9

CHAPTER 2
Vision And Mission
We are fully aware of our responsibility for the region in which we operate, for
the people who live in the region and for our employees. We consistently
implement the policy of corporate responsibility, which is considered to be an
integral part of the Company management system.
ArcelorMittal Ostrava strives for:
- becoming a good and responsible neighbour that understands the needs of the
region in which it operates, and is able to adapt to them;
- protecting the environment for future generations and carrying out all
activities bearing future generations in mind;
- treating its employees with fairness and dignity;
- reducing the impact of its activity on society and the environment in
conjunction with its key partners, i.e. employees, customers, suppliers,
business partners and other stakeholders.










10

CHAPTER 3
Business Strategy
ArcelorMittals success has been built on a consistent strategy that
emphasizes size and scale, vertical integration, product diversity, continuous
growth in higher value products and a strong customer focus. We intend to
continue to be the global leader in the steel industry, in particular through the
following:
Three-dimensional strategy for sustainability and growth. ArcelorMittal
has unique geographical and product diversification, coupled with upstream
and downstream integration that reduces exposure to risk and cyclicality.
This strategy can be broken down into its three major elements:
Geography: ArcelorMittal is the largest producer of steel in Europe, North
and South America, Africa, the second largest steel producer in the CIS
region, and has a growing presence in Asia, particularly in China.
ArcelorMittal has steel-making operations in 20 countries on four continents,
including 66 integrated, mini-mill and integrated mini-mill steel-making
facilities which provide a high degree of geographic diversification.
Approximately 36% of its steel is produced in the Americas, approximately
49% is produced in Europe and approximately 15% is produced in other
countries, such as Kazakhstan, South Africa and Ukraine. ArcelorMittal is
able to improve management and spread its risk by operating in six segments
(Flat Carbon Americas, Flat Carbon Europe, Long Carbon Americas and
Europe, AACIS, Stainless Steel, and Steel Solutions and Services) reflecting
its geographical and product diversity.
Worldwide steel demand in recent years has been driven by growth in
developing economies, in particular in the BRICET countries. The Companys
expansion strategy over recent years has given it a leading position in Africa,
Central and Eastern Europe, South America and Central Asia. The Company is
also building its presence in China and India. As these economies develop, local
customers will require increasingly advanced steel products as market needs
change.



11

Products:
As a global steel producer, ArcelorMittal is able to meet the needs of
diverse markets. Steel consumption and product requirements are
different in mature economy markets and developing economy markets.
Steel consumption in mature economies is weighted towards flat products
and a higher value-added mix, while developing markets utilize a higher
proportion of long products and commodity grades. To meet these diverse
needs, ArcelorMittal maintains a high degree of product diversification
and seeks opportunities to increase the proportion of its product mix
consisting of higher value-added products. The Company produces a
broad range of high-quality finished, semi-finished carbon steel products
and stainless steel products.

Value chain:
ArcelorMittal has access to high-quality and low-cost raw materials
through its captive sources and long-term contracts. ArcelorMittal
plans to continue to develop its upstream and downstream integration in
the medium-term, following a return to a more favorable market
environment. Accordingly, the Company intends in the medium-term to
increase selectively its access to and ownership of low-cost raw material
supplies, particularly in locations adjacent to, or accessible from, its steel
plant operations.
Downstream integration is a key element of ArcelorMittals strategy to
build a global customer franchise. In high-value products, downstream
integration allows steel companies to be closer to the customer and
capture a greater share of value-added activities. As its key customers
globalize, ArcelorMittal intend to invest in value-added downstream
operations, such as steel service centers and building and construction
support unit services for the construction industry. In addition, the
Company intends to continue to develop its distribution network in
selected geographic regions. ArcelorMittal believes that these
downstream and distribution activities should allow it to benefit from
better market intelligence and better manage inventories in the supply
chain to reduce volatility and improve working capital management.
Furthermore ArcelorMittal will continue to expand its production of
value-added products in developing markets, leveraging off our
experience in developed markets.

12

Organic Growth.
Notwithstanding the current downturn, ArcelorMittals management
believes there will be strong global steel demand growth in the medium
and long term. Accordingly, the Company is maintaining its previously
announced strategic growth plan to increase shipments in the medium-
term to 130 million tonnes, which represents a 20% increase over 2006
levels, primarily through production improvements at existing facilities.
Realization of this plan will nonetheless be delayed due to the
postponement of capital expenditure in light of current market conditions
and uncertainties.

Mergers and acquisitions/Greenfield growth.
Mergers and acquisitions have historically been a key pillar of
ArcelorMittals strategy to which it brings unique experience, particularly
in terms of integration. Instead of creating new capacity, mergers and
acquisitions increase industry consolidation and create synergies.
ArcelorMittal has also placed strong emphasis on growth in emerging
economies through greenfield developments. In light of the current
economic and market conditions, ArcelorMittal has temporarily curtailed
merger and acquisition and greenfield investment activity until a return to
a more favorable market environment.











13

CHAPTER 4
ArcelorMittal Code of Business Conduct
ArcelorMittal has a reputation for honesty and integrity in its management
practices and in all its business transactions. It is vital, for the Company,
including each subsidiary, and for each one of us, that we preserve this
reputation and maintain the relationship of trust that must exist with all the
individuals and companies with whom we have dealings. In varying degrees, we
are all the custodians of ArcelorMittal's reputation. Accordingly, the Company
expects each one of us to behave in an upright manner. This code of conduct
applies to all directors, officers and employees of ArcelorMittal and its
subsidiaries worldwide. It is designed to help us understand our ethical and
legal obligations in handling the Company's business. Although this code of
conduct does not cover every issue that may arise, it is intended to establish
guidelines to which we can refer in situations where the proper course of
conduct may not seem clear.
The guidelines set out in this code of conduct are mandatory and, as such, must
be observed by every one of us at all times.Our supervisor, a member of
management, the head of the Legal Department/General Counsel or the head of
the Internal Audit Department can advise us and help us make the appropriate
decisions concerning our conduct at work and in business.
COMPLIANCE WITH LAWS
ArcelorMittal and its employees worldwide must comply with every local, state,
federal, national, international or foreign law or regulation that applies to the
Company's business. If we are unsure whether a particular legal provision is
applicable or how it should be interpreted, we should consult our supervisor or
the Legal Department. Many of the Company's activities are subject to complex
and changing legislation governing domestic and international trade and
commerce. Ignorance of the law is generally not considered a valid defense
when an infraction is committed, regardless of the jurisdiction where the
Company is operating.




14

Competition and Antitrust
ArcelorMittal is committed to strict observance of the competition and antitrust
laws of the countries in which it does business and to the avoidance of any
conduct that could be considered illegal. Agreements or arrangements may be
found illegal even if they are not made in writing, since the conduct of the party
involved can be sufficient to establish that a violation occurred. Consequently,
we must not take part in any formal or informal discussions, agreements,
arrangements, projects or accords with current or potential competitors related
to pricing, terms of sale or bids, division of markets, allocation of customers or
any other activity that restrains or could restrain free and open competition. The
courts may impose large fines and, in certain circumstances, lengthy prison
terms for violations of antitrust laws, and these penalties may be imposed on
both employees and companies. In view of the serious legal consequences, at
both the civil and criminal levels, to which such violations could expose the
Company, ArcelorMittal will take any steps that may reasonably be warranted
against employees who disobey these laws. Ignorance, overzealousness, good
faith or the argument that time did not permit the advice of the Legal
Department to be sought will not be accepted as an excuse. All questions in the
competition/antitrust area should be submitted to the Legal Department before
any action is taken.
Payments and/or gifts to Government Officials
ArcelorMittal will comply with the anti-corruption laws of the countries in
which it does business, including the US Foreign Corrupt Practices Act, which
applies to its global business. We will not directly or indirectly offer or give
anything of value to any government official, including employees of
stateowned enterprises, for the purpose of influencing any act or decision in
order to assist the Company in obtaining or retaining business or to direct
business to anyone. We will also ascertain that any agents we engage to conduct
business on our behalf are reputable and that they also will comply with these
guidelines. Trading in the Securities of the Company Should we decide to
acquire, as employees, any shares issued by any listed company in the
ArcelorMittal Group, is aware that the purchase of securities of any corporation
listed on a stock exchange entails a certain risk and that the decision to acquire
shares of any ArcelorMittal Group company is strictly a personal one. In
addition, before we conclude any trade involving securities of the Company, we

15

must consider that securities laws contain prohibitions concerning the use of
privileged or "inside" information. In particular, securities laws prohibit us from
purchasing, selling or otherwise trading in or recommending, for our own
account or for others, any securities of corporations where we are in possession
of any "material inside information" concerning the corporation in question.
Communicating such information to others is also prohibited. The term
"material inside information" refers to any information which, if it were made
public, would be reasonably likely to influence the price of the securities of the
corporation or to affect an investor's decision to purchase or sell securities of the
corporation.
CONFLICTS OF INTEREST
ArcelorMittal recognizes that we all have our own individual interests and
encourages the development of these interests, especially where they are
beneficial to the community at large. However, we must always act in the best
interests of the Company and we must avoid any situation where our personal
interests conflict or could conflict with our obligations toward the Company. As
employees, we must not acquire any financial or other interest in any business
or participate in any activity that could deprive the Company of the time or the
scrupulous attention we need to devote to the performance of our duties.
We must not, directly or through any members of our families or persons living
with us or with whom we are associated, or in any other manner:
1. have any financial interests that could have a negative impact on the
performance of our duties,or derive any financial benefit from any contract
between the Company and a third party where we are in a position to influence
the decisions that are taken regarding that contract; or
2. attempt to influence any decision of the Company concerning any matter with
a view to deriving any direct or indirect personal benefit. We must inform our
supervisor or the Legal Department of any business or financial interests that
could be seen as conflicting or possibly conflicting with the performance of our
duties. If the supervisor considers that such a conflict of interest exists or could
exist, he or she is to take the steps that are warranted in the circumstances. If the
case is complex, the supervisor is to bring it to the attention of the Vice-
President of his or her division, the Chief Executive Officer or the General
Counsel.

16

Receiving Gifts or Benefits
We must not profit from our position with ArcelorMittal so as to derive
personal benefits conferred on us by persons who deal or seek to deal with the
Company. Consequently, accepting any personal benefit, such as a sum of
money, a gift, a loan, services, pleasure trips or vacations, special privileges or
living accommodations or lodgings, with the exception of promotional items of
little value, is forbidden. Any entertainment accepted must also be of a modest
nature and the real aim of the entertainment must be to facilitate the
achievement of business objectives. For example, if tickets for a sporting or
cultural event are offered to us, the person offering the tickets must also plan to
attend the event. In general, offers of entertainment in the form of meals and
drinks may be accepted, provided that they are inexpensive, infrequent and, as
much as possible, reciprocal. As these instructions cannot cover every
eventuality, we are all required to exercise good judgment. The saying
"everybody does it" is not a sufficient justification. If we are having difficulty
deciding whether a particular gift or entertainment falls within the boundaries of
acceptable business practice, we should ask ourselves the following questions:
Is it directly related to the conduct of business? Is it inexpensive, reasonable and
in good taste? Would I be comfortable telling other customers and suppliers that
I gave or received this gift? Other employees?
My supervisor? My family? The media? Would I feel obligated to grant favours
in return for this gift? Am I sure the gift does not violate a law or a Company
policy?
In case of continuing doubt, we should consult our Supervisor or the Legal
Department.
Corporate Boards of Directors
Before agreeing to sit on the board of directors of a business corporation, we
must obtain the authorization of our supervisor or the General Counsel. The
purpose of this step is to ensure that there is no possible conflict of interest.
Political Activities
Employees who run for an elected office are required to so inform their
supervisor or the General


17

Counsel.
Employees who wish to participate in activities of a political or public nature
must do so in a personal capacity only and during non-working hours.
Corporate Opportunities
We, as directors, officers or employees, are prohibited from (a) taking for
ourselves personal opportunities that are properly within the scope of the
Company's activities, (b) using corporate property, information or position for
our own personal gain, and (c) competing with the Company; unless otherwise
authorized by the Board of Directors of the Company. We owe a duty to the
Company to advance its legitimate interests to the best of our ability.
FAIR DEALING
Customer Relations
The Company's prosperity is founded on customer satisfaction. ArcelorMittal
expects us to preserve the quality of our customer relations by maintaining
business relationships that are based on integrity, fairness and mutual respect.
Only clear, concrete, pertinent and honest information is to be given to
customers. We must be careful to avoid making any statement to a customer
that could be misinterpreted. The Company does not tolerate the making of
promises to customers which will probably be impossible to keep, regarding
product quality and characteristics, delivery times and prices.
Offering Gifts and Entertaining
The Company expects us to refrain from offering gifts or granting favours
outside the ordinary course of business to current or prospective customers,
their employees or agents or any person with whom the Company has a
contractual relationship or intends to negotiate any agreements. Employees who
are called upon to do so may incur reasonable expenses for the entertainment of
current or prospective customers or other persons who deal with the Company,
provided that such entertainment is in keeping with the person's position and is
related to business discussions and that appropriate accounts are kept.
Supplier relationships
Suppliers of the Company are to be chosen in consideration of objective criteria,
based on quality, reliability, price, utility and performance or service. Suppliers

18

are to be treated justly, fairly and honestly. Fees and commissions are to be paid
to consultants only in the course of ordinary business relations. Any fees must
be substantiated by documentation demonstrating that the amount charged is
commensurate with the value of the services rendered.
Confidential Information
Data, information and documents pertaining to the Company are to be used
strictly for the performance of our respective duties and may be disclosed or
communicated to persons outside the Company only to the extent that the
information in question is needed by such persons in connection with their
business relations with the Company, or where the information is already in the
public domain or is required to be disclosed by law or court order. In case of
doubt as to whether the information may be disclosed and to whom it may be
sent, we should consult our supervisor or the Legal Department. We are
required, for the duration of our employment with the Company and after our
employment terminates, to keep such information confidential and to use the
utmost discretion when dealing with sensitive or privileged information. Such
information includes, in addition to the technology used by the Company,
intellectual property, business and financial information relating to sales,
earnings, balance sheet items, business forecasts, business plans, acquisition
strategies and other information of a confidential nature.
Confidential information must not be discussed with or disclosed to any
unauthorized persons, whether Company personnel or persons outside the
Company. We must take the necessary steps to ensure that documents
containing confidential information, when sent by fax or other electronic media,
are not brought to the attention of unauthorized persons, whether Company
personnel or persons outside the Company. We must take the appropriate
security measures when destroying documents that contain confidential
information (regardless of the medium by which such documents are
recorded).We must also keep confidential any similar information relating to the
organizations with which the Company has a business relationship of any kind.
Public statements on behalf of the Company can be made exclusively by
authorized persons. Any request for information concerning the Company that
originates with the media or a government agency should be directed to the
Communications/Public Affairs Manager, the Chief Executive Officer or the
Legal Department, depending on the nature of the information requested.

19

Personal Information
Personal information, that is, information relating to an individual that allows
that individual to be identified, is protected, among other things, by laws in
most of the jurisdictions where ArcelorMittal is doing business. ArcelorMittal
fully supports the objectives of such legislation and applies rigorous measures
to ensure compliance with its provisions. Any collection, retention, use or
communication to third parties of personal information must be carried out in a
manner that is respectful of the individual and in compliance with the law at all
times. Except in certain limited cases, personal information is to be used strictly
for the performance of our respective duties and may be disclosed to third
parties only where such disclosure has been authorized by the individual
concerned. Such information must be kept in a secure place. In case of doubt as
to the handling of personal information, we should consult our supervisor or the
Legal Department.
















20

CHAPTER 5
PROTECTION AND PROPER USE OF COMPANY ASSETS
Accuracy of Records
The books, records, files and statements of ArcelorMittal must faithfully reflect
the entirety of the Company's assets and liabilities, as well as all of its
operations, transactions and any other items related to its business, without
omission or concealment of any kind, in accordance with applicable standards
and regulations.
All transactions must be authorized and carried out in accordance with the
instructions of management. Transactions must be recorded in a manner that
will allow accurate financial statements to be prepared and the utilization of
assets to be accounted for. No file is to be destroyed without the authorization
of our supervisor. Such authorization will be granted only if it is in keeping with
applicable laws and Company policy.
Property of the Company
The loss, theft or inappropriate use of the Company's property is bound, sooner
or later, to affect the Company's profitability. The protection of the Company's
property by each one of us is a matter of integrity and honesty.
We must use any property of the Company entrusted to us in an appropriate
manner, ensure that it is secure, and prevent theft, damage and premature wear
from occurring. Company property must be used exclusively for the business of
the Company and must not to be used for personal purposes unless we first
obtain permission from our supervisor.
ArcelorMittal encourages initiative, creativity and innovation on the part of its
employees. Nevertheless, intangible property such as inventions, ideas,
documents, software, patents and other forms of intellectual property related to
the Company's business, created or conceived by employees in connection with
the performance of their duties, belongs, on that basis, to the Company. Subject
to any mandatory applicable law, we may not derive profit from, or apply for a
patent in our personal name for, any creation or invention conceived or made by
us in the course of performing our duties.

21

Software developed or acquired by the Company may not be reproduced or
tampered with, nor may it be used for any purposes other than those intended by
the Company. Software that is not owned or licensed by the Company is not to
be used on the work premises or in the Company's business.
E-mail and the Internet
ArcelorMittal owns the e-mail and internet systems used in the workplace and
thus we should use these systems primarily for work-related communications.
Although we each have individual passwords to access the e-mail and internet
systems, the Company reserves the right, subject to applicable law, to access
and monitor our use of these systems in appropriate circumstances.
We are strictly prohibited from using the e-mail and internet systems for any
improper or illegal purpose, including the transmission of messages that may be
viewed as insulting or offensive to another person, such as messages, cartoons
or jokes that could be construed as harassment of others on the basis of race,
color, religion, sex, age, national origin or disability.














22

CHAPTER 6
RESPECTING THE ARCELORMITTAL COMMUNITY
Work environment free of harassment and discrimination ArcelorMittal is
committed to providing a work environment that is free of any form of sexual or
other harassment, whether it be harassment by an employee of another
employee or harassment by an employee of a customer or supplier or vice-
versa.
ArcelorMittal is committed to ensuring that each one of us is treated with
fairness and dignity; accordingly, any discriminatory practice based on race,
color, sex, age, religion, ethnic or national origin, disability or any other
unlawful basis will not be tolerated. The Company seeks to provide each of us
with equal opportunity for advancement without discrimination. However,
distinguishing between individuals based on the aptitudes or qualifications
required for a particular employment does not constitute discrimination.
An employee who believes he or she has been the victim of, or a witness to, a
situation involving harassment or discrimination should immediately report that
situation to the head of the Legal Department. All such reports will be treated in
confidence. ArcelorMittal permits family members of existing employees to
work for the Company, provided that they are evaluated and selected
objectively and on the basis of the same criteria as other candidates and
provided that their respective positions will not be potentially in conflict or
collusion.
Occupational Health and Safety
ArcelorMittal makes every effort to provide us with a healthy and safe work
environment, to conduct regular inspections so as to eliminate any dangerous
conditions or behavior and their causes, and to develop programs dedicated to
our safety and well-being. We must abide by the Company's standards in safety
matters, do our part to maintain a healthy and safe work environment and take
the necessary steps to ensure our own safety and the safety of others.
The manufacture, use, purchase, sale, trafficking or possession on the Company
premises (or outside the premises while we are on duty) of substances such as
alcoholic beverages (except in permitted circumstances), stimulants, narcotics
and other intoxicants is forbidden.

23

Respect for the Environment
Respecting and protecting the environment is an important value to which
ArcelorMittal subscribes. We must comply at all times with the environmental
legislation applicable to ArcelorMittal, and we have an important role to play in
implementing the guidelines issued by the Company in this regard.
A SHARED RESPONSIBILITY
Each one of us is responsible for adhering to the values of ArcelorMittal in our
daily lives as employees of the Company and for making every effort to ensure
that our rules of conduct are respected by all. Conduct that is contrary to these
rules is punishable by disciplinary action up to and including termination of
employment, in compliance with all applicable laws and procedures.
WAIVERS OF THIS CODE OF CONDUCT
A waiver of any provision of this code of conduct will only be given if it is
deemed absolutely appropriate under the circumstances. A waiver of this code
of conduct for executive officers or directors of the Company will only be
granted by the Board of Directors of the Company or a committee of the Board.
Any such waiver granted will be promptly disclosed as required by law or stock
exchange requirement.
REPORTING ANY ILLEGAL OR UNETHICAL BEHAVIOUR
Any behaviour that deviates from this code should be reported immediately to
our supervisor, a member of management, the head of the Legal Department or
the head of Internal Audit Department. In the case of accounting, internal
control and auditing issues, these may also be reported to the Audit Committee
of the Board of Directors of ArcelorMittal. If, after our supervisor has been
informed, appropriate steps still have not been taken, we should personally
bring the matter to the attention of one of the other persons mentioned above. It
is the policy of the Company not to allow retaliation of reports of misconduct by
others that we make in good faith. Employees are expected to cooperate in
internal investigations of misconduct




24

CHAPTER 7
STRATERGIC ALLIANCE OF POSCO AND ARCELLOR MITTAL
ArcelorMittal will sell 15 per cent stake in a Canadian subsidiary that owns
Labrador Trough iron ore mine to a consortium led by Posco and China Steel
Corporation (CSC) for $1.1 billion. ArcelorMittal Mines Canada (AMMC), the
worlds largest steel makers wholly-owned subsidiary, will retain the rest 85
per cent stake in the joint venture, ArcelorMittal said in a statement on
Wednesday.
As part of the transaction, Posco and CSC will enter into long-term off-take
agreements proportionate to their joint venture interests, it added.
AMMC, according to information on its website, produces around 15 million
tonnes iron ore concentrate and over nine million tonnes of iron oxide pellets
annually. ArcelorMittal, which is facing challenges due to subdued demand in
Europe, said the move to sale stake in the iron ore venture is part of its strategy
to build strategic relationships with key customers.
Apart from Posco and CSC, the consortium has certain financial investors,
but their identities were not disclosed. Subject to various conditions, the deal is
expected to be closed in two instalments in the first and second quarters of
2013.
We are committed to growing ArcelorMittals mining business. This joint
venture incorporating a long-term off-take agreement is consistent with our
strategy to forge strategic relationships with key customers as we build our
global mining business, Peter Kukielski, Chief Executive, Mining at
ArcelorMittal said.
ArcelorMittal had clocked USD 94 billion revenue in 2011 and produced 91.9
million tonnes of crude steel, representing approximately six per cent of world
steel output. The Groups mining operations produced 54 million tonnes of iron
ore and eight million tonnes of metallurgical coal.




25

CHAPTER 8
Risks Related to ArcelorMittal
ArcelorMittal has a substantial amount of indebtedness, which, along with
adverse conditions prevailing in global credit markets, could make it more
difficult or expensive to refinance its maturing debt, incur new debt and/or
flexibly manage its business.
As of December 31, 2008, ArcelorMittal had total debt outstanding of $34.1
billion, consisting of $8.4 billion of short-term indebtedness (including payables
to banks and the current portion of long-tem debt) and $25.7 billion of long-
term indebtedness. As of December 31, 2008, ArcelorMittal had $7.6 billion of
cash and cash equivalents, including short-term investments and restricted cash,
and $5.8 billion available to be drawn under existing credit facilities (although
$4.2 billion is earmarked under current Company policy as back-up for its
commercial paper program). Substantial amounts of indebtedness mature in
2009 ($8.4 billion), 2010 (8.1 billion), 2011 ($3.9 billion) and 2012 ($7.7
billion) although ArcelorMittal has recently secured refinancing commitments
from banks for two Forward Start facilities (i.e., a committed facility to
refinance an existing facility upon its maturity) that, if drawn, would effectively
extend the maturities of $4.8 billion of lines of credit (drawn and undrawn) to
2012 (from original maturity dates ranging from 2009 to 2011). See Item 5
Operating and Financial Review and ProspectsLiquidity and Capital
Resources.
In response to the downturn in the global steel market and difficult credit
market conditions, ArcelorMittal is targeting a reduction in net debt (i.e.,
long-term debt net of current portion plus payables to banks and current portion
of long-term debt, less cash and cash equivalents, restricted cash and short-term
investments) of $10 billion by the end of 2009. While ArcelorMittal achieved
$6 billion of this reduction in the fourth quarter of 2008 (of which a substantial
portion resulted from the unwinding of a hedging transaction and gains on an
asset disposal), there can be no assurance that it will attain the full amount of
the targeted reduction. If the steel market deteriorates further, consequently
reducing operating cash flows, ArcelorMittal may come under liquidity
pressure, depending in particular on conditions in the credit markets. Credit
default swaps on ArcelorMittal debt, although illiquid and driven by technical
or speculative factors, have traded at elevated spreads since the fall of 2008,

26

although easing somewhat since early 2009. ArcelorMittal could, in order to
increase financial flexibility during a period of reduced availability of credit,
implement capital raising measures such as an equity offering or asset disposals,
which could in turn create a risk of diluting existing shareholders, receiving
relatively low proceeds and/or causing substantial accounting losses
(particularly if done in difficult market conditions).
ArcelorMittals principal financing facilitiesthat is, the $3.2 billion term and
revolving credit facility, which was amended on February 6, 2007 and on
March 14, 2008 (the 2005 Credit Facility), the $800 million committed multi-
currency letter of credit facility (the Letter of Credit Facility), the 17 billion
(approximately $25 billion) term and revolving credit facility entered into on
November 30, 2006 (the 17 Billion Facility) and the $4 billion revolving
credit facility entered into on May 13, 2008, which was amended on
October 23, 2008 (the $4 Billion Facility)contain restrictive covenants.
Among other things, these covenants limit encumbrances on the assets of
ArcelorMittal and its subsidiaries, the ability of ArcelorMittals subsidiaries to
incur debt and ArcelorMittals ability to dispose of assets in certain
circumstances. These facilities also include financial covenants: a leverage ratio
(that must not exceed 3.5 to 1) in the 2005 Credit Facility, the 17 Billion
Facility and the $4 Billion Facility; and an interest coverage ratio (that must be
greater than 4 to 1) in the Letter of Credit Facility. See Item 5Operating and
Financial Review and ProspectsLiquidity and Capital Resources for a
detailed presentation and explanation of these covenants. Failure to comply with
these covenants would enable the lenders to accelerate ArcelorMittals
repayment obligations. Moreover, ArcelorMittals debt facilities and its
guarantees have provisions whereby certain events relating to other borrowers
within the ArcelorMittal group could, under certain circumstances, lead to
acceleration of debt repayment under other ArcelorMittal credit facilities. Any
possible invocation of these cross-acceleration clauses could cause some or all
of the other.





27

CHAPTER 9
CASE STUDY ON ARCELLOR AND MITTAL RELATED TO EU
Summary
This briefing examines how the worlds biggest steel company, ArcelorMittal,
is set to become the largest beneficiary of the EU Emissions Trading Scheme.
By 2012 the company is set to have 80 million permits to pollute which it does
not need and which it was given for free. If sold, these will make over 1
billion in windfall profits by 2012, paid for in part, by UK power consumers.
briefing goes on to make the case Lakshmi Mittal, the CEO of the ArcelorMittal
and also Britains richest man, should choose to forgo windfall profits and opt
instead for climate philanthropy. Cancelling the 80 million surplus permits
would be equivalent to Denmark, host nation of the forthcoming climate talks,
producing no carbon for a whole year. Such a commitment would make Mittal
the worlds foremost climate change philanthropist.We have produced this
briefing using European Union verified data on the emissions and allocations
received by polluting installations across Europe under the EU ETS. To enable
us to isolate polluting installations belonging to ArcelorMittal we have used
data provided by Carbon Market Data who have carefully matched all EU
installations to the parent companies which own them.
Background: The EU Emissions Trading Scheme
In 2005 the EU implemented the worlds first large scale emissions trading
scheme, know as the EU ETS. The scheme put in place an emissions cap on
heavy industrial sectors and power generators within the EU. For each tonne of
carbon that polluters were allowed to emit, an emissions permit (EUA) was
issued. These permits were given out for free to companies who, to comply with
the scheme, had to make sure they had enough permits to cover their pollution.
The theory was that the cap would result in a shortage of permits and would
mean companies either had to cut their carbon emissions, or buy extra permits,
thereby paying for emissions reductions elsewhere. For the first three years of
the scheme, known as Phase 1, things did not go to plan. Following intense
lobbying and high profile claims that the scheme would harm business and
mean job losses, the cap on emissions was set too high and therefore too many
permits were issued. Arcelor also launched an unsuccessful attempt to block the
trading scheme. As it turned out, most companies found themselves in a

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position to sell surplus permits on the market generating windfall profits, until
the price of carbon reached zero. Thus the great potential the scheme had for
cutting emissions was not achieved; instead the scheme became a cash cow for
many of the businesses it covered. The EU ETS is now into Phase 2 of trading
which will last until the end of 2012 and the problem of windfall profits
continues. This time around industrial companies are the main beneficiaries.
Even before the recession they had many more permits than they needed. With
2009 one of the worst years on record for industrial production, these
companies will now be sitting on vast numbers of unused emissions permits. If
these are sold we will see a repeat of the huge windfall profits from Phase 1,
and if not, the permits will be banked to allow future pollution undermining the
integrity and ambition of the EUs post 2012 climate targets.
The Case of Arcellor Mittal
One company stands out as the biggest beneficiary of the EU Emissions Trading
Scheme the worlds largest steel company, ArcelorMittal. Its CEO and major
shareholder Lakshmi Mittal is the UKs richest resident, and one of the worlds
richest men. The company is the EUs 5
th
biggest polluter but rather than being
asked to cut its emissions under the scheme, it has been allowed to increase
them. In 2008, ArcelorMittal had over 14 million surplus permits equivalent to
the annual emissions of Luxembourg, or a windfall of over 200 million. With
global steel production dropping by over 37% in 2009, we estimate that this
could grow to 40 million for that year meaning surplus permits equivalent to a
windfall of 560 million. By the end of 2012 ArcelorMittal is likely to control
surplus permits equivalent to 80million tonnes of carbon, or put another way,
more than the annual emissions of nation hosting this months climate change
talks, Denmark Selling these permits which ArcelorMIttal was assigned for free,
could make the company around 1 billion.Could Mittal have the makings of a
great philanthropist?
As the major stakeholder of Arcellor and its CEO, Lakshmi Mittal has
enormous influence over what happens to the companys surplus permits. One
option which he has is to retire the permits and thereby securing global
emissions cuts equivalent to Denmark emitting no carbon for a whole year. If
the current prime minister of Denmark were to make such a commitment, the
world would most certainly stand up and take notice. Famously a donor to the
Labour party, Mittal even has considerable power when compared to Secretary
of State Ed Milliband MP who is in currently in charge of the UKs response to

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climate change. Between now and 2012, if Lakshmi Mittal cancels all his
surplus emissions permits he will deliver 80% of the emissions reductions that
the whole UK has promised.A century ago a man named Andrew Carnegie was
the most powerful man in the steel industry but he is now more renowned for
his work to tackle poor education and illiteracy, key challenges of the
20thCentury. Today Bill Gates is famous for his work to tackle malaria, HIV
and international poverty but he has no equivalent in thefield of climate change.
But Lakshi Mittal certainly has the power to become the worlds greatest
climate philanthropist if he chooses.
Or will EU citizens be paying the price?
Of course if Mittal does not act to cancel his surplus emissions permits and
instead sells them to make windfall profits, then it will be the ordinary power
consumer paying the price. Our major power providers are short of the permits
that allow them to pollute. But at the moment it is cheaper for them to buy
surplus permits from elsewhere in the EU, or pay for emissions reduction
projects abroad, than to invest in making our power cleaner and greener. With
its huge surpluses, ArcelorMittal will be one of the places power companies go
to buy permits. So when we pay our power bills there is a chance that we are
reaching into our pockets to pay windfall dividends to Britains richest man.
There is rightly strong concern than tax payer supported banks might pay large
and unwarranted bonuses to their top staff; we should be equally concerned
about the case of ArcelorMittal. Despite the windfall profits that companies
such as ArcelorMittal are set to make, they are still seeking special treatment for
the period from 2013 to 2020. Whilst power companies will have to buy all of
their emissions permits at auction, industrial sectors have argued that they will
continue to need to receive theirs for free. The steel industry claims that if it
were forced to buy permits it would be cheaper to relocate production outside
the EU and on this basis, has organised steelworkers to carry out street protests.
This spectre of job losses has led to European politicians to deliver a raft of
concessions to industry even though the risk of such relocation is actually
minimal if the costs of transporting goods and of building new plants are taken
into account. However, with the huge power of the industrial lobby there is a
real risk that windfall profits will continue even after 2012 and that little will be
done to reduce industrial carbon emissions.


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Conclusion
The weakness of the EUs targets in relation to industrial companies such as
Arcellor Mittal may seem like an isolated problem. But if we are unable to
make cuts to industrial emissions in the EU, then what chance is there of
emerging economies such as China and India cutting theirs? Until polluters are
asked to pay to pollute rather than being handed windfall profits, we will
struggle to effectively tackle climate change. Tougher overall caps on emissions
in Phase 3 of the scheme will be vital, and the European Commission, with
Member States must ensure that industrial companies are set challenging targets
for emissions reductions, rather than being given a free ride.We call on Lakshmi
Mittal and his company ArcelorMittal to take positive action and commit to
cancellation of all its surplus emissions permits between now and 2012. This
would be an unprecedented act of climate philanthropy and an example to
business and industry worldwide.We also call on the European Commission and
EU Member States to ensure that in Phase 3 of Emissions Trading tougher caps
on carbon emissions are put in place, and that industrial companies like
ArcelorMittal are given challenging targets, rather than windfall profits.

KEY FACTS: ARCELORMITTAL AND EMISSIONS TRADING
General
ArcelorMittal operates across 85 sites in the EU with its head office based in
Luxembourg. Its international revenues in 2008 were $124.9 billion and its
global crude steel production was 103.3 million tonnes, representing
approximately 10% of world steel output. ArcelorMittal owns both steel plants,
and mines which supply raw materials for steel production. The company has
been repeatedly criticised by civil society groups for poor environmental
practice in a variety of its plants and mines, most recently in South Africa where
the company has been challenged for local pollution


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CHAPTER 10
CONCLUSION
Since its inception, ArcelorMittal has rapidly grown through a successful
consolidation strategy with a number of significant acquisitions ArcelorMittal is
the successor to Mittal Steel, a business originally set up in 1976 by
Mr Lakshmi N Mittal, chief executive officer and chairman of the board of
directors. ArcelorMittal was created through the merger of Arcelor and Mittal
Steel in 2006. Mittal Steels rapid growth since 1989 has been the result of
combining a successful consolidation strategy with a number of significant
acquisitions. Since setting up operations in Trinidad and Tobago in 1989, some
of its major acquisitions are Siderurgica del Balsas (Mexico) in 1992, Sidbec
(Canada) in 1994, Karmet (Kazakhstan) and Hamburger Stahlwerke (Germany)
in 1995, Thyssen Duisburg (Germany) in 1997, Inland Steel (US) in 1998,
Unimetal (France) in 1999, Sidex (Romania) and Annaba (Algeria) in 2001,
Nova Hut (Czech Republic) in 2003, BH Steel (Bosnia), Balkan Steel
(Macedonia), PHS (Poland) and Iscor (South Africa) in 2004, ISG (US),
Kryvorizhstal (Ukraine), as well as a significant interest in Hunan Valin Steel
(China) in 2005, and three Stelco Inc. subsidiaries (Canada) in 2006.
Arcelor was created in February 2002 through the merger of Arbed
(Luxembourg) founded in 1911, Aceralia (Spain) and Usinor (France). Arcelor
also had major steel production facilities in Belgium, Germany, Italy, Brazil and
Argentina.Arcelor acquired a controlling interest in Companhia Siderurgica
Tubarao (now a part of ArcelorMittal Brasil) in 2004, Huta Warszawa (Poland)
in 2005, a controlling interest in Sonasid (Morocco), as well as Dofasco
(Canada) in 2006.
At the time of the merger with Mittal Steel, Arcelor was the second largest steel
producer in the world. In 2007 the newly merged ArcelorMittal continued to
pursue an expansive growth strategy, with 35 transactions announced
worldwide. At the beginning of 2008 ArcelorMittal continued to make
investments, with significant transactions announced in Australia, Brazil,
Canada, Costa Rica, France, Russia, South Africa, Sweden, Turkey, United
Arab Emirates, the US and Venezuela, the majority of which were completed.


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But in light of the deteriorating economic situation during 2008, ArcelorMittal
suspended most investment activity by the end of the year.Post-crisis,
ArcelorMittal has cautiously restarted certain projects to capture growth in key
emerging markets and mining. Capital expenditure on mining doubled in 2011
to almost US$1.3 billion, as the group embarked on major development
programme aimed at expanding existing mines and developing new ones.