22nd January 2003

File Reference: u:\Guidelines - BlueScope Lysaght PowerPoint Template

Port Kembla Steelworks & Springhill Analyst Site Visit

Noel Cornish 15 - 16 May 2008

2

Important Notice

THIS PRESENTATION IS NOT AND DOES NOT FORM PART OF ANY OFFER, INVITATION OR RECOMMENDATION IN RESPECT OF SECURITIES. ANY DECISION TO BUY OR SELL BLUESCOPE STEEL LIMITED SECURITIES OR OTHER PRODUCTS SHOULD BE MADE ONLY AFTER SEEKING APPROPRIATE FINANCIAL ADVICE. RELIANCE SHOULD NOT BE PLACED ON INFORMATION OR OPINIONS CONTAINED IN THIS PRESENTATION AND, SUBJECT ONLY TO ANY LEGAL OBLIGATION TO DO SO, BSL DOES NOT ACCEPT ANY OBLIGATION TO CORRECT OR UPDATE THEM. THIS PRESENTATION DOES NOT TAKE INTO CONSIDERATION THE INVESTMENT OBJECTIVES, FINANCIAL SITUATION OR PARTICULAR NEEDS OF ANY PARTICULAR INVESTOR.

TO THE FULLEST EXTENT PERMITTED BY LAW, BLUESCOPE STEEL LIMITED AND ITS AFFILIATES AND THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS, ACCEPT NO RESPONSIBILITY FOR ANY INFORMATION PROVIDED IN THIS PRESENTATION, INCLUDING ANY FORWARD LOOKING INFORMATION, AND DISCLAIM ANY LIABILITY WHATSOEVER (INCLUDING FOR NEGLIGENCE) FOR ANY LOSS HOWSOEVER ARISING FROM ANY USE OF THIS PRESENTATION OR RELIANCE ON ANYTHING CONTAINED IN OR OMITTED FROM IT OR OTHERWISE ARISING IN CONNECTION WITH THIS.

3

IntroductionIntroduction

4

Internal business restructure to focus on strategic priorities and execution – Australian & New Zealand Steel Manufacturing Businesses

Noel Cornish Paul O’Keefe Mark Vassella (2) TBA Bob MooreBrian Kruger (1) (3)

Aus/NZ Steel Manufacturing

Businesses

Australian Coated and Industrial

Markets

Australian Distribution and

Solutions

CFO (Charlie Elias)

Asia

Legal (Michael Barron)

ChinaCorporate Strategy

and Innovation;North America,

People and Organisation Performance (Ian Cummin)Paul O’Malley

Managing Director and CEO

Oversees all manufacturing facilities in Aus/NZ; responsible

for driving safety, process excellence and

meeting production schedule at lowest cost• PKSW•Springhill•Western Port•Western Sydney•Acacia Ridge•Glenbrook NZ

Note: (1) Mark Vassella will be succeeding Brian Kruger as President of the North American businesses (2) Mark Vassella’s current responsibilities – TBA(3) Corporate Strategy and innovation - TBA

5

Aimee AllenGeneral Manager

Western Port

Oscar GregoryGeneral Manager

Iron & Slab

Gabe MeenaGeneral ManagerMills & Coating

Ross MurrayPresident

New Zealand Steel & Pacific Islands

Chris FogartyGeneral Manager

Finance

Alan ThomasGeneral Manager

Eng’g, Technology &Environment

Barb BridgerGeneral Manager

People & OrgPerformance

Sharon WingatePersonal Assistant

Noel CornishChief Executive

ANZSMB

Australian & New Zealand Steel Manufacturing Businesses

John NowlanChief Manufacturing

Officer BSL

6

Topics

• Safety & Environment

• Community

• Port Kembla Steelworks– Process and Production– Costs and Raw materials– Capital– No. 5 Blast Furnace reline– Sinter Plant upgrade

• Coated Businesses– Markets– Process and production– Costs– Western Sydney Update– Blueprint initiatives

• Summary

7

Safety & EnvironmentSafety & Environment

8

3.5

2.5 2.4

1.8 1.8

0.7

1.2

00.2

0

0.5

1

1.5

2

2.5

3

3.5

4

99/00 00/01 01/02 02/03 03/04 04/05 05/06 06/07 1H07/08

Medically Treated Injury Frequency RateLost Time Injury Frequency Rate

22.2

16.2

13

7.34.9 4.2 4.3 4.9

3.6

0.0

5.0

10.0

15.0

20.0

25.0

99/00 00/01 01/02 02/03 03/04 04/05 05/06 06/07 1H07/08

Port Kembla Steelworks - Safety

9

4.2

3.02.6

2.2

1.4

0

2.3

0

0.8

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

99/00 00/01 01/02 02/03 03/04 04/05 05/06 06/07 1H07/08

Medically Treated Injury Frequency RateLost Time Injury Frequency Rate

Springhill - Safety

21.7

11.89.7

6.9

10.1

5.5 53.6 3.7

0.0

5.0

10.0

15.0

20.0

25.0

99/00 00/01 01/02 02/03 03/04 04/05 05/06 06/07 1H07/08

10

Water Conservation – further reducing fresh water consumption

Total process water use

50% REDUCTION IN FRESHWATER CONSUMPTION

Salt Water96%

Recycled Water 2%

Fresh Water2%

11

Port Kembla Steelworks

Co-Generation Plant

ProcessSteam

Electricity 120Mw base load up to

220Mw peaking

Surplus process gasfrom iron & steel making

• Feasibility study expected to be completed in 2H calendar year 2008

• Total investment in the range of $700m - $1,000m• Net NSW reduction approximately 800,000 tpa

CO2 equivalent • One of the largest GHG reduction projects in

Australia - equivalent to taking 185,000 cars off the road

• A workable Government policy for trade exposed industries is a critical part of assessing this major investment

• We will continue to look for projects that will reduce CO2 emissions

PKSW Cogeneration plant – technology led solution to abate greenhouse gas emissions

12

• Policy of supporting education, youth, arts and culture

• Active participation in variety of community initiatives e.g. youth unemployment committee

• $80,000 in donations towards charities, schools, sport, employees and their families

• $500,000 in sponsorships

• Support 30+ Illawarra organisations

Community Engagement

13

BlueScope’s Illawarra Businesses

14

Port Kembla Steelworks overview

• Fully integrated plant with steel making capacity of 5.3mtpa. Optimal unit size.

• Situated on 760 hectares and employing 3,400 permanent employees (plus 1,500 - 2,500 contractors on any given day).

• Amongst world’s most technically advanced producers of quality carbon steel products.

• Excellent technical and operational skills and experience.

• Focus on: - Safety - Productivity - Customers - Quality - Environment - Costs - Community - Flexibility

15

Process

16

4.9 4.8 4.8 5.0 5.1 5.1 5.3 5.3

2.62.4 2.1 2.4 2.4 2.5 2.5 2.6 2.8

1.4

0.3 0.3 0.3 0.3 0.3 0.4 0.4 0.4 0.20.0

1.0

2.0

3.0

4.0

5.0

6.0

99/00 00/01 01/02 02/03 03/04 04/05 05/06 06/07 1H07/08

Millio

n To

nnes

Slab HRC Plate

Port Kembla Steelworks production

17

Cokemaking

18

GAS PROCESSING

COKE SCREEN

3.0Mtpa BLENDED COAL

COKE PLANT

2.3Mtpa COKE

SOLIDS

Cokemaking process overview

TARSULPHATE

39Kt 86Kt

BTX (Benzene)

23ML

COKE OVENS GAS 19,000TJ

Interworks energy (boilers,

furnaces)

BREEZE(< 10 mm)

NUT(10 – 25 mm)

LUMP(25 – 80 mm)

TATA(20 – 50 mm)

86%

7%

2%

5%

Coke usageBlast furnaces 1.9MtpaSinter plant 0.2MtpaExport 0.2Mtpa

2.3Mtpa

Export coke

BlueScope approach is to sell excess production on a spot basis. Generally offered in 30-45kt cargo sizes.

Current expected sales of coke in FY08 260k tonnes

1 tonne of coke solids is equivalent to 1.30t coking coal

Types of coke solids produced•Lump•Tata•Nut•Breeze

19

Sinter Plant

20

1996

21

22

Hot Strip Mill

23

Plate Mill

24

Port Kembla Steelworks – relentless cost control

Total cost $

FY2003 FY2004 FY2005 FY2006 FY2007 FY2008(E)

S&A Conversion Costs Despatch & Freight Raw Materials(1) Raw material includes iron ore, coal, scrap and alloys but not scrap purchased on behalf of OneSteel.

(1)

$

25

• Iron Ore:– approximately 7.7mtpa– current indicative mix – 20% lump, 50% fines and 30% pellets– principally sourced from BHP Billiton. Other suppliers include OneSteel, Savage River, IOC

(Rio) and Vale (CVRD)– contract volume term – most contracts up for renewal during FY 2009 (renewal term

expected to be 3/5 years)– annual pricing review, with price effective from 1 July (for approx 90%)

• Coal:– approximately 3.7mtpa (3.0mtpa coking coal and 0.7mtpa PCI coal)– principally sourced from local BHP Billiton Illawarra mines (coking coal) and Xstrata Hunter

Valley mines (PCI coal)– long term contract (30 years from July 2002)– typically annual pricing review, with price effective from 1 July

• Scrap:– approximately 1.0 mtpa– 40% sourced externally

Expected raw material usage - FY 2008

26

Raw material costs

• Historical global iron ore (fines) and coking coal prices (financial year):

• Reported for FY 2009– 71% increase in iron ore costs

• Finalised price with CVRD• Prices to be finalised with other suppliers

– 205% increase in coking coal cost• Price to be finalised but will be reflected of this increase

US$/wmt 2002 2003 2004 2005 2006 2007 2008

Iron Ore Fines $17.97 $17.54 $19.12 $22.68 $38.88 $46.27 $50.66% change 4.3% -2.4% 9.0% 18.6% 71.5% 19.0% 9.5%

Coking Coal $42.75 $48.10 $46.20 $57.20 $101.00 $116.00 $98.00% change 7.5% 12.5% -4.0% 23.8% 76.6% 14.9% -15.5%

27

0

2,000

4,000

6,000

8,000

10,000

99/00 00/01 01/02 02/03 03/04 04/05 05/06 06/07 1H 07/08*0

250

500

750

1,000

1,250

1,500

1,750

Employees Productivity (Tonnes per person per year)

Port Kembla Steelworks productivityEm

ploy

ee N

umb e

rs

Prod

uctiv

ity (C

rude

Ste

el Ou

tput

, Ton

nes/E

mpl

oyee

/Yea

r)

* Annualised

28

Commissioning Project Capex (A$m)

1996 No. 6 Blast Furnace 478

2000 5mtpa Project 90

2001 Coke Side Emission Control 91

2004 Sinter Plant Emission 94

2006 Hot Strip Mill Expansion 100

Mid year 2009 No. 5 BF Reline 370

Mid year 2009 Ore Preparation Upgrade Project 134

Feasibility study Steelworks Cogeneration Plant (SCP)

700 – 1000(estimate)

Port Kembla Steelworks Capital Expenditure

29

Port Kembla Steelworks – No.5 Blast Furnace reline

28

30

Port Kembla Steelworks – No.5 Blast Furnace reline

• Every blast furnace in the world needs to be relined periodically, typically every 15-20 years

• History – No. 5 BF– Built in 1972, relined in 1978 – Most recent reline took place in 1991– Currently produces approximately 2.6mtpa of hot metal

• Scope of work– Extends to replacement / upgrade of associated equipment items – Unlikely to result in a material increase in capacity– Take approximately 105 days– Cost approximately $370m

• Target remains to undertake the reline in the March to June 2009 period, subject to furnace performance

31

Port Kembla Steelworks – No. 5 Blast Furnace reline

• Total capital cost A$370m ($140m committed to end Mar 08). • The project is scheduled to take approx. 105 days.• Expected lost slab production (shutdown and ramp up) is approx 680kt,

reflecting part offset from increased No.6 BF production and higher scrap use in basic oxygen steelmaking.

• A number of export customers will be affected during this exercise. Have contacted our customers who will make alternative arrangements during the reline project.

• Domestic external sales are not expected to be materially affected.• Major raw materials impact:

– expect to purchase approx 700kt less iron ore (principally fines and pellets) than the 7,700kt purchased in 2007 and expected in 2008;

– approx 65kt of additional scrap purchased; and– present intention is not to change coal consumption and to export excess coke

(approx 240kt). However, if coke margins don’t meet our requirements at the time then we would reduce our coking coal purchases by up to 300kt.

32

Reline experience

• Many of the Project Team and Key personnel have been key resources in :o 1996 No.6 BF constructiono 1993 No.4 BF Relineo 1991 No.5 BF Relineo 1989 No.2 BF Reline o 1987 No.4 BF Relineo 1978 No.5 BF Relineo 1976 No.3 BF Reline

• Technical collaboration with Nippon Steel Corporation - design and operational issues• Technical collaboration with Posco on blow-in & uprating plans• Many overseas steel plant and equipment supplier visits by several key personnel on

design, operational and equipment performance issues.• Several hundreds of years combined blast furnace related team experience

33

Activities during the No. 5 Blast Furnace reline

Operation continues until the raw materials inside the furnace are consumed. Furnace is shutdown and isolated from rest of the plant.

5 days

Holes are cut in the shell to gain access to rake out remaining material and refractory lining including cooling staves

16 days

Install protection and working platforms inside furnace; clean out hearth 12 daysInstall taphole shell plate; Install hearth plug refractory 17 daysRemove & replace bosh shellplate; install bosh staves; install tuyere staves 28 daysInstall hearth sidewall, tuyere and bosh area refractories 25 daysRemove platforms and close up furnace; pressure test 12 daysCharge raw materials, heat up hot blast main; blow-in 9 days

Additional activities; Repair /Replace/Upgrade ancillary equipment:- Furnace Top, Downcomer, Dustcatcher, Gas Cleaning Plant, Water Treatment Plant, Hot Blast & Bustle main rebrick, Casthouse Floor structural and refractory rebrick, Slag Granulation system, Electrical and Control systems

NB: Some activities are in parallel

34

Cut in - access through shell (No.5 BF reline 1991)

33

35

Hearth demolition (No.5 BF reline 1991)

34

36

Internal working & protection platforms (No.5 BF reline 1991)

35

37

Installation hearth sidewall refractory (No.5 BF reline 1991)

36

38

Installation hot blast main refractory (No.5 BF reline 1991)

38

39

Granulator stack & downcomer installation (No.5 BF reline 1991)

40

Reline Complete (No.5 BF reline 1991)

41

No. 5 BF reline - implementation risks

• Two major unknown conditions at blow-out(1) : (a) Remaining untapped liquid hot metal (salamander) requiring blasting and (b) Condition of the bosh shellplate, can add additional time to schedule

• Skilled labour and contracting firms to undertake this intense activity with many interface challenges (peak 1200 personnel on site)

• Efficient and safe use of very large cranes on a complex and vertically intense site• Complex commissioning activities • Industrial collaboration between several different unions and many contractors• Efficiency of labour force over 3 months • Commissioning and uprating performance

(1) Blow-out - terminology to indicate a halt in blowing "hot blast” (the wind that is blown through the furnace that creates the conditions for the reduction process) through the blast furnace (see supporting information for further details pg 64).

42

No. 5 BF ramp up plan

5 BF Uprate Plan

0

1000

2000

3000

4000

5000

6000

7000

8000

1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59

Days

Tonn

es/d

ay

6BF Plan 5BF Plan Actual 6BF

Note: 7000 tonnes per day by day 11 and 7700 tonnes per day by day 44 this is equal to an annual capacity of 2.8mtpa however this will be reduced to 2.6mtpa (nameplate capacity) due to standard scheduled maintenance.

First servicepost reline

43

STRAND

Dustrecycled

MainFans

Dry Electrostatic Precipitators

Waste Gas Mains x2

IronOre

Fines

LimestoneFines

CokeBreeze

SinterFines

Sinterto Blast

Furnaces

Water

Mixing &Rolling Drum

Port Kembla Steelworks - Sinter Plant upgrade

Sinter process

4444

45

Exit End• Rebuild cooler• Increase Width• Increase Fan Power • Relocate Lowering wheel and extend

building• New cooler feed chute

Entry End• New Ignition Furnace• New Strand Feeder

Precipitators• Refurbish zones 2, 3 & 4 -

R&M• New Zone 1 • Modern ElectricsStrand

• Increase Height• Increase Length

Port Kembla Steelworks – Sinter Plant upgrade

Two new major conveyor systems and several chute modifications will be installed in raw materials handling yards

46

Port Kembla Steelworks – Sinter Plant upgrade

• Main shutdown planned for April – May 2009 (approx. 35 days)• To coincide with No.5 BF reline, when demand for sinter is reduced.• Total capital cost A$134m.• No.3 Sinter machine at PKSW

– is single source of 5.3 mtpa of sinter for No. 5 & No. 6 blast furnaces– currently the typical blast furnace burden mix is: – 57% sinter (fines based); 25% pellets; 18% lump

• Outcome post upgrade from FY2010 onwards:– increased sinter production by 1.1 mtpa to 6.6 mtpa (nameplate capacity is currently

5.5 mtpa)– this will require + 1.1 mtpa of fines BUT would displace 1.0 mtpa of pellets (Presently

fines to pellet price differential is approx US$50/t).– Increased Pulverized Coal injection rates (cost saving as use more thermal and less

coking coal) due to blast furnace permeability being improved by higher quality sinter.

47

Springhill & Western Sydney Coated

47

48

Springhill Coated

• Springhill’s Coupled Pickle Cold Mill 990kt• Packaging Cold Mill/Pickle Line 135kt

• Metal Coating Lines (3 lines) 790kt• Springhill Paint Line 200kt

• CRM Paint Line 50kt – Closing within 12 months

49

Markets and Supply Chain

Building & Construction

Export

Domestic

Distributors

Distribution & Solutions

Australia

Direct

Manufacturing

Pipe & Tube

Western Port

Illawarra

50

Markets

Building Markets- Branded product price increases implemented in February with further increases

announced for July- New COLORBOND® steel colour launch planned for last quarter 2008- Non dwelling demand will underpin strong sales for building products through 08/09- Dwelling, remains subdued, however NSW being most negatively affected

Manufacturing and Automotive Markets- Manufacturing sector customers face strong competition from imports and strong dollar - BlueScope growing volume in this sector via import replacement- Substantial price increases on steel purchases in line with global steel price trends

Distribution Markets- Buoyant demand in commercial and resource sectors- Strong global demand has reduced import volumes- Substantial price increases in recent months in line with global steel price trends

51

• Hot dip metallic coating of Zinc or Zinc/Al alloy

• Acacia Ridge• Service Centre paint

line at Port Kembla

Coupled Pickle Cold Mill990 kt/a

• Descaling of strip via acid bath

• Strip thickness reduced by up to 80% by cold reduction

• Organic coating applied through use of applicator rolls

• Oven cured

Port Kembla Steelworks

Uncoated Strip

Metal Coating Lines

790 kt/a

Paint Line200 kt/a

Metal Coated Strip

Painted Strip

Note: Capacities represent nominal annual volumes

HR Coil

Packaging Cold Mill

135 kt/a

Springhill - material flow

52

Springhill - cold rolling

Hot rolled coil is uncoiled

Scale removal (pickling) using hydrochloric acid

Coupled Pickle Cold Mill

Thickness reduction via cold rolling

through five standsRecoiling using carousel reel

To Metal Coating or Pack & Despatch

COUPLED PICKLE COLD MILL (Springhill Site) Technical Capabilities

CPCM – Thick 0.30 – 3.30 mm

Width 615 – 1320 mm

Process: Hot rolled coil is pickled in hydrochloric acid to remove iron oxide to prepare the strip for cold rolling. Cold rolling reduces steel thickness by passing the hot rolled pickled strip through a series of five rolling stands. High roll force and strip tension allows the strip to be progressively reduced at each stand without changing the width. The CPCM is a continuous pickling operation coupled to the cold reduction process.

Output: Sold as cold reduced uncoated steel, or sent to metal coating lines for further processing.

Capacity: 990 kt/a

53

Springhill - cold rolling (packaging)

PICKLING and COLD ROLLING (Packaging site)

To Metal Coating or Pack & Despatch

Technical Capabilities

Pickle Line – Thick 1.48 – 3.0 mm

Width 457 – 1300 mm

Cold Mill – Thick 0.18 – 1.45 mm

Width 650 – 1085 mmHot rolled coil is uncoiled

Pickle Line

Scale removal (pickling) using hydrochloric acid

Five-Stand Cold Mill

Thickness reduction via cold rolling

Hot rolled pickled coil is uncoiled

Process: The Pickle Line removes iron oxide from the strip to prepare for cold reduction or for the coil to be sold as hot rolled pickled steel. The coil is the transferred to the Five Stand Cold Mill where the strip thickness is reduced.

Output: Sold as hot rolled pickled and oiled steel, cold reduced uncoated steel, or sent to metal coating lines for further processing.

Capacity: 135 kt/a (based on 2 crew operations,120kt CRFH + 15kt HRPO)

54

Springhill - metal coating

Cold rolled coil is uncoiled

Pre-Heat Ovens

Natural Gas Fired Selas Furnace

Metal Bath & Pre- melt Pot

Cooling Tower

Horizontal Cooling Baths

Skin Pass Mill Tension Leveller Passivation System

Resin Coaters

Zincalume or Galvanized coil

To Painting or Pack & Despatch

METAL COATING LINESTechnical Capabilities

MCL1 – Thick 0.03 – 3.30 mm Width 610 – 1240 mm

MCL2 – Thick 0.50 – 3.50 mm Width 610 – 1240 mm

MCL3 – Thick 0.30 – 1.00 mm Width 610 – 1240 mm

Process: Cold reduced coils are hot dipped coated with ZINCALUME® coating (Nos 1 & 3 Lines) or galvanised (zinc) coating (No 2 & 3 Lines) to provide corrosion protectionOutput: Sold as ZINCALUME® coil or galvanised coil to building and manufacturing industries or processed further by our Paint Lines.ZINCALUME®, ZINCSEAL®, ZINCANNEAL®, GALVASPAN®Capacity: 790 kt/a

55

Primer OvensPrimer Coater

Main Oven Main Coater

Chemical rinsing, cleaning & pre-treatment

Inspect & Test

Painted coil is recoiled

Automatic Guided Vehicles

Labelling Plastic Wrap

Protective Packaging

Strapping Finished Coils

PAINTINGPACK & DESPATCH

Coated Coil from Metal

Coating Lines

Technical Capabilities

No.3 Paintline - Thick 0.20 – 1.5mm Width 600-1320 mm

Process: Uncoated or metal coated strip is thoroughly cleaned and chemically treated to provide best surface to apply a primer coat followed by a finish coat of paint, via roller application, which is then oven cured.

Output: Building, packaging and manufacturing marketsCOLORBOND®, AQUAPLATE®

Capacity: 200 kt/a

Springhill – painting and finishing

56

Springhill - cost profile

• 06/07 coating metals – increased zinc and aluminium prices• 07/08 conversion costs – increase in price of electricity

Total cost $

FY2005 FY2006 FY2007 FY2008(E)

Conversion Costs S&A Paint Metals Feed

$

57

Springhill – zinc / aluminium consumption

2000

4000

6000

8000

10000

12000

14000

2005/06 H1 2005/06 H2 2006/07 H1 2006/07 H2 2007/08 H1

Tonn

es

Zinc Aluminium

58

Western Sydney COLORBOND® facility - update

• Currently Western Sydney paint line is progressing well– Best start up in BlueScope Steel with respect to quality and output– Operating at 64ktpa (annualised) vs. nameplate capacity of 120ktpa– Not currently operating at full capacity (currently expected in FY2010)

• World Class facility– New technology making this one of the most automated paint lines in the world– World class environmental operation (Regenerative Thermal Oxidiser unit reduces

Greenhouse Gas)– Water saving built into the process (40% of roof area is captured for re-use on site)

• High performance teams– Extensive training at other facilities– Excellent start up

59

Western Sydney COLORBOND® facility

Process: • Strip is thoroughly cleaned and chemically pretreated prior to painting• Primer and finish coats are applied through a series of rolls then oven cured at 200–260 deg C

Output:• Organically painted coil, COLORBOND® for building, distribution and manufacturing markets• 20 colours represent 90% of our production

Annual Actual Capacity:• 120,000 tonnes

60

Blueprint InitiativesBlueprint Initiatives

61

Blueprint initiatives

What we will do …

A. Reinvigorate our Australian and New Zealand businesses

B. Continue the improvement process across our Asia and North America businesses

C. Grow, or acquire, new businesses that build on our distinct competitive advantage

Areas of focus

How we will do it …

1. Increasing customer and market focus2. Improving productivity year on year3. Optimising return on capital

Execution excellence

4. Building an integrated BlueScope operating system5. Further develop organisational capability Business

essentials

What we will be known for …

6. Improve on our world class safety performance

Safety

7. Become a recognised leader in sustainability & environment

Sustainability & Environment

8. Increasing shareholder value

Shareholder value

Categories of Initiatives

• Grow domestic markets and steel penetration

• Drive manufacturing excellence

• Enhance the supply chain

• Continue focus on productivity

• Procurement optimisation

• Improve capital planning and execution

• Monetise surplus assets

• Disciplined growth

62

Technical system

Management infrastructure

Mindsets and behaviours

Manufacturing Excellence

BlueScope’s Operating System

• Improve total cost per tonne produced

• Decrease variable costs• Increase uptime• Optimise changeovers • Optimise inventory• Grow ESVA

Key Outcomes

All three dimensions of the operating system need to be addressed to sustain improvements

63Production; Percent, indexed to 100

111111

124

104

110

117

85

90

95

100

105

110

115

120

125

• FY03 • FY04 • FY05 • FY06 • FY07

• Slab• HSMs• Plate• CRC• MCLs• CPLs

• 100

Focussing on Continuing Business Improvements

64

Summary

• Continued focus on safety, community and environment

• Blueprint focus on– Increasing productivity– Customers focus– Relentless cost reduction– Supply chain improvement– Optimising return on capital

• Complete Steelworks Co-generation Plant feasibility review

• Western Sydney ramped up to full capacity

• No. 5 BF reline and Sinter Plant upgrade– Finalise preparations and safely complete on budget and schedule

65

Supporting InformationSupporting Information

66

Torpedo car – iron to BOS

Raw materials- iron ore lump, sinter, pellets, coal (coke) and limestone are fed into the top of the blast furnace

Hot air, gas and PCI is fed into the blast furnace through the tuyeres

Molten slag to by-products processing

Coke and gases burn to create temperatures up to 2200ºC; “chemical reduction” process creates molten iron and CO2 while limestone (flux) melts and forms slag.

Molten iron and slag fall to the furnace bottom (hearth) where they are drained out through one of three tapholes into a torpedo ladle.

• Feed: - Iron Ore 7.7mtpa - Coal 3.7mtpa - Limestone ~850ktpa

• 2 Blast Furnaces

Blast furnace – iron making process

67

Molten iron (250t)

Scrap steel(approx 60t) Oxygen blowing

Refractory lined BOS furnaces

3 x 280t

Basic Oxygen Steelmaking (BOS)

5.3Mtpa

* Annual Scrap Usage (indicative) 1mtpa

(approximately 40% sourced externally)

Steelmaking process

68

Steel ladle

Steel ladleRevolving

turret

Tundish

Mould

To cut-to-length

Hot Strip Mill, Plate Mill, Westernport or export

Continuous Slab Casters5.3 Mtpa

Max. width = 2200mm

Max. length = 12.5m

Max. thickness = 300mm

Slab making process

69

Slabs ex Slab Casters

Reheated to 1225°C

Dual reheat furnaces

Roughing- Reversing

Mill300mm – 25mm

Coil box

Six Stand Finishing Mill min. gauge 1.48mm

Hot Strip Mill

Commissioned 1955, upgrades 1972, 1985-1987 & 2000-2006

2.9 Mtpa Product flow

HRC process

70

Shearing, stencilling, shot blasting, prime

painting & inspectionProduct flow

Hot leveller

Finishing Mill Roughing Mill

Descaling Box

Reheat Furnaces

Slabs ex Slab Caster0.4 Mtpa

Commissioned 1963 5mm- 180mm thick x 1200mm- 3400mm wide

Plate process

71

Port Kembla Steelworks2.6mt slab 1H FY2008

(2.7mt slab 1H FY2007)

Hot Strip Mill 53%

(53%)

Plate Mill9%

(9%)

C & BP Australia (1)

(Springhill & Distribution)

41% (48%)

Domestic HRC23%

(26%)

Export HRC36%

(26%)Notes:(1) “C&BP Australia” is Coated and Building Products Australia(2) Included 134kt internal sales to BlueScope’s Thailand operations

Export Slab 17%

(16%)

C&BP Australia (1)

(Western Port)21%

(22%)

C & BP Australia (Distribution)

19% (0%)

Domestic Plate 70%

(85%)

Export Plate11%

(15%)

(2)

Hot Rolled Products Australia - product flow (Indicative) 1H FY2008

72

Port Kembla Steelworks - despatches by half year

External Product Sales Mix

Slab 54% 42% 31% 29% 32%HRC 35% 45% 53% 55% 56%Plate/Other 11% 13% 16% 16% 12%

0200400600800

10001200140016001800200022002400260028003000

FY06-1H FY06-2H FY07-1H FY07-2H FY08-1HInternal Customers Domestic Customers Exports Customers *

(kto

nnes

)

2,6892,579

43% 45%

16% 15%

40%41%

* Including BlueScope Steel Asia feed

2,600

47%

21%

32%

50% 45%

18%18%

32% 37%

2,609 2,608

40% sold domestically and 60% exported, with geographic split being:

Asia 42%USA 36%Other 22%

100% exported, with geographic sales split

Asia 68%

USA 32%

Other 0%

73

FISCAL YEARS

99/00 00/01 01/02 02/03 03/04 04/05 05/06 06/07 H1 08

Raw Steel (mt) 4.9 4.8 4.8 5.0 5.1 5.1 5.3 5.3 2.6

Capex (A$m) 38 47 80 83 65 139 202 136 64

Sales Volumes (‘000 tonnes)- Domestic - Export - Internal

Total

813 1,297 2,565 4,675

762 1,604 2,404 4,770

807 1,365 2,324 4,496

877 1,567 2,609 5,053

981 1,504 2,560 5,045

1,050 1,377 2,495 4,922

826 2,109 2,293 5,228

1,004 1,572 2,550 5,126

465 838

1,161 2,464

Historical Data – Port Kembla Steelworks

74

1939 John Lysaght (Australia) Springhill Works begins full operation1955 4 stand continuous Cold Rolling Mill commissioned1968 Cold Rolling Mill upgraded to 5 stands1961 First continuous galvanising line commissioned1964 Second continuous galvanising line commissioned1966 Third continuous galvanising line commissioned1970 BHP acquires 50% of Lysaght’s1976 MCL1 converted to Zinc/Aluminium galvanising

No.3 Paint Line commissioned1979 BHP acquires 100% of Lysaght’s1989 New pickle line coupled to 5 stand Cold Rolling Mill (CPCM)1994 Decommissioning of Electrolytic Cleaning and Galvanising Line facilities1996 CPCM Carousel Recoiler and Entry Accumulator upgrade

Integrated Coil Packaging and Handling Project2000 Closure of Batch Coil Annealing and Temper Rolling facilities2002 Transfer of the Slit Recoil Line to Acacia Ridge2003-05 Brownfield capacity increases2005 Packaging Products site integrated under Springhill management as Illawarra Coated Products2007 Packaging Products Tinplate & Finishing department closed2007 Closure of CRM Paintline announced

Springhill Site History

75

• Springhill site is a zero process water discharge site• all process water is treated through waste water treatment and returned to

Sydney Water for recycling.• only stormwater is received into the local environment.

• Recertified to ISO 14001 April 2008.• Current DECC site licenses.• Reviewed environmental improvement plan (2007 – 2008)• DECC recognition for make safe activities tin plating and finishing, considered

benchmark• Greenhouse gas targets are being established via benchmarking exercise.• Water and energy intensity targets established.• Achieving better than target on electricity energy intensity.• Water use and intensity continues to track at record lows.• Promote BlueScope Water products with installation of several 2 thousand litre

rain water tanks.• Continue to recycle 100% of by-product steel, solvent, HCL, with rags, gloves

and oil

Springhill environment

76

Indicative FY2008 zinc and aluminium usage vs. FY2007

Note:(1 ) In future years BSL Asia’s usage will increase as new mid-stream projects ramp-up to full capacity(2 ) Av FY 2007 Zinc price was US$3,728 per tonne vs av 1H FY 2008 price of US$2,889 per tonne, with current

spot price of US$2,416 per tonne (12 Feb 2008).

Tonnes Zinc AluminiumFY2008(E) FY2007 FY2008(E) FY2007

AUSTRALIASpringhill 21,423 22,787 11,281 10,632Western Port 22,261 21,800 11,284 10,900Sub-total 43,684 44,587 22,565 21,532

NEW ZEALAND 7,300 6,800 3,700 3,500

ASIA 19,814 14,888 18,094 13,092

TOTAL 70,798 66,275 44,359 38,124

22nd January 2003

File Reference: u:\Guidelines - BlueScope Lysaght PowerPoint Template

Port Kembla Steelworks & Springhill Analyst Site Visit

Noel Cornish 15 - 16 May 2008