corporate presentation – september 2010

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Page 1: Corporate presentation – september 2010

September, 2010

Page 2: Corporate presentation – september 2010

Disclaimer

This presentation relating to MMX Mineração e Metálicos S.A. (“MMX”) includes “forward-looking statements”, as that term is defined in thePrivate Securities Litigation Reform Act of 1995, in Section 27A of the Securities Act of 1933 and Section 21E of the U.S. Securities ExchangeAct of 1934. All statements other than statements of historical facts are statements that could be deemed forward-looking statements andare often characterized by the use of words such as “projects”, “expects”, “anticipates”, “intends”, “plans”, “believes”, “estimates”, “may”,“will”, or “intends”, or by discussions or comments about our objectives, strategy, plans or intentions and results of operations. Forward-looking statements include projections regarding our operating capacity, operating expenditures, capital expenditures and start-up dates.

By their nature, these forward-looking statements involve numerous assumptions, uncertainties and opportunities, both general andspecific. The risk exists that these statements may not be fulfilled or, even if they are fulfilled, the results or developments described in suchspecific. The risk exists that these statements may not be fulfilled or, even if they are fulfilled, the results or developments described in suchstatements may not be indicative of results or developments in future periods. We caution participants of this presentation not to placeundue reliance on these forward-looking statements as a number of factors could cause future results to differ materially from thesestatements.

Forward-looking statements may be influenced in particular by factors such as the ability to obtain all required regulatory approvals on atimely basis or at all, exploration for mineral resources and reserves, difficulty in converting geological resources into mineral reserves, andchanges in economic, political and regulatory conditions. We caution that the foregoing list is not exhaustive. When relying on forward-looking statements to make decisions, investors should carefully consider these factors as well as other uncertainties and events.

MMX does not undertake to update our forward-looking statements unless required by law. This presentation is neither an offer to sell(which can only be made pursuant to definitive offering documents) nor a solicitation of an offer to buy any securities in the United States,or any other jurisdiction. The securities referred to herein have not been registered in any jurisdiction, and in particular, will not be registeredunder the U.S. Securities Act of 1933, as amended, or any applicable state securities laws and may not be offered or sold in the UnitedStates absent registration or an applicable exemption from such registration requirements.

This presentation and its contents are proprietary information and may not be reproduced or otherwise disseminated in whole or in partwithout MMX’s prior written consent.

Investor Relations

Roger Downey – CEO & IRO

Camila Anker– IR Manager

Rafaela Gunzburger – Analyst

Tel. + 55 21 2555-6197/ 6338

[email protected]

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Page 3: Corporate presentation – september 2010

Iron ore market

3

market

Page 4: Corporate presentation – september 2010

Seaborne Iron Ore Supply/Demand

DEMAND

• Seaborne market already at record levels. September is now very near the peak levels of June 2008.• Iron Ore Markets are tight and should be even tighter in 2010 and 2011.• Shipments-to-capacity could reach ~ 98%.

Source: Credit Suisse Estimates

SUPPLY

4

Page 5: Corporate presentation – september 2010

Chinese local iron ore production has been replaced by imports. It represented 75% of the total imported volume in Nov/2009.

Source: Credit Suisse

5

Page 6: Corporate presentation – september 2010

Brazil´s iron ore exports in march 2010 grew 24% on a year-over-year basis. China represented 50% of iron ore exports.

Source: Credit Suisse

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Page 7: Corporate presentation – september 2010

Iron ore prices are expected to remainabove US$ 100/ton through 2012

7

Page 8: Corporate presentation – september 2010

Crude Steel Production

1600

2000

Crude Steel Production(million tons)

• Chinese crude steel production has rebounded and is forecast to grow at least 6.0 (CAGR).• The world crude steel output is expected to recover back to pre-crisis levels by 2010.

0

400

800

1200

1600

China Others World

CAGR China 6.0%aa

8

Page 9: Corporate presentation – september 2010

Miners drastically pushed back investments

Investments(US$ billion)

100

90

80

70

110

Planned

Approximately

50

60

40

30

20

10

01992 1994 1996 1998 2000 2002 2004 2006 2008 2010e 2012e 2014e

Estimated

ApproximatelyUS$ 200bn in capexreduction

Source: Credit Suisse

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Page 10: Corporate presentation – september 2010

A uniquestory

10

story

Page 11: Corporate presentation – september 2010

Since IPO (July’06), a lot has been delivered…

• Preliminary agreement with SK Networks

• Wisco’s Investment in MMX and Iron Ore offtake from MMX Sudeste;

• Sale of Corumba’s pig iron facility to Vetorial;

• MoU with Wuhan: supply of iron ore and sale of stake in MMX;

• Minera MMX de Chile: acquisition of mining rights and logistics already identified;

• Development of MMX Sudeste System: acquisition of assets, logistics

September2010

• Development of MMX Sudeste System: acquisition of assets, logistics secured and expansion plans to 33.7 million tons per year of iron ore;

• Sale of assets to Anglo American: MMX Minas-Rio and MMX Amapá;

• Spin off of LLX;

• Partnership with Anglo American and Cleveland Cliffs;

• MMX Corumbá pig iron furnaces: implemented in 12 months;

• MMX Corumbá iron ore mine: operational in 8 months;

• MMX Amapá System, mine, railroad and port: operational in a 14-month record time;.

11

July2006

Page 12: Corporate presentation – september 2010

• The Chinese Wuhan Iron and Steel Corporation (WISCO)

was created in 1955;

• WISCO is the first giant iron and steel complex established

after the founding of the People’s Republic of China;

• WISCO has an annual production capacity of 31 million

tons, ranking the third in China and the 7th largest steel

Wisco

Wuhan Iron and Steel

tons, ranking the third in China and the 7th largest steel

producer in the world;

• WISCO plans to expand its steel production capacity to 50

million tons per year, what would require a supply of

approximately 80 million tons per year of iron ore;

• The CEO of Wuhan happens to be also the President of CISA

(China Iron and Steel Association);

• WISCO is making great efforts to enter into the rank of the

500 top enterprises in the world and become an important

automobile sheets producer in China by 2010. 12

Page 13: Corporate presentation – september 2010

MMX structure

Controlling Shareholders

43.55%

Free Float

34.93%

21.52%

Bom Sucesso under basic engineering studies

Corumbá System started-up in 2005 (Mining)

Assets acquired by MMX (AVG: dec-07; Minerminas: jan-08)

30% EBX Brasil S/A

13

Page 14: Corporate presentation – september 2010

MMX uniqueness:

High quality iron ore;

Low cash cost, due to the high in situ ore content and high productivity;

Secured logistics, through long-term

The only one of its kind

Secured logistics, through long-term agreements with rail, barges and port services providers, including LLX Sudeste Port, its sister company;

The unique independent operating Brazilian junior mining company;

Experienced Management in selecting high value mining assets, implementing and operating mining projects;

Proven ability in delivering value to shareholders.

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Page 15: Corporate presentation – september 2010

Sudeste System

Serra Azul & Bom Sucesso

15

Page 16: Corporate presentation – september 2010

MMX Sudeste: Connected to Sudeste Super Port by MRS

16MMX also has rights to use the Açu Super Port

Page 17: Corporate presentation – september 2010

Serra AzulOverview

17

Page 18: Corporate presentation – september 2010

Serra Azul8.7 Mtpy of capacity reached in Oct’08

• Assets acquisition concluded in Jan./2008;

• Construction of Magnetic Concentration Plant and operational enhancements: 8.7 million tons as annual installed production capacity in Oct./2008.

OPERATIONS

• Railway capacity secured through long-term agreement with MRS up to 15 Mtpy;

• Port capacity from mid-2011 untill 2032 secured through long-term agreement with

SALES & LOGISTICS

long-term agreement with LLX Sudeste Port;

• Long-term agreements with domestic and international customers;

• Wysco will off-take at least 50% of MMX Sudeste production.

Magnetic Concentration Plant – Start-up Oct./2008 18

Page 19: Corporate presentation – september 2010

MMX Sudeste System: Growth and proximity to existing infrastructure

MMX is the natural consolidator in the region 19

Page 20: Corporate presentation – september 2010

Bom Sucesso: Outstanding magnetite content and logistics

Expected Quality:

Fe: 67.2% P: 0.033%

SiO2: 2.5% PPC: 0.6%

AL2O3: 0.5% FeO: 8.8%

• Acquisition of mining rights concluded in July/2008;

• Unique magnetite content (close to 30%);

• The closest iron ore asset to Sepetiba Bay – 240km;

• Greenfield basic engineering studies and environmental licensing under development;

• Rail capacity under negotiation with MRS to extend current contract for additional 17 mt up to 2032. 20

Page 21: Corporate presentation – september 2010

MMX Sudeste System: competitive high-grade iron ore producer with efficient logistics

Bom Sucesso Tenement:A promissing world class resource

21

Page 22: Corporate presentation – september 2010

MMX Sudeste System: competitive high-grade iron ore producer with efficient logistics

MRS has potential for ~ 300 million tons/year22

Page 23: Corporate presentation – september 2010

Environmental and ConstructionLicenses obtained;

MMX Sudeste System: competitive high-grade iron ore producer with efficient logistics

Long term financing undernegotiation;

50 million ton/year of iron oreCan be expanded to 100 million ton;

Start-up second half 2011.

Export target of 32 milliontons per year

23

Page 24: Corporate presentation – september 2010

Sudeste SuperportGeneral view: onshore site

Administrative Buildings

Iron Ore Yard El. 32Iron Ore Yard El. 06

24Last available location for a Bulk Terminal in Sepetiba region

Rail Loop

RailcarDumper

Page 25: Corporate presentation – september 2010

Sudeste SuperportMilestones

Sudeste Superport will start its operation in 1H 2012

2H06 1H07 2H07 1H08 2H08 1H09 2H09 1H10 2H10 1H11 2H11 1H12

Development

start-up

Environmental

Studies

Pedreira

Sepetiba

Acquisition

EIA

RIMA

EIA RIMA

Completed

Environmental

License

Construction

License Start up

Sudeste Superport

25

Navy

Approval

ANTAQ

Authorization

Construction

begins

Development

Construction

Operations

Under ConstructionSudeste Superport

Page 26: Corporate presentation – september 2010

500

600

700

800

Sudeste SuperportVolume and Capex

40,0

50,0 50,0 50,0 50,0 50,0 50

40,0

50,0

Volume Ramp up (mtpy)CAPEX (R$ Million)

Sudeste Superport Total CAPEX: R$ 1.8 billion

86 40 63

741 712

1150

100

200

300

400

500

2007 2008 2009 2010 2011 2012

26

14,5

-

10,0

20,0

30,0

2012 2013 2014 2015 2016 2017 2018... ...2032

Source : Verax Feasibility Study as of March 2010

Actual

Page 27: Corporate presentation – september 2010

Chile

27

Chile

Page 28: Corporate presentation – september 2010

Iron Ore in Chile: Quality, logistics and competitiveness

• 4 mining rights (2 purchase and options agreements);

• USD 44.5 million;

• 50km from the Chilean coast, approx. 1,760 hectares;

Preliminary tests in Ouro Preto pilot plant:

Fe: 67.50% SiO2: 2.5%

Al2O3: 0.85% P: 0.015%

• Pellet feed with high magnetite content;

• Existing railroad (FERRONOR).

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Page 29: Corporate presentation – september 2010

Logistics: Puerto Punta Cachos

• EBX has 240,000 ha property in the Atacama region;

• Permits to develop the urban, industrial and port zones;

• Water availability with permits;

• Guaranteed site contract for:

• 89 ha of premium area (port);

• 782 ha of retro-area;

• Unlimited scalability for a long-term development;

• Located close to mining players;

• Opportunities for industrial businesses:

• Port / Thermo.

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Page 30: Corporate presentation – september 2010

30

Corumbá System

Page 31: Corporate presentation – september 2010

• Unique high quality lump yield;

• Current Capacity: 2.1 Mtpy.

• MMX has Long Term Supply Agreement with traditional steel makers in South America and Europe;

• Transport barges down the Paraguay River to Rosario Port;

MMX Corumbá Mineração

• MMX has long-term contracts with local and international barge operators;

• Rosario Port in Argentina: Handymaxvessels to Europe;

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Page 32: Corporate presentation – september 2010

Iron ore volumes estimates by System

35

35

40Chile Corumbá Sudeste

1,3*

32

* GVA acquisition – 1,3 Mtpy until 2017

0

10

2,12,1

8,7

0

5

10

15

20

25

30

35

20092015E

33,7

Page 33: Corporate presentation – september 2010

SK Networks deal

33

deal

Page 34: Corporate presentation – september 2010

� Capital increase in MMX of up to US$2.2 billion

� Capital increase of common shares at R$13.963

� The Controlling Shareholder will convert part of the perpetual debentures issued

by MMX and held by the Controlling Shareholder into MMX equity at R$13.963

per share

� Acquisition of Sudeste Superport, valued at US$ 2.3 billion in (i) MMX shares or cash (ii)

Transaction Highlights

� Acquisition of Sudeste Superport, valued at US$ 2.3 billion in (i) MMX shares or cash (ii)

and royalties

� MMX’s strategy to consolidate iron ore assets may accelerate the second phase of

Sudeste Superport

� Long-term iron ore off-take agreement granting SK Networks entitlement to:

� 50% of the production of MMX Chile’s mines

� Part of MMX Sudeste’s production equal to at least the percentage of SK's

shareholding in MMX immediately following the consummation of the

Transaction(1)

34(1) Applicable from 2013 and beyond. In 2011, SK will receive two capesize ships from MMX’s Serra Azul mines and in 2012 one million tons, subject to availability, from MMX’s Serra Azul mines

Page 35: Corporate presentation – september 2010

SK Network Profile

� SK Networks, a SK Group affiliate based in the Republic of Korea, operates in 22 countries with its businesses

ranging from energy sales to mobile phone distribution, trading and retail

– SK Networks recorded US$ 17.1 billion in sales and US$ 274.6 million in operating income in 2009

– Its parent company, SK Group is one of the largest conglomerates in the Republic of Korea and recorded US$

69.8 billion in sales and US$ 3.2 billion in operating income in 2009

Mine & SmelterMine & Smelter

• Developing partnerships and making strategic acquisitions to secure access to

overseas natural resources and investing in mine & smelter projects

• Coal Mine Project in Australia

Source: Company website and presentations

Mine & SmelterMine & Smelter

Energy &

Chemicals

Energy &

Chemicals

Information &

Telecomunication

Information &

Telecomunication

OtherOther

• Coal Mine Project in Australia

• Lead & Zinc Mine Project in China

• Gold Mine Project in Uzbekistan

• 4th largest refining capacity in Asia

• 25 E&P blocks across 14 countries

• LNG production accounting for 56% of domestic demand

• World’s fourth largest Polyester film production capacity

• No. 1 Korea mobile service provider with 20 million subscribers

• First succeeded in developing CDMA and DMB services for Korea

• Building B2C networks

• Largest carrier of crude oil and LNG in Korea

• Hotel & stock brokerage business

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Page 36: Corporate presentation – september 2010

42.1% 21.5% 36.4%

MMX ownership structure LLX ownership structure

Page 37: Corporate presentation – september 2010

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