VOTORANTIM METAIS

• Jurisdiction: Derecho Internacional

International Mining and Oil & Gas Law, Development and Investment
(Apr 2009)
CHAPTER 9C
VOTORANTIM METAIS
Jones Belther
Votorantim Metais
Sao Paulo

Jones Belther was educated in Brazil at UNESP Rio Claro, graduated in geology with a master's degree on Mineral Exploration at the same University. He has been the the Global Mineral Exploration Director of Votorantim Metais since August 2004 and has 18 years of experience in Mineral Exploration working in Brazil and abroad. Jones started his career in Rio Tinto Brazil, worked for Golden Star Resources in Suriname and the Guyana Shield, for Phelps Dodge in Chile and Brazil and for CVRD (Vale) in Brazil and Peru and joined Votorantim Metais in 2004. He has experience on managing mineral exploration programs for gold, base metals and diamonds over the Americas.

Scope of presentation

1. Introduction - Votorantim Group and Votorantim Metais

2. Why to go international?

3. Where to go international?

4. The growth strategy and history

5. Important needs to go international

6. Difficulties on the way - Legal, People, Culture

7. Successes on the internationalization process

8. Opportunities on the new global scenario

9. Concluding remarks

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Votorantim Group

60,000 Employees

Net Revenue in 2008 US$18.7 Billions

Revenue Distribution - 2007

▪ Integrated industrial conglomerate with 08 business, operating since 1918.

▪ Among the largest zinc and aluminum producers in the world.

▪ Among the ten largest cement producers in the World.

▪ World leader producer in pulp and paper.

▪ Second largest (non governmental) electrical energy producer in Brazil.

▪ Started the internationalization process in 2001 with the cement business.

▪ The metals division started internationalization in 2004 with acquisition of Cajamarquilla in Peru.

▪ Votorantim is present in 15 countries with industrial operations in 07 countries.

▪ Internationalization process is still active and is part of the growth strategy.

Votorantim Group - 8 Business in the Portfolio

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Votorantim
Metais
A GLOBAL AND COMPETITIVE COMPANY

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GLOBAL PRESENCE

17 units: Brazil, China, USA and Peru We export to more than 40 countries

Votorantim Metais - Business Units

ALUMINUM

NICKEL

▪ Integrated business from mining to smelting.

▪ Three metals in the portfolio.

▪ Energy generation to increase competitiveness.

▪ Mineral exploration intense for the three metals with 12 advanced projects in the portfolio. Investments of US$85MM in 2008 and US$30MM in 2009.

▪ Copper is the target metal for the near future.

ENERGY

ZINC

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ALUMINIUM

ENERGY

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NICKEL

ZINC

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Votorantim Metais main figures

Revenue (US$ Billions)

Revenue Distribution - 2008

Acquisitions	(US$ MM)
Paraibuna	(2002)	100
MSF	(2003)	73
Cajamarquilla	(2004)	210
Milpo	(2005/2008)	288
Paz del R~21io	(2007)	491
U.S.ZINC	(2007)	295
Acerbrag	(2007)	Not released
Atacocha	(2008)	145

Investments

Why to go international?

▪ Triple the business values in 10 years through a combination of organic projects and M&A.

▪ A country scale is not enough to support Company Growth plans.

▪ An integrated mining and smelting company is dependent on mineral resources and has to be established in the most potential mineral provinces.

▪ Brazil is not competitive in energy and has very poor infrastructure to transport mineral concentrates.

▪ Mineral potential in Brazil is not enough for Company growth plans.

▪ Internationalization allows the Company to create a natural currency hedge.

▪ The mining and metals business naturally require Global Scale to be competitive.

▪ Competitiveness is crucial to grow and maintain mining and metals business and strategic geographies play a very important in this process.

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INTERNATIONALIZATION

(Part of the process of becoming a medium size Mining House)

Become a medium size Mining House devesified in base metals and geographically positioned in the best mining environments.

Lead in some base metals, with possibility of consolidation (e.g. Zinc) and/or reaching a relevant position in the segment with competitive position in the market (e.g., Ni, Al e Cu).

Own exploration capacity to develop greenfields, M&A and competitiveness to integrate acquisitions, since targeting opportunities up to ramping up production.

Develop a distinctive insight to reach corporate excellence compatible with growth plans and own competitiveness to face the other MH's globally.

▪ Mineral potential is fundamental in a country selection.

▪ Political and economic stability combined with a positive business environment.

▪...