130530_banz briefing pack_final (1) bluesvope briefing pack v good

8/11/2019 130530_banz Briefing Pack_final (1) Bluesvope Briefing Pack v Good

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BlueScope Australia & New Zealand (BANZ)Investor Briefing Day

30 May 2013

BlueScope Steel Limited. ASX Code: BSL


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Important Notice

THIS PRESENTATION IS NOT AND DOES NOT FORM PART OF ANY OFFER, INVITATION ORRECOMMENDATION IN RESPECT OF SECURITIES. ANY DECISION TO BUY OR SELL BLUESCOPE STEELLIMITED SECURITIES OR OTHER PRODUCTS SHOULD BE MADE ONLY AFTER SEEKING APPROPRIATE

FINANCIALADVICE. RELIANCE SHOULDNOTBE PLACEDONINFORMATIONOROPINIONS CONTAINEDINTHIS PRESENTATION AND, SUBJECT ONLY TO ANY LEGAL OBLIGATION TO DO SO, BLUESCOPE STEELDOES NOT ACCEPT ANY OBLIGATION TO CORRECT OR UPDATE THEM. THIS PRESENTATION DOES NOTTAKE INTO CONSIDERATION THE INVESTMENT OBJECTIVES, FINANCIAL SITUATION OR PARTICULARNEEDSOFANYPARTICULARINVESTOR.

THIS PRESENTATIONCONTAINSCERTAIN FORWARD-LOOKINGSTATEMENTS, WHICH CANBEIDENTIFIEDBY THE USE OF FORWARD-LOOKING TERMINOLOGY SUCH AS MAY, WILL, SHOULD, EXPECT,INTEND, ANTICIPATE, ESTIMATE, CONTINUE, ASSUME OR FORECAST OR THE NEGATIVETHEREOF ORCOMPARABLETERMINOLOGY. THESE FORWARD-LOOKINGSTATEMENTSINVOLVEKNOWNAND UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS WHICH MAY CAUSE OUR ACTUALRESULTS, PERFORMANCEANDACHIEVEMENTS, ORINDUSTRYRESULTS, TOBEMATERIALLYDIFFERENT

FROM ANY FUTURE RESULTS, PERFORMANCES OR ACHIEVEMENTS, OR INDUSTRY RESULTS,EXPRESSEDORIMPLIEDBYSUCHFORWARD-LOOKINGSTATEMENTS.

TO THE FULLEST EXTENT PERMITTED BY LAW, BLUESCOPE STEEL AND ITS AFFILIATES AND THEIRRESPECTIVEOFFICERS, DIRECTORS, EMPLOYEESANDAGENTS, ACCEPTNORESPONSIBILITYFORANY

INFORMATION PROVIDED IN THIS PRESENTATION, INCLUDING ANY FORWARD LOOKING INFORMATION,AND DISCLAIM ANY LIABILITY WHATSOEVER (INCLUDING FOR NEGLIGENCE) FOR ANY LOSSHOWSOEVERARISINGFROMANYUSEOFTHIS PRESENTATIONORRELIANCEONANYTHINGCONTAINEDINOROMITTEDFROMITOROTHERWISEARISINGINCONNECTIONWITHTHIS.


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Medically Treated Injury Frequency Rate (BANZ)Lost Time Injury Frequency Rate (BANZ)

Safety is a core value for BlueScope. BANZ continues to have world classperformance and is striving for zero harm

0.90

1.231.35

0.95

0.64

1.17

1.01

1.38

0.86

1.52

2.24

FY13*

FY12

FY11

FY10

FY09

FY08

FY07

FY06

FY05

FY04

FY03

9.209.159.65

4.875.26

6.286.76

5.005.35

7.14

11.34

FY13*

FY12

FY11

FY10

FY09

FY08

FY07

FY06

FY05

FY04

FY03

Losttimeinjuriespermillionman-hoursworked

Medicallytreatedinjuriespermillionma

n-hoursworked

*Note: FY2013 data is up to and including March 2013. Charts in include both contractor and direct employee data combined


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BlueScope remains committed to continuously improving the environmentalfootprint of its operations

The BlueScope Steel Environment Management System comprises the following major elements:

Our Bond

HSEC Policy

Environment Principles

Environment Standards BSL & Operational Procedures and Guidelines

BlueScope continues to work on improving performance through its Environment Network involvingenvironment reviews and audits, implementation of the compliance system, the business planning process,and the engagement of all employees in environment awareness & training

We manage our environmental risks and impacts through the use of a framework we call LAWWNE, whichseeks to:

Reduce our environmental impact on Land, Air, and WaterReduce generation of Waste and NoiseMinimise our use of Energy and the generation of GHG emissions


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Introduction


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BlueScope Australia & New Zealand businesses

BlueScope external operating segment reporting structure1

Coated & Industr ialProducts Australia(CIPA)

Building Components& DistributionAustral ia (BCDA)

Global BuildingSolutions

Building ProductsASEAN, Nor thAmerica and India

New Zealand andPacifi c SteelProducts

Hot Rolled ProductsNorth America

Largest supplier and onlymanufacturer of HRC, plate,metal coated and paintedsteel in Australia

Australian finished-productcapacity of ~2.5Mtpa;domestic market 1.9Mt inCY2012

Major steel productsupplier / distributor to theAustralian building andconstruction, automotive,white goods manufacturingand general manufacturingindustries

Only fully integrated flatsteel maker in New Zealand

Leading domestic marketshare of flat products

Includes iron sands mines(own consumption and

export sales)

2.1Mtpa mini-mill in Ohio

50/50 JV with Cargill Inc.

Voted no. 1 flat rolledsteel supplier in NorthAmerica (JacobsenSurvey) for ten

consecutive years

Operates metallic coatingand painting lines and roll-forming in Indonesia,Malaysia, Thailand,Vietnam, India and NorthAmerica

Includes NS BlueScopeCoated Products JV

Leading global designerand manufacturer of pre-engineered buildings2

Key markets in China &Nth America; plants inASEAN, India, Mid. East

Supplying buildings to

global customers China coating & painting

(1) BlueScope also has a Corporate segment which is not shown; (2) engineering and component building systems


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The BANZ business structure was created in July 2011, and the management teamwas refined in January 2013 to ensure we stay focussed on core business

BANZ Management Team


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Business Changes

On 1 July 2011, BANZ was established by combining three existing businesses into one. The right structure tosupport better management decisions across one value chain, enabling more effective resource allocation acrossbusiness lines.

Major Australian operational restructure announced on 22 August 2011:

Halved production, largely exited export business and moved to a one Blast Furnaces operation at PortKembla steelworks

Numerous consequential changes for other operational assets in the supply chain

Subsequently, major changes and restructures completed across both the Distribution and LYSAGHT businessesin Australia to reduce costs and better align with the current market

Expanded our minerals business in New Zealand, including iron sands exports. During 2H CY2014 we expect toachieve at least a 2.7Mtpa run rate and therefore the Company will be 55% economically hedgedon iron ore cost

In January 2013 announced significant changes to optimise our Western Port operations to match our supplycapability to the current market demand

Launch of Next generation ZINCALUME with Activate technology in coming months breakthrough newcoating technology

BlueScope Australia and New Zealand (BANZ)Considerable change since established on 1 July 2011


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Behavioural Changes A fundamental change in the way we operate

A one value chain approach

A market driven approach

Focusing on controlling the actual cost and quality per tonne of steel produced (at half the volume)

Initiated the Triple A culture change program in early 2012. Goal: all employees to be: Aligned, Accountable andAgile

More effective and efficient communications to better engage employees. BANZ Blog, BANZ TV, BANZ News

BlueScope Australia and New Zealand (BANZ)Considerable change since established on 1 July 2011


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$

TARGET WINNING

MARKETS

OPTIMISE

VALUE CHAIN

GET LEAN, FIT

AND HUNGRY

BROADEN VIEW TO

CREATE GROWTH

TRIPLE ACULTURE

BANZ will be a vibrant, sustainable steel business. We are good at what we doand proud of it

Were recharging BANZ to deliver long termsustained profitability and cash generation


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Target winning markets

Next generation ZINCALUME steel with Activate technology hascommencedproduction in Australia and is being progressed at NZ Steel

This will become the substrate of next generation of COLORBOND steelproducts which will be released in late 2013

Progress is being made on combating unfair trade by internationalsteelmakers (anti-dumping & countervailing actions)

Get lean, fit, and hungry

Ongoing cost reductions in CIPA through feed mix changes, leanmanufacturing initiatives, and manning optimisation

Continue to improve performance of BCDA through network and processoptimisation initiatives

Cost savings in NZS through utilisation of lower cost raw materials,maintenance spend optimisation, and ongoing productivity improvements

Optimise value chain

During 2H CY2014 we expect to achieve at least a 2.7Mtpa iron sands

export run rate Utilisation of NZiron sands in PK blast furnace to lower the total feed cost

Maximising by-product revenue streams through Vanadium sales growth

Pacific Islands businesses selling broader suite of BSL products andsolutions (e.g. PEBs)

Broadenview to create growth Deep pipelineof product development initiatives to unlock new market

opportunities for BANZ

Investigating non-traditional areas of business activity

Snapshot of BANZ strategic initiatives


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Coated & Industrial Products Aust

Products & Markets


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Product categories and applications

Slab

Plate

Hot rolled coil

Cold rolled coil

Galvanised (includingGALVASPAN steel) and specialzinc finishes

Zinc/aluminium alloy-coatedZINCALUME steel

Painted (including pre-paintedCOLORBOND steel)

Steel manufacturing Hot rolled coil and plate

Manufacturing, building and constructionand mining

Infrastructure projects, mining equipment and structuralapplications

Building and construction, mining,automotive and transport, manufacturing

Mining equipment, racking, guard rails, building and constructionproducts, structural tubing, water pipelines, oil/gas pipelines andautomotive components

Automotive and transport, manufacturing Automotive, packaging (drums) and storage systems

Building and construction, manufacturing,automotive and transport

General manufacturing, automotive, structural sections forcommercial and industrial buildings and structural decking

Building and construction Commercial and industrial construction including roofing, walling,rain water goods and residential framing

Building and construction Residential, commercial and industrial construction includingroofing, walling, fencing, rain water goods, architectural panels,sheds and garages

Product Primary end use markets Applications


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1H FY2013 despatch mix

Domestic

Export

Six monthsended Dec-2012

1,248kt

903kt

345kt

Domestic

Export

HRC

Other

Painted

Metal Coated

CRCPlate


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Four fundamental drivers of profitability

CIPA Profitability

DomesticVolume / Mix

Domestic Demand

Market Share

Margins

Global Spread

Domestic ValueProposition


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Building ComponentManufacturers

(including Lysaght)

Steel Distribution(including BSD)

GeneralManufacturing

Market Segments

Residential

Non-Dwelling

Engineering

Manufacturing

Agriculture &

Mining

Automotive &Transport

Steelmaking & Coating

Domestic

Export

Pipe and TubeManufacturing

Market channels


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0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

Auto & transport

Agri & mining

Manufacturing

Engineering

Dwelling

Non-dwelling

(1) Normalised despatches exclude third party sourced products, in particular, long products.(2) Engineering includes infrastructure such as roads, power, rail, water, pipes, communications and some mining-linked use

000tonnes

2H FY08 1H FY09 2H FY09 1H FY10 2H FY10 1H FY11 2H FY11 1H FY12 2H FY12 1H FY13(No. 5 Blast

Furnace Reline)63%

13% (208kt)

15% (239kt)

9% (144kt)

14% (212kt)

13% (192kt)

14% (202kt)

9% (130kt)

29% (236kt)

28% (235kt)

13% (109kt)

11% (90kt)

11% (92kt)

8% (62kt)

13% (161kt)

13% (160kt)

13% (156kt)

8% (105kt)

14% (187kt)

11% (152kt)

14% (198kt)

10% (134kt)

Construction

65%66%

70%

64%

27% (436kt)

21% (344kt)

15% (243kt)

27% (389kt)

23% (341kt)

28% (349kt)

25% (312kt)

28% (391kt)

23% (320kt)

211% (133kt)

11% (123kt)

13% (157kt)

9% (102kt)

67%

29% (340kt)

27% (313kt)

13% (154kt)

10% (124kt)

14% (164kt)

9% (106kt)

67%

29% (344kt)

26% (308kt)

65% 64%

10% (119kt)

11% (128kt)

15% (174kt)

9% (106kt)

29% (346kt)

26% (301kt)

1,614kt 1,466kt 824kt 1,243kt 1,381kt 1,168kt 1,198kt 1,174kt 1,138kt 1,048kt

(264kt) (192kt) (140kt) (164kt) (166kt) (161kt) (160kt) (159kt) (148kt) (143kt)

1,368kt 1,274kt 684kt 1,079kt 1,215kt 1,007kt 1,038kt 1,015kt 990kt 905kt

FY20091,958kt

FY20112,045kt

FY20102,294kt

FY20122,005kt

GrossDespatchesless 1

NormalisedDespatches

12% (138kt)

12% (131kt)

15% (170kt)

9% (103kt)

28% (321kt)

24% (274kt)

65%

8% (89kt)

11% (118kt)

15% (158kt)

9% (94kt)

30% (311kt)

27% (278kt)

Australian external despatch volumes


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Quarterly number of Australian residential construction starts (total new houses) to December 2012 1

Source: Australian Bureau of Statistics. Series ID: 8752.0 Building Activity, Australia. Table 33: Number of Dwelling Unit Commencements by Sector, Australia.

(1) Based on total number of dwelling units total houses, on seasonally adjusted basis. Excludes multi-dwelling commencements.House definition: A detached building primarily used for long term residential purposes consisting of one dwelling unit. Includes detached residences associated with a non-residential building, and kit and transportable homesDwelling: A dwelling unit is a self-contained suite of rooms, including cooking and bathing facilities and intended for long-term residential use. Units (whether self-contained or not) within buildings offering institutional care, such ashospitals, or temporary accommodation such as motels, hostels and holiday apartments, are not defined as dwelling units. The value of units of this type is included in non-residential building.

(Number per quarter)

Jun99

Jun00

Jun01

Jun02

Jun03

Jun04

Jun05

Jun06

Jun07

Jun08

Jun09

Jun10

Jun11

Jun12

Jun97

Jun93

Jun98

Jun96

Jun94

Jun87

Jun92

35,000

30,000

25,000

20,000

15,000

10,000

40,000

Jun85

Jun91

Jun90

Jun89

Jun88

Jun86

Jun95

Australian residential construction starts slowly improving


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$0

$100

$200

$300

$400

$500$600

$700

$800

Jan-03Jan-02Jan-01Jan-00 Jan-13Jan-12Jan-11Jan-10Jan-09Jan-08Jan-07Jan-06Jan-05Jan-04

East Asia HRC Price (US$/t) and Indicative Steelmaker HRC Spread (A$/t)Spread: SBB East Asia HRC price less cost of 1.5t iron ore fines and 0.71t hard coking coal

Source: SBB, CRU, Platts, TSI, Reserve Bank of Australia, BlueScope Steel calculations

Notes on calculation: Indicative steelmaker HRC spread representation based on simple input blend of 1.5t iron ore fines and 0.71t hard coking coal per output tonne of steel. Chart is not a specific representation of BSL realised export HRC spread (eg does not account for iron

ore blends, realised steel prices etc), but rather is shown primarily to demonstrate movements from period to period arising from the prices / currency involved. Indicative spread with pricing lags includes three month HRC price lag and two month rawmaterial prices lags

Indicative iron ore pricing: 62% Fe iron ore fines price assumed. Industry annual benchmark prices up to March 2010. Quarterly index average prices lagged by one quarter from April 2010 to March 2011; 50/50 monthly/quarterly index average from April2011 to December 2012. Monthly thereafter. FOB estimate deducts Baltic cape index freight cost from CFR China price.

Indicative hard coking coal pricing: low-vol, FOB. Industry annual benchmark prices up to March 2010; quarterly prices from April 2010 to March 2011; 50/50 monthly/quarterly pricing thereafter.

FY2010 FY2011 FY2012 1H FY12 2H FY12 1H FY13

Indicative steelmaker HRC spread (US$/t) 365 271 276 260 291 273

Indicative steelmaker HRC spread (A$/t) 414 275 267 253 282 263

Indicative spread with pricing lags (A$/t) 398 290 261 249 273 287

A$ / US$ FX 0.88 0.99 1.03 1.03 1.03 1.04

Spread is a major determinant of CIPA profitability

Indicative SteelmakerSpread (A$/t)

SBB East Asia HRC (US$/t)

Indicative spread withpric ing lags (A$/t)


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Category Summary

Hot Rolled Coil

Plate

Cold Rolled Coil

Limitedproductdifferentiation

Ingredient products, typically substantially transformed into finalgoods.

BSL offer principally differentiated by service offer, supply reliabilityand product quality

Import parity pricing (IPP)

Aluminium Zinc Coated(Next Generation

ZINCALUME steel)

Galvanised coated

Increasedproduct

differentiation

Make use of sophisticated coating technologies, important to product

durability in end applications

BSLs products principally differentiated by product quality andreliability, reputation (brand), service offer

BSL investing in the introduction of unique product coatingtechnologies that further improve differentiation

IPP influences pricing

COLORBOND SteelMost

differentiated

High quality painted products designed for Australian environment tomaximise durability

BSLs products differentiated by strong consumer brand preference,

product warranties, product reputation, ubiquity and supply offercomplexity.

Intermaterial pricing most influential

Better profitability in coated and painted products


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Progress on challenging unfair trade and dumping

Process Current Duties

Hot Rolled Coil(Anti-Dumping)

Preliminary Affi rmative Determination (PAD) issued Oct 2012

Final recommendation Dec 2012

Trade Measures Review initiated in Feb 2013 and announced in Apr2013, has resulted in reinvestigation by Customs for Ministerssign-off by July 2013 (deals with four matters: basis of AscertainedExport Price, Hyundai dumping margin, Auto industry dumping duties,HR P&O other than Japan)

Interim Dumping Duties (IDD) rates:

Japan 0- 7.5% Korea 2.6 - 11.8%

Malaysia 15.4%

Taiwan 2.6-8.2%

Galvanised steel &aluminium / zinc (AlZn)

coated steel(Anti-Dumping)

PAD issued Feb 2013

Minister decision due Jul 2013

Galv PAD rates: China 6.8-60.6%;Korea 0-17.6%; Taiwan 0-12.7%

AlZn PAD rates: China 4.9-20.4%;Korea 0-7.7%

Galvanised& AlZn coated steel(Countervailing China)

PAD issued May 2013

Ministers decision due July 2013

Galv PAD rates: 0-24%

AlZn PAD rates: 0-21%(duties are not cumulative on top ofantidumping duties, no doublecounting)

Plate

(Anti-Dumping &Countervailing)

Statement of Essential Facts due June 2013 Await ing f indings


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Production of next generation ZINCALUME steel with Activate technology commenced in 2H FY2013following development and testing over a number of years

Customers will benefit from: Improved product lifespan and longer warranties

Reduced environmental footprint due to reduced coating metals and increased lifespan

BlueScope will benefit from:Sales into new areas and applications including perforated construction products

An exclusive offering of leading technology for roofing, walling and rainwater applications; patent protection for BSL andNSSMC

Market familiarisation program very positive response from construction industry professionals

Will become the substrate of next generation of COLORBOND steel products which will be released late 2013

Next Generation ZINCALUME: Reinforcing status as market leader


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The introduction ofmagnesiuminto the aluminium-zinc alloy coating improves galvanic protection byactivating the aluminium to providemore effective corrosion resistance

Outcome - Improved performance with less total coating mass (125 g/m2)

Next generation

ZINCALUME

steelwith Activate technology

AZ150AM125

Original

ZINCALUME steel

Doing more with less

Next Generation ZINCALUME: Activate technology


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Multi-channel marketing program well advanced

Targets four key audience groups: Architects,Builders, Developers and all construction

professionals

Direct customers are engaged and very positivetowards the opportunities this new productpresents

Architects actively specifying the new product forprojects in pipeline

Low risk implementation: Better performing product

Recognised in Australian Standards for roofing andwalling as highest corrosion-resistant productavailable

Longer warranty

Readily available with no change to fixing techniques

Next Generation ZINCALUME: market response positive


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Coated & Industrial Products Aust

Manufacturing


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BlueScopes Illawarra businesses

Research, Administration & Original Steelworks Site

Iron & Steelmaking

Flat Products(HRC & plate)Recycling Area


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Overview of flat products process in Australia: raw materials to HRC

COKE OVEN

Iron Ore

Coal

Coke

SINTERING

BLAST FURNACE

Slag

Molten pig iron

Sintered ore

Graded LiquidSteel

REFINING

STAND

Slab

CONTINUOUS CASTING

HOT STRIP MILL

Hot Rolled Coils

REHEAT

FURNACE

CONVERTER

(BOS)


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Overview of flat products process in Australia: pickling and cold rolling

Hot rolled coil isuncoiled

Scale removal (pickling) usinghydrochloric acid

Thickness reduction via cold rolling throughfive stands

Recoiling usingcarousel reel

ToMetal Coating orPack & Despatch

Coupled Pickle Cold Mil l (CPCM)


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Overview of flat products process in Australia: metal coating

Metallic Coating Line (MCL)


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Overview of flat products process in Australia: painting

Primer Ovens Primer Coater

Main Oven Main Coater

Chemical rinsing, cleaning & pre-treatment

Inspect & Test

Painted coil is recoiledCoated Coil from

Metal Coating Lines

Continuous Paint Line (CPL)


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Western Port Coated Works(Hastings, Victoria, Australia)

Springhi ll Coated Works(Wollongong, NSW, Australia)

Port Kembla Steelworks (Wollongong, New South Wales, Australia)

Annual capacities

Note:

Numbers reflect mill capacity in kt per annum

(1) There is an additional 215ktpa of combined capacity at Western Sydney and Acacia Ridge (Qld) paint lines; (2) idling of MCL 5 has reduced available capacity by around 230Ktpa

Slab Casters2,600

Plate Mill

450

Metal Coating Lines

8302

Cold Mill1,000

Pickle Line1,100

Paint Lines330

Pickled HRC

CRC

Painted Strip

Metal Coated

Strip

Coupled Pickled Cold Mill990

Metal Coating Lines825

Paint Lines2001

CRC

Metal CoatedStrip

Painted Strip

#5 Blast Furnace2,600

Slab

Hot Strip Mill2,900

Plate

HRC

Majorchangesover the last twoyears tomatchcapacity todemandandto


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Port Kembla

Shipping berths Reduced manning and loading outbound coal at bulk berth; loading outbound coke

on No1 Products Berth

Cokemaking Closed one battery; now operating 3 batteries (closed No. 4) and 21/22 Blowers

Sinter Plant Reduced production rate

Blast Furnaces Shut down No. 6; operating No. 5

BOS Operating two vessels (closed No. 3)

Steel Treatment Reduced manning

Slab Casting Closed No. 1, operating two strands

Hot Strip Mill Reduced shift operation

Skin Mill Reduced shift operation

Plate Mill Reduced manning

Major changes over the last two years to match capacity to demand and toimprove efficiencies

Majorchangesover the last twoyears tomatchcapacity todemandandto


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Springhill

Cold Rolling Reduced load (no export)

Metal coating MCL1 converted and capable to produce Next Generation ZINCALUME steel;MCL3 in process of conversion

Painting Reduced shift operation

Western Port

Hot Strip Mill Closed

Cold Rolling Reduced shift operation

Metal coating Mothballed MCL5 and reduced shifts MCL6; MCL4 converted and commissioning toproduce Next Generation ZINCALUME steel

Painting

Reduced shift operation

Major changes over the last two years to match capacity to demand and toimprove efficiencies (cont.)


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Examples of business improvement initiatives: cost saving initiatives

1. Hot rolled coil transported to Western Port by rail a cheaper and more reliable option than marinetransport

2. Iron sands mix (from NZ Steel) used as feed material to the sinter plant displacing external iron orepurchases

3. Use of our own burnt lime in the sinter plant (replacing purchases)

4. Reclamation of iron ore from the storage and blending yards previously viewed as being too hard

5. More extensive use of recycled ferrous material through the iron and steelmaking process

6. Sharing maintenance spares between departments previously, siloed behaviour prohibited this approach

7. Improving scrap management ways to get higher value through different channels and preventing aged

stock rather than economic disposal of aged stock


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Examples of business improvement initiatives: market facing initiatives

1. Sale of coke to export. We have deliberately configured our plant to enable export coke and driveadditional revenue for the business. Focus on ensuring the appropriate quality and changing our

process as a result to maximise returns

2. Development of a new Low Glare DECKFORM Steel product that has the potential todisplace 5,000tonnes or more of imports. Collaborative work between R&D, manufacturing, sales and supply chain

3. Multi-slit galvanised coils at Western Port. Creating an additional 300 tonnes per week of product salesand displacing imports. Teams from across Western Port, Logistics and Sales working together to meetthe customers expectations.

4. Western Sydney Service Centre producing 2 tonne horizontally packed coils and dispatching themdirectly to customers (to save transportation and reprocessing costs at Chullora)

5. Victorian Processing Optimisation long term cross business view of Processing asset requirementsinstead of internal only view


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More cost effective iron ore blend

NZ Iron Sands Recycled Materials

Yandi Fines

SINTER

Fine iron ores and recycled materials areblended and fluxed in Sinter Machine to

produceSinter

Mt Newman Lump

Mt Newman Fines

Iron inputs into Sinter Machine Iron inputs into Blast Furnace

Sinter and lump iron ore are added to

the Blast Furnace

LUMP IRON ORE


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Supply and pricing of iron ore and metallurgical coal to PKSW

Supplier Term Approximate Volume (p/a) Pricing Basis

BHP Billiton10 years from

1 July 2009Up to 4.18Mt1 lump & fines

Linked to average monthly index in the month of

shipment

New Zealand Steel Short term contracts 0.15Mt iron sands Linked to average index 15 days prior to shipment

Note: 1) reflects agreed reduced annual volumes post closure of No.6 Blast Furnace at Port Kembla

Supplier TermProduct /

Approximate Volume (p/a)Pricing Basis

BHP Billiton(Illawarra Coal)

30 years from1 July 2002

Hard coking coal;minimum volume linked toblast furnace requirements

Market based pricing linked to BHP Billiton sales tocontract customers

Peabody Energy Until 31 March 2014 PCI Coal; 300-400Kt1 Agreed quarterly pricing

Various suppliers forproduction of exportcoke

Short term contracts Coking coal as required Agreed monthly & quarterly pricing

Ironore

Metallurgicalcoal

I f i


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Impact of restructuring

4,2244,339

5,272

FY13FY12FY11

Note:

1) CIPA employee numbers include: CIPA Manufacturing, CIPA Sales & Marketing and CIPA Supply Chain & Processing

2) FY2013 is based on April 2013 position

2

CIPA1 employee numbers

ThemonthlySales&OperationPlanning(S&OP)cycleprovidesoperationaland


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The monthly Sales & Operation Planning (S&OP) cycle provides operational andfinancial integration across CIPA

DemandReview

Supply &LogisticsReviews

ManagementReview

ProductReview

C it t i th Ill


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Community engagement in the Illawarra

High-profile community partnership program established

in the Illawarra with WIN Network (headquartered in theIllawarra) the largest regional TV network in Australia

Policy of supporting health, safety, environment, diversity,youth and education

Funding decisions made against established criteria to

promote worthwhile community programs/projects Independently managed by a local not-for-profit, along

with representatives from BlueScope and WIN

~$500,000 in sponsorships and donations supporting 30+community organisations

Urban Grown Community farm

Sustainable farming jobs for disadvantaged

youth

Life Education Australia - Mobile school education facility

Telephone counsellor

recruitment program

Citizenshipprogram for

disabled

and able

bodied

young

athletes

BlueScope Youth Orchestra

Foundation sponsor (27 years)

Surf Lifesaving

New Jet Ski

Southern Stars

2000 strong school spectacular

Bl S i t l f ffi i &GHG


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BlueScope environmental performance resource efficiency & GHG measures

The reduction in operations at Port Kembla Steelworks, the closureof the WesternPort Hot StripMill and otherassociated changes in downstream operations have contributed to significant changes in BlueScopes groupenvironmental footprint

BlueScopes freshwater consumptionhas fallen significantly, with an overallreduction in use of 2,677 ML (~14%)

We have managed these changes suchthat the percentage of recycled water

contributing to the total water demandhas continued to increase, reaching anew record level of 41.5% in FY2012

The changes have contributed the majority of a 40.1 PJ (26%) energyreduction and a corresponding 4.45 million tonne (28%) reduction in CO2emissions in FY2012

FY2013 data will reflect the first full year of operations at this new level, andfurther Energy and GHG emissions reductions will be reflected in these

While the Energy and GHG emissions intensities have deteriorated as aresult of the changes in economies of scale, BlueScope Steel remainsfocussed on continual improvement off the new production baseline


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Page 43

Building Components &

Distribution Australia

Overviewofsegment


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Page 44

The Building Components & Distribution Australia (BCDA) segment, effective from FY2013, bringstogether BlueScope Steels LYSAGHT and Distribution businesses

The Australian solutions businesses (Buildings, Water, Ranbuild, Highline etc) are now part of thenew Global Building Solutions segment

Sheet & Coil Processing is included in the Coated & Industrial Products Australia segment

Overview of segment

Plate

Tube

Structural steel

Merchant bar

Reinforcing steels

Rural products

Pipes, valves & fittings

Specialty steels

Processing services

Roofing

Walling

Rainwater goods

Fencing

Home improvements

Structural products

Mobile roll forming

Hot rolled coil

Cold rolled strip

Metallic coated coil Painted coil

Plate

Stainless steel

Aluminium

Processing services

Sheet Metal Supplies& Impact Steel

Steel & Tube DistributionLYSAGHT

R l fBCDAi BANZ


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Page 45

Aim for positivecash flows and profits, achievementof hurdle rates of return andpull through tonnes tobenefit the integrated chain

To achieve this, BCDA must:

Be a low cost steel channel to market

Ensure ongoing access to competitively priced steelproducts (vs. imports and spot markets)

Effectivelymanage inventories and the supply chain Be a market leading processor/ value adder

Deliver consistent service against customer expectations

Role of BCDA in BANZ

BCDALocations


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Page 46

LYSAGHT

Distribution

Perth

Brisbane

Sydney

Melbourne

Adelaide

11 20

11 10

414

1 1

1 92 2

3

Sites 91Active Customers >20,000

33

58

Darwin

Legend

Hobart

2

BCDA Locations

BCDAsalesbymarketsegment (FY2012)


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Page 47

BCDA sales by market segment (FY2012)

17%

8%

26%

33%

11%

6%Construction - Engineering

Construction - Dwelling

Construction - Non Dwelling

Auto & Transport

Agriculture & Mining

Manufacturing

Construction segment represents 65% of total domestic despatches


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Distributionbusinessplan&focusareas


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Page 49

Get lean, fit &hungry

Productivityenhancement

Facility utilisation

Scrap reduction

Target winningmarkets

Customer & Salesexcellence

Steel efficiencyreview

One Best Way

Optimise valuechain

Reduct ion of waste

Productrationalisation

SLOB reduction

Broaden view tocreate growth

Branch excellence

Customer focussedtechnology &

innovation

Distribution business plan & focus areas

TRIPLE A CULTURE

Distribution: Vision


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Page 50

Distribution: Vision

to deliver sustainable, profitable growth by positioningBlueScope Distribution as the preferred business partner to

customers throughout the value chain

Distribution: Coreproducts


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Page 51

Distribution: Core products

Steel & Tube Sheet & CoilPlate Hot Rolled

Hot Rolled Structural ColdRolled

Tube Galvanised

Merchant Bar ZINCALUME steel

Pipe, Valves& Fittings TrueCore steel

Reinforcing & Rural

Aluminium

COLORBOND steel

Distribution: Processingsolutions


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Page 52

Value added processingservices provided include:

Distribution: Processing solutions

Plate profiling

Drilling

Cutting & Sawing

Routing

Slitting

Shearing

Recoiling

Distribution: Restructuringprogram


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Page 53

During FY2012 Distribution implemented a comprehensive restructuring program

Focus was on lowering costs and better aligning BSD to customer demand

Continue to strive for Zero Harm through engaged workforce participation

Restructure program has achieved significant cost reductions, along with productivity improvements

Additional business improvement initiatives have been indentified focused on:

Customer and Sales Excellence

People and Branch Excellence

Productivity Enhancement

Business is aiming to increase volume and has targeted initiatives underway, however market demandcontinues to remain weak

Distribution: Restructuring program

LYSAGHT: Overview


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Page 54

LYSAGHT: Overview

Over 30 locations and close to 900 employees around Australia, providing a unique service capabilityunsurpassed by our competitors

Manufactures and markets an extensive range of roll formed steel products for the building industrywith specific offerings into the residential, commercial, structural, home improvement, distributor andshed segments

Trusted steel supplier with over 90 years of operations in Australia, 100% Australian steel supply,unmatched technical expertise and quality service

Works in conjunction with other parts of BlueScope to ensure a consistent and complete solutionoutcome for our customers

Leverages the brand equity in BlueScope products such as COLORBOND steel, ZINCALUME

steel and GALVASPAN steel and incorporates the warranties of these products to provide peace ofmind for our customers

LYSAGHTbusinessplan&focusareas


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Page 55


Deliver on customerpromise

One best way

Operationalefficiency

Optimiseproduction footprint


Reconnect withcustomer base

Deepenunderstanding of

market

LYSAGHT brandeffective and

relevant

National approachto key market

segments

Optimise valuechain

Differentiatedproducts and

services

Achieve customerservice promise

Upgrade serviceoffers and profiles


Expand footprintinto emerging

markets

Grow high valuesegments

Partner wi th keycustomers

LYSAGHT business plan & focus areas

TRIPLE A CULTURE

LYSAGHT: Vision


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Page 56

Service

TechnicalExpertiseTechnicalExpertise

Heritage

Australian

Quality

LYSAGHT

The trustedexperience

in steel

Klip-lok

Custom Orb Dune TM

Half Round Gutter

Custom Blue Orb Heritage Red TM

LYSAGHT: Vision

LYSAGHT: Channel to Residential and Non-Residential Market Segments


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Page 57

LYSAGHT: Channel to Residential and Non Residential Market Segments

LYSAGHT

Roll formed Product

Reseller Network

Construction Industry

Roofing Contractors

Building Contractors

Fencing Contractors Shed Manufacturers

DIY

Residential Building

CommercialBuilding

Sheds

Structural Segment

HomeImprovements inc

Fencing

MARKET SUB-SEGMENTS

LYSAGHT: Coreproductsandbrands


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Page 58

LYSAGHT: Core products and brands

Roofing for the residential and commercial segments in profiles such asCUSTOM ORB, TRIMDECK and KLIP-LOK 406

A walling range that gives flexibility to suit any architectural style or environmentwith brands such as MINI ORB

Fencing profiles such as NEETASCREEN, SPANSCREEN andSMARTASCREEN

Structural products such as battens, purlins and structural decking in brands suchas TOPSPAN, SUPAPURLIN and BONDEK

Full range of rainwater products including gutters, fascia and downpipes

Combinations of the above products also support Ranbuild and other shedcustomers in the manufacture of domestic, light commercial and industrial sheds

Our LYSGHT Living Collection range of verandahs, patios, carports and decks

are supported by products such as FIRMLOK and FLATDEK

NEETASCREEN Domain TM

CUSTOM ORB Night Sky TM

SUPAPURLIN

LYSAGHT: Recent Innovations


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Page 59

LYSAGHT: Recent Innovations

LYSAGHT has a strong pipeline of product development with expectedrange enhancements across the segments we service.

Recent and imminent releases include: Patented four panel fence structure using less posts for better aesthetics and

quicker installation

New roofing profiles and systems

LYSAGHT DIY Carport

LYSAGHT Living Collection range of custom designed Patios, Verandahs, Decksand Carports


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Page 60

New Zealand &Pacific Islands

NZ&PI assets, products & markets:O i fN Z l d&P ifi I l d it


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Page 61

Overview of New Zealand & Pacific Island sites

GlenbrookIntegratedSteel Mill

WaikatoNorth Head Mine

Taharoa Mine

NZ&PI assets, products & markets:Glenbrookoverview


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Page 62

Rolling Mills

Coating & Finishing

Glenbrook overview

Iron & Steel Making

Raw Material Yards

NZ&PI assets, products & markets:Ann al capacities


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Page 63

Glenbrook Steelworks

Note:

Numbers reflect mill capacity in kilotonnes

Slab casters670

Coupled pickled cold mill380

Metal coating lines230

Paint line65

Cold rolledcoil

Metal coatedstrip

Painted str ip

Steelmaking670

Slab

Hot strip mill750

Hot rolled coil

Hollow sections mi ll45

Heavy Plate mil l25

Plate

Pipe & tube

Annual capacities

Light Plate mill90

NZ&PI assets, products & markets:Unique process to directly reduce iron sands


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Page 64

Unique process to directly reduce iron sands

NZ&PI assets, products & markets:Steelmakingrawmaterials


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Page 65

Iron Sand Concentrate (Waikato North Head Mine)

Iron sand mined and concentrated on site 58.5% Fe

Sufficient resource for long term steel making operations

Concentrate is slurry pumped 18km underground toGlenbrook

Low cost captive iron units

High value vanadium by-products captured through ironmaking process

Thermal Coal

Multi-source domestic and imported coal

Approximately 0.8Mt transported by rail to Glenbrook each

year

Lime (McDonalds Lime - 28% NZS owned)

34Ktpa lime (oxide and chip) quarried and processed atOtorohanga

Railed and trucked to Glenbrook

Steelmaking raw materials

NZ&PI assets, products & markets :Key product categories and applications


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Page 66

Key product categories and applications

Hollow sections

Plate

Hot rolled coil

Cold rolled coil

Galvanised (includingGALVSTEEL

)

Zinc/aluminium alloy-coatedZINCALUME s teelAXXIS STEEL

Painted (including pre-paintedCOLORSTEEL )

Agriculture, construction andmanufacturing

Agricultural applications, including machinery and dairy systems.Building scaffolding

Manufacturing, building and construction

and mining

Infrastructure projects, mining equipment and structural

applications including welded structural beams

Building and construction, mining,automotive and transport, manufacturing

Racking, guard rails, building and construction products,structural tubing and water pipelines,

Agriculture and petroleum Packaging (drums) and storage systems

Building and construction andmanufacturing,

General manufacturing, structural sections for commercial andindustrial buildings, structural decking and residential framing

Building and construction Commercial and industrial construction including roofing,cladding, and rain water goods

Residential framing solution

Building and construction Residential, commercial and industrial construction including

roofing, cladding, fencing, rain water goods, architectural panels,sheds and garages

Product Primary end use markets Applications

Steltech (Welded Beams) Building and construction Multi storey applications, industrial and commercial construction,bridges

NZ&PI assets, products & markets:NZmarketataglance


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Page 67

Council/GovtAsset owner

End User

Building Owner

Installer/Developer

Reseller Distributor

Builder/Developer

Manufacturers

Manufacturers

Installers

Distributors

Building & Construction

Manufacturing (Agriculture Included)

Infrastructure

Distributors

Rollformers &Distributors

NZ market at a glance

53%

31%

16%

Infrastructure

Manufacturing /Agriculture

Building &Construction

End use segments (NZS domestic despatches)

Pacific Steel(long)

Flat Imports

New ZealandSteel (flat)

120

56

Long Imports

29

250

Total market size wi thin New Zealand CY2012 (Kt)

NZ Steel Value Stream

NZ&PI assets, products & markets:1HFY2013despatchmix


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Page 68

1H FY2013 despatch mix

Domestic

Export


261kt

125kt

136kt

Domestic

Export

HRC

Other

Painted

Metal Coated

CRC

Plate

Main export markets:

Australia North America

Pacific Islands

NZ&PI assets, products & markets:Better profitability in coated and painted products


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Page 69

Category Summary

Hot Rolled Coil

Plate

Cold Rolled Coil

Limitedproduct

differentiation

Ingredient products, typically substantially transformed into finalgoods

Import parity pricing (IPP). NZS offer principally differentiated byservice offer, supply reliability and product quality withcorresponding price premium

Aluminium Zinc coated

Galvanised coated

Increasedproduct

differentiation

Make use of sophisticated coating technologies, important to productdurability in end applications

NZSs products principally differentiated by product diversity, productquality and reliability, reputation (brand), and service offer with small

order quantities IPP influences pricing

COLORSTEEL

prepainted steel

Most

differentiated

High quality water based painted products designed for the NewZealand environment with superior durability

NZSs products differentiated by strong consumer brand preference,

product warranties, product reputation and supply offer complexity

Intermaterial pricing most influential

Better profitability in coated and painted products

NZ&PI assets, products & markets:Taharoaminingandexpansion2012


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Page 70

Taharoa mining and expansion 2012

Mining land and mineral title owned by a Maori trust

Mining free-flowing sands via dredge and floatingconcentration plant

Typical magnetic content of mined sand 40% to 50%

Fresh water resources are as important as the ironsand resources. Very low environmental impact

Current mining & concentration capacity is 1.5 Mtpa;shipping capacity ~1.35 Mtpa

Mining and Processing

Taharoa Shipping

Taharoa loading facility is via a slurry pipe line, 3kms

offshore Use specialised vessel MV Taharoa Destiny

(replaced 22 year old vessel). In service since May2012

Increased loading capacity by 40% Enhanced safety, speed, and product loading

NZ&PI assets, products & markets:WaikatoNorthHeaddifferent miningmethodologygivendifferent sandstructure


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Page 71

Waikato North Head different mining methodology given different sand structure

Consolidated rather than free flowing sand. Dry mining method via bucket wheel excavator

Deposit is very different to the Taharoa deposit

Lower valuable mineral content

But higher Fe product

Average magnetic content of between 20% and 40% through the depth of the resource but highly variablebetween lithologies

Very low environmental impact

Mine Face

Settling Ponds

Tailings planted inForest

Concentrate Stock

Concentration Plant

NZ&PI assets, products & markets :Ironsandsshipmentmodel


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Page 72

Iron sands shipment model

Taharoa iron sand legacy model Dedicated slurry vessels

40 to 50 day cycle time

System constrained by vessel

Port expansion to accept 175,000 DWT

Waikato North Head iron sand model

Commenced 2012

Pumped to Glenbrook & road to Portof Auckland

Charter 40,000 DWT vessels

Combined coal and irons and logisticswhen possible

Transhipment model Commenced 2012

14 day cycle time

Greatly increases slurryvessel utilisation

FY2013f

1.7

1.4

0.3

FY2009

1.2

1.0

0.2

FY2010

0.8

0.8

FY2011

0.9

0.9

0.7

0.7

FY2008

0.9

0.9

FY2012

Taharoa

Waikato North Head

Iron sands volume growth driven by:

New larger vessel Taharoa Destiny

Increased capacity

Faster turn around

Ability to ship export out of Waikato NorthHead (WNH), with agreement of NZgovernment

Ability to trans-ship via Port Kembla Range of shipping solutions opens up new

markets and customers

Iron sands exports (Mt)

NZ&PI assets, products & markets:Usesof ironsands


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Page 73

Iron sand in sinter operations: Has been used at 20% blend ratios No affect on sinter quality at blend

ratios < 5% blend

Iron sand in pellet operations: Has been used at > 60% blend ratios 100% pellets are possible

Uses of iron sands

Iron sands are common geologically, but uncommon on the seaborne trade

Demand for low cost Fe units is increasing

An increases in the number of pellet plants in China is also driving demand

Iron sand

Iron ore

Lump6mm 31 mm

Pellets

Sinter Blast Furnace

Fines1mm 6 mm

Concentrate< 75m

Taharoa180m

WNH150m

Examples of business improvement initiatives: cost saving initiatives


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Page 74

Recycling of previously dumped par processed raw materials

Use of alternative imported coal sources

Recycling of previously by-products in steelmaking

Redesign of maintenance team with significant role reductions

6% reduction in FTE across steel assets with no asset closures

Changed contractor arrangements for major capital shut work resulting in lower cost and reduced time tocomplete

10% increased in iron making capability through a range of initiatives in the kilns

Extended WNH and Taharoa operations to 24/7 to allow iron sand market expansion and growth

Change of roster arrangements in rolling mills, pipe mill to provide flexibility and lower cost

20% improvement in WNH iron sand production through de-bottlenecking improvement team activity

Examples of business improvement initiatives: market facing initiatives


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Page 75

Export sales of iron sands from Waikato North Head

Dynamic costing models developed to allow assess best option of HRC sales vs. iron sands sales

Introduction of new COLORSTEEL Maxx product range, run rate of an additional 1,000t of sales p.a.

New cattle rail products introduced with potential for 1,500 tonnes of sales p.a. replacing imported product

Differentiation of aggregate products to allow for increased value added product sales

NZ&PI business plan & focus areas


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Page 76


Back 2 Basics

Leading throughour people

Productivity


Deliveryperformance

Quality products &services

Product & margin

Optimise valuechain

Supply Chainefficiency

Energymanagement

Flexibi lity to meetthe market


Market Innovation

Product Innovation

Iron SandsExpansion

Talent Pipeline

BusinessDevelopment

TRIPLE A CULTURE

NZ&PI business plan & focus areas:Pacific Lysaght Growth continues as we look to broaden product range and territories


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Page 77

Pacific Lysaght Growth continues as we look to broaden product range and territories

New Caledonia

New facility in North opened in Feb2013 performing ahead of plan

New territory exploration for JV Tahiti

PEB solution for housing in North

Nexus Building Solution

Vanuatu

Continue to build market for lowcost steel intensive housing.

BlueScope Acier Nord, New Caledonia

Fiji

New territory exploration for JVSolomon Islands

Agricultural sheds

Light steel framing solutions fordistribution through the pacific

NZ&PI business plan & focus areas:Productandsystemsinnovationsandvaluechainmanagement


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Page 78

Product and systems innovations and value chain management

DevelopConcept

No. of Projects 12 8 3 3 4

ProductProving

ManufacturingProving Market

Launch

COLORSTEEL

Bounce

Box Section

Systems

Vintage PatinaWarmframe TM

Markets: Residential construction approvals trending higher Christchurch rebuildunderway


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Page 79

Monthly number of New Zealand residential construction approvals1

(Number per month)

Source: Statistics New Zealand. Series ID: SSC11AS.

(1) Based on total number of new dwellings consented on an unadjusted basis. Data to March 2013Data includes apartments. Figures for new apartments are compiled from consents that have 10 or more attached newdwellings. Consent definition: A building consent is the formal approval issued by a Building Consent Authority (BCA)to ensure certain works meet the requirements of the Building Act 2004, Building Regulations and New ZealandBuilding Code

underway

Mar02

Mar03

Mar04

Mar05

Mar06

Mar10

Mar12

Mar11

500

Mar08

Mar07

3,500

3,000

2,500

2,000

1,500

1,000

0Mar09

4,000

Mar13


80/124


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Page 81

Summary & Questions

Summary


82/124

Page 82

Market factors still seemingly at bottom of the cycle (construction activity, A$ and

spreads); we are acting on matters in our control Made the necessary changes to business mix and strategy

Working smarter lean, fit and hungry culture

Targeting winning markets and new products; innovation

Positioned to benefit as market conditions recover


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Page 83

Appendices


84/124

Page 84

Appendix:Financials for BANZ

Segments

Segmental financials


85/124

Page 85

CIPA BCDA NZS Interseg Total CIPA BCDA NZS Interseg Total

Steel desp atches (kt) 1,248 364 261 3,544 758 580

Revenue 1,668 720 319 (338) 2,369 4,280 1,486 755 (710) 5,811

EBITDA (underlying) 79 2 27 (4) 104 (151) (27) 113 3 (62)

EBIT (underlying ) (6) (7) 2 (3) (14) (327) (46) 69 3 (302)

EBIT (reported) 7 (10) 2 (4) (5) (726) (227) 65 3 (885)

Capi tal & in vestment expend itu re 56 3 19 - 78 110 6 42 (1) 157

Net op erating assets (pre-tax) 1,973 324 339 (12) 2,623 2,003 329 296 (9) 2,620

1H FY2013 FY2012

CIPA: breakdown of 1H FY2013 revenue


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Page 86

Domestic

Export


1,248kt

903kt

345kt

Domestic

Export

Other

Painted

Metal Coated

CRC

Plate

HRC

Steel despatch volume 1H FY2013CIPA revenue 1H FY2013

Steel business

Non-steelbusiness


$1,668m

Export prices aregenerally sensitive to

regional steel prices

Most domestic non-painted

steel prices are largely

sensitive to regional steel

prices, though timing and

degree of relationship canvary

Export coke

Cold ferrous

By-products

CIPA: breakdown of 1H FY2013 underlying cost components


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Page 87

Non-steel businesscosts

Raw materials

Freight

Depreciation

1H FY2013

Conversion &overhead

A$1,674mConversion & OverheadComponents (in order of value):

Direct labour

Repairs & maintenance

Sales & administration

Services & contractors

Utilities

Consumables

Other (includes $36m one-off workers compensationbenefit)

Non-steel business costsrelate to:

Export coke sales

Cold ferrous feed to Arrium(scrap pool)

By-products (eg. Tar, BTX,Sulphate)

Raw materials(in order o f value):

Iron ore Coal

Scrap

Fluxes and alloys

Paint

Zinc

Aluminium

Freight

(in order o f value): Domestic despatches

Export despatches

Internal (eg. Springhill &Western Port to ServiceCentres)

BCDA: volume and costs


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Page 88

Components of underlying costs in order of size

Steel feed / purchases

Labour

Freight

Facilities / leases

Depreciation

Other

Product mix 1H FY2013 (by volume)

Structural

Tube

Painted

Plate

Metal Coated

Merchant bar

Reinforcing

HRC

Other


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Key earnings drivers


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Page 90

Coated &IndustrialProducts

Australia

Selling prices

Material costs including iron ore,coal, fluxes, alloys,and coatingmaterials

Conversion costs

Foreign exchange(eg AUD/USD)

Despatch volumes

Domestic / export

and product mix

New Zealand& Pacif ic Steel

Products

BuildingComponents &

Distribution

Australia

Despatch volumes

Product andsegment mix

Margins

Foreign exchange

(eg AUD/USD)

Selling prices of steel

Material costs mainlycoal, fluxes, alloys, andcoating materials

We own our iron sands

resource, so just anextraction cost applies

Conversion costs

Foreign exchange

Despatch volumes

Domestic / export and

product mix Iron sands and

vanadium revenue


91/124

Page 91

Appendix:

CIPA Markets & Logistics

Logistics and supply chain


92/124

Page 92

Inbound and Outbound Shipping

Inbound iron ore (~ 4mtpa) and othersteel making raw materials

Exports BSLs steel products to marketsin Asia Pacific, Europe and North America

Perth

Adelaide

Sydney

Brisbane

Melbourne

National & Metropo litan RoadTransport

Road delivery to metro and regionalcustomers nationally

Leverage across multiple BSL businessunits

Road transport networks: over 1.5Mtpaannually

Western Port Works

Pt Kembla Works

InboundRaw materials

OutboundExport markets

National Logis tics Network

National rail network serving major cities

Network of warehouses / distribution centresin local markets to service customers

SteelLink: over 1.2Mtpa annually of BSLproduct

Hobart

Darwin

Cairns

Examples of product applications


93/124

Page 93


94/124

Page 94

Appendix:CIPA Manufacturing

BlueScope Australia and New Zealand History


95/124

Page 95

1915 BHP commenced steelmaking in Newcastle

1918 John Lysaght (Australia) founded

1925 BHP acquires Port Kembla Steelworks

1928 Australian Iron & Steel Limited (AIS) was formed to operatea steelworks at Port Kembla

1935 BHP acquiresAustralian Iron & Steel Limited (AIS)

1939 Lysaght Springhill plant opened and Commonwealth

Rolling Mills (CRM) plant established as partnershipbetween American Rolling Mills and John Lysaght

1966 First COLORBONDSteel Produced

1968 New Zealand Steel operations commenced at Glenbrookproducing GALVSTEEL

1970 Commissioning of iron and steelmakingat Glenbrook,pioneering the direct reduction process to utilise iron sandsfrom Waikato North Head

1971 BHPacquires 50% of John Lysaght

1972 WesternPort works opens; commenced exports of Taharoairon sands

1976 ZINCALUME steel was launched

1979 JohnLysaght becomes fully owned by BHP

1989 BHPacquires 71% of New Zealand Steel

2000 Long products division separated and listed on ASX as

OneSteel2002 BHP Steel listed on ASX

2003 Name changedto BlueScope Steel

2006 Exit tinplatingbusiness

2007 Smorgon Steel Distribution acquired

2008 Western Sydneyservice centre opens

2011 BlueScope Australia & New Zealand business unit formed.Closureof some manufacturing facilities at Port KemblaSteelworks and Western Port to reduce exposure to exportmarkets. Expanded coke exports from PK using freed-upcoke capacity

2012 Commenced exports of irons ands from Waikato NorthHead and expanded Taharoa exports

2013 Manning reductions at Western Port to respond to lowdomestic demand

Background: overview of main steel production processes


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Page 96

?

?

SteelScrap

ScrapLadle

Electric ArcFurnace

ContinuousCasting Machine

MoltenSteelLadle

Basic OxygenFurnace (converter)

MoltenIron

Torpedo Ladle

Blast Furnace

Hot rolled stripmill

Cold rolledstrip mill

Wide coil Narrow strip

Electr ical coi l Metal Coatedcoil

Cut lengths

PlateReversing mil l

Slab

SCRAP ROUTE

MOLTEN IRON

ROUTE

STEEL PRODUCTION FLAT PRODUCTSSEMIs

Painted co il Laminated coi l

H-section I-sectionT-section U-section Z-section L-section Rai l

I-sectionH-sectionRound Square Half Round Flat

Seamless tubemill

Wire rod Wiredrawing

Wire

Tubes Welded tube mill

Rod mill

Heavysection

mill

Bar/Sectionmill

Billet

Bloom

LONG PRODUCTS

Background: overview of main steel production processes


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Page 97

Run out tablecooling

Minimil l Thin-Slab Casting 1 to 3 Mt/a

300 to 400 m4-6 m/minute

50-60mm thickHolding furnace

Finisher

300-400 m

1-10mm thick

Coiler

20-40 metric ton coil

Integrated Conventional Slab Casting 3 to 5 Mt/a

500 to 800 m

200-300 mm thick


1-2m/minute

Gas cutter

Cooling

Reheat furnace

RougherCoil box Finisher

1-10mm thick

Coiler

500-800 m


Strip Casting 0.5 Mt/a

60 m15-150 m/minute

Scale ControlChamber


0.7 - 1.8 mm thick

60 m

Mill

Coiler


Cokemaking process


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Page 98

SULPHATEGAS

PROCESSING

COKE SCREEN

BLENDED COAL

COKE PLANT

TAR

BTX(Benzene)

COKE OVENSGASInterworksenergy (boilers,furnaces)

BREEZE(< 10 mm)

NUT(10 25 mm)

LUMP(25 80 mm)

TATA(20 50 mm)

Cokemaking: Pyrolysis of coking coal: coal heated to >1000C in absence of air Largely carbon plus some hydrogen, nitrogen, sulphur and

inorganic minerals 1.25t of coking coal generally produces 1 tonne of coke solids

Desirable physical properties of coke: Strong and large lumps Able to withstand the blast furnace environment without generating

fines Irregular shape, so that it doesnt pack tightly (permeability) Very porous (react with blast)

Desirable chemical properties: Low sulphur and phosphorus (steel quality) Low ash (less slag, less fuel, lower hot metal cost)

Cokemaking


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Page 99

Iron ore fines


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Page 100

Typically 58-63% Fe; South American exception at 66% Fe

Generally the cheapest, due to lower %Fe and higher gangue

Not suitable for direct charge to blast furnaces (too fine, gets blown out as dust) Requires agglomeration into larger solid forms such as sinter or pellet by:

Blending the fine ores to control chemistry & size

Then add fluxes: limestone (CaCO3), dolomite (MgO) & serpentine (SiO2; MgO)

Add fuels (coke) layered on a moving grate

SINTER

Iron ore lump


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Page 101

Ideal properties of lump: High % Fe yield of hot metal

Low combined gangue (SiO2, Al2O3) = less slag volume(costs)

Low Phosphorus (P) = quality of steel Low Loss on Ignition (LOI) combined water = freight cost &

fuel

Low Specific Trace elements Ti, V, Cr and alkali (Zn, K2O)

Typically 61-64% Fe

As received from the Mine, has 6mm)

Remaining lump ore (>6mm to 60mm) is direct charged to BF However difficult to control chemistry comes as Mother Nature including variability in SiO2, Al2O3,Phos, MgO, CaO etc

Therefore non ideal smelting in the BF wide temperature range ; affects zones in BF

Generally limited to < 20% of Burden mix, however in lower productivity scenarios can use higher

proportions Comes with penalty of increased slag volume (gangue) and fuel costs


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Sinter plant at Port Kembla


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Page 103103

Blast furnace process


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Page 104

Raw materials: sinter, lumpore, coke & fluxes chargedthrough top of furnace

Hot air + PCI blown into

furnace through 28tuyeres. Temperature 1200 oC Pressure 370 Kpa Velocity 230 m/sec

Molten iron drained fromtaphole in side of furnaceinto brick lined torpedoshaped vessels.

Slag converted to eithersand-like particles in agranulator or rock slag

when cooled in pits

Excess hot gases flow fromtop of furnace to gas cleaningplant and reused for heating

Layers of coke & ferrousmaterials descend tobottom of furnace overeight hours soften thenmelt and collect in thehearth

Carbon refractory lining

Cast iron / copperstave cooling system

100 oC

2200 oC

1500 oC

Function of a blast furnace is to: Remove oxygen from iron oxide

Remove gangue from the iron ore

to form slag Achieved through use of carbon

monoxide gas from thecombustion of carbon from coke& coal

Port Kembla blast furnaces


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Page 105

No.5 No.6

Built 1972 1996

Relined 1978, 1991, 2009 -

Inner Vol m3 3,427 3,208

Work Vol m3

3,000 (88%) 2,749 (86%)Output 2.6 Mtpa 2.6 Mtpa

No.5 Blast Furnace (in operation) No.6 Blast Furnace (not operating)

Basic oxygen steelmaking (BOS) process


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Page 106

Molteniron (260t)

Scrap steel

(approx 50t)

Oxygen blowing

Refractory lined BOS

furnaces ~ 280t per heat2

Indicative recipe of raw materialsper output steel tonne:

1.24t iron ore fines (sintering)

0.26t lump ore (into BF) 0.57t hard coking coal (into BF)

0.15t PCI (into BF)

0.18t scrap1 (into BOS)

Note: 1) 40% of scrap feed is sourced externally; balance, internally sourced scrap.

2) Yield loss resulting from BOS process is due to impurities in the hot metal that are burnt off. Eg Carbon, silicon, phosphorous.

Slabmaking process


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Page 107

Steelladle

Steel ladleRevolvingturret

Tundish

Mould

Continuous Slab Casters

Max. width = 2200mm

Max. length = 12.5mMax. thickness = 300mm

Oxy Cutter

Hot rolling process


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Page 108

Slabs ex Slab

Casters

Reheated to1225C

Dual reheatfurnaces

Roughing-Reversing Mill

300mm 25mm

Coil box

Six Stand Finishing Millmin. gauge 1.48mm

PKSW hot strip mill (HSM): Commissioned 1955, upgrades 1972, 1985-1987 & 2000-2006

2.9 million tonnes per annum capacity

Product flow

Plate mill


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Page 109

Shearing, stencilling& inspection

Product flow

Hot levellerFinishing MillRoughing Mill

Descaling Box

Reheat Furnaces

Slabs ex SlabCaster

PKSW plate mill : Commissioned 1963

5mm-180mm thick x 1200mm-3400mm wide

0.45 million tonnes per annum capacity

Summary of steelmaking steps: inputs and conversion costs


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Page 110

Process Raw material inputs Main conversion costs

Cokemaking Metallurgical coalsMaintenance, labour, refractories & consumables, services (eg labs,cleaning, coal handling), depreciation; (Note: utilities is a net neutral cost dueto coke ovens gas transferred to other units for energy)

Sintering Iron ore fines, iron sands, limestonefines, dolomite fines, recyclables

Services (eg materials handling, cleaning), maintenance, labour,depreciation, utilities, refractories & consumables

Ironmaking (blastfurnace)

Coke, sinter, iron ore lump, fluxes, PCIcoal

Services (eg materials handling, PCI, transport), utilities, depreciation,refractories & consumables, maintenance, labour

Steelmaking (BOS andslab casting)

Molten iron,scrap, alloys (eg ferro

manganese, molybdenum, aluminium),fluxes

Labour, maintenance, refractories & consumables, utilities, services (eg

transport, contractors), cryogenic gases (argon, nitrogen, oxygen)depreciation

Plate mill Slab Labour, maintenance, depreciation, utilities, services

Hot strip mill Slab Labour, maintenance, depreciation, utilities, services

Pickling and cold rolling Hot rolled coilLabour, maintenance, services, utilities, depreciation, refractories &consumables

Metal coating Cold rolled coil, zinc, aluminiumLabour, maintenance, services, utilities, depreciation, refractories &consumables

PaintingMetal coated strip (generallyZINCALUME steel), paint

Labour, maintenance, services, utilities, depreciation, refractories &consumables

Western Port History


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Page 111

Why Western Port ?

Deep water port

Energy from Bass Strait/Latrobe Valley

Key southern states customers:

automotive, white goods, drum makers and buildingindustry

Milestones

1968: Feasibility study undertaken for a new steel site

1970: Joint venture signed and Victorian Government

approval

1972: Cold Mill and Metal Coating Line 4 commissioned

1973: Pickle Line and Paint Line 2 commissioned

1978: Hot Strip Mill commissioned

1979: Metal Coating Line 5 commissioned

1982: Paint Line 4 commissioned

1992: Metal Coating Line 6 last major production unitcommissioned

2011: Hot Strip Mill decommissioned & MCL 5mothballed

2013: MCL4 upgrade Next Generation ZINCALUMEsteel

Western Port operations overview


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Page 112

No.4 Zincalume Line

CSP Warehouse / Slitter / Pack l ine

AdminBldg

MaintenanceServices Bldg

Hot rolled coils arrivevia rail from PKSW

Bayview Road

TechnicalBldg

WaterTreatment

Plant

Main GateFinished Product:

Despatched to customers viaroad & rail

Finished product to:

Western Port Wharffor export

Coil Annealing

Coil Temper Mill

Pickle Line

FiveStandMill

No.6 Galvanising Line

No.5 Zincalume Line

HRC CoilStorage

No 2 Paint Line

No 4 Paint Line

WarehouseCoil transfer to

Paintlines


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New Zealand Steel History


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Page 114

1965 Company established

1968 First production of Galvanised Coil

1969 Production of Steel Billets

1972 Commenced iron sands exports from WNH

1984 Approval for an integrated flat productsbusiness

1987 Commission flat products manufacture

1989 Purchased by Helenus (BHP Steel)

1992 100% BHP Steel ownership

2002 Brand changed to New Zealand Steel

2003 Company renamed BlueScope Steel Limited

2011 Executed long-term supply contract to doubleTaharoa exports. Ship expected to be

commissioned in 2H CY2014

2012 Commenced iron sands exports from WNH

2012 Increased Taharoa loading capacity by 40%with New Vessel Taharoa Destiny

Brands


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Page 115

Products: Overview


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Page 116

Iron sand concentration

Hot rolled coil Cold rolled coils

Hollow sections

Metallic coated coil

Waikato North Head process schematic


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Page 117

Taharoa existing process schematic


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Page 118118


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Once Taharoa 2.4 Mtpa rate achieved, BSL 55% hedged for iron ore


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Page 120

45%

55%

85%

15%

Before CIPA Restructure, combinedwith 0.8 Mtpa iron sands exports(9.2 Mtpa usage rate, including NZ)

Unhedged portion of purchasesEconomically hedged

Expected 2.4 Mtpa iron sands exportsfrom Taharoa once second shipoperational, and exports fromWaikato North Head(5.0 Mtpa usage rate, including NZS)

Portion of iron ore consumption economically hedged1 within BlueScope

60%

40%

1.2 Mtpa iron sands exports fromTaharoa, and exports fromWaikato North Head(5.0 Mtpa usage rate, including NZS)

Note:

1) Based on current market pricing ratio of iron ore fines to iron sands

2011 Today Future

Electricity is a key cost which is highly volatile and complex to manage


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Third highest cost for the business

NZ has greater than 50% reliance on hydro generation

High short term (5 min) volatility results in complexity to manage

Effectively 60% self-sufficient in electricity generation from highdemand units

Hedging strategy developed and now in place

0

50

100

150

200

250

5Jan

12Jan

19Jan

26Jan

2Feb

9Feb

1

6Feb

2

3Feb

2Mar

9Mar

1

6Mar

2

3Mar

$/MWh

2013

Electricity

spot

prices

26%

55% Hydro

Gas

7%Coal

Geo-thermalWind

2%

Other

8%2%

Spot

27%

Hedge

16%

Co-Gen57%

NZS Energy Sources

NZS Electrici ty Exposure

Community involvement


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Page 122

Engagement with the community through participation in various committees and fostering good workingrelationships with key community stakeholders

Community Environmental Committee

Formed in the 70s with representatives from localgovernment, health, cultural and rural groups.

Community Liaison GroupForum for open discussion and information sharingof NZ Steel, local neighbour ratepayers groups,Auckland Council

Education SectorInvolvement with secondary schools; Workchoice

Day, LEARNZ on-line interactive visit

Public tours of NZ SteelSchools, universities, community groups,customers, suppliers etc

NZ&PI is committed to reducing our impact on the environment


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Page 123

60% of electricity generated from waste gas

99% of process and storm water is reused or recirculated

100% of process steam generated from waste heat

100% sale of Iron oxide sold into water treatment & magnet production

~200ktpa aggregate recycled into applications such as road base, drainage & construction

~18ktpa mill scale recycled replacing energy intensive gaseous oxygen

123


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BlueScope Australia & New Zealand (BANZ)Investor Briefing Day

30 May 2013

130530_banz briefing pack_final (1) bluesvope briefing pack v good

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