ARCELORMITTAL SOUTH AFRICA LIMITED - Operational update

Operational update

ArcelorMittal South Africa Limited

(Incorporated in the Republic of South Africa)

Registration number: 1989/002164/06

Share code: ACL

ISIN: ZAE000134961

(“ArcelorMittal” or “the Company”)



OPERATIONAL UPDATE

     Shareholders are referred to the Rights Offer circular (“the
     Circular”)   dated   21  December   2015, the  reviewed   condensed
     consolidated financial statements for the six months ended 30 June
     2015 (“the interim results”) as well as the various announcements
     made during November and December 2015.

     In particular the board of directors (Board) indicated that there
     were “specific key initiatives which are in place which in the
     Board’s view have a reasonable prospect of returning the Company to
     profitability”.

     Update

     The Company is pleased to announce, with regard to the consideration
     by the South African Government (“Government”) of the increase of
     custom duties on imported primary steel that is also locally produced
     from 0% to the bound rate of 10%, that further duties have been
     implemented with regard to Wire Rod and Rebar with effect from 18
     December 2015, bringing a total of 3 applications implemented out of
     the final 10 submitted to the International Trade Administration
     Commission (ITAC) to date. Final decisions on the remaining
     applications are expected in early 2016.

     In addition, additional applications for specific safeguard duties
     relating to Other Bars and Rods, Rebar, Hot Rolled Coil, Cold Rolled
     Coil and Plate were submitted to ITAC during December 2015.

     The engagements with Government regarding their consideration of the
     designation of local steel for state procurement and Government
     infrastructure spend (designation) and agreement on a pricing
     mechanism for ArcelorMittal produced steel are advanced and ongoing.

     In addition, Shareholders are referred to the interim results and the
     various announcements and investor presentations made during November
     and December 2015 wherein it was outlined that the company’s funding
     plan takes into account continued efforts in cost reduction, the cut-
     back of non-essential capital expenditure, liquidation of excessive
     stocks, matching production to demand, the sale of redundant assets,
     continued support from ArcelorMittal Group and the continuation of
     local short-term borrowing facilities, the rights offer and the BEE
     ownership transaction and the positive effects of the tariff
     protection and steel designation measures.

     These initiatives remain focused and ongoing.

     Shareholders are advised that the local bank short-term borrowing
     facilities have recently been re-negotiated and have resulted in a
     reduced level, however the ArcelorMittal Group loan facilities have
     been extended to off-set the reduction as and when required.

     As previously communicated, the Rights Offer of R4,5bn is fully
     underwritten by ArcelorMittal Group and the company is expecting
     approximately R1,3bn to be received by about 25 January 2016 after
     partially settling the ArcelorMittal Group loans from the proceeds.

     The BEE Ownership transaction is well on track with net cash (still
     being priced) expected to be raised by July 2016.

     Further options for additional funding are also being explored as
     previously communicated.



Lastly, Shareholders are reminded that the Company still faces challenges
and future profitability is highly dependent on the above initiatives being
successfully concluded. The Company would like to re-emphasise that without
the requisite tariffs as applied for above and without the initiatives
committed by Government regarding the use of local steel for government
infrastructure projects, the steel industry and the Company will need to
undertake significant structural change.

Based on the above plans and initiatives and with the expectation that the
tariff and designation measures will be in place by the end of Q1 2016, or
shortly thereafter, the Board remains of the view that these interventions
have a reasonable prospect of returning the Company to profitability in the
medium term.

Vanderbijlpark

7 January 2016



Sponsor

JP Morgan Equities South Africa

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