The LNM Group Building Global Leadership In The Steel Industry

1

• The LNM GroupBuilding Global Leadership In The
  Steel Industry

2
Agenda

• Introduction
• Iscor LNM involvement Louis van Niekerk
• LNM Group Overview Lakshmi Mittal
• LNM Group Turnaround Expertise Aditya Mittal
• The Future for Ispat Iscor Ltd Lakshmi Mittal

3
Iscor LNM Involvement

• Louis van Niekerk
• CEO, Iscor Limited

4
Global Focus

• Global steel industry moving increasingly towards
  consolidation
• Iscor in isolation would fall behind on
  technology and cost curve
• LNM/Iscor relationship has secured our position
• BAA has already delivered results above
  expectations
• Iscor now formally part of the LNM Group

5
Business Assistance Agreement

• BAA signed with LNM November 2001
• approved by shareholders January 2002
• remuneration linked to performance
• target sustainable cost savings (excl. labour
  first 1) R350m R700m p.a.
• LNM reward value of 5-10 Iscor issued shares
• Services provided
• technical, RD, procurement, benchmarking
• participation in LNM knowledge integration
  programmes
• budget review and quarterly performance reviews
• BAA performance
• paid R613m in December 2003 (equivalent of 5.77
  share issue)
• less than 2 year payback for Iscor
• expectation that full cost saving target will be
  achieved

6
Interaction with LNM

• Total 255 visits between LNM and Iscor to date
• generate cost savings ideas
• transfer knowledge
• implement improved practices
• Examples of major areas of impact
• Blast Furnace reline / campaign extension,
  burden/fuel rate optimization
• Steelmaking refractory consumption, plant
  operation maintenance issues
• Rolling hot rolling maintenance training,
  quality inspection procedure for flat rolling,
  wire rod bar operation and maintenance
• Major benefits from LNM procurement contracts

7
Share Price Evolution
40
35
LNM partial offer
30
390 UPLIFT
25
Unbundling
Rand
20
LNM shareholding moves over 50
15
Iscor shareholders approve BAA
10
5
Jul-02
Jul-03
Jul-04
Jan-02
Jan-03
Jan-04
Nov-01
Mar-02
May-02
Sep-02
Nov-02
Mar-03
May-03
Sep-03
Nov-03
Mar-04
May-04
Including effect of rights issue
8
Iscor Operating Margin since LNM Involvement
25
20
15
10
Upward trend in operating margins
5
0
3Q01
4Q01
1Q02
2Q02
3Q02
4Q02
1Q03
2Q03
3Q03
4Q03
1Q04
Source Iscor Limited published financial
statements
9
Ispat Iscor Limited

• Iscor Limited to be renamed Ispat Iscor Limited
  
• approved by Iscor board
• shareholder approval pending
• Ispat brand name well established
• Ispat name has global recognition and will
  positively benefit Iscor
• Marketing co-operation now possible

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The LNM Group - Introduction

• Lakshmi Mittal
• Chairman, LNM Group

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The LNM Group Overview

• Worlds 2nd largest steelmaker
• 2004 net revenues gtUS17 billion
• 2004 liquid steel production gt44 million tonnes
• Most international steel company
• vertically integrated steel making facilities in
  13 countries
• 150,000 employees of over 45 nationalities
• Unmatched track record in developing competitive
  steel enterprises in both advanced and emerging
  market economies

12
The LNM Group Overview

• Substantial experience in acquiring turning
  around under-performing steelmaking assets -
  including privatised entities
• Among the most efficient lowest cost steel
  producers worldwide using both integrated
  mini-mill processes
• Advanced technical research facilities Chicago
  (USA) Gandrange (France)
• Major supplier to global automotive appliance
  sectors

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The Worlds Most Global Steel Company
The LNM Group Operating Facilities Ispat Annaba,
Algeria Ispat Sidbec, Canada Ispat Nova Hut,
Czech Republic Ispat Unimétal, France IHSW, ISRG,
IWHG, Germany Ispat Indo, Indonesia Ispat Karmet,
Kazakhstan Ispat Mexicana, Mexico Ispat Sidex,
Romania Ispat Polska Stal, Poland Ispat Iscor,
South Africa Caribbean Ispat, Trinidad Ispat
Inland, U.S.A.
The LNM Group major Sales / Marketing
Offices Vienna, Austria Gandrange,
France Duisburg, Germany Beijing,
China Guangzhou, China Urumqi, China Prague,
Czech Republic Budapest, Hungary Jakarta,
Indonesia Tehran, Iran Milan, Italy Luxembourg Mex
ico City, Mexico Katowice, Poland Moscow,
Russia Barcelona, Spain Istanbul, Turkey Dubai,
U.A.E. Chicago, U.S.A. Montreal, Canada
Operating Facility
Sales / Marketing Office

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The Second Largest Steel Company in the World
2003 Steel Production, Millions of Tonnes
Source IISI

• 2003 total steel production in excess of 35
  million tonnes
• Production for 2004 forecast to exceed 44
  million tonnes

15
Global Output
Region Liquid Steel Production (million
tonnes) 2004 Central and Eastern Europe
14.4 (Romania, Czech Republic, Poland) Western
Europe 3.8 (Germany, France) North
America 12.2 (USA, Canada, Mexico,
Trinidad) Africa 8.3 (South Africa,
Algeria) Asia 6.1 (Indonesia, Kazakhstan)
Total
44.8
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LNM Group Upstream Facilities

• Significant interests in coal and iron ore
  mines, DRI and coke production
• Currently mines over 28 million tonnes of iron
  ore, from an annual
• requirement of 48 million tonnes, from LNM
  owned mines in Kazakhstan,
• Algeria, Mexico, South Africa and the US
• Recently furthered iron ore mining facilities
  with the acquisition of the
• Ljubija iron ore mines in Bosnia
• Currently mines over 13 million tonnes of coal,
  from an annual requirement
• of 35 million tonnes, from LNM owned mines in
  Kazakhstan
• Worlds largest producer of DRI through
  facilities in Canada, Trinidad
• Tobago, Mexico, Germany and South Africa

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The LNM Group - Turnaround Expertise

• Aditya Mittal
• Vice-Chairman, LNM Group

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LNM Turnaround Expertise

• Unique reputation for ability to acquire and
  turnaround underperforming steel producing assets
  
• sharp contrast to declining production base of
  peers
• Focus on emerging markets and, in particular, in
  the Central Eastern European markets
• Implementation of this strategy incorporates
  several key elements
• Immediate implementation of group-wide best
  practice to increase production, reduce cost,
  raise value-added improve quality
• Introduction of a phased capital expenditure
  programme to enable improvements to take place

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Proven Turnaround Expertise
Ispat Nova Hut 2003 Shipments annualised from
11 months data. Acquisition completed on 31st Jan
2003 Including Trefileurope shipments
20
LNM CSR Strategy

• Turnarounds for LNM are not just limited to the
  operational side
• LNM believes each of its businesses must play a
  key role in ensuring the well-being of the
  communities in which they operate
• Each business is encouraged to support a variety
  of causes including employment, health,
  education, the arts and sports
• Slides in the appendix detail specific CSR
  examples at existing LNMs facilities

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Global Customer Base
Customer Base - A Whos Who of Leaders in Industry
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Global Management Philosophy

• Manage each subsidiary as independent, incentive
  based entrepreneurial business unit, with full
  responsibility for all its operations
• Continuous operational improvements through
  Knowledge Integration Programme
• Maintain leadership position in globalisation of
  the steel industry
• Maximise benefits from integration of existing
  new business units
• Significant benefits from aggregated purchasing
  power global marketing knowledge
• Promotion of social harmony in each every
  business unit

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LNM Group The Future of Ispat Iscor Limited

• Lakshmi Mittal
• Chairman, LNM Group

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Integration

• Ispat Iscor to be managed as independent,
  incentive based and entrepreneurial business unit
• Full responsibility for all operations
• Benefits of being part of a global group
• Enhanced technology, knowledge skill transfer
• Marketing co-operation
• New proprietary product development technology
  available

25
Management / Employees

• LNM has full faith in Ispat Iscor management and
  employees
• LNM supports Ispat Iscor management in its
  efforts to bring productivity in line with
  international practice
• Ispat Iscor employees are welcomed into the LNM
  Group

26
Downstream Pricing

• Price base to remain international parity
• LNM supports development of downstream steel
  industry
• Further negotiations to develop a sustainable and
  competitive pricing model for downstream industry
  in accordance with WTO principles

27
Environmental Social Responsibility

• LNM has commitment to environmental social
  responsibility
• LNM steel plants adhere to highest levels of
  environmental safety
  regulations
• LNM plants have committed social responsibility
  plans
• LNM invests in local communities, not just steel
  plants
• LNM has long-term commitment to South Africa

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The Future for Ispat Iscor

• Ispat Iscor a core investment for LNM
• Ispat Iscor to be the key in LNMs Africa
  strategy
• Strong level of LNM Group support will continue
• LNM global expertise will make major contribution
  in keeping Ispat Iscor in lowest quartile of
  global cost curve
• LNM will ensure that the country will have a
  steel company that it can be proud of

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Additional Information on LNM Group

• www.ispat.com

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A Global Force in Steel
The LNM Group
LNM Holdings N.V. (The Netherlands)
Ispat International N.V. (The Netherlands)
P.T.Ispat Indo (Indonesia)
Ispat Sidex (Romania)
Ispat International Ltd (UK)
Ispat Karmet (Kazakhstan)
Ispat Nova Hut (Czech Republic)
North American Operations
European Operations
Iscor Limited (South Africa)
Ispat Annaba (Algeria)
Ispat Polska Stal (Poland)
Ispat Shipping
Iron Ore Mines
Ispat Unimetal (France)
Ispat Germany (Germany)
Ispat Mexicana (Mexico)
Caribbean Ispat (Trinidad)
Iron Ore Mines
Coal Mines
Ispat Sidbec (Canada)
Ispat Inland (USA)
Ispat Hamburger Stahlwerke
Trefileurope
Pena Colorada
Power Plant
I/N Tek I/N Kote
Ispat Stahlwerk Ruhrort
SMR
Sersiin
Walker Wire (USA)
Sorevco
Minorca Mines
PMT
Acufil
Delta Tube
Ispat Walzdraht Hochfeld
Empire Mines
50 Majority Equity Stake 70 Majority
Equity Stake
Sidbec-Ferruni
Kent Wire (UK)
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World Class Facilities
PRODUCTS
TECHNOLOGY
COMPANY
CAPACITY (MT)
Ispat Inland, U.S.A.
Flat / Long
BOF / EAF
6 000
Flat
DRI-EAF
Ispat Mexicana, Mexico
4 000
Flat
BOF
Ispat Karmet, Kazakhstan
5 250
Flat / Long
DRI-EAF
Ispat Sidbec, Canada
1 700
Long
DRI-EAF
Caribbean Ispat, Trinidad
1 000
Ispat Germany, Germany
Long
DRI-EAF / BOF
2 800
Long
EAF
Ispat Unimetal, France
1 550
Long
EAF
Ispat Indo, Indonesia
600
Flat / Long
BOF
Ispat Sidex, Romania
5 000
BOF
Ispat Annaba, Algeria
Flat / Long
1 700
Flat / Long
BOF / EAF
Ispat Iscor, South Africa
6 300
Flat / Long
BOF
Ispat Nova Hut, Czech Republic
2 500
Flat / Long
BOF
Ispat Polska Stal, Poland
6 000
TOTAL
44 800
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Joint Ventures and Subsidiaries
Products Facility Capacity Percentage
Country (000) Ownership Raw Materials Iron
ore Minorca Mine 3,000 100 USA Iron ore Empire
Mine 8,000 21 USA Iron ore Peña Colorada
3,500 50 Mexico Iron ore Ispat
Tebessa 3,000 70 Algeria Iron ore Sishen/Thabazim
bi 8,300 50 South Africa Iron ore

Lisakovski/Kentube/Afasu Mines 5,000 100 Kazakhst
an Pulverized coal PCI 700 50 USA Metallurgic
al Coal Karagandaugol 12,000 100 Kazakhstan Coke
Karagandaugol 7,000 100 Kazakhstan Downstream-Fla
t Cold rolled products I/N Tek 1,600 60 USA Galv
anized steel I/N Kote 1,100 50 USA Galvanized
sheet Sorevco 220 50 Canada Downstream-Wire /
Wire products Wire products Trefileurope
385 100 France Wire products Kent Wire (Ispat)
140 100 UK Wire products Walker-Wire
120 100 USA Wire products Acufil
100 100 Canada Wire products WDI
730 33.33 Germany Wire products Ispat
Wire 30 100 Indonesia Bright drawn bars SMR
100 100 France Other Pipes PMT
300 51 Mexico Pipes Delta Tube
Ltd 120 50 Canada Services Sersiin
50 Mexico Shipping company Ispat Shipping 585
DWT 100 UK Power Ispat Power 555
MW 100 Kazakhstan Guaranteed supply to Iscor
Limited
LNM also owns interests in related assets which
provide it with additional cost advantages
33
LNM in Central and Eastern Europe

• Ispat Sidex (Romania), Ispat Nova Hut (Czech
  Republic) and Ispat
  Polska Stal (Poland)
• Leading producer in Central Eastern Europe with
  14 million tonnes of capacity, following the
  completion of PHS acquisition
• Committed investments in excess of 600 million
  in Romania and the Czech Republic, and cUS600
  million in Poland by 2009
• Implementation of LNMs investment, technology
  and skills resulted in enhanced performance
• Further investment in downstream operations like
  tube plants, service centres and rerollers

34
LNM in Western Europe

• Among largest producers of value added long
  products with shipments exceeding 5 million
  tonnes
• Steel making operations in Hamburg Duisburg
  (Germany) Gandrange (France)
• Hamburg operations acquired in 1995 from State of
  Hamburg Duisburg operations in 1997 from
  Thyssen French Luxembourg operations in 1999
  from Usinor (now Arcelor)
• Major downstream wire processing companies in
  Germany, France, UK, Italy Belgium
• State-of-the-art RD facility for long products
  in France
• Largest supplier of steel for rail making to
  Thyssen for wire products to Bekaert,
  Westfaehllische Drahtindustrie, Trefileurope,
  Michellin and for forging applications to Krupp,
  Gerlach, Caterpillar and others

35
LNM in United States

• Among the largest steel suppliers in North
  America with shipments exceeding 12 million
  tonnes
• Ispat Inland employs approximately 7000 people in
  the Chicago area, has an annual turnover of
  approximately 2.3 billion, and is one of the
  largest integrated steel producers in the USA
• Since acquisition, LNM has invested approximately
  500 million on investments in the USA
• Largest supplier to Ford, Toyota Honda Motor
  companies in the US
• Preferred supplier for other automotive and white
  goods producers like General Motors and Whirlpool
• Leading RD facilities in the USA

36
LNM in Africa

• 50 stake in Iscor Limited, with 2003 annual
  production of 7.1 million tonnes annual
  turnover of 1.3 billion
• Iscor produces a variety of high quality flat
  long products at 4 South African based
  operations Vanderbijlpark Steel Saldanha
  Steel (flat products) Newcastle Vereeniging
  Works (long products)
• Additionally, Iscor owns iron ore reserves
  producing 6.25 million tons per annum of high
  quality iron ore toll-mined by Kumba Resources
• Majority 70 equity stake in Ispat Annaba,
  Algerias largest integrated steel plant with a
  steel making capacity of 1.8 million tonnes p.a.
  and iron ore mines with capacity in
  excess of 2 million tonnes p.a.

37
LNM in Asia

• Karmet acquired from the government of Kazakhstan
  in 1995, along with power plant, coal iron ore
  mines
• Karmet turnaround widely viewed as one of the
  most impressive within the industry
• Ispat Karmet one of largest single site
  integrated steel facilities in the world (annual
  production capacity of 5 million tonnes)
• Extensive product range including slabs, hot
  cold rolled coils, sheets, black plates, covers,
  tin plates, hot dip galvanised products and pipes
• Ispat Indo (Indonesia) is the founder member of
  the LNM Group and was set up in 1976 as a 60,000
  tpa green field project for rolling bars wire
  rod
• Indos current annual production exceeds 600,000
  tonnes and product range includes a wide variety
  of billets, wire rods bars

38
LNM Groups CSR Strategy Ispat Karmet

• Collaboration with the IFC to launch a small and
  medium enterprise-financing initiative, expected
  to generate significant employment for the local
  community.
• Built a multi-million dollar tennis complex, one
  of the best sports facilities in Kazakhstan.
• Constructed an aqua park in Astana and has become
  a significant partner in its urban development.
  Undertaken similar projects in Karaganda and
  Temirtau.
• In partnership with Kazakhmys, constructed a new
  building with modern facilities, the Karaganda
  Metallurgical Institute in Temirtau, the only
  institute in Kazakhstan to impart education in
  ferrous metallurgy.
• Manages and supports several municipal services
  (tramways, health services, a local newspaper, a
  television station and rest camps).
• Provides electricity and heating to Temirtau at
  the cheapest rates in Kazakhstan.
• Runs a series of summer camps for children.

39
LNM Groups CSR Strategy Ispat Nova Hut

• LNM Holdings / Ispat Nova Hut has committed to
  investing CzK 200 million towards the Moravian
  Sileasian regional development fund before the
  end of 2005.
• From the initial payment of CzK 50 million CzK 5
  million will be used to advise small towns and
  villages how to utilise money from EU funding for
  various projects.
• The remaining funding will go to two grant
  programmes aimed at supporting employment. CzK 30
  million will go to 14 separate projects, expected
  to create 140 new jobs. The grant will generate
  additional investments of CzK 63 million, as each
  applicant must co-finance its specific project.
• In a separate initiative Ispat Nova Hut has
  committed to being a major sponsor of Banik
  Ostrava, the regions major football team.

40
LNM Groups CSR Strategy Ispat Sidex

• Built a church in 2002, with an investment in
  excess of US 1 million
• Supported local football, handball and other
  sporting activities with sponsorships and
  investments of over US750,000
• Commissioned a reforestation project that
  involved planting a green barrier a forest
  between the city and the plant. The forest will
  covers some 14 hectares in the eastern side of
  the plant