Matt Greene

Matt Greene asked for clarification on ArcelorMittal's strategic CapEx spend, noting a shortfall from guidance in 2025 despite achieving the full strategic EBITDA uplift target. He inquired if the CapEx was deferred or canceled and how this relates to a slightly trimmed 2026 EBITDA uplift target. He also asked about the criteria for expanding Liberia's rail capacity beyond 20 million tons to 30 million tons, and whether rail or mine capacity is the current limitation, including any oversizing for future capital efficiency.

Answer

CFO Genuino Christino explained that the CapEx shortfall was primarily due to the $200 million payment for the Liberia MDA extension, which will be paid in Q1 2026 and capitalized, confirming no project delays or cancellations. He outlined that 2026 CapEx would focus on electric steels in the US and Europe, renewables in India, and the Liberia payment. CEO Aditya Mittal clarified that the rail infrastructure in Liberia is well-designed for up to 30 million tons with minimal additional investment (mainly rolling stock). The focus for expanding beyond 20 million tons is on further exploring and developing mining licenses to achieve 30 million tons at low capital costs and target returns, with a study currently underway.

Matt Greene asked for clarification on ArcelorMittal's strategic CapEx spend, noting it fell short of guidance in the past year while still delivering the full EBITDA uplift. He questioned if the CapEx was deferred or canceled and how it relates to the trimmed 2026 EBITDA uplift target. He also inquired about the criteria for expanding Liberia's rail capacity beyond 20 million tons to 30 million tons, and the limitations of the mine versus rail infrastructure.

Answer

CFO Genuino M. Christino explained that the CapEx shortfall was primarily due to the $200 million payment for the Liberia MDA extension, which will be capitalized in Q1 2026, not a delay or cancellation of projects. He outlined 2026 CapEx priorities including electric steels in the U.S. and Europe, and renewables in India. CEO Aditya Mittal clarified that Liberia's rail infrastructure is well-designed for up to 30 million tons with minimal additional investment (mostly rolling stock). The focus for expanding beyond 20 million tons is on further exploring and developing mining licenses to ensure production can reach 30 million tons at low capital costs, achieving target returns. This study is underway and will take some time to finalize.

Matt Greene asked about the exit margin for the India business in Q2 and its future trajectory, as well as the ramp-up schedule and margin uplift for the new EAF at Calvert.

Answer

EVP & CFO Genuino Christino projected that India's Q3 profitability would be stable with Q2, with future growth driven by new value-added downstream products. Head of IR Daniel Fairclough added that doubling capacity in India should increase normalized profitability by 150% due to this richer product mix. For Calvert, Mr. Christino outlined a one-year ramp-up for the EAF, targeting full capacity by mid-2026.

Matt Greene of Goldman Sachs asked about the margin trajectory for the India business following recent tariffs and new capacity commissioning. He also inquired about the ramp-up timeline and margin impact of the new EAF at Calvert.

Answer

EVP & CFO Genuino Christino projected stable profitability for the India business in Q3 and detailed the Calvert EAF ramp-up, targeting full capacity by mid-2026. Head of IR Daniel Fairclough added that the full India expansion is expected to increase normalized profitability by 150% due to a richer product mix, and that the new Calvert EAF's cost profile should be comparable to imported Brazilian slab.

Matthew Greene of Goldman Sachs asked for confirmation that ArcelorMittal has been able to pass on higher prices for auto-related volumes from Canada and Mexico into the U.S. to cover duties. He also questioned if the company would consider acquiring high-quality metallurgical coal assets given the distress in that sector.

Answer

Group CFO Genuino Christino confirmed that outflows of auto tonnes from Canada and Mexico have not changed and that the company is honoring all contracts, with the importer of record varying by contract. He stated that order books remain healthy and stable. On the topic of M&A, Christino said that acquiring metallurgical coal assets is not high on the company's agenda at this point.

Matt Greene of Goldman Sachs asked about Rio Tinto's strategy to capitalize on US copper tariffs, the development timeline for the Resolution Copper project, the expected incentive pricing for new Chilean lithium assets, and whether the company is actively looking to streamline its portfolio through asset sales.

Answer

CEO Jakob Stausholm stated that US copper tariffs present a clear opportunity, making the Kennecott smelter more profitable and noting the US administration's prioritization of the Resolution Copper project. He explained that new Chilean lithium projects like Maricunga will leverage similar DLE technology to Rincon, aiming for competitive costs. Regarding portfolio simplification, Stausholm acknowledged the need to review asset ownership but did not comment on specific rumors.

Matt Greene from Goldman Sachs asked about the impact of US copper tariffs on Rio's Kennecott smelter, the updated timeline for the Resolution Copper project, the expected incentive pricing for new Chilean lithium projects, and the potential for portfolio streamlining.

Answer

CEO Jakob Stausholm explained that US copper tariffs are a positive opportunity that should make the Kennecott smelter significantly more profitable. He noted the Resolution Copper project is now a priority for the US administration, with a land exchange imminent. For lithium, he stated that new Chilean projects will leverage similar DLE technology to achieve competitive costs. Regarding the portfolio, he acknowledged ongoing simplification but did not comment on specific rumors.

Matt Greene from Goldman Sachs asked about the strategic implications of upcoming U.S. copper tariffs, the potential for the Resolution Copper project, and the expected incentive pricing for new Chilean lithium projects compared to Rincon.

Answer

CEO Jakob Stausholm described the U.S. copper tariffs as a positive opportunity that will enhance the profitability of the Kennecott smelter. He noted that the U.S. administration has prioritized the Resolution Copper project, with a land exchange imminent. Regarding lithium, he explained that while Chilean projects have different royalty schemes, the DLE technology will be similar to Rincon, with a focus on continuous improvement to lower costs.