Aditya Mittal: Sure. Just on net debt of AM/NS, that’s on a 100% basis, right? So it’s not our share, just so that everyone is clear on that. So as I mentioned earlier, a lot of these joint ventures have strong balance sheets and they continue to perform well. Coming back to the overall question, look, I think this quarter, we announced that we have increased our base dividend. And we alluded directly to the Pecém acquisition and what we have done in Texas. I think it’s clear reading between the lines, we’re doing really well. Pecém is outperforming our expectations, Texas is outperforming our expectations. In fact, we talked about in the presentation how we intend to double the productive capacity of our facility in Corpus Christi, Texas.
We are achieving our synergy numbers are ahead of schedule. These facilities are achieving more capacity than we thought. In the past, we have guided to EBITDA numbers of $350 million for Pecém $150 million more in Texas. And these facilities are run rating at those levels. In 2024, we will see the benefit of Pecém on a full year basis because in 2023, as you know, we acquired it towards the end of Q1. So that’s another benefit we should see 2024, apart from all of the growth projects, which are expected to be commissioned.
Alain Gabriel: Thank you.
Daniel Fairclough: Thanks, Aditya. So we’ll now move to the next question, please, from Tristan at BNP Paribas.
Tristan Gresser: Yes, hi. Thank you for taking my questions. The first one is on HBI growth. You’ve announced plans to build in Europe, five DRI plants, I think, in around 10 EAF but you now announced plans to double HBI capacity in the U.S. So I’m curious to why you shouldn’t or couldn’t triple capacity in Texas and maybe drop one or two DRI projects in Europe where the economics are less favorable? Or do you really need those DRI plants in Europe? And to add up to that question, more big picture, can you see a future European footprint without iron making? Or is it impossible due to CBAM and taxes on DRI imports? That’s my first question.
Aditya Mittal: Yes, thank you. Look, it’s a great question. I will provide an overall context and then provide a little bit more of a specific answer to your question. Fundamentally, when we think of decarbonizing our business, there are two things that we are absolutely focused on in terms of ArcelorMittal. The first, as you know, we have been a technology leader, and we will continue to be a technology leader, and we will do that also in how we should decarbonize the steel business. We have identified three routes, DRI/EAF, smart carbon, electrolysis. We continue to invest in these three routes. We continue to develop know-how, process knowledge, CapEx knowledge and that strategy will continue. The second is that we need and we will maintain our relevant market share in terms of low-carbon products in the markets in which we are present.
And so we look at both those strategies, technology leadership, market leadership in terms of low carbon products and what does that mean for our business. As a result of that, we have embarked on examining DRI-EAF projects both in Canada as well as in Europe. But the advantage of ArcelorMittal is that we are global. The fact that we are global as we can access energy sources, which are global or iron ore sources, which are global and use that to our advantage as we plan a low-cost approach or relatively lower cost approach to the market and supply of these products. And it’s not just about the OpEx cost is also about the CapEx cost. And without getting into specifics of which project we will start up first, I want to provide you with the framework.
The framework is technology leadership, market leadership and ensuring that we use our asset base, the fact that we are global, present in various markets to ensure that we deliver to the market relatively the lowest cost, most CapEx-efficient, decarbonized product.
Tristan Gresser: All right, that’s helpful. So maybe as a follow-up to that. And as my second question, if you do plan to maintain market share in your current market, notably in Europe, you’re seeing competitors are moving a bit faster on building the EAF, building those DRI plants. So when you look at the budget and the plan, the decarbonization plan, do you see a risk there to the budget and also the time line as you may be losing first-mover advantage in the region?
Aditya Mittal: Yes. Just on that, look, we have today over 1.8 million tonnes of HBI sitting in Texas. Some of that will go into Calvert as we start up the Calvert project, but we still have quite a significant amount. I mean, if you look bigger picture, we are the world’s largest producer of DRI, we actually produce — we’re the only steel producer, which is producing DRI in Europe and Germany and Hamburg and we have plans where we can dial up the capacity and use that and bring it to Europe if that is what the market is demanding. We also have electric furnace capability in Europe. We actually have a flat EAF-based facility in Europe, in Sestao, Spain. So if you just look at our technology basis, we have the DRI already, and we have an electric furnace and a caster which can produce flat products.
So I don’t believe that we will be behind from a relative perspective in bringing products to the market. I think we will be right in front with the rest of the European steel industry. In terms of the overall budget, yes, you’re right, there has been CapEx inflation, but our focus is to remain within that target and ensure that we redesign or use our advantages, whether it is global or whether it is our scale advantages to achieve the same target within the budget that we have announced.
Tristan Gresser: All right, that’s really clear. Thank you.
Daniel Fairclough: Thanks, Tristan. So we’ll move now to next question from Myles at UBS. Go ahead, Myles.
Myles Allsop: Great. Thanks. A couple of questions. Maybe can you talk about the growth you expect in India sort of medium term, it’s growing sort of 8% or so this year. What do you see over the next sort of five, 10 years as a sustainable level of demand growth in India and other parts of Southeast Asia? That’s the first question.
Aditya Mittal: Yes. So India has surprised us all positively. We were always very constructive on the outlook. We felt that India is really a growth vector. But if you just look at the numbers coming out of India in 2023, 2024. I mean, in 2023, apparent steel consumption grew by 12% and the year before by 9%. This year, we’re projecting 6.5% to 8.5% growth. So really strong numbers that are coming out of India and clearly, that’s benefiting our joint venture and supporting our growth plans. We are in the process of doubling capacity in Hazira. Today, we have 20,000 people who are working there and we should hit 15 million tonnes of capacity by 2026. We are not stopping there. We intend to take that site to 20 million tonnes before the end of this decade and we have plans on the West Coast of the country as well.
In terms of overall demand numbers, I mean, we’ve talked about growth of 300 million tonnes on a global basis in terms of the steel business, and a significant portion of that is coming from India in excess of 100 million tonnes. Obviously, there’s also growth in Brazil and North America, all of which are core markets for us.
Myles Allsop: And that 300 million tonnes is that by 2030 or what was the time frame that you were thinking for that?
Aditya Mittal: Yes. It’s actually the next 10 years, so early part of 2030s.
Myles Allsop: Okay. The second question is on Liberia. How confident are you that the new concentrator will start up in Q4? And what sort of ramp up profile and cost position will that operation have?
Aditya Mittal: Yes. So the concentrator will start up end of the year. The ramp up, obviously will take a longer period of time. At this point in time, unless Genuino has more specifics to provide you, we have not provided that guidance. In terms of cost position, look, it’s a very low cost mine. We have a very good and extensive ore body. Costs are low in Liberia. We own the rail line. We have the port facility. It’s not even a long rail line. It’s a relatively short rail line. And so when we look at FOB costs, it’s super competitive. Genuino, Perhaps you can add a little bit more detail.
Genuino Christino: Yes, Aditya, I think you’re absolutely right. So we should start have the first war by the end of this year. And then the idea is that we start in, we will have three models, so the first 5 million tonnes, and then by the end of 2025, we should be at the run rate of 15 million tonnes. So that’s the plan. And then the teams are also exploring the possibility that we can keep a DSO for some more time, so that we can also maybe add some more value to the project.
Myles Allsop: And what’s the capacity of the rail if you’re thinking about longer-term options there?
Genuino Christino: Sorry, Myles, I could not…
Myles Allsop: Sorry. I was just thinking about the capacity of the rail line for other optionality in the future.
Genuino Christino: Yes. So as we execute the project now, we are actually taking capacity of the rail from about 30 million tonnes. So we will have a capacity that should go to a second wave as and when we feel it’s appropriate.
Myles Allsop: All right. Thank you.
Daniel Fairclough: Great. Thanks, Myles. So we’ll now move to a question from Tom at Barclays.
Tom Zhang: Hi everyone, thanks very much for taking our questions. The first one just on the U.S. business and Calvert, maybe just any thoughts on how you see the U.S. system evolving, given your partner at Calvert is potentially taking on quite a lot of U.S. footprint, basically whether or not you see any opportunities with Calvert into those U.S. deal assets. Thanks.
