ArcelorMittal South Africa 2007 Sustainability Report Page 4 In pursuing our vision to be the most admired steel institution, we at ArcelorMittal South Africa recognise our responsibility to manage the social, environmental and business impact of our operations and products on all stakeholders who are touched by our business. Message from Rick Reato Chief Executive Officer Our philosophy on sustainability is driven by the firm belief that the financial prosperity of the organisation is inextricably linked to the manner in which the company cares for its people, the environment and the communities in which it operates. But achieving true sustainability is an ongoing journey that involves both successes and shortfalls against the principles we are guided by. This report, therefore, acknowledges those instances where we as a company have not managed to meet the high standards that we set for ourselves, and we commit to taking whatever corrective action is necessary to improve our sustainability record. This commitment exists at the highest level within ArcelorMittal South Africa. Tackling the most material issues During the year under review, the two most material sustainability issues for the company were its environmental impact and the pricing of its products: •  Environmental exposure: Following an audit by the Environmental Management Inspectorate (EMI) in October 2007, the company was accused of disposing hazardous waste at the Vaal Waste Disposal site without a permit. As it was impossible to take remedial steps immediately, the site was closed down and the company had to make alternative arrangements for the disposal of waste products. While we are well advanced with our R1 billion environmental mitigation programme, this event has exposed weaknesses in our management of the programme, as well as in our dealings with the relevant authorities. The environmental section of our Sustainability Report describes our exposure in more detail, as well as the plans we have in place to improve our performance. •  Pricing: During 2007, the Competition Tribunal found that ArcelorMittal South Africa was charging excessive prices on its flat steel products and imposed a fine of R692 million on the company. The company has also been found guilty of restrictive trade conditions. An appeal hearing is expected in the latter part of 2008 and we remain confident of our case. As we discuss in the chapter on managing our impact in the marketplace, we contend that our pricing policy is fair and that the export rebates we offer to companies further processing and exporting our products are not designed to protect our dominant position in the local market, but rather to encourage the export of value-added steel products. The substantial downstream industry thus supported, would to a large extent be unviable without this incentive scheme. Power supply – a force majeure Power failures are having an impact on ArcelorMittal South Africa’s production, threatening the supply of steel to customers. The extent of supply interruptions to customers will depend on the magnitude and duration of the power failures. The company is managing the situation to minimise production losses by optimising power between the various production facilities and between the company’s four steel works.