drawing on the rich and diverse store of technical know-how within the Group, lies at the heart of ArcelorMittal’s success. Knowledge and skills are leveraged on a global basis in a systematic manner to optimise operating processes and drive performance leadership.


Systematic exchange of best practices is part of ArcelorMittal’s strategy. The Corporate Performance Enhancement team coordinates and drives the Continuous Improvement process. Part of ArcelorMittal’s Technology department, its activities span three areas:

• Operational excellence: using its consulting skills, the team challenges the organisational capability of each entity to drive operational excellence and Continuous Improvement, ensures focus and effectiveness of performance improvement efforts and leads or supports critical projects as they arise. To deliver these objectives, it is strengthening and training a core group of operational excellence managers.

• Knowledge Management Programme (KMP): the team manages the KMP, which acts as a global engine of improvement by annually bringing together the key people involved in a given function or technical area, thereby facilitating the exchange of best practices and knowledge throughout the Group and closing the performance gap between the best and weakest units.

• Technical infrastructure: the team has developed a global technical benchmarking system, detailing the key performance indicators for the most important production processes. It is currently developing two other central databases – a skills repository identifying individual sources of expertise and a knowledge database.

The three areas are closely integrated. The team’s overarching objective is to leverage the skills and know-how within the Group to extract added-value from existing assets. The global technical benchmarking system helps managers identify critical problem areas, the scope for improvement and the top performing units to contact for best practices exchange. The Continuous Improvement process then delivers the levers for tackling them. Via the skills and knowledge repositories, managers will be able to locate existing expertise and know-how on which to draw as they pursue a given project. And by breaking down the barriers between managers and technicians across the Group, the KMP facilitates peer group interaction and the dissemination of best practices.

ArcelorMittal Way for Continuous Improvement

As part of the integration process in 2007, the Corporate Performance Enhancement team identified the need for a standardised approach to Continuous Improvement that was specific to the Group’s needs. The key was to provide a simplified approach that would build on existing best practices and establish a common language and shared understanding across the Group. Above all, it needed to be results-driven and fact-based.

Following detailed analysis of all the different tools and methods in operation, the Performance Enhancement team identified problem-solving as the key common denominator. From there it developed the ArcelorMittal Way for Continuous Improvement, a three-stage process that unites all the existing tools into a structured and fact-based methodology, combining them with the right attitude, skills and processes to make them effective. The three-stage process is to:

• Focus – this requires the identification of, and clear focus on, the key areas that matter in achieving the business plan.

• Solve – using a rigorous, fact-based, problem-solving approach, managers identify the key drivers of performance, prioritise their actions on the basis of economic impact and feasibility, and develop clear, standard operating practices to implement.

• Sustain – clear ownership and accountability, together with measurements based on clearly defined performance indicators, are the keys to sustained improvement.

Throughout the process, emphasis is placed on the importance of leveraging the Group’s in-house skills.

Following successful pilot courses in late 2007, the Performance Enhancement team will be driving the adoption of the ArcelorMittal Way of Continuous Improvement across the Group in 2008, with an initial training programme targeting around 400 individuals in the first year. It will begin by training the shop managers and Continuous Improvement managers in units facing critical bottleneck issues.

Global Technical Benchmarking

In early 2007, an interim global technical benchmarking system was introduced to facilitate inter-unit performance comparisons and help units identify areas for improvement – and which units to contact for support. The interim system, however, relied on reporting data drawn up according to historical measuring techniques and approaches, which varied between Arcelor and Mittal Steel.

To address this challenge, the Performance Enhancement team undertook a major exercise to produce new, globally aligned definitions for key performance indicators across the Group, based around key value drivers. Following a series of meetings with different process expert teams, and further testing and review at unit level, standard performance indicators were defined for 18 production processes. During the year, the new, harmonised performance indicators were implemented on a step-by-step basis following the relevant KMP meeting of process experts. The new system has met with widespread support and acceptance at operating unit level.

The system is now receiving data from the operating units on a monthly basis and a new IT system is being introduced to improve access and reporting functionality, making it easier for operational managers to analyse and compare performance. Together with a new knowledge database, extended skills repository and directory of in-house specialists, the new system gives ArcelorMittal a world-class Knowledge Management infrastructure.

Knowledge Management Programme

The calendar of annual KMP meetings was expanded in 2007 – both in terms of subject matters and number of participants. New subjects ranged from long rolling of sections to asset risk management and environmental issues. In 2008, the KMPs will additionally be used to train participants in the use of the value driver system that underpins the global technical benchmarking database. Hundreds of participants across the Group are taking this forward and enhancing knowledge.


ArcelorMittal’s Slab Casting, Hot Rolling and Blast Furnace operations’ managers came together at the end of June in Paris, Rotterdam and Bremen, respectively, for their global Knowledge Management Programme (KMP) meetings. The meetings are one part of the whole KMP, which aims to foster a continual knowledge exchange between managers of similar operations across the Group.

Focus Solve Sustain


Achieving Quality, Developing New ProductsWith a commitment to stay at the forefront of steel industry innovation, and consistent with our value to achieve Quality, ArcelorMittal invests heavily in Research and Development (R&D). We employ more than 1,400 researchers in 14 research centres in Europe, the USA, Canada and Brazil. Research and Development at ArcelorMittal is a major driver for future growth in high added-value segments. The more high-value added to ArcelorMittal’s products, the greater their growth potential. With a budget of approximately 214 million US$ in 2007, the Group possesses a R&D capability unique in the steel industry.

In 2007, all R&D activities were integrated under one leadership team. These activities are further organised into 14 portfolios covering the market segments in which the Group is a major player. The product application teams were integrated within this organisation in order to fully align new product developments with market expectations and cut time to market. Resources are complemented by an extensive network of partnerships with other industrial players, communities and universities. R&D’s global mission is in accordance with the whole Group’s growth strategy, in line with its three dimensions – value chain, geography and product – and it aims to be a tool for long-term competitive advantage. ArcelorMittal’s broad range of specialties and value-added products1 give a complete offering of advanced solutions and products to demanding customers. Value-added products1 represent 60% of shipments and a unique opportunity to leverage ArcelorMittal global Leadership.

Product R&D

ArcelorMittal works closely with its customers to develop next generation solutions that will sustain their competitiveness. Co-engineering programmes, a feature of the Group’s relationship with the worldwide automotive industry, are progressively being extended to OEMs (Original Equipment Manufacturers) in the appliances field. In 2007, the Group’s relentless innovation extended and improved its range of offerings in every product area.

Automotive

With engineering teams resident in customers’ plants, ArcelorMittal works with OEMs from the design stage of new product launches, helping to create vehicles that are lighter, stronger, safer and more attractive to end-purchasers. In 2007, a global technical partnership programme was implemented with individual OEMs aimed at applying the best

ArcelorMittal steel solutions in terms of cost and performance to new vehicle designs. This unique, global approach was well received by all automotive manufacturers.

Our range of steels was further extended and improved in 2007. ArcelorMittal has led the way with Advanced High-Strength Steels (AHSS) and high deformability steels. In 2007, the range of both was extended with the completion of the hot dip galvanised offer on AHSS (TRIP, dual phase), with dual phase and martensitic steels of up to 1,200 MPa, and with hot stamping steel Ductibor. In June, the Group held its Auto Symposium in Cannes, France, presenting a number of breakthrough products in the R&D pipeline.

The Group’s contribution to global vehicle design was recognised with the prestigious Henry Ford Technology award.

In 2008 a new, three-year project will be launched to develop a second-generation ArcelorMittal Body Concept (ABC), the first having been developed in 2005. Its objective is to achieve a 20% weight reduction by using AHSS steels of the future. The Group will also continue to develop AHSS solutions for mechanical components such as crankshafts, suspension springs, valve and clutch springs and bolts to address the added stresses to which many of these parts are increasingly subjected in the search for smaller and lighter components.

Appliances

In appliances, the focus in 2007 was on anticipating new legal and regulatory requirements and developing environmentally friendly solutions through the Cr6-free passivation and Easyfilm product lines. The latter will be completed in 2008 with the addition of conductive easy film – a Chromium-free product with enhanced conductivity properties for LCD screens and DVD players.

ArcelorMittal won two gold awards at Batimat, the world’s most important building and construction event:• The Golden Innovation Medal

was awarded to Arsolar, a solar panel designed by Arval, part of the Construction division of ArcelorMittal. A roof or cladding system with an integrated photovoltaic solution, Arsolar converts solar radiation into electrical energy, reducing energy consumption in buildings.

• The Golden Design Medal was awarded to the Angelina® beam, created in response to a proposal from the leading architect Claude Vasconi. The result is a sleek, open and versatile beam which offers a new architectural dimension within an environmentally friendly approach. Thanks to reduced production time and substantial material savings, Angelina® meets the economic requirements of customers’ projects while ensuring optimal safety.

1 Finishing products excluding HRC, Bars & Rebars.

The product offering in enamelling continues to widen. A new galvannealed coated steel is scheduled for launch in mid-2008. Allowing direct white enamelling without pickling or nickeling, this offers both ecological and economic benefits for customers.

Metal processing

Adapted hot rolled dual phase steels were developed in 2007 for metal processing applications. A new steel gas cylinder, only about half the weight of a traditional gas cylinder, was developed in collaboration with gas bottle supplier Liotard and was runner-up in the Swedish Steel Prize 2007. A steel solution developed jointly with Alstom for the rail transport industry achieves shorter assembly times while maintaining flexibility.

Packaging

In packaging, a drawn, shaped and microwavable food container with a peel-off lid made out of Creasteel – a very soft and thin tinplate – was developed in partnership with Impress and won the gold award in the field of prototypes at the Can of the Year summit in Chicago.

Construction

In the construction and civil engineering markets, the Group works to develop new products and solutions that will improve safety and comfort, reduce cost or construction time, extend durability, improve architectural quality and, increasingly, reduce environmental impact. ArcelorMittal’s innovative approach in this sector was recognised at the biannual Batimat fair which took place in Paris in November 2007 (see far left).

Among other developments in 2007, the HISTAR 355 steel grade was selected for the beams for the Federation Tower, the ‘super-tall’ skyscraper now under construction in Moscow. A new firewall, the Firebreak4H™, was also developed for storage facilities that need four-hour fire resistance in each of their compartments.

A new partnership between ArcelorMittal and five leading companies supplying commercial design software for the construction market was established to improve the dissemination of the Group’s software programmes.

Stainless

In stainless, the launch of a new product brand - KARA - is aimed at reinforcing the Leadership of ArcelorMittal in ferritic products creating a new reference for the customers. New ferritic grades – K43X and K44X – were developed. The development of ferritic grades also aims to reduce the Group’s exposure to the nickel price. R&D also supported the development of ferritic stainless in new applications ranging from decorative tubes and chairs to water supply systems and sugar industry. A new 200-series austenitic grade with 4.5% nickel – but demonstrating almost identical properties to the 304 grade (containing 8.5% nickel) – was launched. The chemistry has the support of most European stainless producers as the new European standard.

Electrical steel

ArcelorMittal is taking part in the development of new energy-saving technologies. The year 2007 saw the start of production of new, fully processed grades of electrical steel. The new grades significantly reduce energy loss and have particular applications for high-efficiency and high-frequency transformers. They have attracted the interest of a number of automotive manufacturers.

Specialty plate

Nine new products, offering improved properties or reduced cost, were launched in 2007, maintaining ArcelorMittal’s lead in a number of niches within the specialty plate market. One example was a lean duplex stainless steel with a reduced nickel content but with higher strength and corrosion-resistant properties than the standard grade. This will now be proposed for storage tank, construction and pulp and paper industry applications.

Energy markets

ArcelorMittal has a growing presence in the wind energy sector. Its Gijón plant in Asturias, Spain, produced 200,000 tonnes of plate for wind generators towers in 2007. Wind farm operators are increasingly looking to install higher capacity generators on higher towers in order to maximise performance. The Group’s research centre at Ghent, Belgium, is engaged in a number of projects aimed at developing steel grades that will allow wind turbines to be installed on towers of over 100 metres in height.

Process R&D

R&D contributed strongly to the synergies realised in 2007 by sharing process knowledge between all parts of the Group. It enables ArcelorMittal to achieve sustainable technological Leadership, while providing other units with breakthrough innovations and incremental improvements. A notable example was the implementation in North America of clogging reduction technology developed in Europe. In the development area, significant emphasis was placed in 2007 on raw materials, environmental improvements, energy and quality. For instance:

• An iron ore allocation model for application worldwide was developed and tested in the Central and Eastern Europe. It is proving an invaluable cost reduction tool.

• The first large-scale trial for treating sludges and dusts in an EAF (Electrical Arc Furnace) was completed at the Isbergues plant, France, leading to the development of key technical and financial indices and finally to approval for full-scale operation.

• On-line batch annealing models were successfully industrialised, allowing the annealing cycle to be optimised and so reduce energy use. The technology is rapidly being deployed around the Group.

• Electro-magnetic strip stabilisers were installed in several mills, reducing variations in the thickness of zinc coating and increasing line speeds.

Numerous prizes were also received for process improvement technologies in areas such as the thermodynamics of slags and the development of a pickling control model.

Exploratory work

ArcelorMittal continued to progress its work on the European Union’s Ultra Low CO2 Steelmaking (ULCOS) project. The Group is currently coordinating a consortium of 48 European partners in this project, aiming to reduce steel production emissions by 30% to 70%. This 5-year programme, begun in 2005, selects from a vast number of potential technologies a few solutions for a pilot programme. As for the coal fired power plants, the solution will come through separation of CO2 in the process and its further sequestration underground. Phase II (the second part of ULCOS 1), involving pilot-scale trials on the four technical routes chosen from among 70 studied in Phase I, commenced in 2007. The first trial of top gas recycling technology on an experimental blast furnace in Lulea, Sweden, delivered promising results.

The steel industry is facing the challenge to support the growing demand for steel while minimising its impact on climate change. ArcelorMittal has the intention to lead the steel industry towards a global solution against climate change, through the exchange of best practices, combined with the monitoring of CO2 emissions performance and carbon intensity improvement at industry level.

In addition, a number of other innovative technologies are being developed. Under-vacuum deposition technology, already employed in a pilot line at the Liège plant, Belgium, has successfully produced very innovative coatings and a number of new products are close to industrialisation.

A number of emerging technologies – in nanomaterials, biomimetic materials, meso-architecture, zinc-less anti-corrosion coatings – continue to be investigated in collaboration with a number of universities.

Paul Wurth

Paul Wurth, a subsidiary of ArcelorMittal, utilises a confirmed know-how and outstanding methods to optimise industrial processes and develop new technologies. It is active worldwide in the area of iron and steelmaking as general contractor of industrial plants and projects; 600 industrial developments have been patented over the last 30 years. In 2007, demand continued to increase and is expected to rise further in the next 12 to 18 months. With the large number of new orders a record level has been achieved for the fourth consecutive year. With the development of Paul Wurth’s entity in Canada, ‘Paul Wurth Automation’, it specialises in developing computer programming modules for the main equipment and processes. These solutions increase the added-value of the technological offer and exploit Paul Wurth’s know-how to the full.



Sustainability and Climate ChangeArcelorMittal is committed to Sustainability and is acting to minimise the impact of its operations on the environment. Recycling steel is a real opportunity as steel is an endlessly recyclable material. About 600 million tonnes of CO2 can be saved annually around the world by recycling steel.

Steelmaking is an energy-intensive business. However, steel is an endlessly recyclable material. In some sectors, such as the automotive industry, 90% of the steel used is recycled. This results in major savings for the environment. Globally, recycling steel brings about 600 million tonnes of CO2 savings annually.

ArcelorMittal recognises the effect its operations have on the environment and its responsibility to minimise the impact. ArcelorMittal has indeed a significant responsibility in the climate change debate. The Group recently signed the ‘Care for Climate’ declaration of the UN Global Compact and can point to its strong record in reducing CO2 emissions. Our European plants have been at the forefront of efforts to reduce carbon emissions in the steelmaking process. Since 1990, for instance, the carbon footprint of our European facilities has been reduced by more than a fifth and many of our plants are now global benchmarks for steel industry emission standards. The Group is also the largest recycler of steel in the world.

ArcelorMittal continues to invest in technologies that will further reduce CO2 emissions in the steelmaking process. It is leading the EU-sponsored ‘Ultra Low CO2 Steelmaking’ (ULCOS) project which aims to develop breakthrough technology that will drastically reduce the industry’s emissions of greenhouse gases. ULCOS 1 is now in its second phase (terminating in 2009) and is focusing on a range of promising processes. ArcelorMittal is engaged in equivalent programmes with the American Iron and Steel Institute in the USA and worldwide with the International Iron and Steel Institute (IISI).

While committed to such long-term initiatives, ArcelorMittal believes that climate change can be better addressed through a global approach. Currently, the EU operates the only mandatory emissions reduction scheme within the Kyoto framework.

However, there is a need for a global framework associating all major steel producing countries in an agreement to reduce emissions per unit of production, so that production does not migrate to countries that are not subject to emission reduction mechanisms.

It is also apparent that those environmental targets will only be achieved if adequate CO2 capture and storage solutions become available for steelmakers and other major emitters. Most of the industrial processes now being investigated in the ULCOS research programmes require a contribution from carbon capture and sequestration.

Energy efficiency

ArcelorMittal believes energy efficiency and optimisation can play a major role in minimising environmental impacts. To that end, it is committed to creating a global CO2 database to determine the CO2 intensity of every product and every site, allowing each process and plant to be benchmarked worldwide.

A dedicated energy efficiency team within the Shared Services organisation has undertaken assessments in 22 major plants in 2007, allowing it to identify the key actions required to reduce natural gas and electricity consumption. The potential reduction in energy usage, based on all of the Group’s plants reaching benchmark performance, represents 10% of current consumption.

The main action areas are gas reallocation and optimisation through the better management of power plants and energy flows. At Kryviy Rih in Ukraine, for example, the status of gas available from the coke ovens, blast furnaces and basic oxygen furnaces was examined, alongside its usage in the plant. In total, 12 actions were identified. Similar projects are being undertaken elsewhere in the Group. For instance, the Tubarão plant in Brazil is self-sufficient due to its electric power being generated by gas recovery.

On November 15 2007 ArcelorMittal Tubarão received through UNFCCC (United Nations Framework Climate Change Convention) the Certified Emission Reductions (CER) of Green House Gas, within the project scope of LDG Gas Recovery, for Electric Energy Co-generation in compliance with the Kyoto Protocol Clean Development Mechanism (CDM). These CERs are related to the first Auditing Report, which was made by SGS - Audit Company, and refers to the amount of 213,899 t/CO2 reduced of a total 430,000 tonnes. This process shows the consolidation of the efforts made according to ArcelorMittal Tubarão, Strategic Orientation. These are the first CERs issued by UNFCCC to the ArcelorMittal Group.

Benchmark analysis of coke usage between plants is also being undertaken. This will provide the basis for reducing coke consumption in the Group’s blast furnaces. Taken together, these projects constitute an important element of ArcelorMittal’s long-term strategy to fight climate change.

Environmentally beneficial solutions

ArcelorMittal contributes significantly to the battle to reduce carbon emissions by developing environmentally beneficial solutions for its customers.

For the automotive and heavy vehicle industries, it has developed new generations of ultra high strength steels that result in a weight reduction of up to 40% compared with conventional steels, thereby allowing heavier payloads per journey and improved fuel consumption. For one industrial customer, it has developed a gas cylinder weighing just half the weight of the cylinders it has replaced. The resultant saving in CO2 is of a similar magnitude.

ArcelorMittal is also participating in the IISI’s ‘Living Steel’ initiative aimed at promoting more environmentally efficient building design and structures.


Recycling is second nature for steel. Figures from APEAL (Association of European Producers of Steel for Packaging) show that 66% of steel packaging is recycled in Europe. This amount means that over 2.5 million tonnes of food and drinks cans and other steel containers have been recycled in 2006. This prevented 4.7 million tonnes of CO2 from being released into the environment, the equivalent of taking 2 million cars off the road.

QWhy is ArcelorMittal cultivating eucalyptus forests in Vale do Jequitinhonha?

ArcelorMittal Jequitinhonha is a subsidiary foresting company of ArcelorMittal Inox Brasil, dedicated to the production of wood and charcoal from cultivated eucalyptus forests for steelmaking application. The Company is located in Vale do Jequitinhonha, in the Brazilian state of Minas Gerais, and occupies a continuous area of approximately 126,000 hectares. 20% of this area is maintained as a permanent ecological reserve. The fruit of 30 years of scientific studies has led the Company to master a state-of-the-art technology and produce eucalyptus seedlings from selected clones. The result is a high-performance charcoal; a product that is suitable for steelmaking application and is highly competitive in the global market. Charcoal, produced from eucalyptus from mature forests, is considered an environmentally sustainable alternative. Its levels of carbon dioxide (CO2) emission are considerably smaller than those resulting from coal burning. Furthermore, eucalyptus forests ‘sequester’ carbon gas from the atmosphere and help reduce global warming.In addition, elsewhere in Brazil ArcelorMittal has land totalling 160,000 hectares – or 100,000 hectares of planted area – with additional eucalyptus forests which last year produced 1,100,000 m3 of charcoal.

A

Operational Review Flat Carbon AmericasWith operations in Canada, the United States, Mexico and Brazil, Flat Carbon Americas offers a broad product mix that spans slab, hot rolled, cold rolled and coated sheet and plate. It is the region’s leading supplier of value-added products, such as the advanced high-strength steels now penetrating the automotive market, while its operations in Brazil and Mexico make it the largest global slab producer.


Overview of operations

Separately, ArcelorMittal USA and ArcelorMittal Hamilton, Dofasco Facility are the largest flat-rolled producers in the United States and Canada, respectively. ArcelorMittal USA provides a full range of sheet products and is the region’s largest supplier to the automotive market, which consumes more than 25% of the 14 million tonnes shipped by this operation. ArcelorMittal Hamilton, Dofasco Facility serves a wide range of Canadian markets with its 4.5 million tonnes of shipments – of which more than 25% is consumed by the NAFTA automotive industry. ArcelorMittal USA is also the largest plate producer in North America and has a leading position in specialty plates.

ArcelorMittal is the largest steel producer in Brazil and supplies a wide variety of high-quality flat carbon steels to Latin American customers. Its major operation, ArcelorMittal Tubarão in Vitória, now has a capacity of 7.5 million tonnes of slabs annually and is the largest single-site operation in the Southern hemisphere. Through its affiliated downstream operations, ArcelorMittal Vega, the Brazilian operations continue to strengthen their market share in value-added products for the automotive and other key consuming sectors.

The 4 million tonnes of slabs produced by ArcelorMittal Lázaro Cárdenas in Mexico complement the slab production of ArcelorMittal Tubarão, with ArcelorMittal Lázaro Cárdenas specialising in high-quality grades, particularly API grades for pipeline and high-strength plate applications. Together, ArcelorMittal Lázaro Cárdenas and ArcelorMittal Tubarão make ArcelorMittal the largest, most reliable and highest-quality slab supplier in the world.

Performance in 2007

The year 2007 was a challenging one for the USA and Canadian operations, with high customer inventories throughout the year and increasingly weak demand driven by a slowing economy in the latter half of the year. As a result, price levels significantly lagged global levels, which is a highly anomalous situation given North America’s status as a significant net importer. In addition, Canadian consumption and profitability were negatively affected by the surge in the Canadian dollar. However, our Mexican and Brazilian flat carbon operations experienced very strong demand and a relatively favourable pricing environment.

Total steel shipments for Flat Carbon Americas in 2007 were around 28 million tonnes compared with 30 million tonnes (pro forma) in 2006. This drop was due largely to lower shipments from the USA operations, partially offset by the commissioning of a major expansion at ArcelorMittal Tubarão in the second half of the year. The 2006 volumes also included proportionate consolidation of about 800,000 tonnes at the Gallatin Steel Joint Venture, which is now out of the scope of ArcelorMittal consolidation and reported in 2007 as ‘equity accounted Joint Venture’.

Revenues finished for the year at 22.9 billion US$, up from 21.9 billion US$ on a pro forma basis the previous year. EBITDA was 4 billion US$ (2006 pro forma: 3.6 billion US$) before the costs associated with the restructuring of the Canadian operations (specifically, the consolidation of flat-rolled and finishing in Hamilton).

In the United States, the Company responded to weak steel consumption by reducing production, particularly in the first half of the year, and by adjusting outage and maintenance schedules. 2007 shipments were 9% below the level achieved in 2006. Inventory adjustments, reduced imports, and supply restrictions brought the market into balance by the fourth quarter, when price levels also began to rise towards world levels despite the seasonal market weakness typical of that quarter. Despite lower output levels, ArcelorMittal USA maintained strong operating performance at its lowest-cost facilities, for example, Indiana Harbor Blast Furnace Number 7, the largest in North America, achieved a new annual production record of 4 million tonnes. The Company also undertook measures to better align its operations with market requirements, recommissioning its Gary plate mill in the third quarter and closing the hot strip mill at Weirton, West Virginia, in mid-December in order to supply that plant with substrate from lower-cost operations in the United States.


Operational Review

The major flat-rolled operation in Canada, ArcelorMittal Hamilton, Dofasco Facility began the year under a hold-separate order imposed by the US Department of Justice as part of the consent decree that enabled the merger of Arcelor and Mittal Steel. This order was lifted in February, at which point ArcelorMittal Dofasco’s operations were integrated into those of the global Group. From this point forward, ArcelorMittal USA and ArcelorMittal Hamilton, Dofasco Facility strengthened and aligned their operations in 2007, establishing a joint marketing structure for North American automotive and packaging products as well as pursuing a variety of other operational and purchasing synergies. In addition, ArcelorMittal Hamilton, Dofasco Facility successfully implemented many improvement initiatives that had been initiated in 2006, when it was acquired by Arcelor. Such initiatives enabled ArcelorMittal Hamilton, Dofasco Facility to improve its financial results in 2007 over 2006 despite the weakness in the USA and Canadian markets. The market challenge was even more severe in Canada due to the impact of the stronger Canadian dollar on price realisation and on demand from Canadian manufacturers. ArcelorMittal Hamilton, Dofasco Facility’s 2007 steel shipments were 5% lower than those achieved in 2006.

As in the United States, decisions were made in 2007 to better align Canadian flat-rolled production with market requirements. Specifically, hot rolling and cold rolling operations for flat-rolled products will be closed at ArcelorMittal’s Contrecoeur facility, with these operations shifted to more efficient operations at ArcelorMittal Hamilton, Dofasco Facility. Contrecoeur will still produce slabs for processing at ArcelorMittal Hamilton, Dofasco Facility.

Strong market conditions throughout the year allowed our slab operations in Mexico and Brazil to maintain high levels of output and financial performance throughout the year. ArcelorMittal Lázaro Cárdenas in Mexico maintained slab production levels versus 2006 while also providing crude steel for the adjacent long products operations acquired by ArcelorMittal early in the second quarter. ArcelorMittal Lázaro Cárdenas realised substantial synergies with this newly acquired long products operation, complementing the significant synergies realised through specialisation and coordination of the slab businesses at ArcelorMittal Lázaro Cárdenas and ArcelorMittal Tubarão in Brazil.

Based on the commissioning of its major expansion project in the third quarter, ArcelorMittal Tubarão achieved record levels of output and profitability in 2007. Shipments increased 5% over 2006, and full production from the expansion was achieved in November, less than four months after commissioning. As a result, 2008 output should be much higher than that achieved in 2007. Although this expansion allows the Company to increase its participation in the global slab market, the focus for Brazilian operations continues to be on strengthening the position in the market for finished products in Brazil and other strategic Latin American markets where demand continues to be very strong. ArcelorMittal Tubarão achieved record shipments from its hot strip mill in 2007; this facility is now being expanded to produce over 4 million tonnes annually, with this expansion expected to be commissioned in the first quarter of 2009.

Flat Carbon Americas continued


Investments

A substantial expansion of ArcelorMittal Tubarão was commissioned in July, adding an additional 2.5 million tonnes of annual slab capacity. The expansion included a new, environmentally friendly coke complex, a third blast furnace, new steelmaking and continuous casting capacity and ancillary improvements in infrastructure. With full ramp-up achieved in November, ArcelorMittal Tubarão produced 1.8 million tonnes of crude steel in the final quarter of 2007. This facility’s access to raw materials and deep water ports provides the competitive base to support further investment.

In addition to this major investment at ArcelorMittal Tubarão, Flat Carbon Americas also successfully concluded several significant cost-reduction investments in 2007, such as its CO2 segregation unit at Lázaro Cárdenas and important environmental upgrades, particularly in the United States.

The future

The major factors underlying weak 2007 conditions in the USA and Canada – excessive customer inventories and high imports – improved significantly by the end of the year, providing more favourable market prospects for 2008. These may be offset by the slowing of the Canadian and American economies, driven by the depressed housing market and related credit issues in the United States. In addition, prices for key inputs, particularly iron ore, coal and coke, are increasing sharply, requiring that sales prices increase as well to avoid margin compression. Conditions in the global slab market are expected to be strong, while Brazil’s economy is expected to experience healthy growth led by automotive demand and infrastructure improvements – both of which are significant drivers of steel consumption.


ArcelorMittal is the largest steel producer in Brazil and supplies a wide variety of high-quality flat carbon steels to Latin American customers.

Sparrows Point

The proposed divestiture of the Sparrows Point facility near Baltimore, Maryland, USA was terminated in December due to the purchaser’s inability to secure financing. ArcelorMittal was required to divest Sparrows Point by the US Department of Justice as part of the consent decree related to the Arcelor-Mittal Steel merger. On March 26 2008, the court divestiture trustee has entered into an agreement to sell ArcelorMittal’s Sparrows Point steel mill to OAO Severstal for 810 million US$, net of debt.



AACIS

Overall steel production in AACIS1 (including Pipes and Tubes) was 1% higher on the year at 20.9 million tonnes. Shipments, prices and EBITDA all rose. Higher volumes in Ukraine and Kazakhstan were partly offset by a fall in output in South Africa, where production was impacted by the rebuild of Blast Furnace D and other production-related events.

Total shipments, including the Pipes and Tubes business, rose 3% to 20.9 million tonnes. At ArcelorMittal Kryviy Rih, the construction boom in Ukraine, CIS, the Middle East and Africa drove increased demand for long products. At ArcelorMittal Temirtau, Kazakhstan, the increased volume came mainly from the domestic market and Eastern Europe. In South Africa, part of the production loss was made up by slab imports, enabling the Company to maintain its volumes in the domestic market.

An average price increase of 17% was partly offset by increases in material and labour costs. EBITDA rose by 22% to 3.8 billion US$ after allowing for the costs of voluntary retirement schemes at ArcelorMittal Kryviy Rih, Ukraine and ArcelorMittal Annaba, Algeria.

Investments

Ongoing investment projects include the 1 billion US$ plus expansion of ArcelorMittal Kryviy Rih to take capacity to 12 million tonnes and support a corresponding increase in mining production; a new bar mill and the reconstruction of Coke Oven Battery Number 7 at ArcelorMittal Temirtau; the reline of Blast Furnace Number 5, the reline of the Midrex/Corex and two new direct reduction kilns in South Africa; and a project to initiate production via the integrated route at Zenica, Bosnia this year.

A number of new projects are planned for 2008. They include a new billet caster and galvanising line at ArcelorMittal Temirtau and four environmental projects – one in Temirtau, the others in South Africa.

An investment programme for 2008-2012 is planned to modernise the mines in Kazakhstan. Starting with the improvement of the gas monitoring system, this substantial investment in Health and Safety will ensure a safe working environment for all employees.

ArcelorMittal is engaged in large-scale Greenfield projects in Algeria, Egypt, India, Mozambique and Russia – all conforming to the Group’s long-term strategy of extending its geographical reach.

In Algeria, ArcelorMittal has started the feasibility study for an integrated steel complex. The site has been selected and the work on the site is expected to start for the first phase before the end of the year.

ArcelorMittal has been awarded a licence from the Industrial Development Authority (IDA) of Egypt’s Ministry of Trade and Industry to construct a steel plant in Egypt. The licence was auctioned in a competitive bidding process and ArcelorMittal’s winning bid was approximately 60 million US$.

Under the terms of the licence, the plant will produce 1.6 million tonnes of steel using DRI technology and 1.4 million tonnes of billets through the Electric Arc Furnace route. Construction of the plant, which will be located close to the Northern Red Sea Coast, is expected to start in 2009.

In India, ArcelorMittal intends to develop two steel plants in the states of Jharkhand and Orissa. Each will have a capacity of 12 million tonnes and will be constructed in two phases of 6 million tonnes. ArcelorMittal has requested the respective state governments for access to 600 million tonnes of iron deposits. With a steel consumption in India of around 50kg per capita (compared with more than 400kg in the USA for instance), there is a remarkable scope for India to increase its steel usage gradually.

In Mozambique, ArcelorMittal is building a 400,000 tonne rebar mill close to Maputo. The mill is expected to start production at the beginning of 2010.

In Russia, ArcelorMittal has signed an agreement with the administration of the Tver region that will lead to the creation of a long carbon steel plant, with a capacity of one million tonnes a year, and two bar mills. The steel complex will be built in two phases. Work on the site is expected to start during the third quarter of 2008 for the first phase.

Outlook

It was a strong start to the year for both long and flat products and it is expected to remain this way over the first half of 2008.

Operational Review Asia, Africa, Mining and Stainless (AAMS)ArcelorMittal’s market-leading position in Africa, coupled with its strong presence in Ukraine, Kazakhstan and the Balkans, gives it both a large, low-cost production base and an extensive footprint in some of the world’s fastest growing steel markets.

1 Asia, Africa, Commonwealth of Independent States or CIS.

Operational Review

Pipes and Tubes

The management of ArcelorMittal’s tubular products businesses, combining the former Pipes and Tubes operations with those of Dofasco, was consolidated under one team to create a global business capable of competing strongly in the energy, mechanical and automotive products sectors. Shipments finished the year slightly lower at 1.2 million tonnes, as a result of weaker markets in the second half of the year. However, with price increases of 17% achieved over the year, revenues rose 11% to 1.4 billion US$2 .

Three steel tube production facilities in France were acquired in the second half of the year from two tube making companies (Vallourec Précision Soudage and Vallourec Composants Automobile). This will strengthen the Group’s tubular products presence in the automotive market. In addition, in early 2008, a definitive agreement was signed to acquire Unicon, the leading manufacturer of welded steel pipes in Venezuela. Unicon shipments were 552,000 tonnes in the year ended March 31 2007.

Investments

Investment projects worth 100 million US$ per year are either underway or planned. They span all the main Pipes and Tubes facilities and are designed to expand capacity, improve quality, lift the proportion of high-end products - particularly those relating to the oil and gas industry - or reduce costs. Additionally, over 500 million US$ will be invested in Greenfield projects over the next three years to expand ArcelorMittal Tubular products’ footprint.

In Saudi Arabia, ArcelorMittal has signed a partnership agreement with Bin Jarallah Group for a seamless tube mill on the Persian Gulf coast. In Nigeria, the Company is to build a 300,000 tonnes per year Longitudinal Submerged Arc Welded Pipe Mill. This follows an invitation to invest from the Nigerian Government.

Outlook

Demand is expected to remain stable in the energy sector with modest growth in the mechanical sector in both North America and Europe – although a strong Euro is expected to attract imports into the European market. Pressures on USA motor manufacturers are expected to be a constraint on demand in the automotive sector.

Stainless steel

ArcelorMittal is a world leader in stainless steel and nickel alloys. ArcelorMittal Inox Brasil is a key player for electrical steels, both grain-oriented and non-grain oriented. In Brazil, ArcelorMittal Timóteo is the only South American producer of stainless and electrical steels. ArcelorMittal Stainless & Nickel Alloys is also a world player for nickel alloys for applications such as LNG (Liquefied Natural Gas) carriers, wire rods for welding and resistance or bimetals.

In 2007 the stainless market was strong but volatile. Soaring nickel and stainless prices at the beginning of the year triggered speculation and unprecedented imports from Asia to Europe. However, a London Metal Exchange initiative to curb speculation brought the nickel price back from a peak of 54,000 US$ a tonne in mid-May to around 30,000 US$ a tonne in early August. This led to rapid destocking, a drop in apparent demand and production cuts. Over the three years 2005-2007, final demand for stainless nonetheless continued to show growth of between 2% and 8%, varying by region.

ArcelorMittal was able to limit the impact of this volatility on its results through the strict control of inventory, geographic and product diversification, and good risk management. ArcelorMittal was also successful in increasing its output of lower cost ferritics. While total shipments in 2007 were 13% lower at 1.9 million tonnes, revenues were boosted by a 41% increase in selling prices largely driven by the surcharge for nickel. Revenues reached 9.3 billion US$ compared with 7.3 billion US$ in 2006, generating an EBITDA of 1.2 billion US$ compared with 0.9 billion US$ in 2006.

Asia, Africa, Mining and Stainless (AAMS) continued


2 Pipes and Tubes’ figures are excluding Dofasco.

Downstream expansion

Expansion of the downstream activities was accelerated in 2007 as part of a strategy to broaden the geographical footprint. A service centre was commissioned in Colombia, the distribution facilities in China doubled in size and work started on new service centres in Poland and Vietnam. The cold rolling and bright annealing of narrow coils started in Firminy, France, to supply the Turkish market. In December, ArcelorMittal agreed to acquire M.T. Majdalani, the leading stainless steel distributor in Argentina, and expanded its manufacturing base in South America with the acquisition of Cinter, a producer of stainless steel tubes in Uruguay. In addition, Acesita took over a service centre in southern Brazil.

Investments

The ramp-up of the new melt shop in Belgium was successfully completed. New capital spending will be devoted to product mix improvement; an expansion in ferritic, bright annealed products and electrical steels; Continuous Improvement with a particular emphasis on IT systems in the European downstream activities; and Health and Safety and environmental issues.

Outlook

Markets in Europe and Brazil are expected to continue their modest recovery in 2008. Though we expect increasing imports, the underlying demand is regarded as healthy.

Mining

ArcelorMittal is convinced of the value of an integrated business model, and to this end is focusing on its mining activities. With mining activities in Canada, Kazakhstan, Ukraine, Mexico, Bosnia and Algeria, ArcelorMittal is one of the largest producers of iron ore, for capture consumption worldwide. Its access to high-quality, low-cost raw materials through both captive sources and long-term contracts gives it a valuable hedge against rising input prices.

In 2007, iron ore availability (including strategic contracts) was 64.2 million tonnes, up from 64.1 million tonnes in 2006. This was equivalent to approximately 46% of ArcelorMittal’s requirements. At the same time, around 13% of the Group’s coal requirements were supplied from its own mines or via long-term contracts.

ArcelorMittal is actively developing its raw material base to raise self-sufficiency levels. Projects for expanding capacity in Ukraine and Mexico are underway and good progress is being made with the major development project in Liberia. ArcelorMittal’s involvement in Liberia represents a 1 billion US$ investment to operate an iron ore mine, a railway to the coast and a port development near Monrovia. This new investment will create around 3,000 direct jobs. Under an agreement signed with the Government of Senegal in February 2007, ArcelorMittal is developing iron ore mines and related activities in the Faleme region with a planned investment of 2.2 billion US$.

The Group also purchased a 10% equity stake in the USA company, General Moly, Inc. and signed an off-take agreement for the supply of 6.5 million pounds of molybdenum per year. This supply is expected to begin in the second half of 2010 when General Moly’s Mount Hope in Nevada commences production.

In January 2008, ArcelorMittal agreed to acquire three coal mines and associated assets in Russia for a consideration of 720 million US$, subject to regulatory approval. It also signed a Memorandum of Understanding with Société Nationale Industrielle et Minière in Mauritania, to jointly develop a large iron ore mining project.

ArcelorMittal is committed to investing heavily to accelerate the modernisation plan in its mines, and improve safety. The Group is especially working with the government of Kazakhstan on a programme of investments to improve and further modernise the mines.



Long Carbon Europe

Long Carbon Europe operates 17 plants in seven countries, with a significant presence in the fast-growing markets of Central and Eastern Europe. With an all-encompassing portfolio of products, it is the market leader in sections, sheet piles and quality wire rod.

Performance

In 2007, European demand for long products was particularly firm in the first half but softened in the area of wire rods and rebars in the second. Long Carbon Europe (excluding Wire Solutions) shipped more than 14 million tonnes of steel, two-thirds of it within the EU. Within the product mix, sheet piles and rails remained stable, but shipments of wire rods and rebars were lower than in the previous year. Overall market share was maintained after the strong growth witnessed in 2006 and margins remained stable.

Revenues rose to 14.1 billion US$ while EBITDA increased to 2.9 billion US$. Moves to optimise the flow of both semi-finished products and the delivery of finished products had a material impact on profitability and service levels, and offset increases in scrap and other input prices.

Investments

A number of strategic investment projects were completed in 2007. The new plant at Zaragoza, Spain, is now operational. The modernised rolling mill at Rodange, Luxembourg, is set to produce 70,000 tonnes of sheet piles in 2008, with output rising to 150,000 tonnes over time. A new coke battery in Poland has already commenced production in March 2008.

As part of Long Carbon Europe’s contribution to the Group’s growth plan, five new projects were either initiated or approved in 2007. In Spain, the plant relocation at Zaragoza added 400,000 tonnes to capacity. In Germany, contracts are in place to expand hot metal output at the Duisburg plant by 200,000 tonnes. In Luxembourg, revamping of the Electric Arc Furnace (EAF) at Differdange will add 160,000 tonnes of capacity while a mill revamp at Rodange will increase annual sheet pile output by 300,000 tonnes. In Romania, improvement to the EAF at Hunedoara will add 130,000 tonnes of new capacity.

Outlook

The European market for long products is expected to continue to grow. Demand for sheet piles and rails remains particularly healthy. In general, prices are expected to increase in line with the sharp rise in scrap, iron ore, freight and other costs.

Long Carbon Americas

With 14 major plants, Long Carbon Americas has a steelmaking capacity of 12.5 million tonnes. Of that total, 5.5 million tonnes is located in South America, with the remainder divided equally between North America and Mexico/Central America.

Performance

In 2007, steel shipments rose from 8.2 million tonnes to 9.4 million tonnes on the back of strong demand in South America. Shipments of Direct Reduced Iron (DRI) were 100,000 tonnes higher at 1.4 million tonnes. Revenues increased to 8.5 billion US$ (2006: 5.9 billion US$) with average price increases. EBITDA rose to 1.7 billion US$ (2006: 1.5 billion US$). Financial performance was aided by operational improvements at ArcelorMittal Point Lisas, Trinidad and Tobago in the second half of the year. New production records were set in a number of our Brazilian operations.

Investments

A number of investments were completed during the year. Two new charcoal blast furnaces were successfully brought into production at Juiz de Fora in Brazil. The upgrade to steelmaking and the introduction of a heat treatment facility for rails at Steelton in the USA were both completed. At Acindar in Argentina, the expansion of DRI facilities has lifted production capacity to 1.3 million tonnes and start-up of the new bar and wire rod mill went successfully.

As part of the Group’s growth plan to lift shipments by 20% by 2012, ArcelorMittal is to invest approximately 5 billion US$ in its Brazilian operations of flat and long products over five years. In 2008, works will commence to double the total production facility in Monlevade up to 2.4 million tonnes per year.

Restructuring in Canada

In Canada, ArcelorMittal plans to build a 380 million US$, 800,000 tonne beam mill in Contrecoeur as part of a restructuring that will see all long carbon production consolidated at that plant, while flat production is concentrated at the former Dofasco facility at Hamilton. The beam mill is expected to begin production in 2010.

Outlook

In 2008, Long Carbon Americas will seek to benefit from the weak US$ to leverage its market position in the North American market.

Operational Review Long Carbon, Steel Solutions and Services, Wire SolutionsGrowth in demand from developing markets, particularly South America, combined with major integration synergies drove a 31% improvement in EBITDA in Long Products in 2007. Steel shipments totalled 24.6 million tonnes. With continuing strong demand in many areas of the market worldwide, the outlook for 2008 is for a continuing volume increase and stable margins.


Operational Review

Steel Solutions and Services

Steel Solutions and Services segment is the world’s largest steel distributor and processor, operating a network of more than 450 facilities and serving more than 200,000 active customers. Its activities range from steel processing to technical consultancy, engineering, and the provision of construction and foundation solutions for infrastructure projects. Steel Solutions and Services also manages the International’s unit, the sales network for the Group’s worldwide exports.

Performance in 2007

Strong growth in civil engineering and infrastructure projects in developing economies, combined with a buoyant building market in the developed world, provided a strong backdrop to demand. Helped by an expansion of the Steel Solutions and Services network, steel shipments reached 15.9 million tonnes, compared with 14.5 million in 2006, while revenues rose from 11.9 billion US$ to 16.2 billion US$. EBITDA of 0.7 billion US$ (2006: 0.6 billion US$) was achieved in 2007.

Expansion

Steel Solutions and Services is targeting growth in shipments of 60% before 2012. This will be achieved through a mixture of organic growth, Brownfield and Greenfield expansion and acquisitions. The object is to:

• Reinforce market leadership in Western Europe by leveraging the Group’s strong upstream presence in Central and Eastern Europe (CEE), with the target of achieving a 20% market share in the fast-growing CEE markets.

• Precede or accompany upstream expansion in other growth markets worldwide.

• Add value with new products and services – improving the service delivered to large industrial customers.

In 2007, new or expanded centres were opened in Poland (at Kraków, Bytom, Rawa, Katowice and Stalobrex), Czech Republic (Ostrava), Romania (Bucharest), Slovakia (Senica) and Germany (Edenkoben). Three acquisitions were also made in Poland and Czech Republic. In Western Europe, Steel Solutions and Services bought distribution centres in Austria, Italy and in the UK and a service centre in Belgium.

In other developing markets, the Company acquired a distribution centre in Turkey, while Oriental Sheet Piling, a joint venture in foundations, opened branches or representative offices in Thailand, Indonesia, Philippines and Vietnam, and commenced rental operations in China.

Total Offer Processing

Total Offer Processing (TOP) supports the Group’s key accounts, supplying them with high-value-added components and services. It is engaged in a major expansion programme aimed at accompanying its customers’ worldwide development. In 2007, TOP:

• Set up a logistical platform directly linked to the plant of a major car manufacturer in France.

• Opened a facility at Lyon, France, for specialties and stainless steel processing.

• Completed a second plant in Changzhou, China, three times the size of its existing facility.

• Signed a joint venture agreement in Chennai, India to manufacture components for the yellow goods and truck industries.

Outlook

The outlook for the first half of 2008 is favourable. Global infrastructure demand remains high and the early months of the year have been marked by rising prices as a result of exchange rate shifts and reduced imports.

Long Carbon, Steel Solutions and Services, Wire Solutions continued



As part of Long Carbon Europe’s contribution to the Group’s growth plan, five new projects were either initiated or approved in 2007.

Wire Solutions

Wire Solutions segment is the most important wire drawer in the world with 40 plants in Europe, the Americas and Asia providing a diversified portfolio of low and high carbon wires, steel cord, strand, ropes and corrosion-resistant solutions. The automotive industry is the segment’s biggest customer, followed by construction, energy and agriculture.

Performance in 2007

Market conditions in the automotive industry remained difficult in North America and Western Europe but were positive in Eastern Europe. With China becoming the third most important automotive producer, a significant part of the tyre cord business is progressively moving to Asia. In construction, demand began to soften in Western Europe in the second half but remained strong in Eastern Europe. Overall, price trends were generally positive until September when high inventories began to bite.

Investments

The major event of the year was the acquisition of the Chinese steel cord producer, Rongcheng Chengshan Steelcord, for 26.6 million US$. Located in the fastest growing tyre cord region of China, the acquisition reinforces Wire Solutions’ ability to serve its global customers. Other acquisitions are being studied in Europe and Asia. A number of investments aimed at organic expansion and modernisation, together with improved Health and Safety, are planned for 2008.

Outlook

While cost factors continue to drive the price of wire products higher, inventories remain low and demand firm. As a result, the outlook for the first half of 2008 is positive. With its diversified portfolio, Wire Solutions is well placed to take full advantage of those markets showing the strongest growth.

In July 2007 approximately 805 tonnes of steel were produced in ArcelorMittal Differdange, Luxembourg, to make the first steel columns for the Freedom Tower in New York City, USA. These first 27 ‘extra-large’ steel columns weigh 730 pounds per foot and range in length from 30 to 56 feet. In August, the steel columns were shipped by vessel from Antwerp, Belgium. Four different ships made the trans-Atlantic voyage to deliver the columns to two port cities, Portsmouth, Virginia and Camden, New Jersey where they were then transported to the site.


Operational Review


Flat Carbon Europe

In 2007, the European steel market situation was characterised by a final activity at an unexpected level, encouraged by a mild winter in the construction segment, a good level of activity of the automotive industry (+1.1% of Western European car registration) and German exports not affected by the strength of the Euro on the mechanical engineering sector.

Strong demand encouraged rising imports which took inventories to a record level by mid-2007. They continued to rise in the third quarter as massive shipments arrived from China in particular.

Flat Europe maintained its market share and delivered strong results. Driven by higher prices, revenues rose more than 25%. EBITDA reached a new record at 5.6 billion US$, an increase of about 1.7 billion US$ on 2006. Deepened integration and synergies achieved between the Western and Eastern European plants contributed to the results.

Following a strategic review in 2007, Flat Europe has embarked on a new growth path designed to deliver an additional 4 million tonnes of steel by 2012. As a consequence, the hot phase of the Florange plant, France, will not be closed in 2010 as originally planned and Blast Furnace Number 6 in Liège, Belgium – idle since 2004 – was restarted at the end of February 2008. In addition to major capacity increases – such as a new galvanising line at Eisenhüttenstadt, Germany (to serve the growing automotive industry in Eastern Europe) and a new 500 million US$ hot strip mill in the joint venture with Borusan in Turkey – debottlenecking operations will be undertaken in all plants.

Capital expenditure in 2007 amounted to 1.7 billion US$. It included the completion of three major projects in Poland: the new continuous caster in Dąbrowa Górnicza, the hot strip mill in Kraków and the new colour coating line in Florian. Other important projects completed included a blast furnace reline at Avilés, Spain, a Pulverized Coal Injection (PCI) capacity increase in Fos-sur-Mer, France, the introduction of PCI in Bremen, Germany, a new slab reheating furnace for the plate mill in Gijón, Spain, the coupling of pickling line and cold tandem mill in Liège and Ghent, Belgium, the regeneration of the pickling line in Bremen, a new inspection line in Avilés, and galvanising line capacity increases in Sagunto, Spain and Mouzon, France.

Work started on a number of new investments in 2007. These included blast furnace relines in Fos-sur-Mer, France, Bremen, Germany and Ostrava, Czech Republic; the revamping of continuous casters in Fos-sur-Mer and Dunkerque, France; the rebuilding of coke batteries in ZKZ Poland, Galati, Romania and Ostrava, Czech Republic; the modernisation of the cold rolling mill in Kraków, Poland; and the construction of a new galvanising line in Piombino, Italy.

During 2007, the outstanding 25% of the shares in ArcelorMittal Poland were purchased and an agreement reached to acquire Galvex, an independent galvanising line in Estonia. This acquisition offers strong product flow synergies with the Group’s Central and Eastern Europe portfolio.

While overall demand growth is expected to moderate in 2008, a forecasted decline in imports should ensure satisfactory volumes for European producers. On the back of rising raw material costs and falling imports, steel prices are expected to strongly increase starting in the first quarter of 2008 and reach record levels towards the second half of the year.

While the market in Western Europe is expected to remain stable, sales are expected to increase on the back of rising demand in Eastern Europe and Russia. With additional capacity anticipated from the reopening of the Liège blast furnace and the reline at Fos-sur-Mer, ArcelorMittal is well placed to consolidate its market share in Europe.

Flat Carbon Europe, Automotive, Plates, R&DWith a network of 21 plants, ArcelorMittal Flat Europe serves all markets, offering a complete portfolio of flat steel products. It is the largest supplier of high-value-added steel sheets to the automotive industry and enjoys a leading position in sophisticated packaging products.

Operational Review

Automotive

ArcelorMittal delivered 17 million tonnes of steel sheets and steel solutions to the automotive industry in 2007. This was in line with 2006 shipments and represented a leading market share of 23%. Around 10 million tonnes were sold in Europe, 6 million tonnes in North America and 1 million tonnes in South Africa and South America.

Automotive experienced a step-change in financial performance, largely as a result of the establishment of the new global organisation, ArcelorMittal’s Automotive Worldwide Division, which now steers relationships with automotive clients worldwide and tailors a strategic value creation plan for each one – delivering ‘one face, one offer to the customer’. Benefits include a worldwide product catalogue, a global pricing policy, consistent deployment of steel solutions to OEMs and volume back-up from one region to another.

Going forward, ArcelorMittal intends to reinforce its global organisation, strengthening its presence in both traditional markets and in the developing regions – including China, South-East Asia, India and Russia.

Plates

Global Plates covers 14 plate mills in Europe, the USA and South Africa. At the end of 2007, ArcelorMittal commanded a worldwide market share in heavy plates of 5%. In the high-end specialty segment (cryogenics, alloyed plates, special stainless plates), ArcelorMittal’s subsidiary Industeel is the undisputed world leader.

Demand in 2007 was robust in all major segments. Aided by debottlenecking operations, 4.7 million tonnes of plates were shipped, compared with 4.4 million tonnes in 2006. EBITDA rose by 45% to 1.5 billion US$, with an estimated 29 million US$ contribution from synergies and the sharing of know-how between plate mills. This was ahead of target. Relationships with Steel Solutions and Services’ growing plate distribution and processing businesses created additional synergies of 24 million US$.

In addition to the fully-controlled plate activities, ArcelorMittal owns a 51% interest in Dillinger Hütte Saarstahl (DHS). DHS posted in 2007 a record profit of 617.2 million Euros (Net result) which represents an increase of approximately 45% as compared to 2006.

With plans to grow output to 6.8 million tonnes by 2010, investment projects worth 640 million US$ have been identified. Major projects are already underway in Galati, Gijón and Industeel and the plate mill at Gary, Indiana, USA, was reopened in September. A new Electrical Arc Furnace dedusting system was installed in Industeel’s Charleroi plant, Belgium, to comply with tightened environmental regulations.

There has been a good start to 2008 in both the commodity and specialty segments.

Research and Development

ArcelorMittal operates 14 research centres in Europe, the USA, Canada and Brazil, and employs more than 1,400 researchers. In 2007, all R&D activities were integrated under one leadership team and organised into 14 portfolios covering the market segments in which the Group is a major player plus process improvement R&D. The product application teams were integrated within this organisation in order to fully align new product developments with market expectations and cut the time to market.

R&D contributed strongly to the synergies realised in 2007 by transferring knowledge between all parts of the Group. A notable example was the implementation in North America of clogging reduction technology developed in Europe.

Flat Carbon Europe, Automotive, Plates, R&D continued


Numerous awards were won during the year. In the automotive field, ArcelorMittal’s contribution to global vehicle design was recognised by the prestigious Henry Ford Technology award. The development of a new Fe-Mn-C austenitic steel for the automotive market was also awarded a prize.

Several awards were also received for process improvement technologies. In the area of metal processing, a new low-weight gas cylinder developed in collaboration with a supplier was awarded runner-up in the Swedish Steel Prize 2007. In packaging, a drawn, shaped and microwavable food container made out of Creasteel with a peel-off lid won a gold award at the Can of the Year summit in Chicago.

In the construction area, the Angelina® beam, a cellular beam obtained by a sinusoidal cut of a beam, and the Arsolar solar panel both received gold medals at Batimat in Paris.

In stainless, new ferritic grades were developed to reduce the Group’s exposure to the nickel price. In specialty steels, 2007 saw nine new product launches, strengthening the Group’s leadership position in this niche market.

In addition to a sustained R&D effort in the key market areas, 2008 will see an increased focus on energy conservation, environmental issues, raw materials and the construction market.

For more information, please see pages 44-45.


Following a strategic review in 2007, Flat Europe has embarked on a new growth path designed to deliver an additional 4 million tonnes of steel by 2012.

ArcelorMittal’s Automotive focuses mainly on safety and the reduction of fuel consumption (and thus, of emissions). An example is the ABC (Arcelor Body Concept) project, which offers car manufacturers a full line of new steel solutions for improved vehicle safety and performance, while trimming 20% off their weight. This creates safer and more environmentally friendly cars without increasing the final cost and involves working with clients at a very early stage, which is just what we do.

QHow is ArcelorMittal seeking to strengthen its position in China?

In December 2007 ArcelorMittal became the first foreign company to acquire a substantial stake in a Chinese steel firm – China Oriental Group (COGL) – in a deal valued at about 1.6 billion US$. Hong Kong-listed COGL is a holding company for Heibei Jinxi Iron and Steel Company Ltd., one of China’s largest suppliers of steel billets, and one of the few Chinese steel firms that are privately owned and listed outside mainland China. The Shareholder’s Agreement is a significant step forward for ArcelorMittal’s strategy of strengthening its presence in the Chinese market and will enable ArcelorMittal to eventually raise its equity stake in the company to 73.13%. The Business Cooperation Agreement enables ArcelorMittal to share technology, technical expertise and know-how with China Oriental with an aim to transform the Chinese firm into a leading producer in the industry in China. ArcelorMittal will also assist China Oriental in sourcing iron ore and coal.

A


Corporate Responsibility Sustainability is one of the three core values to which ArcelorMittal has committed itself as the world’s leading steelmaker. More and more, people inside and outside of the ArcelorMittal Group want to know what we mean when we use this word, what our strategy will be and how this strategy will be managed.

The term Sustainability or Corporate Responsibility is interpreted differently by different people. For ArcelorMittal, it means analysing our global footprint and impacts to improve our risk management. However, Sustainability is also about identifying areas of competitive advantage, both within our products and attracting and retaining the talent of our workforce.

In addition to performing up to and beyond the expectations of our customers and shareholders, it means providing long-term career prospects for our employees; acting as a responsible corporate citizen; and working to transform and improve the long-term prospects of the communities in which we operate.

Ensuring the highest standards of Health and Safety is a top priority for ArcelorMittal. The Company is committed to the well-being of all employees and aims to become the safest steel and mining company in the world. Drawing on the best systems and reporting standards of the two predecessor companies, a common Health and Safety model has been implemented throughout the Group. A detailed description of Health and Safety objectives and practices can be found on page 40.

Only by achieving those goals does ArcelorMittal maintain its ‘licence to operate’ within its regions of operation, while minimising social risks and building support for its operations throughout society.

An effective Corporate Responsibility (CR) programme is key to Sustainable Development. In 2007, a new CR governance structure was put in place with a CR Orientation Committee, consisting of Group-level senior managers, which sets the strategy, prioritises actions, approves policies and reviews CR activities and performance.

An interim Corporate Social Responsibility Review, focusing on the period between the merger of Arcelor and Mittal Steel in July 2006 and November 2007 has been produced. This report is available on our website www.arcelormittal.com. It was developed in reference to the ten principles of the United Nations Global Compact, to which ArcelorMittal is a signatory. A fuller report, including additional performance data, will be published later in 2008.

ArcelorMittal has established a strong ambition and a clear roadmap for CR that we are now ready to implement. We have put in place a CR organisation with a fully dedicated team and clear governance structure. The Corporate Social Responsibility Review is only a first step in communicating our intentions and goals.

ArcelorMittal’s CR management system recognises that social and economic circumstances vary widely among the communities in which it operates. To address that diversity, the CR approach is designed to:

• Provide a business framework for responsible behaviour.

• Empower regional operations to address CR challenges.

• Provide the knowledge and tools to support the regions.

The Corporate Responsibility team has started research activity to quantify the opportunity cost of implementing a CR strategy in the business, with the early findings of this activity to be published during the year 2008. Another objective is to harness the talent of people across the ArcelorMittal world to make the Group responsive to the needs of local and global communities. In this way ArcelorMittal will be transformed into a leader among the most trusted and admired companies in the world.

Steel is part of the solution to climate change. Committed to fight climate change, ArcelorMittal will increase Direct Reduced Iron production in our sites in Trinidad and Tobago and Algeria. Energy savings will be accelerated in Eastern Europe as part of cost reduction programme and CO2 approach. The measures taken until now to minimise emissions are achieving encouraging results.

To achieve all of these ambitions, the team will be launching a learning network, develop training programmes, sharing best practices through an online knowledge centre and benchmarking activities between sites.

To focus the Group’s CR ambitions, and build on an internal benchmarking exercise carried out in 2007, ArcelorMittal has developed 12 broad commitments to CR. They address specific areas such as reducing greenhouse gas emissions and improving Health and Safety. In addition, they underline the Group’s commitment to excellence in areas such as corporate governance, social dialogue and labour standards (see table above).

Alongside these commitments, the Group has adopted a Code of Business Conduct that addresses issues related to business ethics and corporate accountability. They include bribery and corruption, political involvement, discrimination, Health and Safety and environmental involvement. The Code explicitly requires reporting of any violations to the Legal Department or Head of Internal Assurance without fear of retaliation.

What follows is an overview of the Group’s CR policies and activities in the key areas of Human Resources, Environmental Management and Community Engagement. Group activity in the areas of Health and Safety and Climate Change is detailed on pages 40 and 46 respectively.

Human Resources The Human Resources (HR) function focuses its activities on three key areas:

• Develop and recruit talents and offer challenging and rewarding careers in the dynamic and growing steel and mining industries.

• Enable employees at all levels to contribute to the best of their ability to the objectives and success of the Group’s business and ensure a sufficient talent pool for the future leadership of the Group.

• Build and maintain good relations with the employees and their representatives.

Resourcing

ArcelorMittal is committed to giving internal candidates priority whenever job vacancies arise. To make the process transparent and encourage internal recruitment, an interactive website, JobMarketOnline, was launched in March 2007, advertising vacancies. Employees can apply for jobs and be notified of vacancies. More than 13,000 employees have visited the site. Nearly 4,000 have submitted their profile and preference on the site, which can be accessed in eight languages. An external version of the website was launched at the end of 2007 to attract external talents.

Through the Business Leaders Resourcing Programme, 58 MBA (Master of Business Administration) and 15 Master graduates in Finance were monitored in 2007. The programme was relaunched to include an Executive Career Panel to manage recruits’ development needs and provide mentoring. Its aim is to:

• Attract new ideas to refresh the organisation.

• Provide a globally mobile pool of international managers who will develop to become the future leaders of our business.

• Assist in addressing some of the key skills gaps in organisational succession plans including: – Skills shortages in emerging markets – Demographic challenges in

developed markets – Tapping into the latest thinking

from the top Business Schools worldwide.

A Group Engineering and Technical Programme was introduced in 2007 with the aim of creating a global pool of engineers and technical specialists. The goal is to recruit up to 300 high achievers every year – over and above local recruitment needs – from key institutions in countries such as Romania, Brazil, Ukraine, Poland or Czech Republic. After initial assignments and intensive training in their home country, they will be assessed for their suitability for international assignments.


Human Resources

Social Commitments

•Health and Safety •Social dialogue • Human rights and world

class labour standards

Environment

Environmental Commitments

•Greenhouse gas emissions • Waste, water resources

and pollution • Research and Development

of product sustainability

Communities

Communities Commitments

• Local economic development

• Foundation for social investment practice

• Community engagement around new acquisitions and resettlements

Shareholders

Corporate Governance Commitments

• Board independence • Equal rights among

shareholders • Best in class disclosure

and shareholder dialogue

Training and development

Since its launch in 2007, The Corporate University has been the primary source of development opportunities within ArcelorMittal. All programmes are tailored to the ArcelorMittal vision, mission and brand values, and are designed to be delivered through local training centres. Examples include:

• Health and Safety Academy and Health and Safety training for all employees and sub-contractors – with 8,000 people being trained in safety in Romania alone.

• Intensive language training in English and local languages to facilitate integration – the ‘Global English’ online course will be extended to 4,000 users in 2008.

• Core Leadership and Management Skills programmes – 62 sessions with 1,200 plus participants delivered in 2007, over 380 sessions and 8,000 participants scheduled for 2008 across 23 countries.

• Talent pipeline programme to grow future leaders – more than 400 people will attend revised programmes in 2008, up from 73 in 2007.

• Technical and functional academies – with more than 2,000 people registered to attend steel, mining and functional programmes in 2008.

The budget for The Corporate University in 2008 is more than double the amount granted in 2007, at 19.6 million US$ compared with 7.5 million US$ .

The Group’s Knowledge Management Programme (KMP) was expanded in 2007. The KMP is designed to speed the flow of best practices and techniques around the Group by bringing together all the key people involved in a given function, technical area or business unit, and gives added impetus to the Group’s Continuous Improvement drive. In all, some 20 different KMP events were held in the course of the year.

The Group places great emphasis on international mobility through short-term assignments, allowing staff to progress through multiple functions, countries and regions. In 2007, there was a sharp increase in the number of people undertaking such assignments, many of them as the result of the internal recruitment opportunities offered through the JobMarketOnline website.

Performance Management and Leadership Development

The performance management process provides a means of aligning individual behaviour with Group values and competencies and recognising the contributions, strengths and development needs of employees in every location. At its core is the Global Executive Development Programme (GEDP), which provides an annual, four-step process for managing an individual’s performance. The process is transparent, with regular feedback and coaching to support development and boost motivation. The GEDP ensures a systematic approach to performance management, training and development, succession planning and bench strength, as well as identifying those with high potential.

To help develop the crucial leadership skills needed for the future, ArcelorMittal has developed a Competency Framework involving eight competencies that characterise desirable performance among its people.


Corporate Responsibility

ArcelorMittal Brasil is a perfect example of HR success, as it recorded huge online numbers of people interested in a career at ArcelorMittal in 2007. In total 134,433 individual visits to their website were reported, all from people interested in finding out information about the Company’s global resourcing for engineers programme in 2007. This demonstrates ArcelorMittal’s strong and positive image in the job-seeking community.

continued

There are five key competencies:

• Change management• Decision making• Results orientation• Strategic thinking• Teamwork

They are supported by three additional competencies used for building organisation performance:

• Stakeholder orientation• Effective communication• Learning and development

The Competency Framework helps to ensure consistency of skills across the Group; identify the behaviour and values required to be a successful manager; provide an objective standard for evaluating professional abilities and performance; provide employees with a clear view of the competencies they may need to develop for their careers; and build Company performance and corporate culture.

A renewed bonus scheme was set up in 2007 and covers the Group’s top 500 executives. It will be extended to cover more than 2,000 employees in 2008. It is complemented by local rewards systems that cover the wider employee population.

Workforce planning

A workforce planning process was put in place in all the Group’s operations in 2007. Its objective is to provide a reference framework and follow-up tools in relation to organisation, workforce development and the skills required for each process area. This will aid profitability, sustainability and the further development of know-how – allowing permanent and break-through productivity gains. The planning process is aligned with the Group’s mission, included in the budget cycle and will be maintained as a Continuous Improvement initiative.

Social dialogue with trade unions and employees

ArcelorMittal is committed to a continuous dialogue at multiple management levels with trade unions in an open and structured manner, based on mutual respect, and with a free flow of information. It subscribes to the process of collective bargaining and has established a clear partnership approach with trade unions and employee representatives. That partnership was illustrated with the agreement signed in July 2007 for a new European Works Council (EWC), that successfully combines the works councils of the two predecessor companies.

In line with the Group’s priorities, Health and Safety is a key focus of the EWC. This has led to the initiative of a worldwide Health and Safety Committee constituting a global partnership between ArcelorMittal and its trade unions.

ArcelorMittal regards its employees as a key stakeholder in the business. As a result, it is essential that employees and their representatives are aware of the business environment, the financial performance of their business unit, and the competitive challenges it faces. The acknowledgment of working together to develop a sustainable business is fundamental to the success of all concerned. Above all, it has permitted the achievement of continued efficiency improvements through voluntary agreements.

For further details concerning ArcelorMittal’s HR policies and processes, visit www.arcelormittal.com

EnvironmentArcelorMittal launched its new environmental policy in July 2007. The policy sets out ten principles that will guide the Group’s practices worldwide. ISO 14001, the internationally accepted standard for environmental management systems, forms the basis of the Group’s management arrangements and is now a mandatory objective for all production facilities. The Group’s target is to achieve certification at 162 sites, including some non-production facilities. By the end of 2007, 141 sites had attained certification. Certification of the remainder is planned by the end of 2008.

ISO 14001 includes an independent compliance audit cycle with any instance of non-compliance reported and resolved. Compliance is monitored quarterly and the results communicated to both the Board of Directors and the Group Management Board.

To support environmental managers, an online information exchange tool provides up-to-date information on the environmental legal framework, measurements, best practices techniques, cleaner production processes, biodiversity management and relevant research studies. In order to establish a baseline from which future performance can be measured, data relating to air, water, energy and residues at every facility are being compiled in a new database, OpsEnvironmental. Four areas have been identified for specific management focus:

• Atmospheric emissions• Water flows• Residues management• Contribution to climate change

Atmospheric emissions

Continuous process improvements through reduction of energy consumption, together with increased steel recycling and material efficiency have substantially reduced the CO2 impact of final steel products. Today, technical achievements in the blast furnace route in Europe mean that many European sites generate CO2 emissions close to the theoretical minimum for steelmaking. Further reductions will come from developing recycling or from technology advances.

ArcelorMittal is working with the International Iron and Steel Institute (IISI) to develop a sector approach to CO2 monitoring and reduction, to be supported by all major steel producing countries. This would assess the potential for CO2 reduction through the reliable measurement of current CO2 emissions and the analysis of current performance for every product on every site. One benefit of this approach is that it includes not only direct emissions but those for pre-processed materials or energies.

ArcelorMittal has a strong record in reducing CO2 emissions and can exchange best practices at sites with good results with worldwide sites where the level of performance is not so good. In Europe for example we have reduced the CO2 footprint of our steelmaking by more than 20% since 1990. We have an internal monitoring system and database on CO2 emissions which allows building consistent benchmarking and gap analysis. This gives us the ability to detect and target additional improvements.

ArcelorMittal takes its responsibility very seriously in the climate change debate. We are aware of our impact and determined to improve our performance, although it should also be recognised that primary steel will often be recycled many times, resulting in lower additional CO2 emissions.

ArcelorMittal is also active in developing ways of reducing other macro-pollutants in the steelmaking process. Despite coke oven gas desulphurisation, iron ore sintering still accounts significant emissions of sulphur dioxide (SO2) and nitrogen oxide (NOx) emissions. Some progress has recently been achieved with the use of bag filters together with slaked lime injection, which is able to catch almost 90% of SO2. This technology has been introduced with success at the Group’s facility at Fos-sur-Mer, France.

In 2007 major investments were sanctioned to tackle emissions. These included:

• 50 million US$ investment in coke oven gas desulphurisation at Kryviy Rih, Ukraine. A 100 million US$ investment in a blast furnace at the same plant includes dust collection and treatment facilities.

• 42 million US$ investment in coke oven gas cleaning at Vanderbijlpark, South Africa: this is part of a 100 million US$ environmental investment programme over the next three years.

• 32 million US$ investment in a secondary de-dusting system at the Galati plant, Romania.

• 30 million US$ investment in coke oven de-dusting at Avilés, Spain.



Corporate Responsibility

With these investments, ArcelorMittal is compliant with all relevant environmental laws and regulations, and goes beyond certain local regulations. They also promote innovation and are encouraging growth of regional economies.

Water

Many sites have made strenuous efforts to reduce their water consumption, particularly those in countries where this resource is critical. While the Group’s Electric Arc Furnace plants have shown the way to zero effluent operation, integrated plants are larger consumers of water. High recirculation rates at plants such as Monlevade in Brazil and Saldanha and Vanderbijlpark in South Africa have achieved substantial reduction in water usage.

Residues

ArcelorMittal sites have taken great strides in recent years to reduce the amount of final residues going to landfill or incineration. In 2007, the management of by-products and recycling was improved and systematised across the Group.

Recycling by third parties is often dependent on local market conditions and residues can be stored while market conditions evolve. The Group’s focus is now on identifying new markets for recycling residues.

Contribution to Fighting Climate Change – Green initiatives

On top of direct CO2 reduction action are our Green initiatives, which help to meet ArcelorMittal’s commitments to minimise its environmental impacts. The Group engages in a host of plant or country-specific initiatives to fight against climate change. In Romania, for example, it is planning to plant one million new trees in and around the Galati steelworks over a four-to-five-year period.

The programme will be in two phases. In the first, some 14 locations within the plant – spanning 20 hectares – will be reforested with medium and large size trees of 25 different species. The second phase will focus on a number of locations in the vicinity of the plant. The project aims at fertilising the soil and increasing its capacity to retain water and support vegetation. It is being conducted with the support of a number of local environmental agencies.

In Brazil, ArcelorMittal grows eucalyptus on brown land adjacent to its sites, producing 3,000 m3 per km2 each year. Wood from these forests is used to produce charcoal for the production of pig iron. This, in turn, is used as a substitute for metallurgical coke – giving rise to significant CO2 savings.

For additional information, please see Climate Change page 46.

Local CommunitiesArcelorMittal engages actively with local communities wherever it operates. All play a key part in helping the Group achieve its business objectives. The presence of a healthy, well-educated workforce is clearly a key ingredient in the success of every business unit.

ArcelorMittal recognises that its responsibilities go beyond the narrow requirements of its own business. It has a wider responsibility to contribute to the well-being of its people, their families and the societies in which they live. That means ensuring there is adequate infrastructure, health care and education, stimulating economic development, and responding to specific local needs as and when they arise.

The ArcelorMittal Foundation

In the past year, the Group has mapped the many different community initiatives in which it is engaged around the world. To support these and future projects, it has established the ArcelorMittal Foundation, chaired by Mr Kinsch. Its mission is ‘to promote ArcelorMittal’s commitment to local communities where it is present and to contribute to their development in a sustainable way.’ It aims to do so through integrated projects that involve the participation of the local community, local authority, NGOs and private partners.

In ArcelorMittal Temirtau for instance, a workshop with the main local NGOs has been organised on November 30 2007, as part of ArcelorMittal’s strategy to improve stakeholder’s dialogue. A delegation from the European Bank for Reconstruction and Development (EBRD) attended the workshop. ArcelorMittal Temirtau took key steps in multi-stakeholder engagement, such as working on a Regional Engagement Action Plan, which will be shared and exchanged with other units in the Group to promote Corporate Responsibility.

ArcelorMittal Foundation brings a coordinated and strategic approach to the Group’s social investment initiatives, prioritising future activities in a systematic manner based on dialogue with the regional operations and the communities in which they operate. It has identified health, safety, social inclusion and economic development as key factors in building sustainable communities, recognising education as the most efficient way to achieve this objective.

continued


Local development actions

ArcelorMittal has developed a Sustainable and Integrated Development strategy as a way to improve people’s life standards and promote communities’ capacities.

One example of a major focus for the Foundation is currently Liberia, where ArcelorMittal is committed to a major social and community development programme as part of the mining development agreement it concluded with the Liberian Government in 2007. In addition to employing around 3,000 people in its iron ore mines, ArcelorMittal will be rebuilding roads, a railway line and a port, creating up to 20,000 indirect jobs. These are significant numbers in a country suffering from 80% unemployment.

The first major company to enter Liberia since the end of the country’s civil war, ArcelorMittal has been engaged in social projects in Liberia since 2005. Hospitals have been built in the towns of Buchanan and Yekepa. The Foundation offers mobile medical attention and has also established a school in Yekepa, offering education not only to employees’ children but to the communities nearby. ArcelorMittal has pledged to invest 3 million US$ a year for the next 25 years on such social projects.

The Group is committed to engaging in further dialogue with both local and international stakeholders in Liberia and NGOs to help increase the country’s economic development. It has already participated in international events to promote the Liberian economy by attracting other investors and by inviting Liberian expatriates to return home.

ArcelorMittal is also committed to Community Health and Infrastructure Development. ArcelorMittal Foundation promotes this commitment to the local communities where we are present and develops projects to contribute to their development in a sustainable way. For example, to support AIDS orphans in South Africa, the Bel Porto project aims to provide financial help to 500 children in a home for the disabled and HIV/AIDS orphans in Cape Town. The initiative provides them with specialised training and the development of employment-oriented skills.

In Argentina, the Sumemos Seguridad project encourages teachers to incorporate safety issues in their classes in addition to spreading basic concepts of disease prevention among the children. Activities to date include the distribution of teaching materials, workshops, visits from safety specialists from Acindar and the organisation of an annual safety competition.

A social initiative of ArcelorMittal Foundation has been to help rebuild Long Beach, Mississippi, USA. The Foundation has made a series of grants worth 1.75 million US$ to help the city rebuild in the wake of Hurricane Katrina in 2005. The grants provided the necessary seed funding for an additional 20 million US$ in subsequent capital improvement projects.

In addition to numerous health and infrastructure projects, the Foundation, together with the Group’s regional operations, has been involved in initiatives to promote Education and Professional Skills Development. Much of the effort has focused on developing skilled professionals and supporting small businesses.

In Brazil, for instance, several projects are underway simultaneously, demonstrating our commitment and strategy towards Sustainable and Integrated Local development. At ArcelorMittal Tubarão, the Gerar Project is a community development bank providing micro credits to help people start small businesses after a short training exercise. It is carried out in partnership with the NGO Movive. At ArcelorMittal Belgo, the Sabara Collaborative Network promotes the development of small enterprises in partnership with 50 institutions. At ArcelorMittal Timóteo, the Vale do Jequitinhonha projects promotes small businesses in one of the poorest regions of Minas Gerais State. Together, the three projects helped nearly 20,000 people.

Community Resettlement

Some of ArcelorMittal’s Greenfield projects involve relocating people and communities. This means giving access to resources such as water and fuel, to cultural heritages sites and activities, developing new infrastructure and continuing livelihoods.

ArcelorMittal’s proposed investments in India, involving iron ore mines, power and steel plants, will be one of the largest the country has seen. The two states involved – Jharkhand and Orissa – are less industrially developed than many other regions. It is thus vital that the Group acts transparently, and with the utmost sensitivity to the needs of the existing population in the relevant regions.

ArcelorMittal India has already started a resettlement and rehabilitation study in the State of Orissa which will form the basis of an ambitious programme of community action designed to lessen the impact on local people.

ArcelorMittal’s willingness to take an active part in community support and development is increasingly being recognised by governments around the world. In November, the Group signed a Memorandum of Cooperation with the Republic of Mozambique. The agreement will help stimulate economic growth in the country and further the development of its steel and mining sectors.

Welcoming the agreement, Sergio Macamo, Mozambique’s National Director of Industry, cited ArcelorMittal’s “reputable record as a responsible investor in various business ventures all over the world that contribute in a profound way through financial and social investments.”

Technology training in China

ArcelorMittal promotes exchange of best practices at all levels and encourages knowledge sharing within the Group. Several trainings and exchanges have been organised for Hunan Valin’s employees in China, in order to provide precise knowledge on ArcelorMittal operations, products and know-how. These exchanges aim at preparing future operations or joint ventures between ArcelorMittal and Hunan Valin.

Four teams of high level managers from Valin visited ArcelorMittal operations worldwide for a few days, discussing with local teams about specific operations. To prepare new joint ventures in the automotive sector and in electrical and stainless steel areas, a group of people visited ArcelorMittal Inox Brasil, ArcelorMittal Tubarão and the hot strip mill in Kraków, Poland. Another group went to Czech Republic and Romania to learn about their operations, products and technologies.

In addition to these short-term assignments, 18 engineers from Valin were trained in various locations such as South Africa, Riverdale, USA, Gandrange, France and in the R&D Centre in Chicago, USA.

QHow does steel compare to other basic materials in terms of recycling?

More steel is recycled than all other metals (including aluminium), paper, glass and plastic combined. In fact, steel is the only basic material which can be endlessly recycled without any reduction in its performance and hence is sustainable by its basic characteristics. Along with it being a building material of strength, durability and stability, steel’s recyclability and recycled content are increasingly seen as advantageous benefits. For example, steel construction material is 100% recyclable. In addition, steel scrap is an essential ingredient in making new steel. It is not unusual for the steel used in construction projects to have been made from steel cans and other recycled steel products. Thanks to recycled steel, in 2006 CO2 emissions were reduced significantly - the equivalent of taking 2 million cars off the road.ArcelorMittal South Africa owns a 60% stake in ‘Collect-a-Can’, a non-profit initiative it started which supports the collection of metal cans, the separation of tin from steel and the sale of recuperated materials. The benefits are threefold. The first is environmental; the recovery rate of cans in South Africa has gone from 18% to 67%, even more than in Europe or North America! The second benefit is educational, teaching children (and adults) about the environment. And the third benefit is social, as can collection provides revenue to people all over South Africa and in some neighbouring countries.

A

Corporate Governance The following summarises aspects of ArcelorMittal’s Board Practices and corporate governance practices more generally.


Following the merger taking effect on November 13 2007, ArcelorMittal has been governed by a Board of Directors and a Group Management Board.

Board of Directors, Group Management Board and Management Committee

ArcelorMittal is governed by a Board of Directors and Group Management Board.

Mr Joseph Kinsch is currently the Chairman of the Board of Directors of ArcelorMittal, while Mr Lakshmi N Mittal is currently the President of the Board of Directors and Chief Executive Officer (CEO) of ArcelorMittal.

On December 4 2007, ArcelorMittal announced that Mr Joseph Kinsch will step down as Chairman of the Board of Directors after ArcelorMittal’s Annual General Meeting (AGM) of shareholders on May 13 2008. As provided in the Memorandum of Understanding, the Board of Directors has unanimously chosen Mr Lakshmi N Mittal as the new Chairman. Mr Mittal will also continue as CEO. An announcement on the position of a new President, who will fulfil the role of lead independent director, will be made at the time of the 2008 AGM.

The Articles of Association provide that the Board of Directors is composed of a minimum of three and a maximum of 18 members, all of whom except the Chief Executive Officer are non-executive. Currently, the Board of Directors comprises 16 non-executive directors. The sole executive director is the President of the Board of Directors, who is also the CEO of ArcelorMittal, Mr Lakshmi N Mittal. The Board of Directors is responsible for the performance of all acts of administration necessary or useful in furtherance of the corporate purpose of ArcelorMittal, except for matters expressly reserved by Luxembourg law or the Articles of Association of ArcelorMittal for the general meeting of shareholders.

The Articles of Association provide that the directors are elected and removed by the general meeting of shareholders by a simple majority of votes cast. No shareholder has special rights to nominate, elect or remove directors except in certain cases (e.g. Significant Shareholder Right of Opposition). The Board of Directors is elected by the general meeting of shareholders for three-year terms.

The five members of the Group Management Board are entrusted with the day-to-day management of ArcelorMittal. Mr Lakshmi N Mittal, the CEO, is the Chairman of the Group Management Board. The other members consist of Aditya Mittal, Michel Wurth, Gonzalo Urquijo and Malay Mukherjee. The members of the Group Management Board are elected and dismissed by the Board of Directors. As the Group Management Board is not a corporate body created by Luxembourg law or ArcelorMittal’s Articles of Association, it exercises only the authority granted to it by the Board of Directors.

The Group Management Board is assisted by a Management Committee comprised of the members of the Group Management Board and 17 other senior executives. The Management Committee concentrates on matters of Group-wide importance.

Operation of the Board of Directors

The required quorum for meetings of the Board of Directors is a majority of the directors, including at least the Chairman, the President and a majority of the independent directors present or represented. Each director has one vote and none of the directors, including the Chairman, has a casting vote. Decisions of the Board of Directors are made by a majority of the directors present and represented, except as otherwise required by Luxembourg law.

Director Independence

The Articles of Association provide that at least half of the members of the Board must be independent. Currently, 12 of the 17 members of the Board of Directors are independent. A director is considered to be ‘independent’ if he or she is independent within the meaning of the Listed Company Manual of the New York Stock Exchange (NYSE), or any successor provision, and he or she is unaffiliated with any shareholder owning or controlling more than two percent of the total issued share capital of ArcelorMittal. For these purposes, a person is deemed affiliated to a shareholder if he or she is an executive officer, a director who also is an employee, a general partner, a managing member or a controlling shareholder of such shareholder.

Separate Meeting of Non-Executive Directors

The non-executive members of the Board of Directors may schedule meetings outside of the presence of management. There is no minimum number of meetings that the non-executive directors must hold per year. During 2007, the non-executive directors of ArcelorMittal held one meeting outside the presence of the executive director.

Board of Directors Committees

The Board of Directors has two committees: the Audit Committee and the Appointments, Remuneration and Corporate Governance Committee.

Audit Committee

The Audit Committee is composed solely of independent members of the Board of Directors, as defined above. Currently, the Audit Committee is composed of four independent directors. The members are elected by the Board of Directors to help the Board in fulfilling its overall responsibilities.


The Audit Committee makes decisions by a simple majority with no member having a casting vote. The Audit Committee’s primary duties and responsibilities are to:

• Serve as an independent and objective party to monitor ArcelorMittal’s financial reporting process and internal controls system.

• Review and appraise the audit efforts of ArcelorMittal’s independent auditors and internal auditing department.

• Provide an open avenue of communication among the independent auditors, financial and senior management, the internal auditing department and the Board of Directors.

• Approve the appointment and fees of the independent auditors.

• Monitor the independence of the independent auditors.

The current members of the Audit Committee are: Messrs. Narayanan Vaghul, José Ramón Álvarez Rendueles, Wilbur L. Ross and Edmond Pachura, all of whom are independent under ArcelorMittal’s Corporate Governance guidelines and the NYSE standards. The Chairman of the Audit Committee is Mr Vaghul, who is the Chairman of ICICI Bank Ltd., a company listed on the NYSE and the Mumbai Stock Exchange. Mr Álvarez Rendueles, a former Governor of the Banco de España and former President of the Banco Zaragozano, also has significant experience and financial expertise. Both Mr Ross and Mr Pachura have considerable experience in managing businesses.

The Audit Committee is required to meet at least four times a year. During 2007, the Audit Committee met 11 times either in person or by teleconference.

Appointments, Remuneration and Corporate Governance Committee

The Appointments, Remuneration and Corporate Governance Committee has four directors. The members are elected by the Board of Directors. The Committee makes decisions by a simple majority with no member having a casting vote. The Committee’s role is to:

• Encourage and reward performance that will lead to long-term enhancement of shareholder value.

• Determine ArcelorMittal’s remuneration and compensation framework, including stock options for the Chief Executive Officer and the Chief Financial Officer, the members of the Group Management Board and the members of the Management Committee.

• Consider, advise and make recommendations on any appointment or reappointment to the Board of Directors at the request of the Board of Directors.

• Develop, monitor and review corporate governance principles applicable to ArcelorMittal.

The current members of the Committee are: Messrs. Joseph Kinsch, Sergio Silva de Freitas, Lewis Kaden and Jean-Pierre Hansen, all of whom are independent under ArcelorMittal’s Corporate Governance guidelines and the NYSE standards. The Chairman is Mr Kaden.

The Appointments, Remuneration and Corporate Governance Committee is required to meet at least twice a year. During 2007, it met five times.

Corporate Governance

ArcelorMittal is committed to adopting best practices in its dealings with shareholders. In particular, it aims to ensure good corporate governance by applying rules on transparency, quality of reporting and the balance of powers. ArcelorMittal continuously monitors USA, European Union and Luxembourg legal requirements and developments in the area of corporate governance and will adjust its corporate governance controls and procedures, if necessary. In this regard, on January 1 2007, the Ten Principles of Corporate Governance of the Luxembourg Stock Exchange entered into force. In 2007 ArcelorMittal complied with the principles and recommendations set out therein and is committed to continue to meet the corporate governance requirements set out in the Principles, except that, upon the appointment of Mr Lakshmi N Mittal as Chairman of the Board of Directors in May 2008, ArcelorMittal will deviate from the recommendation to separate the roles of Chairman and Chief Executive Officer.

In April 2008, the Board of Directors completed a review of certain provisions of the Memorandum of Understanding dated 25 June 2006 and amended on 5 November 2006 (the “MoU”), to adapt the MoU to the Company’s needs in the post-merger and post-integration phase. In particular, the Board has decided to create the role of Lead Independent Director. The Lead Independent Director will replace the role of President and his/her function will be to (i) co-ordinate the activities of the independent directors, (ii) liaise between the Chairman of the Board of Directors and the independent directors, (iii) call meetings of the independent directors when necessary and appropriate, and (iv) perform such other duties as may be assigned to him by the Board from time to time. Furthermore, the Board of Directors has decided to remove references in the MoU to the size and composition of the Board and the distinction between former Arcelor and Mittal directors. Finally, the Board of Directors has decided that the Audit Committee and the Appointments, Remuneration and Corporate Governance Committee will be composed of a minimum of three independent directors.

There are no significant differences between ArcelorMittal’s corporate governance practices and those currently required to be followed by USA domestic companies under the NYSE listing standards.

Process for Handling Complaints about Accounting Matters

ArcelorMittal’s Code of Business Conduct encourages all employees to bring complaints or concerns about internal controls and accounting or auditing issues to the Audit Committee’s attention on a confidential basis. Concerns with regard to possible irregularities or bribery within the business of ArcelorMittal and its subsidiaries may also be communicated through the Corporate Governance - Whistleblower section of the ArcelorMittal website.

During 2007, employees reported no significant complaints of this nature.

Independent Auditors

As well as ensuring the independence of the independent auditors, the Audit Committee has also obtained a confirmation from the firms that none of its former employees is in a position with ArcelorMittal which may impair auditors independence.

Ethics and Conflict of Interest

Ethics and conflicts of interest are governed by ArcelorMittal’s Code of Business Conduct. The Code sets out standards for ethical behaviour that are to be followed by all employees and directors of ArcelorMittal. They must always act in the best interests of ArcelorMittal and must avoid any situation in which their personal interests conflict, or could conflict, with their obligations to ArcelorMittal. As employees, they must not acquire any financial or other interest in any business or participate in any activity that could deprive ArcelorMittal of the time or the attention needed in performing their duties. The Code of Business Conduct is available on ArcelorMittal’s website.

Market InformationWith half of its industrial presence in high-growth regions, a high-level of self-sufficiency in key raw materials, a strong distribution network and a broad product portfolio, ArcelorMittal has a competitive advantage compared to its competitors and is ideally positioned to capture growth opportunities. ArcelorMittal is listed on the stock exchanges of New York (MT), Amsterdam (MT), Paris (MTP), Brussels (MTBL), Luxembourg (MT) and on the Spanish stock exchanges of Barcelona, Bilbao, Madrid and Valencia (MTS).


ArcelorMittal has an ambitious Growth Plan 2012, which aims at:

• Expanding capacity by 20%.

• Upgrading more than 5 million tonnes of product mix.

• Expanding distribution network by 50% and iron ore production by 70%.

• Accelerating growth through Greenfield projects, Mergers and Acquisitions.

With a strong cash flow generation, a solid balance sheet, an attractive dividend policy, a free float of more than 55%, a market capitalisation of more than 100 billion US$ and a presence in major indexes, ArcelorMittal has the ambition to develop and balance its shareholder base on the major listed markets and to attract new investors.

Share price performance

ArcelorMittal had record share price in 2007. The Company was labelled ‘star’ of the French stock exchange in 2007 by La Tribune newspaper. Stocks on the Paris stock exchange rose by 73%. ArcelorMittal was also the best performer in the Amsterdam AEX and among the top performers globally in the Eurostoxx 50. While ArcelorMittal’s share price rose by 73% in Europe, it also increased by 96% in the USA. These figures are all very impressive given that, globally, the metals and mining stocks were up by 48%, the steel stocks by 36% and the general stock market by just 5%. This record performance reflected the success of the merger, through our results and profitability.

Indexes

ArcelorMittal is member of more than 120 indices including the following leading indices: DJ STOXX 50, DJ EURO STOXX 50, CAC40, AEX, FTSE Eurotop 100, MSCI Pan-Euro, DJ Stoxx 600, S&P Europe 500, Bloomberg World Index and NYSE Composite Index. Recognised for its commitment to Sustainable Development, the Group is also member of the FTSE4Good index.

Dividend Policy

The policy of ArcelorMittal aims to return 30% of ArcelorMittal’s prior year’s annual net income to shareholders every year through an annual base dividend, supplemented by share buy-backs. Based on the 2007 annual results, ArcelorMittal will return in 2008 a total of 3.1 billion US$ to shareholders, by paying a cash dividend of approximately 2.1 billion US$ and a 1.0 billion US$ share buy-back.

Base dividend

The base dividend has been designed to provide a minimum payout per year and would rise in order to reflect ArcelorMittal’s underlying growth. Payment of this dividend will be made on a quarterly basis. Dividends are announced in US$ and paid in US$ for shares listed on the NY Stock Exchange and paid in Euros for shares listed on the European stock exchanges (Netherlands, France, Spain, Luxembourg and Belgium).

ArcelorMittal’s Board of Directors has recommended increasing the Company’s base dividend to be paid in 2008 by 20 cents from 1.30 US$ to 1.50 US$. The dividend will be submitted to a shareholders vote, at the next Annual General Meeting of shareholders in Luxembourg on May 13 2008. The dividend payments will occur on a quarterly basis for the full year 2008 (see Financial Calendar opposite).

Share buy-back programme

ArcelorMittal has announced on February 22 2008 that the 1 billion US$ share buy-back related to its dividend policy has been completed.

Investor Relations

By implementing high standards of financial information disclosure and providing clear, regular, transparent and even-handed information to all its shareholders, ArcelorMittal aims to be the first choice for investors in the sector.

To meet this objective and provide information to fit the needs of all parties, ArcelorMittal has decided to implement an active and broad communications policy: roadshows with the financial community, conference calls, plant visits, meetings with retail and private investors, and website featuring management comments on quarterly, half-year and full-year results.

ArcelorMittal share price performance since creation

Base 100 at 1st August 2006 (US$)

HSBC Global Metals & Mining index

ArcelorMittal

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165

1 Aug 18 Oct 4 Jan 23 Mar 9 Jun 26 Aug 12 Nov 29 Jan

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Private Investors

ArcelorMittal’s senior management intends to meet private investors and shareholder associations in road-shows throughout 2008. A dedicated toll free number for private investors is available at 00800 4792 4792. Requests for information may also be sent to: [email protected]

Analysts and Investors

As the world’s leading steel company and major investment vehicle in the steel sector, ArcelorMittal constantly seeks to develop relationships with financial analysts and international investors. Depending on their geographical location, investors may use the following emails: [email protected] [email protected]

Socially Responsible Investors

The Investor Relations team is also a privileged source of information on the growing Socially Responsible Investment community. The team organises special events on ArcelorMittal’s Sustainable Development strategy and answers all requests for information sent to the Group ([email protected]).

Credit and Fixed Income Investors

Credit, Fixed Income Investors and rating agency are followed by a dedicated team from Investor Relations ([email protected]).


Financial Calendar

Financial resultsMay 14 2008 Results for 1st quarter 2008 July 30 2008 Results for 2nd quarter 2008 and 6 months 2008 November 5 2008 Results for 3rd quarter 2008 and 9 months 2008

Dividend payment June 16 2008 2nd quarterly payment of base dividend September 15 2008 3rd quarterly payment of base dividend December 15 2008 4th quarterly payment of base dividend

Shareholder and investor meetingsSeptember 17&18 2008 Investor Day in EuropeMay 13 2008 Annual shareholder meeting in LuxembourgJune 17 2008 Retail Event in LuxembourgNovember 21&22 2008 Shareholder fair Actionaria in Paris

To subscribe to ArcelorMittal releases and results, please visit the subscription page in the Press section of www.arcelormittal.com

Key Operating Subsidiaries


Subsidiary (full legal name) Registered Office Percentage ownership

FlatCarbonAmericas

ArcelorMittal Dofasco Inc. 1330 Burlington Street East, P.O. Box 2460, 100% L8N 3J5 Hamilton, Ontario, Canada

ArcelorMittal Lázaro Cárdenas S.A. de C.V. Fco. J. Mujica No. 1-B, Apartado Postal No. 19-A, 100% C.P. 60950, Cd. Lázaro Cárdenas, Michoacán, Mexico

ArcelorMittal USA Inc. 1 South Dearborn 100% Chicago, IL 60603, USA

Companhia Siderúrgica de Tubarão S.A. Av. Brigadeiro Eduardo Gomes, 930, Jardim Limoeiro 100% 29163-970 Serra, Espírito Santo, Brazil

FlatCarbonEurope

Acería Compacta de Bizkaia S.A. 6 Chavarri, 48910 Sestao, 79.78% Vizcaya, Spain

Arcelor Produits Plats Wallonie Quai du Halage, 10 100% 4400 Flémalle, Belgium

Arcelor Steel Belgium N.V. Avenue de l’Yser, 24 99.82% 1040 Brussels, Belgium

ArcelorMittal Atlantique et Lorraine SAS 1 à 5, rue Luigi Cherubini 100% 93200 Saint-Denis, France

ArcelorMittal Bremen GmbH Carl-Benz Str. 30 100% D-28237 Bremen, Germany

ArcelorMittal Eisenhüttenstadt GmbH Werkstr. 1 100% D-15890 Eisenhüttenstadt, Brandenburg, Germany

ArcelorMittal España S.A. Residencia La Granda 99.79% 33418 Gozon, Asturias, Spain

ArcelorMittal Flat Carbon Europe SA Avenue de la Liberté, 19 99.82% L-2930 Luxembourg, Luxembourg

ArcelorMittal Galati S.A. Strada Smardan nr. 1 99.65% Galati, Romania

ArcelorMittal Méditerranée SAS 1 à 5, rue Luigi Cherubini 100% 93200 Saint-Denis, France

ArcelorMittal Ostrava a.s. Vratimovska 689 85.47%1 707 02 Ostrava-Kunčice, Czech Republic

ArcelorMittal Packaging SA 1 à 5, rue Luigi Cherubini 100% 93200 Saint-Denis, France

ArcelorMittal Piombino S.p.a. Via S. Egidio nr.16 99.79% 50123 Firenze, Italy

ArcelorMittal Poland S.A. Ul. Chorzowska 50 98.99%1

40-121 Katowice, Poland


1 Represents the percentage of shares to which ArcelorMittal has title or that are subject to an executed agreement providing for their transfer to ArcelorMittal at a fixed price and future date.2 Acindar Industria Argentina de Aceros S.A. is controlled by ArcelorMittal Brasil, a subsidiary of ArcelorMittal.3 ArcelorMittal Ruhrort and ArcelorMittal Hochfeld are together referred to as ArcelorMittal Duisburg.


FlatCarbonEurope

Cockerill Sambre S.A. Rue Trasenster, 21 100% 4102 Seraing, Belgium

Industeel Belgium S.A. Rue de Châtelet, 266 100% 6030 Charleroi, Belgium

Industeel France S.A. 1 à 5, rue Luigi Cherubini 100% 93200 Saint-Denis, France

LongCarbonAmericasandEurope

Acindar Industria Argentina de Aceros S.A. 2739, Estanislao Zeballos 65.21%2

B1643 AGY Buenos Aires, Argentina

Arcelor Huta Warszawa Sp.z.o.o. UL. Kasprowicza 132 100% 01-949 Warszawa, Poland

ArcelorMittal Belval & Diferdange SA 66, rue de Luxembourg 99.82% 4221 Esch-sur-Alzette, Luxembourg

ArcelorMittal Bergara S.A. 6, C/Ibarra 99.79% 20570 Bergara, Spain

ArcelorMittal Brasil S.A. 1115, avenida Carandai, 24° Andar, 30130-915 100% Belo Horizonte, Minos Gerais, Brazil

ArcelorMittal Commercial Sections SA 66, rue de Luxembourg 99.82% 4221, Esch-sur-Alzette, Luxembourg

ArcelorMittal Hamburg GmbH Dradenaustrasse 33 100% D-21129 Hamburg, Germany

ArcelorMittal Hochfeld GmbH3 Wörthstrasse 125 100% D-47053 Duisburg, Germany

ArcelorMittal Madrid S.L. Ctra. De Toledo KM 9,200 99.79% 28021 Madrid, Spain

ArcelorMittal Olaberría S.L. Carretera Nacional Madrid – Irun S/N 99.79% 20212 Olaberría, Spain

ArcelorMittal Ostrava a.s. Vratimovska 689 85.47%1

707 02 Ostrava-Kunčice, Czech Republic

ArcelorMittal Point Lisas Ltd. Mediterranean Drive 100% Point Lisas, Couva, Trinidad and Tobago

ArcelorMittal Poland S.A. Ul. Chorzowska 50 98.99%1

40-121 Katowice, Poland

ArcelorMittal Rodange & Schifflange S.A. 1, rue de l’Industrie, BP24 79.70% 4801 Rodange, Luxembourg

Key Operating Subsidiaries



LongCarbonAmericasandEurope

ArcelorMittal Ruhrort GmbH3 Vohwinkelstrasse 107 100% D-47137 Duisburg, Germany

ArcelorMittal USA Inc. 1 South Dearborn 100% Chicago, IL 60603, USA

Mittal Canada Inc. 4000, route des Aciéries, Contrecoeur 100% Québec J0L 1C0, Canada

ArcelorMittal las Truchas, S.A. de C.V. Francisco J Mujica 160950, 99.87% Lázaro Cárdenas, Michoacán, Mexico

AACIS

ArcelorMittal Annaba Spa Sidi Amar, El-Hadjar Complex 70% B.P. 2055 Annaba 23000, Algeria

ArcelorMittal South Africa Ltd. Main Building, Room N3/5, Delfos Boulevard 52.02% Vanderbijlpark, 1911, South Africa

JSC ArcelorMittal Temirtau Republic Avenue 1, 101407 Temirtau 100% Karaganda Region, Republic of Kazakhstan

Mittal Steel Liberia Limited 401, Ocean View Apartments 70% UN Drive, Monrovia, Liberia

OJSC ArcelorMittal Kryviy Rih 1 Ordzhonikidze Street, Kryviy Rih, 94.67% 50095 Dnepropetrovsk Oblast, Ukraine

Société Nationale de Sidérurgie S.A. Route Nationale n°2 Km 18 32.34%4

BP 551 Al Aarroui, Morocco

StainlessSteel

ArcelorMittal Inox Brasil S.A. Avenida Joao Pinheiro, 580 Centro 57.32%5

30130-180 Belo Horizonte, Minas Gerais, Brazil

ArcelorMittal Stainless Belgium Avenue de l’Yser, 24 99.82% 1040 Brussels, Belgium

ArcelorMittal Stainless France 1 à 5, rue Luigi Cherubini 100% 93200 Saint-Denis, France

ArcelorMittal Stainless & Nickel Alloys BP 1 99.99%6 58160 Imphy, France

continued


3 ArcelorMittal Ruhrort and ArcelorMittal Hochfeld are together referred to as ArcelorMittal Duisburg.4 Société Nationale de Sidérurgie, S.A. is controlled by Nouvelles Sidérurgies Industrielles, a subsidiary of ArcelorMittal.5 Offer underway for outstanding shares.6 ArcelorMittal Stainless & Nicklel Alloys is controlled by ArcelorMittal France, a subsidiary of ArcelorMittal.


SteelSolutionsandServices

ArcelorMittal Construction France S.A. Immeuble Hermès, 20, rue Jacques Daguerre 100% 92500 Rueil Malmaison, France

Arcelor International America, LLC 1, South Dearborn Street 100% 60603 Chicago, USA

ArcelorMittal Auto Processing France SAS Route de Saint Leu d’Esserent 100% 60160 Montataire, France

ArcelorMittal International FZE Jebel Ali Free Zone, LOB 15523 99.82% PO Box 17619 Dubai, United Arab Emirates

ArcelorMittal Stalhandel GmbH Gutenbergstrasse 11 100% D-33790 Halle, Germany

QHow can our Leadership in the specialty steel industry have a significant positive impact on our growth and on that of our global customers?

At ArcelorMittal, Leadership is one of the Company’s three core values and plays a significant role in terms of innovation. One key pillar of our innovative Leadership is high-value niche products. The replacement of a standard commodity product with an advanced high-value product not only ensures a competitive advantage to the technologically advanced producer, but it also increases the ‘value in use’ of the steel – thus contributing to the growth of our industry. One excellent example is the high-strength steel which ArcelorMittal has contributed to the creation of new steel gas cylinders, which are about half the weight of the traditional ones. Now a steel cylinder weighs 6.3kg and can hold 10kg of gas. ArcelorMittal and steel bottles supplier Liotard were awarded the 2nd prize of the Swedish Steel Prize 2007 for this innovation that is ‘transforming tomorrow’.

A

ArcelorMittal Pro Forma Consolidated Financial and Other InformationCondensedConsolidatedStatementsofIncome(Based on IFRS, in millions of US dollars, except shares, per share, employee and shipment data)

Year Ended Year Ended December 31, December 31, 2007 20061

Actual (audited) Pro forma (unaudited)

PRO FORMA STATEMENTS OF INCOME DATA Sales 105,216 88,576Depreciation and impairment 4,570 3,448Operating Income 14,830 11,857Operating Margin (as percentage of sales) 14.1% 13.4%Net financing costs, income from equity method investments and other income 58 (709)Income before taxes and minority interest 14,888 11,148Income tax expense 3,038 1,667Income before minority interest 11,850 9,481Minority Interest (1,482) (1,487)Net income 10,368 7,994Basic earnings per common share 7.41 5.78Diluted earnings per common share 7.40 5.78Weighted average common shares outstanding (in millions) 1,399 1,383Diluted weighted average common shares outstanding (in millions) 1,401 1,385EBITDA2 19,400 15,305EBITDA Margin (as percentage of sales) 18.4% 17.3%OTHER INFORMATION (unaudited) Total shipments of steel products3 (millions of metric tonnes) 109.7 110.5Employees (000’s) 311 319 1 The pro forma information reflects the combined business as if the acquisition of Arcelor and its subsidiaries had taken place at the beginning of the period.2 EBITDA defined as operating income plus depreciation and impairment.3 Some inter-company shipments are not eliminated.


ArcelorMittal Pro Forma Consolidated Financial and Other InformationCondensedConsolidatedStatementsofCashFlows(Based on IFRS, in millions of US dollars)

Year Ended Year Ended December 31, December 31, 2007 20061

Actual (audited) Pro forma (unaudited)

OPERATING ACTIVITIES: Net cash provided by operating activities 16,532 10,285INVESTING ACTIVITIES: Purchase of property, plant and equipment (5,448) (4,638)Acquisition of net assets of subsidiaries, net of cash acquired (6,052) -Investments in companies accounted for under equity method (1,196) -Other investing activities (net) 787 (137)Net cash used in investing activities (11,909) (4,775)FINANCING ACTIVITIES: Proceeds from and payments of short-term and long-term debt 1,435 (718)Purchase of treasury stock (2,553) -Dividends paid2 (2,269) (2,480)Other financing activities (net)3 (30) (88)Net cash provided by (used in) financing activities (3,417) (3,286)Effect of exchange rate changes on cash 634 295Net increase in cash and cash equivalents 1,840 2,519 1 The pro forma information reflects the combined business as if the acquisition of Arcelor and its subsidiaries had taken place at the beginning of the period.2 Includes Minority Interest Dividend paid.3 Includes sale of treasury stock for share based payment.


ArcelorMittal Pro Forma Consolidated Financial and Other InformationCondensedKeyFinancialandOperationalInformation(Based on IFRS, in billions of US dollars, unless otherwise stated)


2007 Actual (audited) Flat Carbon Flat Carbon Long Carbon AACIS Stainless Steel Consolidated Americas Europe Americas Steel Solutions Total and Europe & Services

FINANCIAL INFORMATION Sales 22.9 34.6 23.8 18.2 9.3 16.2 105.2Depreciation 1.0 1.4 0.8 0.6 0.3 0.1 4.6Operating income 3.0 4.1 3.9 3.2 0.9 0.6 14.8Operating margin (as a percentage of sales) 13.1% 11.8% 16.4% 17.6% 9.7% 3.7% 14.1%EBITDA 4.0 5.5 4.7 3.8 1.2 0.7 19.4EBITDA margin (as a percentage of sales) 17.5% 15.9% 19.7% 20.9% 12.9% 4.3% 18.4%OPERATIONAL INFORMATION (unaudited) Crude Steel Production (millions of metric tonnes) 31.1 37.5 24.7 20.9 2.2 - 116.4Steel Shipments (millions of metric tonnes) 27.9 34.4 24.6 20.9 1.9 15.9 109.7Employees (000’s) 35.5 68.0 56.5 123.5 11.6 13.1 311.4

2006 Pro forma (unaudited)1 Flat Carbon Flat Carbon Long Carbon AACIS Stainless Steel Consolidated Americas Europe Americas Steel Solutions Total and Europe & Services

FINANCIAL INFORMATION Sales 21.9 27.6 18.5 14.7 7.3 11.9 88.6Depreciation 1.0 1.0 0.6 0.5 0.2 0.1 3.4Operating income 2.6 2.8 3.0 2.6 0.7 0.5 11.9Operating margin (as a percentage of sales) 11.9% 10.1% 16.2% 17.7% 9.6% 4.2% 13.4%EBITDA 3.6 3.8 3.6 3.1 0.9 0.6 15.3EBITDA margin (as a percentage of sales) 16.4% 13.8% 19.5% 21.1% 12.3% 5.0% 17.3%OPERATIONAL INFORMATION (unaudited) Crude Steel Production (millions of metric tonnes) 31.5 38.5 24.6 20.8 2.6 - 118.0Steel Shipments (millions of metric tonnes) 30.0 33.1 24.9 20.3 2.2 14.3 110.5Employees (000’s) 36.7 67.2 41.0 148.3 11.5 11.6 319.6 1 The pro forma information reflects the combined business as if the acquisition of Arcelor and its subsidiaries had taken place at the beginning of the period.• EBITDA is defined as operating income plus depreciation and impairment.• Crude steel production is a combination of crude steel at the former Arcelor units and liquid steel at former Mittal Steel units.• Some inter-segment and intra-segment sales have not been eliminated.• Some inter company shipments are not eliminated.• Steel Solutions and Services shipments are not consolidated and exclude all hirework and commission shipments from April 1 2007 onwards.• Presented on the same basis as in our Annual Report.• As from the fourth quarter onwards, Steel Solutions and Services division includes buying and selling trading activity from the ArcelorMittal International Business.

ArcelorMittal Audited Consolidated Financial InformationCondensedConsolidatedBalanceSheet(Based on IFRS, in millions of US dollars)


As of As of December 31, December 31, 2007 2006*

ASSETS Current Assets Cash, cash equivalents and restricted cash 8,105 6,140Short-term investments - 6Trade accounts receivable 9,533 8,769Inventories 21,750 19,240Prepaid expenses and other current assets (including assets held for sale) 5,940 5,258Total Current Assets 45,328 39,413Goodwill, intangible assets and property, plant and equipment 77,025 65,613Investments accounted for using the equity method 5,887 3,456Other non-current assets 5,385 4,199Total Assets 133,625 112,681LIABILITIES AND EQUITY Current Liabilities Short-term debt and current portion of long-term debt 8,542 4,922Trade accounts payable and other 13,991 11,342Accrued expenses and other current liabilities (including liabilities held for sale) 9,676 8,296Total Current Liabilities 32,209 24,560Long-term debt, net of current portion 22,085 21,645Other non-current liabilities 17,796 16,248Total Liabilities 72,090 62,453Equity attributable to equity holders of the parent 56,685 42,148Minority Interest 4,850 8,080Total Equity 61,535 50,228Total Liabilities and Equity 133,625 112,681 * As required by IFRS, the 2006 information has been adjusted retrospectively for the finalisation of the allocation of purchase price of Arcelor.

Report of the Independent Registered Public Accounting Firm

TotheBoardofDirectorsandShareholdersofArcelorMittal(successorentityofMittalSteelCompanyN.V.)19,avenuedelaLibertéL-2930Luxembourg

We have audited the consolidated balance sheet of ArcelorMittal (successor entity of Mittal Steel Company N.V.) and subsidiaries (the ‘Company’) as of December 31 2007 and the related consolidated statements of income, changes in equity, and cash flows for the year then ended. Such consolidated financial statements and our report thereon dated March 19 2008, expressing an unqualified opinion (which is not included herein) are included in the Company’s Annual Report on Form 20–F as filed with the United States Securities and Exchange Commission on March 19 2008. The condensed consolidated balance sheet as of December 31 2007 presented on page 89 of the ArcelorMittal Activity Report 2007, is the responsibility of the Company’s management. Our responsibility is to express an opinion on this condensed consolidated balance sheet in relation to the consolidated financial statements.

In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31 2007, is fairly stated in all material respects in relation to the consolidated financial statements from which it has been derived.

Deloitte S.A.

Luxembourg, Grand-Duchy of LuxembourgApril 4 2008


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Photography: ArcelorMittal Photo Library; 52drive.lu; © Eventattitude / T. Belvaux; Wolfgang von Brauchitsch; Luc Delflorenne; Pierre-François Grosjean; Michel Monteaux; Raj Takhar; Emiel Verhasselt-Hippo Architecten; Corbis; Getty Images.Designed and produced by www.thoburns.com (United Kingdom).Printed by Imprimerie Centrale, Luxembourg. This document is also available in French and Spanish.

Copyright 2008 ArcelorMittal.

Published in April 2008. To receive a copy of the Activity Report, please contact:

ArcelorMittal

Luxembourg: 19, Avenue de la Liberté L-2930 Luxembourg Grand-Duchy of Luxembourg T: +352 4792 1

London: 7th Floor, Berkeley Square House Berkeley Square London W1J 6DA United Kingdom T: +44 20 7629 7988

www.arcelormittal.com