Overview

2016 was a year of important progress for ArcelorMittal.

Action 2020

Action 2020 is ArcelorMittal's commitment to structurally improving profitability and cash flow generation.

Governance

Good corporate governance is about compliance, continuous stakeholder dialogue and being a good corporate citizen.

Fact book

Details of our steel and mining operations, financials, production facilities and shareholder information.

Employees

27,233

Sales

15.8

(US$ billion)

Ebitda

1.7

(US$ billion)

Steel shipments

21.3

(million tonnes)

Lost time injury frequency rate

0.95

(incidents per million hours worked)

Ebitda contribution to Action 2020

164

(US$ million)

Supporting STEM skills for a sustainable future

A shortage of STEM skills is a critical workforce challenge – for our company, and for US manufacturing as a whole. We're partnering with local educational institutions so that we can work together on a curriculum that will give young people the skills they – and our business – need.

John Brett
President and CEO, ArcelorMittal USA

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As an engineering and technology company, our future depends on the right people, with the right skills, driving our growth. What's more, we believe that science, technology, engineering and mathematics (STEM) will be critical to sustainable development for economies and societies as a whole. That's why developing skills in STEM is the global theme for our community investment strategy, and why the number and quality of our STEM projects is growing.

We emphasise the importance of partnerships across the education continuum from elementary school through to colleges and universities. In the US, we partner with a leading STEM non-for-profit, Project Lead the Way, to implement an engineering curriculum in middle and high schools in the communities in which we operate.

Among many other unique STEM programmes in the US, is a public-private partnership between AM/NS Calvert, Mobile Baykeeper, Mobile Area Education Foundation and Exploreum which encourages students, community members and government officials to care for waterways near the Gulf Coast in Alabama.

University partnerships remain a cornerstone of our STEM programme, since they help support a pipeline of talent needed in ArcelorMittal today and in the future. In the US, our Campus Partnership Program emphasises long-term relationships with university partners to recruit interns and full-time hires each year.

In Canada in 2016, our Dofasco plant pledged CAN$1 million towards technology labs and classrooms at the nearby Mohawk College of Applied Arts and Technology in Ontario, Canada, where we have also funded bursaries for 85 students in financial need. ArcelorMittal Mexico awarded 504 scholarships for university STEM students in 2016.

These and many other STEM-related initiatives in NAFTA directly support our SD outcome 9 – a pipeline of talented scientists and engineers for tomorrow.

Safety performance

LTIFR

incidents per million hours worked

Color #8B819E
X-axis LTIFR
2014 1.13
2015 1.01
2016 0.87
LTIFR

Severity rate

number of days lost to injury per thousand hours worked

Color #AA9E6E
X-axis Severity rate
2014 0.09
2015 0.10
2016 0.08
Severity rate

Instilling safety in the next generation

Our safety philosophy goes beyond work. A person who acts safely at work will often act the same way at home, and vice versa. ArcelorMittal Long Products Canada took a new approach to Health and Safety Week in 2016 – organised by a joint labour/management committee – making an accident prevention awareness video with local schoolchildren, many of whom had parents working at ArcelorMittal.

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On camera, the children talked about their understanding of hazardous situations, and the example they felt adults should set. During Health and Safety Week all 1,500 employees of ArcelorMittal Long Products Canada in Quebec saw the video, then met the children who presented each employee a small, plasticine angel as a symbol to be careful during their shift so they could go home safely to their families.

Classroom discussions paved the way for adults and children to talk about safety together, in their homes. This innovative approach will leave a lasting impression on the children of the community and we hope they will become safety ambassadors themselves in their future jobs.

A responsive business with a focus on productivity

Delivering our Action 2020 strategy in NAFTA is a complex exercise that involves anticipating, understanding and responding to a range of stakeholders' interests, from customers to communities, while maintaining our focus on the actions and improvements we need to make within our operations.

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Our 'footprint' asset optimisation plan in the US, which began in 2016, is a case in point – ratifying our new contract with the United Steelworkers Union (USW) in June created an opportunity for renewed investment in several facilities along with the long-term idling of non-essential units so that we can achieve the same or greater productivity using fewer assets and optimising costs. Our three-year collective bargaining agreement covers more than 12,000 USW-represented employees at 13 of our facilities in Indiana, Illinois, Minnesota, Ohio, Pennsylvania and West Virginia.



Meeting customer needs for safer, lighter-weight cars

At our AM/NS Calvert joint venture with Nippon Steel and Sumitomo Metals Corp in Alabama, US, significant investments in the latest steel-making technology, which came on stream this year, are enabling us to meet customers’ demands. The capability to produce, for example, third-generation advanced high-strength steels can help the automotive industry achieve safer and lighter cars, with correspondingly lower emissions. AM/NS Calvert is also currently the only mill in North or South America which can produce the specialist substrate needed to make spiral-welded pipes for the energy industry.

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Our customers had high expectations around the ramp-up at Calvert. In 2016, we increased production by 17% to 4.2 million tonnes with a continuous supply and no disruptions. This success was the result of several factors – we drew on the expertise of ArcelorMittal as a whole by assembling a global team of experts in the hot steel mill, improved maintenance planning to reduce interruptions, and invested in higher capacity in our yard. It meant we could run more hours, and generate more steel per hour.

Robrecht Himpe
President and CEO, AM/NS Calvert, CEO ArcelorMittal North America

New lightweighting solutions for SUVs and mid-size sedans

Our latest S-in motion® solutions for mid-size sedan and SUVs won the annual ‘Best Innovation – Product’ award from American...

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Innovating sustainably

We want our innovation to go hand in hand with applying our expertise in lifecycle assessment, so that we can help customers understand the commercial and environmental benefits of advanced steels.

For example, in 2016 our global R&D division partnered with Lehigh University and Pennsylvania Infrastructure Technology Alliance (PITA) to evaluate the lifecycle cost of bridges by comparing conventional painted steels with our corrosion-resistant steel, Duracorr® (ASTM A 1010). Despite Duracorr®’s higher initial cost, the lifecycle cost of the Duracorr® bridge is one-half to one-third that of a bridge built with conventional painted steels because of maintenance savings (no painting costs) during the bridge’s 100-year lifetime. The fact that no painting is required is also a significant benefit for the environment and particularly important in ecologically-sensitive areas.

Maintaining our focus on costs

To meet our Action 2020 objectives, we need to drive down costs across the business. In the US, we reached a new iron ore contract so that our future raw material costs are better aligned with pricing conditions in the steel market, and we continue to explore new technologies and processes to keep costs low in our sites.

Improving our energy efficiency is an important part of both cost reduction and our work to create a lower-carbon future, and we made investments in Burns Harbor and Dofasco which, on completion, will substantially reduce our energy usage. In total across the NAFTA segment, we completed 33 energy projects that will provide annual savings of over US$26 million and 230,000 tonnes of CO2.

Key investments will reduce US energy use

Investments play an important part in our overall ambition of reducing energy intensity by 10% in the US over 10 years.

In 2016 we invested in the second phase of a major revamp of Burns Harbor power plant, which we anticipate will bring significant energy savings on completion in 2019, and some 240,000 tonnes of carbon reduction annually.

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The Burns Harbor project is part of an ongoing series of investments across our US portfolio that includes projects to reduce the blast furnace fuel rate at Cleveland and Indiana Harbour.

ArcelorMittal USA is one of 190 organisations in the US Department of Energy “Better Plants Program”, a multi-sector partnership between leading manufacturers to improve energy efficiency in the industrial sector. This is part of the Better Buildings Initiative, with an overarching goal of significantly improving the energy efficiency of commercial, residential, and industrial buildings in the United States.

Energy projects at Dofasco save enough power for 12,500 homes

Energy is one of our biggest input costs. Since 2011, a range of energy optimisation projects at our Dofasco site in Ontario, Canada, have achieved annual recurring savings of some CAN$10 million and 125,000 megawatt hours, enough to power some 12,500 homes.

We now expect new and existing projects to achieve a further 258,000 MWh of savings by 2020.

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A significant contribution to this will come from a new project announced in November 2016, the utilities boiler and power generation project, which will see three existing boilers replaced by one high-efficiency boiler as well as a turbine generator. The system will use waste gases from the steelmaking process to produce steam to generate electricity.

The goal of our Dofasco energy optimisation team is to beat the benchmark – just over 16 gigajoules of energy per metric tonne of steel produced – by 2020. In 2016, we used just over 17.5 gigajoules of energy per metric tonne.

Managing energy to achieve ISO 50001

Projects like this go hand in hand with Dofasco's drive to become compliant with ISO 50001, a certification standard which specifies requirements for establishing, implementing, maintaining and improving an energy management system – already a requirement in Europe for major energy users.

In April 2016, ArcelorMittal Dofasco and Mexico joined eight other companies in the North American Energy Management Pilot Program, supported by energy ministries from Canada, Mexico, and the US. This pilot scheme gives participating companies training and technical assistance to achieve ISO 50001.

At-a-glance: key progress against our Action 2020 objectives

Cost

  • Footprint optimisation in our US business ahead of schedule, with assets idled at Indiana Harbor including the #1 aluminize line, 84” hot strip mill, and #5 continuous galvanizing line.
  • Portfolio optimisation progressed with sale of long steel-producing subsidiaries in the US (Harriman, LaPlace and Vinton).
  • Launched a major revamp of Burns Harbor power plant (second phase) with significant energy and carbon savings expected on completion in 2019.
  • Agreed new iron ore contract in US so that raw material costs are better aligned with steel market pricing conditions.
  • Reduced supplies, refractories and expenses (SRE) spend in US.

Volume

  • Automotive volumes at AM/NS Calvert 50% higher, with a further 50% increase expected in 2017.
  • Slab yard expansion at AM/NS Calvert combined with improved maintenance planning and product optimisation enabled increased coil production to 4.2 million tonnes per year, with further expansion planned for 2017.
  • Indiana Harbor investments including new caster at #3 steelshop, installed ahead of schedule, and in 80” hot strip mill, which is now positioned to make approximately 4.5 million tonnes and will continue working its way to its goal of 5 million tonnes.

Product mix and customer service

  • Preparations in place for new generation of advanced high strength steels (AHSS), which include the launch of new press hardenable steels (PHS) Ductibor® 1000 and Usibor® 2000.
  • Delivery Initiative Team launched in US to better understand and deliver on customer needs.
  • Improved quality performance in US, with internal rejects down 17%.

Outlook for 2017