Ephrem Ravi

Ephrem Ravi asked for clarification on the 'further expansion at Hazira' mentioned in the presentation, specifically if it refers to the previously guided 15-24 million tons or beyond. He also inquired about ArcelorMittal's acquisition capacity in Brazil, given its high market share, in light of news reports about CSN considering selling its steelmaking assets. Finally, he asked for a realistic timeframe for approving the second Electric Arc Furnace (EAF) at Calvert, considering the ongoing ramp-up of the first furnace.

Answer

CEO Aditya Mittal clarified that Hazira's current capacity is 9 million tons, expanding to 15 million tons by 2027, and they are actively working on an additional 8 million-ton greenfield facility in Rajayyapeta, with a long-term vision to exceed 40 million tons in India. For Brazil, Mr. Mittal stated ArcelorMittal is comfortable with its existing business (Tubarão and Pecém), focusing on trade measure support and organic growth in facilities like Vega and mining projects, rather than acquisitions. Regarding Calvert, Mr. Mittal indicated that approval for a second EAF is not an immediate-term phenomenon but a short-term plan, as they are also building an electrical steel facility and plan to double EAF capacity. CFO Genuino Christino added that they would announce next steps when ready.

Ephrem Ravi asked for clarification on the 'further expansion at Hazira under study' mentioned in the presentation, specifically if it refers to the previously guided 15-24 million tons capacity or beyond. He also inquired about ArcelorMittal's acquisition perspective in Brazil, given its existing market share, and the realistic timeframe for approving a second Electric Arc Furnace (EAF) at Calvert.

Answer

CEO Aditya Mittal clarified that Hazira's current capacity is 9 million tons, expanding to 15 million tons by 2027. He mentioned active work on an additional 8 million-ton greenfield facility in Rajayapeta, India, with a long-term vision to exceed 40 million tons. Regarding Brazil, Aditya Mittal stated the company is comfortable with its existing business, focusing on organic growth (Vega facility, Tubarão downstream, Serra Azul mining projects) and government support for trade measures, rather than M&A. For Calvert, he indicated that while the first EAF is complete and an electrical steel facility is ongoing, a second EAF approval is not an immediate-term phenomenon, but part of short-term organic growth plans to double EAF capacity. CFO Genuino M. Christino added that they would announce next steps for Calvert when ready.

Ephrem Ravi requested more specific timing for the decision on the second EAF at Calvert and asked about the ramp-up of iron ore shipments and contribution margins from the Liberia project.

Answer

EVP & CFO Genuino Christino indicated that an update on the second Calvert EAF study would likely come with Q4 results, without committing to a decision date. For Liberia, he confirmed the 10 million tonne shipment guidance for the year, explaining that Q3 shipments would be stable with an improved mix, and Q4 shipments would increase as the remaining new lines are commissioned, boosting profitability.

Ephrem Ravi from Citi sought clarity on the timeline for a decision on Calvert's second EAF and requested details on Liberia's iron ore shipment ramp-up, production mix, and expected contribution margin.

Answer

EVP & CFO Genuino Christino indicated that studies for Calvert's second EAF are progressing, with a more substantial update expected alongside Q4 results. Regarding Liberia, he confirmed the 10 million tonne shipment guidance for the year, explaining that while Q3 shipments will be stable, the product mix will improve, leading to higher shipment levels and profitability in Q4 as new concentrator lines come online.

Ephrem Ravi of Citigroup asked about the realism of the 2029 and 2033 timelines for the new greenfield steel plant in Visakhapatnam, India, and inquired about any special government support. He also questioned the rationale for canceling the Monlevade expansion project in Brazil after it had already commenced.

Answer

Group CFO Genuino Christino described the India project as an exciting new avenue for growth, highlighting the ideal location with sea access and proximity to iron ore pipelines, but noted it's still early days. He explained the Monlevade project was canceled because updated engineering work revealed prohibitive costs, and the team is exploring more cost-effective options to develop the Brazilian business. Daniel Fairclough clarified the Monlevade impairment was a Q4 event.

Ephrem Ravi inquired about the impact of the new electrical steel plant on the Calvert project's timeline, the outlook for strategic and decarbonization CapEx beyond 2026, and the rationale for the modest EBITDA increase from the expanded Liberia project.

Answer

CEO Aditya Mittal stated the Calvert electrical steel project won't materially delay the second EAF. He affirmed the overall CapEx envelope is targeted at $4.5-$5 billion, with flexibility to reallocate funds based on market dynamics and policy. Regarding Liberia, he explained the EBITDA uplift is tempered because the volume increase involves blending a lower-quality DSO product with higher-grade sinter feed, impacting the average revenue per tonne.

Ephrem Ravi sought clarification on the Sustainable Solutions EBITDA target, asking if it was solely from Italpannelli and India renewables. He also asked about the working capital build from Mexico and the CapEx for the 5 million tonne DR pellet project.

Answer

Group CFO Genuino Christino clarified that Vallourec will be in JVs, not Sustainable Solutions, and the division's growth target requires more projects. He did not quantify the Mexico-specific working capital but expressed confidence in the overall H2 release. Executive Daniel Fairclough stated the DR pellet project CapEx is $200 million, with Mr. Christino adding the output is mostly for internal use.

Ephrem Ravi from Citigroup asked about Holcim's strategy to achieve a top-two market position in new LatAm markets like Peru and Guatemala, and whether the faster growth of EcoCycle and EcoPact over EcoPlanet indicates a strategic shift towards downstream products.

Answer

CEO Miljan Gutovic affirmed the strategy to scale up in new, high-margin LatAm markets by exploring all opportunities from building materials to solutions, including the Disensa retail network. Regarding the product mix, he advised not to read too much into the growth rates, stating that EcoPlanet (low-carbon cement) has great momentum and will be boosted by new calcined clay production facilities coming online in markets like the Czech Republic and North Africa.

Ephrem Ravi from Citigroup asked about Holcim's strategy for new LatAm markets like Peru and whether the faster growth of EcoCycle over EcoPlanet indicates a strategic shift.

Answer

CEO Miljan Gutovic affirmed they will pursue all growth opportunities in new LatAm markets to leverage their high-margin potential. He advised against reading into the product growth rates, stating EcoPlanet momentum is strong and will be boosted by new calcined clay capacity coming online.

Ephrem Ravi from Citigroup asked about Holcim's strategy for new markets like Peru and Guatemala, and whether the faster growth in EcoCycle and EcoPact compared to EcoPlanet indicated a strategic shift towards downstream products.

Answer

CEO Miljan Gutovic confirmed Holcim will pursue all growth opportunities in new LatAm markets, from materials to solutions, leveraging their high-margin potential. He clarified that the different growth rates of sustainable products are not a strategic shift, stating that EcoPlanet has great momentum and is being scaled up through new calcined clay plants, such as one being commissioned in the Czech Republic.

Ephrem Ravi asked whether the trend towards supply chain localization, such as the U.S. Inflation Reduction Act (IRA), represents an opportunity or a threat for Glencore's global business model. He also questioned their investment approach, contrasting 'moon-shot' projects like Britishvolt with more stable investments.

Answer

CEO Gary Nagle described the IRA as a net positive, as it stimulates demand for Glencore's metals and creates market disconnects where their global network can add value. He clarified that the Britishvolt investment was a small, venture-style play in a proven technology (gigafactories) to support the supply chain, not a 'moon-shot,' and confirmed they would not be buying a stake in Vale's base metals unit.