So we have a flagship project in Belgium, which has started up this year. It’s a €200 million project. We actually take the off gases converted into bioethanol and therefore, allow the CO2 to be reused. So, I think it’s an ongoing dialogue. I think we’re very focused as a company that we ensure that as we decarbonize, we generate a return on that. And I think that becomes critical as we navigate the future and how we continue to generate value for all stakeholders.
Moses Ola: Thank you.
Daniel Fairclough: Thanks. We will move now to a question from Timna at Wolfe Research.
Timna Tanners: Yes, hey. Thanks for taking my question. I really wanted to follow up, if I could, about the mention of the core growth region in North America and particularly the comments about automotive exposure. Can you talk — expand perhaps on the opportunities in Canada, Mexico, U.S. and maybe downstream versus build versus buy. Just you did divest some automotive exposed assets to Cliffs a couple of years ago. So just wondering what type of growth you’re looking at, if you could just give us some high-level thoughts.
Aditya Mittal: Sure. Thank you, Timna. So just overall, starting with the basic facts, I think I mentioned this already, but we have about 14 million tons of hot-rolled capacity. So just starting with Mexico, we just commissioned a new hot strip mill that’s doing really well. It has hit — it’s been better than the ramp-up that we had anticipated. So the young team has done a fabulous job there. We have the ability to continue to invest downstream, right? So this is a value-add finishing projects, and that opportunity exists. We continue to invest in our finishing operations. When you look at North America, we’re increasing automotive capacity through Usibor investments and other investments that we continue to make in our finishing lines.
Moving to Calvert in Alabama, clearly, our focus right now is to invest in electrifying our primary operations today purchase slabs, where we have the opportunity to do almost 3 million tons of electric furnace capacity there. Which not only supports the automotive franchise, but also helps our presence in the market. As we complete those projects, I think we will update the market on future expansion opportunities that we may have in the U.S. And moving on to Canada, I think the biggest opportunity there is how do we decarbonize. Otherwise, if you look at Dofasco asset, it’s a flagship asset. It has a lot of value-add capability. It continues to generate very good margins remains a low-cost, high-quality producer, and we have the opportunity to now move into the low-carbon — low-carbon production routes and also reduce its cost, because if you look at the energy mix in Canada, I think there are some opportunities to decarbonize and also find cost savings.
So, I hope that gives you a flavor on how we intend to develop upstream as well as downstream capacity in our North American business. I’ve not talked about metallics, but just very quickly to complete the picture. We intend to double our capacity of HBI in Texas. And we have a flagship mining business in Canada, we should not do sight of that. That’s a 24 million ton business. It has a 10 million ton pelletizer. And that pelletizer has been converted to full DRI capability as we speak. So then we will have 10 million tons of DR pellet available in Canada, which obviously is a good location to supply to various of our facilities.
Timna Tanners: That’s a great overview and there’s a lot of demand for it second or third alternative in the market for automotive. So that all sounds great. I just wanted to shift, if I could, on the second question on the Brazilian market has been kind of plagued by cheap Chinese imports or other imports that doesn’t have as many trade barriers. Just wondering if you see any room for hope there. Obviously, the demand is solid longer term, but any signs of greater protection going forward from those imports? Thanks.
Aditya Mittal: Yes. Thank you. So that remains a live discussion with the Brazilian government. We remain focused on ensuring that there’s a fair trade environment, a level playing field. At this point in time, I don’t have an update. But what I would add is that our Brazilian business is going through a growth phase. There are a number of projects, which are being commissioned. You asked about automotive. We are expanding our automotive capability there through expansion of Vega, which is our downstream cold-rolling/galvanizing facility. We’re also growing our long products capability, growing our mining business. And so when you look at Brazil in 2024, we actually think it’ll do better than 2023. Also, the inclusion of Pecém, the acquisition that we made in the Northeast of Brazil, is doing really well, and we have the benefit of full year results from Pecém.
So I do see higher Chinese imports into the Brazilian market. We clearly are working with relevant stakeholders to ensure there’s a level playing field. But in spite of that, just because of the strength, resilience, the high quality, low cost nature of our business, we’ll continue to do well in 2024 relative to 2023.
Timna Tanners: Okay, great. Thanks again.
Aditya Mittal: Sure.
Daniel Fairclough: Thanks, Timna. So we’ll move now to a question from Patrick at Bank of America.
Patrick Mann: Thank you very much for the presentation. Two questions, please. The one is just what percentage of EBITDA do you think your strategic projects will be once they ramp up? So we’ve had quite a few moving parts and now a change in disclosure as well with ACIS basically going. So the 1.8 billion at normalized spreads, what would that kind of be of your group total? And then the second question, I think is probably a follow on from, but a bit of a different angle. So Nippon is your JV partner at Calvert, but if they take over U.S. Steel, which seems very likely, then they end up being quite a significant competitor in terms of automotive. Is that a conflict of interest at all and how do you manage it? Or are you comfortable that the JV is sufficiently independent that it’s not going to be an issue at all? Thank you.
Aditya Mittal: Sure. I’ll take the second question, and I’m not sure Genuino will answer your first question because I think you’re almost asking for guidance. But I’ll leave him — I’ll leave it up to him. In terms of your second question, look, I’m not going to comment on the specific provisions of our joint venture, but typically in such situations, when there is a selling partner, they sell it to the other partner in the joint venture, right. So I could imagine such a situation would develop. Genuino?
Genuino Christino: Yes. So, Patrick, I mean, as you can see, I mean, all the EBITDA that we are providing for the project, they are based on, I would say conservative assumptions. These two projects, they are based on the average spreads that we saw during 2015 to 2020. In the mining projects, we have long-term assumptions that are, as we all know, much lower than what we have seen in the last couple of years. So I would say that today we see if you were to do a mark-to-market of these projects, I would see a lot of upside in the mining projects, but it’s not our intention to be providing this mark-to-market. We will see when we start to produce and sell the products. But clearly today, based on the assumptions today, that is good upside to the numbers that we are providing there.
Patrick Mann: Got it. Thank you.
Daniel Fairclough: Thanks, Patrick. So we’ll move to Bastian at Deutsche Bank. Go ahead, Bastian.
Bastian Synagowitz: Yes. Thanks, Daniel. Thanks for taking my questions. I got two left, actually, and the first one is on the new sustainable solution segment, which is something you’re moving into the focus here as well. So will you report the green steel sales under this new segment as well? Or is it mostly just the renewables which will drive growth here? And then also, maybe in that context, is this an area where you’re looking for M&A, because even after doubling EBITDA, it will obviously be still pretty small in the group context. That’s my first question.
Aditya Mittal: Yes, hi. So in terms of sustainable solutions, it’s actually a business that we own — businesses that we own. It is not meant to capture our low carbon product. So maybe I’ll just first address the low carbon product offerings that we have. So, as you know, we’re already selling various products under our XCarb branding. They’re doing well. In this earnings presentation, we have highlighted how Schneider and Vestas are procuring our items and using them and providing them in their low carbon solutions. So I think we continue to do well. I think as we decarbonize, the product that we will sell from a low carbon standpoint is part of our core business, right? So that’s not changing. So as the market develops and our customers, whether it’s auto or otherwise, will be demanding these products, they will be furnished by North America segment, by our Europe segment, by Brazil, et cetera, et cetera.
