ArcelorMittal, the world's largest steelmaker, aims to implement a further $2bn of cost cuts by 2012 and will spend $4bn to make it more self-sufficient in iron ore over the next five years.
The savings over the next two years will come largely from an efficiency drive throughout its business.
ArcelorMittal has already achieved $3bn of what it describes as ‘management gains’ since the financial crisis struck, largely by axing jobs.
The new target is in keeping with the $5bn it said at the start the crisis that it hoped eventually to save.
The company's head of mining told a Reuters Summit in March it planned to increase its annual iron ore production from its own mines to 100Mt by 2015, a more than 50% increase from current capacity. ArcelorMittal said this would cost $4bn.
The output target includes long-term contracts as well as ArcelorMittal's own mines.
Steelmakers face increasing pressure from iron ore producers, notably after the latter forced a shift to quarterly contracts and away from fixing prices over an entire year.
ArcelorMittal said that the volatility of iron ore pricing had led to a mismatch between spot steel prices and costs. It said it expected the volatility to decline due to new supply and the mismatch to even out in the longer term.
The company also has plans to increase its access to coal, with joint ventures and expansion into new territories.
ArcelorMittal said its immediate expansion targets were in India and Brazil.
In India, where land acquisition has been an issue, it has revised its strategy. Instead of concentrating solely on two mega-projects, it would now focus on smaller hubs, with the first domestic production expected in 2013.
It expects Indian steel demand to triple by 2020. In Brazil, it has plans to increase capacity of its three long product plants and, for flat steel, would either expand its Tubarao rolling mill or build a new one. It also plans at least one greenfield project by 2020.
The company believes that Chinese demand was fundamentally robust and that concerns related to monetary tightening were ‘over-hyped’.
In Europe the company has recovered its share of the auto market that it lost during the 08/09 crisis and aimed to bring its share of the northern European flat carbon market to pre-crisis levels by 2011.
It also said the stainless steel spin-off was proceeding as planned.